A Montessori school franchise that wants to build a new $1.2 million school on Center Ridge Road received preliminary support for a 10-year property tax abatement from the city's Tax Abatement Review Committee on Aug. 5.
The committee asked Young Explorers Montessori Schools, which has four schools in Northeast Ohio, to make yearly payments to the school district over six years of the abatement, which would total $55,000.
Young Explorers, which serves children from six months to 12 years old, wants to forgo paying property taxes on its land and building for the first five years and then pay a reduced amount over the next four years. This would save the business $322,365.75 in real estate taxes over the tax abatement term. The abatement would end in the 10th year.
City Council must approve the tax abatement, which it is expected to do Monday, said North Ridgeville Mayor Dave Gillock.
The schools won’t get any tax revenue for the first five years, but eventually they will gain. Five percent comes off the top for administrative fees and then the schools receive 47.5 percent of the taxes generated. As a condition of approval, the city is requiring that a donation be made directly to the school district. The donation is $10,000 for the first five years and then $5,000 in year six, the year the donation ends, according to the city.
If the school is approved, Young Explorers plans to open it by Labor Day 2020 and employ about 50 full- and part-time staff, or the equivalent of 27 full-time jobs.
"If you don't do the tax abatement, there's no guarantee they'll come here," Gillock said. "We want them to come here.”
Young Explorers co-owner Will Scott said he expects construction on the school would be finished late next summer.
“We’re excited at the prospect of building a new school in North Ridgeville and becoming part of the community,” said Scott, co-founder and co-owner with his wife, Rita. “North Ridgeville is a growing community and we believe it is a good fit for our school and the services we provide.”
School districts in Ohio get most of their funding from property taxes, so tax abatements, while they are used to lure businesses, hurt a district’s bottom line.
North Ridgeville City Schools Superintendent Roxann Ramsey-Caserio told the committee she supported the abatement to attract more industries and businesses to the city.
"In general, the more of a business and industrial presence we have here, the stronger the city and schools will be,” she said. “The city is forward thinking while providing businesses an environment where they would want to locate and help build a foundation that will help the schools."
The tax abatement process begins with a business requesting a tax abatement, which is then reviewed by the five-member committee. If the committee approves it, the request is forwarded to City Council, which has the final say.
The city’s Tax Abatement Review Committee consists of three voting members: Gillock, school district Treasurer Michael Verlingo, Chamber of Commerce member Jason Jacobs and non-voting members Bruce Abens, North Ridgeville Building and Lands Committee chairperson (who was not at the meeting), and city Treasurer Brian Keller.
Once the abatement term ends, the school district would receive 63.6 percent of the real estate taxes paid by the school and 47.5 percent of the income taxes.
The maximum number of students in the school would be 450, and there will be programs and aides for autistic or special-needs children, Scott said.
The tax abatement would allow the school to get established in the community and its donation to the school district would be income it wouldn’t have otherwise, Scott said.
Two of the four other schools the business has opened in the past 17 years received tax abatements. The school received 75% tax abatements from Avon and Twinsburg, Scott said.
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