Ohio Environmental Law Blog : Ohio Environmental Lawyer & Attorney : Joseph Koncelik : Frantz Ward Law Firm : Environmental Regulation, Land Use, Compliance : Cleveland, Ohio

Details were released this week by the Kasich Administration on the establishment of its privatized economic development agency known as JobsOhio.  Many of the traditional job creation duties that fell to the Ohio Department of Development will be shifted to JobsOhio. 

Along with the restructuring of development duties, the Administration is shifting the State's liquor profits to help fund the Agency.  Last year the liquor profits took in around $700 million in revenue to the State.  In return for a 25 year agreement to fund JobsOhio with liquor profits, JobsOhio will make a one-time $1.4 billion dollar payment back to the State.  Details of how those funds would be utilized were discussed in the Plain Dealer:

The $1.4 billion agreement calls for Ohio to collect $500 million for its general revenue fund, money already factored into the current state biennial budget, $750 million to pay off existing liquor revenue backed bonds, and $150 million to continue "Clean Ohio" environmental programs for the next three years.

The reference in the Plain Dealer Article regarding Clean Ohio is a bit confusing.  Based upon an article in Columbus Business First, the $150 million is set aside to pay for the grants that were awarded or will be awarded by July 1, 2012.  In the future, funding will be set at $43 million per year.

The agreement, which will be reviewed and possibly voted on Jan. 30 by the state Controlling Board, includes a provision for the $43 million for economic revitalization projects as well as $150 million to cover Clean Ohio Fund projects approved by the state before July 1, 2012.

Impact on Clean Ohio

The transformation of the Ohio Department of Development and creation of JobsOhio has resulted in tremendous uncertainty regarding  the State's $50 million dollar per year brownfield redevelopment program. 

This fall, when the Administration made the announcement that liquor profits would be shifted, the Administration said it would look for a new revenue source to support Clean Ohio.  It now appears that the same revenue-a portion of liquor profits- will be used to support the program for the next three years. 

What remains uncertain is when that money will be available.  Currently, the Ohio Department of Development announced the end of funding for the Clean Ohio Assistance Fund (COAF) which pays for Phase II environmental assessment on brownfields.  Also, the Department announced the current round of the Clean Ohio Revitalization Fund (CORF) would be its last. Now that the funding source has been announced, the question is when will the State start accepting grant applications again?

Due to the fact the $150 million is being allocated pay for COAF and CORF grants in the pipeline and the last round of CORF, it appears no new funding will be available for Phase II work prior to July 1st.

Who Will Administer Clean Ohio in the Future?

What also remains uncertain is whether the current process for grant selection and administration will remain.  During yesterday's announcement, the Administration indicated that the current process will remain in place through the summer.  However, the Kasich Administration also suggested that legislation could be introduced this Spring to modify the program. 

What the Administration did make clear is that they want to see more direct economic development benefits for use of Clean Ohio funds in the future.  This means it is unlikely grants such as the Redevelopment Ready track of the Clean Ohio program will continue. 

The Redevelopment Ready track provided grants up to $2 million to clean brownfields that were primed for development based on their location but lacked a specific end use (i.e. development project).  Some argued that the Redevelopment Ready Track allowed areas outside Cleveland, Columbus and Cincinnati to better compete for the grant money. 

While this week's announcement seemed to answer the question as to whether funding will remain in place for Clean Ohio in the near future, there remains three major questions:

1. When will the grant process open up again:
2. Who will administer the program- the newly created Ohio Development Services Agency or JobsOhio; and
3. What will the grant application and selection process look like in the future?

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Yesterday, the Ohio Department of Develop put the following notice on the Clean Ohio Fund webpage:

NOTICE

Effective immediately: The Clean Ohio Assistance Fund is no longer accepting applications. If you have a project and would like to discuss other funding opportunities please contact us.

Back in October, Governor Kasich announced that he was redirecting the funding for the Clean Ohio program to his JobsOhio economic development program.  Funding would remain for one additional round of the Clean Ohio Revitalization Fund which provides up to $3 million in clean up grants for brownfield redevelopment.. 

In addition, funding for the Clean Ohio Assistance Fund (COAF) was thought to last through June 2012.  However when the announcement was made that funding was shifted to JobsOhio it cast doubt on the future of the Clean Ohio program.  As a result, the Department of Development was flooded with COAF applications in December.  No one wanted to risk missing what could the last of the Clean Ohio funding. 

Due to the rush of applications, all available funding was already allocated in December for the COAF program.  Several projects that were also seeking funding were told they were too late.

With the last round of CORF this month and the announcement ODOD is no longer accepting applications for the COAF program, the Clean Ohio program in Ohio is effectively closed.  This announcement is disappointing since the program was one of the most successful in the country in spurring revitalization of brownfield properties. 

In November, the Governor's spokesperson indicated the Administration was looking to find new revenue to continue the program.  No such funding has been identified to date.  The prospects for finding new revenue must be very uncertain because the Department is not even allowing developers to submit applications to form a line when funding does come available. 

Signs point that the Country and State's economy may slowly be turning the corner. If that is indeed the case, It would be nice to have the tools in place to direct new development to abandoned sites and contaminated properties which populate Ohio's urban core.

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Rumors abound that the Kasich Administration is seriously considering totally overhauling the Clean Ohio brownfield grant program.  Multiple sources have indicated that the Administration is discussing internally making the next round of Clean Ohio the last for the program in its current form.

During the transportation engineers conference in Columbus, Governor Kasich made remarks that Clean Ohio would be reconstituted.  He said the program needs to improve upon providing funding projects that have the best opportunity to either create or retain jobs.

Back in April I wrote a post titled Clean Ohio Ends 2013....What Next?  In that post I discussed that the Department of Development was planning on four rounds for the competitive Clean Ohio Revitalization Fund (CORF):

• Round 11 in November 2011 (applications have already been submitted)
• Round 12 in Award in July 2012 (applications due in January or February)
• Round 13 in November 2012
• Round 14 in July 2013

In addition, to the Clean Ohio Assistance Fund (COAF) would receive new funding in July 2012 which would provide assessment (Phase II) funding through July 13.

The Kasich Administration may be planning on scrapping Rounds 13 and 14 and making Round 12 the final round.  If this happens it will make the final round highly competitive with many cities trying to cram projects in at the last opportunity. 

What Next?

There are no details that have been released publicly as to how the remaining funds (Rounds 13 and 14) may be used.  One possibility discussed was the Administration would proactively target sites rather than allow developers to join with cities in filing applications.  Another possibility would be to do away with the Redevelopment Ready and Sustainability Reinvestment tracks that do not require immediate development or jobs.

Its hard to comment on the merits of a new program when details have not been released.  However, there is no doubt the Clean Ohio program is extremely popular with all the cities as well as developers.  The program has been the key to allowing redevelopment on a number of highly contaminated and complex sites that would have otherwise sat idle.  In Ohio, where brownfields are too numerous, the COAF and CORF grants literally forced development onto underutilized or vacant properties. 

