2019 Opportunity Zones Document

Opportunity Zones Development Opportunities

Contents 4 U n d e r s ta n d i n g O p p o r t u n i t y Zones 5 W h y H a m i lt o n 1 1 N o r t h H a m i lt o n Opportunity Zone 1 7 S o u t h H a m i lt o n Opportunity Zone 2 1 Economic Incentives & Financing

W e l co m e

to

With a history shaped by both industrialists and artists, the City of Hamilton has become a place where these two creative forces come together to make big things happen. Throughout every sector of our economy, we’re seeing this energy breathe new life into our community.

As the county seat of Butler County, the City of Hamilton stands out from neighboring communities by providing a vibrant, walkable downtown for urban living. More than $220 million has been invested into capital improvement projects in the last five years, with 1.25 million square feet of commercial, office, and residential space redeveloped in the urban core alone. In the same period, more than 80 new small businesses have opened their doors and over 2,500 new jobs have been filled in a community of just 62,000.

3

H a m i lt o n

Even with all of our recent progress, we know the real transformation has only just begun. The largest redevelopment project in the city’s history broke ground in October 2018, a $144 million investment that will bring in at least a million visitors annually. Located in one of Hamilton’s two Opportunity Zones, Spooky Nook Sports Champion Mill is a sports and events center that will have an impact on the regional economy to the tune of $40 million per year. We anticipate a flood of new retail establishments, restaurants and bars, hotels, and other tourism-related businesses opening over the next five to ten years.

Opportunities abound in the City of Hamilton. Find out how to get in on the ground floor today.

U n d e r s ta n d i n g Opportunity Zones Opportunity Zones

Opportunity Funds

The Opportunity Zones tax incentive was established by Congress in the 2017 Tax Cut and Jobs Act to stimulate long-term, private sector investments in low-income urban and rural communities.

Opportunity Funds are the investment vehicles organized as corporations or partnerships for the purpose of investing capital gains into Opportunity Zones.

Opportunity Zones are limited to designated Census Tracts and investments in Zones must occur through qualified Opportunity Funds.

The program enables investors with capital gains tax liabilities to receive favorable tax treatment for making equity investments into eligible Opportunity Zone business property.

Opportunity Zones community designations will sunset in 2028, but investors are able to make the election through December 31, 2047.

Investor Benefits Realized gains must be invested into an Opportunity Fund within 180 days to be eligible for the tax benefits.

The tax on these gains is deferred until the earlier of investment liquidation or Dec. 31, 2026.

The basis of the original gains invested is increased by 10% if the investment is held in the Opportunity Fund for at least 5 years.

The basis of the original gains invested is increased by 15% if the investment is held in the Opportunity Fund for at least 7 years.

The basis of the original gains invested is increased by 15% and any capital gains accrued from the investment in the Opportunity Fund are permanently excluded from taxable income of capital gains if the investment is held in the Opportunity Fund for at least 10 years.

Investors in Opportunity Funds are eligible to receive tax deferral and permanent exemption benefits based on how long the investment is held in the Opportunity Fund.

Opportunity Funds will be self-certified per IRS guidelines.

Opportunity Funds are required to invest 90% or more of capital as equity in Opportunity Zone property, including qualified stock, partnership interest, or real estate or business property.

Eligible Investments Business Property: Opportunity Funds can invest in tangible property used in a trade or business located within a qualified Opportunity Zone. The asset must either be newly placed into service or “substantially improved.”

“Substantial improvement” means that, over a 30-month period beginning on the date of acquisition, investment in the property exceeds the basis of the property (excluding land value). New construction or redevelopment of retail, residential, mixed-use, or industrial properties; purchase of new equipment or other business assets.

Partnership Interest: Opportunity Funds can purchase, for cash, capital, or profits interest in a domestic partnership located within a qualified Opportunity Zone. Equity recapitalization; growth capital investments.

Stock: Opportunity Funds can purchase, for cash, newly issued stock in a domestic, qualified opportunity zone business located within a qualified Opportunity Zone. Seed stage investments; series A investments.

4

W h y H a m i lt o n ?

