The Ohio Vacant Facilities Fund

While in Spokane, Washington at the National Trust for Historic Preservation annual conference, I, along with many other Ohio delegates, attended a session on right-sizing.  Presenter Cara Bertram, with Place Economics, conducted a survey of older industrial cities that have experienced significant population change over the last 40 years.  Cleveland, Youngstown, Dayton and Cincinnati were 4 of the 20 cities selected for the survey.[1]

We expected answers and concrete models working in other cities that we could bring back to Ohio. Instead, we learned that there currently are no success stories.  The issue of vacant properties and low population has only begun to be documented and the idea of rightsizing, or the process of reshaping physical urban fabric to meet the needs of current and anticipated populations, is only a working theory.   We discovered that dramatic population loss is being experienced across the nation, not just in older industrial cities, but also in Texas, where army bases have vacated, and also in Niagara Falls, NY where they are about to lose their city status along with a significant reduction in federal funds .  While a few facts remain constant, such as decreased population, vacant buildings, and economic decline, the available resources change dramatically from city to city and also state to state.  Essentially, Ohio needs to find creative ways to solve rightsizing issues through our own resources and funding sources because a national model is not coming any time soon.

Two Ohio cities, Sandusky and Painesville, have decided to create disincentives by using penalties to nudge people and companies to make decisions that expand the tax base.  Both cities have created vacant property registries.  The ordinance requires owners of vacant properties to sign a registry.  Part of the registry requires that the property owner indicates who the lawful owner of the property is and provide the contact information for that owner, or in the case of out of town owners, to provide the local contact for the person acting as the owner’s agent.  The property owner is then required to submit a plan for leasing the property, selling the property or developing the property.  The ordinance also requires the property owner to keep the property safe and secure and maintain the property in accordance to local standards.  As stated in the purpose of the Painesville ordinance, “(t)he purpose of this ordinance is to establish a program for identifying and registering vacant residential and commercial buildings; to determining the responsibilities of owners of vacant buildings and structures; and to speed the rehabilitation of the vacant buildings. Shifting the cost burden from the general citizenry to the owners of the blighted buildings will be the result of this ordinance.”  The key to this statement is “shifting the cost from the general citizenry to the owners of the blighted building.”  A dilapidated downtown building affects the whole city.[2]

On a statewide level, the Ohio Development Services Agency has created the Ohio Vacant Facilities Fund to create reuse incentives for vacant buildings while investing in local businesses and creating jobs.  An employer will receive $500 in grant funds for every new full-time position created in eligible facilities.  The position must last at least one year before funds will be distributed.  Funds can be used for acquisition, construction, enlargement, improvement, or equipment of the facility.  The fund has been allocated $2 million through August 2015 and will begin accepting pre-certification requests November 26.  Over the next two years, the fund has the ability to create up to 4,000 jobs.

The program can be used by all scales of employers to fill both big-boxes and main street storefronts.  For example, a bakery opens in a downtown.  They create 4 jobs after opening.  After 1 year, they are eligible for $2000, which could be used to reinvest in their equipment to meet their growing business needs.

Employers should submit a pre-certification request form, available from the Ohio Development Services Agency’s website http://development.ohio.gov/cs/cs_ovff.htm.  The request must be submitted prior to occupying the vacant facility or increasing employment in order to verify eligibility and reserve funds.  All for-profit businesses are eligible, while non-profit and governments are not eligible.  The building must be 75% or more unoccupied and available for use in trade or business for no less than 12 months.  If the building is not occupied or construction is not complete, then construction must be at least 85% or more complete and able to be lawfully occupied with a certificate of occupancy.  Also, the employer must increase employment above the Base Employment Threshold.

For more information and pre-certification request applications, please visit the agency’s website: http://development.ohio.gov/cs/cs_ovff.htm, or contact the Office of Redevelopment at historic@development.ohio.gov or call 614-995-2292.[3]

 


[1] For more information on rightsizing and a full list of all 20 cities, the report in its entirety can be found on Place Economics’ website at http://www.placeeconomics.com/services/rightsizing.

[2] This excerpt is from the article “The Price of Vacant Property” written by Jeff Siegler and can be found in the Fall 2012 issue of Revitalize Ohio.

[3] For direct assistance contact: Nathaniel Kaelin, Ohio Historic Preservation Tax Credit Program Manager, Office of Redevelopment, Community Services Division.  Nathaniel.Kaelin@development.ohio.gov or 614-995-2292.

Combating Vacant Property Workshop

If you missed the vacant property workshop or you’d like to review the materials, you can find them all below.

 

The Legal Approach to Nuisance Property – Matthew Yourkvitch, esq.

 

The Cost of Vacant Property & Solutions You Can Use – Alison Goebel, Ph.D.

 

Sandusky’s Vacant Property Registry – Sandusky Fire Inspector Stephen Rucker

 

Painesville Vacant Property Registry – Doug Lewis and Cathy Bieterman