The Economic Benefits of the Clean Ohio Revitalization Fund and the Future of Brownfield Redevelopment in Ohio

The Economic Benefits of the Clean Ohio Revitalization Fund and the Future of Brownfield Redevelopment in Ohio

Presentation to the Environmental Law

Section of the Cleveland Metropolitan Bar

Association

Lavea Brachman, JD, MCPExecutive DirectorGreater Ohio Policy [email protected]

Photos of the remediation and construction of Jeffrey Place, in Columbus. Ohio. Ohio Development Services Agency

October 7, 2013

Greater Ohio Policy Center:“Think” and “Do” tank

An outcome-oriented statewide non-profit organization that develops and implements policies and practices to: • revitalize Ohio’s urban cores and

metropolitan regions• achieve sustainable land reuse and

economic growth

Greater Ohio Policy Center:“Think” and “Do” tank

Since its formation in 2008, GOPC has championed revitalization and sustainable growth in Ohio, advocating policies and practices that enhance our metropolitan regions as economic drivers and preserve Ohio’s open space and farmland.

Greater Ohio Policy Center Research

• 2010 Restoring Prosperity to Ohio, a report co-written with the Brookings Institution

• 2013 report Investing in Brownfields: The Economic Benefits of the Clean Ohio Revitalization Fund

• 2013 policy brief on Regenerating America’s Legacy Cities for the Lincoln Institute of Land Policy

Restoring Prosperity Findings

State policies undercutting Ohio’s competitiveness:• Hollowed out urban core & sprawl• Not building on our urban/metro

assets• Insufficient regional/metro

economic growth• Fragmentation due to too much

government

Restoring Prosperity Findings

• Ohio can compete in the “next economy”

• But to compete, we must adapt

• Reforms in Innovation, Infrastructure, Quality of Place, Workforce & Governance

Clean Ohio Fund Background

The Clean Ohio Fund is a state bond approved by Ohio taxpayers in 2000, and again in 2008, to support a “package”:• brownfield revitalization (CORF)• farmland preservation• green space conservation, and • recreational trails

Clean Ohio Fund Background

• Ohio voters overwhelmingly supported the Clean Ohio Fund

• The voter initiative in 2008 passed in all 88 counties

• 70% of all Ohioans voted in favor of the Clean Ohio Fund

Clean Ohio Fund Background

$400 M in both 2000 & 2008:• $ 200 M for brownfield revitalization

(CORF)• $200 M for farmland preservation, green

space conservation, and recreational trails

The Original Clean Ohio Revitalization Fund

The Clean Ohio Revitalization Fund (CORF) was the Clean Ohio Fund’s brownfield redevelopment program.

• Funding source: bond on liquor tax profits

• Primary factors and requirements:– Grants awarded and loans made shall provide not more than

seventy-five percent of the estimated total cost of a project.– A grant or loan to any one project shall not exceed three million

dollars.

Value Proposition of CORF

Since the upfront cost of brownfields is prohibitive, CORF allows developers to redevelopment properties they otherwise would not have been able to.

The Clean Ohio Revitalization Fund

Since 2002, CORF has made grants totaling over $315 million to support the clean-up of 160 brownfield sites in 71 communities.

Why We Care aboutBrownfield Redevelopment in Ohio

• Brownfield sites are scattered by the hundreds throughout the state in cities of all sizes as well as rural areas, a legacy of Ohio’s industrial past.

• Land consumption is outpacing population growth in Ohio.

• Economic benefits of greenspace

Land Consumption in Ohio has Outpaced Population Growth

• Ohio is 8th in land conversion• But Ohio is only 45th in population growth• Ohio’s rate of development of acres

outpaced its population growth by almost 6 times in last thirty years

• Developing new land without increasing population leads to vacancies in urban areas.

Why CORF is Important for Communities

• Proximity to a brownfield reduces adjacent property values by approximately 20 percent.

• Brownfield cleanup increases nearby property values by approximately 5-13 percent.

Investing in Brownfields: The Economic Benefits of CORF

In 2013, GOPC conducted the first independent study of CORF to analyze the statewide economic impacts of public investments in brownfield sites:

Report Methodology

• Analyzed a representative sample of 21 CORF projects at various levels of development and success located across the state.

• 21 CORF projects selected for the diversity in their degree and type of end use, geographic location, and other characteristics.

Report Findings

The GOPC study found the CORF generated substantial direct and indirect economic impacts:

1) The 21 projects resulted in a net positive value for the state’s investment, producing $1.16 billion in one-time contributions and contributing $1.4 billion annually to the state’s Gross Domestic Product.

Report Findings

2) Goods and services related to predevelopment alone produced a return on investment of $4.67 in new economic activity for every one dollar spent by the Program on the 21 projects.

Report Findings

3) For every direct job created or sustained through activities tied to a remediated brownfield, more than one additional job was indirectly created or sustained by the 21 projects.

Report Findings

4) Predevelopment and construction activities in the 21 projects created more than $360 million in household and business earnings, while ongoing project operations produce almost $500 million a year in household and business earnings.

Report Findings

5) The 21 projects annually generate $55 million in state and local taxes and were responsible for an additional $42 million in one-time state and local taxes.

Report Findings

If all 160 CORF-funded sites experienced the same level of success and failure demonstrated in the 21 sites of the study, benefits to Ohioans would be projected at 7.6 times the estimated benefits, including: • Over $8 billion in one-time and over $10 billion in annual

contributions to the state GDP• Over $2.5 billion in one-time household and business

earnings based on remediation and construction activities and over $3.5 billion in annual household and business earnings

• $418 million annually in state and local taxes.

Report Findings

GOPC concluded that the Clean Ohio Revitalization Fund has:• Protected Ohio’s

environment• Served as a catalyst for

economic development in Ohio’s communities

• Generated state-level return on investment

Benefits of Brownfield Redevelopment

CORF helps support economic development and job creation by making our communities more attractive to businesses and individuals looking for a high quality of life.

Program in Transition

• The CORF program is in transition since JobsOhio was created.– Funding for brownfield redevelopment has been

channeled to JobsOhio.– The program now falls under the administration of

JobsOhio.

Current status of Brownfields Redevelopment financing in Ohio

JobsOhio is in process of creating a brownfields program that aligns with its other programs.

Program in Transition

Program is now the JobsOhio Revitalization Program:• Beginning to accept applications• Priority will be placed on projects that support near term job

creation opportunities for Ohioans.• JobsOhio will refer its recommendations to the Director of

the Ohio Developmental Services Agency or Clean Ohio Council for review and potential approval.

JobsOhio Revitalization Program

According to JobsOhio, the program will be:• Launched in late 2013• A more streamlined and responsive program• Open to public and private entities• Funded by up to $43 million annually• Patient capital with flexible terms

Increasing Demand for Urban Living further Increases Importance of Brownfields Redevelopment

Societal changes since the program was created 15 years ago:• Increasing demand for green, urban living• Demographic trends: Gen Y and Baby Boomers• Cities and metros are driving economies• The time is ripe for an urban agenda in Ohio

Questions?

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