State Launches Final Round of Historic Preservation Tax Credits
The Ohio Department of Development (ODOD) will go to work on the final round of funding for the Ohio stimulus plan’s Historic Preservation Tax Credit, which has $24.4 million remaining for rehabilitation projects that to date have leveraged more than $1.2 billion in private investments and federal grants.
ODOD Director Lisa Patt-McDaniel announced Wednesday that the state has received 50 applications from 14 Ohio cities large and small as of the March 31 filing deadline for round four of the historic preservation tax credit. Applicants included all of Ohio’s major urban areas and many smaller cities, including first-time filers Newark, Berea and Celina. Cleveland had the largest number of applications at 12, followed by Cincinnati, 11, and Akron, seven. Columbus and Toledo were a distant fourth, with three grant seekers apiece. Dayton and Youngstowneach had a single applicant.
State Approves Clean Ohio Grants to Communities for Brownfield Redevelopment
The State Controlling Board Monday approved $786,029 in Clean Ohio Assistance Fund grants for the cities of Massillon and Columbus, and the Stark County Park District for remediation activities. Clean Ohio Assistance Fund grants are administered by the Ohio Department of Development’s Urban Development Division and are awarded to aid in brownfield redevelopment of Ohio’s urban areas.
Supreme Court: Use “Sound Discretion” in Prevailing Wage Criteria
On March 25, 2010, the Ohio Supreme Court held that if a public authority creates a policy establishing criteria by which it will evaluate bids for public works contracts to determine the lowest and best bidder, the public authority is obligated to apply its bid evaluation criteria by exercising its sound discretion.
At the center of this case is the Prevailing Wage standard in a set of 18 criteria adopted by the Franklin County Board of Commissioners for evaluating construction bids. One of the criteria imposed by the County is that the bidder had not “violated” Prevailing Wage law more than three times in a two-year period in the last ten years.
The Painting Company’s bid on the Huntington Park baseball stadium project in Columbus was $46,000.00 less than the next-low bid. The County rejected the low bid on the basis that fourteen complaints had been filed against The Painting Company with the Ohio Department of Commerce during the specified time period. However, several investigations concluded that any Prevailing Wage violation either was not intentional, or resulted in no liability or a settlement agreement denying any violation.
The Supreme Court held that the County did not exercise sound discretion in rejecting The Painting Company’s bid. The Supreme Court based its holding on the meaning of the term “violation,” which is not defined either in the statutes on prevailing wages, or in the County’s Project Manual. The Supreme Court defined “violation” to mean, “the situation in which the director makes a formal finding that a contractor or subcontractor intentionally violated the prevailing-wage laws, and all appeals are exhausted.”
The Supreme Court reasoned that The Painting Company never “violated” Ohio’s Prevailing Wage law (since it never was subject to a formal finding by the State), and thus the County’s rejection of its low bid was not an exercise of sound discretion. The Supreme Court also held that the County abused its discretion by failing to consider other evaluation criteria, instead using this single Prevailing Wage criterion as a “gate-keeping function.”
The Supreme Court acknowledged that a public authority has considerable latitude in selecting a low, qualified bidder, and that the courts cannot interfere unless it clearly appears that the public authority is abusing its discretion. Still, based on these facts, the Supreme Court held that the County did not exercise sound discretion in this instance because: (i) the County misapplied one of its selection criteria; and (ii) the County did not take into consideration the other selection criteria.
Of significance is that the Supreme Court did not consider any of the County’s other 17 bidder qualifications criteria, affirmed by the lower courts. Nor did the Supreme Court agree with The Painting Company that the County cannot consider Prevailing Wage violations at all. Thus, the County legally may revise its Prevailing Wage violation standard to evaluate low bidders.
The Supreme Court decision is at odds with the recent federal decision in Gaylor, Inc. v. Franklin County Board of Commissioners, et al., U.S. District Court, Southern District of Ohio (Eastern Division), Case No. 2:10-cv-00183, in which Franklin County rejected Gaylor’s low bid for reasons identical to those in the The Painting Company case. The Supreme Court will consider the Gaylor case, separately filed and pending.
Brown, Strickland Outline Plans for Offshore Wind Turbine Projects
U.S. Sen. Sherrod Brown (D-OH) and Gov. Ted Strickland joined Cleveland leaders Monday to outline plans to move ahead with offshore wind energy projects, which included Brown’s unveiling new legislation aimed at advancing the installation of offshore wind turbines in freshwater bodies like Lake Erie.
