The Tax Cuts and Jobs Act of 2017 created the first federal Opportunity Zones program (“Opportunity Zones I”). In July 2025, the passage of the One Big Beautiful Bill Act made the federal Opportunity Zones program permanent (“Opportunity Zones II”). Although the structure and purpose of the Opportunity Zones are largely the same, Opportunity Zones II imposes new designation requirements and many census tracts that currently qualify as Opportunity Zones will no longer be eligible under the new program.

How Opportunity Zones Benefit Businesses

Opportunity Zones allow individuals and businesses to invest their capital gains in a Qualified Opportunity Fund. A Qualified Opportunity Fund (“Fund”) is an investment vehicle that is organized as a corporation or partnership and holds at least 90% of its assets in qualified opportunity zone property. In other words, an investor can put his or her previously realized capital gains into a Fund and the Fund will invest the money to improve property located in a designated Opportunity Zone.

If the money is used to improve or develop property in a designated Opportunity Zone and an investor holds its investment for at least ten years, the investor may be able to fully exclude the gain from their taxes when the property is sold. This creates a significant incentive to invest in distressed areas. Since the passage of the Tax Cuts and Jobs Act, these tax incentives have led to increase in real estate development and improvement projects within distressed communities and will likely do so in the future.

Designation of New Opportunity Zones

The Ohio Governor has the responsibility of nominating eligible census tracts for designation. Once the tracts are nominated, the Secretary of the U.S. Treasury will certify and designate the nominated census tracts as qualified opportunity zones. By law, the Ohio Governor will re-designate the zones every ten years with the updated final map scheduled to go into effect on January 1, 2027.   

To be considered for designation, a census tract must first be eligible. For a census tract to be considered eligible, (1) the average family income within the tract must be less than 70% of the average family income in the state or metropolitan area, or (2) one in five residents must live in poverty and the average family income cannot exceed 125% of the average family income in the state or metropolitan area.

Opportunity Zones II: What It Means for Cuyahoga County

After the federal government created Opportunity Zones I in 2017, Ohio worked with the U.S. Treasury to establish 320 Opportunity Zones, 64 of which were located in Cuyahoga County. There will only be 258 Opportunity Zones in Ohio under Opportunity Zones II (i.e., 25% of Ohio’s total qualifying low-income communities). Consequently, because Ohio will have fewer designated Opportunity Zones under Opportunity Zones II, Cuyahoga County will also see a reduction in its designated Opportunity Zones. However, once the zones go into effect, they will remain in place for ten years.

A ten-year timeframe provides certainty to investors and will allow for the distressed areas that are designated as Opportunity Zones to transform over this ten-year period. More abandoned buildings can transform into productive properties such as businesses, affordable housing, and shopping centers. Investors will have certainty knowing there is a long-term tax incentive, and communities will benefit from having the increased investment. 

How We Can Help

Real estate development and improvement projects in Opportunity Zones often involve a range of legal, tax, and financing considerations. Projects may also require resolving title issues, securing grants or financing, and negotiating or drafting agreements related to the acquisition, development, and operation of the property. Addressing these legal and transactional matters early can help support a smoother development process and reduce the risk of delays or disputes.

For more information or to seek counsel from our Real Estate & Construction group, please reach out to request a consultation or call us at 216-696-1422. McCarthy Lebit would like to thank law clerk Logan B. Kijewski for his work in assisting with the preparation of this legal blog post for The More Report.

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This information is provided for general informational purposes only and should not be construed as legal advice. Readers should consult with qualified legal counsel regarding their specific circumstances before taking any action based on the information presented.

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The undertaking of a new stadium isn’t the only project headed towards Cleveland’s west side. In June, the City of Cleveland announced a $1.4 billion overhaul of Cleveland Hopkins International Airport, with construction beginning within the next year and major phases set to be completed in the early 2030s.

These two projects, being within a few hundred yards of each other, represent a generational shift in how people, businesses, and capital will move across Northeast Ohio. For middle-market businesses, particularly those in construction, logistics, and real estate and facility services, a window of opportunity is opening now. Here’s how your business can prepare.

The Game is Changing, But Is Your Business Ready?

Brook Park currently sits at a strategic logistics junction, with I-71, I-480, and the airport providing connectivity for regional and interstate areas. With the new domed stadium and airport renovations slated for over $3.8 billion in combined investment, Brook Park and the surrounding west side of Cleveland are primed to become a new industrial and service corridor, creating a surge of opportunities for manufacturers and suppliers.

