Cuyahoga County May End Brownfield Program

After more than ten years of building a brownfield redevelopment program, Cuyahoga County Officials are currently contemplating bringing the program to a close.  Over the last few years significant staff cuts have reduced the amount of resources dedicated to the program.  Now it appears that in 2017 the various incentives available to attract redevelopment to brownfields may no longer be available.  Or, there will be no staff dedicated to run the program.

Hopefully, County Officials will understand the critical need the brownfield programs provide to overcome the major impediments to reuse of old industrial and commercial buildings in the region.  Even with the recent economic development boom in Cleveland there remain hundreds of underutilized or vacant brownfield properties.

One of the most critical needs the County program fills is grant funds to pay for Phase I and limited Phase II environmental assessments through the County's Brownfield Community Assessment Initiative. Under the program, the County would provide up to $5,000 in grant funds for Phase I assessments and up to $35,000 for Phase II assessments.  These incentives help overcome the first major hurdle to brownfield redevelopment- having no information about the condition of the property.  Many developers and businesses aren't willing to front these assessment costs as part of early evaluation of a property.  

The County also provided forgivable loans to help offset environmental cleanup costs.  Under its Redevelopment Ready Program, the County can provide loan funds up to $1 million with 40% of the total loan forgivable if certain criteria are met.  This type of loan was a critical tool in the Miceli Dairy expansion project which was one of the significant brownfield redevelopment projects in Northeast Ohio.  Without County incentives, both assessment grants and a forgivable loan, the project never would have occurred.  The expansion kept and expanded jobs in a critical area in Cleveland.  

The County had offered a wide array of programs and incentives to help renovate vacant buildings and spur brownfield redevelopment.  It took nearly ten years to build up the expertise and incentives which made it a very successful program.  For a full list of the County Brownfield Programs click here.

We can only hope that the new Administration realizes what a critical function a brownfield program plays in an area with a long industrial past and limited space for redevelopment.

State of Ohio Pursues Recovery of Incentives

Companies expanding onto brownfield sites need public incentives to make their projects viable.  However, the days when cleanup of contamination by itself could attract public incentives are long over.  Under the new local and State brownfield programs companies must make job commitments and/or improvements to the property to attract government assistance.

When companies work with State and local officials to obtain brownfield incentives they must engage in negotiations regarding what they are willing to commit to as part of the project.  These commitments will often extend 3 or more years out into the future when it becomes more challenging to predict economic and business conditions.

The Dayton Daily News discussed the State of Ohio's pursuit to recover incentives from companies that failed to meet business expansion or development commitments.  The DDN reported:

State officials reviewed 329 economic development deals that concluded in 2015 and found that all but 50 had substantially complied with the terms, such as hitting job creation and retention numbers, training workers and generating new payroll.

If companies fail to live up to their promises, the state may demand repayment or make other changes to the deal. In the 50 cases where targets weren’t hit, the state is moving to clawback a collective $776,000. Some of the biggest take backs are being launched against well-known, big companies — Proctor & Gamble Co., U.S. Steel Corp., and The Dannon Co. — for failing to create or retain promised jobs

This is very relevant to JobsOhio brownfield grants and loans provided to companies to assist with sampling or cleanup at contaminated properties.  The grant agreements for the JobsOhio Revitalization Program include contractual commitments to increase payroll, add jobs or make capital investments to expand the business.  For example, at minimum, JobsOhio typically requires 20 new jobs over a three year period to compete for brownfield cleanup grant funding under its Revitalization Program.

The grant agreement language is somewhat vague as to what happens if the grant commitments are not met by the company.  The language does allow for companies to assert that changing economic conditions resulted in unmet commitments.  However, the contract language does leave open the possibility JobsOhio could request return of the entire brownfield grant provided.

It is important that companies pursuing brownfield incentives be aware of the consequences of not meeting commitments.  It is also important to avoid putting forward unrealistic job or capital investment commitments just to attract upfront grant money.  Companies that over commit open themselves up to clawback by the State of the funds provided as well as publicly being outed for failing to live up to their commitments.

State Poised to Accept Grant Applications for Gas Station Cleanups

This Fall the Ohio Development Services Agency (ODSA) announced program implementation details for the newly created $20 million dollar Abandoned Service Station Fund.  ODSA sent out an announcement to contacts that it would likely begin accepting applications winter, however, to date the ODSA has yet to begin accepting applications.  ODSA developed the program in conjunction with Ohio EPA and the Bureau of Underground Storage Tank Regulation (BUSTR).

