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

1. #ED411
IS YOUR ECONOMIC
DEVELOPMENT TOOLKIT
CURRENT AND COMPETITIVE?
December 1, 2017

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. #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
pfinley@bricker.com

4. #ED411
RESOURCES

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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

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LOCAL PROPERTY
TAX ABATEMENTS
• Enterprise Zone Program
• Community Reinvestment Area Program
• Tax Increment Financing
• Downtown Redevelopment Districts
• Undeveloped Property Tax Abatement

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ENTERPRISE ZONES AND
COMMUNITY REINVESTMENT
AREAS
• True Tax Abatement
• Maximum Period of 15 years
• School Notice and Approval

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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

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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. #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

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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

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WHITE CASTLE
REDEVELOPMENT
• 18-acre site on Goodale
• Columbus has been
headquarters to WC since
1934

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WHITE CASTLE
REDEVELOPMENT
• Development will be
anchored by new WC HQ
• Mixed-use including office,
retail, housing and
community facilities

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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. #ED411
Price Finley
Bricker & Eckler LLP
614.227.8897
pfinley@bricker.com

16. #ED411
IS YOUR ECONOMIC
DEVELOPMENT TOOLKIT
CURRENT AND COMPETITIVE:
CINCINNATI’S PERSPECTIVE
Monica Hardman, Deputy Director
Department of Community & Economic Development

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AGENDA
 Overview of comprehensive
incentive analysis
 Review of recommendations
 Return on Investment (ROI)

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OVERVIEW OF INCENTIVE ANALYSIS: HR&A
ADVISORS, INC.
 Economic strengths and weaknesses
 Peer City Benchmarking
 Incentive Program & Deal Analysis
 Strategic Recommendations

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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

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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.

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COST PER JOB
Full Incentive Cost ÷ Number of Jobs Created
= The Cost Per Job
to determine the cost associated with a single job

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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.

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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)

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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

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RETURN ON INVESTMENT
AccountabilityTransparency
Resource Allocation &
Prioritizing of Technology
Enhanced Communication with
City Administration and the Public

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THANK YOU
ChooseCincy.com
@ChooseCincy

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LEGISLATIVE UPDATE
Matt Koppitch, Bricker & Eckler, LLP

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FEDERAL TAX REFORM
 HR 1 passed along a mostly party line vote
 Has far-reaching changes to federal tax policy
 Senate deliberations
 Conference Committee??

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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

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STATE ACTIVITY – ENERGY
 HB 114 – Dealing with Ohio’s renewable energy portfolio
 Wind setbacks
 ZEN and OVEC
 HB 247

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STATE ACTIVITY –
INFRASTRUCTURE
 Transportation budget
 HB 281 - Broadband investment
 Capital budget??

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STATE ACTIVITY – TAX
LEGISLATION
 HB 69 – TIF Districts
 HB 371 – Property Tax exemptions for residential developments until
construction occurs or a transfer

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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?

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THANK YOU
http://www.bricker.com/
mkoppitch@bricker.com

35. #ED411
THANK YOU