Community Reinvestment Area Reform Legislation

House Bill 123, the legislation that would modify the law governing community reinvestment areas, has been a topic of much discussion over the past couple of months.  With construction costs rising, making it harder to develop commercial real estate, economic development incentive programs are more important than ever.  That Bill would expand the use and benefits from CRA-designated districts.  That Bill passed the Ohio House on May 26, 2021.  Mike Sikora and Rick Craven have been involved on behalf of NAIOP in discussing proposed modifications to improve that Bill that would further benefit the commercial real estate industry.

Economic Development Incentives More Important Than Ever

Construction costs continue to rise – with no good answer in sight.  That makes economic development incentives more important than ever to get development deals or redevelopment deals done.  One such economic development incentive is Ohio’s new Transformational Mixed-use Development Program.

Ohio’s Transformational Mixed-used Development Program has the potential to promote commercial real estate development that makes our communities stronger.  Crain’s Cleveland Business featured an excellent story on this subject, in which Mike Sikora was asked to share the latest details on that Program, and its future, as well as the promise it affords to the commercial real estate industry in Ohio.

Check out that article in Crain’s Cleveland Business by clicking here.

Dower to Remain on the Books in Ohio

Despite our best efforts to craft legislation to enable dower to be abolished, it will remain part of Ohio real estate title law for the foreseeable future.  Our firm invested considerable time drafting legislation narrowly tailored to address the sole purpose asserted by Ohio domestic lawyers for keeping dower in Ohio.  The domestic lawyers sole stated purpose is to limit or curb equity stripping by title holding spouses in marital residences, which may thereby harm non-title holding spouses.  Members of the Ohio State Bar Association Real Property Section then helped us refine that language.  The Ohio Land Title Association has decided that it does not support the proposed spousal share legislation as drafted.

If this legislative initiative or anything similar to it ever moves forward at any point in the future, rest assured, our firm will continue to be part of the process.

Crain’s Cleveland Business OZ Article Quotes Mike Sikora as OZ Resource

Mike Sikora was interviewed for a story on Ohio’s OZ Program that was featured in last week’s Crain’s Cleveland Business.  To review that article that provided a synopsis on Round 2 of the Ohio Opportunity Zone Program, specifically as to Northeast Ohio, click here

Sikora Law Clients Awarded 35% of All Ohio OZ Tax Credits

Round 2 of Ohio’s Opportunity Zone Program was just completed.  Sikora Law broke its previous record by preparing and/or submitting 51 Ohio Opportunity Zone Applications for Round 2 of that Program.  Sikora Law Clients received approximately 35% of all Ohio Opportunity Zone tax credits that were issued in 2021 (topping our record in Round 1 of 21% and 42 Applications).

Sikora Law has also helped a number of its Clients monetize their awards through a sale and transfer process that allows developers and their investors to receive a near immediate return on their investment in Ohio Opportunity Zones.

American Land Title Association’s Title News Features Sikora Law’s Appellate Victory

The American Land Title Association’s Title News Online featured Sikora Law’s 32nd appellate victory (Clinton v. Home Investment Fund V, LP, 2020-Ohio-4555 ) on the subject of lis pendens.   Check out that article on ALTA’s website by clicking here.

Sikora Law Celebrates 33rd Title Appellate Victory

Ohio’s Sixth District Court of Appeals recently affirmed an Order issued by the Ottawa County Court of Common Pleas granting summary judgment in favor of an party that was represented by our lawyers.  See Nationstar Mtge., LLC v. Cody, 6th Dist. Ottawa Case No. OT-18-041, 2020-Ohio-5553.

In Cody, the borrower received $938,250 in exchange for a mortgage granted on two adjacent parcels located on Put-in-Bay Island.  One parcel contained a residential structure.  The other parcel was mostly vacant, but a portion of a detached garage was located on that “vacant” parcel, along with a private boat dock.   The heirs argued that the legal description contained in the Mortgage listed only the street address of the residential parcel.   Our lawyers presented evidence to the Trial Court showing that the Mortgage described both parcels by metes and bounds and by parcel numbers.   Our lawyers also produced evidence showing that the borrower had intended to mortgage the vacant parcel, such as the appraisal, which included both the detached garage and the private dock in the valuation of the property.  They also presented evidence showing that no separate street address had ever been assigned to the vacant parcel, and thus no such other street address could have been included in the description of the property to be encumbered.