The Abandoned Gas Station Cleanup Grant was specifically created to target a certain segment of brownfields largely neglected in Ohio - abandoned gas stations and petroleum underground storage tanks.  The program provides grant funding to pay for sampling and clean up of BUSTR Class C sites (underground storage tanks with documented petroleum releases and the owner of the tank has no funds).

A key eligibility issue discussed in a prior post has been resolved favorably.  Local government entities do not need to actually own the site to be eligible to receive funding.  Local governments can work with the landowner, similar to other brownfield programs, and apply for funding so long as there is a development agreement between the government and the landowner.  However, the applicant and property owner cannot have contributed to the prior release of petroleum or other hazardous substance on the site.

Eligible activities include up to $100,000 for assessment and up to $500,000 for cleanup. Other eligible activities include costs to empty or remove underground storage tanks, abatement of asbestos, lead or other contamination, demolition and site clearance.

ODSA stated in its announcement that priority will be given to vacant gas or service station projects where cleanup provides the greatest environmental, community and economic impact.  This statement suggests that priority will be given actual abandoned gas stations.  There are also many instances where abandoned underground storage tanks exist on industrial or commercial property. It appears the State views these sites as less of a priority.

As discussed in the prior post, the State already maintains a list of BUSTR Class C tanks.  There are over 500 Class C tanks already appearing on the list.  With so many abandoned tanks, it is very likely that the $20 million in funding will be used up very quickly.  Therefore, it is important for any landowner or community seeking funding to make sure they are ready to submit an application as soon as the program opens.  

Update:  ODSA just released its webpage on the Abandoned Gas Station Cleanup Grant Fund.  Application materials and scoring matrices for projects will soon be availble

Key Eligibility Issue Needs to be Decided for New Underground Storage Tank Fund

I previously posted about the new $20 million dollar cleanup fund created to address old gas stations.  The fund with be operated by the Ohio Development Services Agency (ODSA).  

The fund will provide up to $100,00 for sampling and $500,000 for cleanup of abandoned gas stations or underground storage tanks that are classified as Class C (i.e. the Bureau of Underground Storage Tanks has certified that the party responsible for cleanup is not viable).  

ODSA is currently developing program guidelines and is planning on having the program up and running some time this fall.  One major legal issue that needs to be resolved is who exactly is eligible to receive funding.  

The legislation states that the “property owner” for purposes of applying for the grant money must be “a political subdivision and an organization that owns publicly owned lands.”  The Legislative Service Commission (LSC) analysis for H.B. 64 states that a political subdivision must own the land but “publicly owned lands include land that is owned by an organization that has entered into a relevant agreement with such a political subdivision.”

What does “entered into a relevant agreement with such a political subdivision” mean? Does this mean that a private property owner (as long as they didn’t create the contamination) could enter a redevelopment agreement with a City similar to how Clean Ohio operated(i.e. the City applies for the funds, but a private entity can own the land as long as it has a redevelopment agreement with a public entity). Or, does this mean the organization must hold the property on behalf of the City for public purposes?

If ODSA ultimately decides only political subdivisions or entities that hold public land can receive funding, there may be a pretty limited pool of applicants for funding.  Such an interpretation would ultimately require a City or County to take ownership of the land in order to clean it up.   

First, many cities may not have the wherewithal to purchase or take ownership of such property even through foreclosure.  Second, many may be concerned with liability concerns since neighbors could still sue for releases of contamination.  These are the types of liability issues and costs that government typically relies upon the private sector to address.

How this issue gets decided in the coming months will be a major factor in how quickly funds are utilized and how effective the program will be in addressing these sites.

Review of Compliance with Job Commitments in State Incentive Packages

The Attorney General's Office completed its review of compliance with job commitments the state received in exchange for various incentives.  Here is the summary of its findings:

  • Workforce Compliance Rate: 100% (49 of 49 awards in substantial compliance)
  • Grant Compliance Rate: 74.4% (29 of 39)
  • Tax Credit Compliance Rate: 62.4% (78 of 125)
  • Loan Compliance Rate: 57.1% (24 of 42)

The chart and figures show the break down of compliance by type of incentive.  The report also contains an appendix which identifies all of the specific incentive packages by company and the status of compliance.  

