David Goodman, the current director of the Ohio Department of Commerce, will take over the Ohio Development Services Agency (DSA) on March 18, 2013, according to a press release from Gov. Kasich’s office. Director Goodman, a former state senator and a familiar face to many Columbus business leaders, replaces Christiane Schmenk, who is leaving the state economic development agency. Director Goodman will be charged with leading the organization as the state continues the complicated transfer of its economic development portfolio to JobsOhio. For more, read the full press release.

The Ohio Development Services Agency is coordinating with the Appalachian Partnership for Economic Growth (APEG) of Nelsonville to offer Manufacturing Extension Partnership (MEP) services to 28 counties in southeastern Ohio, Perry County Tribune reports. The Innovation Center at Ohio University, as well the Muskingum County Business Incubator in Zanesville and the Manufacturing and Technology Small Business Development Center at The Ohio State University South Center in Piketon, will serve as satellite partners providing “products, services, and assistance vital to the health of manufacturing businesses with fewer than 50 employees” in designated counties. APEG will provide MEG services directly to “manufacturers with 50 or more employees throughout the entire 28 county region,” the article said. For more, read the full story.

Last week, the Clean Ohio Council announced that it has “streamlined its brownfield incentive programs” in an effort to provide funding “quicker to encourage redevelopment of sites with environmental issues,” Columbus Business First reports. The new streamlined program, co-managed by JobsOhio, the Ohio Development Services Agency and the Clean Ohio Council, will “operate on rolling cycles” rather than competitive funding rounds used since the inception of the Clean Ohio Revitalization Fund and Clean Ohio Assistance Fund programs. Projects seeking funding through JobsOhio and its regional network partners can qualify for grants up to $200,000 for testing, down from $750,000, “while grants for actual cleanup remains capped at $3 million,” the article said. For more, read the full story.

The Ohio Development Services Agency (DSA) recently announced that the application period for Round 10 of the Ohio Historic Preservation Tax Credit program is now underway and a total of “$30 million in tax credit allocation is currently available for Round 10 applicants,” according to a press release from the agency. The program — which is administered by the DSA’s Office of Redevelopment and the Ohio Historic Preservation Office — provides a tax credit of 25 percent for historic rehabilitation projects. Applications must be submitted to the Office of Redevelopment by 5 p.m. on Tuesday, April 2, 2013. Prior to submission, all applicants must “schedule pre-application meetings” with both the Ohio Historic Preservation Office and the Ohio Development Services Agency. For more, read the full press release.

Site Selection magazine recently announced that Texas eclipsed Ohio for a first-place finish in the new and expanded 2012 facilities race to claim the Governor’s Cup. Annually, Site Selection magazine compiles data to measure how states and cities rank against each other based on economic-development metrics. Ohio was ranked second in the nation in 2012 after a first-place finish in 2011. Texas posted 761 projects while Ohio came in second with 491 projects, just seven fewer projects than last year’s total of 498. Rounding out the top 5 and providing a strong Midwestern showing in job creation and retention in 2012, Pennsylvania was ranked third with 430 projects, Michigan was ranked fourth with 337 projects and Illinois was ranked fifth with 322 projects.

The Columbus Dispatch reported that Site Selection magazine also announced seven Ohio cities making it into its rankings in the following categories:

• Metropolitan areas with a population of at least 1 million: Cincinnati came in eighth and Columbus finished 10th.
• Metropolitan areas with a population of 200,000 to 1 million: Dayton came in first for the third time in the past five years; Akron finished eighth.
• Micropolitan areas (the smallest population category): Findlay, Wooster and Ashtabula all finished in the top 10.

Fourteen other Ohio cities were ranked as top micropolitan areas by number of projects, putting a total of 17 Ohio cities — more than any other state — on the magazine’s list: East Liverpool-Salem (T13), Greenville (T13), New Philadelphia-Dover (T13), Sidney (T13), Defiance (T23), Bellefontaine (T30), Tiffin-Fostoria (T30), Wapakoneta (T30), Cambridge (T45), Fremont (T45), Ashland (T86), Bucyrus (T86), Celina (T86) and Zanesville (T86).

For more, read the 2013 edition of Site Selection magazine and The Columbus Dispatch story.

According to JobsOhio’s 2012 Annual Report, the economic development entity created and retained fewer jobs in 2012 than in 2011, which a spokeswoman attributed to “political uncertainty at the federal level,” Columbus Business First reports (See out March 05, 2013, blog post for more information). Despite the job retention drop (from 61,686 in 2011 to 54,633 in 2012) and job creation drop (from 21,099 in 2011 to 20,979 in 2012), the “sum of economic development projects and capital investments tied to them rose.” Payroll commitments, however, dropped 27 percent ($1.3 billion) between 2011 and 2012, the article said. For more, read the full story.

During the Wayne Economic Development Council's annual meeting in Wooster last week, JobsOhio President John Minor discussed recent successes and ongoing challenges with regard to job creation in Ohio, The Daily Record reports. Echoing many of the points Gov. Kasich made in his State of the State speech last week, Minor said that Ohio was first in the Midwest and fourth in the nation for job creation, and he also shared the anecdote that CEOs were seeking out Gov. Kasich at the World Economic Forum in Switzerland recently to figure out "what Ohio was doing differently" to achieve such success. Minor then argued in favor of JobsOhio, which he said is changing how the state does business "from a transaction- and project-based mindset to one of developing relationships with businesses," the article said. For more, read the full story.

A recent change of strategy for the Kasich administration’s economic development efforts will reduce the number of large-scale incentive packages offered to retain, expand or attract businesses in favor of a greater emphasis on “broader issues” that involve investing in the state’s competitive assets, including “infrastructure, talent and technology,” Crain’s Cleveland Business reports (see our January 29, 2013, blog post for more information). This new return-on-investment approach is not without its critics, as some have noted that altering the Clean Ohio revitalization fund program to require end-users before communities receive funds will cause cities to have difficulty competing to attract businesses because companies “don’t want to commit to a move if they must wait a year or more for an environmental cleanup before they can begin construction or renovation,” the article said (see our February 22, 2013, blog post for more information). For more, read the full story.

According to Gongwer, “[t]he transfer of the state’s wholesale liquor enterprise to JobsOhio was finalized Friday [February 1, 2013], along with the sale of $1.57 billion in bonds” even though the Ohio Supreme Court has agreed to hear the JobsOhio case (see our January 31, 2013, blog post for more information). The “enterprise transfer includes the previously executed Franchise and Transfer Agreement, and the Operation Services Agreement between JobsOhio, the Ohio Office of Budget and Management, and Ohio Department of Commerce,” according to a press release from JobsOhio. According to the offering circular, “[o]nly about $125 million in bond revenue will go to JobsOhio as ‘working capital’ for job-creation efforts,” through its agreement to lease the liquor franchise for 25 years, Gongwer reports. For more, read the JobsOhio press release.

Just days after the Ohio Supreme Court agreed to hear the JobsOhio case (see our January 25, 2013, blog post for more information), the State of Ohio and JobsOhio moved forward with its plan to sell bonds to finance a 25-year lease of the state’s liquor distribution system, The Bond Buyer reported. “Ohio on Monday and Tuesday priced $1.56 billion of liquor-profit backed bonds,” of which $410 million was tax-exempt revenue bonds and $1.1 billion was in taxable bonds. “The agency (JobsOhio) will give $1.43 billion of the proceeds to the state as a cash payment for the lease and to defease outstanding liquor-backed bonds. Another $5 million will be used for capitalized interest and $9.2 million for issuance costs. The private, non-profit group will use the remaining $125 million to fund economic development projects across the state,” the article said. Moreover, the lease is “in addition to an estimated $100 million annually from liquor sales,” JobsOhio will receive as a result of this transaction an article in Columbus Business First reported. For more, read the full story.

