December 19, 2014

Elyria
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Judge to hear Lorain tax abatement

ELYRIA — County officials are asking a county judge to decide if the city of Lorain is within its rights to offer a 100 percent tax abatement to more than 300 west-side homeowners for the next 15 years.

County Prosecutor Dennis Will’s office, acting on behalf of the county commissioners, wants Common Pleas Judge Mark Betleski to decide if Lorain officials can offer the tax abatement in one of a handful of community reinvestment areas in the city.

A hearing on the matter is scheduled for Tuesday in Betleski’s courtroom.

Various areas in Lorain have differing abatement offerings, which are used as a way to lure potential home buyers to struggling areas.

A disagreement between Lorain and Lorain County officials arose last month after 323 homeowners in a tax-abatement area on the city’s west side applied for the sweeping abatement, and the county auditor rejected their applications.

In 1989, homeowner tax abatements in the west-side community reinvestment area were at 50 percent and lasted just a year. In 2006, however, Lorain officials passed an ordinance that offered the 100-percent tax abatement for a 15-year period in that particular community reinvestment area, according to the court document filed Friday. 

City officials made the ordinance retroactive and offered it to some west-side homeowners whose homes were built as early as 2000.

Jim Walther, Lorain’s assistant law director, said homebuilders used the tax abatement as a selling point to the homeowners, many of whom reside in the Amherst school district.

In the court appeal filed Friday, county officials said the abatement will affect a number of government entities, and the county has a right to appeal the city’s decision.

County officials say the abatement will result in a loss of tax revenue for the county — about 15 percent of the total real estate taxes for the next 15 years — as well as taxes lost for Lorain County JVS, Lorain County Mental Health and Retardation Board, and libraries and schools in both Lorain and Amherst.

Walther said the city was within its rights to offer the abatement.

“We’d welcome the opportunity to find out what the problem is with the program,” Walther said. “We’re glad that the county filed the lawsuit – it gets the issue in front of the court quicker.”

The issue, according to the court document, is whether Lorain’s 2006 tax abatement complied with a 1994 Ohio law relating to the issue – a perplexing legal document that the judge will have to wade through.

On Aug. 17, the county auditor refused to certify tax abatements for 307 of 323 homeowners in the west-side Lorain reinvestment area. Of the 307, 77 were in the Lorain school district and 230 were in the Amherst school district, the court documents said.

Contact Shawn Foucher at 653-6255 or sfoucher@chroniclet.com.