Because Clean Ohio was passed by the voters, it seems impossible for the Administration to redirect the money to other programs than brownfields.  However, the Administration does have the latitude to completely reshape the process for how sites get selected for funding. 

We will have to watch to see how it unfolds.  Regardless, it looks rather certain Clean Ohio as we know it will not look the same after the January Round. 

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One of Governor Kasich's top priorities is to restructure the Ohio Department of Development shifting some of its core functions to the private sector. The General Assembly passed the JohsOhio Bill which launched an evaluation of the current Department.

The bill allowed for the creation of a non-profit corporation which would assume some of the duties and responsibilities of the existing Department. The bill also required the Director of the Ohio Department of Development to evaluate all powers, functions, and duties of the existing Department and submit a report to the General Assembly that includes recommendations in the following areas:

• Improve the functions and efficiency of the Department
• Transfer specified powers, functions, and duties to other existing state agencies or to JobsOhio (private sector entity);
• Eliminate specified powers, functions, or duties of the Department.

On August 18^th, the Administration released its report with the results of its review and proposal for restructuring the Ohio Department of Development to the Ohio General Assembly. In the report, the Administration makes the recommendation to transfer core duties to the non-profit corporation. The Department will also undergo a restructuring relative to those duties and responsibilities that remain with the Department.

JobsOhio Duties

The following functions will be moved to the non-profit corporation:

·        Office of Business Development- responsible for jobs retention, expansion and location. This includes incentive packages to attract or retain companies.

·        Office of Grants and Tax Incentives- responsible for grants and tax incentives associated with business attraction and development.

·        Office of Loans and Services- loan origination and servicing

·        Ohio Tourism- marketing of the tourism in the State

Ohio Development Services Agency

The old Ohio Department of Development will be renamed the Ohio Development Services Agency. It will have three key divisions that will retain a large portion of the remaining functions of the current Department.  The new organization of the Agency will consist of three divisions:

·        Business Services

·        Community Services

·        Operations

Impact on Environmental Grant Programs (Clean Ohio)

The Clean Ohio and Jobs Ready Site programs are the two largest grant programs available for redevelopment of brownfields. These programs will remain government functions and be housed under the Community Services Division of the newly formed Ohio Development Services Agency.

The report includes additional recommendations from stakeholders and staff about changes to the urban development functions including the Clean Ohio program. One possibility apparently not seriously discussed was moving these functions over to Ohio EPA’s brownfield program.  Other improvements suggested including reducing public notice periods and expediting grant administration.

It appears that the Clean Ohio program will largely be untouched by the major transformation at the Ohio Department of Development. The only possibility could be staff reductions. The report contains the following chart showing significant staff reductions. However, the report notes that most of those reductions will be through attrition (i.e. as people leave they won’t be replaced). 

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The State has announced the latest modifications to the Clean Ohio Assistance Fund (COAF) policies which provides up to $300,000 for Phase II environmental assessments and up to $750,000 for brownfield clean up.  The State released its COAF policy update last month.

Unlike the Clean Ohio Revitalization Fund (CORF), COAF grants are given out on a rolling basis as long as the State had money during the funding cycle. COAF has traditionally been used to obtain funding for Phase II assessments on brownfields.  The use of the COAF for clean up has been less frequent due to limited funding available and the larger clean up grants available under CORF (up to $3 million). 

The changes to the COAF program this time include:

Asbestos- 

The policy now explicitly states that abatement of asbestos are eligible clean up costs.  See, 3.06

Matching Funds- 

For the first time, the State is requiring a 10% match for use of COAF for clean up grants.  This means for a max clean up grant, the applicant will need to supply $75,000 toward clean up. While its understandable the State wants to see the applicant have some "skin in the game,"  the no-match component of COAF was one element that made it more attractive than CORF. 

Another issue is that the policy says the match must be spent by the "project approval date."  The policies don't define this term, but it would appear to be the date the Controlling Board approves the issuance of the grant.  This timing seems odd in that applicants would need to spend the 10% before they knew for sure they were getting the grant.

Jobs Commitment-

Perhaps even a larger change than the 10% match, is the requirement that COAF clean ups for industrial or commercial use must generate or retain at least 10 jobs.  See 6.09  Not every project has a job component at the get go. 

The State previously recognized that some brownfields may not have redevelopment committed but are located in prime locations for future development.  This is why for the CORF the State created the "Redevelopment Ready Track."  Perhaps the limited amount of COAF clean up funds available is driving the State to use the money only for projects that have a job component.

No Longer a "First Come/First Serve" Program-

In the e-mail to interested parties providing notice of the changes to the COAF policies, the Ohio Department of Development also stated the following:

"During the month of July, cleanup applications will be reviewed and approved based on project merits rather than a first come/first serve basis."

While the indication is projects will be evaluated on their merits, there were no other changes to the policies which shed light as to how they will be evaluated on their merits.  Unlike the CORF application process there is no defined scoring methodology for projects.  This statement from ODOD can probably only be interpreted to mean the Director retains discretion to reject your clean up project as not worthy of COAF funding. 

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In 2000, Ohio originally voted to approve the Clean Ohio Fund as a $400 million dollar bond program. In 2008, the Clean Ohio Fund was reauthorized through a ballot initiative known as Issue 2. The ballot initiative was overwhelmingly approved in all 88 counties which extended the Fund with another $400 million dollars.

Clean Ohio is probably the most successful brownfield redevelopment program in the Country.  Approximately $400 million of the $800 million in funding went to brownfield projects in the last twelve years.  Here is an outdated chart from the Clean Ohio Fund Report which shows the number of projects and dollars used for brownfield revitalization just in the first four rounds of the program. 

Since the first four rounds that State has gone to two rounds per year.  We are now up to Round number 10. 

The Clean Ohio Fund Interactive Map provides the location and project information for over 1,200 projects financed through the Clean Ohio Fund, representing over $627 million in awards to date.

Four Rounds Left After July 

Round 10 is in July.  Then there is enough funding for Round 11-2 (Round 12 will be May 2012).  That is not a lot more opportunities to use the program if you have a project that you think would be a good match for Clean Ohio funding.  It takes around 6-8 months to get a project ready for a Clean Ohio Revitalization Fund (CORF) project.  Which means projects for Round 10 are basically getting ready to be finalized and Round 11 projects are already being discussed.

Will Clean Ohio Continue?

The Clean Ohio program has been wildly successful.  Funding projects across the State.  Many significant development projects simply would not have happened with out the grant funds available through the program. 

While perhaps a little premature, its time to start planning another ballot initiative if suporters are going to seek to renew the program.  Governor Kasich has not been asked his opinion as to whether the program should continue.  While the program is funded through bonds it still takes state revenue to retire those bonds.  With an $8 billion budget hole and a difficult budget process, the challenges facing renewal have never been greater.

What Happens if Clean Ohio is Not Renewed?

