As published in the July 1, 2009 Toledo Business Journal
Jerry Arkebauer
Arkebauer & Associates
Port authorities set to
aid growth
Jerry Arkebauer spent nearly 20 years at the Toledo-Lucas County Port Authority and helped create financing programs now modeled by other Port Authorities around the state. Called the “father of port financing programs,” he has been involved in more than 230 projects with total capital investments of more than $1.7 billion. Now he is a consultant with three other Port Authorities in northwest Ohio. He shared the following thoughts with Toledo Business Journal.
Toledo Business Journal: Can you discuss the Regional Port Authority of Northwest Ohio? What geography does it serve and what role can it play in regional economic development?
Jerry Arkebauer: The Port Authority was created by the boards of commissioners of Defiance, Fulton, Henry, and Paulding Counties. Under Ohio law, Port Authorities have authorized purposes, which include “activities that enhance, foster, aid, provide, or promote transportation, economic development, housing, recreation, education, governmental operations, culture, or research within the jurisdiction of the Port Authority.”
So, a Port Authority has wide latitude in the kinds of projects in which it can become involved.
However one of the biggest attributes of a Port Authority is that, while it is a unit of government, it can own land, building, and equipment and lease it to credit-worthy companies or other governments. The Toledo-Lucas County Port Authority owns the HCR Manor Care and Owens Corning headquarters and BAX Global air cargo hub. The Cleveland Port Authority owns the Rock and Roll Hall of Fame and Museum, the Cleveland Browns Stadium, and the Cleveland Cavaliers player development center. The Summit County Port Authority in Akron will be instrumental in retaining Goodyear by owning its new corporate headquarters.
TBJ: Can you discuss the Sandusky County – Seneca County – City of Tiffin Port Authority and the role it can play in economic development?
JA: This Port Authority was formed in 1989 by commissioners in Sandusky and Seneca County and the city council of Tiffin to acquire a 26-mile railroad line from Tiffin to south of Woodville. That line would have been taken out of service without the Port Authority, and a number of users of the line would no longer have had rail service. For 20-years, the Port Authority was content with owning the rail line, which it leases to an operator. Recently, the board has elected to take steps to become more active in economic development throughout the two counties.
The Port Authority already has issued $16,675,000 of tax-exempt refunding bonds for Heidelberg University. It has the same authorized purposes as the Regional Port Authority.
TBJ: A proposal was made to involve the Port Authority in the renovations of the Seneca County Courthouse in Tiffin. Can you discuss this financing approach and other options that surfaced?
JA: The Courthouse Development Group, of which I am a member, suggested to the commissioners that they could involve the local Port Authority by deeding the courthouse to the Port Authority, which would issue bonds to finance renovations and lease the facility to the County for 20-years. At the end of the lease when the bonds are paid off, the courthouse could revert to the County.
I believe this opportunity resulted in the commissioners taking another look at renovating the Courthouse instead of tearing it down and building a new Courthouse on the same site. The Commissioners now are leaning toward using the County’s general obligation bonding capacity if they decide to proceed with renovating the 1882 courthouse.
This effort showed the Port Authority board of directors that other opportunities existed other than owning the railroad. That led to the board deciding to pursue other economic development projects.
TBJ: Can you discuss the Blanchard Valley Port Authority? What geography does it serve and who are its economic development partners?
JA: This Port Authority was organized early in 1998 by the Hancock County Commissioners and the Findlay City Council. One of its economic development partners is GreaterFindlayInc., the public-private partnership combining the Chamber of Commerce, Community Development Foundation, and the Convention & Visitors Bureau. The other partner is the Hancock Regional Planning Commission, which recently was named economic development officer for the Commissioners.
The focus of all 57 Ohio Port Authorities is local focus and local control. It’s easy to create a Port Authority, but it’s much harder to actively seek out the type of projects, which fit with what Port Authorities can do effectively.
TBJ: Do you see the possibility of these regional port authorities working cooperatively with the Toledo-Lucas County Port Authority to finance area economic development projects?
JA: I’ve always thought that should be the case. The Toledo Port Authority has several programs that the other three Port Authorities are never likely to have.
Toledo has an investment grade rated bond program, which offers long-term, fixed interest financing. It is the regional administrator for the Ohio Department of Development (ODOD) Regional Loan Program, and it offers SBA 504 loans throughout the area.
The object of the Port Authorities ought to be getting the project done in the best way for the customer. The quicker we learn to work together, the quicker the region will benefit.
TBJ: Are there any other issues that you would like to address?
JA: I truly believe that Port Authorities can be an effective tool for economic development. They are not the tool. Working in concert with the County and City economic development directors and others, Port Authorities can help. In some cases, what the Port Authority can offer might just be a “tie breaker” that provides the difference between getting a project or not.
We know Ohio Port Authorities are well ahead of Indiana or Michigan. We just need the economy to improve so we can continue to show it.