Testimony — Melissa Ferchill, Downtown Cleveland, Historic Preservation Credit (February 26, 2025)

Summary

Testimony of Melissa Ferchill on behalf of Downtown Cleveland, Inc. to the Ohio House Development Committee, dated February 26, 2025, in support of expanding the Ohio Historic Preservation Tax Credit Program. It cites the Cleveland Restoration Society for over $10 billion in total economic activity and over 7,000 jobs since 2006. It proposes a rolling application process rather than a biannual approach. It asks for an increase of the annual cap to follow the Governor's recommendations of $120 million, with the per project increase from $5 million to $10 million.

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                          Ohio House Development Committee

                 Melissa Ferchill, Vice Chair, Downtown Cleveland Inc.

                           Chair, Policy & Advocacy Committee

                                      February 26, 2025



Chair Hoops, Vice Chair Lorenz, Ranking Member Abdullahi, and Members of the House
Development Committee:

Thank you for the opportunity to provide testimony in support of expanding the Ohio
Historic Preservation Tax Credit Program.

I am providing testimony on behalf of Downtown Cleveland, Inc., a nonprofit organization
that attracts talent, jobs, residents, and investment through market influence, community
impact, and irresistible experiences. As the only organization focused solely on
strengthening and building the heart of Cleveland itself, we envision Downtown Cleveland
as a vibrant and welcoming city center that weaves Downtown districts and surrounding
neighborhoods into a seamless urban fabric that is greater than the sum of its parts. We
work from sidewalk to skyline and everything in between, leading efforts to enhance
Downtown’s environment, economy, and experience.

The Ohio Historic Preservation Tax Credit has been monumental in transforming Cleveland
and its city center, generating over $10 billion in total economic activity and over 7,000 jobs
since 2006 according to the Cleveland Restoration Society. Additionally, Cleveland is now
a national leader in office conversions and is looked to as an example from peer cities,
largely thanks to this incentive.

While the program has been truly transformative, we from the business community
understand that there are modifications that can be made to make the program more
impactful and competitive.
Firstly, a rolling application process with preference for higher scoring projects, rather than
a biannual approach, would free up the market to pursue all viable redevelopment
opportunities on a natural timeline. With more shovel-ready applicants applying on a
rolling basis, preservation funds can be deployed more efficiently, reducing current delays
between allocating awards and project completion to maximize the program’s
effectiveness. This would also further reduce the administrative burden on the State and
better leverage the incentive, because projects will apply for credits when all financial and
other requirements are secured.

Secondly, we are asking for an increase of the annual cap to follow the Governor’s
recommendations of $120 million, with the additional per project increase from $5 million
to $10 million. The limited supply of historic preservation funding has created a strong
incentive for projects to pursue allocations in the earliest stages of the development
process, tying up portions of each annual allocation as owners work to complete pre-
development work. An increase to the per project cap is needed to follow the rise in
construction and project costs. Increasing the per project cap would help push projects
toward completion and help fully realize the potential of the incentive.

Additionally, adjusting the qualified rehabilitation expenditure percentage allocation for
small projects incentivizes developers to take on smaller projects or projects in smaller
communities due to improved economic circumstances created by the program.

Lastly, since all historic preservation projects generate a net positive return on investment
to the State, as verified by the cost-benefit analysis that is a precondition for every award,
the State’s best interests are served by maximizing the volume of historic preservation
projects completed each year.

We feel that these improvements are needed to simplify the program and make it a more
reliable economic development tool incentivizing developers to invest in Ohio. On behalf of
Downtown Cleveland, Inc., thank you for the opportunity to speak today. I am happy to
answer any questions for the committee.


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