The major source of assistance in Ohio to spur brownfield redevelopment will disappear.  There are other federal and local programs, but none with the resources and successful track record like Clean Ohio.  Unfortunately, if the program is not renewed, many brownfield sites with significant contamination will simply be avoided.  New development will be pushed out to greenfields and perhaps away from our urban core.

With the number of brownfield sites remaining in the State, the need for the program remains as strong as it was in 2000.

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The Clean Ohio program has released a new interactive tool called the"Project Location and Information Map" which provides an interesting overview of brownfield and greenfield projects that have received grant funding under the program. 

You can search by type of grant funds for all projects across Ohio.  You can also search by specific county and see all the projects in that area that received funding.

The project information is pretty limited once you select a specific site.  It basically has a picture of the site and a description of the type of funding received (the picture above was taken from interactive map).  There does not appear to be any details on the type of development anticipated or description of clean up issues encountered.

The State is inviting the project developers to provide more description, so perhaps there is an opportunity to give more detail.  It would be helpful if the description on the map at least identified the parties involved on the project.  

Due to the limited information, the map does not have much utility other than highlighting the large number of projects that have received grant funding across the State. However, you do have other options to gain more information about projects listed on the map. 

Perhaps you are interested in a property in close proximity to a project that received funding.  You always have the option of making a public record request to find out more details on a specific project.  Under public records law you are entitled to see all the documents generated regarding the investigation and clean up associated with a project.

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The Governor's top legislative priority is the privatization of the State's economic development functions.  House Bill 1, known as "JobsOhio", has been introduced and a vote in the Senate may come yet this week. 

The Ohio Department of Development (ODOD) plays a critical role in the administration of the Clean Ohio program which provides millions in grants for brownfield redevelopment.  The Department's current role includes the following:

• Review for Clean Ohio grant applications for completeness;
• With the assistance of Ohio EPA, makes eligibility determinations;
• Meets with applicants to discuss projects (known as "PRAMs");
• Selects which projects will receive Clean Ohio Assistance Fund (COAF) funding which has recently become Phase II assessment grants;
• Assists the Clean Ohio Council in evaluating projects for Clean Ohio Revitalization Fund (CORF) funding for clean up; and
• Determines which projects can be reimbursed with grant funds.

On the brownfield projects I work on, the ODOD personnel are the key point of contact when evaluating projects and through out implementation of the project.  More than once, ODOD personnel have made absolutely critical decisions that impact the viability of projects or have made significant reimbursement decisions that cost  developers hundreds of thousands of dollars. 

With the privatization of economic development functions, ODOD's key role will almost certainly be absorbed by another state agency.  Most likely, Ohio EPA will pick up these functions, but its possible the functions could stay with the newly created non-profit corporate entity.

How far away are we from that transition? House Bill 1 is only the first step in privatization of the Ohio Department of Development and the associated transfer of existing functions to other state agencies.  The bill basically establishes the non-profit corporation to be known as JobsOhio.  The Bill then calls for a six month consultation process to evaluate transition of the other functions of ODOD. 

Here is the relevant section of H.B. 1:

Sec. 187.05. The director of development, as soon as
practical after the effective date of this section, shall, in
consultation with the governor, evaluate all powers, functions,
and duties of the department. Within six months after that
effective date, the director shall submit a report to the general
assembly recommending statutory changes necessary to improve the
functioning and efficiency of the department and to transfer
specified powers, functions, and duties of the department to other
existing agencies of the state or to JobsOhio, or eliminate
specified powers, functions, or duties. The recommendations shall
be submitted in writing to the speaker and minority leader of the
house of representatives and the president and minority leader of
the senate.

After submitting the report, the director, in consultation
with the governor, shall continue to evaluate the department and
make additional recommendations on such matters to the general
assembly.

We are probably at least a year away from seeing any of ODOD's responsibilities transition to other agencies or to the JobsOhio entity.  For now it will be the status quo.  But in the near future a crucial decision will be made as to who will administer ODOD's critical Clean Ohio responsibilities.

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The Ohio Water Development Authority (OWDA) has long had a revolving loan fund to help finance brownfield clean up projects.  However, the OWDA program has rarely been utilized because of two factors:

• Clean Ohio Program-  Offers grants up to $3 million for clean up and remediation of sites (i.e. why take a loan when there is significant grant money available?)
• Non-competitive interest rates

At this week's Ohio Brownfield Conference, the State announced that they soon would be revamping the OWDA program to make it more attractive.  The two major changes to be made are:

1. Responsible Parties-  OWDA will allow companies that have legal responsibility for contamination to be eligible for loans so long as the company is not under enforcement orders. Responsible parties (PRPs) are not eligible for Clean Ohio or other federal grant funding.
2. Competitive Interest Rates-  The State did not announce the exact interest rate.  They simply stated the the new rates would be competitive.

The biggest change is allowing responsible parties to be eligible for loans.  Now companies have a new financing option if they want to address historical contamination on their property to eliminate liability risks.  Companies can utilize the Ohio Voluntary Action Program (VAP) in performing their clean up.

Clean up under VAP is a far better option than clean up under traditional enforcement or regulatory programs like RCRA (hazardous waste regulatory program).  VAP clean ups are:

• Cheaper- the program allows use of institutional (i.e. deed restrictions) and engineering controls (physical barriers) as an alternative to more costly removal/disposal of contamination
• Companies have much more flexibility in how to perform their clean up-
  • Residential versus industrial/commercial standards can be selected
  • Buildings and parking lots can be used to contain contamination versus digging and hauling material off-site
  • Companies private environmental consultant oversees the clean up and selects remedies versus the regulator

The OWDA program may provided needed financing to companies wishing to take advantage of the VAP program.

We will need to see the details for the changes to the program once the State rolls them out.  I was told that would occur in the next few weeks.  However, these changes appear to make the OWDA Brownfield Loan Program much more attractive.

(See extended entry for the current program guidelines which will soon be changed)

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Clean Ohio Council has expanded the types of eligible projects that can receive funding under the Clean Ohio Revitilization Fund (CORF).  Parks, urban waterfronts, solar and wind projects are now eligible for funding so long as these projects take place on a brownfield. 

This change will create greater competition begining in Round 10 of the program.  

Three Grant Tracks Under CORF

For round 10 of the CORF, applicants can now seek funding under three different development scenarios:

1. Known End Use Track- $3 million for projects with a use of the property identified as part of the application.
2. Redevelopment Read Track- $2 million for projects on land believed to be primed for redevelopment, but with no specific end use identified. 
3. Sustainable Reinvestment Pilot Track- $1.5 million for sustainable Infrastructure, which includes certain park projects and green infrastructure, urban waterfronts, and cleanfields and brightfields (Wind and Solar projects).

The CORF program has funded very good projects which have always been classic brownfield redevelopment projects, such as the following:

• Construction of new commercial or industrial facilities on a brownfield property
• Expansion of existing industrial and manufacturing facilities onto contaminated land
• Refurbishment and/or renovation of existing structures for reuse

The classic redevelopment projects with known end users have become less frequent in recent rounds.   In order to increase the number of applicants, the Clean Ohio Council decided to create the Known End User Track.  This allowed clean up of brownfields in key locations in hopes of attracting development on these parcels.