The report really doesn't provide much insight as to why some incentives have a greater level of compliance than others. One explanation for the 100% compliance with workforce development is that the commitment is really just a training commitment, not a job creation commitment.

The state not only reviews compliance with the job commitments in state incentive agreements, it takes enforcement against those companies that it deems are not in substantial compliance.  This from the Columbus Dispatch Article discussing the Attorney General's Report:

The state has taken action against many of the companies behind the 75 projects that were not in compliance. It demanded the return of some grant money, modified terms on loans and shortened periods in which the companies were able to collect the tax credits. In other instances, the state found the companies were mostly in compliance despite coming up short and ordered no remedial action.

Incentive agreements also contain an out clause in the event there is an economic slowdown which prevents the company from meeting its commitments.  

Brownfields

One type of grant not covered in the report are brownfield grants.  This is because under the Clean Ohio Program, the grant agreement required a commitment to cleanup the property to Ohio EPA's Voluntary Action Program standards, not a specific job creation commitment.  While job creation was a metric evaluated when projects competed for Clean Ohio funding, the pledges did not make it into the grant agreements.  

That has changed under the JobsOhio Revitalization Program.  Under the new grant template being used by JobsOhio, companies are required to make specific commitments in terms of job creation, job retention and/or capital investment.  The JobsOhio agreement contains a specific deadline for meeting that commitment and the ability to require repayment of the grant in the event those commitments are not met.  

The JobsOhio agreement focus on job creation and investment  is similar to other State economic incentives.  It is an example of the shift in philosophy behind brownfield redevelopment in Ohio. Clean Ohio was focused on cleanup and redevelopment of contaminated property.  The JobsOhio Revitalization Program is focused on economic redevelopment.  

 

U.S. EPA Solicits Proposals for Brownfield Assessment and Clean Up Grants

U.S. EPA has released its fiscal year 2011 request for proposals (RFP) for brownfield assessment and clean up grants.   There is a relatively short window of opportunity to file your application- the deadline is October 15, 2010

[Click here for access to U.S. EPA's RFP for the brownfield assessment, clean up and revolving loan]

There is a total of $92.9 million available.   While the RFP allows for greater funding under certain circumstances, the basic limit is $200,000 per site for assessment or clean up.  EPA is required to expend 25% of the total amount available for sites contaminated with petroleum. 

Ohio is lucky to have one of the best state brownfield grant programs- Clean Ohio.  Often Clean Ohio is a better option than pursuing the U.S. EPA grant funding because U.S. EPA's program is a national competition.  However, there are certain circumstances that make the U.S. EPA brownfield grant program potentially a better option than Clean Ohio.

COAF Clean Up Funding Exhausted for this Fiscal Year

The Ohio Dept. of Development announced that it is no longer providing funding under the Clean Ohio Assistance Fund (COAF) for clean up of brownfields in fiscal year 2011.  However, assessment funding remains.

COAF can provide provide up to $750,000 in funding for clean up of brownfields.  Projects are evaluated and grants awarded on a rolling basis. 

Clean Ohio Revitalization Fund (CORF) is still available to fund clean up.  It provides up to $3 million in funding per site.  However, a 25% match is required and there are only two CORF rounds per year which typically are competitive.  Therefore, for smaller clean up projects looking for funding in the next year, U.S. EPA's program may be the better option.

Abandoned or Vacant Gas Stations

Under the Clean Ohio policies, removal and clean up of BUSTR (Bureau of Underground Storage Tank Regulation) regulated storage tanks and remediation of leaks from such tanks are not eligible costs under either the Clean Ohio Assistance Fund (COAF) or the Clean Ohio Revitalization Fund (CORF).

For local governments that are trying to deal with abandoned or vacant gas stations in their communities, the U.S. EPA brownfield grant may be their best option.  Communities can seek money for sampling of the site to determine if contamination exists. 

The fear of the unknown (whether contamination exists) acts as a strong deterrent to purchase and redevelopment by private parties.  Once sampling data has been generated, it removes one more impediment to purchase and redevelopment of the site.

Of course if sampling reveals contamination, this can act as a major obstacle to redevelopment.  However, communities can secure clean up funding for these sites under the U.S. EPA program.

Community Assessment Grants

U.S. EPA's program may also be better for communities that are interested in creating a brownfield inventory of various sites within their jurisdiction.  Also, U.S. EPA's program is great for local communities that want to create and fund their own local brownfield assessment programs. 

