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In This Issue
From the Statehouse
Ohio Economic Development
2014 Elections
"Hicks Partners Presents..."
Client Spotlight - Cristal
Milestone

October 2013

 
 
Dear Friends:

As I began to write this edition of our newsletter, I couldn't help but think of a line from my favorite song, "The seasons pass, the years will roll."  

I thought about this lyric not only because its football season and summer has turned to fall, but also because of the milestones we achieve over many years.  Our firm reached one such milestone this summer.  In this newsletter, we focus on the busy legislative and economic development season ahead, look forward to 2014, provide a spotlight on a world-class client and highlight one of Ohio's newest statewide public officials.

As always, please feel free to contact any of us at Hicks Partners if we can be of assistance.


Sincerely,  

Brian K. Hicks 

President & CEO

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From the Statehouse

Ohio General Assembly - Busy, Busy, Busy
After a summer recess filled with hearings throughout the state, members of the General Assembly have returned to Columbus with a busy fall schedule. The Senate Committee on Medicaid, Health, and Human Services explored infant mortality in a series of hearings this summer while the House held study committees on tax reform, higher education, prescription drug addiction and healthcare.  These committees have issued or are preparing their respective reports, which likely means legislation introduced later this session.
 
Medicaid Expansion and Reform
The Kasich Administration won approval to expand Medicaid as part of the Affordable Care Act (ACA) through the Ohio Controlling Board.  The Governor was forced to pursue this controversial route because of strong opposition within his own party. Under ACA, the cost of Medicaid expansion will be funded 100% by the federal government for the first three years and 90% thereafter.  In addition to strong opposition to ObamaCare, many Republican legislators do not believe the federal government will keep its promise to pay expansion costs, hence their opposition.

The Controlling Board normally makes routine adjustments to the state budget but the Governor argued the board has authority to expand Medicaid without further legislative action. The board did just that on a divisive 5-2 vote earlier this week, thereby allowing the state to meet the Jan. 1 start date of expanded eligibility.

The Controlling Board's action has already been challenged in the Ohio Supreme Court.  How such a challenge impacts expansion remains to be seen.

More Tax Cuts on the Way?
As a result of Medicaid expansion and the federal funding that goes with it, conservatives in the legislature, are planning to redirect up to $400 million in state funds to pay for another round of personal income tax cuts.  Under a bill introduced by Sen. Chris Widener (R-Springfield), Ohioans would receive a 4% state income-tax reduction beginning in 2014. This reduction would come on top of the 8.5% personal income tax cut that became effective in September.

The newest tax reduction would not go into effect if the Medicaid expansion lawsuit is successful in the Ohio Supreme Court.

Revising Ohio's Energy Policy?
The General Assembly is reviewing Ohio's energy policy, with specific attention on the state's Renewable, Advanced and Energy Efficiency Standards created by SB 221 in 2008.  Sponsored by the Senate Public Utilities Committee Chairman Bill Seitz (R-Cincinnati), SB 58 has been the subject of intense debate over the past few weeks. Most notably, the bill would remove the in-state requirement for renewable energy resources, expand the list of energy efficiency measures that can be counted toward meeting efficiency benchmarks, and permit forms of advanced energy that also produce energy efficiency savings to be counted toward both the advanced and energy efficiency standards.
 
SB 58 has sparked strong opposition from wind, solar, renewable energy, environmental and even some business groups.  Chairman Seitz has promised ample opportunity for testimony on the measure as he continues hearings this fall.  In the meantime, the House Public Utilities Committee will get a head start on SB 58 by considering HB 303 (Stautberg, R- Cincinnati), a companion measure in the House, speeding possible adoption of the legislation.

Capital Budget
The Kasich Administration is preparing its capital budget for consideration early next year. Because state revenues have generally improved in recent years, the 2014 capital bill is expected to include more money for colleges and universities as well as funding for arts and other community projects.

For more information about pending legislation or the General Assembly's upcoming agenda, please contact Zach Holzapfel or Tony Brigano.
Ohio Economic Development

  

Ohio Third Frontier     
The Ohio Third Frontier (OTF) Commission and Advisory Board held a two-day strategic planning retreat in September.  The retreat led to a few conclusions, including:  OTF is OTF with tag successful with a strong ROI; commissioners must be good stewards of the OTF funds by analyzing additional data on award recipients; and an assessment of the capital continuum is needed. The capital continuum study is to determine if a venture funding gap exists, and if so, how OTF can best help fill the gap.