The City of Hamilton is the seat of Butler County and its center of arts & culture and modern urban living. Hamilton is more than 200 years old, and our rich history is matched only by the momentum of revitalization that has taken hold of our community. The city boasts an affordable cost of living, a variety of recreational amenities including the Great Miami River and a fantastic parks system, and wonderful educational institutions including Miami University Hamilton, Badin Catholic High School, Butler Tech, and Hamilton City School District. The Economic Development Department serves as a one-stop shop for developers and business-owners doing projects in the City, with a service-oriented team that will work with you to answer any questions and solve any issues that may arise.

Demographics

within a 30 minute drive of the City of Hamilton

Population: 1.02 million Workforce: 525,000 Median household income: $62,432 Bachelor ’s degree or higher: 34.1% 5

G r ow i n g B u s i n e s s thyssenkrupp

Healthcare

One of Hamilton’s largest companies, thyssenkrupp Bilstein (TKB), has experienced enormous growth in our community over the past twenty years. Employing just under 200 people in 2011, today the company employs more than 700. TKB received the 2017 Employer of the Year Award from the Ohio Governor’s Council on People with Disabilities for its work with the disabled community. In addition to investing tens of millions of dollars at its facility, TKB is also an invaluable community partner.

The healthcare sector in Hamilton has been growing. Both Community First Solutions and Kettering Health Network have major presence in Hamilton.

Community First Solutions (CFS) is a nonprofit network that provides health and community based services for residents at all ages and stages of life throughout Butler County. CFS invested more than $5.8 million into a historic building in downtown Hamilton to create its new headquarters, which opened in 2015. In early 2017, it opened Jamestowne, an inpatient/outpatient physical therapy center, on Hamilton’s west side.

New Builds

Just next door to Jamestowne, Kettering Health Network (KHN) celebrated a ribbon cutting for its new medical office facility in April 2019. KHN owns and operates Fort Hamilton Hospital, which was one of only four regional hospitals to earn a spot on Healthgrades America’s “Best Hospitals” list.

This list recognizes the top 5% of hospitals in the nation, and 2018 is the second year in a row Fort Hamilton made the list. The hospital will soon have a new state-of-the-art Cancer Center as well as a Neonatal Service Center, after the $8 million+ investment by KHN to renovate several floors.

Two new industrial buildings are currently being constructed in Hamilton by NorthPoint Development and Prologis. These buildings, 300,000 and 156,000 square feet respectively, will be completed in summer 2019 and are available for sale or lease to a number of industrial-use tenants. NorthPoint Development is partnering with thyssenkrupp Bilstein to create a new warehousing space for the company; TKB will utilize approximately 160,000 square feet, leaving 140,000 available for another tenant.

6

Barclays Barclays opened a customer contact center at Vora Technology Park just south of downtown Hamilton in early 2016. This center will employ 1,500 people once fully operational, and was the largest job announcement for Greater Cincinnati in 2015. The company has spent over $9 million renovating almost 80,000 square feet of vacant and underutilized office space. It currently employs almost 500 people.

ODW Logistics ODW LTS has been one of Hamilton’s fastest growing employers for years. ODW is a logistics company employing 75 people, and in 2018 it was once again on the Inc. 5000 list. Inc. 5000 recognizes the fastest growing companies based on year over year sales, making the award harder to win each year. ODW has won the award each of the last six years, placing it among the top growing private companies out of more than 7 million in the nation.

Kirsch CPA After receiving historic tax credits in late 2017, developers renovated a downtown Hamilton building into Class A commercial office space. The five-story building was nearly fully leased by the time renovation was completed, proving the high demand for quality office space in Hamilton. Anchor tenant Kirsch CPA moved into its space in May 2018 with plans to grow its 30 person team up to 40 employees over the next several years.

80 Acres Farms Perhaps one of Hamilton’s most exciting recent announcements is the first fully automated indoor farm being built at Hamilton Enterprise Park. 80 Acres Farms broke ground on Phase I of its facility in fall 2018, creating an initial 10,000 square foot facility with later phases expected to add up to 100,000 square feet and 20 new jobs. 80 Acres’ revolutionary technology allows it to grow food pesticide- and GMO-free in urban areas while using fewer resources and nearly eliminating food miles.

