Clayton council workshop hears primer on CRAs, TIFs and new‑community authorities

Jacqueline Lewis, a partner with the law firm Bricker and Graydon, gave Clayton City Council members a roughly hourlong briefing on municipal economic development incentives at a council workshop. Lewis described how Community Reinvestment Areas, tax increment financing districts, new community authorities and special assessments are used to support development and infrastructure, and she answered council members’ questions about timelines, school‑district compensation and how incentives can be structured in development agreements.

Lewis told the council that “property tax is the biggest player” in local incentives and explained three broad buckets of tools: abatements such as CRAs, tax redirections such as TIFs, and new or added charges such as NCAs and special assessments. She said the development agreement is a key negotiating document that lays out infrastructure responsibilities, incentives to be layered on a project, and any caps or termination triggers for reimbursement.

The presentation emphasized statutory timelines and notice requirements that can slow or change projects. Lewis summarized CRA rules she said are statutory in Ohio: a housing survey requirement, notice and public‑hearing thresholds, default exemption terms of 10 years (extendable to 15 years and, for so‑called mega projects, up to 30 years), and a default exemption percentage of 75% (with local authority to raise that to 100%). She also said school districts have statutory rights to notice (14‑ and 45‑day windows were cited) and may negotiate compensation agreements when property tax revenue is diverted.

On TIFs, Lewis said, “TIF is not an abatement. It is a redirection of property taxes.” She explained that TIF redirects incremental property‑tax revenue tied to new improvement value into a TIF fund (often to pay for public infrastructure or to pledge debt service on municipal bonds). She told council members that TIFs are commonly used to finance infrastructure that makes a project feasible, that TIF revenues can be monetized by issuing bonds, and that there are several statutory TIF types in Ohio (parcel/project TIFs, incentive‑district TIFs, urban redevelopment TIFs, etc.). Lewis noted typical default TIF terms of 10 years and a default percentage of 75%, with school‑district approval required to extend terms to 30 years or change percentage caps.

Lewis described incentive‑district TIF limits that are statutory, including a maximum of 300 contiguous acres and a requirement that parcels meet one or more statutory ‘‘distress’’ criteria (examples she listed included median income, unemployment and poverty measures, or a blighted designation from the Ohio Department of Development). She also said TIFs generally collect payments in lieu of taxes (PILOTs) that are held in a TIF fund and that any remaining fund balance on dissolution typically transfers to the city’s general fund.

On new community authorities, Lewis described NCAs as a growing tool that creates a separate taxing/charging authority. She said an NCA typically has a seven‑member board with four appointees from the creating jurisdiction and three appointees from the developer; that board can levy an NCA charge separate from property or income taxes and can issue debt. Lewis explained that NCAs are often “developer‑driven” and can be layered with other tools such as TIFs and CRAs.

Council members asked several practical questions about structuring agreements. Councilmember Farmer pressed on how to cap infrastructure reimbursement and what happens to TIF revenues after a cap is reached; Lewis said caps or termination triggers can be written into development or TIF agreements so that once a stated reimbursement threshold is met the agreement can terminate or excess revenues can be redirected by ordinance. Farmer also asked about which levies are redirected by TIF increments; Lewis said there are nuances and that some voter‑approved levies may have separate requirements and she did not give a blanket rule off the cuff.

Lewis used a local example: she said the council has previously discussed Hunter’s Path and that the two options presented to council for that project are an incentive‑district TIF or a Community Reinvestment Area (CRA). She also noted a local precedent, the North Clayton Community Authority, which now functions to maintain common spaces after a developer bankruptcy; one councilmember said that authority currently assesses about $600 per year for residential and $6.50 for commercial (the transcript did not specify the commercial assessment unit or basis).

The presentation included a question‑and‑answer exchange about NCA debt and security. Lewis said she has not commonly seen municipal bonds backed solely by an NCA charge; bond structures are often layered, for example parking revenues backed by TIF revenues and by an NCA charge as a final backstop.

No formal development approvals were requested or taken at the workshop. The only formal action recorded in the minutes was a motion to adjourn the workshop; Councilmember Merkel moved to adjourn, Councilmember Gorman seconded, and the motion passed by voice vote. The council reconvened at its scheduled start time later that evening.

Lewis offered to provide follow‑up materials and to answer more detailed legal questions from council staff as the city evaluates incentive options for specific projects.