Having faced some criticism for his use of tax incentives to retain businesses in Ohio that did not create any new jobs, Gov. John Kasich said during a year-end press conference with reporters late last month that he is not interested in offering copious incentive packages to companies that “come to him with threats of moving out of state,” Stow Sentry reports (see our December 10, 2012, blog post for more information). Gov. Kasich said that instead of engaging in bidding wars with other states, he now touts Ohio’s great higher education and workforce training, great location and stable politics to attract and retain businesses, the article said. For more, read the Stow Sentry story and this Dayton Daily News story.

The Ohio Tax Credit Authority approved state assistance Monday for 11 projects expected to create 410 new jobs and retain 874 existing jobs in Ohio, generate $20 million in new payroll, and prompt $51 million in other investments over the next several years, according to Gongwer and The Hannah Report. For more information on the companies and an overview of their projects, see the press release from Governor Kasich’s office. 

In other development news Monday, the Ohio Controlling Board approved the Development Services Agency’s expenditure of $9.2 million in Ohio Third Frontier funding for five different organizations through JobsOhio, according to The Columbus Dispatch. The organizations approved to receive funding are the Appalachian Partnership for Economic Growth, receiving $800,000; Regional Growth Partnership Inc., of Toledo, receiving $1.1 million; Development Projects Inc., of Dayton, receiving $1.2 million;  Columbus 2020, receiving $1.8 million; and Team NEO in Cleveland, receiving $2.8 million. The money represents the second round — the first $14 million having been awarded in August 2011 — the article said.

Gongwer and The Hannah Report also reported that the Ohio Controlling Board approved several additional requests, most notably:

• Funding for multiple economic development projects in the sum of $873,000.
• A $1 million request by the Ohio Department of Transportation to assess private-public partnerships.

On Wednesday, the Ohio Supreme Court agreed to consider whether ProgressOhio “has standing to challenge the constitutionality” of JobsOhio, The Columbus Dispatch reports. The Supreme Court, however, will not rule on the merits of ProgressOhio’s question of the legality of JobsOhio using state liquor profits as a funding stream; only “whether ProgressOhio has standing to file the legal challenge.” The Franklin County Common Pleas Court and the 10th District Court of Appeals both dismissed the lawsuit on the standing question (see our October 11, 2012, blog post for more information).

In response to the Supreme Court announcement, JobsOhio is delaying the $1.5 billion sale of taxable and tax-exempt bonds that would be backed by the profits of the state’s liquor franchise, Bond Buyer reports (see our January 10, 2013, blog post for more information). For more, read The Columbus Dispatch story, the Bond Buyer story (subscription required) and The Supreme Court of Ohio Case Announcements.

Last week, State Sen. Bill Beagle (R-Tipp City) announced that the State Controlling Board approved “nearly $11 million in funding for the Choose Ohio First Co-op/Internship Program,” Dayton Business Journal reports. Twenty-two higher education institutions throughout Ohio will receive funding for the administration and development of internship and co-op programs. “The goal of the program is to better align the skills, knowledge and experience of Ohio’s workforce with the jobs that need to be filled in the workplace,” the article said. For more, read the full story.

With pending legal challenges delaying the execution of the $1.5 billion lease of the state’s liquor franchise to JobsOhio, which is anticipated to generate approximately $100 million annually to fund the JobsOhio’s economic development efforts (see our January 10, 2013, blog post for more information), the entity has been functioning with money from the former Ohio Department of Development (now the Development Services Agency) in the amount of $1 million, as well as from private donations, such as the $2 million it received from American Electric Power (AEP), The Columbus Dispatch reports.

Filings with the Securities and Exchange Commission reveal that AEP’s donation went to the Ohio Business Development Coalition, which was renamed the JobsOhio Beverage System (JOBS) within days of JobsOhio’s opening in 2011. As a separate, nonprofit organization, the JobsOhio Beverage System is currently handling all of JobsOhio’s donations and will be used later to “house the leased liquor profits from the state once the lease is complete,” the article said.

The article also said that JobsOhio “would not disclose the identities” of its donors, but John Minor, JobsOhio’s chief investment officer, stated, “I don’t think we would seek private donations any longer” once the lease of the state’s liquor franchise was executed, “although he wouldn’t rule them out.” For more, read the full story.

The Ohio Incumbent Workforce Training Voucher Program, which “reimburses businesses for eligible employee training expenses” in an effort to enhance the skill set of Ohio workers and help Ohio companies become more competitive, has already received voucher requests totaling $21.4 million despite having only $20 million available, Cincinnati Business Courier reports. Although applications are accepted on a first-come, first-served basis, interested individuals are still encouraged to apply as some applicants may not be qualified to receive program funding, the article said. For more, read the full story and visit the program’s webpage.

On Tuesday, Standard & Poor’s applied an “AA” rating and Moody’s Investors Service Inc. applied an “A2” rating for bonds that JobsOhio intends to issue this year to finance the lease of “the state’s liquor business for 25 years in return for an up-front payment of $1.2 billion to the state,” Columbus Business First and a press release from JobsOhio report. Although this moves the entity one step closer toward acquiring its funding stream, it may still face delays as the group ProgressOhio continues to challenge the legal standing of JobsOhio, asking the Ohio Supreme Court to hear its arguments, Columbus Business First reports. For more, read the full story and the press release.

The Warren-based Tech Belt Energy Innovation Center (TBEIC), a federally-funded center intended to help the development and commercialization of early stage clean technologies, has officially joined the Cleveland-based JumpStart Entrepreneurial Network, a connected group of entrepreneurial support organizations, to help startups “best assess their opportunities” and to “groom them for investors,” The Business Journal reports. Under a five-year commitment that will run through 2016, TBEIC will “coach, mentor and help energy entrepreneurs in preparing investor presentations and identifying markets, connections to key partners and access to alternative sources of funding” free of charge, the article said. For more, read the full story.

Case Western Reserve University, University Hospitals and the Ohio Third Frontier program are pooling $6 million to create the Case Technology and University Hospitals Ventures Fund, which aims to launch “a dozen companies over the next three years,” Crain’s Cleveland Business reports. Case Western contributed $2 million, Third Frontier contributed $3 million and UH Case Medical Center contributed $1 million for the fund, with the goal helping “advance the rate at which discoveries are commercialized in areas such as medical technology related to imaging, surgical equipment, implant devices, regenerative medicine, health care and business software and others,” the article said. For more, read the full story.

Last month, Ed Looman tendered his resignation as executive director of Progress Alliance to take a job with the Appalachian Partnership for Economic Growth (APEG) — a regional economic development organization created as part of the JobsOhio Network that serves 25 counties in southeast Ohio, The Herald-Star and WTOV9 report. At APEG, Looman is now the project manager for Jefferson and seven other counties in eastern Ohio, the articles said. For more, read The Herald-Star story and WTOV9 story.

Last week, the Ohio Development Services Agency announced the details for round nine of the Ohio Historic Preservation Tax Credit Awards: $35.9 million was awarded to 23 owners and applicants for the rehabilitation of 45 historic buildings across the state, according to a press release from the agency. The projects are located in nine communities across Ohio and are expected to "leverage more than $252 million in private investments." For more, including a list of all round nine Ohio Historic Preservation Tax Credit recipients, read the full press release.

