Presentation Transcript

1. Community Improvement Corporations:A Tool forBrownfield Remediation & RedevelopmentJames Sisto, Esq.October 19, 2012

2. The Challenges of BrownfieldRemediation & Redevelopment Abandoned sites Unknown or long-gone owners Mothballed sites Known owner who prefers to do nothing Ugly Sites Known owner – willing to proceed but lacking resources Upside down Sites Cost of remediation outweighs cleaned value
3. Relevant Ohio Statutory Provisions ORC Chapter 5722: Land Reutilization Program A municipal corporation, township, county Sale at “fair market value” ORC Chapter 1724: Community Improvement Corp’s “…sole purpose of advancing, encouraging, and promoting the industrial, economic, commercial, and civic development of a community or area.” Broad powers Agency or non-agency
4. Comparison of CIC as an Agent or as an Independent Entity Footnotes / Comments 1 The City would be required to follow all Civil Service requirements if City Employees were loaned to the CIC, regardless of the nature of the CIC. 2 Depending on the facts and circumstances of any given situation, the Independent CIC structure would provide the City with legal defenses not available to the Agent CIC. 3 The CIC may, through its Code of Regulations/By-Laws agree to provide some level of public disclosure. 4 According to Ohio Attorney General Opinion. 5 The CIC would be responsible for acquiring liability and environmental insurance, and directors and officer insurance for its board members. Statutory authority for CIC to indemnify board members found in ORC §1702.12(E) 6 Proceeds made on the sale of real property may be retained by the CIC as determined by an agreement entered into at the time of the title transfer from the City to the CIC. 7 In the case of an Independent CIC it is generally presumed and recommended that not more than 49% or 2/5 of the board will be City Officials of appointed by the City or the independent status could be legally challenged.
5. Checks and Balances on the CIC Appointing Authority chooses a majority or all of the Trustees CIC meetings, through the organization’s code of regulations, can be in a public setting so the appointing authority can always aware of resolutions and other actions taken. The CIC can also deal with sensitive issues by going into executive session. The Appointing Authority has primary control through funding structure; allocation of funding pledged by the Appointing Authority can be limited to those projects they endorse. The Appointing Authority can control how many properties are transferred from the Land Bank or through other means into the CIC.
6. Benefits of the CIC: The CIC shields the Appointing Authority from environmental liability if the Appointing Authority was not an owner of the property. The CIC provides a corporate shield for liability issues that arise in the normal course of business. The CIC limits financial liability to the Appointing Authority as there is no indirect or implied financial liability for the Appointing Authority except as they directly agreed with the CIC. The CIC provides a public buffer between the Appointing Authority and the general public and the media. The CIC provides a public/private partnership as an interface with the private sector to streamline work and oversight with private contractors.
7. Contact Information James E.P. Sisto President Teralogix, Inc. 88 E. Broad Street, 15th floor Columbus, OH 43215 Email: james.sisto@teralogix.com (614) 580-6832