7

Small Business A strong small business sector is essential to make any community feel vibrant and to draw in new visitors, and the sheer number of new small businesses shows that our community is on the right track. Hamilton has several distinct downtown shopping districts, each with its own flavor and mix of commercial tenants. With more than 80 new small businesses opened in our community in the last five years, anyone can find something they love!

CBD

Main Street

As Hamilton’s urban core for business and commerce, the Central Business District also hosts a variety of small retailers, restaurants, and storefronts. This district is home to Sara’s House, a clothing and gift shop specializing in original, unique, and repurposed gifts. Made to Love is a non-profit that partners with artists in Haiti, and One Love is a new yoga studio. To grab something sweet, head over to The Almond Sisters Bakery for a hand-made treat or to Henry’s Candy. InsideOut Studio provides an opportunity for artists with disabilities to produce and sell their artworks for a profit.

The Main Street Business District in historic Rossville is home to the first True West location, which sells coffee, sandwiches, and muffins & other baked goods. The Studio is a paint-yourown pottery shop, and Rustic Home and Fleurish Home both sell upcycled goods for the home. Make sure to check out Future Great Comics for your entertainment needs, and Pet Wants for your pet’s needs. Unsung Salvage sells items made from reclaimed wood and t-shirts with cool designs. Part of this district is in one of Hamilton’s Opportunity Zones.

German Village

Pleasant Avenue

German Village is one of Hamilton’s three historic districts and is just north of the Central Business District. German Village boasts Third Street Plaza, a newly-renovated streetscape area capable of hosting outdoor community events. With the recent opening of A Game Knight and the announcement of Pinball Garage, both gaming bars, some are now calling the district “Gaming Village!”

Finally, Hamilton’s public library is a center of learning and fun activities for all ages.

The Pleasant Avenue Business Corridor is the business district of Lindenwald, one of Hamilton’s largest and oldest neighborhoods.

This district, part of which falls into one of Hamilton’s two Opportunity Zones, has a unique character and a large selection of buildings with historic charm. New businesses to the Pleasant Avenue Corridor include A&A Pretty Pets, a pet groomer, and Kensho Traditional Shotokan Karate.

8

Quality

of

Life

RiversEdge at Marcum Park

DORA & CED: Nightlife Amenities

In 2019, RiversEdge at Marcum Park earned national recognition from the American Planning Association (APA) as one of America’s Five Great Public Spaces in 2018. APA’s Great Places in America program recognizes the streets, neighborhoods, and public spaces in the United States demonstrating exceptional character, quality, and planning, all of which are attributes that enrich communities, facilitate economic growth, and inspire others around the country. RiversEdge at Marcum Park is one of the top reasons for Hamilton’s resurgence in recent years. With events such as David Shaw’s Big River Get Down, the Hamilton Flea, and the award-winning free summer concert series, this park attracts tens of thousands of visitors to the urban core every year. Additionally, the Marcum Apartments project was announced as a direct result of Marcum Park itself, and these amenities together have drawn a lot of attention from additional investors and developers.

City of Hamilton undertook two initiatives in 2018 to enhance the nightlife appeal of the city: the Downtown Outdoor Refreshment Area (DORA) and the creation of two Community Entertainment Districts (CED). The DORA allows alcohol-serving establishments to sell adult beverages to go in designated cups. Patrons can then walk around to explore business districts and everything else Hamilton has to offer. There are currently nine locations in Hamilton that sell into the DORA, with at least another seven expected to open in 2019. The CEDs bring 30 new D5J liquor permits to downtown Hamilton, which are available to establishments looking to locate within the boundaries of the CED for an annual cost. The CEDs overlay the DORA district, which extends on both sides of the Great Miami River encompassing German Village, the Central Business District, and Main Street, as well as the site of Spooky Nook Sports Champion Mill.

