Mapping a Pathway to Successfully Access New All Ohio Future Fund Opportunities
The Ohio General Assembly, in its budget bill (HB33) approved July 3, 2023, authorized up to $750 million in state budget resources to the All Ohio Future Fund (R.C. 126.62). The fund is to be used for infrastructure to compete for – and win – more sizeable economic development projects such as the Amazon, Honda-LG, and Intel megaprojects that Ohio landed in recent years.
When Gov. DeWine proposed the All Ohio Future Fund (Fund) in his State of the State Address, he said the intent was to “prepare the infrastructure of large economic development sites located in every single part of Ohio.” The budget bill language states the Fund will “promote economic development throughout the state, including infrastructure projects and other infrastructure improvements.” Economic development leaders believe the Fund will serve to make sites across the state “project ready.” The Ohio Department of Development (ODOD) will be issuing guidelines for the Fund soon.
As communities, economic development organizations, and private developers prepare for the details of the Fund’s deployment, we encourage potential applicants to consider the following:
1. Understand your target industries and your proposed project’s competitive strengths and weaknesses in relation to those targets. This should include the proposed site and its infrastructure and the regional workforce and compatibilities to nearby communities.
2. Consider whether you have the correct entity as the lead developer (CIC, port authority, public-private partnership, etc.). For public-private partnerships, applicants must craft a development agreement that leverages each party’s strengths and effectively balances public and private interests.
3. If you have the funds available, conduct a title search to ensure the owner has a clear title or that all liens or encumbrances known are manageable. You may also need a survey and an appraisal. Remember, these professionals are often very busy, and the lead times may be longer than anticipated.
4. Ensure you have site control by ownership or written agreement (purchase agreement, purchase option, development agreement, etc.).
5. Complete and update all the necessary due diligence studies (environmental assessment, wetland delineation, threatened and endangered species review, historical/archeological reviews, geotechnical studies, etc.). This can often be done during a due diligence period before closing the property. Sellers hold a lot of power in today’s real estate market, but give your organization plenty of time in a due diligence period before closing on the property if you can negotiate it.
6. Complete preliminary engineering studies for site development and infrastructure extensions. Preliminary engineering studies should include cost estimates and timelines for construction. Given long and unpredictable construction periods, ask for an annual inflation escalator in case the project is delayed. Utility capacity studies should also be included for water, sewer, electric, natural gas, broadband, and potentially railroad access. Utility capacities should meet or exceed requirements for your targeted industries.
7. Identify necessary permitting and approvals and map the path and timing of completions. Permits and approvals may include zoning, annexation, utility taps, planning commission, 401/404 wetland and water quality permits, traffic studies, highway access, stormwater run-off, etc.
8. Establish the tools and resources that will be required to “compete” for projects (such as tax exemption zones like Enterprise Zone or Community Reinvestment Area) and “complete” the site build-out with Tax Increment Financing, Joint Economic Development Districts, and New Community Authorities, all of which can support bond financing for site and infrastructure improvements. (Learn more about these programs here.)
9. If your project is strong enough to win a Fund award, have a plan for final design, bidding, construction financing (until grant reimbursements arrive or permanent financing is available), construction contracts, and construction management. The thrill of winning a large grant can quickly evaporate when a contractor has not been paid and is threatening legal action or the owner is not equipped to protect against unwarranted and costly change orders.