State proposes loans, not grants, to clean up brownfield sites.
By Amelia Robinson, Staff WriterUpdated 7:33 AM Monday, March 5, 2012
A statewide program credited with creating thousands of jobs and cleaning up old industrial sites is undergoing changes that local governments fear might curtail future developments.
JobsOhio officials are considering changes to the Clean Ohio Revitalization Fund that has distributed more than $380 million in grants to clear hazardous waste from former industrial sites, also known as brownfields.
At issue is whether the program will change from grant-based funding to loans — a conversion that economic development officials fear could dissuade developers from investing in these former industrial sites.
Dayton Economic Development Deputy Director Timothy Downs fears revisions to the Clean Ohio Revitalization Fund also would require that a developer be identified as a condition of acceptance.
Downs said the cost of evaluating and rehabilitating old industrial sites would be too high for the city and most developers if Clean Ohio were a loan program.
“A loan program is certainly less attractive to us than what exists right now,” he said. “We couldn’t take advantage of it like we have the existing program.”
The current program was set to end June 30 because of a restructuring of the Ohio Department of Development and the creation of JobsOhio, the state’s newly formed private economic development arm.
But Gov. John Kasich announced last month that the program will be saved and administered by JobsOhio.
It is projected that the Clean Ohio Revitalization Fund will use about $43 million of the $100 million statewide liquor profits JobsOhio hopes to receive for economic development each year.
Statewide, the program’s return on investment has been $3 billion in new development and 14,000 permanent jobs, the Department of Development said.
Since 2002, Clean Ohio has granted $22.9 million to clean up old Montgomery County industrial sites for reuse according to the Department of Development. Most of the sites have been in Dayton, including the future site of the GE EPISCenter, a $51 million research and development facility being built near the University of Dayton and TechTown, a technology center near Fifth Third Field.
About $5.3 million has been granted for Greene County projects and about $5.1 million for Miami County projects. Clean Ohio has not funded a project in Warren County.
“Taking something from a grant to a loan is potentially a tremendous challenge,” said Jerad Barnett, president of Beavercreek-based Synergy Building Systems, which built the Ohio Valley Medical Center on a former Clean Ohio project in downtown Springfield.
Without knowing how much cleanup might cost, Barnett said, a developer wouldn’t know how big of a loan payment to factor into the cost of the building. And without certainty in that calculation, developers will think twice about a project.
“The cost of environmental cleanup can be tremendous,” Barnett said. “The new group usually can’t afford to clean it up.”
Funding the program
In 2000, voters approved the $400 million program pushed by former Gov. Bob Taft as a way to demolish, cleanup and address infrastructure issues at former industrial sites with environmental issues as well as land issues like farmland preservation, recreational trails and conservation of greenspace.
With bipartisan support, voters in 2008 approved a renewal of the programs with another $400 million amendment.
The constitutional amendment allows the state to sell $800 million in bonds for greenspace and farmland preservation, brownfield cleanup and trail construction.
More than 300 former commercial and industrial properties representing 3,200 acres of land have been revitalized as part of the program.
Future of the program
Applications currently are not being accepted while JobsOhio officials consider the future of the program.
Laura Jones, JobsOhio’s communications director, said criteria for the new Clean Ohio program is being developed with assistance from the Ohio Environmental Protection Agency and the Department of Development.
Jones said officials are trying determine how to best use resources earmarked for CleanOhio.
“The end goal will remain the same, revitalizing former industrial sites and getting them in the hands of new end users (owners),” she said. “Looking strongly at loans is one aspect that is being evaluated at this time.
“This plays a key role in economic development, and economic development is what JobsOhio is about,” she said.
Chris Lipson, Dayton’s senior development specialist, said the multimillion dollar GE research center being built on River Park Drive would not have been possible without the $3 million grant from Clean Ohio.
The University of Dayton owned the former NCR property, but no developer was known when the city applied for the grant in 2005.
The cleanup helped make the property attractive, he said.
“We probably can’t overstate the value it will have down the road for us. The GE project is potentially a game changer for decades to come,” Lipson said. “We probably wouldn’t have the GE site if we didn’t have the foresight to clean up the site in the first place.”