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Senate Bill 39 Allows Up to $100 Million in Business Incentive Credits for Transformational Mixed-Use Development in the State of Ohio

Client Alert

Ohio Governor Mike DeWine signed Senate Bill 39 on December 29, 2020, which created a new tax credit applicable to insurance premium taxes. This tax credit is designed to provide funding for a transformational mixed-use development or “TMUD” in the state of Ohio.

Effective as of March 31, 2021, Senate Bill 39 authorizes the Ohio Tax Credit Authority (“OTCA”), within the Ohio Development Services Agency (“ODSA”), to award up to $100 million of total business incentive credits in each of the fiscal years 2020-2023, which will then be applied against insurance premium taxes. Individual projects are capped at $40 million. Of the $100 million, there remains a reserved amount of $20 million of such credits each fiscal year for projects not located within a “Major City”, which is within ten miles of a municipality with more than 100,000 people.           

What Qualifies as a TMUD Project?

According to O.R.C. 122.09, the development project may be certified as a TMUD by meeting the following requirements:

  1. Must consist of new construction or redevelopment, rehabilitation, or expansion of an existing vacant structure, or a combination of the two; and
  2. Must have a “transformational economic impact” on the site and surrounding area. Transformational economic impact can be measured through the estimated increased tax collections resulting from the increased activity of the development, which must exceed 10% of the development costs within five (5) years of certification (as measured by a preliminary economic impact study, although not yet defined); and
  3. Must be mixed-use (integrating some combination of retail, office, residential, recreation, structured parking, or other similar uses); and
  4. Must include a structure or structures that meet certain height, square footage, or increased payroll requirements (urban projects must include at least one new or previously vacant building that is a) at least 15 stories high, or b) has a floor area of at least 350,000 square feet, or c) after completion will be the site of employment accounting for at least $4 million in annual payroll, or d) includes two or more connected buildings that collectively have a floor area exceeding 350,000 square feet); and
  5. Cannot be completed unless the applicant receives the credit; and
  6. Must have estimated development costs exceeding $50 million if the project is located within ten miles of a Major City.

Who Can Apply?

Those who may apply for these TMUDs include either a) property owners, or b) insurance companies that contribute capital which is then used in the planning or construction of this type of eligible development. Insurance companies may ultimately claim this credit, as it is a credit against an entity’s Ohio insurance premium taxes. A property owner who originally applies and receives the TMUD credit may either transfer it to an insurance company or sell or transfer the rights to that credit to others in order to raise project capital.

What’s Next?

The state is currently undertaking rulemaking for this new incentive and developing program guidelines. These guidelines, as defined by the Director of ODSA, are expected to be released within the next 30 days. All TMUD projects must be certified by the OTCA by June 30, 2023.

For additional questions on this tax credit, please contact BMD Member Jason Butterworth at jabutterworth@bmdllc.com or (330) 374-3216.


Valley National Bank/Trulieve Loan: A Big Step Out of the Shadows

In a late December press release, Trulieve announced that it had secured a $71.5 million commercial bank loan. In addition to the amount of the loan, which may be the largest commercial bank loan to date to a cannabis company, the release prominently identified Valley Bank and featured both a quote from Valley’s Senior Vice President, John Myers, and a description of the Bank’s service platform and commitment to the cannabis industry.

The End of Non-Competes? The Impact It Will Have on the Healthcare Industry

On January 5, 2023, the Federal Trade Commission (“FTC”) announced a proposed rule that, if enacted, will ban employers from entering into non-compete clauses with workers (the “Rule”), and the Rule would void existing non-compete agreements. In their Notice, the FTC stated that if the Rule were to go into effect, they estimate the overall earnings of employees in the United States could increase by $250 billion to $296 billion per year. The Rule would also require employers to rescind non-competes that they had already entered into with their workers. For purposes of the Rule, the FTC has defined “worker” to also include any employees, interns, volunteers, and contractors.”

2022 Healthcare Recap and 2023 Healthcare Check-Up

As the country begins to return to a new “normal” following the COVID-19 pandemic, there are many healthcare rules changing on both the federal and state levels as a result. Thus, it is important for healthcare providers and their employers to be aware of these changing rules, and any implications they may have on their practice. Look back on healthcare in 2022 and find a checklist for 2023.

Direct Support Professional Retention Payments

On December 15, the Ohio Senate and House passed House Bill 45, which authorizes the Department of Developmental Disabilities (DODD), in conjunction with the county boards of developmental disabilities, to launch their initiative to issue retention payments to Direct Support Professionals (DSPs). These retention payments will be distributed quarterly to participating home and community-based waiver providers to address the workforce crisis in the direct provider sector. Governor DeWine needs to sign the Bill to begin the payments, but he is expected to do so by the end of 2022.

Real Estate Investors Position for 2023 Opportunities

Real estate investors weathered another year in a post-pandemic world, with the year closing with yet another interest rate increase coupled with both uncertainty and heightened interest carrying into 2023. Just last Wednesday, the Federal Reserve raised its benchmark interest rate 0.50 percentage points, shifting the target range to 4.25% to 4.50%. The new level is the highest the fed funds rate has been since December 2007 and marks the seventh rate hike this year. So what does this mean to investors, brokers, lenders, and others in the real estate world? Read a few perspectives below from stakeholders familiar with our BMD clients and the markets in which they do business.