restoring the great lakes: what opportunities from fy 2010 appropriations, arra and the bailouts?...
TRANSCRIPT
Restoring the Great Lakes: What Opportunities from FY 2010
Appropriations, ARRA and the Bailouts?
Charlie BartschVice President/Senior Fellow – ICF International
Great Lakes Metros and the New Opportunity SummitBuffalo, NY – June 19, 2009
www.icfi.com
• Private sector – Lenders; also developers, investors, transaction
support partners
• Public sector– Federal, state, and range of local governments
• Quasi-public sector– Development, port, housing authorities
• Non-profits– CDCs, CBOs, universities, cultural-social institutions
Finding the Right Financing Mix for Sustainable Great
Lakes Revitalization: Who Should Play?
Financing Programs: A Federal “Laundry List”
Loans EDA capital for local revolving loan funds HUD funds for locally determined CDBG
loans and “floats” EPA capitalized revolving loan funds SBA’s microloans SBA’s Section 504 development company
debentures EPA capitalized clean water revolving loan
funds (priorities set/ programs run by each state)
HUD’s Section 108 loan guarantees SBA’s Section 7(a) and Low-Doc programs USDA business, intermediary, development
loans
Grants HUD’s Brownfield Economic Development
Initiative (BEDI) HUD’s Community Development Block
Grants (for projects locally determined) EPA assessment, cleanup grants EDA public works and economic adjustment
Grants (continued) DOT (various system construction, preservation, rehabilitation programs) Army Corps of Engineers (cost-shared services) USDA community facility, business and industry grants
Equity capital SBA Small Business Investment Cos. Tax incentives and tax-exempt financing Targeted expensing of cleanup costs Historic rehabilitation tax credits Low-income housing tax credits Industrial development bonds Energy efficiency construction credits
Tax-advantaged zones HUD/USDA Empowerment Zones HUD/USDA Enterprise Communities
What’s Been Used to Support Sustainable Redevelopment?
“Big blast” of ARRA is over – resuming
more traditional funding levels • Promoting competitive advantages in Great Lakes communities
– Distinctive older structures– Waterfront locations– Educated/adaptable/trainable work force– Breadth of supportive institutions – colleges, non-profits,
CDCs • Exploring creative ways for federal funding to support them
– Usual suspects – CDBG, EPA, EDA, DOT, training funds
– Unexpected -- ACE, CZM, USDA
It’s all about linkages...
It’s all about leveraging...
Appropriations and Budget Proposals –
What impact of FY2009 funding provided by Congress, FY 2010 Obama Administration requests on efforts critical to Great Lakes communities?
EPA brownfields appropriations
FY 2009 -- $145.7 million • $97.0 million for project grants• $48.7 million for state VCP support
FY 2010 proposed -- $149.5 million • $100 million for project grants • $49.5 million for state VCP support
EPA LUST/cleanup activities FY 2009 -- $112.6 million FY 2010 proposed -- $113.1 million
HUD/Community Development Block Grant appropriations
FY 2009 -- $3.9 billion• includes $3.64 billion in CDBG formula grants FY 2010 proposed -- $4.45 billion • includes $4.19 billion in CDBG formula grants • includes $150 million Sustainable Communities Initiative• allocation formula change being prepared
EDA
FY 2009 – $230 million (key programs) • planning grants -- $31 million• public works -- $148 million• economic adjustment -- $35 million • climate change initiative -- $16 million
FY 2010 proposed – $245 million (key programs) • planning grants -- $31 million• public works – $73 million• economic adjustment – $125 million • climate change initiative -- $16 million
Most common include: • Historic rehabilitation tax
credits
• Low income housing tax credits
• New Markets tax credits
• Brownfield cleanup expensing
Federal tax incentives that can be linked to sustainable
development – at little or no cost to the community or
project….
Increase project’s internal rate of return Ease borrower’s cash flow by freeing up
cash ordinarily needed for tax payments Some credits can be sold for cash, or
syndicated to attract additional investment Credits attract different players to the
redevelopment table (i.e., passive investors) Not subject to competitive public grant
process – you qualify, you win!
Advantages of Using Tax Incentives in Revitalization
Projects
• New Markets Tax Credits -- new $3.5 billion allocation for 2009 *
• Brownfield cleanup expensing extension (to 12/31/09)• Energy efficiency incentives
– Authorized $800 million in clean renewable energy bonds (CREBs) *
– Authorized $800 million in energy conservation bonds *– Renewable energy tax credit (thru 1/1/11)– Green building/sustainable design project incentives
* Increased by stimulus
New opportunities from the 2008 bailouts– what could be applied to Great Lakes
revitalization efforts?
Neighborhood Stabilization Program -- $4 billion nationally under NSP-I
• New York state allocation -- $54.6 million• 6 NY jurisdictions getting additional $45.7 million • Eligible activities include:
– Establishing land banks – Demolishing blighted structures
• NSP II -- $2 billion via stimulus– Distributed competitively; RFP due June 12
New opportunities from the 2008 bailouts– what could be applied to Great Lakes
Revitalization efforts?
American Recovery and Reinvestment Act –
What leveraging opportunities remain for Great Lakes communities in the stimulus funding ?
New opportunities from the stimulusClean Water RLFs -- $4 billionDrinking Water RLFs – 2 billion • state matching waived; priority for “green” projects * state to target 20% of allocation, if possible • states can identify brownfield/vacant site needs
Brownfield targeted assessments -- $8 million• communities can request assessment help independent of regular grant cycle for sites, projects with reuse potential• distributed by EPA regional offices
New opportunities from the stimulusSBA -- $730 million • increase guarantee levels (to 90%)• waive guarantee fees (thru end of 2009)• $255 million for a new loan program for small business debt stabilization loans (up to $35,000) • expand Section 504 to allow refinancings
EDA – $150 million• to address economic dislocation, including corporate downsizing
New opportunities from the stimulus
New Markets Tax Credits -- $3 billion in additional allocations• adds $1.5 for FY 2008 allocation (to $5 billion) • adds $1.5 billion to FY 2009 allocation in Wall Street rescue (to $5 billion)
Industrial development bonds• expanded eligible activities in 2009, 2010
* manufacturing related/supportive projects
New opportunities from the stimulusRelated opportunities with opportunities to “connect the redevelopment dots” • weatherization assistance -- $5 billion • energy efficiency/conservation block grants -- $3.2 billion• authorizes new taxable “recovery zone” bonds – $10 billion and tax-exempt “recovery zone facility” bonds -- $15 billion • adds $800 million in authority to CREBs (to $1.6 billion) • adds $2.4 billion in authority to energy conservation bonds (to $3.2 billion)
Thank you!
If you have questions…If you need additional information….
Charlie Bartsch [email protected]
(202) 862-1134