The 2012 Economic Development Accountability Report from Ohio Attorney General Mike DeWine’s office, titled Award Recipient Compliance with State Awards for Economic Development, reports that of the 255 economic-development contracts with a performance period ending in calendar year 2011, 162 award recipients “substantially complied (met at least 90 percent of the commitments) with the terms and conditions of their state awards,” while 93 awards did not comply — representing an overall compliance rate of 63.5 percent. This is an increase from last year’s 59.1 percent compliance rate (see our March 5 blog post for more information).

According to The Columbus Dispatch, the award recipients received a total of $114 million worth of benefits in the form of loans, tax credits or grants in exchange for “employee training or hiring or maintaining certain wage levels.” Award contracts were divided into the following categories:

• Employee-training aid worth $7 million: 80 of 89 companies complied.
• Hiring tied to grants worth $35 million: 36 of 74 companies complied.
• Hiring or wage levels tied to tax credits worth $7 million: 25 of 42 companies complied.
• Hiring tied to loans worth $65 million: 21 of 50 companies complied.

For more, read The Columbus Dispatch story and the Ohio Attorney General’s 2012 Economic Development Accountability Report.

Last week, the Ohio Third Frontier recommended that the Controlling Board approve more than $9.1 million in funding for the JobsOhio Network Program, which works with six regionally-based economic development groups to aggressively pursue job and wealth creation through the “retention, expansion and recruitment of businesses”; more than $610,000 for the Technology and Validation Start-Up Fund (TVSF), which helps to “commercialize technologies developed by Ohio institutions of higher education and other Ohio not-for-profit research institutions”; and $24 million for the Pre-Seed Fund Capitalization Program (PFCP), which provides early-stage risk capital investment to promising start-up technology companies, a press release from Ohio Third Frontier announced. For more, including details about each award recipient, read the full press release.

Christiane Schmenk, director of the Ohio Development Services Agency, discussed the functional differences between the agency and its former self, the Ohio Department of Development. Whereas the department worked to attract companies into the state and help major expansions, the agency’s role now is “to help service the incentives or engagements negotiated by JobsOhio, as well as to oversee what JobsOhio is doing,” Business Courier reports. In addition to discussing the agency’s relationship with JobsOhio, Schmenk explained how internal processes have been streamlined to not only help established businesses move into Ohio, but also to help small businesses get assistance, the article said. For more, read the full story. 

Despite an 8.6 percent growth projection of 169,000 jobs in Northeast Ohio over the next eight years and the fact that there are currently “fewer than 150,000 unemployed people in the region,” economic development agency Team Northeast Ohio (Team NEO) predicts that many in the region will still struggle to find work because the growth will occur in more highly skilled vocations, The Plain Dealer reports. Industries expected to add the most jobs to the area are health care, scientific and technical fields, construction and finance, while increased production efficiency in the region’s manufacturing sector will be responsible for less job growth in that once dominant sector, the article said. For more, read the full story and the Team NEO third quarterly 2012 economic review.

With Ohio’s unemployment rate having fallen below 7 percent last month for the first time since the summer of 2008, the state’s private, nonprofit economic development entity JobsOhio is launching a national advertising campaign to promote the state’s economic successes in an effort to recruit out-of-state companies and talented workers, Columbus Business First and The Columbus Dispatch report. The $1.4 million “Thrive in Ohio” campaign will feature online and print ads in national publications as well as television commercials. Workers and business owners alike are encouraged to share their stories at www.ThriveInOhio.com. For more, read the Columbus Business First story and The Columbus Dispatch story.

In recent comments to Columbus Business First, Mark Kvamme, who stepped down as the top executive at JobsOhio on November 1, revealed that he has started a venture capital firm that he hopes will “raise at least $250 million for investments in Midwest businesses, with the majority to be in Ohio.” Kvamme, who prior to JobsOhio was a Silicon Valley venture capitalist, plans to utilize this new venture to address the region’s lack of access to capital, which he sees as “one of the main obstacles to growing Ohio’s economy,” the article said. With only 7 percent of the nation’s venture capital invested in the Midwest, expanding access to capital, both in Ohio and the wider Midwest region, is crucial to expanding economic growth, according to Kvamme. For more, read the full story.

According to a new report from JobsOhio, the private nonprofit corporation and its economic development partners “received commitments on 5,788 new jobs and $228 million in annual payroll during the third quarter,” Dayton Business Journal reports. These figures represent $1 billion of capital investments by 87 companies, the article said. Of the new jobs committed, “4,626 were created through expansion projects by existing Ohio companies and 1,162 were created through attraction of new companies to Ohio,” the report said. For more, read the full story and JobsOhio’s third quarter report.

The Regional Growth Partnership (RGP), Northwest Ohio’s JobsOhio network partner, recently announced two new hires to support their activities, according to a press release from RGP. Brian Bilger, a former economic development manager with Lucas County who has more than 11 years of economic development experience, was hired to be a regional project manager. Kyle Dodd, a recent graduate of Ohio University who interned with RGP, was hired as a regional program coordinator.

Meanwhile, the Appalachian Partnership for Economic Growth (APEG) — a subsidiary of the Ohio Appalachian Business Council — hired Marty Walsh, the former business services manager at the Columbus Chamber of Commerce, to be vice president of programs; Katy Farber, the former president of the Highland Chamber of Commerce, was selected to be a regional project manager; and Dorinda Byers, a former Appalachian Ohio regional sales manager for TechSolve in Cincinnati, was brought on as a project manager and program coordinator for the partnership’s Manufacturing Extension Partnership program, according to a press release from APEG. For more, read the RGP press release and the APEG press release.

At the Ohio Third Frontier Commission meeting on October 23, 2012, the commission authorized the approval of a $236 million budget for the program’s 2013 fiscal year. The budget will allocate program resources as follows:

• Capital & Talent – $43 million
• Innovation – $50.1 million
• Commercialization – $77 million
• Research – $8 million
• Marketing – $1 million
• Reserve – $56.9 million

Agreeing to switch to a calendar year budget cycle, the commission will carry-over $61 million from the FY 2012 budget into the FY 2013 budget, Columbus Business First reports. The Growth Fund and Micro Loan Fund programs will be eliminated, while two new programs, Technology Commercialization Centers and Technology Asset Grants, were created.

For more, read the Columbus Business First story and view the Third Frontier Commission meeting presentation.

Last month, the Ohio Supreme Court declined to rule on the constitutionality of JobsOhio, the newly created private, nonprofit economic development organization designed to leverage the state’s liquor operations as a funding stream to promote economic development and job creation. The Columbus Dispatch reported that in a letter to Mark Kvamme, interim president and chief investment officer of JobsOhio, Department of Commerce Director David Goodman voiced concern over “lingering constitutional issues” regarding the transaction, including “whether JobsOhio violates the prohibition of the General Assembly from conferring corporate powers via special act; and whether the transfer improperly allows the state to lend credit to a private corporation.” Therefore, JobsOhio put the Kasich administration “in the unusual position of challenging itself in court” when it responded to Goodman’s refusal to sign the agreement to transfer the state’s liquor operations by “asking the Ohio Supreme Court to settle the matter,” an editorial from the Akron Beacon Journal reported. For more information, read our August 17, 2012, blog post.