Perhaps because the State fears future reductions in applications submitted for CORF, the Clean Ohio has decided to expand eligible projects far beyond the classic brownfield redevelopment project.

Sustainable Reinvestment Pilot Track

In Round 10 of the program, there will be up to $8 million available for these projects.  Here are some of the key aspects of the Sustainable Reinvestment Pilot Track:

• Can only get a maximum of $1.5 million in funding
• Must be on a brownfield
• Can spend the grant funds on demolition, clean up and infrastructure activities
• Infrastructure expenditures are capped at $400,000
• For this track, the definition of "infrastructure" is expanded to include:
  • pathways
  • structures used to manage stormwater
  • wetlands
  • stream restoration
• 25% Match is required, and the following can be used as match:
  • park amenities
  • plants, trees, landscaping, urban gardens
  • solar panels and components
  • wind turbine components
  • green roofs
• Projects must meet the following for infrastructure or new construction:
  • Follow sustainable best practices
  • LEED
  • Green Infrastructure Guidelines
  • Local ordinance mandating all future construction on the project property meet LEED guidelines for a period of 10 years

Parks and Waterfront Restoration Projects Now Eligible

Under the new track, parks and urban waterfronts redevelopments can also be projects.  This subcategory is called the Signature Parks, Sustainable Infrastructure and Urban Waterfronts category.  All park and waterfront projects must meet the following:

•  80% of area must be greenspace or public space
• max 20% of area can be used for parking
• deed restrictions good for 10 years
• commitment for maintenance and stewardship
• Signature Parks or Sustainable Infrastructure must be a minimum of 1.5 acres
• Urban Waterfront projects must be a minimum of 1.0 acre

Cleanfields/Brightfields (Wind and Solar)

Nothing is provided in the Round 10 CORF policies regarding restrictions on this subcategory of the Sustainable Reinvestment Track.  However, if you review the scoring methodology the Council will use to evaluate these projects, the following a key considerations:

• project site has grid access with a participating electric company; or
• project will result in net-metering for an existing entity
• the electric generation site will be a minimum of 25 acres

Impact of New Track

Clean Ohio has not increased funding by $8 million.  Rather, the Council decided to make up to $8 million of the total $23 million available in CORF Round 10 available for the new Sustainable Reinvestment projects. For future applicants, this change likely means increased competition. 

While grant funding for wind, solar, parks and urban stream restoration is understandable, the Clean Ohio program is moving away from classic brownfield redevelopment projects.  The core of the program has always been to remove the barriers to commercial and/or industrial reuse of contaminated land.  In essence, with more competition less money will be available for these classic clean up projects.

Deadlines

Applications are due to your local library by January 14, 2011 as a part of the scheduled Round 10 of the Clean Ohio Revitalization Fund. Approved applications will be announced in May 2011. 
 

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Ohio has one of the best state brownfield grant programs in the country.  There are two pots of money available at the state level:

• Clean Ohio Revitalization Fund (CORF)- Grant that offers up to $3 million to reimburse clean up and some redevelopment costs.  Requires a 25% match.  Typically awards are made twice a year and applications for projects compete against one another for limited funding.
• Clean Ohio Assistance Fund (COAF)- Grants are awarded on a rolling basis so long as money remains available in the grant cycle.  COAF pays up to $300,000 in assessment costs (Phase II) and $750,000 for clean up.

A year ago, the Ohio Department of Development (ODOD) announced a major change to COAF-greatly expanding areas eligible to submit COAF applications.  ODOD has just released the 2010 Priority Investment map which shrinks the eligible areas back down the "normal" coverage under the program.

Properties eligible to request COAF funding are those located in a "inner city area", a "labor surplus area" or a "situational distress area" as defined by O.R.C. 122.65(H). Each year the Ohio Department of Development releases a map of the State that identifies which areas fall under one of the three categories and could apply.

ODOD also announced a freeze on COAF clean up grant requests because the number of applications in the pipeline already exceed available funds for FY 2011.  You can still submit an application, but you will not receive clean up funding in FY 2011.  This is in part because ODOD decided to prioritize Phase II grants last year thereby reducing available funding for clean up.

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Recently, Ohio EPA released its newsletter directed toward those interested in brownfield redevelopment (SABR News).  The July 2010 newsletter included some important recent developments at the federal and state level.

Federal Brownfields Legislation

The Federal Brownfield Re-authorization Bill was introduced in May 2010.  If the bill passes it could include some important reforms to U.S. EPA's brownfield programs, including:

• Increased funding- From $350 million in 2011 up to  $600 million in FFY 2016.  While an increase in funding helps spur brownfield redevelopment, one has to question whether such an increase is at all likely given the state of the federal deficit.
• Increase in the cap on federal grants-  Move from $200,000 to $750,000. This is obvious change because the cap was woefully low compared to real word sampling and clean up costs at brownfield sites. Compare it to the Clean Ohio program that has a cap for property assessment work of $300,000.  Over and above the assessment money, you can also get a maximum of $3 million in clean up funding under Clean Ohio. 
• Locally owned properties eligible for federal funding-  Under current law, any municipality who takes ownership of a parcel through foreclosure is considered a PRP under CERCLA and is ineligible for federal brownfield funding.  The legislation would remove this prohibition. This is a very important change.  Cities often take properties because of health or safety issues presented by their current conditions.  We shouldn't penalize cities for being proactive.

Background Soils Workgroup

The newsletter provides an update on Ohio EPA's effort to create a background soil database.  Native Ohio soils can contain various contaminants.  For example, Ohio farm soils are known for higher natural arsenic content. 

At clean up sites, consultants are often asked to perform an analysis to determine if detected levels of contamination are "above background."  If levels are at or below background, then remediation is not necessary. 

The site specific background evaluations can become time intensive and costly.  Hopefully, by producing an Ohio background soil database these types of evaluations will be streamlined and can be performed in a more cost effective manner.  A draft of the database may be available by this Fall.

New Guidance on Vapor Intrusion

In May 2010, Ohio EPA released its new guidance document for sampling and evaluation of potential vapor intrusion associated with contaminated soil and groundwater.  The technical guidance document provides information regarding how Ohio EPA will determine whether soil or ground water contamination would potentially result in unhealthy indoor air exposure to occupants of buildings. 

Vapor intrusion is getting much more attention nationally.  Previously, Ohio EPA simply referred to U.S. EPA's OSWER guidance on vapor intrusion.  Now, Ohio EPA has developed their detailed guidance. 

From discussion with some environmental consultants, they indicate that the Ohio EPA guidance seems to tilt the scales toward sampling in addition to just modeling.  Regardless, it is an important guidance document on an issue that will be receiving heightened attention.

