The Gutting of Clean Ohio Brownfields Grants
A March 3 Columbus Dispatch article expressed grave concerns about the lack of grants for brownfields redevelopment in Ohio. The state responded that Clean Ohio funding has been replaced by financial assistance under the Jobs Ohio program. Unfortunately for developers and private companies interested in revitalizing environmentally impaired property, the state’s position that grants are as available and as large as they previously were under the Clean Ohio Fund is illusory.
Developers, manufacturers, retail establishments and other commercial entities have struggled over the last few years as the previously available grants for brownfields redevelopment under the Clean Ohio program were purportedly “shifted” to the Jobs Ohio program. Put simply, the shift did not work, and Ohio’s economy is bearing the burden. In fact, Jobs Ohio offers very little in the way of brownfields grants, especially for environmental cleanups. Revitalization grants are available for some Phase II Environmental Site Assessments under Jobs Ohio, but meaningful grants are not available for brownfields remediation, even when the applicant can establish an economic benefit to the state of Ohio.
Many environmentally impaired properties across Ohio remain undeveloped because the Clean Ohio Fund has been gutted. The state makes much of the fact that the Jobs Ohio program and the Ohio EPA offer loan opportunities to private parties for investigating and remediating brownfield sites. Loans are not the solution when the cost of borrowing is at an all-time low. The 2015 annual report for Jobs Ohio dedicates one sentence of the lengthy report to accomplishments from grants for brownfields revitalization, and that is because the state’s grant record is remarkably unimpressive. The state indicates that there is no empirical data to support a finding that companies are not developing brownfields due to the lack of Clean Ohio funding. In other words, developers, manufacturers and employers are not interested for legitimate business reasons in media attention, a public march on Columbus or testifying before legislative committees. Instead, they have quietly moved their operations to other states (e.g., Kentucky) that provide a more welcoming approach to property development.
Ohio’s Voluntary Action Program (“VAP”)(R.C. Ch. 3746) established a system for allowing private parties to investigate and remediate brownfields using the private party’s Certified Professional (“CP”). The CP can then petition on behalf of the “volunteer” to obtain an Ohio EPA covenant not-to-sue, thereby providing comfort to prospective buyers and lenders. The VAP has been a success, with one notable exception. Ohio EPA reviews, comments on and approves No Further Action letter packages under the VAP and issues the covenant not-to-sue with a typical six-month turnaround. That timeframe simply does not work well in the fast-paced world of real estate development and tenant acquisition.
The Ohio General Assembly has observed that certain incentives for brownfields redevelopment are less than a model of clarity. For example, Rep. Jonathan Dever (28th Dist.) introduced HB 482 in March 2016 in an effort to clarify the date upon which a VAP volunteer may be eligible for real property tax abatement under R.C. Ch. 3746. While HB 482 is helpful in providing a tax relief incentive (after the cleanup is complete), it is but one small step.
Ohio needs to return to a robust grant system like that which formerly operated under the Clean Ohio Fund in order for Ohio to be in a competitive position with other states to attract and keep businesses that are prepared to restore environmentally distressed properties. In the meantime, the number of empty, old warehouses and manufacturing buildings in Ohio continues to grow, and the jobs and vibrant areas that could have grown are not.
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