Official: Airport needs deals
The Summit authority has established deals with other northeastern Ohio counties.
VIENNA -- It will be up to the Regional Chamber and Western Reserve Port Authority to find "deals they think have legs" for bond financing through the Summit County Port Authority, its executive director says.
Christopher J. Burnham, the Summit authority's president and executive director, is hoping such opportunities will come through a cooperative agreement with the Western Reserve authority, which runs Youngstown-Warren Regional Airport here.
"The idea here is it's good for us to keep expanding the capacity of the fund as long as we're doing viable deals," Burnham said from Akron.
Summit County Port Authority provides funding and trade advantages to new or expanding businesses. One mechanism -- which it seeks to offer to the Western Reserve Port Authority -- is tax-exempt and taxable long-term fixed and variable-rate financing.
"It might be good for the folks in the Valley to have another alternative for providing financing," Burnham said.
Walter Good, the Regional Chamber's economic development action team director, works a two-pronged approach with businesses: business retention and expansion and business attraction.
His team ventures into Mahoning and Trumbull counties and talks to local executives about their particular needs. At the same time, marketing and outreach involves trade shows, out-of-area visits, and working with out-of-town real estate executives.
"If we come across a project that might be suitable for this type of financing, we would introduce it to the Western Reserve Port Authority," Good said. "I think it brings another unique financing program to businesses that could benefit."
Summit County Port Authority's bond reserve fund offers financing for qualified industrial, commercial and public projects from $1 million to $6 million, plus a sales tax exemption for all construction and building materials.
The $5 million fund has an investment-grade credit rating of BBB+ by Fitch Ratings, Chicago. Fitch says this "reflects the sound structure" of the fund and its program reserve requirements. This fund was established in 2001 between Summit County Port Authority and National City Bank.
There are only four such ventures in Ohio counties, Burnham noted -- Summit, Cuyahoga, Lucas and Montgomery.
"It took a couple years, but we've gained some traction, and we've done some deals," he explained. "I'm kind of a 'walk-before-you-run' guy. I wasn't going to go anywhere until I could prove to my board that we can do this in Summit."
Now, the Summit County Port Authority has deals in place with Medina, Summit, Cuyahoga and soon Portage counties, including:
* Goodyear Tire & amp; Rubber Co. is modernizing the utilities systems supporting its Akron headquarters complex, expecting to reduce annual utility costs by more than 25 percent. The bond financing for the $18 million project involves the Summit County Port Authority, the Cleveland-Cuyahoga County Port Authority, the Ohio Department of Development and the City of Akron.
* A deal expected in August with Portage County commissioners for $2.5 million in funding for water, sewer, road and other public improvements.
* New town halls in the village of Seville (Medina County) and in Twinsburg Township (Summit County).
William L. Reali, chairman, Western Reserve Port Authority, has promoted expanding the airport authority's economic development capabilities. He gave the port authority's board an information packet last week; it will take up the Summit County matter at a meeting Aug. 24.
Burnham said Summit's board will discuss it in September and will have final approval on the credit.
Ninety to 100 percent financing can be determined by the credit of the borrower and assets. Terms are up to 30 years for governmental, infrastructure or nonprofit borrowers; up to 15 to 20 years for industrial and commercial loans. Maximum port participation will be about $6 million but larger transactions may be funded if other lenders are involved.
Tax-exempt bonds are for industrial, nonprofit and government projects; taxable bonds are for commercial projects. The bond fund program summary says investment real estate, such as hotels and retail centers, is to be avoided.
Burnham said he believes local banks' business will not suffer from such a venture, which would focus on the long-term, fixed- rate loan on real estate. The local banks, he surmised, would concentrate on the rest of the business, namely buildings, machinery and the like.
"If you've got a growing business, banks are pretty comfortable focusing on the cash management," he said.