April 04--Summit County says the math works out like this: $2 million in county government funds will create $14 million in new economic development and jobs.
Government officials on Monday announced what they call Summit County's Down-Payment for Jobs.
The county government is looking at placing $2 million of its $300 million in "inactive funds" -- money the county has in its accounts but isn't using other than to generate interest -- with the Development Finance Authority's Jobs and Investment Bond Fund. That additional $2 million in turn means that the Development Finance Authority will be able to issue up to $14 million in bonds to fund economic development projects in the region.
County Council gave initial approval to the plan on Monday and may pass it on April 17 after additional discussions.
The $2 million in Summit County funds would be a last-resort backstop in case borrowers default on repaying their bond loans, county officials said.
Without the $2 million in funding, the quasi-public Development Finance Authority will have $12 million in projected bond fund capacity later this year.
With the additional $2 million backstop as leverage, bond fund capacity jumps to $26 million.
The $2 million will still be invested at the direction of the Summit County fiscal officer. Interest earned on the $2 million will continue to fuel the county's general fund; earned interest from the $300 million inactive fund also goes to the county general fund.
The $2 million that goes into the DFA fund will be a low-risk investment, county officials said.
"The economy would have to fall apart for the county to lose the $2 million," County Executive Ilene Shapiro said.
"This is another arrow in the quiver for economic development for Summit County," said John Schmidt, council president.
Rick Rebadow, executive vice president of the Greater Akron Chamber, was at the news conference and said he liked the concept.
"I think it's a good opportunity," he said. "It's very low risk for a high return."
Chris Burnham, president of the Development Finance Authority, said the DFA and county late last year began discussing creating the new finance tool. He said other governmental entities outside Summit County could also provide similar financing to the authority.
Lucas County took part in the same kind of financial arrangement with the Toledo-Lucas County Port Authority several years ago, Burnham said.
The DFA's Jobs and Investment Bond Fund dates back to 2004. Since its inception, the fund has issued $82.2 million in bonds, with $37.1 million of that used for projects in Summit County. There has been one default over those years, with the money paid back via the selling of a building.
The Development Finance Authority has used the bond fund for the Goodyear headquarters project, the East End redevelopment of the former Goodyear campus, the Cleveland Cavaliers, Shearer's Foods and the East Bank of the Flats renovation in Cleveland.
The DFA expects to use the fund to help provide financing to the Pro Football Hall of Fame Village project in Canton and the Testa renovation of the City Center Hotel in downtown Akron.
County Council also:
--Agreed to rebid for a mobile hospital unit that would be used if there is what is called a mass casualty event. Council rescinded a $185,500 bid it accepted earlier this year.
--Held a public hearing on having the county join the Northeast Ohio Public Energy Council natural gas aggregation program.
--Listened to a presentation by Brian Harte, president of Cleveland Clinic Akron General. Harte provided an overview of the hospital and ongoing projects, including the expansion of its emergency department.
--Adopted a resolution supporting a state House bill that would close a loophole and cap annual interest rates for payday loan lenders.
--Declared April to be Child Abuse and Family Awareness Month in the county.
Jim Mackinnon can be reached at 330-996-3544 or jmackinnon@thebeaconjournal.com. Follow him @JimMackinnonABJ on Twitter or www.facebook.com/JimMackinnonABJ