The Trial Court granted summary judgment, finding that the Mortgage was unambiguous and should be enforced as to both parcels described in the legal description.  On appeal, the heirs claimed error based on the Trial Court’s refusal to consider the heirs’ testimony about their father’s claimed statements that the Mortgage wasn’t supposed to encumber the vacant lot.  The Appellate Court further found that the legal description included in the Mortgage clearly and unambiguously described both the residential parcel and the vacant parcel, and therefore affirmed the grant of summary judgment in favor of our Client.

To review the Cody Decision, click here.

Non-paying Tenant Evicted Despite Appeal – Due to Procedural Missteps

Both the number and significance of cases involving disputes between landlords and tenants continue to rise.  Ohio’s Twelfth District Court of Appeals just decided a case in which a tenant was evicted for failure to pay rent, and the advantages one party had over the other proved costly for the losing party.  Landings at Beckett Ridge v. Holmes, 2020-Ohio-6900.

The landlord obtained an order from the Trial Court evicting the non-paying tenant.  The tenant appealed from that decision, which normally would have allowed the tenant more time to occupy the premises until the appeal (and all of the litigation) was completed.  However, that tenant did not file a Motion to Stay the underlying Trial Court Judgment.  As a result, the Court of Appeals dismissed the appeal, the tenant was evicted, and the tenant no longer had any rights in the premises.

To review the Holmes case, click here.

ENTITY TRANSFERS AFFECT FINANCIAL FEASIBILITY OF DEALS

Considering whether to use an entity transfer for your commercial real estate transaction is more important than ever.  For multiple reasons (construction costs, lending terms, low supply, unrealistic seller expectations, to name a few), getting commercial real estate deals done is getting harder.  Sometimes, it makes the most sense to use an entity transfer structure for your deal.

There are even variations among forms of entity transfers – ranging from straight entity transfers – to so-called “drop-and-swap” transactions – each of which is better than the other under certain circumstances.

Certain interest groups are pushing, through legislation, to eliminate the opportunity to complete transactions at all, or to thwart financial feasibility of deals, and we are pushing back.  In these challenging economic times, thoughtfully considering these options is more important than ever.  Until a better model can be established, we all have to make the best of this model.  We believe we know how to do that extremely well.

Every week, we advise our Clients on the importance of this subject, and we believe we know better than any other firm in Ohio exactly where the law stands on this subject and where it is headed, so we believe we know better than any other firm how to help you determine how best way to structure transactions for financial feasibility and maximum success.

Let us know how we can help.

 

 

 

Click here to learn why nearly every major commercial brokerage that conducts business in Ohio chooses Sikora Law.

Senate Bill 39 is Now Ohio Law

On December 29, 2020, Senate Bill 39 – the Transformational Mixed-use Development Tax Credit Bill – became the law of Ohio.  That new law is extremely important for the commercial real estate industry – it is something that is sorely needed as our economy pulls out of the Coronavirus Recession.

This new law will now enable certain transformational mixed-use developments to move forward.  Mixed-use developments with $50,000,000 or more in total project costs (and 15 stories or 350,000 square feet) that are in or around cities with a population of 100,000 or more, or smaller scale but still transformational mixed-use developments that are located more than 10 miles outside of a major city may qualify.

Unlike any other Ohio commercial real estate economic development law – it includes a first of its kind, built-in return on investment calculation and methodology to ensure that additional state and local taxes generated by the development will exceed the amount of the tax credits awarded to the developer.

Senate Bill 39 also improves Ohio Commercial Broker Lien Law by mandating recovery of all attorneys’ fees and costs for the prevailing party and streamlining the process for serving Broker’s Liens.

Our firm drafted portions of Senate Bill 39, and we were extremely involved in the process of advocating for its passage – before it became law.