The results of the capital continuum study, as well as more data related to the performance of Third Frontier recipients, is expected to be presented in December and will impact the programmatic decisions for the coming years.  Currently, OTF has approximately $378 million to invest.
 
Open Third Frontier RFPs include the Technology Commercialization Center program, Technology Asset Grant program, Commercial Acceleration Loan Fund, Incubation Program and the Industrial Research and Development Program.

For more information on Ohio Third Frontier, please contact Emily Turner.
 
JobsOhio - Positioned to Invest?     
JobsOhio has approximately $180 million to invest in job creating deals according to an audit conducted by KPMG.  JobsOhio, funded through a lease of the  state's liquor profits, has begun to divulge details of their planned investment programs.  

The JobsOhio Revitalization Program Loan and Grant Fund and the Revitalization  Program Phase II Assessment Fund have been unveiled.  These initiatives build on the JobsOhio success of the CleanOhio program, but promise to be faster, more flexible and open to more eligible applicants.  Up to $43 million annually is dedicated to these programs.

Both programs still require new and/or retained jobs in a project, but the number of eligible applicants has been expanded to include not just local governments, but also companies, developers, port authorities, Community Improvement Corporations and non-profit organizations.  In addition, the definition of eligible sites has been expanded to include not only contaminated sites that require remediation, but also abandoned and under-utilized properties where there are significant redevelopment constraints that hinder job growth.

The Revitalization Program Loan and Grant Fund is intended to accelerate the redevelopment of a site where the cost of the redevelopment and remediation is more than the value of the land and a site cannot otherwise be competitively developed in the current marketplace.  This loan program can fund up to 75% of eligible costs, up to $5 million with a deferral of principal and interest up to 5 years or until the site is occupied.  The grant portion of this program is to assist the applicant fill funding gaps where remediation costs exceed net gain of the improvement value of the property.  The grant must be coupled with a loan.

The Revitalization Program Phase II Assessment Fund can provide up to $200,000 in grant funding to assist in the review and analysis of potential environmental risks on sites where redevelopment for job creation or retention is likely to occur.  

If you are interested in learning more about these programs, please contact Keith Conroy for additional information.

2014 Elections

2014 Elections -"It's the Economy, Stupid!"
 
The race for governor will heat up very soon with Governor Kasich facing Cuyahoga County Executive Ed Fitzgerald in the November 2014 election. At this early stage of the campaign, polling data reflects more name ID and view of the Governor's job performance than actual voter preference between the two candidates. As a result, Kasich leads FitzGerald in most reliable polls by 9-14 points.

Ohio's economy will be the key issue during the campaign and how the economy performs in the coming months will have a major impact on the race.  Ohio's  unemployment rate had been declining but climbed slightly to 7.3% in August, placing Ohio even with the national unemployment rate.  

If Ohio continues to mirror the national unemployment rate - or if Ohio's lags the US average - Governor Kasich will need to refine his economic message. With over $550 million of economic development funds available through Ohio Third Frontier and JobsOhio, expect the Kasich administration to accelerate funding for worthy job-creating projects.

Conventional wisdom suggests the Governor will be favored to win reelection.  It is very hard to unseat a sitting governor; only two governors since 1970 have been defeated for reelection.

Ohio Democrats officially endorsed their slate for the other statewide offices in September.  The party tapped former Hamilton County Commissioner David Pepper to challenge Attorney General Mike DeWine, State Representative John Carney to run against Auditor David Yost, State Senator Nina Turner to compete with Secretary of State Jon Husted and State Representative Connie Pillich to take on Treasurer Josh Mandel.
 

Meet Ohio's 155th Supreme Court Justice

Judith French became the 155th justice of the Ohio Supreme Court earlier this year.   Justice French was appointed by Governor Kasich upon the retirement of former Justice Evelyn Stratton.

Justice French has a long and distinguished career in the legal profession.  She served on the Tenth District Court of Appeals, which hears appeals from Franklin County courts and state administrative agencies. She was elected to the appellate court in 2004 and served until her appointment to the Supreme Court.

Prior to becoming a judge, Justice French served as chief legal counsel to Governor Bob Taft, chief counsel for Attorney General Betty Montgomery and legal counsel in the Ohio Environmental Protection Agency under Governor George Voinovich.

Judi French has argued twice before the United States Supreme Court, including when she successfully represented the State of Ohio in the landmark Cleveland school vouchers case.

