Northeast Ohio Leads State in New Historic Preservation Tax Credits
Northeast Ohio leads the state with just under half of all Historic Preservation Tax Credits announced by the Ohio Development Services Agency (DSA) Wednesday as part of its latest round of awards.
Of the 30 projects in six regions of the state selected for the tax credit, a dozen lie in the northeast quadrant, including a $4.5 million offering to the NASA Lewis Research Center, Development Engineering Building and Annex in Fairview Park, Cuyahoga County. The estimated project cost is more than 10 times that amount.
In Central Ohio, the Columbus Dispatch Building at 34 S. Third St., right across from the Statehouse, will also receive a tax credit of $2,228,459 which could go up to $2.9 million if funds become “available through withdrawn applications or project savings.” The total project cost is set at $29.1 million.
Overall, Northeast Ohio will receive $15,585,192 in Historic Preservation Tax Credits in the 18th funding round. Including the old Union Terminal in Cincinnati, Southwest Ohio is marked out for $10,407,500; Western Ohio, $5,186,850; Central Ohio, $2,478,459; Eastern Ohio, $713,489; and Northwest Ohio, $609,065.
DSA says the $35 million in total tax credits are expected to leverage private investments exceeding $520 million in 13 communities.
“Preserving these historic buildings creates opportunities for small businesses and revitalizes downtowns,” DSA Director David Goodman said in a release. “We’re capitalizing on what makes Ohio unique.”
Awards will help private developers rehabilitate historic buildings in downtowns and neighborhoods. Once rehabilitated, they will drive further investment and interest in adjacent properties, DSA says.
Developers are not issued the tax credit until project construction is complete and all program requirements are verified.
The full list tax credit recipients can be found here.
2017 Ohio Building Code Finalized
At its May 26, 2017 public meeting, the Ohio Board of Building Standards (BBS) adopted of what will be the next edition of the Ohio Building Code (OBC) (hereafter referred to as the 2017 OBC). The 2017 edition of the OBC will go into effect on November 1, 2017. All applications for a permit submitted on or after November 1, 2017 will be reviewed for compliance with the new OBC and its referenced standards. THERE IS NO GRACE PERIOD.
The BBS approved select rules of the Ohio Administrative Code (OAC), identified as Amendments Group XCIII (93) pursuant to Chapters 119, 3781, 3791, and 4104 of the Ohio Revised Code (ORC). The 2017 OBC is based on the International Building Code 2015 (IBC), first printing, Chapters 2 to 35 – with Ohio Amendments through April 14, 2017. Publication dates for hard and electronic versions from ICC and Thompson-Reuters are not yet available.
The full text of the approved draft can be viewed on the Board’s website at:
http://www.com.ohio.gov/documents/bbs_CombinedPHDraft-AG93.pdf
While there are numerous changes from the 2011 OBC to the 2017 OBC, some of the specific rules adopted in Chapters 1 through 35 of the 2017 OBC include:
- Updating the provisions for health care occupancies including revisions to the occupancy classifications based on the levels of care being provided, and new definitions for the levels of care being provided.
- Revisions throughout the OBC for better alignment with the 2012 edition of NFPA 101, which is required by the Center for Medicare and Medicaid Services (CMS).
- Reformatting Table 503 and Chapter 5 provisions for building height and area.
- Expanding the use of exit access stairs and unenclosed exit stairs, including atriums.
- Continuing the use of Chapter 34 for existing buildings in lieu of adoption of the ICC International Existing Building Code (IEBC).
Status of the Residential Code of Ohio (RCO)
The Ohio Residential Construction Advisory Committee (RCAC) recently completed review of the 2015 International Residential Code (IRC) and will begin review of the 2018 IRC once available for recommendation to the Board. It is expected that the next edition of the RCO will be based on the 2018 IRC and be effective mid to late 2018.
Status of the Ohio Fire Code (OFC)
The Ohio Department of Commerce, Division of State Fire Marshal’s (SFM) has recently issued the DRAFT of the 2017 Ohio Fire Code (OFC) and associated SFM rules at: http://www.com.ohio.gov/fire/OhioFireCodeInformation.aspx. Further details about OFC rule-related meeting dates, updates regarding procedures for and the status of the OFC update process, and proposed OFC related rule/hearing information can be found on the SFM’s website at http://www.com.ohio.gov/fire/OhioFireCode.aspx. No firm adoption date has been established at this time.
