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ED411 | 2017 | Track 5: Is Your Economic Development Toolkit Current and Competitive?


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ED411 | 2017 | Track 5: Is Your Economic Development Toolkit Current and Competitive?

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ED411 | 2017 | Track 5: Is Your Economic Development Toolkit Current and Competitive?

  2. 2. #ED411 Price Finley Partner, Bricker & Eckler LLP Monica Hardman Deputy Director, Department of Community and Economic Development, City of Cincinnati Matthew Koppitch Associate, Bricker & Eckler LLP
  3. 3. #ED411 IS YOUR ECONOMIC DEVELOPMENT TOOLKIT CURRENT AND COMPETITIVE? Brief Overview of Ohio’s Economic Development Incentives Toolbox Price Finley Bricker & Eckler LLP 614.227.8897
  4. 4. #ED411 RESOURCES
  5. 5. #ED411 JOBSOHIO PROGRAMS WWW.JOBS-OHIO.COM • Growth Fund Loan • Workforce Grant • Economic Development Grant • Revitalization Loan and Grant Fund • Research and Development Grant • Talent Acquisition Services • SiteOhio Certification Program • State Jobs Creation Tax Credit Program
  6. 6. #ED411 LOCAL PROPERTY TAX ABATEMENTS • Enterprise Zone Program • Community Reinvestment Area Program • Tax Increment Financing • Downtown Redevelopment Districts • Undeveloped Property Tax Abatement
  7. 7. #ED411 ENTERPRISE ZONES AND COMMUNITY REINVESTMENT AREAS • True Tax Abatement • Maximum Period of 15 years • School Notice and Approval
  8. 8. #ED411 TAX INCREMENT FINANCE • Exemption with PILOTs • PILOTs typically used to pay for public infrastructure • Maximum Period of 30 years • School Notice and Approval • Downtown Redevelopment Districts are a form of TIF
  9. 9. #ED411 SPECIAL PURPOSE ENTITIES/DISTRICTS • Joint Economic Development Districts • New Community Authorities • Transportation Improvement Districts • Special Assessment & Improvement Districts • PACE Districts • Community Improvement Corporations • Port Authorities
  10. 10. #ED411 JOINT ECONOMIC DEVELOPMENT DISTRICTS • Typically used to generate income tax revenue in an unincorporated township in cooperation with a neighboring municipality – one way to address challenges with annexation • Voter approval required unless majority of property owners and businesses petition for JEDD
  11. 11. #ED411 NEW COMMUNITY AUTHORITIES • Developer-driven overlay tax district • Additional charge based on real property values, incomes, sales, etc. • Used to finance community facility and enhanced services
  12. 12. #ED411 WHITE CASTLE REDEVELOPMENT • 18-acre site on Goodale • Columbus has been headquarters to WC since 1934
  13. 13. #ED411 WHITE CASTLE REDEVELOPMENT • Development will be anchored by new WC HQ • Mixed-use including office, retail, housing and community facilities
  14. 14. #ED411 WHITE CASTLE REDEVELOPMENT • Using CRA abatement, urban redevelopment TIF, and NCA • Infrastructure loans under consideration by State agencies to be paid from TIF and NCA revenues
  15. 15. #ED411 Price Finley Bricker & Eckler LLP 614.227.8897
  16. 16. #ED411 IS YOUR ECONOMIC DEVELOPMENT TOOLKIT CURRENT AND COMPETITIVE: CINCINNATI’S PERSPECTIVE Monica Hardman, Deputy Director Department of Community & Economic Development
  17. 17. #ED411 AGENDA  Overview of comprehensive incentive analysis  Review of recommendations  Return on Investment (ROI)
  18. 18. #ED411 OVERVIEW OF INCENTIVE ANALYSIS: HR&A ADVISORS, INC.  Economic strengths and weaknesses  Peer City Benchmarking  Incentive Program & Deal Analysis  Strategic Recommendations
  19. 19. #ED411 INCENTIVE ANALYSIS RECOMMENDATION 1. Deploy a more streamlined and strategic deal evaluation process  Standardize Outcome Metrics a. Metric #1: Benefit Ratio b. Metric #2: Cost per Job c. Metric #3: City Gap Funding Percentage  Soft Factor Evaluation  Template deal sheet transmittal
  20. 20. #ED411 BENEFIT RATIO  The benefit ration calculation divides the full fiscal costs of a deal by the direct fiscal benefits created for the City  A benefit ratio of 25% means that for every $1 the City receives from a deal, it forgoes 25 cents. Assuming the firm or developer would not have created the new jobs/capital investment without the deal, the City receives a net benefit of 75 cents that it would have otherwise not received.
  21. 21. #ED411 COST PER JOB Full Incentive Cost ÷ Number of Jobs Created = The Cost Per Job to determine the cost associated with a single job
  22. 22. #ED411 CITY GAP FUNDING PERCENTAGE  City loan amount ÷ the total project investment = The City Gap Funding Percentage  This metric provides a normalized method of comparison across loans of various sizes to determine the extent to which they have been successful in seeking other capital and using City money to just fill the gap in their project.
  23. 23. #ED411 SOFT FACTOR EVALUATION Place-based Development Housing Stock Diversification & Creation of Vibrant, Mixed-Income, Mixed-Use Neighborhoods Targeted Industry Growth, Job Creation, Innovation & Entrepreneurship Workforce Development Enhancement of Built Environment (Safe, Healthy, and Green Structure)
  24. 24. #ED411 TEMPLATE DEAL SHEET  Enhancements to existing Council transmittal  Reflect standardized quantitative economic cost/benefit metrics (annual and lifetime fiscal benefits and costs, benefit ratio, and cost per job)  Metrics benchmarked against program averages  Soft Factor framework
  25. 25. #ED411 RETURN ON INVESTMENT AccountabilityTransparency Resource Allocation & Prioritizing of Technology Enhanced Communication with City Administration and the Public
  26. 26. #ED411 THANK YOU @ChooseCincy
  27. 27. #ED411 LEGISLATIVE UPDATE Matt Koppitch, Bricker & Eckler, LLP
  28. 28. #ED411 FEDERAL TAX REFORM  HR 1 passed along a mostly party line vote  Has far-reaching changes to federal tax policy  Senate deliberations  Conference Committee??
  29. 29. #ED411 STATE ACTIVITY  Tax Expenditure Review Committee  Created by HB9-131  Reviews tax expenditures every 8 years  In the current biennium – tax expenditures equate to $9.1 billion  HB 122/SB 97 – Regional Economic Development Alliance Study  OEDA has requested an amendment creating an ex officio seat on the study committee
  30. 30. #ED411 STATE ACTIVITY – ENERGY  HB 114 – Dealing with Ohio’s renewable energy portfolio  Wind setbacks  ZEN and OVEC  HB 247
  31. 31. #ED411 STATE ACTIVITY – INFRASTRUCTURE  Transportation budget  HB 281 - Broadband investment  Capital budget??
  32. 32. #ED411 STATE ACTIVITY – TAX LEGISLATION  HB 69 – TIF Districts  HB 371 – Property Tax exemptions for residential developments until construction occurs or a transfer
  33. 33. #ED411 NEXT GOVERNOR?  Republican Candidates  Mike DeWine  Jon Husted  Jim Renacci  Mary Taylor  Democratic Candidates  Joe Schiavoni  Connie Pillich  Nan Whaley  Betty Sutton  Bill O’Neill  Rich Cordray?
  34. 34. #ED411 THANK YOU
  35. 35. #ED411 THANK YOU