On October 22nd, Kristi Tanner, a managing director of JobsOhio presented regarding Ohio’s new brownfield redevelopment incentive program which will replace Clean Ohio. Many in the brownfield redevelopment community have been anxiously awaiting the roll-out of the new program.
According to Ms. Tanner, JobsOhio will start discussing potential projects now, but awards under the new program are not likely to be made until March 2014.
Under the new program, the amount of funding available will be comparable to the Clean Ohio- approximately $43 million annually. However, the State is making a major shift away from a grant based program under Clean Ohio to a low interest loan program through JobsOhio.
Review of Ohio’s Prior Brownfield Incentive Program- Clean Ohio
Since 2002, Clean Ohio provided over $400 million in grants for brownfield redevelopment projects. The Clean Ohio Revitalization Fund (CORF) was Ohio’s centerpiece brownfield funding program with some of the largest incentives available Under Clean Ohio the basic program consisted of the following:
|Competitive Pool- awards 1 or 2 times per year
|Non-Competitive Selection Process
|Complete Application- Phase I, Phase II and Proposed Remedy
|Only available in eligible areas
|Up to $300k for Phase II Assessments
|Up to $300k for Phase II Assessments
|Up to $3 million in grants for cleanup
|Up to $750k for Cleanup
|Eligible costs = demolition, purchase, infrastructure and cleanup costs
|Eligible costs = demolition, purchase, infrastrucutre and cleanup costs
|Required to complete VAP
|Required to complete the VAP
Many liked the openness the CORF selection process which used a competitive pool where all projects were pitted against one another for funding. Award were made either once or twice per year.
Projects were selected was through the Clean Ohio Council with heavy involvement from the local communities. One major drawback of the program was that an applicant could spend approximately $30,000 just to develop the application (assuming a Phase I and Phase II was already complete) with no guarantee of being funded.
Still, as one of the best brownfield incentive programs in the country, CORF/COAF allowed many projects to move forward that may not have occurred otherwise. As discussed in a Dispatch Article, Clean Ohio provided funding for over 70 projects in just Northeast and Central Ohio alone.
JobsOhio Revitalization Program
Under the new JobsOhio program, the State will be making major changes to the structure and process for selection. Here are the basic elements of the the new program:
- Up to $200k for Phase II Assessments- JobsOhio had commented that it felt $300k for Phase II’s under CORF/COAF was excessive. However, in order to qualify for the cleanup grant or loan, the developer is required to meet the applicable standards established by Ohio EPA’s Voluntary Action Program (VAP). Therefore, a Phase II must generate sufficient data to be deemed VAP compliant. With reduced funding, some projects may not be able to satisfy Ohio EPA’s rigorous Phase II VAP standards.
- Up to $500k for Asbestos & Lead Paint- This is a new component of the Ohio brownfield program which appears to target existing structures that may be idle due to asbestos and/or lead paint issues. Under the proposal, the funds can be used for asbestos abatement, demolition, site preparation and disposal of universal waste.
- $5 million cleanup loan with possibility of $1 million cleanup grant- As the biggest change with the new program, JobsOhio has shifted from a grant cleanup funded model to a loan model. Developers and companies looking to expand may have an opportunity to secure a $1 million cleanup grant if need is demonstrated and the grant is coupled with a loan. Details on the requirements for securing a $1 million dollar cleanup grant were not provided.
- Open funding versus competitive pool- JobsOhio has done away with the competitive pool process utilized by CORF. Under the old process all grant applications were scored and the top projects were funded. The positive aspect of this process was its transparency. The negative was that an applicant could spend a significant amount of money ($30k just for the application) without knowing whether they would receive an award. The new process will be more flexible and less costly than Clean Ohio. Projects can receive awards throughout the year and will not compete with one another. Also, JobsOhio will likely notify an applicant it will receive an award before it has to put together the more detailed aspects of the application.
- Criteria for selection– The JobsOhio selection process will utilize three basic criteria
- Jobs– Retained or created with priority for projects with higher-than-average wage rate (generally must retain or create 20 jobs)
- Investment- private versus public, capital investment in addition to site prep and priority will be given to JobsOhio targeted industry project
- Certainty of completion- must have an end user committed to the project, have redevelopment plans and sufficient funding to complete the project.
More details should be forthcoming regarding the program this fall. However, JobsOhio has made clear that they will discuss prospective projects now. However, awards will likely not be made until March 2014.
The most likely users of the program will be commercial/industrial clients looking to expand onto brownfield properties. With $200,000 available in grants for Phase II assessments and the possibility of $1 million in grant cleanup funds, the program offers very strong incentives.
Due to the focus on job creation, cities looking to cleanup properties in hopes of attracting future development will have to look elsewhere for incentives. Also, residential development projects will find it harder to compete without a jobs component.
While there are good aspects of the new program, its overall success will depend upon whether loans will will be sufficient to attract redevelopment of contaminated properties.