Restoring the Great Lakes: What Opportunities from FY 2010 Appropriations, ARRA and the Bailouts? Charlie Bartsch Vice President/Senior Fellow – ICF International Great Lakes Metros and.
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Transcript Restoring the Great Lakes: What Opportunities from FY 2010 Appropriations, ARRA and the Bailouts? Charlie Bartsch Vice President/Senior Fellow – ICF International Great Lakes Metros and.
Restoring the Great Lakes:
What Opportunities from FY 2010
Appropriations, ARRA and the
Bailouts?
Charlie Bartsch
Vice President/Senior Fellow – ICF International
Great Lakes Metros and the New Opportunity Summit
Buffalo, NY – June 19, 2009
www.icfi.com
• Private sector
Finding the Right Financing
Mix for Sustainable Great
Lakes Revitalization:
Who Should Play?
– Lenders; also developers, investors, transaction
support partners
• Public sector
– Federal, state, and range of local governments
• Quasi-public sector
– Development, port, housing authorities
• Non-profits
– CDCs, CBOs, universities, cultural-social institutions
Financing Programs: A Federal “Laundry List”
What’s Been Used to Support Sustainable Redevelopment?
Loans
EDA capital for local revolving loan funds
HUD funds for locally determined CDBG
loans and “floats”
EPA capitalized revolving loan funds
SBA’s microloans
SBA’s Section 504 development company
debentures
EPA capitalized clean water revolving loan
funds (priorities set/ programs run by each
state)
HUD’s Section 108 loan guarantees
SBA’s Section 7(a) and Low-Doc programs
USDA business, intermediary, development
loans
Grants (continued)
DOT (various system construction,
preservation, rehabilitation programs)
Army Corps of Engineers (cost-shared
services)
USDA community facility, business and
industry grants
Equity capital
SBA Small Business Investment Cos.
Tax incentives and tax-exempt financing
Targeted expensing of cleanup costs
Historic rehabilitation tax credits
Low-income housing tax credits
Industrial development bonds
Energy efficiency construction credits
Grants
HUD’s Brownfield Economic Development
Initiative (BEDI)
HUD’s Community Development Block Grants Tax-advantaged zones
(for projects locally determined)
HUD/USDA Empowerment Zones
EPA assessment, cleanup grants
HUD/USDA Enterprise Communities
EDA public works and economic adjustment
It’s all about leveraging...
“Big blast” of ARRA is over – resuming
more traditional funding levels
• Promoting competitive advantages in Great Lakes communities
– Distinctive older structures
– Waterfront locations
– Educated/adaptable/trainable work force
– Breadth of supportive institutions – colleges, non-profits,
CDCs
• Exploring creative ways for federal funding to support them
– Usual suspects – CDBG, EPA, EDA,
DOT, training funds
– Unexpected -- ACE, CZM, USDA
It’s all about linkages...
Appropriations and Budget Proposals –
What impact of FY2009 funding provided
by Congress, FY 2010 Obama
Administration requests on
efforts critical to Great Lakes
communities?
EPA brownfields appropriations
FY 2009 -- $145.7 million
• $97.0 million for project grants
• $48.7 million for state VCP support
FY 2010 proposed -- $149.5 million
• $100 million for project grants
• $49.5 million for state VCP support
EPA LUST/cleanup activities
FY 2009 -- $112.6 million
FY 2010 proposed -- $113.1 million
HUD/Community Development
Block Grant appropriations
FY 2009 -- $3.9 billion
• includes $3.64 billion in CDBG formula grants
FY 2010 proposed -- $4.45 billion
• includes $4.19 billion in CDBG formula grants
• includes $150 million Sustainable Communities
Initiative
• allocation formula change being prepared
EDA
FY 2009 – $230 million (key programs)
• planning grants -- $31 million
• public works -- $148 million
• economic adjustment -- $35 million
• climate change initiative -- $16 million
FY 2010 proposed – $245 million (key programs)
• planning grants -- $31 million
• public works – $73 million
• economic adjustment – $125 million
• climate change initiative -- $16 million
Federal tax incentives that can be linked
to sustainable development – at little or
no cost to the community or project….
Most common include:
• Historic rehabilitation tax
credits
• Low income housing
tax credits
• New Markets tax credits
• Brownfield cleanup expensing
Advantages of Using Tax Incentives
in Revitalization Projects
Increase project’s internal rate of return
Ease borrower’s cash flow by freeing up
cash ordinarily needed for tax payments
Some credits can be sold for cash, or
syndicated to attract additional investment
Credits attract different players to the
redevelopment table (i.e., passive investors)
Not subject to competitive public grant
process – you qualify, you win!
New opportunities from the 2008 bailouts–
what could be applied to Great Lakes
revitalization efforts?
• New Markets Tax Credits -- new $3.5 billion allocation
for 2009 *
• Brownfield cleanup expensing extension (to 12/31/09)
• Energy efficiency incentives
– Authorized $800 million in clean renewable energy
bonds (CREBs) *
– Authorized $800 million in energy conservation bonds *
– Renewable energy tax credit (thru 1/1/11)
– Green building/sustainable design project incentives
* Increased by stimulus
New opportunities from the 2008 bailouts–
what could be applied to Great Lakes
Revitalization efforts?
Neighborhood Stabilization Program -- $4 billion
nationally under NSP-I
• New York state allocation -- $54.6 million
• 6 NY jurisdictions getting additional $45.7 million
• Eligible activities include:
– Establishing land banks
– Demolishing blighted structures
• NSP II -- $2 billion via stimulus
– Distributed competitively; RFP due June 12
American Recovery and Reinvestment
Act –
What leveraging opportunities remain
for Great Lakes communities
in the stimulus funding ?
New
opportunities
from the stimulus
Clean Water RLFs -- $4 billion
Drinking Water RLFs – 2 billion
• state matching waived; priority for “green” projects
* state to target 20% of allocation, if possible
• states can identify brownfield/vacant site needs
Brownfield targeted assessments -- $8 million
• communities can request assessment
help independent of regular grant cycle
for sites, projects with reuse potential
• distributed by EPA regional offices
New
opportunities
from the stimulus
SBA -- $730 million
• increase guarantee levels (to 90%)
• waive guarantee fees (thru end of 2009)
• $255 million for a new loan program for small
business debt stabilization loans (up to $35,000)
• expand Section 504 to allow refinancings
EDA – $150 million
• to address economic dislocation,
including corporate downsizing
New
opportunities
from the stimulus
New Markets Tax Credits -- $3 billion in additional
allocations
• adds $1.5 for FY 2008 allocation (to $5 billion)
• adds $1.5 billion to FY 2009 allocation in Wall
Street rescue (to $5 billion)
Industrial development bonds
• expanded eligible activities in 2009, 2010
* manufacturing related/supportive projects
New
opportunities
from the stimulus
Related opportunities with opportunities to “connect the
redevelopment dots”
• weatherization assistance -- $5 billion
• energy efficiency/conservation block grants -- $3.2 billion
• authorizes new taxable “recovery zone” bonds – $10 billion
and tax-exempt “recovery zone facility” bonds -- $15 billion
• adds $800 million in authority to
CREBs (to $1.6 billion)
• adds $2.4 billion in authority to energy
conservation bonds (to $3.2 billion)
Thank
you!
If you have questions…
If you need additional information….
Charlie Bartsch
[email protected]
(202) 862-1134