Ohio Establishes Transformational Mixed-Use Development Tax Credit

Construction & Real Estate Update

Date: January 07, 2021

On December 29, 2020, Ohio Governor Mike DeWine signed Senate Bill 39 into law. This bill establishes the new Transformational Mixed-Use Development (TMUD) Tax Credit for catalytic mixed-use new construction and rehabilitation projects in Ohio. The final administrative details of the program and the application process are still being worked out. It is expected that the first applications will be accepted by June for projects that break ground this year.

TMUD Tax Credit Structure

Senate Bill 39 authorizes the Ohio Tax Credit Authority to award up to $100 million in annual business incentive tax credits available for insurance companies that invest in eligible TMUD projects through calendar year 2023. Up to $100 million in total credits may be awarded each calendar year, with up to $80 million in credits being authorized for urban projects (projects located within 10 miles of a major city) per calendar year. Eligible projects are restricted to up to 10% of certified project investment by a developer in tax credits, with no more than $40 million in tax credits to be awarded per project.

TMUD tax credits will be awarded in a competitive process administered by the Ohio Development Services Agency. It is anticipated that applications will exceed program limits, so projects will be ranked and awarded credits based on their expected transformational economic and community impacts, as outlined in their applications. All projects awarded TMUD credits must generate at least 10% of estimated development costs in new tax revenues. The state is currently undertaking rulemaking and developing program guidelines, which are expected to be released in the next 45 to 90 days.

Eligible Projects

Projects eligible for the TMUD insurance company tax credit include those that will have a transformational economic impact on the development site and surrounding area, as supported by an economic impact study. The investment in so-called urban projects, across all potential phases, must exceed $50 million. The project program must include a combination of retail, office, residential, recreational, structured parking and other similar uses into one mixed-use development. Urban projects must include at least one new or previously vacant building that:

  • Is at least 15 stories high;
  • OR has a floor area of at least 350,000 square feet;
  • OR after completion will be the site of employment accounting for at least $4 million in annual payroll;
  • OR includes two or more connected buildings that collectively have a floor area exceeding 350,000 square

Rural projects have slightly different requirements: They must have a floor area of at least 275,000 square feet or include two or more connected buildings that contiguously exceed 275,000 square feet in floor area.

PMC Financial Services

Project Management Consultants LLC (PMC), a wholly owned subsidiary of Thompson Hine, has been an integral force behind the bill since the inception of the concept. Our professionals helped shape the original proposed language shared with the state, provided feedback as the Ohio Legislature proposed changes and restrictions, and worked to make sure the bill was approved during this legislative session. The final bill creates one of the most exciting and potentially beneficial programs for catalytic projects available in any state.

Our financial professionals have extensive experience advising on public finance structuring in Ohio and can assist with preparing a competitive application for this new tax credit. They can help secure tax credit awards and understand how to syndicate the credits and structure the financing. Insurance company clients pursuing the credits for their investment and tax deferral benefits can rely on our structuring experience to help secure the best pricing on the tax credits once they are awarded. In addition, our economic impact modeling capabilities and in-depth familiarity with the law can provide an edge in preparing the economic impact report supporting the tax credit application, which will be critical in determining which projects receive rewards.


For more information, please contact:

Jeffrey R. Appelbaum
Practice Group Leader, Construction
Managing Director, PMC

Ryan P. Sommers, CPA*
Managing Director of Financial Services, PMC

Thomas J. Coyne
Practice Group Leader, Real Estate

Francesco A. Ferrante
Partner, Tax

David Lewis
Partner, Real Estate

Alan S. Ritchie
Partner, Construction & Real Estate

Arik A. Sherk
Partner, Commercial & Public Finance

*Not licensed to practice law

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