For example, in Northeast Ohio, the Northcoast Brownfield Coalition was created using U.S. EPA funding.  The Coalition is made up of  the Cuyahoga County Board of Commissioners, the City of Cleveland, the Cleveland-Cuyahoga Port Authority and the Northeast Ohio First Suburbs Consortium.  The Coalition makes provides local grant funding for brownfield projects in Northeast Ohio in amounts up to $30,000.

Below are the applicable limits for assessment grants under the U.S. EPA program:

 

 

 

 

 

 

(Photo:  everystockphoto peasap)

Important Ohio EPA Updates on Brownfield Redevelopment

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.

Ohio Offers Grant Funding for Biomass and Waste Conversion

Ohio is using federal stimulus money to establish a new grant opportunity in the renewable energy area.   The Ohio Department of Development has released an RFP soliciting proposals with a total of $10 million in available funding. 

Minimum award is $500,000 and maximum is $1 million.

The grant program is looking for projects that convert feedstocks such as municipal solid wastes, food and farm wastes, or other bio-mass or waste materials to electricity, heat, fuel and/or bio-products.

There is a cost share requirement of 25% of total cost of the project. Cost share can take the form of financial or in-kind contributions.

Grant funds can only be used to purchase and install eligible project equipment for conversion of wastes and biomass into energy , heat, fuel or products.  Due to limitations placed on federal stimulus funding, you may not use grant funds for any of the of the following:

  • Construction costs;
  • Purchase of buildings or land; and
  • Purchase of equipment for renewable energy techniques that are deemed not commercially available.

More information on the Transforming Waste to Value grant program offered by ODOD.

Changes to Clean Ohio Policies Impact Brownfield Projects

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.


 

Major Expansion of Areas Eligible for Ohio Brownfield Grant Program

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. 

 

Stimulus Funding for Diesel through U.S. EPA's DERA Program; Update On Ohio's DERG Program

The American Reinvestment and Recovery Act (ARRA) contains the highest federal funding yet for the 5 r's of diesel- retrofits, replacements, repowers, replace and refuel.  The competitive announcements for the ARRA Funding for National Diesel Emissions Reduction Program became available on March 20, 2009. Better get your act together if you still want an application in- the deadline is April 28th to submit a request for funding.  If you can't make the deadline there will be normal funding available ($60 million) in the fall. 

Who can file the application?

  1. Regional, state, local, tribal or port agency with jurisdiction over transportation or air quality; and
  2. Nonprofit organization or institution which:

a) Represents or provides pollution reduction or educational services to persons or organizations that operate diesel fleets; or

b)Has, as its principle purpose, the promotion of transportation or air quality

What will it pay for?

  • 75% for engine repowers
  • 25% for all replacements except
  • 50% for school buses that meet 2010 standards
  • 100% for retrofit technologies
  • 100% for idle reduction technologies
  • 100% for engine upgrades (kits only)
  • 100% for incremental cost of cleaner fuels

Much more information is available on U.S. EPA's Region 5's web page.  Just page down to the section on ARRA. 

Helpful information and tips are available from the Diesel Technology Forum.  For example, here is some very helpful advice on addressing one of the more perplexing components of filing a DERA application- calculating jobs retained or created.

How to Calculate Job Creation - Follow the Flow. Finally, the issue which appears to be causing the most apprehension among applicants is the need to demonstrate how a project will preserve or create new jobs. The sheer range of retrofit options (remember the 5 Rs of retrofit: retrofit, rebuild, repower, replace and refuel?) as well as the varying locations and productivity of individual equipment manufacturing facilities make it very challenging to offer solid figures of new jobs added. But don’t despair. Everyone is in the same situation, so applicants are advised to focus on writing a credible, well-reasoned narrative which highlights the general labor/job impacts along every step of the project flow.

For example: project manager oversees grant award, progress, reporting; device manufacturers produce XXX new devices for the grant (incremental increases in manufacturing, packaging, processing, shipping jobs affected); equipment dealer schedules service to install devices (estimated XXX man-hours for mechanics, helpers and administrative); and so on, specific to your project. If you are not installing equipment yourself, you can ask the equipment manufacturer who has helped assess the fleet to provide an estimate of time necessary to conduct the type of installation you’re seeking. A formula which seeks to quantify jobs through use of a multiplier building on study by Keybridge Research is also available at www.meca.org.
 

