Ohio returns to funding spec-based commercial & industrial development

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In 2020, Ohio’s development officials are again awarding grants to fund commercial and industrial development projects that don’t have known end users. JobsOhio is now in the midst of launching a $50 million per year grant and loan program for spec-based opportunities. Such projects often originate from local communities or developers eager to prepare sites for future business use. These types of projects lack a business prospect waiting in the wings. They are pursued from a “if we build it, they will come” mindset.

A spec-based site opportunity may take the form of a vacant industrial building, a city-owned set of parcels in the central business district, a former brownfield or a large tract of undeveloped land near an existing industrial park. The site appears ideal for development, if only an end user would come forward and invest his or her money to connect the site to far-off utility lines, level the ground, remove the dilapidated factory and so on.

During the past few decades, state development officials have gotten involved to award grants in support of spec-based development. The Clean Ohio Revitalization Fund, Industrial Site Improvement Fund, and Job Ready Sites program all are recent historical examples of Ohio providing grants to prepare sites for future commercial and industrial development.

Until this year, JobsOhio viewed such spec-based development funding with a skeptical eye. During the last decade, JobsOhio had some pilot grant funding available for spec-based site development, but most programming was loan-based. Loans were often available. Local leaders were left with limited funding approaches to prepare sites in their communities. However, this has now changed.

This month, JobsOhio officials are crossing the state to launch the Ohio Site Inventory Program (OSIP), an updated version of previous spec-based grant programs.

Key highlights of the OSIP include:

  • JobsOhio will award up to $250 million in grants and loans through 2024, with $50 million allocated each year, to spec-based development opportunities. An end user doesn’t need to be identified.
  • Grant funds will reimburse local governments, non-profits, developers, port authorities and businesses up to $2 million for site preparation, demolition, construction, infrastructure (e.g., utilities and roads) and environmental clean-up, including asbestos removal.
  • Spec-based developable sites should be at least 30 acres in contiguous area and spec-based buildings must align with common site selection criteria (e.g., clear ceiling height, column spacing).
  • This support cannot exceed 50% of a site’s total project cost.
  • Applicants must have control of the site, completed a Phase I environmental assessment and show demonstrated demand for the site’s future end use.
  • Eligible end uses include warehousing, industrial, office (including mixed use), R&D and business parks. Ineligible uses are those involving recreational parks, future multi-family housing, retail, hospitals and parking decks.

We expect further details regarding application deadlines and the timing for this year’s $50 million allocation to be forthcoming.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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