What Are Community Improvement Corporations?

Over 300 of these entities exist in Ohio -- What are they and what do they do?

If you watch a meeting of your city council or city commission here in Miami County, you will undoubtedly hear talk about a “Community Improvement Corporation”. Each city in our county has one to serve as an economic development tool for their respective communities. But, what are these things? What do they do? That is the topic we are going to tackle today.

Community Improvement Corporations (CICs) are quasi-governmental non-profit organizations authorized under Chapter 1724 of the Ohio Revised Code and organized under Chapter 1702 of the code. In the state of Ohio, there are two main types of CICs: traditional CICs focused on economic development and CICs organized as County Land Reutilization Corporations, commonly known as County Land Banks. In this article, we will delve into the realm of Economic Development CICs, exploring their formation, purpose, funding sources, powers, programs, and additional considerations.

Formation and Purpose of Economic Development CICs

The concept of Economic Development CICs was first introduced in 1965 and has since grown to encompass over 300 CICs across Ohio. These organizations are established to "advance, encourage, and promote the industrial, economic, commercial, and civic development of a community or area" (ORC 1724.01(B)(1)). A single county, township, or municipality, or a combination of such entities, can establish a CIC. Moreover, even if a CIC has been previously established for the benefit of an area that includes a township, that township can establish its own CIC.

To become an officially recognized entity, CICs must file Articles of Incorporation with the Ohio Secretary of State. The Articles specify a Statutory Agent, location, and purpose. The Ohio Attorney General reviews and approves these Articles. Furthermore, a CIC must adopt a Code of Regulations (or bylaws) and is governed by a Board of Directors and Officers. While there is no prescribed limit to the size or appointment of Board members, if the CIC serves as a "designated agency" for a local government, at least 40% of the Board must be elected or appointed by officials of the political subdivision(s) that established the CIC.

Funding Sources

CICs can access various funding sources to support their economic development initiatives. Counties can appropriate general funds to CICs and implement economic development property tax levies for the same purpose. Townships can allocate general funds, but only for the administrative costs of the CIC, and municipalities can also provide general funds. CICs can receive donations from companies and charge membership dues to governmental and private entities that are members of the CIC. Additionally, CICs can benefit from certain grant programs and retain proceeds and fees from property sales and services performed through contracts.

CIC Powers

CICs possess broad powers to assist local governments in implementing economic development programs and services, as specified in ORC 1724.02. Some of the essential powers include the ability to borrow money for any CIC purpose, provide loans to individuals for businesses, buy, lease, and sell real or personal property, acquire business assets, charge fees for services provided to political subdivisions, enter into contracts with various governmental levels, apply for and administer grants, and take all necessary actions to carry out its statutory powers. CICs are also not governed by competitive bidding or auctioning laws that governments must follow. This gives the CIC a great deal of flexibility in creating deals with specific developers in terms of selling property or negotiating certain development goals.

CIC Programs and Services

CICs play a vital role in providing economic development assistance to local governments throughout Ohio. They collaborate with various entities to facilitate tax abatement and incentive programs, promote foreign trade zones, and coordinate economic development efforts. CICs are also involved in property acquisition and development, technology initiatives, and supporting small businesses through grants and loans. These organizations are instrumental in promoting economic growth, branding, and marketing localities, as well as encouraging coordination among economic development stakeholders.

Other CIC Considerations

While CICs offer numerous benefits, they are not without limitations. They cannot exercise eminent domain or levy taxes and can only recommend tax abatements and incentives to authorized entities. CICs are generally exempt from paying prevailing wages for construction projects, and serving on a CIC Board of Directors does not constitute holding a public office. However, CICs are subject to audit by the State Auditor's Office and must adhere to the Sunshine Law and Public Records Laws, with limited exceptions.

That last part is important; meetings of CICs are open to the public, but they rarely meet on a consistent schedule. Save and except the required annual meeting, CICs only meet when there are transactions that need to take place. However, meetings of the CIC are announced in advanced and the public is welcome to attend. Attending these meetings can give attendees a better idea of what is happening in their community in terms of economic development. Better yet, why not apply to be on the Board of Directors of a Community Improvement Corporation? Each CIC must have general public representation on their Board of Directors and finding out when these seats are open and who makes the appointments to these boards is as easy as calling your local city hall.

Community Improvement Corporations (CICs) in Ohio, particularly those focused on Economic Development, serve as invaluable agents of change and progress for local communities. Through their formation, purpose, funding sources, broad powers, and diverse programs, CICs play a pivotal role in driving economic growth, fostering community development, and enhancing the overall well-being of residents. As Ohio continues to evolve, CICs will remain essential partners in building a prosperous and vibrant future for the state and its residents.

Have other questions about local government and how things work in your community? Please feel free to send me a note at william.lutz17@gmail.com and I will do my best to answer your questions. Thanks for reading and feel free to share this with your friends and neighbors.