Council committee debates amendment to Brook Park settlement to free IX Center for industry and change tax sharing

During an extended presentation and exchange the Transportation and Mobility Committee considered Ordinance 664-2026, an emergency amendment to the 2001 settlement agreement between the cities of Cleveland and Brook Park concerning the International Exposition (IX) Center and an associated Joint Economic Development District (JEDD).

What the ordinance would do: city staff and the administration said the proposal would abolish the Emerald Park JEDD and other tax-sharing arrangements that currently send portions of income, property, admissions and parking revenue to Brook Park. In return Brook Park would receive a one-time $2.0 million payment and an annual payment in lieu of taxes of $650,000 for 33 years (an aggregate Brook Park payment staff put at roughly $21.4 million). Staff said abolishing the JEDD and related arrangements would permit Cleveland to collect revenues from the IX Center and adjacent developable parcels and use them to attract advanced-manufacturing tenants and other development.

Asset and constraint overview: staff described the IX Center as a 2.2-million-square-foot heavy-industrial-ready building with 16-foot-thick concrete floors, overhead bridge cranes and a 25-megawatt substation, suited for advanced manufacturing tenants in sectors such as aerospace and defense. Officials also said roughly 47 acres adjacent to the IX Center and about 40 acres in Emerald Corporate Parkway are currently restricted under the settlement and are effectively dormant under the existing tax split.

Projected benefits and numbers: Economic-development staff, led by Jennifer Shields, said a prospective lead tenant could bring about $72 million in payroll and roughly 700 jobs for an initial about 500,000 square feet of the building; staff estimated a 2.5% payroll tax on that payroll would amount to about $1.8 million annually to the city in a mature state, and an initial-year figure around $750,000 was offered as a rough early-return estimate. Staff framed the deal as a way to convert an underutilized asset into higher-yielding payroll and tax revenue over time while avoiding the high cost of demolition (estimated $30--35 million) and unlocking developable land.

Council concerns and constraints: council members repeatedly pressed for more specifics and documents. Key concerns included: - The master lessee that operates the IX Center (an affiliate of Industrial Commercial Properties/Industrial Realty Group) retains control over who may occupy the facility under its current 13-year lease; staff said that relationship persists and the city does not unilaterally control tenant selection while the lessee's master lease remains in place. - Members sought the existing master-lease agreement (staff agreed to provide it) and asked for a clear projection spreadsheet that compares present tax receipts under the settlement versus likely future receipts under the proposed amendment over multi-year horizons. - Some council members expressed skepticism grounded in prior unmet promises about the IX Center and in concerns that private lessees (and third parties reported to have approached the lessee, e.g., a Haslam-related group) could retain or steer trade-show operations in ways that would reduce downtown convention traffic or otherwise "poach" economic activity from the city. - Council members asked whether the annual $650,000 payment to Brook Park would be paid from the airport or general fund; staff said a special revenue fund seeded by port/lease and tax revenues would be used and that the payment is not expected to come from the city's general fund.

FAA and zoning issues: staff and airport representatives said that FAA review (the 7460 process) would apply to new development for height and navigable airspace compatibility and that Brook Park zoning currently limits the uses the city held in the adjacent 34 acres in Brook Park; staff said a land transfer to Brook Park would permit rezoning but would still be subject to FAA limitations on height, lighting and certain uses.

No vote today: committee members did not vote on the ordinance. Staff said Brook Park has passed the companion action on its side and that the item is scheduled to come back for final action in mid-July. Council members requested the current master-lease, a detailed financial projection for the 33-year horizon (including the $2.0 million one-time payment and the $650,000 annual payment), and more specific information about current lease terms and any negotiations (including reported approaches by private groups to the master lessee).