- Ed Richter, Staff Writer
A lot of developers were breathing easier last week after Ohio’s biennial budget was signed into law last week.
During the last weeks of the budget process in the Ohio General Assembly, there was a proposal to drop the historic preservation tax credits from the budget. However, that proposal was short-lived and escaped any line item vetoes and was put back into the budget that was signed last week by Ohio Gov. John Kasich.
Had the historic tax credits been eliminated, it would have resulted in roughly a $1.7 million loss to the Manchester Hotel project and about $600,000 from the Snider Building/Brewery project, said Illinois developer William Grau, who heads the ownership group redeveloping both projects.
In a recent email response to the Journal-News, Grau said, “The State Historic Tax Credits are imperative to the Manchester Hotel’s redevelopment as a hotel, but we believe to create a destination, both buildings need to be redeveloped.”
Grau said had the tax credits been discontinued, “Our plan B is the redevelopment of the Manchester Hotel as a hotel, at the urging of the city. Our original proposal was to redevelop the Manchester Hotel as apartments, and if the State Historic Tax Credits we’re to be eliminated, that option would need to be reconsidered.”
Now that the state historic tax credit program remains in place for the next two years, Grau said his group is still on track to submit the historic tax credit application for the $12.7 million Manchester project in September as previously announced.
As for the $3.5 million Snider Building project, the application for historic tax credits that was submitted at the end of March was ruled ineligible by the Ohio Development Services Agency, which administers the program.
Penny Martin, a development services agency spokeswoman, said the Snider application was ineligible because there was no pre-application meeting held with the State Historic Preservation Office. She said the project is eligible to apply in the next round. The application deadline is Sept. 30 and awards for that cycle will be announced on Dec. 31.
Grau said today via email that his group will be resubmitting an application for the Snider Building project by the September deadline along with the application for the Manchester project as previously announced.
He recently told the Journal-News that SHPO was reviewing the restoration plans for the Snider Building provided by Hardlines Design Company. On Tuesday, Grau said the SHPO pre-application meeting needs to scheduled before Sept. 15 and that the meeting, which deals with project plans/design and is the responsibility of Hardlines Design which is also SHPO’s project architect.
“Our original intent was to apply in Round 15 (September 2015) for both the Manchester Hotel and Snider Building but choose to submit an application for the Snider Building in Round 14 in hopes of getting a jump on the microbrewery,” Grau said via email today.
He said “the Historic Tax Credits are comprised of two parts…the State Historic Tax Credits and the Federal Historic Tax Credits. We have been working with SHPO for plan/design approval for the Manchester Hotel since Sept. 30 (Round 13) and the Snider Building since March 31, 2015 (Round 14). Upon SHPO approval, the Manchester Hotel and Snider Building will be eligible for Federal Historic Tax Credits.”
Grau said assuming the State Historic Tax Credits are awarded in December, the Snider Building construction could begin in January 2016 with the completion and opening of the microbrewery and taproom in September, just in time for Oktoberfest. He also said that assuming New Market Tax Credits are secured and the State Historic Tax Credits are awarded in December, the Manchester Hotel construction could begin in April 2016 with completion and opening in June 2017.
Grau also said the group is currently in talks with several existing microbreweries as potential partners, including Cigar City Brewing located in Tampa, Fla.
Although the projects have hit a snag in seeking historic preservation tax credits, Grau’s group may receive some positive financial news tonight.
That is when Middletown City Council is expected to approve a pair of Community Reinvestment Area tax abatements for both projects for 100 percent for 12 years.
City officials said the Manchester tax abatement is valued at approximately $104,000 a year for a total of $1.24 million over the 12-year abatement period. The city’s portion of the property taxes that would be abated is estimated to be $9,660 a year or $115,920 over the abatement period. Announced plans call for The Manchester Inn, which closed four years ago, to be restored back to an operating 70-room/suite boutique hotel with a restaurant, conference and meeting space, and additional commercial office space as well as the historic ballroom event space.
According to city officials, the tax abatement for the Snider Building, also known as the Sonshine Building, is valued at $45,000 a year for a total of $546,00 over the 12-year abatement. The Snider Building is to be redeveloped as a brewery, taproom, distillery project that would have a direct relationship with the Manchester Hotel redevelopment.
In 2010, Middletown created a community reinvestment area to use all reasonable incentive measures to assist and encourage development in the downtown area of Middletown. Based on state guidelines, CRA abatements can be used for residential developments, industrial/commercial developments, or a combination of both.