Cleveland City Council Monday established a Downtown tax increment finance district designed to fund Mayor Justin Bibb’s sweeping development plans.
The TIF district, an economic development tool that uses increases in property taxes to fund further development, is expected to generate between $3.5 billion to $7.5 billion in new revenue over the next 42 years.
The bulk of that money may be used to pay for Cleveland’s Shore-to-Core-to-Shore plan, which includes lake and riverfront access, multimodal transit options, residential and retail development, more than 20 acres of recreational green space and more.
"Without making the investments in public infrastructure as we look at the needs of our Downtown coming out of COVID, we need to make some of these investments to make sure our tax base continues to grow," said Jeffrey Epstein, the city's Chief of Integrated Development.
Unlike other city-approved TIFs, which target one building that typically feeds back to that specific project, the Shore-to-Core-to-Shore TIF district encompasses a larger geographic boundary and is designed to generate revenue that can be used to fund multiple public infrastructure improvements both inside of and outside of the district.
The district's boundaries stretch from the lakefront to the Cuyahoga River in the south and between the Innerbelt to the east to parts of the Ohio City neighborhood to the west. Existing Downtown TIFs will not be impacted.
Other Ohio cities, including Columbus and Cincinnati, already utilize TIF districts, some of which were established decades ago and used to pay for public infrastructure.
"We have to start somewhere," said Councilmember Anthony Hairston. "We cannot continue to manage decline. We have to look at, How do we grow our city? We wonder why Columbus and even Cincinnati is even ahead of Cleveland."
Some council members on Monday questioned the risks associated with the TIF district. "The riskier proposition is to do nothing," said Ahmed Abonamah, the city's chief financial officer.
Others had questions about where the money would go. Many voiced concerns about development in their own city neighborhoods as Downtown expansion plans take shape.
"Water is not running. You see some houses, too hot in the summertime, too cold in the wintertime," said Councilmember Kevin Conwell. "Then you get some children go to school just to get a meal, just to get a meal, then you want to build up Downtown."
The legislation, however, only creates the TIF district and defines its geography. It does not authorize spending. The city will have to come back to council to allocate the funds and seek approval for bonds and other debt issuance.
"Every neighborhood should be a safe, vibrant place for people to live and enjoy their lives," Abonamah said. "It's really important to keep in mind that for this to work, we have to see the increased value in the district we're anticipating ... We have to invest the money in the district first, then when there's excess proceeds ... That's when we can see really tremendous impacts in our neighborhoods."
Previously, Bibb and the City Council struck a deal ensuring 35% of proceeds will go city neighborhoods. Council initially asked for half.
"It’s time to invest in Cleveland. We can’t just sit around and let suburban flight keep draining this city forever and ever and ever," said Council Member Kris Harsh. “We have to abandon 'manage decline' and embrace 'growth mentality,' and that’s essentially what I see happening here.”
