Ohio Pumps up Economic Development Programs Designed to Prime Site and Infrastructure Development

Jul 18, 2023News

Nate Green
Montrose Group

$1.5 Billion was included for public infrastructure spending to encourage economic development projects across the state of Ohio through the recently enacted state operating budget.  These state programs include supporting the development of mega-sites tied to large scale industrial growth, funding critical water and sewer infrastructure, and supporting the development of other public infrastructure.

All Ohio Future Fund.  The Ohio General Assembly’s state operating budget contained a proposal from Governor Mike DeWine to create a $667 Million All Ohio Future Fund to develop job ready sites for mega-projects like the announced Intel “fab” chip manufacturing center in New Albany, Ohio and the LG-Honda EV battery factory planned for Jeffersonville, Ohio. Megasites have traditionally been coveted by local, state, and utility economic developers, due to the sites’ ability to attract industrial and allied end-users. The presence of employers of this magnitude often leads to subsequent investment, multiplying growth opportunities within the commercial and retail sectors at the local level.  Megasites are often designed to be 1000 acres in size to accommodate transformational industrial or high-tech projects that can alter a region’s economic success. Megasites are not easy to develop as they not only require substantial acreage but also large public infrastructure and utility investments.

Connect4Ohio Fund. The Ohio General Assembly created a new fund to support Ohio’s rural counties defined as a county without a municipality with a population greater than 55,000, to improve roadway infrastructure. The new program through the Ohio Department of Transportation will provide $500 Million over the two-year operating budget and requires ODOT and the Transportation Review Advisory Council (TRAC) to work together to prioritize the following projects: (1) Completing existing corridor projects, particularly corridor projects that benefit rural counties; (2) Eliminating traffic impediments along highways, particularly within rural counties; and (3) Replacing at least one bridge in each rural county that has been identified as requiring replacement. The new program also specifies that as part of the program, ODOT and TRAC fund Tier 1, 2, and 3 projects on the TRAC program list published in March 2023, and elaborates on project priorities as follows: (1) completing existing corridor projects, particularly corridor projects that benefit two or more connected rural counties; (2) eliminating traffic impediments on county, township, state, and federal highway routes, particularly within rural counties; (3) funding such projects at one hundred per cent of the project cost, when appropriate, particularly for projects that are located in a rural county or that extend between two or more connected rural counties; and (4) providing the necessary matching funds to receive TRAC approval for any construction projects that are related to the Program and its purpose.

Innovation Hubs. The Ohio General Assembly also supported Governor Mike DeWine’s proposed funding for $125 Million to create Innovation Hubs in regions throughout the state, beyond the current locations in Cincinnati, Columbus and Cleveland.  JobsOhio, together with the state of Ohio and partners, is investing over $3 billion to fuel the creation of three world-class Innovation Districts in Cincinnati, Cleveland, and Columbus. The goal is to create sustainable ecosystems of ideas, infrastructure, and talent where the world’s top people and companies come to roll up their sleeves, innovate, and grow.  In March of 2020, the University of Cincinnati and Cincinnati Children’s Hospital formally announced their joint effort to promote and celebrate innovation in Cincinnati. The Cincinnati Innovation District is a unique ecosystem that plans to graduate an additional 15,000 STEM graduates and drive an additional $2 billion in research investment over the next 10 years. The research will apply ultramodern technologies across multiple life sciences and computer science disciplines in the Greater Cincinnati Region. Launched in January 2021, the Cleveland Innovation District includes the collaborative efforts of Case Western Reserve University, Cleveland Clinic, Cleveland State University, MetroHealth, and University Hospitals. With world-leading medical research and higher education universities, the Cleveland Innovation District is at the forefront of advancement in technology and healthcare and is focused on providing promising careers in research, education, and the healthcare supply chain.  The Cleveland Innovation District intends to leverage talent and research across multiple world-class clinical and academic institutions to drive the next generation of healthcare technology. At the center of this effort, the Cleveland Clinic will launch its new Global Center for Pathogen Research & Human Health to combat emerging infectious disease threats worldwide. Created in February 2021, the Columbus Innovation District is a collaboration between The Ohio State University and Nationwide Children’s Hospital. As the geographic and economic center of Ohio, Columbus has unique opportunities to lead innovation across multiple industries. This Innovation District establishes inviting and amenity-rich places for leading educational and healthcare research organizations to collaborate in ways that lead to economic growth, discoveries, and impactful career opportunities within Ohio’s largest city.

Super RAPIDs.  The Ohio General Assembly also support the funding request of Governor Mike DeWine to provide $100 Million in funding for a “Super RAPIDS” surge in coordination with the Office of Workforce Transformation for high-tech training equipment requested in collaboration with local businesses to prepare Ohioans for high-skilled in-demand jobs. Regionally Aligned Priorities in Delivering Skills (RAPIDS) are an aspect of Ohio’s efforts to bolster and diversify its economy include strengthening the connections between the availability of high-quality talent and the attainment of economic development goals. States that lead the charge in this area develop strategies to build education and training infrastructures that draw on the dynamic nature of regional economies and labor markets. In pursuit of such opportunities, the Ohio Department of Higher Education (ODHE) makes regionally strategic investments that foster a resilient workforce ecosystem. These equipment investments develop and support workforce development initiatives at postsecondary institutions that focus on furthering the career aspirations of students and the economic growth of businesses in the region. Funded projects actively support Ohio’s efforts to retain and expand existing businesses, attract new enterprises, and further entrepreneurship in communities where talent and workforce issues are key cornerstones of business engagement.

