Hard to believe that it was 32 years ago that the first tax abatement for the National City Bank building at Euclid & E. 9th Street became a central issue in the defeat of a mayor. Presently, its new owners are seeking a $1,489,500 deduction in its value for tax purposes.
The first tax abatement given by the City of Cleveland came as a result of a law drafted by Squire, Sanders & Dempsey.
Mayor Ralph Perk successfully pushed this first abatement and paid a heavy price because it, along with other decisions that earned him a reputation as a give-away mayor. Dennis Kucinich and Edward Feighan finished one-two in the primary race, knocking Perk out of office.
Perk’s abatement was a bit more conservative than those offered later by Mayor George Voinovich. The National City bank building was given a 20-year abatement that declined by 25 percent every five years, starting at 100 percent and finishing in the last five years at 25 percent. Voinovich inaugurated 20-year abatements at 100 percent for the duration.
In March, owners of the building – Kope Realty/PNC Financial Services Group, successor to National City Bank – requested of the Board of Revision a $1,48 million reduction in the value of the property.
The E. 9th & Euclid corner over the years has been home to some of the city’s major banks – Huntington National, Ameritrust (Cleveland Trust) and National City. Cuyahoga County owns the old and empty Ameritrust site, and the Huntington Bank building has tenancy troubles.
The prime downtown corner has fallen on bad times.
The city had to declare the National City site blighted back 32 year ago in order to qualify it for the tax abatement. National City Bank at the time was one of the most profitable banks in the U. S. It had been acquiring properties for some time in that area for the new bank building.
At the time, Perk awarded another abatement for a Sohio headquarters building behind Tower City. It was never built. Later, Sohio constructed a headquarters building on Public Square. But no abatement was sought as Sohio was awash with North Slope cash. The profitability of the oil company made an abatement a tough sell. Mayor George Voinovich, who still feared Kucinich’s anti-abatement supporters, shunned a Sohio abatement.
Kucinich battered Feighan on the abatement issue. Feighan had voted on the legislation as a state representative.
The request for a reduction in the National City Building follows other such requests and appears to be a forerunner of more active and heavier requests for tax value reduction early next year.
This will be a further financial problem for the City of Cleveland as value reductions mean a decline in tax revenue for the city and particularly for the Cleveland schools. Schools receive some 55 percent of collected Cleveland property tax revenues.