9

S u s ta i n a b l e E n e r g y The City of Hamilton owns and operates all four major utilities: electric, natural gas, water, and wastewater. As a municipality that has owned and operated its own electric system since 1893, Hamilton has a long history of investing in sustainable energy. With the completion of Meldahl Hydroelectric Facility on the Ohio River in 2016, more than half of the city’s energy comes from a clean, renewable source. Meldahl is the largest hydroelectric facility on the Ohio River, took ten years to complete, and represents an investment of over $500 million

in sustainable electricity. Hamilton is also a majority owner in Greenup Hydroelectric Facility, another sustainable generation asset on the Ohio River. As a result of these efforts, Hamilton’s low-cost power provides its customers with highly competitive and stable electric rates as compared to other electric energy providers in the region. By investing in its utility systems consistently, Hamilton is able to provide the most cost-effective, responsive, and reliable service possible.

Reliable Hamilton’s electric system won the Reliable Public Power Provider (RP3) Diamond designation from the American Public Power Association (APPA) in 2017. Hamilton was one of only 43 utilities nationwide, out of more than 2,000, to receive the honor that year. This award recognizes public power providers for reliability, safety, and system improvement, and lasts for three years.

High Quality The City of Hamilton has some of the best water in the world. It was ranked “Best Tasting Tap Water in the World” at the Berkeley Springs International Water Tasting Competition in both 2010 and 2015. It also won the silver medal in 2014 and the bronze in 2017 among municipal water. Hamilton’s water has also been named “Best of the Best” by the Ohio section of the American Water Works Association four times since 2010.

Easy Due to our high investment in sustainable power generation, the City of Hamilton is able to offer stable and competitive rates that are not subject to the market fluctuations of fossil fuels. Additionally, you will have a single point of contact for all questions and issues, including those related to your utility service. At every step of the process, from initial contact to the final occupancy permit, City staff will ensure that your questions are answered quickly and that issues are addressed before they escalate.

10

N o r t h H a m i lt o n Opportunity Zone Census Tract 147, known locally as Prospect Hill, is adjacent to Hamilton’s urban core on the west side of the Great Miami River. This area is the home to several exciting projects, including Spooky Nook Sports Champion Mill, the revitalization of the Main Street Business District, and investments being made by Kettering Health Network. Ideal projects for this area include mutli-family residential developments, commercial, restaurant, or mixed-use redevelopment, and single-family development.

11

Population: 4,125 Workforce: 2,150 Median household income: $42,292

S p oo k y N oo k S p o r t s Spooky Nook Sports Champion Mill is the single largest redevelopment project in Hamilton’s history.

This former paper mill previously employed thousands of local residents, and was the cornerstone of Hamilton’s economy for over a century. The site, just across the river from downtown Hamilton, was left vacant in 2012 after the mill closed down.

Now, Spooky Nook Sports is redeveloping the site into the nation’s largest indoor sports complex & event center. This $144 million project, many years in the making, broke ground in October 2018 and will be completed in 2021. Once completed, Spooky Nook Sports Champion Mill will have the second largest convention center space in the Tri-State area, along with restaurants and possible brewery, two on-site hotels, a youth sports medical center, daycare and preschool center, fitness club, and more. The project is expected to bring more than a million visitors to Hamilton per year, who are estimated to spend upwards of $40 million in the local economy annually.

Overall, this project will provide a massive economic boost to not only Hamilton, but the entire Greater Cincinnati region. The project has already spurred additional investment by local entrepreneurs and developers, who anticipate seeing huge benefits once the sports and events center is opened.

Fast Facts Investment: $144 million Annual Visitors: More than 1 million Economic Impact: More than $40 million Size of site: 45 acres

12

Spooky Nook Sports Champion Mill will have two hotels onsite with a total of around 230 rooms

The facility will have a 230,000 square foot conference & event center

Other onsite amenities will include a daycare center, orthopedic center, restaurants, fitness club, and more 13

Main Street Investment Opportunities The Main Street Business District is home to a variety of unique buildings with historic charm. With more than 30 new small businesses opened over the past five years, the corridor is now 76% occupied, the highest occupancy in years. Storefronts include up-cycled and home decor shops, boutique clothing and

pet food stores, a make-your-own-candle shop as well as a paintyour-own-pottery studio, a music store, a comic book shop, and much more. Upper-floor residential opportunities abound, and with more than 20 apartments now in this corridor, the demand for more Main Street housing is clear.

