Bexley Gateway developer Larry Ruben has scaled back his tax abatement request for 36 Main Street condos, in a compromise presented to City Council's finance committee June 2.
Some council members are unsure how such a move would affect future development in the city, and residents are concerned about the school district and city losing tax revenue.
Council members have tabled the ordinance that would amend the current 50 percent property tax abatement on the residential units to 100 percent for 14 years. The change would not alter the abatement on the commercial and office spaces.
Ruben requested the amendment in the face of a free-falling real estate market that has allowed him to sell only three of the 36 condos.
After hearing opposition from some residents, and hestitation on the part of council, Ruben suggested an abatement that would decrease over time, averaging 70 percent over the life of the agreement.
Under this plan, buyers would get a 50 percent abatement this year. The 100 percent abatement would be in effect the following five years, decreasing to 75 percent for four years, 50 percent for three years and to 25 percent for the final two years.
In an impassioned address to council, Ruben refuted claims that the abatement is about rescuing him from a bad business climate.
"Focus on the project and not Larry Ruben," he told council, pointing out that he is reconciled to taking a personal loss on the $24 million development. "This is not about lining my pockets. You're not going to bail me out."
Ruben said that he wants to get people into the condos - including his own mother, a Berwick resident - as quickly as possible, bringing in income and estate tax revenue to Bexley.
Councilman Ben Kessler pointed out that the proposed ordinance would apply to all Main Street residential developments valued over $300,000, and that representatives should draft a policy that is flexible for future developers.
"This is a policy that extends beyond Gateway," Kessler said. "We don't want to tailor-make a policy around Gateway."
Resident Ted Schmidt called the Gateway "a poster child for development" and warned that failing to support the effort would tell future entrepreneurs to "stay away."
Other residents have questioned the fairness of revisiting the abatement when other property owners are struggling.
"How do we address the next property owner on Main Street who has fallen on hard times?" Councilman Jeff McClelland asked.
Bexley resident Emily Turner, who has worked with the Ohio Department of Development, commented that the compromise could create legal and accounting problems. In earlier meetings, Turner had suggested some type of step-down approach to the abatement.
She thinks the compromise would still take too much money away from the school district.
School officials, who have no say on the issue, have been silent on the abatement. City offcials stated that they have discussed the issue with adminstrators and have invited them to attend council debates.
City Attorney Lou Chodosh said he would prepare a fact sheet for council outlining the various scenarios before drafting an ordinance that includes the compromise proposal. The finance committee meets again June 9 at 6 p.m., followed by the regular council meeting at 7 p.m.
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