Charlie Bartsch Vice President/Senior Fellow – ICF International

1. 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

2. Finding the Right Financing Mix for Sustainable Great Lakes Revitalization: Who Should Play? • Private sector • 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

3. Financing Programs: A Federal “Laundry List” What’s Been Used to Support Sustainable Redevelopment? • 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 • Tax-advantaged zones • HUD/USDA Empowerment Zones • HUD/USDA Enterprise Communities 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 • HUD’s Brownfield Economic Development Initiative (BEDI) • HUD’s Community Development Block Grants (for projects locally determined) • EPA assessment, cleanup grants • EDA public works and economic adjustment

4. 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...

5. Appropriations and Budget Proposals – What impact of FY2009 funding provided by Congress, FY 2010 Obama Administration requests on efforts critical to Great Lakes communities?

6. 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

7. 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

8. 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

9. 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

10. 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!

11. 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

12. 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

13. American Recovery and Reinvestment Act – What leveraging opportunities remain for Great Lakes communities in the stimulus funding ?

14. 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

15. 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

16. 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

17. 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)

18. Thank you! If you have questions… If you need additional information…. Charlie Bartsch cbartsch@icfi.com (202) 862-1134