12.13.13 real property law institute

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 Authoritypbmuething@cincinnatiport.org

www.cincinnatiport.org513.621.3000

info@hamiltoncountylandbank.org