Ohio Urban Development

Division

Toledo Tax Credit WorkshopMarch 2011

Agenda

Urban Development Tools• Clean Ohio Fund• Brownfield Revolving Loan Fund• Alternative Storm Water Loan Fund• New Market Tax Credits

Ohio Historic Preservation Tax Credit Program Process• Success Stories

Urban Development DivisionRemoving obstacles to the sustainable revitalization of

Ohio’s urban places & buildings with:

- Innovative Financing

- Critical Resources

- Redevelopment Expertise

Urban Development Tools

Helps take blighted properties from vacancy to redevelopment through:

• Grants• Clean Ohio Fund

• Tax Credits • Historic Preservation Tax Credits• New Market Tax Credits

• Loans• Brownfield Revitalization Fund• OWDA Brownfield Loan Fund• Alternative Stormwater Infrastructure Loan Fund

Urban Development Division

Problem: Environmentally Contaminated Site

Tools: Environmentally Contaminated Site

• Grants• Clean Ohio Revitalization Fund: Up to $3 million• Clean Ohio Assistance Fund: Up to $750,000

• Loans• Brownfield Revolving Loan Fund: Up to $1 million• OWDA Brownfield Loan Fund: Up to $5 million

NEW Tool: OWDA Brownfield Loan Program

• Partnership with OWDA • Loans up to $5,000,000 for demolition and cleanup

– Max 10 year term; interest rate no more than 2%• Loans up to $500,000 for assessment

– Max 5 year term; interest rate no more than 2%• Must use VAP process• Local governments and private entities (including those

who caused or contributed)• No match or public involvement requirements

Problem: Urban runoff and CSOs

NEW Tool: Alternative Stormwater Infrastructure Loan Program

• Partnership with OWDA• Loans up to $5,000,000 for alternative stormwater infrastructure in

developed areas – Consultant costs– Materials– Construction; installation– Site prep– Limited maintenance– LEED certification fees

• Max 10 year term; interest rates no more than 2%• Local governments, with Development Partner

Problem: Financing Gap

Tool: Ohio New Market Tax Credits

CF Ware Coffee Building, Dayton

$25.6 million per year allocated to Community Development Entities (CDEs)

Up to $2.56 million per project

Provides tax credits to investors to create below market rate business investments in low-income communities

Attracts Federal New Markets

Terminal Tower, ClevelandOhio Historic Preservation Tax Credit Program Overview

25% of QRE’s

Biannual competitive application process

$5 million per project cap

Program administered by the Dept. of Development with assistance from the Ohio Historical Society and Dept. of Taxation

Ohio Historic Preservation Tax Credit

Program Features

Allocated credit with special allocation authority

Can be bifurcated from Federal Credit

Refundable up to $3 million in credits

Tax credit received upon certification

No recapture provision

Current Status Approved $245 million in tax

credits to 108 applicants through 4 rounds

35 Projects have been completed and certified to date

Program has allocated all tax credit authority granted by the legislature

Efforts are underway to renew the program through state budget (June 30th deadline)

Total Project Investment: $408 M

Total Tax Credits Certified: $69 M

Leveraged Investment Ratio: 5.91

Total Permanent Jobs: 5,464

Total Construction Jobs: 2,984

Total Residential Units: 911

35 Completed Projects have led to…

Akron

Berea

Cambridge

Canton

Cincinnati

Cleveland

Columbus

Dayton

Hamilton

Ironton

Lebanon

Lima

Marietta

Oberlin

Piqua

Port Clinton

Portsmouth

Russell Twp.

Sandusky

Scott Twp.

Springfield

St. Clairsville

Toledo

Urbana

Youngstown

All Approved Projects

Ohio Historic Preservation Tax Credit Program Process

1. Establish Project Concept Contemplate demand and end use

- Conduct market study to validate

- Consider similar successful projects

Assemble team

- Architect (& Historic Pres. Consultant)

- Legal Counsel & Accountant

- Construction Manager, contractors, etc

Establish eligibility

- Historic Building: Approved Part 1

2. Pre Application Activities Establish Site Control

Preliminary Design

- Develop Rehabilitation Approach

- Develop Initial Cost Estimates

Seek Financing

- Review successful financing models

- Create finance model with likely sources identified

- Pursue sources and secure commitments, letters of interest

Create Ownership Structure

-Ability to Receive Tax Credit: For-profit ownership structure

3. Application Process – 6 months Conduct Preliminary Meetings

- Meet with OHPO to discuss rehabilitation approach

- Meet with ODOD to discuss application and funding approach

Submit Part 2

- Allow time for review and questions, ideally submitted a month before application deadline

Complete Application

- ODOD available for questions and review prior to submission

Application Approval

- OHPO Part 2 recommendation required

- ODOD awards highest scoring projects

4. Development Communicate Changes to Project

- Ownership, scope and timeline amendments to ODOD

- Part 2 amendments to OHPO

12 Month Reviewable Progress Report

- Viable financial plan

- Construction drawings complete

- Part 2 approvals up to date

18 Month Reviewable Progress Report

- Closed on financing

Project End Date

- Project should be complete or nearing completion

5. Certification Part 3 required

- Allow for time for review and sign off

Request for Certification

- Proof of Ownership

- Certificate of Occupancy

- Financial Analysis (3rd party cost certification)

- Structure for Claiming the Credits

6. Claiming the Credits Can be claimed against the following taxes:

- Individual Income

- Corporate Franchise

- Dealer in Intangibles

Certificate submitted with tax return

- Department of Taxation standard review policies

Realization of Benefit

- Reduce Tax Liabilities

- Refund

o SPRINGFIELD –Shawnee HotelTotal Project Investment:$14.7 Million Former hotel converted

for affordable senior housing in the 1980’s

Substantial upgrades to building systems and finishes allowed property to continue operation

85 apartment units are completely occupied

o CINCINNATI – 1346 BroadwayTotal Project Investment: $470,000 Long vacant residential building fully rehabbed into 4 apartments Owner performed much of the work himself

o CLEVELAND – Capitol TheatreTotal Project Investment: $6.6 Million Long-vacant theatre converted to modern, three-screen cinema complex Community gathering place showing independent and specialty films Highlight of emerging Gordon Square Arts District

o COLUMBUS – Seneca HotelTotal Project Investment: $16 Million Saved from demolition and converted to housing for college students Close proximity to Columbus State, Columbus College of Art and Design,

Capitol Law School, and Franklin University Utilized Clean Ohio Assistance Fund to address environmental issues

Before

After

o PIQUA – Fort Piqua HotelTotal Project Investment: $21 Million 1891 Romanesque Revival castle anchoring downtown Restored for community library, coffee/candy shop, and banquet facility 2009 National Preservation Honor Award from the National Trust

http://development.ohio.gov/UD/OHPTC/

Urban Development DivisionMark Lundine, Urban Revitalization CoordinatorPhone: 614-995-2292E-mail: historic@development.ohio.gov

Urban Development Division