Senate Finance Committee Treats AIA Ohio Issues Positively
The Ohio Senate Finance Committee released its version of the state budget bill, Sub. HB 49 Monday agreeing with AIA Ohio on all three issues architects have raised relative to the original bill Governor Kasich introduced last January:
First, it removed a House inserted provision that allowed the Department of Administrative Services to circumvent the Qualification Based Selection of Architects (QBS). The language would have allowed DAS to award its own design and construction contracts as “supplies” or “services” contracts under R.C. Chapter 125, thereby circumventing R.C. Chapter 153 construction law. Using this language, DAS could have authorized a private third-party administrator to bid and award construction contracts, without the transparency and fair processes required under ORC 153. Further, DAS could have used its cooperative purchasing authority to extend this same contract to all political subdivisions. The state’s construction authority, OFCC, could not have challenge these contracts since “a contract awarded by DAS takes precedence over the commission’s authority.”
When this provision was inserted into HB 49 by the House, AIA Ohio issued an Action Alert asking members to communicate opposition. Points made about the provision:
- It bypasses the competitive processes and protections of standard construction under ORC Chapter 153, including advertising, bonding, subcontractor protections, etc.;
- It creates a path for all political subdivisions to avoid competitive bidding for construction;
- It could be a path to “pay to play” and the selection of less qualified professionals;
- It makes the award of construction contracts less transparent;
- It breeds confusion and a sense of unfairness within the design and construction industry in Ohio;
- It provides no legal recourse to challenge the appropriateness of a construction contract awarded by a non-construction agency (DAS).
Second, The Senate Finance Committee followed the House of Representatives by leaving intact the House’s removal of Governor Kasich’s provision that would have extended the sales tax to both interior and landscape design services.
Third, the Senate Finance Committee maintained the provision that’s intended to address the 2015 U.S. Supreme Court decision against the North Carolina Board of Dental Examiners that ruled they violated federal antitrust laws because members of the state’s dental board were active participants in the profession they regulated.
HB49 proposes the creation of a third-party review process by the Department of Administrative Services (DAS), in which the DAS would review any action taken by or on behalf of a board that could be subject to antitrust laws. Not only would this protect boards from costly legal action for antitrust-related concerns, it would also prevent unnecessary delays in business decisions the boards make and promote better coordination and efficiency within the licensing boards structure.
Finally, HB 49 continues to fund the operation of the Ohio Architects Board, though at a slightly lower level than the House version. Faced with a projected $1 billion shortfall in both sales and income taxes, senators balanced the budget with a 3-4% across the board cut in the administrative costs for state agencies ($20 million), more targeted cuts to agency programs ($100 million), the elimination of millions of dollars in earmarks and reducing Medicaid $200.
Following the unveiling of the Senate Finance Committee’s Substitute Bill, it was accepted by the Committee and will undergo several additional hearings where minor changes may be made prior to being approved by the full Senate on June 21. From there it will be reconciled by a conference committee composed of House and Senate leaders before being sent to Governor Kasich for his signature prior to June 30.
At this point state lawmakers have heard from AIA members and have responded favorably to all of AIA Ohio’s Budget Bill concerns. We’ll update you with any meaningful developments as the bill progresses through the Conference Committee and on to the Governor’s desk.
BBS Updates Ohio Building, Plumbing and Mechanical Codes on 2015 I-Codes
At its meeting on May 26, 2017, the Board of Building Standards adopted updates to the Ohio Building, Plumbing and Mechanical Codes based on 2015 I-Codes effective November 1, 2017.
The Board initiated the rule change process in October 2016 and the rules have been available in draft form on the Board’s website. The final adopted rules with summaries can be found at the following links:
Ohio Building Code (OBC) Rules:http://www.com.state.oh.us/documents/AG%2093%20OBC%20Adoption%20Announcement.pdf
Ohio Plumbing Code (OPC) Rules:http://www.com.state.oh.us/documents/AG%2093%20OPC%20Adoption%20Announcement.pdf
Ohio Mechanical Code (OMC) Rules:http://www.com.state.oh.us/documents/AG%2093%20OMC%20Adoption%20Announcement.pdf
Any non-residential project submitted to a building department on or after November 1, 2017 shall comply with the above rules. Any non-residential project submitted before November 1, 2017 shall comply with the current Ohio Building, Plumbing & Mechanical Codes based on the 2009 I-Codes as amended. These rules can be found here: http://www.com.state.oh.us/dico/bbs/NonResidentialBuildingCodes.aspx#OBC
The Residential Code of Ohio (RCO) which regulates 1-, 2- & 3- Family dwellings is not affected by these code updates. The RCO remains based on the 2009 International Residential Code (IRC) as amended. The Residential Construction Advisory Committee and the Board continue to review newer editions of the IRC for possible adoption at a later date.
