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IS YOUR ECONOMIC

DEVELOPMENT TOOLKIT

CURRENT AND COMPETITIVE?

December 1, 2017

#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

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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

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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

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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

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Price Finley

Bricker & Eckler LLP

614.227.8897

pfinley@bricker.com

#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 YOUChooseCincy.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

#ED411

THANK YOU