In a 4-2 ruling, the Supreme Court stated that although on the surface the complaint seeks to compel Director Goodman to comply with the transfer of the state’s liquor operations to the agency, it is actually trying to get “an expedited ruling” from the court declaring the agency constitutional so as to “preclude any further challenges,” Gongwer reports. Moreover, the justices said the court is “powerless to grant” a declaratory judgment and dismissed the action because “parties who seek an advisory declaratory judgment” have “adequate remedies in the ordinary court of law,” namely the lower courts, that must be exhausted before proceeding to the high court, the article said.

For more, read this Columbus Dispatch story.

Mark Kvamme, the California venture capitalist who was recruited by Gov. John Kasich to be the first president of his private economic development entity JobsOhio, will resign his position on November 1, 2012, during JobsOhio’s quarterly board meeting, Gongwer reports. John Minor, a managing director for JobsOhio, will take over for Kvamme at that time. Kvamme, who “helped more than 400 companies locate or expand in Ohio, adding about 31,300 new jobs and $6.1 billion in capital investment,” will remain in Ohio to pursue private sector economic development opportunities.

The Ohio Board of Regents recently announced that it is seeking proposals from business and education partnerships that create co-ops and internships within JobsOhio’s key industries — biohealth, energy, automotive, advanced manufacturing, polymers, aerospace and aviation, food processing, financial services, information technology and consumer products — so that it can award grants to help these programs align the skills and knowledge of Ohio’s workforce with the needs of the state’s businesses, Dayton Business Journal reports. The board will award $11 million total and each awarded grant must be matched 100 percent for undergraduate programs and 150 percent for graduate programs. Proposals are due October 12, 2012. For more, read the full story and the request for proposals release.

Governor John Kasich announced last week that Dr. E. Gordon Gee, the president of Ohio State University, will be reappointed to the nine-member JobsOhio board of directors, the Columbus Dispatch reports. According to a press release from the governor’s office, Gee’s new term began on September 17, 2012, and will end on July 5, 2016. For more, read the full story and the press release

Recently, the Clean Ohio Council proposed a major program overhaul to the Clean Ohio Fund. The proposal would combine Clean Ohio’s Revitalization Fund and Assistance Fund into a single incentive program with the intention of streamlining the “process for funding brownfield projects,” according to a press release from the Ohio Department of Development (ODOD). Clean Ohio, which provides funding to help brownfield projects acquire property, demolish structures, conduct environmental cleanup and improve infrastructure, will manage the single brownfield incentive program in collaboration with JobsOhio and the Ohio Department of Development’s Office of Redevelopment, the release said.

If the proposal is passed, JobsOhio and its regional network partners would initially accept all funding requests and would evaluate a project’s economic benefit for funding. If the project meets the evaluation criteria, JobsOhio would refer a Clean Ohio grant recommendation to the director of development or to the Clean Ohio Council for review and potential approval, the release said. “Up to $1 million would be available per project for cleanup activities and $200,000 per project would be available for environmental assessment activities,” the release said. Additional funding would also be available through ODOD’s Brownfield Loan Program. The council is also proposing doing away with specific grant funding rounds and instead allowing these funds to be available on a rolling basis. For more on the proposed Clean Ohio Fund program changes, read the press release.

JobsOhio filed a lawsuit in the Ohio Supreme Court last month to “compel the Ohio Department of Commerce to sign a state contract to transfer its wholesale liquor operation to JobsOhio for 25 years” after the commerce department’s director, David Goodman, declined to sign the agreement due to lingering constitutional concerns, Hannah reports (see our August 17 blog post for more information). On August 24, ProgressOhio, Sen. Mike Skindell (D-Lakewood) and Rep. Dennis Murray (D-Sandusky) filed motions asking the Court to “dismiss the JobsOhio lawsuit for lack of jurisdiction” and allow Ohio courts to “decide the constitutionality of JobsOhio,” the article said. These opponents regard the lawsuit as “sham litigation” because both sides already agree that JobsOhio is constitutional and “any judgment arising from such collusion would be tainted” because there are no “parties in true opposition” present, the article said. Visit our DevelopOhio Resource Center for more information about JobsOhio.

Bruce Langner, former director of development and planning for the city of Bexley, returned to the Ohio Department of Development in July as a business services coordinator in the agency’s Office of Strategic Business Investments, Columbus Business First reports. In his new role, Langner will “manage disbursement and compliance on economic development loans for projects around the state,” the article said. He previously worked at the department for 15 years as a loan officer and business development specialist, the article said. For more, read the full story.

In its second quarter economic development report, Columbus 2020, the Central Ohio JobsOhio network partner led by the Columbus Chamber of Commerce and the Columbus Partnership, announced that “employment in the Columbus region rose 0.8 percent,” or by 7,600 jobs, for the quarter ended June 30, 2012, Columbus Business First reports. State and national “job growth rates were 0.7 percent and 0.2 percent” respectively during the same period, the article said. For more, read the full story and Columbus 2020’s quarterly economic update.

As the Ohio Supreme Court weighs whether to hear ProgressOhio and the 1851 Center for Constitutional Law’s joint appeal regarding the constitutionality of JobsOhio, proponents and opponents of the new private job-creation agency hope the high court will settle the issue once and for all (see our August 3 blog post for more information). The Columbus Dispatch reports that the budget and commerce department has agreed to transfer to JobsOhio “rights to the state liquor business” and use of the profits to promote economic development, but Ohio Department of Commerce Director David Goodman declined to sign the agreement because “constitutional concerns raised about the entity and the transfer deal haven’t been addressed by the Ohio Supreme Court.” In a letter to Mark Kvamme, interim president and chief investment officer for JobsOhio, Director Goodman voiced concern over “lingering constitutional issues” regarding the transaction, including “whether JobsOhio violates the prohibition of the General Assembly from conferring corporate powers via special act; and whether the transfer improperly allows the state to lend credit to a private corporation.” JobsOhio views this as an opportunity “for the Supreme Court to address lingering legal questions, though Kvamme said he is confident that nothing about JobsOhio’s operation is unconstitutional.”

JobsOhio put the Kasich administration “in the unusual position of challenging itself in court” when it responded to Goodman’s refusal to sign the agreement by “asking the Ohio Supreme Court to settle the matter,” an editorial from the Akron Beacon Journal reports.

For more, read The Columbus Dispatch story and the Akron Beacon Journal story.

As the Ohio Third Frontier Commission re-evaluates the Entrepreneurial Signature Program (ESP), Mark Kvamme — president of JobsOhio and an Ohio Third Frontier Commission member — said that of the six nonprofits funded by ESP,  CincyTech has “by far the best portfolio,” Crain’s Cleveland Business reports. Although some believe Kvamme’s affinity for CincyTech will result in a push for the other five organizations — JumpStart, TechColumbus, Rocket Ventures of Toledo, the Dayton Development Coalition and TechGrowth of Athens – to adopt some of CincyTech’s traits, others are of the opinion that a “cookie cutter model” to which all six of the core ESP nonprofits would have to conform fails to consider regional market diversity, the article said. For more, read the full story (subscription required).

Team NEO, the nonprofit organization dedicated to advancing economic development interests in Northeast Ohio's 18-county region, announced that Paul Boulier, formerly the chief marketing officer of A. Schulman Inc., is the new vice president of business attraction, Crain's Cleveland Business reports. Also, Michael Lalich, a master's degree student in urban planning, design and development at Cleveland State University, was hired as the organization's new research associate, the article said. For more, read the full story (subscription required).

