October 2011

Columbus Update

2012 Plan Approved at Last 

* Advanced Materials

* Software Applications for Business and Healthcare

* Fuel Cells and Energy Storage

* Medical Technology

* Aero-Propulsion Power Management

* Sensing & Automation Technologies

* Situational Awareness and Surveillance Systems

* Solar Photovoltaics

Within the focus industries, funding will be divided between three functional service areas - Entrepreneurial Support ($77.7 M), Open Innovation ($65 M) and Value Chain Development ($39.9 M).  Additionally, the Third Frontier Internship program will receive $3 M.   Budget details are summarized below.

Entrepreneurial Support
Entrepreneurial Support will receive $77.7 million spread over the following five programs:

Entrepreneurial Signature Program (ESP) - $40 million
Funds will be used by six existing ESPs to provide entrepreneurial services throughout Ohio.  The $40 million will support two years of ESP funding.   Some of the funding will be used for other new undefined activities.

 

Pre-Seed Funds - $25 million
Monies will be made available to leverage private sector investment into existing and new early stage investment funds.  Awards will range from $500,000 - $3,000,000 and require a 1:1 cash match.

Micro Fund - $1 million
This new fund will provide awards of $5,000 - $25,000 for new community based non-profit investment funds.  No fund will receive more than $100,000 and each has to match Micro Fund monies dollar for dollar.

Growth Fund - $10 million
This new fund will make two investments of $5 million each and require a private match of 1:3 and an SBA match of 1:8.  Thus, the state's $10 million investment will create $120 million of new capital available to Ohio companies. 

 

Ohio's New Entrepreneurs Fund (ONE Fund) - $1.7 million
The ONE Fund is designed to attract and retain entrepreneurial talent in Ohio.  FY12 funding will support up to four ONE Fund Accelerators.  Entities interested in serving as accelerators can find more information about the program here.

  

Value Chain Development
Support for value chain development will come in two forms: the new JobsOhio Network and the new Commercial Acceleration Loan Program.  Approximately $39.9 million has been set aside to improve the value chain of Ohio businesses and attract new companies to fill gaps in that chain.

 

JobsOhio Network - $14.9 million
Funds have already been awarded to six regional organizations to support business retention, expansion and attraction efforts.  Each organization is charged with boosting the economic development of its region and Ohio as a whole.

Commercial Acceleration Loan Fund - $25 million
This new program is designed to provide loans to help companies move products and services into the market.  Three different loan products based on the stage of a company's development and product's commercialization will be offered.  Loan amounts will range from $500,000 to $3 million.  Working capital is eligible for funding.  Forgiveness of principal, deferred and/or balloon payments and low interest rates will be available. 

 

Open Innovation
The OTF Commission approved $65 million for Open Innovation initiatives to continue to encourage collaboration between companies, universities and non-profits.  "Seekers" (Ohio for-profit company) and "Solvers" (Ohio for-profit company or non-profit research institute) who come together to pursue commercial opportunities can find funding through four new programs.
 
Technology Validation & Start-Up Fund - $6 million
These monies will be divided between two separate but connected funds: $3 million for Technology Validation and $3 million for Start-Up.  Technology Validation grants of $50,000 can be sought by higher education institutions to fund validation activities. The university/college will need to provide a 1:1 cash cost share.  Additionally, new companies launched out of university technologies can compete for $100,000 grants through the Start-Up fund to move their technology along the commercialization pathway.  No cost share is required for Start-up awards.

Open Innovation Incentive - $8 million
This program changed significantly from its original rollout in August.  As approved, funding will be used to support "Open Innovation Intermediaries" which will provide match-making services for a middle-market company with a specific problem ("seeker") to get connected to a "solver" to address their problem.  Funds will support the costs of the intermediary and facilitate any IP transfer, agreements or payments.  Seekers must provide a 1:1 cost share for the intermediary's service and pay all of the cost of the solver's service. 
 
Innovation Platform Program - $18 million
Funding will be awarded for operations, equipment and facilities for established technology platforms at higher education and non-profit institutions.  These facilities must be used by two or more for-profit industry collaborators.  Awards will range from $1 million to $3 million and require a 1:1 cash match.

Industrial R&D Center Program - $25 million
This program is a revamped initiative designed to attract R&D centers to Ohio.  Industrial R&D Center Program (IRDCP) grants are up to $5 million and cannot exceed 15% of the prime investment amount.  This program is designed to attract corporate R&D centers or large federal centers with direct industrial relevance.  A minimum corporate investment of $15 million is needed for the corporate R&D center and $10 million for a federal center award.  OTF has already released this RFP.  

Research Incentive - $8 million
The Ohio Board of Regents will continue to fund its Research Incentive, a performance-based program that provides funding to universities on the basis of their success in generating external research support.
 

Talent
Third Frontier Internship Program will provide $3 million this year for companies to pay interns up to $3,000 each.  These funds are deployed through regional partners.

For more information about the Ohio Third Frontier Project or to discuss how Hicks Partners can assist your company, please contact Emily Turner.  

Energy and Economic Summit 

Governor Kasich held the Ohio Governor's 21st Century Energy and Economic Summit at The Ohio State University last month.  The summit brought together leaders from a variety of companies, industries, and organizations including utilities, oil and gas, coal, manufacturers, academia, and environmental advocates.  Goals of the summit included beginning a dialogue to determine policies that will guide Ohio's energy future and economic growth.

Themes visited throughout the summit included Powering the Future of Ohio's Economy, Impact of the Marcellus and Utica Shales, the Future of Ohio's Transportation Industry, and Planning Ohio's 21st Century Energy Policy.  Hicks Partners was pleased to have three clients featured as panelists at the summit. 

Governor Kasich is working with his policy team and the General Assembly to develop an energy policy that will be unveiled in Spring 2012.  The Administration has encouraged feedback on energy policy to be submitted at http://energy.ohio.gov. 

For more information on the summit or to learn more about the coming legislative action on energy policy, please contact Tony Brigano.

Upcoming Legislative Activity

The General Assembly is not expected to have much legislative activity until after the November elections.  However, once legislators swing back into action they could have several action items on their schedule.  While many key proposals have not yet been unveiled, the Fall agenda will likely include additional JobsOhio legislation and Workers' Compensation reforms. There are also possible municipal income tax changes and further criminal justice reforms in the offing.  Additional legislative action may also arise depending on the outcome of Issue 2 and the current uncertainty over congressional redistricting.

Hicks Partners is actively engaged in advancing several legislative initiatives for clients this fall. Zach Holzapfel leads our legislative initiatives.

American Greetings Case Study on Business Retention

Governor John Kasich and the Ohio General Assembly should take a bow for the retention of American Greetings corporate headquarters in Ohio.  This project, one of the first completed by the Kasich Administration, is an interesting case study for the new way of doing economic development in Ohio.

Although Hicks Partners did not have the pleasure of working on this project, we are keenly aware of the impacts this project has on other incentive projects in Ohio and elsewhere.  According to public announcements, the final package of incentives includes (among other things) a refundable Job Retention Tax Credit worth $75 million over 15 years.  This refundable tax credit program did not exist prior to the AG project and was approved specifically by the state legislature with this project in mind.  In addition, the $150 - $200 million AG project will utilize a $65 million loan from the Cleveland International Fund as noted above.  Either one of these incentive programs could be considered cutting edge but combined they make this deal one to watch. 

We wonder what the creative writers at AG could compose for the thank you note.  

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