With construction at the forefront of both projects, it will drive demand for foundational materials such as concrete, steel, fabricated components, and more. Simultaneously, opportunities for HVAC providers, aviation construction specialists, and contractors with large-scale public infrastructure experience will be in high demand. Evaluating your company’s service or product alignment could open multi-year revenue streams with strategic partnerships.

New Space, New Possibilities

As the Browns prepare to relocate to Brook Park, the City of Cleveland has secured a $100 million settlement with the Haslam Sports Group to resolve outstanding lease and redevelopment issues tied to the team’s lakefront property. Under the settlement, $25 million is due by December 1, 2025, with additional payments thereafter dedicated to the demolition, site preparation, and community benefit investments over the coming years. The settlement reserves $30 million to demolish Huntington Bank Field and prepare the lakefront site for redevelopment as a mixed-used extension of Downtown Cleveland.

For companies looking to expand beyond the west side of Cleveland, and with the Browns slated to leave their downtown location, opportunities for expansion in downtown and the City’s lakefront are beginning to emerge. This summer, The City of Cleveland started seeking proposals from developers for up to 50 acres of public property, including the land currently owned by the Cleveland Browns, to reimagine the site through long-term ground leases and public-private partnerships. Mayor Bibb has stated that his request for proposals includes invitations for developers to come up with a different purpose for the lakefront stadium beyond a sports venue. This presents a blank slate opportunity for residential, commercial, cultural, and civic uses that can complement the evolving downtown area and waterfront.

How Businesses Can Position Themselves Now

For business clients and middle-market firms looking to participate in this transformation, the key is to engage early. Now is the time to identify and respond to initial requests for proposals and qualifications for the upcoming lakefront redevelopment. Businesses specializing in utilities, environmental remediation, landscaping, lighting, signage, public improvements, and more can provide critical value as the demolition of Huntington Bank Field transitions into infrastructure development. Success will also depend on strategic collaboration between developers, designers, civic organizations, and local stakeholders, which can help ensure proposals reflect the City’s priorities in their selection and evaluation process.

Preparing now is essential. Firms should begin building internal capacity, developing concept proposals and market briefs, and modeling potential partnership structures so your firm can quickly respond when public solicitations are released. Staying in tune with timelines, zoning updates, and funding windows will give businesses a crucial timing advantage once projects move from planning to execution.

A Strategic Realignment

Two of the region’s most prominent public projects, the Browns stadium and the Hopkins airport renovation, are converging on Cleveland’s western corridor. Although there are differing opinions on whether this is a civic upgrade or a step in the wrong direction for Cleveland, for middle-market businesses, it opens up multiple opportunities to reposition for growth.

Businesses exploring expansion opportunities, procurement strategies, long-term leasing planning, or redevelopment can benefit from partnering with an experienced real estate attorney for assistance with thoughtful planning and guidance in evaluating options. Ensure your business is aligned with where Northeast Ohio is headed, not just where it’s been.

For more information on business or real estate opportunities, or to seek counsel from our Real Estate & Construction practice group, please reach out to request a consultation or call us at 216-696-1422.

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This information is provided for general informational purposes only and should not be construed as legal advice. Readers should consult with qualified legal counsel regarding their specific circumstances before taking any action based on the information presented.

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Back in 2015, a survey by the Western Reserve Land Conservancy found that roughly 8% of the city’s buildings were sitting empty. Another 18% were just empty lots with nothing on them. That’s a lot of unused space. However, in the last 10 years, local, state, and federal leaders have worked harder to bring these places back to life.

Today, more tools are available to help transform abandoned buildings into homes, businesses, and community spaces. For cities like Cleveland and related communities, these programs create significant opportunities for revitalization.

What Are Opportunity Zones?

In 2017, the federal government created something called Opportunity Zones. These are designated areas where investors can get tax breaks if they help improve the neighborhood. The program’s goal is to attract private sector investments to revitalize economically challenged areas, including Cleveland, by transforming abandoned properties into homes, businesses, and community spaces.

If someone sells a stock or property and makes money from it (called a capital gain), they can choose to invest that money into something called a Qualified Opportunity Fund (QOF). This fund must be used to build or fix up property or businesses in an Opportunity Zone. If the investor keeps their money in the fund for 10 years, they don’t have to pay taxes on the extra money they earn from the investment.