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Hush-Hush Hazards

 

State kept unaware of environmental dangers at casino site

 

Delphi spent about a year identifying toxins at the West Side manufacturing plant it closed in 2007 but never told the state about what it found. It wasn’t required to. New owner Penn National Gaming has shared Delphi’s 3,000-page report with the EPA and plans to clean up the site before opening a casino in 2012... Prospective buyers have a right to know about any potential problems, said Tiffani Kavalec, the agency's (Ohio EPA) cleanup and reuse-section manager.

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The administration of the Clean Ohio program is largely governed by the policies developed by the Clean Ohio Council. Separate policies have been generated for the Clean Ohio Assistance Fund (COAF) and the Clean Ohio Revitalization Fund (CORF).

Over the life of the Clean Ohio program, the Clean Ohio Council has routinely updated the program policies to address issues and provide additional clarification to applicants. The policies govern critical components of the brownfield grant program including eligibility, evaluation of projects and administration of grants.

The policies are used as a mechanism to address many of the more common issues that arise and to modify the program. Every brownfield project is different and on most Clean Ohio projects issues will arise that are unique to that project or that are not clearly addressed by the policies. However, it is important to pay attention any time the Council updates their policies.

On March 19, 2010, the Clean Ohio Council approved changes to the policies that govern projects seeking funding under the Clean Ohio Revitalization Fund (CORF). CORF funding is awarded on a competitive basis semi-annually by the Clean Ohio Council. The new policies were placed on the Clean Ohio web page today and are effective immediately.

An Ohio EPA newsletter states the changes were made based upon recommendations received from the Ohio Department of Development (ODOD), Ohio EPA, grantees and other interested parties. While the changes do adjust some of the administrative procedures, there are no changes on the scale of past policy updates. Prior changes included creation of the Redevelopment Ready Track and the addition of extensive conflict of interest provisions.

Here is a quick summary of the changes made:

• Eligible Grant Costs- Costs incurred responding to Ohio EPA comments are now eligible. However, costs associated with re-issuance of a No Further Action letter are not eligible. Clarification was provided that costs incurred in preparing an application are not eligible.
 

• Clarification of Eligible Infrastructure Work- To be eligible as match, infrastructure work must be performed on or at the project property. Infrastructure work used as match must be completed prior the end of the grant. The 10% limit on use of grant funds for infrastructure costs was maintained. A new definition of what constitutes “infrastructure” was added which states:

            o “Infrastructure” means technical structures that support society, including but not limited to roads, bridges, water supply, sewers, power grids, and telecommunications, but excludes vertical structures, such as buildings and parking garages. The exclusion of buildings and parking garages is the most important clarification of this added definition.
 

• Requires a Project Resource and Advisory Meeting (PRAM)- The PRAM meeting includes ODOD and Ohio EPA at the Site. This is where any issues identified with the clean up or proposed project can be discussed early on with the State Agencies. While these meetings have been routine, the policy update makes clear that the meeting is mandatory and must be conducted prior to placing the grant application in the library for public comment.
 

• Integrated Rankings- Under the policy revisions, if an Integrating Committee ranks multiple projects, and a project is withdrawn prior to the Clean Ohio Council award meeting, lower ranked projects will move up in ranking. This is an important change because projects do routinely drop out of the process and some areas of the state (including Cleveland) typically have multiple projects submitted. The Integrated Committee related points are crucial you’re your application is in a competitive grant round.
 

• Initiation and Completion of the Project- New requirements were added regarding funding projects. Applicants are not required to open a Technical Assistance Account with Ohio EPA within 60 days of grant award. These accounts are used to discuss clean up issues with Ohio EPA. Work must commence on site within 12 months of the effective date of the grant agreement. Finally, projects must be completed within 48 months (including issuance of the Covenant Not to Sue by Ohio EPA) of the date the grant contract is executed.

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There has been much discussion regarding the use of Land Banks to assist in addressing the aftermath of the foreclosure crisis.  Here is an excerpt from the Cleveland Plain Dealer discussing the County's recently launched non-profit corporate land bank:

Formally launched by the county in April, the new, nonprofit land bank is the first of its kind in Ohio.It could soon turn Cleveland into the nation's biggest urban laboratory on how a declining industrial city with a comatose real estate market can downsize gracefully -- and prepare to rebound in the future. The impact on the city as a whole could be far greater than individual projects such as the proposed medical mart and revamped convention center downtown.

Ohio recently passed Senate Bill 353 which allows a two year trial period for Counties to create a separate county land reutilization corporation for purposes of acquiring abandoned and tax delinquent properties.  By allowing creation of a separate corporation, the law addresses the issue of liability- a major short-coming of Ohio's existing land banking law set forth in Ohio Revised Code 5722.  The law also allows for an expedited foreclosure process. The Federal Reserve Bank of Cleveland released an good analysis of the new legislation titled "Understanding Ohio's Land Bank Legislation."

Why create a land bank?  Obviously, thousands of abandoned properties bring down property values across the board and create blight.  Abandoned properties also present other risks. Here is a quote from a University of Michigan study of its Land Bank program:

The U.S. Fire Administration reports that over 12,000 vacant structure fires are reported each year in the U.S., which results in $73 million in property damage annually.  In addition, abandoned properties tend to attract crime. A 1993 study of 59 abandoned properties in Austin, Texas, found that 34 percent were used for illegal activities and of the 41 percent that were unsecured, 83 percent were used for illegal activities.

While the focus of the recently enacted Land Bank Legislation has been as a tool for addressing abandoned residential properties, its utility should also be examined for application to brownfields. Land Banks can serve has effective means of addressing the complex legal and environmental issues that face brownfield properties. 

As an example, the Franklin County Land Bank was used successfully to address tax liens on the former Bedford Landfill which overcame a significant barrier to redevelopment.  The Bedford Landfill became a successful Clean Ohio project receiving a $3 million grant from the State of Ohio.

Today, I attended a presentation by members of the City of Cleveland's Economic Development Department on the City's Industrial Land Bank Program.  Nate Hoelzel and David Ebersole provided an interesting overview of this unique effort by the City to address large brownfield's for redevelopment.

The City of Cleveland's Industrial/Commercial Land Bank was launched in 2005.  The creation of the Cleveland Industrial Land Bank was preceded by an academic study by Cleveland State University.  The purpose of the bank is to try an assemble large tracks of abandoned property in areas identified by the City for priority commercial/industrial development.  Criteria include looking for properties of at least 20 acres in size and near key infrastructure.

In a relatively short time period (less than 4 years), the Land Bank has acquired 100 acres of brownfield property.  Thirty-seven (37) acres are currently on the market for industrial or commercial redevelopment.  The adjacent picture is from Economic Development Department's web page shows the location of 3 tracks currently held by the Land Bank.

The industrial/commercial land bank is designed to overcome the unique aspects of  contaminated urban property that prevents major development.  Representatives for the City of Cleveland estimated it cost approximately $300,000 per acre to address urban brownfield property.  Such a staggering costs often drives development to greenfields and promotes urban sprawl.  The factors that drive such staggering costs include:

• liability for contamination
• assessment costs for investigating the extent of contamination
• demolition costs for vacant buildings
• property title issues including tax liens

Land Bank's can overcome many of these barriers by providing public funds for costly environmental assessment, removing title issues and even potentially addressing liability through clean up of the property.  A property returned to the market may be free of tax liens and have received a full release from the State of Ohio for environmental contamination.

