Why Is a Dead Man Raising Your Rent? And Why Didn't He Do It Sooner?
Who owns the land? If you own a business or rent an apartment in certain parts of Over-the-Rhine, the answer might be an expensive surprise.
Eighty-one parcels near the School for Creative and Performing Arts (SCPA) likely will see a substantial interest in ground rents soon, and some of the people hit with the bill might not even know what they are.
In 1830, William Woodward created a trust to benefit Cincinnati's schoolchildren, donating land he owned in the neighborhood now called Over-the-Rhine. More than 170 years later, the Woodward Trust still owns the land. The buildings sitting on it are owned separately.
If business owners and apartment owners were unaware of ground rents owed to the Woodward Trust, they're not to blame. The rents have stayed at levels set decades ago and have largely gone uncollected.
"The trustees were to collect ground rents on these properties, set at a very nominal price back in 1830," says title attorney Michael Maio. "The trustees have the right to reevaluate the property every 15 years. What's causing the furor is the trustees have been negligent in not reevaluating the property every 15 years. The ground rents were ridiculously low to begin with. There's been some move on the part of the trustees to update the rents."
For 18 months, Maio has been researching deeds for property in the Woodward Trust, an area roughly bounded by Broadway, 12th Street, 13th Street and an area halfway between Sycamore and Main streets.
Maio's research is the groundwork that will lead to an increase in ground rents.
"I get the impression those ground rents are not actually being paid," Maio says. "Every time we've had a closing on a property, we've had to go to the Woodward Trust and get a payoff for the ground rents."
Money from the Woodward Trust goes to the Cincinnati Public Schools. Last year the trust provided $12,000 to the district, according to CPS Treasurer Michael Geoghegan. The money paid for needy students' clothing, eyeglasses and medical expenses. The trust also provides $1,000 renewable college scholarships for graduates of Cincinnati high schools.
Woodward High School -- originally in the building now housing SCPA -- was named for William Woodward. In fact, Woodward and his wife Abigail are buried on the school's property. Twelfth Street was originally Abigail Street, and 13th Street used to be Woodward Street, according to Maio.
Woodward Free Grammar School, as the school was originally known, was the first free public high school in Cincinnati.
"He was a philanthropic individual who decided something needed to be done to improve the education of children in Cincinnati," Maio says. "This is a source of revenue for the board of education. They sorely need the money for all the improvements and renovations. It can become an even more significant source once the ground rents are revalued."
A deed from 1833 set the round rent on one lot at $22.50 a year.
"These leaseholds are for a period of 99 years, renewable forever," Maio says. "Between 1830 and 1930, there were very few reevaluations."
Some business owners have expressed surprise upon learning a reevaluation is underway, with the purpose of raising ground rents.
"These provisions are disclosed in various documents of public record," Maio says. "None of this is secret. People might be surprised because they weren't informed at time of closing."
Even so, Maio acknowledges bills for ground rents, once they are adjusted to 2001 rates, could shock some people.
"Based on my observations, if the (trustees) raise rents to be commensurate with market rates, it will have an impact," he says. "A lot of these properties have been assessed on 1930 evaluations."
Most of the affected properties are apartments, but several parking lots and businesses also sit on land in the Woodward Trust.
"I don't think the business owners need to worry," Maio said. "It's not going to break them. The board will just be getting what it's entitled to. It helps the board of education get some much needed revenue. Nobody's trying to burn anybody."