A person or group can even start their own QOF by filling out a form with the IRS. To qualify, at least 90% of the funds must be used in an Opportunity Zone. Investors can use the fund to build new structures, fix up old ones, or support local businesses in these zones.

What’s Next for Opportunity Zones?

The Opportunity Zone program was set to end in 2026, but it was extended into perpetuity under the “One Big Beautiful Bill Act!” This means that the program will keep going and bring even more benefits to places that really need help, like underserved neighborhoods in cities and rural areas. It will support not only buildings but also local businesses.

Ohio has its own special tax credit to encourage people to invest in its Opportunity Zones. The Ohio Opportunity Zone Tax Credit gives a 10% tax credit to investors who put money into a fund that helps improve Ohio properties in these zones. Right now, there are 320 Opportunity Zones across the state in big cities, small towns, and rural counties.  These zones can be found online at the Ohio Department of Development’s website.

Ohio also offers other helpful programs, some of which can be especially valuable for cities like Cleveland, including:

Transformational Mixed-Use Development Program

The Transformational Mixed-Use Development Program gives tax credits to large projects that combine homes, stores, and offices.

Historic Preservation Tax Credit

A Historic Preservation Tax Credit helps cover the cost of restoring historic buildings, with up to 25% back on eligible renovation expenses.

Building Demolition & Site Revitalization Program

The Building Demolition & Site Revitalization Program provides grants to demolish unsafe, vacant buildings, clearing the way for new development.

City of Cleveland Resources for Development

The City of Cleveland also has funding to support new projects. One program is the Community Development Block Grant, which gives money for building homes, helping small businesses, improving streets and parks, and more. Another program, the Citywide Development Assistance Program, helps nonprofits fix up homes and business areas.

Legal Guidance for Real Estate Projects

Even with these programs in place, most large projects still require funding from multiple sources to get off the ground, and that’s where lawyers add value. Experienced real estate attorneys can help by:

• Forming business entities
• Resolving ownership issues (called ‘title issues’)
• Applying for and securing grants or loans
• Obtaining zoning and building permits
• Drafting fair community agreements

Working with a lawyer who has a background in real estate and real estate development can help you put the pieces together to make a project work.

Old buildings may be empty, but they’re full of potential. With the right tools and support, they can become homes, shops, and spaces that bring people together. Federal, state, and local incentives, like the Opportunity Zone program, give cities such as Cleveland real opportunities for growth and revitalization.

For more information or to seek counsel from our Real Estate & Construction group, please reach out to request a consultation or call us at 216-696-1422. McCarthy Lebit would like to thank law clerk Ayishat M. Szalacha for her effort in assisting with the preparation of this legal blog post for The More Report.

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This information is provided for general informational purposes only and should not be construed as legal advice. Readers should consult with qualified legal counsel regarding their specific circumstances before taking any action based on the information presented.

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The Importance of Title & Survey Review

A review of a title commitment confirms the seller owns the property and has the legal right to sell it. Without this confirmation, buyers can inherit undisclosed liens, outdated mortgages, restrictive covenants, easements, or unresolved ownership claims. Any of these issues can delay closing, reduce the value of the property, and create legal disputes.

Survey review is equally as important as title review, and the two go hand-in-hand. A survey reveals the property’s physical boundaries and identifies easements, encroachments, setbacks, and other conditions that impact land use. These issues may be detailed on the title commitment but are often misunderstood until they are revealed by a current survey of the property.

Title insurance also plays a major role. A clean title is usually a prerequisite for a title insurance policy, which protects against future claims or undiscovered issues. Further, most commercial lenders will not fund a transaction without it.

A Real Estate Lawyer’s Role in the Title & Survey Review Process

Real estate lawyers serve as both legal translators and risk managers in the title and survey review process. On the title side, they examine the title commitment issued by the title company, flag concerning exceptions, and negotiate their removal or mitigation. Lawyers will also ensure that the property title complies with the representations and warranties in the purchase agreement.

When it comes to the survey, it is cross-referenced with the title documents to identify any conflicts, encroachments, or unrecorded easements. The analysis focuses on how the property’s physical and legal boundaries could affect intended use, such as future expansion plans, parking layout, compliance with local zoning regulations, or more.

Beyond identifying issues, the goal of a real estate attorney is to help mitigate risk. This may involve recommending specific endorsements to the title policy, drafting or revising agreements, or coordinating with the title company, engineers, and lenders to resolve issues before closing. It is also essential to ensure the proper issuance and recording of deeds and other legal documents.