ProgressOhio has found an unlikely ally — the conservative group 1851 Center for Constitutional Law — in its appeal of the recent ruling in favor of JobsOhio to the Ohio Supreme Court, Gongwer reports. The 1851 Center is providing “in-kind contributions of labor” after determining that the 10th District Court of Appeals ruling, which “upheld Franklin County Court of Common Pleas Judge Laurel Beatty's finding that ProgressOhio and the lawmakers were unable to demonstrate injury as a result of JobsOhio and overruled plaintiffs' argument that the issue is one of great public interest and importance warranting the judges' attention,” to be “abysmal,” Gongwer reports. The 1851 Center has taken particular issue with the finding that ProgressOhio lacks standing, stating that such a ruling “is akin to determining no Ohio taxpayer has a stake in controlling its government ‘when it’s out of control’ in terms of spending, indebtedness and taxation,” the article said. For more information on the court of appeals decision, read our June 15 blog post.

With the court of appeals ruling, JobsOhio was finally positioned to finalize the financing of the long-term lease of the Ohio Liquor Enterprise and access its dedicated funding stream of approximately $100 million per year to meet its job creation and retention mandates. However this appeal to the Ohio Supreme Court will likely put the financing transaction on hold…again.  

Visit our DevelopOhio Resource Center for more information about JobsOhio.

A recent op-ed in the Plain Dealer points out that “the pace of Third Frontier grant-making has slowed to a walk” since Governor John Kasich took office. Since its inception in 2002, the program has successfully leveraged billions in private investment funding to support high-tech industries. However, barely a quarter of the program’s $191 million budget had been allocated when the state’s fiscal year ended on June 30, 2012. Although the op-ed acknowledges that the slowed pace of grant-making can be partially attributed to the review and restructuring of the program initiated by the new administration, it also opines that the delays in allocating funding “are unacceptable and in themselves threaten the integrity of the process.” For more, read the full op-ed.  

Dissatisfied with data from the six regional organizations applying for Entrepreneurial Signature Program (ESP) funding, the Third Frontier Commission voted in its last meeting to maintain the commission’s existing funding levels through the end of the year in order to gather more data for final funding decisions, The Columbus Dispatch reports. According to Christiane Schmenk, director of the Ohio Department of Development and chairwoman of the Third Frontier Commission, the commission is aiming “to be thorough before using public funds for programs that are good, but we need to be able to show results,” the article said. Invantage Group, an analyst hired to review the ESP, concluded that four of the six regional organizations should be approved for funding. Based on a variety of concerns, requests from the Dayton and Toledo regions were not recommended for funding, the article said. For more, read the full story.

On June 14, the Franklin County Court of Appeals affirmed a decision by the Franklin County Court of Common Pleas that the plaintiffs seeking to challenge the constitutionality of JobsOhio have no standing to bring suit (read our May 30 blog post for more information). The appeal, brought by State Senator Michael Skindell, State Representative Dennis Murray and ProgressOhio, was rejected by a vote of 3-0. The opinion of the court, written by Judge Gary Tyack and concurred by Judges Lisa L. Sadler and Julia L. Dorrian, stated that the lack of standing by the appellants effectively barred their consideration of the issues raised at the trial court level. 

With economic development legislation recently passed by the Ohio House and Senate headed for the governor's desk and this ruling by the court, JobsOhio is well on its way to being fully operational. Moreover, the conclusion of this lawsuit will allow JobsOhio to finalize the financing of the long-term lease of the Ohio Liquor Enterprise and access its dedicated funding stream of approximately $100 million per year to meet its job creation and retention mandates. 

The Appalachian Partnership for Economic Growth (APEG) has announced the selection of John Molinaro as president and CEO of the Nelsonville-based economic development organization, according to a press release from the Foundation for Appalachian Ohio. A subsidiary of the Ohio Appalachian Business Council, APEG was created by the council to serve as the JobsOhio Network partner and works with 25 counties in southeast Ohio, including Athens, Meigs, Hocking, Vinton, Jackson, Perry, Morgan and Washington.

Molinaro, who will begin his role at APEG on July 1, currently serves as co-director of the Community Strategies Group at The Aspen Institute in Washington, D.C., helping communities across the nation with economic development efforts. Molinaro stated that his “first priority will be to build APEG’s partnerships with local economic development professionals and the region’s businesses,” the press release said.

Following the release of the JobsOhio 1Q report (see our May 23 blog post), Team NEO, the Northeast Ohio regional partner of JobsOhio, reported that it has gained commitments from 26 companies to create 2,270 new jobs throughout the region in the first quarter of 2012, Crain’s Cleveland Business reports. 

The companies will be making capital investments of $291 million, with approximately $270 million coming from 22 companies expanding in the region, the article said. The largest new investment to the region will come from Exterran Energy Solutions, which plans on building a $12.5 million facility in Youngstown that will employ 103 workers. For more, read the full story (subscription required). 

While JobsOhio is up and running, its funding stream from Ohio's liquor enterprise has not yet to begun to flow. The private, nonprofit entity has agreed to pay $1.4 billion upfront to the state of Ohio for a 25-year lease of the liquor enterprise, covering those costs through bonds, plus a potential share of future profits. The long-term lease of the state’s liquor operations will provide a dedicated funding source of approximately a $100 million dollars per year for JobsOhio, The Columbus Dispatch reported. Those funds will be used to cover administrative costs, to maintain a contract with the Department of Commerce to continue performing most of its regulatory liquor control and enforcement functions on behalf of JobsOhio, and to develop new programs to complement existing state programs (grants, loans and funds to train workers).

Governor Kasich and JobsOhio announced the parameters of the liquor enterprise lease agreement in January, with the expectation that the deal be completed sometime in the first quarter. However, a court challenge of the constitutionality of the organization’s relationship to the state is still pending and extending the timeline for execution of the transaction. The lawsuit, filed by State Senator Michael Skindell, State Representative Dennis Murray and ProgressOhio, was most recently dismissed on December 2, 2011, by Franklin County Court of Common Pleas Judge Laurel Beatty, who ruled that the plaintiffs lacked standing to bring the action. That issue is now before the Franklin County Court of Appeals, and a ruling is expected sometime this year.

In the interim, with a $1 million allocation from lawmakers to cover startup costs and private donations, JobsOhio established an office in downtown Columbus and has hired approximately 25 employees to meet its job creation and retention mandates, the article said. For more, read the full article.

At the JobsOhio board of directors meeting in Cleveland earlier this month, data was released stating that, during the first quarter, the group worked on 70 projects that resulted in $2 billion in capital investment commitments. They also had a hand in attracting more than 5,500 new jobs and retaining 11,800 others in Ohio, Columbus Business First reports. 
 
Last year, JobsOhio helped create or retain more than 82,000 jobs and brought $3.3 billion in capital investment, the article said.

As briefly discussed in our April 27, 2012 DevelopOhio blog post, Ohio Attorney General Mike DeWine has raised concerns about the proposed JobsOhio II legislation regarding public record restrictions of JobsOhio information as it relates to the lack of transparency and what might happen should another agency get involved and handle business records. Specifically, the broadly worded provision in HB 489 that says records created or received by the nonprofit JobsOhio are not public "regardless of who may have custody of the records." DeWine believes that this provision could shield documents from public view that state agencies share with JobsOhio, the Tribune Chronicle reports.

