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