Small Business, Big Stakes

Small business owners often invest their personal savings and take significant risks when acquiring property. That is specifically why due diligence in commercial real estate transactions is not just for major corporations. It is even more crucial when the stakes are personal, margins are tighter, and an owner stands to lose everything. This makes careful legal diligence not a luxury for small businesses, but a necessity.

If you are buying, leasing, or developing property, a real estate attorney can help you uncover hidden risks, negotiate protections, and close with clarity and peace of mind.

To seek counsel from our Real Estate & Construction group, please reach out to request a consultation or call us at 216-696-1422

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In celebration of National Small Business Month, we proudly recognize the contributions of small businesses in our community. McCarthy Lebit is committed to supporting entrepreneurs and business owners with trusted legal guidance through every stage of their journey, from formation to growth and beyond. As a law firm deeply connected to the small business community, we’re proud to serve as trusted advisors and advocates for business owners throughout the region.

This information is provided for general informational purposes only and should not be construed as legal advice. Readers should consult with qualified legal counsel regarding their specific circumstances before taking any action based on the information presented.

The post Title & Survey Review: The Hidden Commercial Real Estate Safeguard appeared first on McCarthy Lebit - A Cleveland/Ohio Law Firm.

Buying Commercial Real Estate

Perhaps the most enticing aspect of purchasing commercial real estate is the ability to build equity. As you pay down the mortgage, your ownership interest becomes less encumbered by debt, which can be a valuable asset to you in the long run.  However, purchasing commercial real estate requires a substantial upfront investment. Down payments, closing costs, and other associated fees can make it challenging for some businesses to afford commercial real estate. Further, once you close, you are ultimately responsible for maintenance and repairs (even if these obligations are offset by tenant payments).

Maintenance and repairs can be a significant ongoing expense, and if not managed properly, it can affect your bottom line.  As such, it is critical that you have your real estate attorney involved from the beginning of the acquisition process to ensure that your short term and long-term concerns are addressed up front.  Specifically, your real estate attorney can help with:

1. Contract Negotiation: Your legal counsel can adroitly negotiate the terms of the purchase agreement, ensuring that the contractual framework not only safeguards your interests but also faithfully reflects your intentions.
2. Due Diligence: A lawyer can orchestrate the due diligence process on the property by scrutinizing the title and identifying other legal conundrums that may impinge upon the acquisition.  Some typical legal conundrums include identifying and addressing potential legal entanglements, environmental liabilities, or zoning issues.
3. Financing: Your lawyer can also help you identify financing options at your disposal by helping you find the option that works best with your financial objectives and prevailing circumstances. In instances where you are procuring financing for the purchase, your lawyer can serve as a knowledgeable guide through the lending process, while reviewing loan documents to ascertain your rights and obligations.
4. Tax Implications: The acquisition of real estate triggers an array of tax implications. Your legal counsel can furnish clarity regarding property tax obligations, potential deductions, and any tax incentives tethered to commercial property ownership.
5. Long-Term Vision: No matter where your business is in its growth cycle, a real estate lawyer can be instrumental in evaluating whether property ownership harmonizes with your long-term growth prospects and prevailing industry trends.

Leasing Commercial Real Estate

Leasing can be a great vehicle for you especially if your business hinges on flexibility.  Leasing requires a smaller upfront investment compared to buying. Businesses can allocate more capital to operations, growth, and other immediate needs. In addition, with a lease, you have a fixed monthly rent, making it easier to budget for occupancy costs.  However, leasing does have its drawbacks, the most significant of which is the lack of equity building. Rent payments do not contribute to ownership, and you won’t benefit from property appreciation.  Further, over the long term, leasing can become more expensive than buying, especially if rent increases significantly over time.  With respect to leasing, your real estate lawyer can provide significant value in the following ways:

1. Lease Review: A lawyer can assist in methodically assessing the comprehensive cost of leasing over the lease term, encompassing rent escalations, maintenance outlays, and can identify any covert expenditures that may lurk beneath the surface. A lawyer’s acumen comes to the fore during the comprehensive review of the lease agreement, where they can identify and highlight pivotal terms and conditions that bear direct relevance to your business. Additionally, they can engage in negotiations with the landlord to ensure that your business objectives are duly accommodated.
2. Understanding Obligations: Leases frequently come laden with a number of tenant obligations, ranging from maintenance and repairs to payment of common area expenses, taxes, and insurance. Your lawyer can be extremely valuable to you in helping you grasp the nuances of these obligations while advocating for terms that are more conducive to your business interests. Skillful negotiation of lease terms, inclusive of rent stipulations, renewal options, and rent escalation clauses, requires a deft legal touch to ensure that you secure an equitable deal.
3. Exit Strategy: A seasoned real estate attorney can furnish guidance on lease termination clauses and the potential ramifications of early exit, thereby assisting you in formulating a contingency plan should the exigency to relocate or downsize materialize.