UPDATE ON OHIO'S DIESEL EMISSION REDUCTION GRANT PROGRAM (DERG)

At $20 million over two years, Ohio had the largest dedicated diesel fund in the entire Midwest.  Ohio received awards for the DERG program.  Round 2 of funding was just completed and the State will be passing out nearly $11 million in funding.  Seemed like a program well worth continuing...

The Diesel Coalition sought to renew the DERG program for another two years at the same level of funding.  Ultimately. H.B. 2 included only $5 million in funding for DERG over the next two fiscal years.  This is a $15 million dollar reduction from the past two years.  While the Legislature included the full $20 million in funding, the Governor issued a line item veto of the funding (see below).

The Ohio Diesel Coalition still intends to request $20 million in funding for DERG in the regular budget bill.  The Coalition, of which I am a member, will be asking that the $15 million designated for the Public Transportation Green Fleets Program in H.B. 2 to be consolidated with DERG. 

Green Fleets are eligible for funding under DERG.  The Coalition believes it would be better to create a single competitive grant program and allow the best and most effective projects to get funding.  Hopefully we can restore funding for this very successful and worthwhile program.

Governor's Veto message in H.B. 2:

SECTION 512.43.

This provision establishes a diesel emission reduction grant program using federal Congestion Mitigation and Air Quality funds from the Federal Highway Administration.

This provision would have a negative impact on the Department of Transportation’s operations because it diverts a large portion of available flexible funding to specific purposes.

I have directed the Department to dedicate $5 million toward a diesel emissions reduction program for purposes consistent with the intent of the legislation. This funding will provide assistance to small businesses and disadvantaged business enterprises. Therefore, this veto is in the public interest.
 

(Photo: terinea/everystockphoto.com) 

Pitfalls and Considerations When Deploying Cleantech or Renewable Energy Projects

So you are about to deploy the first commercial version of your new technology.  Or you are about to select your site for a new renewable or advanced energy project. In ramping up your cleantech project, everything has looked great in small scale trial tests.  You have had great result and are excited to bring this to market as the "next big thing." 

Deployment of new technologies and choosing sites for your renewable energy project can always present major challenges.  What looks good during small scale tests or on paper may prove to be unworkable or too costly in the field. 

How can you better assess your situation and proceed to a smooth launch of your technology or successfully deploy your project?  Here are some suggestions I have developed either from my years as a regulator or in working with clients.  Hopefully, taking careful consideration of some these issues can better position your company and avoid some "unseen enemies." 

1.  Site Selection-  Study closely the practical aspects of various proposed locations for your new facility.  Often company's select a site based upon expected customer demands or other business considerations.  However, prior to moving forward with the significant investment in terms of lease or purchase agreements, permitting, and zoning/building approvals significant investigation should be performed to evaluate the viability of the proposed site.

  • What the local zoning and building requirements?
  • Transportation routes should be evaluated
  • Any significant history with regards to citizen or environmental groups in the area?- Cleantech companies can naively think they are immune to NIMBY concerns only to find themselves immersed in costly and protracted litigation
  • Will your project require significant amounts of water?  If so, is there a readily available source or any issues with tapping into that source?

2.  Environmental Permitting and Regulatory Requirements-  Will your source have air or water emissions?  Will you generate significant solid waste or hazardous waste?  You should have an assessment of how environmental permitting and regulatory requirements could impact either the location or configuration of the facility at the site.  You should also know whether environmental requirements are going to impact the ultimate engineering design of your facility.  I have seen companies forced to completely redesign their process because they did not fully incorporate environmental permitting issues into their designs.

  • Will you have air emissions at levels that will require pollution controls?
  • Are you co-located at a location with an existing air source where EPA requirements may force you to aggregate emissions with that existing source?
  • Will you have a wastewater discharge? If so, can you hook into the wastewater treatment system or need a direct discharge.  If hooking into a pre-existing wastewater treatment system what are the pre-treatment requirements. 
    • What if the local wastewater treatment plant is under investigation or a federal consent decree?  Will that result in stricter standards that could drive up your pre-treatment requirements on-site?

