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The State of Ohio is an Equal Opportunity Employer and Provider of ADA Services Funding Economic Development with JobsOhio/Ohio Development Services Agency.

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Presentation on theme: "The State of Ohio is an Equal Opportunity Employer and Provider of ADA Services Funding Economic Development with JobsOhio/Ohio Development Services Agency."— Presentation transcript:

1 The State of Ohio is an Equal Opportunity Employer and Provider of ADA Services Funding Economic Development with JobsOhio/Ohio Development Services Agency and Other Partners Daryl Hennessy Assistant Chief Business Services Division

2 What is Economic Development? The main goal of economic development is improving the economic well being of a community through efforts that entail job creation, job retention, tax base enhancements, and quality of life.* * International Economic Development Council

3 In the broadest sense, economic development encompasses three major areas: Policies that government undertakes to meet broad economic objectives including inflation control, high employment, and sustainable growth. Policies and programs to provide services including building highways, managing parks, and providing medical access to the disadvantaged. Policies and programs explicitly directed at improving the business climate through specific efforts, business finance, marketing, neighborhood development, business retention and expansion, technology transfer, real estate development and others.* * International Economic Development Council

4 Ohio’s Strategic Business Partners and Resources

5 Network

6 Strategic Business Investments Offers Ohio’s new and expanding businesses a comprehensive package of financial and technical assistance resources that support job creation and retention through site location, infrastructure development, and capital investment by industries traditionally strong in Ohio, as well as emerging advanced energy and technology industries. Targeted Industries Automotive Advanced Manufacturing Aerospace and Aviation Biohealth Consumer Products Energy Financial Services Food Processing and Agribusiness Information Technology and Services Polymers and Chemicals

7 Business Attraction and Expansion

8 Programs Tax Credits Income Property Sales and Use Financing Fixed Assets Capitalized Expenses Grants Infrastructure Workforce Economic Development

9 Requirements Job Creation Tax Credit (JCTC)  Create 10+ New Jobs within 3 years  Annual Payroll of $660,000+  Pay 150%+ of the Federal Minimum Wage  Apply Prior to Project Commitment  Approved by the Ohio Tax Credit Authority JCTCs provide a refundable tax credit against a company’s corporate, commercial, or income tax based on the state income tax withheld from new, full-time employees. This withholding is applied toward commercial activity liability bills. Tax Credits- Income

10 Requirements Ohio Enterprise Zone Program  Municipality or county has applied to the Director of the Ohio Development Services Agency for certification  Must apply to the local community for benefits Enterprise Zones provide real property tax incentives for businesses expanding in or relocating to Ohio. Tax Credits- Property

11 Community Reinvestment Areas An economic development tool administered by municipal and county governments that provides real property tax exemptions to businesses making investments in Ohio. In order to use the Community Reinvestment Area program a city, village, or county petitions the Ohio Development Services Agency for confirmation of a geographical area in which investment in housing has traditionally been discouraged. Part of the petition reviewed by the department is a housing survey performed by the respective city, village, or county. Once an area is confirmed, communities may offer real-property tax exemptions to taxpayers that invest in the area. Tax Credits- Property

12 Tax Increment Financing (TIF) Economic development mechanism available to local governments in Ohio to finance public infrastructure improvements and residential rehabilitation. A TIF works by locking in the taxable worth of real property at the value it holds at the time the authorizing legislation was approved. Payments derived from the increased assessed value of any improvement to real property beyond that amount are directed towards a separate fund to finance the construction of public infrastructure defined within the TIF legislation. Tax Credits- Property

13 Equity Angel Investors, Venture Capital

14 Requirements Innovation Ohio Loan Fund (IOF)  Established company with recent history of positive cash flow  Three years operating history.  Attracted or likely to attract additional third party capital.  Projects related to industry, commerce, distribution, or research. Retail projects are ineligible. The IOF promotes assistance to existing Ohio companies in developing next generation products and services within certain Targeted Industry Sectors. Provides competitive financing terms on loans to finance projects that will positively impact Ohio by creating high-value jobs, increased tax revenues and improve the economic welfare of the State. Financing

15 Research & Development Investment Loan Fund Assists Ohio businesses in competing aggressively for private- sector research and development investments that create research and development capabilities and high-wage jobs. The Ohio Development Services Agency R&D Loan provides low- interest loans partnered with a tax credit. Financing

16 166 Direct Loan 166 loans provide for land and building acquisition, construction, expansion, or renovation, and equipment purchases for eligible businesses. Low-interest loans up to 40%, not to exceed $1.5 million. Financing

17 Requirements Roadwork Development (629)  Must typically create or retain jobs  Usually provided to a local jurisdiction and require local participation These grants may be available for public roadway improvements, including engineering and design costs. Available for projects primarily involving manufacturing, research and development, high technology, corporate headquarters, and distribution activity. Grants