226 & 230 Main Mixed Use Property Targeted Commercial Use: Retail, Bar, Restaurant, Office 1st floor - approximately 2,400 sq. ft. commercial 2nd floor - 2 residential units, approximately 1,200 sq. ft. each 3rd floor - 2 residential units, approximately 1,200 sq. ft. each Other Details The first floor is currently a single U-shaped space with a stairwell in the middle, but could be subdivided into two 1,200 sq. ft. spaces. The spaces would share a Main Street entryway with a door to the right & left into each commercial space.

244 Main Commercial Use Property Targeted Commercial Use: Restaurant 244 Main 1st & 2nd floor - approximately 900 sq. ft. each 16 N. D 1st & 2nd floor - approximately 1,100 sq. ft. each Middle lot - approximately 1,100 sq. ft.

Other Details Targeting a single restaurant that utilizes both buildings and the lot between them. Developer could build a new structure on the middle lot to connect the existing buildings or use the space as an outdoor patio area.

316 & 320 Main Vacant Lot Targeted Commercial Use: Retail, Bar, Restaurant, Office Other Details This vacant lot is approximately 6,600 sq. ft. and can be used for new infill development. New construction should include a multi-story mixed-use building with commercial space on the first floor and residential units on the upper floors. Public parking is planned to be added behind any future new construction.

14

North B Street Main Street Business District

North B Street RiversEdge at Marcum Park

15

North B Street has huge development potential. This 1.3 acre riverfront property located at 227 North B Street is both adjacent to the Spooky Nook Sports Champion Mill development and within walking distance of Main Street, German Village, and the Central Business District.

The property is privately owned, but City of Hamilton staff are happy to facilitate a conversation for sale. Nearby bike trails make this property ideal for an outdoor-focused business, or the view of the Great Miami River and downtown Hamilton make it a perfect location for a restaurant.

Hamilton appreciates the challenges of business and helps overcome those challenges...leadership is a strong, serviceoriented team backed by a forward-looking City Council -Sam Beiler, CEO & Owner, Spooky Nook Sports

16

S o u t h H a m i lt o n Opportunity Zone Butler County Census Tract 3 is just south of Hamilton’s urban core on the east side of the Great Miami River. This area is home to Vora Technology Park, Miami University Hamilton, University Commerce Park, part of the Lindenwald neighborhood, and the recently completed South Hamilton Crossing. With a mix of residential, commercial, and industrial areas, as well as brownfield and greenfield sites, this Opportunity Zone would be ideal for any number of developments.

Population: 3,260 Workforce: 1,255 Median household income: $24,708 17

Existing Amenities Pleasant Avenue The Pleasant Avenue Business Corridor is the business district of Lindenwald, one of Hamilton’s largest and oldest neighborhoods.

This district, part of which falls into one of Hamilton’s two Opportunity Zones, has a unique character and a large selection of buildings with historic charm. New businesses to the Pleasant Avenue Corridor include A&A Pretty Pets, a pet groomer, and Kensho Traditional Shotokan Karate.

Miami University Hamilton Miami University Hamilton is a regional campus of Miami University in Oxford, Ohio. This campus offers all the benefits of a Miami education for a fraction of the cost, with more than a dozen bachelor’s degrees offered for a total annual cost of $6,000. With a beautiful campus, excellent facilities, and a strong focus on working with the community, Miami Hamilton is one of our region’s great hidden gems.

Vora Technology Park Home to Barclays, Centergrid, and CyrusOne, Vora Technology Park is a 400,000 square foot Class A office park overlooking the Great Miami River, just minutes from downtown Hamilton. The facility sits on 55 acres featuring beautiful landscaping, including an illuminated pond and several walking trails. With abundant parking, a full-service cafeteria, and 81,000 square feet of office space currently available, it is perfect for a new or growing company.

18

University Commerce Park

South Hamilton Crossing

Recent & Potential Developments South Hamilton Crossing

University Commerce Park

The Jim Blount South Hamilton Crossing Overpass, which celebrated its ribbon cutting in December 2018, was one of Hamilton’s biggest infrastructure projects in years. The overpass provides greater connection between the east and west sides of Hamilton, which opens up a number of development opportunities in an area of Hamilton that was previously more difficult to access quickly. In addition to benefiting companies and people located in the southeastern part of the community, the overpass provides quicker access to University Commerce Park (UCP), Vora Technology Park, and Miami University Hamilton.

