CONNEAUT — Talks between the city and Conneaut Board of Education regarding tax abatement provided the Cleveland Hotel restoration project are proceeding well, both sides agree.

“I think we’ll have a pretty good solution in short order,” said school board member Charles Lafferty.

At issue is the 12-year, 100 percent tax abatement provided the hotel project earlier this year via the city’s Community Reinvestment Area program. The $2.9 million project is transforming hotel rooms into condominiums and has already welcomed Snap Fitness, a franchise health club.

A snag occurred when the city apparently failed to obtain the blessing of the school board, as is required of CRA projects that exceed $500,000 in value. School districts are big benefactors of property tax that are sometimes sacrificed to the abatement that attracts developers.

The talks are meant to determine how the Conneaut Area City School district can recoup some of the tax revenue lost to the abatement agreement.

The school district has no intention of taking the matter to court or hampering the hotel renovation project, said Mary Zappitelli, school superintendent.

“It’s better for everyone to have a revitalized Cleveland Hotel,” she said. “We’re working on a proposal that’s fair to the city and the district. We’re working together on a solution.”

Council President James Jones and Ward 4 Councilman Tony “Dino” Julio have met informally with Lafferty and school board member Nicholas Iarocci to discuss the matter, according to reports.

“I believe we’re headed in a positive direction,” Julio said Friday night. Jones could not be immediately reached for comment.

The school board does not expect the cash-strapped city to write the district a check as compensation for lost tax, Iarocci said. Instead, the district wants to explore some time of assistance from the city,

“We would like to try to receive some in-kind services from the city (at a value similar to the tax revenue lost to the CRA),” Iarocci said. “The city has equipment and provides services the district doesn’t have. There might be some services the city may be willing or able to provide.”

The first step is putting a dollar value on the abated tax, and that’s a part of the on-going discussions, officials said. “We’re trying to come to some kind of consensus on the amount the district would have lost,” Iarocci said.

Iarocci said the chats have been amicable.

“Things are going well,” he said. “We’ve had cordial meetings.”

Keeping a close eye on the situation is the Cleveland Hotel developer, Lighthouse Historical Development Inc., said Walt Poff of Nova Star Real Estate, local liaison. The developer is hopeful the outcome of the talks will not affect the hotel restoration, Poff said. Tax savings are important to people considering a condominium, he said.

“It’s a big selling feature,” Poff said.

While an unfavorable outcome to the talks probably wouldn’t stall the hotel’s renovation, it could prompt Lighthouse Historical to rethink participation in other Conneaut projects, Poff said.

“(The developer) has confidence in the city to work things out,” he said. “They’re counting on the city to take care of it.”

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