Chancellor Rolls Out $668 Million Construction Reform Pilot
The hard-fought goal of university construction reform took a major step forward Wednesday as Chancellor Eric Fingerhut announced sites for the three pilot projects commissioned in budget corrections bill HB318 (Sykes). Central State University, Ohio State University and University of Toledo will launch the Construction Reform Demonstration Project to test “alternative” forms of public construction management for greater flexibility and lower cost to the state, with total projected expenditures of nearly $668 million.
Public construction contracts guide the renovation and construction of state government, local school, and public university and college facilities. Current laws in Ohio governing public construction mandate “multiple prime contracting” and have remained essentially unchanged for 133 years. Under the multiple-prime approach, numerous contracts are bid and awarded for construction work, which some say makes the process more cumbersome and expensive.
University trustees became more vocal about construction reform last year, prompting discussions with the Ohio Board of Regents and chancellor. The Ohio Construction Reform Panel convened by Gov. Ted Strickland delivered its report to the governor and General Assembly in the spring, and Republicans took up the cause, calling for the insertion of public construction reform into HB318. Fingerhut followed with public testimony on the proposal in committee hearings. The governor and Democratic legislators agreed in the end to including the three-project pilot in HB318.
Public construction accounts for nearly $3 billion annually in state spending with public institutions of higher education spending approximately $1 billion on construction annually.
“These three pilot construction projects will utilize new methods of construction while we measure cost and time efficiencies, minority business participation, and project quality,” Fingerhut said. “Higher education is dedicated to finding new efficiencies, and we hope to find opportunities that allow us to save money while increasing our capacity to educate Ohio’s future workforce and drive economic growth.”
Under HB318, the chancellor may designate three Construction Reform Demonstration Projects based on the following criteria:
– Each project will make use of one or more of the alternative methods of construction delivery described in the law.
– Each state institution of higher education has a comprehensive, credible funding plan for the project that does not rely on any subsequent state capital money.
– Each state institution of higher education has satisfied all internal requirements of the state institution of higher education that are necessary to allow bidding on the project to begin before the end of fiscal year 2010.
– Each project will qualify for LEED certification.
In addition, each project will have an EDGE (Encouraging Diversity, Growth and Equity) minority contracting goal: a dollar value computed by taking the construction reform projects’ EDGE percentage, as determined by the Equal Opportunity Division of the Department of Administrative Services, and applying it to the total project cost.
“Each institution will be expected to use best efforts to achieve their defined EDGE contracting goal,” the chancellor’s office said.
Fingerhut identified the following projects under the construction reform pilot:
Central State University – Emery Hall Renovations – Phase IV: $1.75 Million
EDGE Contracting Percentage Goal: 15 percent
This project is to preserve and restore Emery Hall, one of two remaining historical structures on the original campus of Wilberforce University. Constructed as a women’s dormitory in 1913, the building is included in the national historical register to preserve Emery Hall’s significant place in history.
The total preservation and restoration project is estimated to cost $9.55 million and is organized into five phases. Phases I, II and III were completed with $2.4 million in matching grant funds, and $1.75 million will help complete Phase IV in the preservation and restoration effort. This portion of the project will use the construction delivery method of “construction manager at risk.” Contracts for mechanical, electrical and plumbing will be awarded using an open competitive bid process based on complete design documents.
Ohio State University – ProjectONE Core Phases: $658.3 Million
EDGE Contracting Percentage Goal: 20 percent
ProjectONE is a $1 billion undertaking that will transform the medical center campus with a central tower housing a new Arthur G. James Cancer Hospital and Richard J. Solove Research Institute; a new Critical Care Center designed to facilitate better patient care and enhanced by integrated research and education space.
“This state-of-the-art transformation will make the medical center – already recognized as one of the nation’s top hospitals on the U.S. News & World Report Honor Roll – a leader in innovation and a magnet for the best and brightest students, doctors and scientists,” the chancellor’s office said.
Ohio State has committed to attaining the 20 percent EDGE goal over the entire $1 billion core phase project.
Each of the six core phases is vital to the total project, said the chancellor’s office. Each phase will use one or more alternative methods of construction delivery authorized by HB318, including construction manager at risk and “design assist.” The phases include (1) constructing the Cancer and Critical Care Tower, (2) relocating and upgrading infrastructure and roadways, (3) upgrading current space in Rhodes Hall, Doan Hall, James Cancer Hospital and Cramblett Hall, (4) landscaping and urban planning initiative, (5) demolition of Cramblett Hall, and (6) constructing a South Campus central chiller plant.
