Portage Crossing, a planned shopping center in Cuyahoga Falls, got new life Monday night when the school board agreed to a financing deal. The board previously had rejected the agreement, which is essential to the $60 million project.
School board members in Cuyahoga Falls revived a $60 million retail plan Monday night, when they approved a financing agreement that the board rejected three weeks ago.
The board's five members unanimously voted to support the compensation deal, which provides a way for Cuyahoga Falls to recoup about $16 million in public money spent to buy and prepare land for Portage Crossing. The project, a retail development anchored by a grocery store, is planned for 25 acres at State Road and Portage Trail, where the blighted State Road Shopping Center once stood.
The school board shocked city and schools officials alike April 12, when only two members voted for the compensation plan. Without the schools' approval, Portage Crossing was put on hold, just as Stark Enterprises of Cleveland was preparing to market the project to tenants at a huge shopping-center convention in Las Vegas later this month. Developer Bob Stark said in mid-April that the project could not proceed without the public money.
For the past three weeks, the Cuyahoga Falls City School District and the city have searched for ways to make the compensation deal palatable to the board. Last week, City Council members and the school board met to hash out details of the complicated financing arrangement.
School board President Therese Dunphy said that even though the schools won't be receiving more money, changes to the agreement between the schools and the city enabled board members to support the proposal.
"The project itself is important to the community," she said in an interview Monday. "I think the misconception has been that we've been trying to stand in front of the project. I don't think that's the case. We've been trying to make sure that our students' interests are protected."
The key provisions of the agreement have not changed: Stark Enterprises will pay property taxes only on the value of the land under the project for 30 years. During that time, Stark will set aside money equal to what the property taxes on the improvements -- retail buildings and related development -- would have been. The city and the schools will split that money, with the city taking a 78-percent share and using it to pay off land-acquisition and site-work costs.
But the revised deal between the city and the schools puts more in writing and could accelerate the city's debt-repayment efforts. The city must provide an annual report to the school district. And Cuyahoga Falls must allocate nearly 30 percent of its income tax revenue from the project to paying off the debt. The city borrowed $11 million to buy the State Road property and plans to spend about $5 million to prepare the site for development.
"It's all about balance, balancing the city's interest with the developer's interests and the school district's interest," said Susan Truby, the city's development director. "I believe now that we have finally achieved that goal, and we can move forward with the ultimate goal, which is to build Portage Crossing."
Cuyahoga Falls City Council also unanimously approved the agreement Monday night.
The city-schools deal supports a tax-increment financing agreement, or TIF, that is essential to Stark's project.
The TIF ensures that the city can sell property to the developer and pay to update and expand infrastructure and roads for the project. Once Portage Crossing is complete, the city will receive an estimated $675,000 a year from the money Stark sets aside, until the end of the 30-year TIF agreement. The schools will receive about $191,000, plus the estimated $54,000 a year in property tax revenue based on the value of the land.