CLEVELAND, Ohio – A state agency that helps finance environmentally friendly projects might strip Cleveland and its school district of the ability to collect property taxes on an apartment and office complex planned for Ohio City, the city reported Wednesday.

David Ebersole, the city’s economic development director, told cleveland.com that such a move by the Ohio Air Quality Development Authority would cost the city, city schools, libraries and others about $57 million and could open the door for developers to circumvent taxes on future projects.

The city objects not only to the amount and duration of tax relief sought by the project’s developer, but also that the action by the state would trample on home rule powers granted by the Ohio Constitution.

“We’ve taken strong opposition to this and we will continue to do so,” Mayor Frank Jackson said.

A spokeswoman for Cleveland schools CEO Eric Gordon confirmed the district also is opposed to the tax relief -- and any abatement that would be harmful to the school district and imposed by the state.

What is the project?

The development in question is the $175 million Market Square project, the plans for which call for a 10-story office building and 7-story apartment building just south of the West Side Market along West 25th Street.

Harbor Bay Real Estate Advisors LLC, which is based near Chicago, has told The Plain Dealer that it plans to begin construction later this year and that when complete, the office building will be the nation’s tallest timber-frame building.

Cleveland.com sought comment from Harbor Bay on Wednesday afternoon, but a message was not returned.

An employee from the Ohio Air Quality Development Authority responded to an email from cleveland.com, confirming that the issue was tabled in August.

What’s the developer want?

Harbor Bay Real Estate sought the tax breaks as well as financing from the state authority, which has the power under state law to issue low-interest bonds for projects that promote better air quality and to abate property taxes for 30 years.

By using timber for frames, the Market Square project would be better for the climate than a project using traditional steel or concrete frames. A study published in March 2014 by the Journal of Sustainable Forestry found that substituting wood for other construction materials could prevent 14% to 31% of global carbon emissions.

Harbor Bay Real Estate first approached the state in March about tax relief. The issue was on the development authority’s August agenda, but was tabled, according to the city.

That proposal would have granted 100 percent abatement for 30 years on new taxes generated by the project. The authority tabled the matter after Cleveland objected.

Part of the city’s irritation is that the authority neglected to notify the Jackson administration, the school district and other taxing entities that the request was on the August agenda, said Edward Rybka, Jackson’s chief of regional development.

The authority urged the developers to talk with both the city of Cleveland and the city school district about its request, which has happened. Rybka said Harbor Bay presented its argument for proceeding with the request. It has asked for a complete abatement from the state for the project, Rybka said.

Harbor Bay also is seeking financing through the development authority, Rybka said.

How would this abatement differ from what the city offers?

Cleveland routinely approves property tax relief for both commercial and residential development projects. But the abatements are limited to 15 years and only cover taxes that would otherwise be imposed on the increased value of the property. And some developers still must make payments to the school district, which relies on property taxes.

The development authority could grant tax abatements for up to 30 years. Those abatements would not provide for payments to school districts or other agencies that rely on property taxes.

What happens next?

The authority could vote on the request as early as next month.

What action the city might take is undecided, Rybka said, but he would not rule out suing to protect the city’s home rule authority.

Cleveland and other cities across Ohio have objected to state actions in recent years that have whittled away at their authority to govern themselves, despite the constitutional guarantee.

In this case, the state would be stepping in and forcing tax incentives that traditionally has been left to the cities to grant.

“We really think it’s overstepping,” Rybka said.

Cleveland.com reporter Peter Krouse contributed to this story.