Columbus hired some consultants to look into how effective tax breaks were in development patters compared to other cities and the findings were kind of concerning.
Turns out, Columbus is spoiling the hell out of developers in fast-growing districts like the Short North. The tax incentives we currently offer are far too generous and sometimes completely unnecessary.
This isn’t the case everywhere in the (614) but research reveals Short North is a problematic area.
The consulting firm’s study suggests Columbus could offer an abatement but “recapture” a percentage of the money by making developers chip in for other city objectives.
For example, if the Short North growth trend continues and 21 percent of abated taxes that are expected in new development are recaptured, the city could generate about $1.7 million a year.
The study also found that tax breaks for all development aren’t necessary. Mid-rise structures with surface parking are profitable without abatements. However, incentives are necessary for developments with parking garages on High Street to bridge the cost gap. Though the city needs to tighten up the generosity as our offers are far too much.
Incentives are also critical with Downtown development because rent there has not risen high enough to make the projects profitable. Development in this area was found to be under par compared to that of similar areas in competing metros like Cleveland and Cincinnati.