However, Gongwer reported on Friday, April 27 that DeWine and Governor Kasich’s office worked out a solution to make a minor revision to the pending legislation that could prevent major problems with Ohio’s public records law upon passage. DeWine stated that “we have language now that just makes it very clear that’s not going to happen.” Essentially, the proposed amendment would remove language specifying that any documents “received by” JobsOhio are not subject to Ohio’s public records law, Mr. DeWine said. DeWine believes the issue is resolved, and the bill including the revision is now headed to the Senate.

With JobsOhio established to primarily handle Ohio's economic development efforts, legislators and the Kasich administration are restructuring what’s left of the Ohio Department of Development (ODOD). This week, the Ohio House voted 91-5 to send the Senate a proposal designed to reorganize the ODOD.  The new department will be known as the Development Services Agency (DSA) and legislative leaders hope to pass the bill by the end of May.

As cited in our March 27, 2012 DevelopOhio blog post, in addition to renaming the ODOD, the bill would allow the development director to expedite approval of tax credits; create a pilot program called TourismOhio to provide a dedicated funding source for tourism marketing throughout the state; eliminate the Development Financing Advisory Council (DFAC), a panel that decides whether to recommend approval of low-interest loans for companies to expand or relocate in Ohio; and increase financing opportunities for minority-owned businesses.

The plan is for JobsOhio to handle low-interest loans, grants, tax credits, and “close-the-deal” discretionary funds. The DSA will oversee JobsOhio in executing those loans and tax credits and will provide an additional range of services such as technology assistance, workforce training, and revitalizing abandoned industrial sites. The proposed legislation also includes another public record restriction related to JobsOhio. Some critics, including Ohio Attorney General Mike DeWine, have raised concerns about the lack of transparency of JobsOhio and what might happen should another agency get involved and handle business records. For more, read The Columbus Dispatch article. 

Last year, Governor Kasich’s administration and JobsOhio asserted that the entity has aided in the creation or retention of approximately 80,000 jobs, The Columbus Dispatch reports. JobsOhio is expected to release its Productivity Report for the first quarter to the public on May 1, 2012.  Stay tuned…

The Ohio Economic Development Association (OEDA) will host its 8th Annual Legislative Event in Columbus on May, 2, 2012, to relay its message and agenda to the state's elected officials and to serve as an opportunity for attendees to network with colleagues and state legislators, according to a press release from the organization. During the event, Sen. John Carey (R-OH) will be honored with an OEDA Award for Service "for his efforts in supporting economic development in Ohio," the release said.

For more information about the 2012 Annual Legislative Event and OEDA’s 2012 legislative priorities, click here and select the Advocacy link in the top left corner of the page.

The Cincinnati USA Regional Partnership, a JobsOhio regional organization and the economic development arm of the Cincinnati USA Regional Chamber, reported at its annual meeting that its economic development efforts brought 1,967 new jobs and $43.7 million in business investment to the Greater Cincinnati area in 2011, The Columbus Dispatch reports. The Partnership hopes that a new marketing campaign known as "Cincinnati, the BrandHUB," which aims to "capitalize on the region's existing strengths among consumer marketing and brand-design businesses," will be a catalyst along with five other high growth industry sectors to attract more jobs and investment in 2012, the article said. For more, read the full story here.

JobsOhio II, legislation that aims to solidify JobsOhio as the primary independent entity in charge of economic development in Ohio, was introduced in both the Ohio House of Representatives (Rep. Mike Dovilla (R-Berea) and Rep. Christina Hagan (R-Uniontown) introduced HB 489) and the Ohio Senate (Sen. Mark Wagoner (R-Toledo) introduced SB 314) this past Thursday, Gongwer reports. JobsOhio II follows HB 1, which was enacted in February 2011 and created JobsOhio. The legislature plans to have the JobsOhio II legislation passed and enacted prior to the 2012 summer recess. 

Besides providing further definition to the JobsOhio structure, the JobsOhio II bill language also provides for a number of related changes to the state’s economic development landscape. This non-inclusive list includes:

• The renaming and transfer of all responsibilities currently in the Department of Development to the “Development Services Agency” (DSA). 
• An appropriation to the DSA for fiscal year 2013. The budget bill (HB 153) had set aside a lump sum — $1.2 billion to DSA for FY ‘13, including $117.79 million from the General Revenue Fund — for the entity, but the new bill would formally appropriate the dollars to DSA. House sponsors said DSA’s role going forward would be to provide “essential services” to JobsOhio including the administration and oversight of loans and tax credits that will further create and expand Ohio businesses. The bill also clarifies the contracts between DSA and JobsOhio.
• The Tax Credit Authority would be reconfigured to include the director of the DSA, the chief investment officer of JobsOhio, and five members: the Senate president; the House speaker; an economic development specialist, a specialist in the development of new technology, and a specialist in taxation, each appointed by the governor.
• The bill would reconfigure the Ohio Third Frontier Commission, which would consist of 11 members, including the director of the DSA, the chief investment officer of JobsOhio, the chancellor of the Ohio Board of Regents, the governor's science and technology advisor, and seven others appointed by the governor with the advice and consent of the Senate.
• The bill clarifies that any JobsOhio documents that are not public records do not become public records when someone else possesses them. This type of language was a significant point of contention with the initial JobsOhio legislation, which deemed certain documents were not subject to public records requests — this provision may meet a similar level of scrutiny.
• The Development Finance Advisory Council (DFAC), the entity which currently approves economic development financing programs, will be phased out. The State Controlling Board will continue to review and authorize such loans.
• The Water and Sewer Commission, which has not met or taken action since 2007, will be eliminated.
• The Office of TourismOhio will be created within the DSA. TourismOhio, which will be funded through a five-year pilot program, will link funding for the office to the growth in sales tax revenues of tourism-related industries around the state. The bill will also create the TourismOhio Advisory Board, which will include industry experts to provide guidance and support efforts to promote Ohio tourism.
• The chief investment officer of JobsOhio would be appointed to the TourismOhio Advisory Board.

For more, read SB 314 and HB 489.

It has been announced that Site Selection magazine awarded Ohio its 2011 Site Selection Governor's Cup for being the state with the most "new and expanded corporate facilities," SiteSelection.com reports. Ohio also won this prestigious economic development ranking in 2006, 2007, 2008, and 2009. During the last year, the state saw a 32.5 percent increase in projects that involved a capital investment of at least $1 million, created at least 50 jobs, or added at least 20,000 square feet of new floor area. For more, read the full story here.
 
In other 2011 Site Selection news, in the category of metro areas with a population over 1 million, the Cincinnati/Middletown MSA ranked 6th in the nation in projects secured. In the category of metro areas with a population of 200,000 to 1 million, the Dayton MSA tied for 2nd with Tulsa, while Akron ranked 6th and Toledo tied for 7th. In the category of metro areas with a population less than 200,000, Springfield ranked 2nd and the Wheeling W.V./Ohio MSA leveraged a 4-way tie for 4th place with communities in Louisiana, Pennsylvania, and Virginia.  For more information, read here.
 
Finally, Wooster, Ohio, with 21 projects, finished 2nd in the top micropolitan area in the country category to Statesville-Mooresville, N.C., with 28 projects. The U.S. Census Bureau defines a micropolitan area as a rural county whose largest city does not exceed a population of 50,000. For more information, read here.
 
Congratulations to the state of Ohio, all of the winning communities, public and private sector market participants, and most importantly, to all of the economic development officials that had valuable roles in securing these wins!