University of Toledo – Center for Biosphere Restoration Research – Bowman Oddy Laboratories Building and Wolfe Hall Renovations: $7.8 Million
EDGE Contracting Percentage Goal: 15 percent
The University of Toledo (UT) plans to renovate a 21,291 square foot space in the Bowman-Oddy Laboratories Building and Wolfe Hall to create a facility for the Center for Biosphere Restoration Research (CBRR) and related “domino moves.” The CBRR will house the research teams of 13 faculty from UT’s Department of Environmental Sciences, dedicated to research and education “needed to secure an environmentally sustainable future.”
Constructed in 1966, the Bowman-Oddy building has undergone a number of refurbishment and renovation projects in the past 44 years, excluding the south wing, where the CBRR will be located.
Wolfe Hall, a science building constructed in 1997, will house the required “domino moves” involving the permanent relocation of four undergraduate science instructional labs and related support from Bowman-Oddy Laboratories.
The entire project will use the construction delivery method of construction manager at risk. Renovation will include new air and plumbing systems and wholesale reconfiguration of non-load-bearing walls, new finishing work, and new laboratory cabinets and office furniture.
The three Construction Reform Demonstration Project proposals will go before the Controlling Board on April 5, 2010.
Capital Reappropriations Moves More Schools up Construction List
The Ohio School Facilities Commission (OSFC) is preparing to move forward with seven to 10 new construction projects after the approval of the capital reappropriations bill (HB462) on Wednesday.
OSFC Executive Director Richard Murray briefed members of the commission Thursday on the bill’s impact, saying it allocates an additional $525 million that will be used to help fund the projects of seven to 10 districts in the coming year.
He said without the funds in HB462, the OSFC would have had to wait at least another six months to continue forward with the construction program.
OSFC had pushed for the funds in HB462 with the capital bill apparently delayed until after the election. With approval of the legislation, he said OSFC will begin the process of selecting the school districts that will be eligible and notifying those districts by July so they can prepare to put a local share levy on the November ballot.
He said it is necessary to secure new money because the money set aside from the tobacco securitization fund has already been committed.
Among the actions of the OSFC on Thursday was approval of new grants to make repairs on completed projects.
Murray said the fund that the grants come from allows the repairs to be made immediately while the commission goes after the party responsible for the shoddy work. He called it “frustrating” that the commission has had to go back and fix things on already completed projects.
Senate Committee Moves Toward Finalizing Renewable Energy Bill
Chairman Chris Widener (R-Springfield) set out in early March to move his SB232 at “March Madness” pace through the General Assembly to capture what neighboring states are cashing in on – renewable energy projects for wind and solar. The Senate Energy and Public Utilities Committee during a late hearing on Tuesday accepted a substitute bill that would create a new tax structure in the hopes of attracting business and becoming a leader in the renewable energy market.
With recent approval of three major wind projects in Hardin and Champaign counties by the Ohio Power Siting Board (OPSB) on Monday, Widener believes the last piece of the puzzle is creating a simple, transparent tax structure for developers to work with.
Some of the provisions added in the substitute bill were taken from the conditions made by the OPSB, including facility owners must not only restore roads to their condition before facility construction, but that bridges and culverts also must be restored. The oversight for the restoration will be coordinated between the county engineers, local jurisdictions responsible for the infrastructure and project developers.
Widener introduced SB232 as a market signal to renewable energy companies – wind and solar – that Ohio has a simplistic tax structure for development. To be eligible for this arrangement, the company must be under construction by 2011, operational by 2013 and must commit to create jobs in Ohio.
“SB232 will create a competitive tax structure for renewable energy projects, such as wind development. It will generate clean renewable electric energy for thousands of homes and businesses and pay millions in tax revenue to our schools and local government,” said John Hohn, vice president of economic development for Hardin County Chamber and Business Alliance.
Widener said after meeting with stakeholders on the issue, including school districts, local businesses, House members, the governor’s staff, the Ohio Department of Development (ODOD) and the Ohio Department of Taxation, the substitute bill captures the essence of his ideas with those in the House version – HB464 (Winburn). He said the Legislature and the Strickland administration are sharing ideas to bring new jobs to Ohio.
Going forward on this legislation, Widener said he does not believe his proposal affects anyone’s tax structure negatively.
The substitute bill adds and modifies the following provisions:
– Shifts responsibility for approving property tax exemptions from the Ohio Air Quality Development Authority (OAQDA) to the ODOD;
– Clarifies the extent of the property tax exemption for real property that is part of a tax-exempt renewable energy resource facility;
– Establishes a uniform payment-in-lieu-of-tax level of $7,000 per megawatt (MW) regardless of whether the facility owner is a public utility or not. (The introduced bill established levels of $5,000 per MW for utility-owned facilities and $6,000 per MW for non-utility-owned facilities.)
