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Mark Lundine, Ohio Department of Development, presented this presentation at the Heritage Ohio Historic Tax Credit Workshop in Springfield, Ohio on May 6, 2011.
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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: [email protected]
Urban Development Division