The city's Housing Council Tuesday denied two appeals of an abatement given to North Ridge Ltd., owners of North Ridge Apartments on N. Main Street, under the city's former Community Reinvestment Area program.
NORTH CANTON A controversial tax abatement will stand.
The city's Housing Council on Tuesday denied two appeals of a tax break deal given to North Ridge Ltd., owners of North Ridge Apartments on N. Main Street, under the city's former Community Reinvestment Area program. North Ridge is owned by local developers Bill Lemmon, Bob DeHoff and Dan DeHoff.
The ruling ends a debate over the abatement that began last summer.
North Canton ended its residential CRA program last year.
The program, which proved controversial in the city, offers a tax break to property owners who renovate an existing dwelling or build a new one within a specific geographic footprint. In 2012, North Ridge applied for and received a residential tax abatement through the CRA program to build its 40-unit apartment complex on the site of a former mobile home park.
The 12-year, 100 percent exemption meant that North Ridge essentially pays only property taxes on the land, not the apartment buildings. Developers have foregone about $59,129 annually in property taxes and, when the exemption expires, will have saved about $886,937 overall.
The North Ridge abatement was approved unilaterally by retired Housing Officer and Director of Development Eric Bowles, who left the position in August 2016. The CRA program is designed so only the city's housing officer can approve or deny an abatement.
The deal came under scrutiny last summer when City Council proposed extending the CRA program city-wide.
In September 2016, North Canton City Schools asked the city to reimburse any funds owed to the school due to illegal or improper abatements, arguing that North Ridge was not a residential property and should not have received the tax break.
In June, the district reached settlement agreements with North Ridge and the city. As part of the settlement, North Ridge agreed to pay the district the amount of property tax it would have received had North Ridge received a commercial exemption, essentially 50 percent of the abated property tax.
On Tuesday, the Housing Council held its first hearing on appeals filed by citizens in October 2016.
The council denied two appeals of the abatement, one filed by Melanie Roll and a second filed by Chuck Osborne.
According to video recording of the meeting:
Roll argued that North Ridge is not zoned as a residential property but a commercial one, and should have not received a residential tax abatement. She also questioned why the city's housing council did not review the abatement until 2016, more than three years after it was awarded.
The school district should have been notified and should have gotten all of the property tax dollars it's entitled to receive, she said.
She also argued that the CRA program did not allow for new residential construction, just renovation.
During his appeal hearing, Osborne said that the abatement was illegal and kept secret.
Thomas Winkhart, an attorney representing North Ridge, countered that the appeals are invalid because they were filed after a 30-day deadline, that the housing council had no authority to revoke the abatement and that the abatement was awarded correctly.
Gary Fry, the city's director of Director of Permits & Development and its current housing officer, argued that North Ridge is a residential property, though it's located in an area zoned for general business.
Another appeal withdrawn
Daryl Revoldt, North Canton's former mayor and a current city council at-large candidate, withdrew his appeal at the end of his hearing.
"The matter has been addressed by the housing council. It's been reviewed," he said. "Let's consider it an instructional moment. It's over."
Revoldt also argued that North Ridge is a commercial, not a residential property.
The city should have gone before the school board before granting the abatement, the same way it would have done with a commercial property, he said.
North Ridge is not at fault and fulfilled its responsibility, he said. "The responsibility rests with the municipality. The fault is with the municipality in this matter."
Roll and Osborne withdrew a separate appeal of a 15-year abatement given to the owners of a home built on a vacant lot on Harmon Street SW in March 2006.
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