While the City of Cleveland has been using Community Benefit Agreements (CBAs) for development projects for over a decade, City Council passed Ordinance No. 297-2023 on June 5, 2023, officially enacting Chapter 191A of the Codified Ordinances of Cleveland. Chapter 191A took effect in September 2023 and governs the CBA process along with outlining the community benefits a developer must provide in order to receive City financial assistance for a project. A few of the key requirements are that developers must meet with community stakeholders to receive project feedback, utilize a certain percentage of Minority Business Enterprises, Female Business Enterprises and Cleveland Small Businesses as well as Cleveland residents in the project’s development, and provide internships/apprenticeships to Cleveland area students. The City is currently testing the use of a Community Benefit Scorecard (Scorecard) as a way to promote transparency between the City, developers, and the community in the early stages of a project.
The Scorecard Will Not Apply to All City Incentives
The Scorecard will be used by Economic Development to evaluate projects for tax incentives such as TIFs, and commercial tax abatements, as well as loans and grants over $250,000 in value. The scorecard requirement does not apply to residential property tax abatements or the City’s Job Creation Income Tax Credit program.
What is the Scorecard?
Cleveland has introduced the Scorecard as an objective tool for assessing development projects seeking City incentives. By evaluating how well each project aligns with community priorities, the Scorecard is intended to ensure that development projects bring measurable benefits to the City. The City’s designed approach is intended to ensure that projects seeking incentives support Cleveland’s long-term development goals.
During the current initial pilot phase, the City intends to refine the Scorecard based on feedback and experience and total scores during the initial phase should not be thought of as graded scores. During this beta phase, the City intends to communicate with developers and use the Scorecard to help inform developers of clear eligibility criteria for receiving incentives and discuss potential tools for projects. The City encourages developers to review the scorecard, share their feedback, and explore creative ways to enhance community benefits through their projects.
Who is the Community Benefit Scorecard for?
Aside from its use by the City to evaluate Projects for tax incentives and community benefit purposes, the Scorecard is to be used by developers to help plan future projects. Developers are not required to score their own projects; however, by self-scoring a project in the early phases, developers will be able to adjust their development plans as needed to help ensure the project is providing the community benefits required to receive City financial assistance. Additionally, developers can use the Scorecard as an outline for preparing the community benefit and other aspects of their incentive applications. On the City side of the equation, after the developer’s request reaches the City, the incentive review process is now designed so that the City incorporates the Scorecard into its review. Also, City Economic Development will internally share project scores with the City Office of Equal Opportunity for Community Benefits Agreement purposes. By using the Scorecard as part of their planning process, developers can better prepare for and help streamline the City’s process by including all available necessary information in the developer’s initial application, which should reduce the time, complexity and cost of going through the City assistance process. The City intends to score projects within two weeks of receiving completed applications for assistance.
What Potential Projects Are Scored Using the Scorecard?
- Residential: 99 points available
- Mixed-Use: 117 points available
- Commercial-Industrial (projects > 40,000 square feet): 117 points available
- Commercial Neighborhood (projects < 40,000 square feet): 117 points available
Priority Areas to Earn Points
There are over 15 priority areas that a developer can gain or potentially lose points on, some examples of the priority areas include, but are not limited to:
Capital Investment: The total costs invested by the applicant to develop the project. Capital investment is important because there is a direct connection to the value of the property and the long-term potential to generate tax revenue.
Value-Added Infrastructure: Projects investing in public infrastructure add value to the community. Development projects that entail components such as street lighting, roadway improvements, green infrastructure, and street furnishings will receive points based on what public infrastructure is included in their project.
Transit & Amenity Access: This category will award points for projects located near high frequency public transit stops and in concentrations of 15-minute City amenities. Points in this category will be assigned based on the project site’s Transit Oriented Development (TOD) score. The TOD score is primarily based on proximity to higher frequency transit services, with special attention near fixed infrastructure (rail stations). To a lesser degree, the TOD score weighs how many walkable amenities, services, and public assets currently exist within a 15-minute walk of the project site.
Alignment with Neighborhood Plans: Projects that include specific elements in alignment with the policy goals and land use recommendations from the most recent Citywide Plan will be eligible to receive up to 4 points. If applicable, neighborhood or small area plans adopted by the City Planning Commission may be referred to. The applicant must identify in their application specific components of the Citywide and/or neighborhood/small area plan and describe how the project aligns with these components.
Moving Forward
According to Site Selection Magazine’s Global Groundwork Index, Ohio is ranked as the number one state for infrastructure and economic development for the second straight year. There is a lot of development potential throughout the state, and the City of Cleveland is working to ensure Cleveland remains a top priority for developers. The Scorecard is intended to provide transparency and help ease the incentives and community benefits agreement process, ensuring developers continue choosing Cleveland as the location for future projects.
KJK has had the pleasure of assisting various clients in receiving development incentives for their projects. For more information regarding the content of this article or if you are considering a development project and would like to further discuss potential incentive opportunities, please contact Rich Morehouse (RAM@kjk.com; 216.736.7269) Collin Harrington (charrington@kjk.com; 216.736.7211); or Jace D. Libman-Phelps (JDL@kjk.com; 216.736.7269).