– Clarifies that failure by a tax-exempt facility owner to fulfill the requirements imposed by the bill may result in the revocation of the tax exemption;
– Specifies the property tax treatment of tangible personal property (TPPT) that is part of a renewable energy resource facility that does not qualify for tax exemption;
– Exempts renewable energy resource facilities from property taxation and any applicable utility excise tax if the aggregate nameplate capacity of the facility is 250 kilowatts or less specifying that such a producer is not a public utility for tax purposes;
– Imposes additional requirements on owners of tax-exempt renewable energy resource facilities, including the following: a majority of full-time employees must be domiciled in Ohio (although deviations from this may be allowed by ODOD for good cause); an annual report on employment must be filed with the department; and a certificate of completion of facility construction must be filed with ODOD.
– Specifies that if a tax-exempt renewable energy resource facility is installed or constructed on a portion of a tract of land valued at its Current Agricultural Use Value (CAUV), the remaining part of the land still qualifies for CAUV, and no recoupment charge applies, if the remaining portion of the tract continues to satisfy qualifications for CAUV treatment. Widener said that the CAUV was one of the reasons for increasing the cost per MW from $6,000 to $7,000.
– Specifies that any kind of real property that qualifies as a renewable energy source facility but having a nameplate capacity of 250 kilowatts or less is exempted from property taxation;
– Specifies that property that qualifies as a renewable energy source facility installed on public property is tax-exempt if its primary purpose is to supply electricity to the public body owning the property, even if some of nameplate capacity exceeds 250 kilowatts and some of the electricity is supplied to others; and
– Specifies that the tax exemption does not apply to any property that was used, or is part of a facility that was used, to supply electricity before the bill’s effective date.
Two amendments were added to the substitute version. One, introduced by Sen. Jimmy Stewart (R-Athens), added clean coal and advanced nuclear energy to the list of renewable energy sources. The second amendment introduced by Widener clarified the status of existing electric facilities.
Widener said that over the Easter break members should receive a comparison document from the Legislative Service Commission and he will have further hearings after break with the hopes of passage by the end of April.
New International Green Construction Code (IGCC) Public Version
On Monday March 15 the International Code Council posted a free, downloadable version of its new International Green Construction Code (IGCC) Public Version 1.0 on our website, made possible with the help of our Cooperating Sponsors, the American Institute of Architects (AIA) and ASTM International. Also posted is a read-only version of ANSI/ASHRAE/USGBC/IES Standard 189.1, now offered as an alternative jurisdictional requirement within the IGCC. Click here for access.
We hope that you will take a look at the first-ever code to address regulation of green construction, providing a baseline that integrates with the I-Codes and addresses building performance along with resource conservation, construction and operations impacts, and water and air quality issues.
One version of the IGCC is in Word format to allow you to participate easily in our Public Comment period, which runs through May 15 and will result in August hearings. The PDF version of the IGCC Version 1.0 is offered as an immediately useable resource tool for jurisdictions amending existing codes or writing green codes in the immediate timeframe. Please share this information with your colleagues and give us your comments.
Now the many jurisdictions focused on green code legislation will be able to use the same model code resource that they count on to keep their communities safe and sustainable. We are grateful for the drafting work of our Sustainable Building Technology Committee, its Work Groups and meeting participants, whose names and organizations are listed in the front of the IGCC document. We look forward to working with you in the journey ahead.
The International Code Council
Reynoldsburg tightens design regulations for apartment complexes
Legally, Reynoldsburg city officials can’t ban the construction of apartment complexes, but last night, they did their best to discourage it.
“I understand that apartments are where a lot of people get their start,” Councilman Doug Joseph said. “But we want Reynoldsburg to be a place where people have a high interest in the community, and we want to encourage more high-value property in the city.”
Rentals already make up about a third of Reynoldsburg’s housing stock.
To cope with a sluggish real-estate market, several projects begun as condominium developments have been partially or completely converted to apartments, with builders sometimes finishing projects with smaller, lower-quality units.
That meant early buyers were trapped as condo owners in a sea of rentals, and the city missed out on the prestige associated with high-end condos it originally had been promised.
Cities tend to favor homeownership because people often perceive owners as better for property values and more invested in the community, although studies by the National Association of Home Builders contend there’s no truth to that.
The law passed last night tightened design regulations for multi-unit complexes.
It established pricier building standards, specifying high-end construction materials, limiting developers to four units per building and requiring one-third of a lot to be green space.
The legislation was held up for a few weeks because the Building Association of Central Ohio wanted to be sure that the law wouldn’t apply to projects already started.
