“We are only two weeks out, and we need to get it done, which is why we are pushing as hard as we are,” said Dave Williams, senior development director with Cross Street Partners, one of the main developers of the Arcade complex.
But two city commissioners said they have reservations about the proposal because they worry about damaging the city’s relationship with the school board and how this will impact the Dayton school district.
If two members of the five-member commission vote against the agreement, it likely will not pass. That’s because Commissioner Chris Shaw is expected to abstain from voting to avoid a potential conflict of interest.
On Wednesday, the Dayton City Commission had the first reading of an ordinance to allow the city to enter into a Community Reinvestment Area agreement with Dayton Arcade Partners LLC.
The agreement would provide a 75% property tax abatement for 15 years on proposed improvements to two north Arcade buildings that are being turned into a new Hilton Garden Inn hotel and retail spaces.
The first phase of the Arcade project, which cost about $94 million and involved the redevelopment of seven of the complex’s nine buildings, was approved for a Community Reinvestment Area that abated 100% of the property taxes on the improvements.
The Dayton school board approved that agreement.
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, said Frost Brown Todd, a law firm.
Credit: Tom Gilliam
Credit: Tom Gilliam
A state bill that went into effect on Sunday increased that threshold to 75% for 15 years.
The Dayton Board of Education last month voted 4 to 3 to reject an agreement that would have abated 100% of the property taxes on the improvements to the north Arcade.
Board members questioned the benefits of the agreements, which exempt taxes that otherwise would be owed to the school district.
Williams, with Cross Street Partners, said the north Arcade rehab project was awarded more than $2.7 million in state historic tax credits in late 2019, but the development team had to ask for extensions a few times to avoid losing the incentives.
The state has said the north Arcade project needs to close on its financing by April 17 or the tax credits will be rescinded, Williams said.
Dayton City Commissioners Shenise Turner-Sloss and Darryl Fairchild on Wednesday said the Arcade is an important project, but they are worried about approving an agreement that ignores the interests of the school board.
“I’m so excited about this, but the heartburn is that the school board voted it down,” Fairchild said.
Turner-Sloss said the city might need the school board’s support for future projects and developments that seek abatements above the new threshold, and she wants the city to try to “extend an olive branch” to the school district.
“It is my hope that we will have a conversation and we can figure out how we can work together — the district and the city,” Turner-Sloss said. “My understanding is the door is still open — I think there is still room for us to negotiate and to have that conversation so that there can be a win-win for both parties.”
Chrisondra Goodwine, president of the Dayton school board, said she hopes city leaders will keep the school district in mind when they vote on a proposed agreement.
“It is my hope as always that not only did they look out for development in the city, but they also look out for the development of our school system in the city,” she said. “To be a good city, you got to have a great school district.”
Staff writer Lee McClory contributed to this article.
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