July 23, 2014

Medina
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$20M in bonds to benefit county

MEDINA — Two proposed projects in Medina County that total about $125 million received a financial push forward Monday.

County commissioners voted Monday morning to allocate about $20 million in low-interest, federal Recovery Zone Bonds between a retail project in Brunswick and the construction of a fiber-optic network throughout the county.

Mentor-based Osborne Capital Corp. will receive $16 million in Recovery Zone bonds for an approximately $114 million retail project at Interstate 71 and state Route 303 in Brunswick. The Medina County Port Authority will receive about $4.2 million in bonds for the construction of a 151-mile fiber-optic loop around the country, an estimated $10.8 million project.

The county will not distribute about $1.8 million in Recovery Zone Bonds it is able to, and instead will ask the state to allocate it for a project for the redevelopment of Goodyear’s headquarters in Akron.

Commissioner Steve Hambley said many county businesses are vendors that work with the company, and many residents work in Summit County.

“It obviously impacts us economically,” he said.

The bonds

Ohio received about $1 billion of the $25 billion in Recovery Zone Bonds created by the American Recovery and Reinvestment Act last year. That money then was split between the state’s counties and larger cities. Medina County was permitted to distribute about $22 million of the bonds.

County Administrator Chris Jakab said the county has until the end of the week to report to the state how it will allocate the bonds. The groups that receive the bonds then have until March to secure the rest of the funding needed for their project and to describe to the county their preliminary financing schedules. The bonds must be issued by the end of June.

Jakab has described the bonds as “low-interest financing tools for businesses to utilize for investment for startup or expansion.”

Brunswick retail project

Lance Osborne, president of Osborne Capital, said the bonds are “an integral piece” of the retail project in Brunswick. “It’s one step in many that will make this project come to fruition,” he said.

According to the Recovery Zone Bond application, the development would consist of the only Northeast Ohio store for a “renowned national outdoor retailer.” It would include a general merchandise retailer and other “peripheral development.”
Osborne said he could not disclose the name of the retailers associated with the project.

The Recovery Zone Bond application projects the outdoor retailer will generate about $50 million in sales and the other stores will generate $100 million by the end of 2012.

The project would employ about 220 construction workers through 2012 and up to 678 permanent employees within three years.

City Manager Bob Zienkowski said Brunswick is excited about the project because it will create jobs, boost income tax collection and bring more business to the city to “support other development that is already here.”

Fiber optic project

Jim Gerspacher, who sits on the Port Authority board, said the bonds will allow the authority to save money on interest rates for a significant part of the project.

“It’s a win-win for the potential users and for the county as a whole because when you reduce your costs, you increase our potential for revenue,” Gerspacher said.

Port Authority Administrator Bethany Dentler, who is also director of the Medina County Economic Development Corp., said the rest of the project will be funded through other kinds of bonds issued by the Port Authority.

Cleveland-based One Community has been contracted to construct the 144-strand fiber-optic ring that will provide broadband connectivity for government agencies, libraries, schools, hospitals and businesses. Gerspacher said the Port Authority will make up its costs for the project through broadband service providers, who will pay to use the network.

According to an economic impact model used by One Community, the project would create 218 jobs that pay an average hourly rate of $16.85.

Other projects

Two other groups that applied for bonds earlier this year were not approved.

The city of Medina asked for $8 million for the redevelopment of the Champion Creek neighborhood along Smith Road and the extension of the Roscoe Ewing trail.

Jakab said the project did not qualify for the bonds because the city could not guarantee it could meet the necessary timeline to receive them.

In addition, the Port Authority and California-based Chippewa Partners LLC applied for $17.8 million in Recovery Zone Bonds for the construction of a hotel, resort and club on the site of the former Chippewa Lake Amusement Park in Lafayette Township. According to the Recovery Zone application, the $37.3 million project would have created 189 jobs after three years.

“Basically that means the Port Authority is going to be working with Chippewa to hopefully be obtaining other kinds of financing,” Dentler said. She noted there will be more Recovery Zone Bonds available through the state later this year that for which the project may be eligible.

Contact Maria Kacik at (330) 721-4049 or mkacik@ohio.net.