Guest Author: Rachel Reilly
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If you build it they will come.
An innovative bond issuance will help a public agency in the city of Cincinnati acquire and remediate industrial property in an effort to attract advanced manufacturers and private investment to the region. The Port of Greater Cincinnati Development Authority, aka The Port, shared its plan to launch a $100 million “jobs bond” alongside Quantified Ventures during this month’s 10,000 Communities Initiative rally-up in Cincinnati.
Once acquired, The Port can tap federal programs to create pad-ready sites that can then be marketed to manufacturers interested in growing their operations in Cincinnati.
During the event, representatives from the White House and key federal agencies shared how such instruments can help cities prepare to leverage new programs and tax incentives to attract private investment and support the growth of clean energy and manufacturing companies in the Midwest, while embedding social justice goals into growth strategies.
“We need to quickly reposition over 150 acres of former industrial property if Cincinnati hopes to be competitive in attracting US manufacturers to our city,” The Port’s Laura Brunner said. Private sector developers and lenders will not invest in site acquisition and remediation on spec, says Brunner. “it’s too expensive.”
The $100 million capital raise will be a mix of program-related investments
from philanthropic foundations and money raised through a tax-increment financing bond, which are generally issued to promote redevelopment of
blighted areas.
With support from the city, The Port is stepping in, she says, “to do the hard work and ensure that our region is ready to capture future growth in the domestic manufacturing sector in a way that drives equitable and inclusive growth locally.”
Impact munis
The jobs bond “is a great example of how innovative muni bond structures can provide communities with a competitive edge when competing for federal resources and private investment incentivized by the tax credits enacted in the IRA,” said Dan Carol of the Milken Institute.
The bond announcement came during the two-day Midwest Regional Rally-Up of the 10,000 Communities Initiative, co-hosted by the Milken Institute, The Port, and Heartland Capital Strategies. The Milken Institute launched the 10,000 Communities Initiative earlier this year to accelerate and advance critical community infrastructure projects by maximizing innovation and integration across regions, sectors, and sources of investment capital.
The Port last year partnered with the Lincoln Institute of Land Policy to convene private investors from across the nation for a discussion on its strategy for redressing Cincinnati’s racial wealth gap. The State of Ohio’s economic development arm for the Cincinnati region, the Regional Economic Development Initiative (REDI), received 66 inquiries in 2022 from manufacturers looking for large, shovel-ready sites. However, only one site was available. Manufacturers were forced to look elsewhere, and the region ultimately missed out on multiple opportunities to secure new businesses poised to create high-quality jobs for local workers.
The State of Ohio’s economic development arm for the Cincinnati region, the Regional Economic Development Initiative (REDI), received 66 inquiries in 2022 from manufacturers looking for large, shovel-ready sites. However, only one site was available. Manufacturers were forced to look elsewhere, and the region ultimately missed out on multiple opportunities to secure new businesses poised to create high-quality jobs for local workers.
But for The Port’s latest effort to increase the quantity and quality of land available to manufacturers, this trend will likely continue and Cincinnati will be left behind as domestic manufacturing activity booms in nearby cities over the coming years.
“The demand is clearly there; we just need to work on the supply,” said Eric Letsinger of Quantifed Ventures, which has structured other outcomes-based bonds in Atlanta, Buffalo and Washington DC. The B Corporation has been working with The Port to structure the new bond and bring it to impact investors interested in supporting environmental clean-up and job creation.
Once these sites are remediated and available to manufacturers, says Letsinger, “we will easily be able to achieve the workforce and social impacts targeted through the jobs bond because Cincinnati will be better positioned to leverage new federal programs and tax incentives meant to grow U.S. manufacturing.”
Similar 10,000 Communities Initiative events will be hosted in the Southwest and Pacific Northwest regions later this year.
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(Originally published for Impact Alpha)
Rachel Reilly is founder of Aces & Archers and a senior advisor for the Milken Institute.
Photo:The Lunkenheimer Valve Co in Cincinnati | Credit: The Port / FB