Final Thoughts

The conundrum of choosing between the purchase and lease of commercial real estate is an exercise that hinges on your financial standing, business objectives, and risk appetite. Purchasing provides an opportunity for long-term equity cultivation and autonomy, albeit burdened with a heftier initial financial outlay and an array of enduring responsibilities. Conversely, leasing provides flexibility and lower upfront costs but lacks the prospect of equity accumulation and enduring stability. It is imperative to subject your options to exhaustive scrutiny, leveraging a deep understanding of your business’s unique requirements, prior to making any decisions. Collaboration with a seasoned real estate lawyer can provide expert guidance throughout the process, from evaluating property options to negotiating contracts. Their insights can help you make an informed decision that aligns with your business objectives and minimizes risks. Consulting with a lawyer early in the decision-making process can save you time, money, and potential legal complications down the road.

For more information or to seek counsel from our Real Estate & Construction practice, please reach out to request a consultation or call us at 216-696-1422.

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This information is provided for general informational purposes only and should not be construed as legal advice. Readers should consult with qualified legal counsel regarding their specific circumstances before taking any action based on the information presented.

The post The Crucial Role of a Lawyer in Deciding to Buy or Lease Commercial Real Estate appeared first on McCarthy Lebit - A Cleveland/Ohio Law Firm.

You may wonder why you would voluntarily enter into such an agreement, especially when you have no specific lease obligation. As a practical and business-savvy landlord, it is imperative for you to recognize the importance of your tenant’s financial success. To secure that success, the tenant presumably needs the loan to improve its business and generate revenues needed to pay the rent.

Nonetheless, just because you want your tenant to succeed does not mean you should sign any form waiver the lender throws your way. To ensure that your rights as a landlord are properly balanced, you should consider the below:

Waiver vs. Estoppel

You will want to subordinate your lien on tenant’s property rather than completely waive it. Lenders typically agree to subordination, as their focus is receiving a first security interest. With subordination, the lender obtains priority, but your lesser secured position may still provide reduced recovery if the tenant defaults.

Collateral Description

The collateral description should be limited in scope and easily identified, avoiding blanket descriptions. The specificity of the definition will ensure that you do not waive or subordinate rights to property other than what was financed by the lender, including your own property, like real property improvements, plumbing, or fixtures. You could violate your own mortgage if you waive your interest in these items.

Landlord’s Notice Obligations

Landlords should only agree to use “reasonable efforts” to notify lender of a default which may result in a lease termination. Additionally, your failure to give notice should not void the default, prevent your ability to terminate the lease, or subject you to damages.

Lender’s Right of Occupancy

You should set limits on lender’s occupancy rights, providing that activities are only allowed at reasonable times and notice, and with your representative present. The lender should also agree to pay rent if the tenant fails to do so, obtain adequate liability insurance, covenant to repair any damage to the premises as a result of removing the collateral, and indemnify you from any liability or expenses resulting from its access and removal of collateral. Include language that lender’s failure to remove property by a certain date is considered abandonment, at which point you may remove such property from the premises. In regards to auctions, you may want to prohibit lender from conducting a collateral sale onsite or, if you are inclined to allow a sale, lender must obtain your prior consent and the sale should be subject to your terms. Lastly, lender should agree not to interfere with your efforts to lease the premises to a replacement tenant.

No Further Obligation Of Landlord

The Lien Waiver/Subordination must confirm that all of your obligations terminate upon the earlier of (1) tenant’s satisfaction of its loan; or (2) the end of lender’s occupancy period, in which any remaining collateral will be deemed abandoned.

Attorneys’ Fees

Finally, because you are negotiating and executing the Lien Waiver/Subordination as an accommodation, it is reasonable for you to require your tenant be a party to the agreement and compensate you for reasonable attorney’s fees incurred in negotiating the Lien Waiver/Subordination.

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This information is provided for general informational purposes only and should not be construed as legal advice. Readers should consult with qualified legal counsel regarding their specific circumstances before taking any action based on the information presented.

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