BEACHWOOD, Ohio — We’re used to seeing neighboring school districts battle it out on the gridiron. But two Northeast Ohio districts have decided to take the battle to the courtroom.
Beachwood City School District is suing its neighbor, Warrensville Heights City Schools, for $5 million dollars over a tax agreement gone wrong.
It all started with a 1997 tax sharing agreement that coincided with the development of the Chagrin Highlands development at the Harvard Road exit of Interstate 271.
The land used in that development project belonged to Cleveland before it was annexed in a five-city collaborative deal designed to spur development and benefit everyone involved. Involved in the deal were Cleveland, Orange, Beachwood, Warrensville Heights, and the newly incorporated Highland Hills.
The five cities worked out agreements to divvy up income taxes based on new city boundaries. But figuring out which school district received property taxes wasn’t so simple.
Property taxes from the land that encompasses Chagrin Highlands was already setup to go to Warrensville Heights City Schools prior to the new city limits. Despite the city of Beachwood annexing 405 acres of the land, property taxes still belonged to Warrensville Schools.
21 years ago, the two districts engaged in a contentious debate about sharing the property tax revenue and utilized a mediator to reach a deal.
On paper, it appears the two sides agreed on the structure of tax sharing, and also included a clause that would lead to joint education programs.
To date, Beachwood Schools says Warrensville Schools have yet to make a payment. And Warrensville doesn’t believe they have to.
Sources privy to the debate say Warrensville Schools believe the agreement is invalid because it never got approval from the State Board of Education, which would have been a requirement.
Both school districts declined to comment as the case proceeds through the courts.