18 Requirements Workforce Training Grant (Ohio Workforce Guarantee)  Company must fall into one of the Targeted Industries  Choose a training provider, either in- house or an outside vendor Provides direct financial support to employers for training, paying a portion of instructor salaries, materials, travel, and special needs. Will reimburse grantees the cost of approved training for full-time employees receiving at least $10.88 per hour, excluding benefits. Supports companies making investments in facilities, equipment, and training that result in the retention and creation of jobs for Ohioans. Grants

19 Requirements Ohio Vacant Facilities Fund  Company must occupy a building that has been at least 75% vacant for at least 12 months  Company must increase employment at the facility  Company must employ at least 50 employees or half of its Ohio employees at the facility. Provides grants to assist businesses in creating new jobs in vacant and underutilized commercial buildings and business parks. For-profit employers can receive a $500 grant for every new full-time position created in the vacant facility and lasting one year. Grants

20 Forms of Local Support Grants for employment, recruitment, wage subsidies, and construction expenses Reduction of land costs and expenses Lower municipal electric rates Fee reductions on line taps on water and sewer Subsidized training costs Municipal income tax credits

21 Business Support and Servicing

22 Programs Entrepreneurship and Small Business Assistance Minority Business Development Export Assistance Tourism Promotion

23 Small Business Development Centers Small Business Development Centers (SBDC) are the front-line, immediate response, high-impact programs designed to facilitate small business growth, job creation, and access to capital. Staffed with highly trained business advisors who offer business advising and technical services at no charge. In addition, the SBDCs offer low-cost training workshops for entrepreneurs in all industries, at all stages of business development. Our statewide network offers a wide range of services including: Free one-on-one business counseling Workshops and training programs Strategic business planning Market feasibility and research Marketing strategy development Financial projections development Cash flow analysis Identifying sources of capital Business assessment valuation Inventory control assessment Small Business Assistance

24 State Small Business Credit Initiative (SSBCI) The Ohio Development Services Agency received more than $55 million from the U.S. Department of Treasury for the SSBCI to encourage lending to small businesses. The Ohio Development Services Agency administers the following state-run financing programs utilizing SSBCI funds to help finance small businesses and manufacturers that are creditworthy, but are not receiving the financing they need from the private sector to expand and create jobs. Small Business Assistance Collateral Enhancement Program (CEP) Collateral Enhancement Program (CEP): Provides lending institutions with cash collateral deposits to use as additional collateral for loans made to eligible for-profit small businesses Ohio Capital Access Program (OCAP) Provides financing to for-profit and nonprofit businesses that are having difficulty obtaining business loans through conventional underwriting standards. OCAP supports small business lending by establishing a loan "guarantee" reserve pool at a lending institution that participates in the OCAP. The reserve pool is available to the participating Lender for recovery of any losses on any loan they have enrolled in the OCAP. Targeted Investment Program (TIP) Supports the growth and expansion of targeted small businesses within Ohio's manufacturing, technology, and logistics industries. TIP targets small businesses that have received first or second round equity funding and offers debt financing tailored to the specific needs of the company at or below market interest rates.

25 The Ohio Minority Business Direct Loan Program Provides fixed, low-interest rate loans to certified minority-owned businesses that are purchasing or improving fixed assets and creating or retaining jobs. The loans can be used to finance up to 40 percent of the project value and require participation by another lender. Minority Business Development

26 Ohio International Market Access Grant for Exporters (IMAGE) The Ohio International Market Access Grant for Exporters (IMAGE) is a 50 percent reimbursement program designed to offset the costs associated with certain exporting initiatives. IMAGE is funded by the State of Ohio and the United States Small Business Administration as part of the National Export Initiative to double U.S. exports by The purpose of IMAGE is to increase exports and create jobs in Ohio by helping small businesses expand into new international markets. Export Assistance

27 Ohio Motion Picture Tax Incentive Tourism Promotion Ohio Tourism Provides a refundable tax credit that equals 25 percent off in-state spend and non-resident wages and 35 percent in Ohio resident wages on eligible productions.

28 Workforce and Talent Workforce Transformation Ohio Incumbent Workforce Training Voucher Program

29 Ohio Economic Development Rankings

30 Ohio Increases Business Ranking in 2012 No. 2 in Site Selection magazine’s 2012 ranking of states based on business climate, up from No. 9 a year ago, and trailing only North Carolina. Ohio was the only state among the top 10 in the northern part of the U.S. Ohio also won the Governor's Cup this year, with the most new projects announced of any state in 2011, according to Site Selection analysis. THE MAGAZINE OF CORPORATE REAL ESTATE STRATEGY & AREA ECONOMIC DEVELOPMENT

31 2012 Competiveness Ranking 2011 Governor’s Cup Ranking 2012 Survey of corporate site selectors YTD New Projects Logged Tax Foundation and KMPG’s Location Matters analysis of state tax burdens on mature firms Tax Foundation and KMPG’s Location Matters analysis of state tax burdens on new firms Ranking is based: 50% on corporate site selectors survey 50% on remaining factors as listed on chart below

32 The State of Ohio is an Equal Opportunity Employer and Provider of ADA Services Questions? Daryl Hennessy Assistant Chief Business Services Division


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