On June 26th, 2019, the Ohio Senate voted 32-1 to pass Senate Bill 39, legislation that would create an impactful economic development tool for large, transformative mixed-use real estate projects in the state of Ohio. The Ohio House of Representatives will now consider the legislation.
Senate Bill 39, introduced by Senator Kirk Schuring, seeks to create a new tax credit to incentivize the construction of transformational mixed-use developments in Ohio. These developments must meet a number of criteria, chief of which are development cost (more than $50 million) and size (15 or more stories in height or at least 350,000 square feet). The bill authorizes a nonrefundable insurance company tax credit of up to 10% of total eligible project costs for contributions of capital to eligible projects.
Finance professionals from Project Management Consultants (PMC), Thompson Hine’s construction finance arm, assisted in drafting the initial legislation. If approved by the Ohio House later this year, the tax credits will help catalyze large mixed-use projects statewide, generating significant tax benefits for Ohio’s communities. At this time, there is no major statewide grant or tax credit incentive for new construction projects.
As the inventory of historic buildings in Ohio dwindles, it will be critical to have tools to support transformational ground‑up development in the state. The State of Ohio Historic Preservation Tax Credit has been a successful financing tool in the redevelopment of historic buildings and there is an active investment market for the credits. We are confident the market for these new tax credits will be at least as strong as for state historic tax credits.