While successful for its relatively short existence, Cleveland's Industrial Land Bank could be improved if provided additional flexibility.  The Land Bank relies upon the traditional legal framework for its activities.  The legal authority for municipalities to purchase underutilized land exists at the State level in Ohio Revised Code 5722 and at authority for the Industrial Land Bank is located in Section 183.021 of the City of Cleveland Code. Under these authorities, no separate corporation can be created which means the City can face significant liability exposure under federal Superfund laws (CERCLA) for owning contaminated property. 

During the presentation, the presenters mentioned the City's effort to amend federal law during the effort in 2006 to reauthorize U.S. EPA's brownfield program.  While amendment of federal law to allow municipalities or counties to acquire property without fear of CERCLA liability makes sense, it may be an uphill climb.  It may be more practical to allow for expansion of Ohio's new Land Banking Legislation to specifically allow for political subdivisions to acquire brownfield properties through a separate corporation.  This would provide City's a layer of liability protection for being active in purchasing these complex properties.

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On May 18, 2009 the Clean Ohio Council finalized new policies that will govern future rounds of the Clean Ohio Revitalization Fund (CORF).  A major change has been incorporated into the policies that will impact developers, consultants and contractors who work on Clean Ohio projects.  For the first time the Council has included conflict of interest prohibitions. 

The conflict of interest prohibitions are directed primarily at consultants who have previously acted as both developer and environmental consultant on a project.  Contractors are also prohibited from taking any interest in the development if they want to received Clean Ohio funds to perform work on the project. 

Another important prohibition applies to consultants and prohibits participation as both consultant for the developer and a company who caused or contributed contamination at the property.  This has occurred at projects because it appeared to create continuity on the project.   Some public entities saw it as a positive to continue to involve the consultant who has the most knowledge about the challenges presented by contamination at the property.

If you are involved in Clean Ohio projects, this new provision carries important implications that could shape future involvement at brownfield redevelopment projects.  It will also be important to monitor your partners in a project because a conflict of interest could hold up the whole project. 

Here are the new provisions:

10.02 Entities paid for with Clean Ohio Revitalization Fund grant dollars on a funded property must avoid conflicts of interest. A conflict of interest occurs when an individual or organization involved in the cleanup project has an interest that might compromise their ability to execute the project in a manner consistent with the intentions of the Clean Ohio Revitalization Fund program. A conflict of interest may exist even if no proven illegal act results from it, and will include an appearance of impropriety that undermines confidence in the individuals or organizations involved in the project. To avoid a conflict of interest and ensure that proper checks and balances exist, the following restrictions are placed on funded properties:
    • The Certified Professional may not act as the developer or an investor in  the development on the funded project.
     • The selected environmental consulting firm or their employees may not act as the developer or an investor in the development on the funded project.
     • The selected contractor or subcontractors may not act as the developer or an investor in the development on the funded project.
      • The selected environmental consulting firm and the contractor or subcontractor for the funded project may not be the same firm or related firms.
     • The selected environmental consulting firm may not be engaged in concurrent service agreements for the grantee and the party that caused and contributed to the contamination on the funded project.

(Photo: Patriarca12/everystockphoto.com)

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These are great times to investigating potential brownfield projects in Ohio.  The State has two pots of money available under its Clean Ohio brownfield program.  1)  the Clean Ohio Revitalization Fund (CORF); and 2) the Clean Ohio Assistance Fund (COAF).  CORF is a competitive grant process where applications are pooled into rounds and the top projects in that round receive funding.  Under COAF, projects are evaluated on an individual basis and decisions are made by the Director of the Department of Development.

COAF- Areas Eligible to Apply for Funding is Greatly Expanded

This month, the Ohio Department of Development announced a major change to COAF-greatly expanding areas eligible to submit COAF applications.  Properties eligible to request  COAF funding are those located in a "inner city area", a "labor surplus area" or a "situational distress area" as defined by O.R.C. 122.65(H).  Each year the Ohio Department of Development releases a map of the State that identifies which areas fall under one of the three categories and could apply. 

On May 1, 2009, the Ohio Priority Investment Area Map was modified to reflect the recent changes made to the Federal Labor Surplus map. Under the old map 41 counties and certain cities were designated "priority investment areas" based on one of the three categories.  The new map designates 83 counties in Ohio as Labor Surplus Areas. This includes all of Cuyahoga County and most of the surrounding Counties. 

All areas designated on the Priority Investment Map are therefore eligible to file applications for the Clean Ohio Assistance Fund for assessment grants of up to $300,000 and cleanup grants of up to $750,000. COAF will have approximately $12 million for new grants in the coming year. Applications can be submitted on a rolling basis (no deadline). 

The Ohio Department of Development also modified the policies governing COAF.  One notable change is the prioritization of Phase II Environmental Assessment projects.  Here is what the Department said about this change:

In order to maximize assistance to distressed communities during the economic crisis and meet a critical need to prepare sites for cleanup and redevelopment, the Clean Ohio Assistance Fund will now reserve 75% for funding Phase II Environmental Assessments grants and 25% for funding cleanup grants.

CORF's - Redevelopment Ready Track

If you are looking at a project with much higher clean up costs than $750,000, then CORF is still a great option.  The State recently provided more flexibility to the program.  Last summer, the Ohio Department of Development made a major change to the CORF program by adding the "redevelopment ready track." Before this change an applicant for CORF had to identify in its application a committed end user post clean up. Under the "redevelopment ready track" an applicant could qualify for up to $2 million in grant funds to pay for clean up costs even without an end user.

A significant amount of cleanup funding is available in the upcoming rounds of CORF. Funding for Round 7 (deadline July 25th) and Round 8 will total $48 million in the coming year ($24 million per round), which is the largest amount the program has experienced in its history.

Unlike other States, Ohio has a lot of funding available for brownfield investigation and clean up.  Over the last year the State has increased the flexibility in the program and expanded areas within the State eligible for funding.  While the economy is down, it is a great time to explore development options for brownfield sites.  As the economy comes back the competitiveness of these programs will increase. 

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Hurry up and get your site in line by Monday March 30th with the State of Ohio for possible additional federal brownfield money to support your project.  The State is only looking for "shovel ready" sites.  This means the types of brownfield sites that may be able to secure the $200,000 federal brownfield stimulus money are limited. 

Check out the Ohio Department of Development's fact sheet to see if your brownfield site may be eligible.  If it is then you need only fill out a simple form to get your site in line. 

