Some time in the next few months, Cincinnati might have the opportunity to fundamentally change how it handles economic development, from neighborhood housing to downtown business.
Ohio House Bill 397, now in state Local Government and Townships Committee hearings, would grant Ohio cities the power to create their own semi-independent development commissions. It's based on a commission created by Portland, Ore., in 1958.
As of press time, it wasn't clear whether Cincinnati City Council would issue a resolution in support of the bill, introduced on behalf of the city by state Rep. Robert Schuler, R-Sycamore Township. An extended council meeting to consider a resolution was scheduled for March 14 by Councilmen Phil Heimlich and Todd Portune but was canceled at the last minute, possibly due to a lack of consensus.
Right now city development is handled by the Department of Economic Development and the Department of Neighborhood Services, both of which operate under the day-to-day control of City Manager John Shirey and, ultimately, city council.
Heimlich, who's leading the charge for the state bill, has been critical of Neighborhood Services, especially concerning its relationship with the Genesis Development Corporation. Genesis, according to a Cincinnati Enquirer report, spent thousands of dollars on employee home repairs. Heimlich also has said the city's departments have been operating like a bureaucracy instead of a business, leading to patchwork results concerning development.
The bill has its roots in a Portland trip by Heimlich, Councilman Jim Tarbell and former Mayor Roxanne Qualls last summer.
Heimlich and Qualls returned enamored with the Portland Development Commission (PDC), which Heimlich credited for 300,000 jobs created in Portland during the last four decades, among other successes.
In 1958, Portland residents voted to create the PDC, a semi-independent agency that handles the city's residential and commercial development — the first such commission in the nation, according to a memo by Shirey. The mayor nominates citizens for the PDC board who are confirmed by Portland City Council.
The PDC operates semi-independently from the city of Portland, although major decisions such as issuing bonds must be approved by city council. Portland maintains a separate bureau of housing and urban development with about 20 employees and a bureau of neighborhood involvement with about 40 staff members.
If the legislation were to be passed as is, Ohio cities could create seven-member development commissions with a few significant powers, some of which cities don't have and still wouldn't have, Shirey said. They include:
· Tax increment financing (TIF), a way of paying for developments with future taxes. Instead of paying the costs up front, the work is paid for with increased tax revenue the projects are expected to generate.
"To me, that's the most important feature of the bill," Shirey said at a March 9 public hearing. He called TIF a valuable tool and said that he's been asking for the state to grant cities this power for five years.
Right now the city can use TIF on a project-by-project basis, but the bill would grant commissions the power to use TIF on multiple properties at once, even over an entire neighborhood.
· Eminent domain powers, which would allow a commission to take over property to build certain projects. Although this power was originally aimed at building streets and doing similar work, cities such as Cincinnati have expanded it in recent decades to include developments such as the new Contemporary Arts Center — but not without some controversy.
· The ability to buy and sell property and sue and be sued.
· The ability to issue property taxes in special development areas pending approval by residents there.
But there's more to Portland's success than the PDC, Shirey pointed out in his nine-page memo analyzing the bill. Oregon planning laws are among the most progressive in the country, and Portland is circled by an urban growth boundary, outside of which land cannot be developed. This forces developers to work inside the city, filling in its vacant or dilapidated pockets.
Shirey said Oregon was one of six states recently recognized as the most progressive in the nation by an American Planning Association (APA) study.
"One of those states was not the state of Ohio," Shirey said. In fact, the APA identified Ohio as a state that did little in the 1990s to improve its planning.
Although Shirey favored some provisions of the bill, he has at least as many reservations with it, including granting TIF power to all the cities in Ohio at once, which could start a new wave of fishing for businesses and other development using tax dollars as lures. Cities that don't use the bill might have it used against them, he said.
"In my mind, this is one of those things that you either do or it's done to you," Shirey said.
Instead, TIF should be used only to improve the most blighted parts of cities, he said.
Also, Shirey was concerned that the bill allowed a development commission access to all dollars generated by increased property values, which could seriously hamper a school district's budget.
"You always have to tailor things for local conditions and local circumstances," he said.
Shirey was not the only one with questions and concerns about HB 397. At least a dozen people spoke at the public hearing, many agreeing that the city could do better but also expressing concern about the bill's unintended consequences.
An appearance of privatization and a lack of clear accountability were two major concerns of Hubert Guest, chief executive officer of the Greater Cincinnati/Northern Kentucky African-American Chamber of Commerce and a former planning director of Cincinnati.
Guest said minorities have a difficult time participating under the current system and the city would do better if it had better planning to guide development.
"You have a new planning director (Liz Blume, who started in September)," he said. "Give her a chance."
The city also will have a stronger mayor in two years capable of controlling city council's agenda, said Barry Cholak, a member of the Association for Non-Profit Development Corporations.
Cholak, who worked in various Cincinnati city planning jobs from 1962 to 1985, said the state should be careful to whom it gives eminent domain power. During his time with the city, he said, it displaced about 10,000 people, mostly black, from the West End for various projects, including I-75.
"It can be a very dangerous tool," Cholak said.
Which is why Roger Davis, president of the Grass Roots Leadership Alumni, a leadership training group, spoke at the meeting. Davis and other minorities said they were concerned about handing over such power to a new agency that wasn't a traditional government department.
When Davis read HB 397, the words "blighted" and "eminent domain" caught his attention.
"In my neighborhood, that's intimidating," he said, adding that he couldn't support the bill as is.
"The only thing that's wrong with Cincinnati is that you procrastinate and argue too much," said Jackie Martin Carr, a West End resident.
Carr also wondered why the city wasn't making a more concerted effort to ask people what they think about the bill. Looking at Mayor Charlie Luken, Carr said that politicians always come to her neighborhood when they want her vote, such as for a school levy.
"But you didn't send us nothing on this bill," Carr said.
After the hearing, Schuler said some of Shirey's points would be incorporated into a revised bill, but that he disagreed with Shirey's assertion that the bill would pit cities against cities.
"As far as trading (businesses) back and forth, they do that now," Schuler said. "I don't know how to stop that. This doesn't encourage it."
And concerning Ohio's planning, Schuler said that's mainly the job of local government.
"We don't mandate things, so we don't rank real high (in studies)," Schuler said. "My philosophy is to encourage towns to do their own planning."
HB 397 is far from passed and is likely to go through significant revisions.
"We'll be working on this bill and improving this bill as we go," Schuler said. ©