Properties Magazine April 2017 : Page 30

Landscaping Contracts – with Extraordinary Color Plans Planting, Design & Installation • Irrigation Installation & Repair Routine Ro out tine P ti t Property roperty ope pe e y Ins Inspection sp ecti spec s tion o & Maint Maintenance Maintena a t e na ace a c e 

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*+1 narily exist and which benefits the developer’s project. A TIF applies only to real estate taxes, not to both real and personal property taxes. A TIF is not an abatement of real estate taxes but an exemption . How it works is by locking in the taxable value of the real prop-erty at the time of the authorizing TIF legislation. Real estate tax payments that would result from the increase in assessed value after the completion of the improvements are redirected for the development of the project and, per the TIF legislation, are used either to ser-vice debt issued in connection with the TIF or directly into a municipal fund to pay the costs of the infrastructure. Payments in lieu of taxes (sometimes called PILOTS) are paid on the differ-ence between the original value and the development value; in other words, the increment. PILOTS are paid at the same time as real estate taxes and are subject to the same type of tax lien as real estate taxes. Municipal bonds are often issued and the proceeds are loaned to the developer to pay the costs of the public project. The legislative authority may exempt up to 75% of the value of improvements for up to 10 years (ORC 5709.40). However, if the local school board agrees, up to 100% may be exempt for up to 30 years (ORC 5709.41). Like PACE, the TIF runs with the land. Whether the TIF or PACE is already in place or to be put into place, it is wise practice to read all of the docu-ments associated with these programs for the project – not just the docu-ments of record. For example, there may be a Service Agreement for the TIF on record but there may be other off-record documents or documents referred to in the Service Agreement that should be reviewed. P Lori Pittman Haas is the vice chair of Ulmer’s Real Estate Group. Her practice focuses on the representation of buyers and sellers in the acquisi-tion, disposition, and development of commercial property, including retail centers, office buildings, mixed use developments and rehabilitation of historic buildings. Henry Bailey is an associate in Ulmer’s Real Estate Group. His practice focuses on the representation of buyers and sellers in the acquisition, disposition, and development of commercial property, including rehabilitation of historic buildings, tax credit applications and zoning matters. 30 Properties | April 2017

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