The State has been sending out the following notifications:

Dear Brownfield Stakeholder:

The American Recovery and Reinvestment Act was signed into law by President Obama on February 17, 2009. The Recovery Act purpose and goal is to “to jumpstart our economy, create or save millions of jobs, and put a down payment on addressing long-neglected challenges so our country can thrive in the 21st century.” (www.Recovery.gov)

The American Recovery and Reinvestment Act allocated $100 million in additional funds to the United States Environmental Protection Agency (EPA) for the Brownfields program. This is a nationally competitive program for the assessment and cleanup of brownfield properties. Government entities and non-profit organizations may apply directly to EPA for these funds. It is anticipated the EPA will release a notice into the Federal Register detailing guidelines regarding application submittals this week. The timeline for distribution and administration of these dollars is very short. Additional information is available on EPA’s brownfield website: http://www.epa.gov/brownfields/eparecovery/index.htm

The Ohio Department of Development will be applying to the EPA to support brownfield cleanup and redevelopment statewide. Our Urban Development Division has successfully received grants of this type in the past and is well positioned to request significant cleanup dollars and to work in partnership with the communities to have an impact around the state. In preparation, the Department needs to create a pipeline of potential projects given the criteria listed on the enclosed fact sheet. The Department, if awarded, will administer and target the funds for these particular categories of brownfield projects: asbestos abatement, hazardous substance projects in the Ohio Voluntary Action Program and petroleum projects regulated by the Bureau of Underground Storage Tank Regulations.

If you have a viable project in one of these categories, please read the enclosed fact sheet then fill out the web form available at http://development.ohio.gov/recovery/recoveryform/ so we may include your project in our list of projects by Monday, March 30, 2009 at 12 p.m. EDT.

Important Note: Although you may have already submitted a request on recovery.ohio.gov, it is necessary to provide your project information on the web form for the Department’s funding request to US EPA. Submitting information to either the receovery.ohio.gov site or on the web form does not indicate application submittal or funding approval. If the Department receives funding, projects will be prioritized for their readiness to proceed and creation/retention of jobs.

Thank you,

Urban Development Division

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After reauthorization of the Clean Ohio program this November by Ohio Voters, the State has announced their intention to maintain two grant funding rounds per year going forward.  Hopefully this will allow the program to operate more consisentely.  In the past, project developers were often forced to try and rush projects because future funding rounds were uncertain. 

Round 5 was completed in December, with seven projects recieving around $12.7 million in funding.  This was less than the $17 million the state had available in that round.  This marks the first time less then the full amount of funding available was awarded. 

The State has already announced the schedule for the next two funding rounds:

Round 6- Unless your project is already been listed on Ohio's Brownfield Inventory, you are too late to qualify for this round.  The deadline for filing the form to be listed in the inventory was December 5th.

- Grant applications are due January 9th

- Awards will be announced in May of 2009

Round 7

- No deadline for listing a property with the brownfield inventory has been announced to date.  Typcially, the deadline is 30 days prior to the deadline for filing a grant application.

-Grant applications are due July 25th

-Award will be announced in November of 2009

The Ohio Department of Development (ODOD) who administers the program also announced other enhancements to improve the program.  These include:

• Clean Ohio Assistance Fund applications will be processed in 10 days instead of 30 days
• Disbursement requests can be made every 30 days instead of 60 days
• Information regarding public bidding of work associated with Clean Ohio projects will be made available to small and minority owned businesses

The announcement to make the program more consistent should be great news for everyone who works with the program.  This will allow project developers and governments to tee up projects when they are truly ready versus trying to rush the project to meet the funding deadline. 

With the overall lack of development occurring in Ohio right now due to the poor economy, this is a great time to develop Clean Ohio projects because the next few rounds will likely be less competitive.  This was certainly true for Round 5 in which the State did not even award all the money that was avaiable.

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To quote a consultant I work with..."Times must be tough in Ohio when there is free money left on the table" for redevelopment. 

Today, the Clean Ohio Council met to evaluate the project proposals for Round 5 of the Clean Ohio Revitalization Fund.  There was $17 million in grant funding available.  In the previous 4 rounds, CORF was so competitive many projects were left without funding.  As perhaps an indication of the economy, Round 5 was the first time ever all of the money available was not awarded. 

Here is the typical process at the meetings where the Clean Ohio Council makes its decisions about which projects to fund- There is a brief presentation made to the Council about each project. The Council can asked questions to better understand the project or raise concerns.  After the presentations, the members of the Council vote on the project and each project receives an overall score.  The Council breaks for lunch and afterward the Staff of the Ohio Department of Development reveal which projects will get funded.

I used to sit on the Clean Ohio Council and experienced very competitive grant rounds where a number of projects did not get funded.  Due to the time and effort to put a application together, you could hear the audible sighs in the audience from those left out of the money.  No such sighs were heard today....

At today's meeting, Council broke with tradition and did not even bother scoring all the projects.  The total request for all eligible projects was only $12 million of the $17 million available.  Therefore, the Council simply passed a resolution to award all eligible projects the funding they requested. 

I worked on one of the projects that was selected for award.  The project is a great story of a closed manufacturing site getting cleaned up and returned to productive use.  The Clean Ohio program has had many success stories like this in the years it has been operating.  I hope the next round of funding sees renewed interest, it would be a shame to leave "free" redevelopment money on the table that could be put to good use. 

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With very little fanfare, the Department of Commerce put on their web page two documents that change the policy interpretations of the prevailing wage requirements. The "policy interpretation" is controversial.  As reported in the Cleveland Plain Dealer, the Republican controlled House and Senate will likely be discussing ways to block the change.

What are Prevailing Wage laws? To offset the low bid public contract requirement,  the ""prevailing wage" law requires wages commonly paid to construction workers in a particular region will determine the minimum wage paid to the same type of workers employed on publicly funded construction projects. (For additional background view the extended entry below)

The Strickland Administration is claiming that the release of the Commerce Department's new guidance document on prevailing wage is a "simple clarification" of existing law.   The spokesman for the Governor said the law was simply "misapplied" to two situations, one of which is brownfield redevelopment projects.  However, many view it as a broad expansion of the applicability of prevailing wage that could drive up construction costs. 

Strickland Administration Frames the Debate: "In recent years there has been no clear approach used by the Department when determining whether publicly-funded construction activity is so intertwined with private construction activity that the activity constitutes a single "project" (triggering prevailing wage) and when they are sufficiently "separate and unrelated" that they constitute separate projects, one publicly supported (which triggers prevailing wage) and one privately financed (which does not trigger prevailing wage).

THE ISSUE: When a Clean Ohio grant pays for remediation work and demolition but the rest of the project development is privately financed, then what portion is covered by prevailing wage?

FROM ADMINISTRATION'S NEW POLICY STATEMENT:  Whenever a public entity contributes funding or other direct support (e.g.-public land) to a project, even an otherwise privately-financed project, prevailing wage must be paid to the workers on the project.

RAMIFICATION ON BROWNFIELD REDEVELOPMENT PROJECTS:  Under the Administration's new policy, prevailing wage will apply to all construction work at a site receiving Clean Ohio funds whenever an end-user is identified.  Therefore, if the Clean Ohio grant application includes a commitment to use the site by a new tenant or developer, prevailing wage applies to all construction at the site work.  If no end-user is identified in the application, prevailing wage only applies to remediation work at the site.

