12.13.13 real property law institute
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The Port Authority’s Role in Driving Redevelopment
Real Property Law Institute December 13, 2013
Paula Boggs MuethingVice President of Community Revitalization & General Counsel
Port of Greater Cincinnati Development Authority
Port Authority: History • Established in 2000 from Ohio legislation by the City of
Cincinnati and Hamilton County• In 2005 sought to be reformed by the City and County• Reformed in 2008 with expanded funding and public
finance abilities
• New board of directors chosen in 2009• Signed a development services agreement with the City of
Cincinnati for work in GO Cincinnati communities• Hired new President/CEO at the end of 2011
Port Authority: Staff
Port Authority: Focus Areas
5
“To improve the economic vitality of the region through catalytic investment”
Transportation & Logistics
Real Estate Development
CommunityRevitalization Public Financing
Inclusion and Community
Relations
Communication
GO Cincinnati
• Hamilton County Land Reutilization Corporation • Non-profit, quasi-governmental entity• Established by R.C. 1724• Operations commenced in March 2012
www.hamiltoncountylandbank.org
HCLRC “LandBank”
Return vacant properties to productive use through the tools statutorily provided to the HCLRC
and by leveraging the resources of the HCLRC’sexecutive arm, the Port Authority.
Mission
• Economic development• Blight abatement/nuisance remediation• Neighborhood stabilization/revitalization• Strategic parcel assembly• Historic preservation
Purposes of the HCLRC
Unique Redevelopment Tools Port Authority: Traditionally strong in public finance – have
issued $540M in revenue bonds since 2000 on a variety of projects• Dunnhumby garage• Oakley Station• Queen City Square• Fountain Square & 12th & Race lot with 3CDC
Unique Redevelopment Tools Hamilton County Landbank: Removes barriers to redevelopment
• Obtain clean, marketable title on properties via tax foreclosure and carry properties tax-free
• Engage in code enforcement and nuisance abatement as local government agent
• Issue bonds and make loans• Receive assignments of mortgages• Repository for vacant and abandoned property• Have achieved IRS tax lien release (Avondale)• Remove tax lien encumbrances on properties purchased or donated
(High Impact Property Program, CBD & Bond Hill)
How We Work Together
Significant tools of the Landbank are combined with the expertise and relationships of the Port Authority to establish partnerships with community development organizations and neighborhood-based groups, focusing on redevelopment work in key corridors including neighborhood business districts and residential areas.
How We Work Together: Bond Hill
How We Work Together: Bond Hill
How We Work Together: Bond Hill
How we work with others (agencies, communities, developers, owners)
Assemble teams for each real estate/community revitalization project specific to its need:• Industrial & office brokers• Code compliance officers• Engineers• Remediation specialists• Development consultants• Real estate attorneys and bond counsel• Marketing / branding resources• CDCs
How we work with others(agencies, communities, developers, owners)
Participants: Western Southern, City of Cincinnati, Port of Greater Cincinnati Development AuthorityCity
– Approved the TIF– Provided $3.75 million in grants
Port Authority
– Owns the project– Leases the project to master lessee– Issues TIF and Lease bonds
Western Southern
– Develops and manages the project– Provides funding
Queen City Square Public Private Partnership
How we work with others(agencies, communities, developers, owners)
Port Authority purchases or constructs a facility and then leases the facility to a master lessee who makes lease payments sufficient to cover debt service on the bonds that financed the facility.The general resources of the Port Authority are not pledged to debt repayment and any lender or bondholder has recourse only to the lease payments made by the lessee or any guarantor or to the asset leased or financed.
Lease bond financings are heavily credit dependent and are typically, but not exclusively, used by investment grade entities.
May offer the user financial, federal tax and accounting advantages, attractive purchase options and other incentives.