3.  Lease Agreement and Construction Documents-  While you may believe you are headed to a wildly successful deployment or expansion, if anything has been shown in the last six months its that the market place is unpredictable.  You should make sure you understand and negotiate termination provisions in your lease agreements, construction documents or other legal documents governing your relationships with customers or business partners.  While you may be very disappointed you have to cancel the project, you may really be frustrated if you find yourself in a costly legal battle with potential customers, contractors and/or property owners.

4. Feasibility Studies-  Make sure when hiring a consultant to perform a feasibility study that  they have the expertise and knowledge regarding the state and local requirements associated with the project.  Many may be familiar with federal requirements, but you need to take into account local site selection issues as well.

  • Local ordinances- many renewable energy projects will be highly impacted by local ordinances that contain siting requirements.  Make sure your consultant takes into account the hurdles involved in deploying your project.
  • Include assessment of possible environmental market trading mechanisms-  Will you generate CO2 offsets?  Are you deploying renewable energy that could qualify for renewable energy credits?  Is your consultant or project team considering the current market fluctuations in these markets when evaluating whether carbon credits or RECs add to the viability of your project?

5.  Incentives-  It seems every lawyer and consultant is promoting their knowledge regarding availability of federal stimulus funding.  However, don't forget there are many state and even local programs that can provide grants and tax incentives for green businesses and energy.  Make sure you have someone on your project team that has knowledge of these incentives and understands the process for obtaining funds. 

(Photo:jurvetson/everystockphoto.com)

Ohio looks for "Shovel Ready" Brownfield Sites for State Share of Stimulus Money

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

Future Grant Rounds and Improvements to Ohio's Brownfield Redevelopment Program

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.

Ohio Brownfield Redevelopment Program Leaves Grant Money On the Table

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. 

 

Ohio Job Stimulus Package- Advanced Energy Grants and Loans Available

On Friday, November 7th, the Ohio Air Quality Development Authority (OAQDA) held a bidders conference to launch the Advanced Energy/Job Stimulus Program.  The Job Stimulus package set aside $150 million (over three years) to increase the development, production and use of advanced energy technologies in the state.

Those interested can begin filing applications for either grants or loans through the web portal on OAQDA's web page.  Unlike other competitive programs decisions will be made on a rolling basis, there is no deadline for filing applications.  However, $150 million is not a lot of funding for the types of projects involved, therefore it is likely available funds will dissipate quickly. 

The program has two separate pots of money:

  • $66 million for clean coal technology projects administered through OAQDA’s Ohio Coal Development Office (OCDO).  Grants can be for up to $5 million for each project  The funding set aside for these projects is similar to other funding opportunities that have been provided by the OCDO.  Proposals will be reviewed by staff, outside reviewers and the Technical Advisory Committee and approved by OAQDA;
  • $84 million for renewable energy and energy efficiency projects. Grants will be awarded in amounts from $50,000 to $250,000.  Loans will be $1 million to $2 million.  Funding will be in three $28 million annual appropriations administered by OAQDA. Projects will be reviewed by staff and outside reviewers, the Development Finance Advisory Council, approved by OAQDA.  Before funding can be awarded Legislative approval is necessary through the Controlling Board.
     

Some of the tips provided to bidders during the conference include:

  1. "Tipping Point"-  Explain why a grant award or loan would be the tipping point in the project.  Would it help get the project through a difficult time?  Would funding allow some type of breakthrough? Would it lead to a possible major expansion in Ohio?
  2. Jobs, Jobs, Jobs-  The main point of the funding is to stimulate job growth in the Ohio.  Therefore, you must be prepared to demonstrate that the project will generate jobs immediately.  New jobs will be favored over retained jobs.  Better if the are considered "foundational jobs"- meaning the project will lead to more jobs in the future.  Also, want to see better paying jobs.  
  3. Leverage- The State wants to see that a grant award will other funding in the project.  Private funding is favored over other public financing.  The higher the leverage the better the application will be viewed. 

Applications can be made through the web portal.  To start the process applicants must only fill out a "letter of intent" which requires only minimal information.  OAQDA said at the bidders conference it is there goal to weed out unfundable projects early in the process. 

One other note, if you are going to pursue a coal grant, be advised that similiar with other funding through the OCDO, you will be required to sign a royalty/payment agreement.  OCDO is required by statute to seek a recovery for investing in research and development projects.  While I understand it is in the statute,  this requirement discourages businesses looking for funding that will accelerate commercial deployment of a proven technology. 

 (Photo: Great Valley Center Image Bank/everystockphoto.com)