DISCUSSION:  It simply is a false distinction to apply prevailing wage on the basis of whether an end user has been identified.  Under Clean Ohio guidelines, grant funds can only pay for :

• environmental remediation (including asbestos abatement)
• demolition
• a portion of the purchase cost of the property (optional under end user track). 

The Clean Ohio guidelines forbid expenditure on building improvements or infrastructure improvements.   If it is illegal to use to program funds for this work, how can prevailing wage be deemed to apply?

Developers will have to run the numbers.  By choosing the "development ready track" (no end-user), applicants can only seek $2 million in state funds versus $3 million for end-user projects.  Developers will be calculating whether overall project costs exceed the extra $1 million available if prevailing wage applies.  Some may say that's acceptable, but if makes less brownfield projects viable that is not a good result for Ohio's cities.

It seems questionable that the Administration can make such a broad change in application of the prevailing wage through a simple "policy interpretation."  Legal challenges or legislative action seems inevitable.

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This picture may be one of the last of the "big three" (Strickland, Husted, and Harris) holding hands over Clean Ohio. Governor Ted Strickland's administration is proposing to mandate prevailing wage for all construction that occurs on land for which the State has funded environmental remediation.  A key political debate is shaping up as to how this change will affect projects funded using brownfield grant funds through the Clean Ohio Program. 

To provide answers a few points must be addressed:

• Which type of Clean Ohio grant funded the project?
• Which costs are at issue?  Remediation costs or construction costs post-clean up?

Clean Ohio recently created a new "redevelopment-ready" grant track.  This is in addition to the "known end-user track."  Apparently, under the proposed policy how much work at a brownfield is covered by prevailing wage will depend upon which grant track your project was funded.  

Under the proposed prevailing wage policy, if your project receives Clean Ohio funding under the "known-end user track" the use of grant funds will "presumptively subject all construction on the entire project to prevailing wage."  However, if the state were to fund the cleanup at the brownfield under the "redevelopment ready track" (i.e. there is no identified end-user of the property), then only the remediation work is subject to prevailing wage. 

According to the Columbus Dispatch,  Speaker Jon Husted expressed concern that application of prevailing wage to brownfield development could drive people to using green space or farmland for development.  What type of cost increases would decrease the attractiveness of public-subsidized redevelopment of brownfield sites?

A Legislative Service Center (LSC) study of the exemption of school projects from prevailing wage concluded it reduced costs by around 10% and saved $487 million.   The conclusions of the LSC study were challenged, so it is difficult to really know whether similar cost increases could occur at brownfield sites.

Here is my take:

• Environmental remediation is an expensive business, application of prevailing wage may not impact the costs associated with this type of clean up work. However, it may be different when dealing with the redevelopment of the site post-clean up (i.e. pure construction work).  It is possible that construction costs at a brownfield could increase by a comparable amount (10%) as was found in the LSC study. 
• A 10% increase in costs is probably unlikely to make most projects that are premised upon receiving public subsidies no longer attractive.  However, why diminish the cost effectiveness of a grant program designed to spur redevelopment in neglected areas. 

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PTIO Program is Launched-  Effective June 30, 2008 Ohio EPA finalized this new permit program which combines the Permit to Install (PTI) and Permit to Operate (PTO) into a single permit for non-Title V facilities.  Facilities will no longer have to apply for a separate PTO.  This program is intended to deal with Ohio EPA's backlog of PTOs which is in the thousands.  Ohio EPA's new PTIO application is up and must be used for new permits.

Electronic Reporting through Air Services- Effective June 30, 2008 Ohio EPA transitioned from its STARship electronic air reporting software to Air Services.  Air Services is part of Ohio EPA's larger effort to transition to more web based business interaction with the regulated community.  Following the release of the Air Services software, both Title V and Synthetic Minor Title V facilities will be required to use the eBusiness Center: Air Services for all emissions reporting, Title V Annual Compliance Certifications, Title V and other permitting applications.

Electronic Reporting of Surface Water Reports-  If you are using paper reporting or SWIMware to submit monthly-operating-reports (MORs) for NPDES permit compliance you need to quickly transition to Ohio EPA's new electronic reporting system.  Ohio EPA indicates it expects to cease accepting MORs by "end of the  summer". SWIMware has been replaced by the new online system called e-DMR, Electronic Discharge Monitoring Reporting System. The term, MORs (Monthly Operating Reports) is now being referred as DMRs (Discharge Monitoring Reports). The new reporting system is entirely web-based and accessible via any internet connection.

Ohio Diesel Grant Awards Announced-  On July 29th the Ohio Department of Development announced the recipients of the grants for diesel retrofit and repower projects for vehicles and fleets.  The award recipients originally submitted applications back in February.  The implementation of the Diesel Emission Reduction Grant (DERG) program was plagued with a number of issues that resulted in the rejection of a large number of applications and delay in announcing awards.  The Ohio Diesel Coalition is working in conjunction with the various State agencies to improve the grant process in the second round.  The Department of Development is expected to release the second request for proposals (RFP) in August. 

Brownfield Redevelopment- Clean Ohio Assistance Fund (COAF)-  As of July 1, 2008 the Ohio Department of Development has begun accepting applications for COAF grants to pay for Phase II site assessments (up to $300,000) and clean ups (up to $750,000) of brownfield properties.  ODOD has approximately $11.4 million to award.  To qualify the property must be in a designated priority investment area (see map).

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On June 4, 2008, the Clean Ohio Council approved two new grant rounds (Rounds 5 and 6) to encourage brownfield redevelopment through its Clean Ohio Revitalization Fund (CORF).  As noted in a recent stakeholder report on the Clean Ohio Program, the CORF is "seen as a significant national model that other states strive to replicate."  If you are not familiar with the program, I urge you to take the time to learn about the benefits. 

While the main benefit of the program is that it allows participants to offset clean up costs associated with industrial and commercial properties, there are also significant tax and legal advantages to participation. Attached is a client note that I prepared that provides more detail regarding the program. 

The most significant change made to the program is the creation of a new grant option called the "development ready track."  Now applicants have two options, they can elect to participate in the "known end use track" or the "development ready track."  The major difference is that under the "development ready track" an applicant for grant funds does not need to identify an end user that has committed to the property post clean up and development. 

The "development ready track" favors properties that have potential to attract future economic development.  For example, properties that have existing sewer and water service or are in close proximity to transportation will receive higher scores using the new scoring methodology developed for this track. 

Under the "development ready track" the maximum amount an applicant can request is $2 million instead of the $3 million potentially available under the "known end use track."   You may not use any of the grant funds for acquisition of the property, whereas the "known end use track" allows up to 33% of your total grant request to go toward acquisition. 

Even with these differences, the "development ready track" presents a new opportunity to communities, businesses and developers.  For communities, it provides an opportunity to drive economic growth toward priority development areas.   For developers, it increases the number of properties that could potentially be viable projects.

The new grant application forms can be obtained from the Ohio Department of Development's web page.

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