Jim Hilz, the association’s executive director, said it’s difficult to build apartments in the suburbs because of government roadblocks. He said that this also would make building condominiums in Reynoldsburg more risky because developers would have to go in knowing that they can’t scale back their project if they hit financial trouble.
He said that has been a useful strategy during the recession.
“Renting condos isn’t an ideal situation when that isn’t the original intention,” he said. “But it is a way to keep money flowing so that the whole project doesn’t fail.”
Prevailing-wage penalty required
COLUMBUS, Ohio – Contractors might be reluctant to bid on public jobs in the wake of an Ohio Supreme Court ruling yesterday that they must pay a 100 percent penalty if workers aren’t paid union wages, a lawyer for a builders association said.
In a 5-2 decision, justices disagreed with a lower court’s decision that trial courts have discretion on whether to assess the penalties, which are outlined in Ohio law. The penalties must be assessed in all but exceptional cases, the high court said, and it sent the case back to the trial court to reconsider.
Under state law, employers who fail to pay the going union rate – known as the “prevailing wage” – must repay workers the unpaid sum along with a 25 percent penalty, and they must pay the state a 75 percent penalty. The state is to use its share to pay for prevailing-wage enforcement.
In the decision written by Justice Robert R. Cupp, the court said Monarch Construction Co. is required to pay about $368,000 in back wages to 36 workers, plus a penalty of about $368,000. The workers, who helped build student housing at Miami University, sued in 2006.
Attorney Greg Rogers, who represents Monarch, said he had not talked with his client and did not know what steps it will take next.
He said the employees worked for a subcontractor who submitted false payroll information to Monarch.
The subcontractor, Don Salyers Masonry, has gone out of business and cannot make payments, according to the court.
The intent of the law is not to punish contractors but to get workers their back pay, said Alan Ross, a lawyer for the Northern Ohio chapter of Associated Builders & Contractors Inc. and ABC of Ohio Inc.
“Whether you’re a union or nonunion contractor, this makes working on a prevailing-wage job a pretty treacherous undertaking,” said Ross, who filed a brief on behalf of the industry groups in support of Monarch’s position.
“It’s either going to drive the cost of public construction up because everybody now is caught in this ugly situation,” he said. “Or, if it doesn’t drive up the cost, it takes bidders out of the arena. They’re not going to want to bid on the work because it’s just too risky.”
Attorney General Richard Cordray issued a statement saying the penalties help small businesses as well as construction workers.
“Ohio’s hourly workers are struggling to make ends meet in these tough financial times. Our small businesses are fighting to survive and must have a level playing field in the marketplace,” said Cordray, whose office filed a brief on behalf of the state in support of the workers’ position.
“This decision underscores the importance of prevailing-wage laws to construction workers across Ohio and will assist the efforts of the state to continue to protect the wages of these hardworking Ohioans,” he said.
Ohio Department of Commerce spokesman Dennis Ginty said that such penalties were being assessed in most cases in which employees complained to the department, and that they will continue to be assessed.
Employees who feel they have been denied a prevailing wage have the option of filing a complaint with the department or suing.
Messages seeking comment were left with lawyers for the employees and for the Ohio State Building & Construction Trades Council, which filed a brief in support of the employees’ position.
Joining Cupp in the decision were Chief Justice Thomas J. Moyer and Justices Paul E. Pfeifer, Maureen O’Connor and Judith Lanzinger.
Dissenting were Justices Evelyn Lundberg Stratton and Terrence O’Donnell.
Columbus Mayor Releases Sustainability Goals
Ohio Construction Conference – All AIA Members Are Invited
All AIA Ohio members are invited to the Ohio Construction Conference, on Tuesday, Feb. 23, 2010, from 7 a.m. – 6 p.m. Spend a day with your colleagues, clients – and potential clients – at a program with affordable tuition and no airfare costs! Contractors, architects and owners will all be in attendance.
The Conference offers up to 8 AIA learning units (including HSW and SD hours) and approval is pending from the Green Building Certification Institute (GBCI) for continuing education hours for LEED AP’s and LEED Green Associates.
Mid-Day General Session: What Owners Look for in Developing Relationships with Designers and Contractors – A panel of local and national owners will share their experiences.
Closing General Session: Join Us at the Table: Small Group Discussions led by Owners – Participants will join owners at small roundtables to discuss the challenges we face as an industry.
A registration fee of $200 (or register 3 of your key people for $500) covers the entire day of networking and education, including meals. Even parking is free!
Register online at www.bx.org
For more information, call Sanda Elkins at the BX at 614/486-9521, ext. 216, or email selkins@bx.org.