Shaker Council Approves $250,000 Loan Incentive to Equity Engineering

Shaker Heights City Council approved a $250,000 forgivable loan to Equity Engineering for improvements and maintenance to Tower East at Monday’s meeting.

The company, which has 60 employees whose payroll generated $115,000 in income tax to the city last year, will buy the top three floors of the building for its offices for $3 million.

Last year, said city officials, the company planned to leave Shaker Heights.

Equity Engineering was considering buying its own office building in Cleveland due to complaints over Tower East’s previous owners’ lack of investment in the building, said Economic Development Director Tania Menesse.

But then the building changed owners and Rosemont Properties, the new owner of the building, made repairs. Last year, funding was finalized for the Van Aken redevelopment project, marking the next step in a master plan that promises a vibrant, walkable business district near Warrensville and Van Aken. And Equity Engineering took a second look at Shaker Heights, said Menesse.

“I would like to applaud the initiative that brought the concept of the forgivable loan to this particular building,” said Councilperson Nancy Moore. “Without the kind of creative thinking that this is an example of, we could have easily lost one of our biggest employers.”

Shaker Heights will hold the money and release it as the company requests it for specific projects to the building’s common spaces over the next ten years.

However, the company will have the opportunity to whittle down the amount it owes by increasing its income tax revenue to the city.

Equity Engineering will be required to pay back what it borrows after ten years, minus any income tax over $115,000 it generates each year.

For example, if the company generates $120,000 in income taxes in 2013, $5,000 will go toward its $250,000 loan repayment. If the company only uses $200,000 of its loan by 2023 and generates $150,000 in extra income tax during that time, it will owe $50,000.

“Equity Engineering is a valued Shaker business that intends to make a $3 million investment in the purchase of 25 percent of Tower East,” Menesse wrote in a memo to Council. “The investment will stabilize an asset that is critical to the health of the Van Aken District and the long term tax base of the city.”

Council approved the ordinance unanimously.