Prior to entering public service, Justice French was associate counsel at Steelcase Inc. in Grand Rapids, Michigan, and an associate at the Columbus law firm of Porter, Wright, Morris & Arthur.

Justice French earned her B.A. in Political Science, M.A. in History and J.D. with honors from The Ohio State University.
  "Hicks Partners Presents..."
 
Hicks Partners Offers EB-5 Training to OEDA

Keith Conroy and Emily Turner, vice presidents of Hicks Partners, presented an overview of the EB-5 Immigrant Investor Program during the Ohio Economic Development Association Annual Summit on October 24.

Congress created the EB-5 program in the early 1990's to encourage foreign investment and job creation in the United States. Through EB-5, immigrant investors receive   accelerated "Green Card" visas while company owners and developers receive low-cost capital for their projects. Foreign investment may be made directly into job-creating projects or coordinated through an "EB-5 Regional Center."

Under the EB-5 Direct Investment approach, a foreign national invests $1 million (or $500,000 if the project is in a rural county or Targeted Employment Area) in a new or existing business that results in the creation of 10 new full time jobs. When making an EB-5 Direct Investment, foreign nationals take an active role in the new commercial enterprise as part of the management or other policy-making role and only direct jobs can be counted.  EB-5 Direct Investments must be in the form of equity.

An EB-5 Regional Center is a licensed by U.S. Citizenship and Immigration Services to conduct business in a defined geographic area and usually within certain industries. A foreign investor working through a Regional Center must make the same level of investment ($1 million or $500,000 in a rural or TEA), but can take a passive role in the commercial enterprise.  Moreover, indirect jobs can be used to count toward the 10 new jobs requirement and the investment may be in the form of equity or debt.

Because immigrant investors are primarily motivated by access to a "Green Card" and not solely by financial return, EB-5 investments have become an attractive source of low-cost capital to fund new companies, real estate development and even public infrastructure. In 2012, more than $1.8 billion was raised through EB-5 investments with most investors coming from China, South Korea, Vietnam and Central and South America.

Look for more details about EB-5 in the coming weeks. In the meantime, please contact Keith Conroy, Emily Turner or Brian Hicks for more information.

BioOhio Panel to include Hicks Partners
Brian Hicks will be a featured panelist at the BioOhio Annual Conference on November 5th. Hicks will provide an overview of current state issues impacting the bioscience industry and emerging trends for 2014. 

The BioOhio conference is the most comprehensive bioscience industry information and networking conference in the state. The event regularly brings Ohio's bioscience business, research, and education communities together for learning, idea sharing and excellent networking.  More information on the conference and registration details can be found at http://www.bioohio.com/news/annual-conference/.
Client Spotlight

 

Cristal is the world's second leading producer of titanium dioxide and a leading producer of titanium chemicals.  The company, headquartered in Jeddah, Saudi Arabia, operates seven manufacturing plants on five continents, with locations in the United States, United Kingdom, France, Saudi Arabia, Australia and Brazil.

Nearly 500 associates work in the Cristal Ashtabula, Ohio complex, making it the largest employer in the northeast county. Earlier this month, Cristal announced a $64 million expansion project at the Ashtabula complex that will retain the existing workforce and create more than 25 new jobs in the coming years.

The Ashtabula expansion project will increase current production capacity
 by 20% and install a new environmentally friendly air handling system.  This will help Cristal to become more competitive in titanium dioxide manufacturing and allow the company to manufacture and market its own liquid oxygen, nitrogen and argon.

Hicks Partners was pleased to work with the Growth Partnership for Ashtabula County, Team NEO and JobsOhio to secure valuable economic incentives for Cristal's expansion.
Milestone
 
Hicks Partners Celebrates its 10th Anniversary

"How time flies when you're having fun!"

"From Fortune 50 companies to entrepreneurs to non-profit organizations, we have worked with an extraordinary group of clients in the past decade.  We look forward to our next ten years of growth and success." said Brian K. Hicks, President and CEO of Hicks Partners.

Founded in August 2003, Hicks Partners provides government relations, economic  development and public relations services.  The firm has served clients in a multitude of industries, including energy, healthcare, manufacturing, chemicals, real estate development, local government and non-profit organizations.   Over the past decade, the firm has helped more than 150 clients impact government policy, promote their cause and generate valuable growth capital.  In all, Hicks Partners has secured more than $160 million of federal, state and local economic development incentives for clients to help create or retain more than 6,200 jobs in the past decade.

 

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