Warren CIC Awaits Decision on $105K Tax Exemption
WARREN, Ohio – The Community Improvement Corporation of Warren and Trumbull County should know by the end of the month whether it is still on the hook for about $105,000 in property taxes owed to the state of Ohio, board members said Thursday at their meeting.
The taxes are due on the former RG Steel office building on Pine Avenue, which the CIC has leased from the Tech Belt Energy Innovation Center for three years. The CIC exercised an option in its lease to acquire the building for $1 Jan. 1.
“We’re going through the closing process,” Tom Humphries, manager of the CIC said.
Humphries is former president and CEO of the Youngstown/Warren Regional Chamber, which has a contract with the CIC to manage the building. “That’s dragging on a little bit longer than we expected but there’s no issue as far as the closing,” he said.
TBEIC owned the building – donated to it by BDM Steel Holdings, but under terms of its lease the CIC was responsible for accrued real estate taxes.
Donating the building to TBEIC, which has 501(c)3 status, rather than directly to the CIC, a 501(c)4, allowed BDM to claim a tax credit for the donation.
The CIC has applied for an exemption and expects to hear from the Ohio Department of Taxation by the end of the month, Humphries said. The agency forwarded resolutions of support from Warren City Council and the Trumbull County Board of Commissioners designating it as an agency acting on the city and county’s behalf.
The CIC, once it formally takes possession of the building will have to separately request its own exemption as an entity distinct from TBEIC. “We should be able to get that property tax exemption for the CIC pretty quickly,” Angela Neely, chief financial officer of the chamber and part of the CIC’s management team said.
The CIC is marketing the building for lease or possible sale.
To cover operating expenses, the CIC’s board voted to withdraw its half of the funds available from a partnership it formed with the Mahoning Valley Economic Development Corp. to loan funds to TBEIC.
TBEIC borrowed $220,000 from the partnership, with each of the two entities contributing half, and TBEIC had been paying interest only on the loan so far.
The board also authorized Humphries to investigate dissolving the partnership, so that the CIC and MVEDC would each service their own half of the loan and TBEIC would repay each separately.
Under the current arrangement, TBEIC pays about $900 monthly to the partnership, and MVEDC charges the CIC fees for expenses including administering the loan and the partnership, and officers insurance.
Copyright 2022 The Business Journal, Youngstown, Ohio.