KMK Law Real Estate Blog

At this year’s International Council of Shopping Centers (ICSC) Retail Development & Law Symposium held in Columbus, Ohio last month, I led a roundtable discussion on a commonly utilized transactional structure referred to as a membership interest “drop-and-swap,” which is also referred to as the “LLC loophole.”

At this year’s International Council of Shopping Centers (ICSC) Retail Development & Law Symposium held in Columbus, Ohio earlier this month, I presented a roundtable discussion on the best practices of land assemblage for large commercial and residential development sites.  Our table analyzed specific examples of land assemblage, both locally (15^th + High Project in Columbus, Ohio, the FC Cincinnati Stadium in Cincinnati, Ohio, and the Rookwood Commons and Pavilion development in Cincinnati, Ohio) and nationally (Google and Amazon data centers and the assembly of Disney World). 

Introduction:
On December 8, 2016, the Ohio legislature passed Senate Bill 235 ("SB 235") which, among other things, adds Section 5709.52 to the Ohio Revised Code (“ORC”). Effective March 28, 2017, this section authorizes local governments to approve property tax exemptions for the increase in property value for property that is either “newly developable property” or “redevelopment property.”  These terms essentially mean that as to a parcel of property, no commercial, industrial or agricultural operations are currently taking place on the property and that construction or reconstruction of a commercial or industrial building(s) is planned, but a certificate of occupancy has not yet been issued.

During this pre-development phase, the property tax exemption provided by SB 235 effectively freezes the taxable value in place during the exemption term until a certificate of occupancy is issued or upon the occurrence of other circumstances, as discussed below.