If you have questions related to these amendments, please contact the Board Office at (614) 644-2613 or bbs@com.state.oh.us.
Ohio’s BBS Adopts 2017 OBC Effective Nov. 1
Ohio’s Board of Building Standards has adopted the 2017 OBC with an effective date of November 1. A combined update of the 2012 and 2015 editions of the IBC, along with Ohio amendments, the new code includes significant improvements to health care (aligning much more closely with the 2000 Life SafetyCode), as well as an updated version of Chapter 34. Ohio is not adopting the IEBC.
Study Finds Project Labor Agreements Increase School Building Costs
Associated Builders and Contractors of Ohio (ABC) teamed up with the Boston-based Beacon Hill Institute on Thursday to release a study finding that project labor agreements add significantly to the cost of school construction projects.
ABC’s Bryan Williams, a former state legislator, said the report bolsters his organization’s position that neutrality should be codified for all state and local public works construction so project labor agreements can neither be required nor forbidden for bidding on government contracts.
David Tuerck, president of the Boston-based think tank, said the study analyzed 88 Ohio school construction projects from 2003 onward, 15 of which had project labor agreements.
Tuerck said in developing the study Beacon Hill accounted for a variety of variables that can affect total project cost, such as the inclusion of a gym or theater or whether a building is to house an elementary or high school. The study concluded a project labor agreement increases final construction costs by $23.12 per square foot, measured in 2016 prices, a 13.12 percent increase over average construction costs of $176.23 per square foot.
That cost difference amounts to more than $2 million for a 100,000-square-foot building, Tuerck said.
“These results are statistically significant,” he said.
Tuerck and Williams said the results are logical given the effect project labor agreements can have on preventing or dissuading companies from bidding on projects, thus hindering competition.
“There are millions of dollars that went into needless cost increases … that could have gone into the cost of a structure or enhancing the quality of the structure for the community that’s using those,” Williams said.
Tuerck said the study is consistent with separate analyses of the use of project labor agreements in other states.
The Ohio Supreme Court struck down a 1999 law restricting the use of project labor agreements. Under the Strickland administration, the Ohio School Facilities Commission issued a policy allowing local boards of education to require project labor agreements on their construction projects. The Kasich administration withdrew that policy.
The Beacon Hill report is available here.
Legislative Action Alert: Ohio House Puts QBS In Jeopardy: Contact your Senator Today!
Qualification Based Selection (QBS) of architects is in jeopardy from an amendment that the House of Representatives added to the state’s Budget Bill, Sub. HB 49. Please contact your state Senator today asking that the Senate remove this amendment.
Background:
In 2012-2013, comprehensive construction reform provided the most significant change to Ohio’s public construction law in more than 130 years. One positive result of this collaboration between industry and government was the centralization of construction authority into OFCC, creating consistency and transparency in Ohio’s public construction projects.
This House amendment to the state’s Budget Bill, Sub. HB 49, takes a step backward by allowing for the establishment of a second construction authority in the Ohio Department of Administrative Services (DAS), causing confusion, inconsistency and the potential of significant legal entanglements.
Details:
The language would allow DAS to award its own design and construction contracts as “supplies” or “services” contracts under R.C. Chapter 125, thereby circumventing R.C. Chapter 153 construction law. Using this language, DAS could authorize a private third-party administrator to bid and award construction contracts, without the transparency and fair processes required under ORC 153. Further, DAS could use its cooperative purchasing authority to extend this same contract to all political subdivisions. The state’s construction authority, OFCC, could not challenge these contracts since “a contract awarded by DAS takes precedence over the commission’s authority” according to the bill.
AIA Ohio Believes:
This language is not in the best interests of public construction in Ohio because:
· It bypasses the competitive processes and protections of standard construction under ORC Chapter 153, including advertising, bonding, subcontractor protections, etc.;
· It creates a path for all political subdivisions to avoid competitive bidding for construction;
· It makes the award of construction contracts less transparent;
· It breeds confusion and a sense of unfairness within the design and construction industry in Ohio;
· It provides no legal recourse to challenge the appropriateness of a construction contract awarded by a non-construction agency (DAS).