News outlets around Ohio are reporting on action taken on Monday, January 30, 2012, by the Ohio State Controlling Board related to the grant of the franchise for the sale of liquor to JobsOhio.  The Controlling Board approved a contract that set out certain agreements between the DOD and JobsOhio to administer certain economic development/job creation programs for the DOD as well as certain services to be provided by the Division of Liquor Control in connection with the operation of the liquor franchise.  For more information, read The Vindicator story here, the Tribune Chronicle story here and the Toledo Blade story here.

On December 2, 2011, Common Pleas Judge Laurel Beatty dismissed the court case filed by State Senator Michael Skindell (D–Lakewood), State Representative Dennis Murray (D–Sandusky), and ProgressOhio.org.  The case challenged the constitutionality of the JobsOhio legislation, House Bill 1 (H.B. 1). enacted earlier this year by the Ohio General Assembly (previously discussed on a September 1 DevelopOhio  post).  According to The Columbus Dispatch, the dismissal was granted by Judge Beatty on technical grounds, not on the merits of the constitutional claims, declaring that the filing parties did not have the legal standing to file the lawsuit because the legislation creating JobsOhio requires any challenge to be filed within 90 days of its creation.

ProgressOhio.org, Sen. Skindell, and Rep. Murray initially filed the suit in the Ohio Supreme Court, challenging several portions of H.B. 1; however, on August 19, the Ohio Supreme Court dismissed the case on jurisdictional grounds, and ruled that it must be filed in a lower court.  Therefore, the Petitioners re-filed their compliant. They claim that the legislation creating JobsOhio is unconstitutional because it confers corporate powers and allows Ohio to take an equity stake in a private corporation, both of which they argue are explicitly prohibited by Ohio's constitution.

Mark Kvamme, president and interim chief investment officer for JobsOhio, said in a statement, “We are very pleased with the judge's decision. Now we can focus 100 percent of our energy on job No. 1: creating jobs in Ohio.”

ProgressOhio.org’s Brian Rothenberg said, “He would consult with his co-plaintiffs, before deciding whether to appeal.”  Rothenberg also said, “The good thing for citizens out of this process is that out of seven issues that we alleged were unconstitutional, six have been reversed by the Supreme Court or the administration itself has changed.”

The Columbus Dispatch notes that  the  remaining issue involves whether state funding of JobsOhio — Gov. Kasich’s privatized economic development agency — is allowed by the state constitution.  It also notes that the legality of restricting lawsuits to the 90-day period has also been questioned as a result of the ruling.

Last week, I attended the Ohio Economic Development Association’s (OEDA) 2011 Annual Summit in Columbus, themed "Ohio in Change."  We heard from a number of speakers regarding relevant economic development topics facing Ohio today.  Some discussions included the current status of JobsOhio and the Ohio Department of Development (ODOD), workforce development issues and programs, and a variety of project financing options.  We also heard about the Ohio Department of Transportation's (ODOT) commitment to retain its status as a sustaining partner in economic development.

Although a substantial amount of valuable and informative data was shared with the conference attendees, I obtained four significant, substantive takeaways from the Summit that I believe are important to know.  If you didn’t have an opportunity to attend the conference and want to know "What did I miss ?," the takeaways are as follows:

1)      Mark Kvamme, CIO of JobsOhio, spoke to the group on the first day of the Summit and said that the State (JobsOhio and the Ohio Department of Development) is a big believer in metrics.  Through the preferred metric, "net new jobs," the State will track success and will not cite job numbers or take credit for any job creation in which JobsOhio did not taken part.  Moreover, Kvamme articulated that measuring return on investment (ROI) over a short period of time, in his experience, is critical in gauging success and will be a major factor in granting incentives going forward.

2)      Later that morning, Director of the Ohio Department of Development Christiane Schmenk  discussed how ODOD has started, and will continue to restructure its agency operations as well as its development team as the department will soon be known as the Ohio Development Services Agency.  One of the stark changes that she noted (and probably the most substantial takeaway of all these points) was that new positions to be created by a company located in or relocating to Ohio, for purposes of the job creation tax credit (JCTC), will be calculated from the date of the State’s offer letter and not from the date of Tax Credit Authority/final departmental approval. 

This policy shift will provide several improvements.  It will clarify the State's incentive process and reduce the administrative timetable from one to two months down to days or weeks.  More importantly, it will reduce the need to "rush" projects through the approval process, and allow the appropriate amount of time for due diligence from the staff without affecting the projects timetable or the State's ability to land the project. 

3)      The governor's assistant policy director for workforce development, Rich Frederick, stated that workforce development is a priority for the State, but that the current model is too fragmented to effectively serve those in need of assistance -- 77 programs in 13 agencies -- and must be revamped.  Frederick assured the group that he is currently working through this process and developments are forthcoming in this area.
 
4)      Finally, Ohio Department of Transportation Director Jerry Wray announced the creation of the Office of Jobs & Commerce within ODOT which will be led by Deputy Director Glenda Bumgarner.  This office was established to provide direct assistance to economic development professionals working on projects that have transportation barriers needing immediate assistance. 

The staff of this office, which will have a representative assigned to each ODOD region of the State, will assess the transportation infrastructure requirements of the project and provide feedback and potential financial and/or regulatory assistance where practicable.  This model had similar components in the Strickland administration, and is evolving under Director Wray, as evidenced by the creation of a designated office and additional staff support.

Although there were other valuable takeaways, these were my substantive reflections of OEDA’s Annual Summit.  I hope that you have the opportunity to share your conference experiences with others as well.  Next year's conference will be held in Dublin, Ohio, at the Columbus Marriott Northwest.

On October 25, 2011, the policy group ProgressOhio and two Democratic legislators (State Rep. Dennis Murray, D-Sandusky and Sen. Michael Skindell, D-Lakewood), who are suing the Kasich Administration over JobsOhio's constitutionality, filed a motion in the Franklin County Common Pleas Court (Case Number 11CVH 08 10807) seeking a temporary injunction that would suspend funding and operations for JobsOhio as well as any related activity by the State of Ohio until the lawsuit has been resolved.  View the DevelopOhio.com post from September 1, 2011 for additional background.  

The filing for temporary injunction was partially precipitated when JobsOhio received an appropriation from the legislature for $1 million in start-up funding.  Also, the Third Frontier approved a one-year grant, totaling $14.85 million, to implement and support six regional economic development organizations, known as the JobsOhio Network, in taking a more significant role in job attraction and retention efforts throughout the state.  Click the September 30, 2011 DevelopOhio.com post for additional background.

The matter is currently with the court and a decision has yet to be rendered.  

The Controlling Board approved "$1.48 million for outside legal work in determining how existing liquor sales will fund JobsOhio, the new privatized arm for the state's economic development initiatives," according to a recent Gongwer & Hannah Report (subscription required).

Waiving competitive selection, the panel gave permission for the attorney general's office to contract with McDonald Hopkins law firm in Cleveland at a rate of $891,000 for fiscal year 2012 to structure the deal. 

The deal consists of three significant components: transfer of the liquor enterprise from the state to JobsOhio; retirement of existing bonds supported by the state's liquor profits; and the development of a service contract for the Department of Commerce to continue performing most of its regulatory liquor control and enforcement functions on behalf of JobsOhio.

A separate action by the Controlling Board "approved an increased appropriation request of about $594,000 for the Ohio Department of Commerce for related outside counsel."

The Columbus Dispatch recently reported the state Controlling Board's approval of approximately $15 million in funding for JobsOhio's regional partners.  