 Water and Wastewater Infrastructure Grant Program.  $124 Million in FY 2024 was provided for the Ohio Water and Wastewater Infrastructure Grant Program which provides grants to improve access to clean drinking water and wastewater infrastructure. Grants are up to $250,000 for design projects and up to $5 million for construction projects to Ohio communities. Public entities within a political subdivision with the authority to own and operate public water and sewer systems and nonprofit, non-community public water systems could apply. As of June 2023, the Ohio Department of Development has awarded nearly $360 million to 253 critical water and wastewater infrastructure projects across the state. Public entities within a political subdivision with the authority to own and operate public water and sewer systems and non-profit, non-community public water systems may apply. Political subdivision means a county, township, municipal corporation, or other body corporate and politic responsible for governmental activities in a geographic area smaller than that of the state. There are two types of eligible projects, design, or construction. Design projects should be submitted after an eligible applicant has completed the preliminary planning phase of a project. Eligible design projects can receive a maximum award of $250,000. Eligible construction projects can receive a maximum grant amount of $5 million. At the discretion of the Director of Development, additional grant funding may be awarded for an individual project due to lack of matching funds and other inhibiting factors. Maximum project awards in these circumstances shall not exceed $10 million and are solely at the discretion of the Director.

The Ohio General Assembly added another $500 million into Ohio Department of Development funding while maintaining key tax credit programs in the state of Ohio operating budget recently enacted.  Key programs funded below include:

Ohio Brownfield Remediation Program. $350 Million for the Ohio Brownfield Remediation Program was added in the state operating budget.  The Ohio Brownfield Remediation Program is designed to provide grants for the remediation of brownfield sites across Ohio to clean up the sites and prepare them for future economic development.  The program is allocating nearly $350 Million with most funds awarded on a first come, first serve basis but all 88 counties are provided with a $1 M allocation only in FY 2024 of program funding if they have eligible projects. Properties applying for the program must meet the definition of brownfield. A brownfield is defined as an abandoned, idled, or under-used industrial, commercial, or institutional property where expansion or redevelopment is complicated by known or potential releases of hazardous substances or petroleum. Units of local government, including counties, townships, municipal corporations, port authorities, or conservancy districts or park districts, or other similar park authorities, are eligible to apply. Other eligible applicants include county land reutilization corporations, nonprofit organizations, or organizations for profit. These entities must have entered into an agreement with a unit of local government to work in conjunction on the project for the purposes of this program.

Building Demolition and Site Revitalization Program.  $150 Million in FY 2024 for the Ohio Building Demolition and Site Revitalization Program was provided by the Ohio General Assembly in the state operating budget.  This program is designed to provide grants for the demolition of commercial and residential buildings and revitalization of surrounding properties. Previously, nearly $150 M was made available. Most of the funds, approximately $106 Million, were available on first-come, first-served basis statewide as provided for in statute. The balance of the funds available is on a $500,000 set-aside per county that were being awarded on a first-come, first served basis. Blighted, vacant or abandoned structures are eligible for demolition. Lead entities should utilize the local governments’ strategic plan and/or Community Housing Improvement Strategy to identify blighted, vacant, or abandoned structures must if available. Commercial and residential buildings on sites that are not brownfields are eligible properties. Commercial properties include buildings that were used for retail, office, manufacturing, industrial, industrial warehousing, institutional, or other non-residential or mixed-use (meaning any mix of these uses or a mix of residential and commercial uses) purposes. Non-vacant and blighted structures are not eligible unless they are contiguous and/or connected to vacant and blighted structures that are necessary to demolish. Counties must establish one “Lead Entity” that will be the applicant and award recipient. A county land reutilization corporation shall be the lead entity if one is established. If a county has not created a county land reutilization corporation, the Board of County Commissioners must submit a lead entity letter of intent and grant user access for to identify a lead entity.  A subrecipient agreement between the lead entity and other end users (i.e. other local governments, nonprofit organizations, community development corporations, regional planning commissions, community action agencies, etc.) must be submitted as part of the application, if applicable. Any remaining funds in the county set-aside will be added to general fund and made available for grants throughout the state on a first-come, first-served basis.

Changes to the current building demo program included in the state operating budget focuses on who can apply for funding from the Ohio Brownfield Remediation and Building Demolition and Site Revitalization Programs. Under the changes included in the budget, county Land Banks would be the lead applicant and funder in counties where they operate. Ohio currently has 66 county land banks across the state. In the counties without land banks, county commissioners would recommend to the Department of Development a lead applicant on behalf of the county. Further changes restrict who can be a sub-recipient of the funding, designating local governments, nonprofit organizations, community development corporations, regional planning commissions, county land banks, and community action agencies as such recipients. This language appears to exclude private entities from being sub-recipients of funds in the absence of a development agreement with one of the other designated entities listed above.

The development of public infrastructure remains a critical economic develop tool in the Ohio toolbox with the addition of new programs and funding for existing infrastructure-based programs in the state operating budget.

Please contact Dave Robinson at drobinson@montrosegroupllc.com if you have any questions or need assistance with gaining funding from the state of Ohio for economic development or other projects.

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