Plans for the north Arcade, which faces Third Street between Main and Ludlow, call for a 94-room hotel and 9,000 square feet of retail space, totaling a $40 million investment.
The agreement would allow the city manager to execute a loan agreement, community benefits agreements and other deals related to the project’s financial closing, according to the City Commission documents.
The forgivable loan sends $2 million to CityWide Development Corp. “as the financial intermediary between the city and the developer,” city documents say. The loan would defer payment and interest for seven years and says “the city may forgive the debt on Dec. 31, 2030, if the project is complete and all the developer obligations have been met.”
The agreement also requires an internship program with Sinclair Community College with the hotel, and there is a goal that half of the North Arcade employees will be city of Dayton residents.
The city commission also is scheduled to have a second reading of a revamped tax abatement plan, via a Community Reinvestment Area, after the Dayton school board voted down an earlier proposal.
That agreement would provide a 75% property tax abatement for 15 years, specifically to the proposed improvements on two north Arcade buildings that are going to be a Hilton Garden Inn hotel and retail spaces.
Until this week, state law required that school districts impacted by Community Reinvestment Areas must sign off on the agreements when the tax exemption exceeds 50% of the value of the new or remodeled structures, according to the Frost Brown Todd law firm.
The new law allows up to a 75% tax abatement in a Community Reinvestment Area without the school board signing off on it. School districts receive the largest amount of property taxes in Ohio.
But because the school board voted down the earlier agreement, some city commissioners seemed hesitant at the last meeting to approve the updated agreement without the school board.
School board members who voted no said in March they would be open to further negotiations with the Dayton Arcade redevelopment team. The school board narrowly voted down the agreement in a 4 to 3 vote.
DPS agreed to an earlier Community Reinvestment Area deal with the Dayton Arcade in 2018, which calls for 100% abatement of property taxes on that phase for 15 years, in exchange for a $190,000 annual payment in lieu of taxes.
The Montgomery County Auditor’s Office said Dayton Public Schools brought in about $75.6 million in calendar year 2022 in property taxes, about a 9.5% increase from 2018, the last time DPS signed a Community Reinvestment Area with the Dayton Arcade.
Cities often use property tax abatements to get companies or developers to their area, but those abatements mean that the school districts, who are heavily reliant on property taxes, often get less money.
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