The Development Finance Authority of Summit County stimulates business growth in Akron and statewide by providing nontraditional lending solutions
By Erik Cassano
Summit County’s northern boundary sits along the city of Northfield, about 30 miles from Lake Erie. No navigable rivers flow through the county, and the Ohio and Erie Canal hasn’t been used for commerce in more than a century.
The county is all but landlocked. Why, then, did its leaders form a port authority in 1993? In other states, port authorities regulate commerce and transport on local waterways. But in Ohio, the powers of port authorities are far more extensive; under state law, their primary purpose is to serve as economic drivers for the regions they serve.
Fast-forward to 2000, when the Summit County Port Authority was reconfigured as the county’s economic development agency and in 2012, the port authority was rebranded as the Development Finance Authority (DFA) of Summit County.
“In Ohio, port authorities have a lot of power and flexibility to stimulate economic development,” said Chris Burnham, president of the Development Finance Authority of Summit County. “Economic development finance became our mission, and in 2012, we changed our name to better reflect that.”
Today, the organization serves as a resource for new and established businesses, as well as communities and private nonprofits seeking unconventional means of funding for creation or expansion, with a reach that can extend to economic development projects statewide.
Companies work with the DFA when developing construction and expansion projects that, for a variety of reasons, can’t secure traditional bank or investor funding or where the DFA can be a complementary lender in some way.
The finance authority brings together public and private funding to formulate loan and credit solutions that can help jumpstart projects that would otherwise struggle to get off the ground.
“We work in places where a traditional lender isn’t the answer, or isn’t the whole answer,” Burnham says. “We might work in combination with traditional lenders, or we might come in on a project that is more difficult to finance, or for some reason is looking for terms that a traditional lender wouldn’t or couldn’t provide.”
The finance authority funds projects primarily through revenue bonds sold to private investors. Since initiating its Job & Investment Bond Fund program in 2004, the authority has raised more than $113 million, which has been used to fund 34 construction, renovation and improvement projects in the past 14 years.
The authority also maintains reserve funds not yet marked for use in a specific project. “To maintain our bond rating, a single project can’t get too big relative to the others we help finance,” Burnham says. “So the projects we help fund are usually in the $2 million to $6 million range, but the nature of the work is typically outside the boundaries of what traditional lenders will finance.”
Beyond Summit County
The Development Finance Authority of Summit County— whose trademark is “Attracting private capital to Northeast Ohio for Public Good”—has helped to finance building construction and improvements in downtown Akron, Bath Township, Medina, Barberton and Green. But it has also had a hand in financing projects in more distant cities like Columbus and Youngstown.
Although the organization still effectively operates as Summit County’s port authority, Ohio port authorities have extensive power to drive economic growth statewide, regardless of where they’re based. That allows it to partner with port authorities in Cleveland, Columbus, Dayton and Cincinnati on projects across the state.
In addition to bond finance, the DFA in 2011 established the Development Fund of the Western Reserve, (DFWR) a private nonprofit which it created to attract New Markets Tax Credits to finance projects in Northeast Ohio’s most economically distressed neighborhoods. DFWR has been able to finance a broad range of projects in many Northeast Ohio communities, including Akron, Lorain, Conneaut, East Liverpool and others.
In fact, Ohio port authorities and their related organizations are such influential drivers of the state’s economic growth that other states are coming to Ohio to learn more.
“At a conference held not too long ago by the Council of Development Finance Agencies, representatives from 31 states came to learn what Ohio port authorities are doing,” Burnham says. “It demonstrates we’re at the leading edge in terms of collaboration and what a port authority can do for its region.”
Burnham says the core focus of the authority will always be the economic revitalization of Akron and Summit County, but there is the opportunity to benefit Northeast Ohio, and even the entire state.
“For a region that is trying to rebound economically the way Ohio is, organizations like ours can’t generate resources fast enough,” he says. “Our challenge is to continue to find ways to bring capital into communities that really need it.”
Political and business leaders talk at great length about job creation, but Burnham says that doesn’t happen without investment in businesses, building space and infrastructure.
“Jobs are a result of investment. Investment drives everything. Without investment, there is no economic vitality for a community, region or state,” he says. “That’s something we all need to remember as we plot the future of this region.”
Part of the solution
In 2004, the Development Finance Authority of Summit County established a Bond Fund program and created a reserve fund to serve as a pool of financing money for construction and expansion projects in the county.
Huntington provided the initial line of credit that enabled the establishment of the Bond Fund program reserve.
In addition Huntington is a supporter of the Development Fund of the Western Reserve and helped DFWR capitalize the Akron Community Revitalization Loan Fund.
“Huntington has worked to develop an extensive knowledge of our organization, and of the Akron area,” says Chris Burnham, the authority’s president.
“We continue to look for ways to provide value to the communities we serve, and Huntington does the same,” he says. “That’s why we work well together.”
For more information, visit www.developmentfinanceauthority.org.