City Agrees to Provide Funding to Developers to Assist in Economic Development Project

Council for the City of Wickliffe, Ohio recently adopted legislation to assist private developers with the costs associated with the redevelopment of approximately 10 acres of blighted property located within the City. Under Ordinance No. 2008-57, Council of the City authorized the Mayor to enter into a contract with LTV Group, Inc., an Ohio corporation, and Milestone Building Company, an Ohio corporation, to provide economic development assistance to partially finance costs associated with the redevelopment of certain parcels of blighted property located on Euclid Avenue within the City.

The proposed economic development project includes the demolition of four buildings to provide space for the construction of 76 condo units and retail stores. The projected cost of the project is $1,300,000. The redevelopment project will result in job creation and employment opportunities in the City.

Under Ordinance No. 2008-57, the City will contribute $300,000 to the proposed project in the form of an 18-month loan to the development companies bearing interest at a rate of 1.5%. If, however, the development companies meet certain prescribed conditions within the 18-month term of the loan, then they will not be required to repay the loan. Ordinance No. 2008-57 provides that portions of the loan will be forgiven upon the satisfaction of each of the following conditions:

• 33% of the loan will be forgiven upon demolition of all blighted structures.
• 33% of the loan will be forgiven upon the commercial site preparation.
• 34% of the loan will be forgiven upon the residential site preparation.

City Council determined that the provision of funding to assist in the redevelopment project to be in the public interest and a proper public purpose under Article VIII, Section 13 of the Ohio Constitution, which provides generally that the making of loans and the lending of aid by a political subdivision for the purpose of creating or preserving jobs and employment opportunities and improving the economic welfare of the people is in the public interest and a proper public purpose. City Council has determined the project to be in the public interest by furthering commerce and industry, by removing blighted structures and by generating property and income tax revenues for the City.