Lease Bond Financing
How we work with others(agencies, communities, developers, owners)
Unique Regional Challenges to Redevelopment
• Broken sites: Underutilized, often require remediation, brownfield
• Buildings with inefficient systems / high-energy use
• Neighborhood challenges include vacant properties, lack of leadership capacity within community to facilitate change
“Broken” Site Characteristics Brownfields Vacated or underutilized for at least a decade Integrated into neighborhoods Small acreage, assembly required
Photo Credit: Google Maps
Unique Regional Challenges to Redevelopment
Kahn’s Facility
Previous Current
Unique Regional Challenges to Redevelopment
MedPace (formerly NuTuone)
Previous Current
Unique Regional Challenges to Redevelopment
Celotex
Previous Current
Unique Regional Challenges to Redevelopment
Linden Pointe (formerly General Motors Corp/Globe-Wernicke)
Unique Regional Challenges to Redevelopment
Previous
Current
Oakley Station
Previous Current
Unique Regional Challenges to Redevelopment
These sites generally had the same economic model: Grant funds (often Clean Ohio) address assessment,
remediation and demolition costs Public assistance with new infrastructure (often
through TIF or grant) Bank financing with high LTV and a willingness to accept
the TIF as the “equity” component Private sector developers with deep enough pockets to
absorb the unexpected
Unique Regional Challenges to Redevelopment
Pressure on Old Model Bank market has adjusted Clean Ohio has been significantly restructured TIF market is weak
Higher interest rates Additional security Lower property valuations Result in lower net dollars to the project
Unique Regional Challenges to Redevelopment
Iconic Regional Sites Crosley
Unique Regional Challenges to Redevelopment
Iconic Regional Sites Hudepohl
Unique Regional Challenges to Redevelopment
The New Paradigm– Existing Tools:
Bank and public finance markets stabilized Role of the State/Clean Ohio Revisions
– New Tools and Partners: Landbank- clear past due taxes and liens, clean the
title U.S. EPA Assessment Grant Metropolitan Sewer District
– Mindset to solve locally
Unique Regional Challenges to Redevelopment
Focus Neighborhood: St. Bernard
Unique Regional Challenges to Redevelopment Cincinnati neighborhoods:
• Topography• Density• Masonry• Remediation• Neighborhoods• Affordability
Our Common Mission
Regal Theater1201 Linn St. West End
Historic Stabilization
Focus Neighborhood: Walnut Hills
Preserve Neighborhood CharacterOur Common Mission
Developed Focus Neighborhood Strategy
Factors considered in selecting focus neighborhoods:
• # of foreclosures• # of code violations/condemnations• Level of public and private investment• Educational and historic resource• Community engagement• Capacity of a lead community-based organization•
Focus Neighborhood Strategy
Walnut HillsEvanstonMadisonvilleAvondaleNorwoodSt. BernardFairfax
Short-Term
Focus Neighborhood Strategy
Price HillNorthsideSouth CumminsvilleCollege HillNorth College HillMount HealthyColerain Township
Long-Term
Focus Neighborhood Strategy
Purpose: To develop and execute housing and revitalization strategies in targeted areas
• Engage with CDC/CIC as eyes/ears on the ground• Identify small, defined priority area for residential and commercial
redevelopment • Use a phased approach to revitalization• Work with lenders to develop loan products that work across markets•
Focus Neighborhood Strategy
911 Yale Street, Walnut HillsLot-to-Yard
Building Value: Stabilization
Before and After: 1572 Dixmont, Evanston
Housing Standards
3351 Woodburn, Evanston
Come Home Cincinnati
Multi-Family Demo: St. Leger
Multi-Family Demo: St. Leger
Moving Ohio Forward: 936-940 McPhersonEast Price Hill to BLOC Ministries
Moving Ohio Forward: 936-940 McPhersonEast Price Hillto BLOC Ministries
•
4528 Hamilton Ave., Northside
Before and after
Queensgate 100
Queensgate 100
Questions and Discussion
Paula Boggs MuethingVice President of Community Revitalization and General Counsel
Port of Greater Cincinnati Development [email protected]
www.cincinnatiport.org513.621.3000