The Ask:
AIA Ohio has uploaded the parts of Sub. HB 49 that include this language here. Please ask your state Senator to remove the language that is shown Please ask your state Senator to remove the language that is shown highlighted in red boxes.
School Facilities Commission Approves Changes to Design Manual
The Ohio School Facilities Commission Thursday approved new changes to the commission’s design manual, including updates to regional cost factor sections and the transition of technical specifications to performance-based criteria.
Melanie Drerup, deputy chief of planning for the commission, said staff worked with consultants to make changes on the manual so that the commission would not have to annually update it to reflect changes in technical terms. She said they are purposefully moving away from technical specifications in the design manual and getting more to performance-based criteria that would examine what a district needs and how a contractor would work with the district on implementing those needs.
The commission also approved three new Classroom Facilities Assistance Program (CFAP) projects for Canal Winchester School District in Franklin County, Minister School District in Auglaize County and Toronto School District in Jefferson County. The districts have their local share in place, but may still need some work on the master plans for the districts.
According to commission Executive Director David Williamson, the commission still has 277 school districts remaining to be served. The commission has served 382 districts with projects at this point.
Sponsor Explains Need for Third Party Building Inspections (HB128)
The bill that would authorize third party building inspections, HB 128 received a sponsor’s hearing April 25 in the House Economic Development, Commerce and Labor Committee.
Rep. Kristina Roegner (R-Hudson) gave sponsor testimony on the legislation that she said would give a common sense solution to expanding the base of inspection to avoid costly delays. She said no matter how efficient and organized a construction company may be, if the inspections are delayed, it holds up progress on the project.
Under current law, the Board of Building Standards formulates and adopts rules governing the erection, construction, repair, alteration and maintenance of buildings, she said. The rules are incorporated into residential and non-residential codes. The board then certifies local building departments and the personnel of these departments as well as individuals, corporations and firms to approve plans and perform inspections. The building inspections currently must be performed by the local building department, she said, but if there are backlogs or personality conflicts, the lack of choice can cause unnecessary and expensive delays.
The bill would specify that inspections, performed by the building department having jurisdiction, must be performed within 24 hours of a request. The general contractor or owner of a building may request an independent inspection, and the Board of Building Standards shall provide a list, which it will maintain, of board-certified, third party, private inspectors and certified building departments from which the contractor may choose. The contractor/owner would still be responsible for inspection fees to the third party, and the local building department may still charge the general contractor/owner any standard fee customary for approval including administrative and filing fees. The third party inspector would be required to send a copy of the inspection results within 24 hours post-inspection to the local building department.
The bill also specifies that local building departments may contract with the division of industrial compliance to exercise enforcement authority, accept and approve plans/specifications and perform inspections for non-residential buildings. It provides for an expedited arbitration process in which a general contractor/owner may appeal inspection results.
During the hearing Rep. Lepore-Hagan asked if the bill would constitute a cut to local governments. Roegner said the bill does not address any funding. She noted that if a contractor or owner uses a third-party inspector, that local government can still charge application and other fees. Lepore-Hagan also said she is concerned that the bill would privatize government services. Roegner said the bill provides choice, and competition can only drive up quality. She also said the contractors could choose a building department from a neighboring jurisdiction.
Lepore-Hagan asked if a situation would be created where a friend of the contractor would do the inspection and be lenient. Roegner said the list of third party inspectors would be certified by the state and any wrong-doing could cause them to lose certification. She also said contractors could also have a situation like that under current law with a friend in the local building department. “I really do not believe that will be an issue,” she said.
Rep. West asked if local governments could farm out inspections under current law. Roegner said they can but a contractor could not do it independently. West also asked if Roegner had talked to local governments about the bill. The sponsor replied that she had talked to the Ohio Municipal League, who has some concerns, but has been at the table.
Rep. Arndt said the 24-hour deadline seems to be a tight period to complete the work. Roegner said she is drafting an amendment to address those issues so there won’t be a time squeeze. She said they want to be reasonable but also put into place best practices.
She told Rep. Kelly that she didn’t have any statistics on how often inspections are delayed or the cost of those delays, but she said it will be interesting to see what proponents have to say about the bill.
She told Rep. Stein that the bill is silent on penalties for violating the 24-hour rule.
She told Rep. Sheehy that she was approached about the issue by several construction companies and contractors. She said they are concerned about retaliation if they complain about lags in building inspections to the Board of Building Standards.