AP NEWS

Beachwood, Warrensville Heights schools battle over property-tax revenues from Chagrin Highlands

October 9, 2018

Beachwood, Warrensville Heights schools battle over property-tax revenues from Chagrin Highlands

BEACHWOOD, Ohio -- Two Northeast Ohio school districts are sparring over property-tax revenues from 405 acres of Chagrin Highlands, a suburban corporate park that’s landed notable corporate headquarters, healthcare facilities and other projects in recent years.

A fight that started almost three decades ago between the Beachwood and Warrensville Heights schools has spilled into court, where the Beachwood district claims that it’s owed more than $5 million under a tax-sharing deal hammered out in the late 1990s.

Warrensville Heights, in public filings, has argued that tax-split agreement was never finalized. And attorneys for the district described Beachwood’s behavior as an “attempted tax grab” that would make it harder for Warrensville Heights schools to fulfill their mission and serve students.

The dispute pits an affluent, high-performing district – Beachwood’s schools received an overall grade of “A” on state report cards released last month – against a troubled neighboring district that narrowly avoided state intervention this year. Warrensville Heights, which serves a high-poverty, largely African-American student body, eked out a “D” grade from the state.

In August, the Beachwood schools filed a lawsuit seeking more than $5 million in unpaid tax revenues from Warrensville Heights, based on property-value growth at Chagrin Highlands. A pretrial conference is set for today. Warrensville Heights hasn’t formally responded but has until Oct. 15 to file an answer in Cuyahoga County Common Pleas Court.

Beachwood Superintendent Robert Hardis didn’t respond to requests for comment. An attorney representing the district referred questions to his client.

Warrensville Heights Superintendent Donald Jolly deferred to the district’s lawyers.

“Warrensville Heights City School District intends to defend this case vigorously. ... The district’s mission is to provide teachers, administrators, staff, parents and, most importantly, students with equal access to sufficient resources and quality educational opportunities. The district will use all legal avenues to oppose educational disparity and to protect its resources,” one of those attorneys, Adrian Thompson of the Taft law firm in Cleveland, wrote in an email.

A similar lawsuit filed and dropped last year sheds some light on the districts’ positions.

In 1990, Beachwood annexed 405 acres from the city of Cleveland as part of a broader, multi-community deal to create the nearly 700-acre Chagrin Highlands development. As part of the agreement, Cleveland and four suburbs hashed out income tax-sharing arrangements.

Property taxes, approximately two-thirds of which flow to schools in Ohio, were another matter. The land Beachwood gained sat in the Warrensville Heights school district. Beachwood quickly sought state approval to change the school-district boundaries. Warrensville fought the move, and a seven-year-long battle ensued.

In 1997, after mediation led by a prominent former federal court judge, the districts’ leaders reached a compromise. The Warrensville Heights schools would hang onto the Chagrin Highlands site. But the Beachwood schools would receive a slice of property-tax revenues from commercial projects in the park, once the real estate’s value surpassed $22.26 million.

In court filings, Beachwood says Warrensville Heights has ignored the agreement, which outlines a rough 70-30 split of property-tax revenues. Warrensville Heights says the mediator’s recommendations never became a valid agreement or contract under state law.

Even if the deal was lawful at one point, Warrensville Heights says, Beachwood neglected its obligations for years by failing to provide Warrensville Heights students with access to joint educational programs and activities – something specifically mentioned in the 1997 agreement. Beachwood, in turn, says Warrensville Heights was the uncooperative party.

The $5 million-plus bill Beachwood is seeking to collect is based on the property’s value for the 2012 to 2017 tax years. Beachwood also wants a 30 percent cut of future tax money from Chagrin Highlands, which is home to corporate offices for Eaton Corp. and Omnova Solutions, University Hospitals Ahuja Medical Center, Lifetime Fitness, an Aloft hotel and other buildings.

AP RADIO
Update hourly