As published in the April 1, 2009 Toledo Business Journal
Mark Barbash
Ohio Department of Development (ODOD)
Stimulus funds to aid Ohio development
Toledo Business Journal recently interviewed Mark Barbash, interim director of the Ohio Department of Development (ODOD). He shared the following thoughts.
Toledo Business Journal: Can you discuss major elements of Ohio’s plan to attract new capital investment including the Ohio Sales Strategy and the Targeted Global Markets Strategy?
Mark Barbash: That information is contained in our strategic plan; it’s actually critical that, not only do we aggressively market the state for new investment, both by existing businesses and new businesses.
For each one of our targeted industries, we’re developing a targeted industry strategy that works with industry leaders to identify the major areas where State investment will make a difference in the growth of that industry. We’re sitting down at that table, identifying the gaps, and filling those gaps.The second thing that we are doing is we are coordinating our marketing activities and focusing in on specific industries. For example, Governor Ted Strickland and Lieutenant Governor Lee Fisher both this year and last year went to the American Wind Energy Association (AWEA) show. We plan on participating in a solar show in the future and the Governor has been personally involved in meeting with a number of solar and wind companies.
We’re doing some things that are important on the ground, such as translating our website into a number of foreign languages. We are going to roll out the first of those in the next couple of weeks so that we are fully conversant overseas. In addition, the state of Ohio maintains 14 foreign offices, probably the most of any state other than Pennsylvania, whose staff is working on the ground in those countries identifying prospects.
The interesting thing about the current economy is that, while we know that businesses are in stress and we know that we have had layoffs, we have probably never been busier. In [recent weeks], I think we have met with a half dozen companies in advanced energy, both wind and solar.
We are working with major Ohio businesses that are looking at expansion projects, and just last [month] we announced that Ohio received the Governor’s Cup from Site Selection magazine for the most economic development projects in 2008.Also significant is that all of the state’s top metro areas, including the Toledo area, made the top ten in their categories. So the lesson is that, when economic times are tough, you have to work very hard and be much more aggressive than you would be. You can’t step back and rest on your laurels.
TBJ: Can you discuss the impact of the American Recovery and Reinvestment Act (federal stimulus funds) on Ohio’s economy?
MB: We are now currently going through all of the approximately 18,000 projects that have come in, and we are working really hard to focus on a couple areas, all of which are significant to northwest Ohio.
The first area is infrastructure, including roadways, bridges, port facilities, transit facilities, and projects that encourage intermodal logistics development.
The second area is advanced energy. There is a significant investment in energy development that we think – particularly for northwest Ohio – has applicability, because northwest Ohio is clearly the hub for photovoltaic development. So, we think the impact is going to be significant.
We are working very hard to make decisions quickly and invest the money quickly.
TBJ: Can you discuss the decision process in Ohio for determining recipients of major segments of this money (e.g. environmental funds coming out of the stimulus, economic development funding, and transportation)?
MB: It’s a good question, because a common misunderstanding about the stimulus package is that it’s one large check being written.
In fact, the funds are being sent to the State through about 110 different line items, each of which has existing guidelines and regulations that both the Federal government and the State government are looking to clear out of the way as fast as possible so that we can invest the money.
We’re not talking about things like environmental clearance, we’re looking for what are called shovel-ready sites where we’re able to invest the money and see the jobs quickly.
The Governor established a website for people who are interested in stimulus money – in any of the programs – to submit their projects. Projects come into the website, they are assigned to staff from a variety of different departments, and I suspect that every department of the State is involved in it. They evaluate those requests based upon the information submitted and the program that they’re submitted for and then their job is going to be to take a look at the individual projects, make a determination if they fit the criteria of the Federal programs, and then try to move forward to make a decision on whether this is a valuable project.
I can tell you that transportation has been primarily the responsibility of the [Ohio Department of Transportation (ODOT)], and they have been working overnight for the last several weeks trying to evaluate each of the projects that have come in.
The Governor also agreed that Ohio would be one of, I believe, 18 states that would have an inspector general overseeing the process for allocation and spending of the money to make sure that in fact it is entirely transparent.
So, the first thing we’re doing is looking at the requests to determine basic eligibility. Then, they’re eligible for the line items, State staff gets additional information, and we go from there.
TBJ: Northwest Ohio is achieving success in developing alternative energy business. Can you discuss the advanced energy component of Ohio’s Job Stimulus Program in terms of the amount of funding available and the eligibility requirements for project funding?
MB: We think that northwest Ohio has phenomenal potential… On the energy side, there’s about $400 million that’s available. That’s split between home weatherization ($277 million) – which we think is obviously very important to make Ohio homes energy efficient – and the State energy program ($123 million), which will include solar, wind, geothermal, and advanced energy projects.
In addition to this, the State of Ohio is allocating $150 million though the State Job Stimulus Program; that program has been up and operating, and we have about 100 applications in that program.
We think that northwest Ohio – particularly Toledo with the University of Toledo; Harold McMaster; and the development of businesses like Xunlight Corporation, Willard & Kelsey Solar Group LLC, and First Solar – has great potential.
The State of Ohio has already invested a good amount of money in a number of those businesses. We invested funds for First Solar in Perrysburg and we invested funds into Xunlight to commercialize technologies related to photovoltaic.
We think there’s obviously great potential, and…northwest Ohio clearly has its act together on this one.
TBJ: Ohio’s Job Stimulus Program also has a logistics and distribution component of high interest to northwest Ohio. Can you discuss the amount of funds available, the timeframe, and the funding criteria?
MB: There is $100 million available in that program; we are well on the way toward meeting the first year commitment, which was to commit $50 million by July 1, the end of Fiscal 2009. We have more than $100 million in applicable, eligible projects for that first $50 million, so we expect to finalize the decisions on all the $50 million by June.
I would anticipate, without making firm commitments, that there would be projects in northwest Ohio.
TBJ: Northwest Ohio also has a high interest in developing bioproducts businesses involving advanced materials, polymers, chemicals, et cetera. Can you discuss the status of the funding for this component of the Ohio Job Stimulus Program concerning legal challenges for use of tobacco settlement monies? What do you see in terms of the time frame of this initiative?
MB: Both the biomedical and the bioproducts program have been delayed. A lawsuit was filed against the State of Ohio for spending the Tobacco Securitization money.
Judge [David] Fais in Franklin County, who ruled on this, indicated that it is a suit that can go to trial; we hope that it goes to trial as soon as possible.
Bioproducts – turning things that grow into replacement for chemical and petroleum-based products – particularly has great potential in Ohio.
We don’t know how long the lawsuit’s going to take, and we don’t know how long the trial is going to take. I can tell you that we are currently working with the State Attorney General’s Office to prepare for that trial.TBJ: Are there any other issues you would like to discuss?
MB: We [testified last month] in support of the development department’s budget. Going before the house economic development committee…one of the initiatives is making some changes in our Job Retention Tax Credit (JRTC) program. The program is provided to existing companies making investment and staying in Ohio. We are proposing lowering the threshold from 1,000 jobs to 500 jobs primarily because job retention is so absolutely important now.
There are a number of initiatives in the budget, and the JRTC is designed to help our existing businesses at the same time that we’re helping new businesses come into the state.