At last month's Ohio Third Frontier Advisory Board and Commission meeting, the commission voted to award a one year grant, totaling $14.85 million, to implement and support six regional economic development organizations, now known as the JobsOhio Network, in taking a more significant role in job attraction and retention efforts throughout the state.
Organizations in the network will work with businesses in their respective regions on behalf of JobsOhio to expand the tax base, as well as execute attraction efforts to bring new businesses to the state. JobsOhio is a nonprofit economic development organization the state created to take on many economic development duties traditionally assigned to the Ohio Department of Development.

State officials told The Columbus Dispatch they based their funding decisions on activity in each region including the number of significant business-attraction or expansion projects, as measured by Site Selection magazine. Team Northeast Ohio was the highest award recipient of the six groups involved, receiving $4.15 million. The Cincinnati USA Regional Chamber received $2.63 million, Columbus2020 received $2.26 million, Toledo’s Regional Growth Partnership received $2.12 million, the Dayton Development Coalition Inc. received $2.03 million, and the Appalachian Business Council received $1.66 million.

On September 20, 2011 the Job Tax Credit bill (H.B. 327) was introduced in the Ohio House of Representatives by Representative Anne Gonzales. 

If enacted as introduced, the credit would provide for a six-year trial period in which employers may receive a job creation or job retention tax credit for the employment of home-based employees.  A home-based employee is currently being defined as an employee whose services are performed primarily from the employee’s Ohio residence.  To qualify for the program, the minimum wage threshold would be $9.50 per hour.  The legislation would place administration of the program within the Ohio Department of Development and the credit would require Ohio Tax Credit Authority approval. 

At the end of the six-year period, the Director of Development would be required to issue a report gauging the effectiveness of the program and to provide a recommendation, if any, for extension of the program.  For more information on the proposed program, read the full text of H.B. 327.

Kevin Potter was announced as the assistant director of the Ohio Department of Development today.  His responsibilities will focus on improving customer service efficiencies associated with Ohio's business and community development efforts.
 
According to a news release from the ODOD, Potter previously served as Government National Account Manager for HD Supply Facilities Maintenance, an international wholesale distributor.  He also served as a senior staff member and Director of Government Relations and Public Affairs at the eTech Ohio Commission; a special assistant for Education and Workforce in the Office of Governor Bob Taft; and as a legislative aide to State Representative David R. Evans from Newark, Ohio.

Potter earned his MBA from Ohio University and a Bachelor of Arts in International Relations and Comparative Politics from the University of Akron.

A Dayton Business Journal article reports the Ohio Department of Development will be gaining a new chief for its Business Services Division.  After four years of service as vice president of economic development, David Zak will leave the Greater Springfield Chamber of Commerce and join the state in October. 

The Springfield market ranks fifth in the country this year for job growth and has twice ranked in the nation's top five for its role in developing projects resulting in 5,000 new jobs and nearly $1 billion in investment.

The Ohio Government Finance Officers Association is holding its 24th Annual Conference and Membership Meeting from September 21 through September 23 at the Cleveland Renaissance Hotel in downtown Cleveland.

This annual meeting is an important gathering of finance officers from across the State of Ohio as members meet for an in-depth look at issues facing the industry.

The conference will concentrate on economic development issues with regard to State and local communities, including an overview of JobsOhio and what it means for local governments.  Additional topics include the identification and review of economic development resources and techniques.  

Several members of Bricker & Eckler's economic development team will be attending the conference as participants and presenters.  Our topics include design build construction practices and other risk management alternatives, and case studies of successful, and not so successful, tax increment financings.  We look forward to seeing you there!

More information about the Ohio GFOA can be found at www.ohgfoa.com. 

The State of Ohio, the eighth-largest exporting state in the United States, announced it will immediately cancel three of its 11 contracts with its network of international trade offices and evaluate the remaining contracts for their return on investment.  The state will end business relationships with South Africa, Chile and Brazil by October 31, largely because those foreign trade offices only focused on export promotions with Ohio.

Although the majority of the contracts with the remaining offices (six of the eight) are set to expire June 30, 2012 or later, the state has given each of the eight offices a 60-day notice that the state will determine if business relationships will be discontinued or revamped.

The move comes as Gov. John Kasich's JobsOhio, the newly-created private non-profit agency created to take over the State’s economic development efforts, begins its transition from the Ohio Department of Development.  The announcement resonated throughout the economic development community as Ohio has consistently ranked as one of the top ten exporting states in the nation since 2001. 

Ohio exported $41.4 billion in 2010, a 21.5 percent increase from 2009.  Moreover, 3,363 foreign-based corporations from 41 countries are operating in the state of Ohio employing more than 194,000 individuals.  Over the past month, the Department of Development's global markets division has let go of several key staff members and reduced staffing as some operations move over to JobsOhio. 

At a JobsOhio Network meeting in Cincinnati on August 25, Christiane Schmenk, Director of the Ohio Department of Development, stated that a current evaluation of Ohio's global trade office network was being conducted for efficiencies and to assess the credentials of the contracted entities and associated staff in those countries.
 
Thus, it seems possible that under JobsOhio, some of the global trade offices may reopen with new (or old) entities and contacts assisting with the export and procurement of foreign direct investment with the state.

The remaining foreign trade offices that may be affected within the next year include Canada, Mexico, Belgium, Israel, Southeast Asia, China, Japan, and India.

Stay tuned...

Gov. John Kasich appointed Lawrence J. Kidd to the ninth and final position on the JobsOhio board today. As reported in the Columbus Dispatch, Kidd is from Jackson County, serving as the only board member from Ohio’s Appalachian region. He is the president and chief executive officer of Reliable Staffing Services and RSS Professional, LLC.

This morning at the Columbus 2020! Economic Development Dialogue event, JobsOhio Chief Investment Officer Mark Kvamme announced the appointment of David Mustine as the general manager for the energy sector at JobsOhio.

David Mustine, formerly the director of the Ohio Department of Natural Resources, has been hired as the general manager for energy. Prior to taking the helm at ODNR, Mustine was a 16 year veteran with American Electric Power.

JobsOhio has identified nine "targeted industries" that general managers will be focused on helping to attract, retain and expand in the state. These are: (1) aerospace and aviation; (2) automotive; (3) banking and insurance; (4) biohealth; (5) consumer goods; (6) energy; (7) food processing; (8) information services and software; and (9) polymers. CIO Kvamme has indicated that he does not anticipate the appointment of nine separate general managers to address these targeted industries, but there could be as many as six.

These general managers are meant to interact between JobsOhio and the six regional network partners to ensure that the nine targeted industries are properly served and to act as industry experts when questions arise.

Previously, CIO Kvamme has introduced two other general managers: John Minor, who formerly worked on Wall Street with now-bankrupt Lehman Brothers, will lead banking and insurance initiatives, and Mark Patton, who will focus on logistics, distribution and information technology. Patton, who was hired into the Ohio Department of Development in January before transitioning to JobsOhio, has a background in sales and marketing at several firms and started his career in the mid-1980s at Procter & Gamble.

With economic development in Ohio changing quickly, the purpose of this blog is to share knowledge of existing and new programs, important events, and other topics of the day at both the state and local levels. At the center of these discussions will be the critical redesign and proposed restructuring of the Ohio Department of Development (soon to be the reconfigured Ohio Development Services Agency) and the newly created private, nonprofit group JobsOhio.

We hope you will find the DevelopOhio blog to be a valuable resource and applicable to your daily practices as an economic development practitioner, business person, site selector or public official.

Please feel free to contact me at qharris@bricker.com if you have any questions or would like more information.