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

3. Financing Programs: A Federal “Laundry List” 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 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 What’s Been Used to Support Sustainable Redevelopment ?

4. “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... It’s all about leveraging...

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. Most common include: Historic rehabilitation tax credits Low income housing tax credits New Markets tax credits Brownfield cleanup expensing Federal tax incentives that can be linked to sustainable development – at little or no cost to the community or project….

10.  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! Advantages of Using Tax Incentives in Revitalization Projects

11. New Markets Tax Credits -- new $3.5 billion allocation for 2009 * Brownfield cleanup expensing extension (to 12/31/09) Energy efficiency incentives –Authorized $800 million in clean renewable energy bonds (CREBs) * –Authorized $800 million in energy conservation bonds * –Renewable energy tax credit (thru 1/1/11) –Green building/sustainable design project incentives * Increased by stimulus New opportunities from the 2008 bailouts– what could be applied to Great Lakes revitalization efforts?

12. 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 New opportunities from the 2008 bailouts– what could be applied to Great Lakes Revitalization efforts?

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