Property Investment Reimbursement Agreement
The City of Cincinnati may offer a Property Investment Reimbursement to a company that is considering expanding in, or moving to, Cincinnati. The incentive is offered in consideration for net, new jobs created in the City, and significant capital investment. This program is for companies that cannot take advantage of the City’s Job Creation Tax Credit (JCTC).
How does a PIR work?
A Property Investment Reimbursement (PIR) is a cash rebate provided to a company that commits to expand or relocate into the City of Cincinnati. The City will provide a PIR for a company’s commitment to invest in a City location and create new full time permanent employees and new payroll within the City for a future number of years. To qualify, the company must commit to create or relocate 25 new full-time permanent jobs to the City within 3 years. In some circumstances, projects creating as few as 10 new, full-time, high-salary jobs may also be eligible (i.e. average of $100,000 salary per job).
The program provides the cash rebate on a percentage of new payroll taxes that are paid to the City from the new employees not to exceed the cost of the Company’s property investment.
The company will be asked to maintain the jobs within the City of Cincinnati (not necessarily at the same location) for the term of the PIR plus an additional number of years. The additional number of years of commitment may be from +3 years to twice the length of the term of the rebate years based on the underwriting for the project.
A company invests $400,000 in project location and creates 100 new jobs averaging $70,000 per year and the City offers a 50% PIR for 5 years:
• 100 jobs @ $70,000 = $7M payroll
• $7M x 2.1% earnings tax = $147,000
• 50% annual reimbursement = $73,500
• Total city incentive = $367,500
What Are the Benefits?
The PIR provides an increase to a company’s yearly profits by paying a portion of their fixed asset investment necessary to grow.
How Is It Used?
To be considered for a PIR, a business must complete a Financial Assistance Application prior to the start of the project. The Department of Trade and Development will then review the application and provide a recommendation to City Council for the rebate at a level supported by internal underwriting. Key factors to the underwriting that will influence an offer from the City include: the number of years the company is willing to commit to stay within the City and the number of jobs and payroll a company is willing to create.
- PIR agreements assist businesses that expand and stay within the City by providing them a rebate for the creation of new jobs and employment opportunities for residents.
- Some companies cannot take advantage of a typical JCTC because they have a low or no profit tax liability; the PIR is a similar program that may benefit these businesses.
The maximum amount for a PIR is set at the beginning of the contract. If a company creates more jobs and a larger payroll than initially agreed upon, they do not automatically receive the advantage of the payment for these additional amounts.
- This incentive helps with funding a portion of a company’s fixed investment associated with relocating or expanding.
- A company must create a minimum of 25 new permanent jobs or, in some cases, at least 10 high paying jobs.
Tax Incentive Application
Tax Abatement Application
Initial Application for Commercial Tax Exemption
This application is to be completed by any company interested in a commercial tax abatement through the City of Cincinnati. Your application must be approved by the city and an agreement excuted by the company and the city prior to beginning construction.
Subsequent Application upon Project Completion
This form is required to be submitted upon project completion. The tax abatement will take effect after review and processing of this application.
CRA Annual Reports
Annual Status Report
This form is required to be submitted each year by existing tax abatement recipients. It must be submitted by March 5th of each year during the tax abatement period.