University Commerce Park is an area of land adjacent to Miami University Hamilton and Vora Technology Park just south of downtown Hamilton. The City of Hamilton owns 40 acres of the site and ARK Investments owns the remaining 20 acres. ARK plans to create a mixed-use development on its 20 acres anchored by housing for nearby Miami Hamilton and local employees. The City of Hamilton is open to sale or lease of remaining land at the site for commercial, office, or mixed-use projects. Based on existing infrastructure in the area, this location would be ideal for a data center.

19

Redevelopment Areas o f F oc u s The City of Hamilton owns a number of properties throughout this Opportunity Zone that are ideal for redevelopment. Two of Hamilton’s oldest neighborhoods, Second Ward and Lindenwald, fall into the bounds of the Opportunity Zone, and each neighborhood has its own distinct character, amenities, and needs.

Central Avenue is the Second Ward’s business district with a variety of storefronts waiting to be redeveloped, while Symmes Park and Bailey Square offer a variety of housing infill options.

The Pleasant Avenue Business Corridor is Lindenwald’s business district, an up-and-coming area with three new small businesses opened in the last six months.

Second Ward

Central Avenue Bailey Square Pleasant Avenue Business Corridor

Lindenwald 20

Symmes Park

Incentives & Financing Job Creation Tax Credit (JCTC)

The State of Ohio offers a refundable and performance-based tax credit calculated as a percent of created payroll and applied toward the company’s commercial activity tax liability. Should the amount of the credit exceed the company’s commercial activity tax liability for any given year, the difference is refunded.

Companies creating at least 10 jobs (within three years) with a minimum annual payroll of $660,000 and that pay at least 150 percent of the federal minimum wage are eligible for the credit; however, they must apply for the credit before committing to a project. The Ohio Tax Credit Authority must approve applicants before hiring begins.

Enterprise Zone The City of Hamilton may grant property tax incentives to enterprises that agree to establish, expand, renovate, or occupy a facility within a designated enterprise zone and agree to retain or create employment at the project’s location. A business must finalize an agreement prior to project commencement.

The maximum allowable benefit to be extended to qualifying companies that does not require local school board approval is a 75%, 10-year real property tax exemption. Real property tax exemptions greater than 75%, 10 years, require local school board approval.

Sales Tax Exemption The Butler County Port Authority has the legal statutory authority to own/lease or finance fixed assets to private and public corporations as well as not-for-profit agencies and partnerships.

The Port as the Owner/Lessor is exempt from sales taxes associated with the construction materials for projects.

Utility Agreement With municipally owned and operated utilities, the City of Hamilton is committed to working with its companies from the beginning to ensure that service to the site is ample, and will explore ways to control and lower utility costs as the business grows.

21

Community Reinvestment Area

The Community Reinvestment Area (CRA) provides property owners a tax exemption for investing in property improvements.

The goal of the CRA is to incentivize revitalization where barriers to investment exist. The CRA tax exemption will be available for both residential and commercial development and can be utilized throughout Hamilton. Commercial projects include new construction, expansion, building improvements, and commercial or industrial developments. Residential projects must have at least $5,000 investment, can be used for renovation, and have a ten year abatement period. Applications will be considered on a case-by-case basis for investment dollar and job creation potential. Final exemption value is determined by the Butler County Auditor.

PACE Financing Property Assessed Clean Energy (PACE) financing is a dynamic and rapidly growing mechanism to finance energy efficiency and renewable energy projects in Ohio. Through PACE, special assessments are used to repay and secure upfront funding for improvements that save or generate energy. PACE financing leverages the security of special assessments to open up new sources of capital, allow for better financing terms, and incentivize development in an economical and environmentally conscious way. PACE requires minimal upfront investment from a property owner. Local governments can use PACE as an incentive tool without foregoing tax revenues or pledging its credit.

Tax Increment Financing (TIF)

Tax Increment Financing (TIF) is an economic development mechanism available to local governments in Ohio to finance public infrastructure improvements. A TIF works by locking in the taxable worth of real property at the value it holds at the time the authorizing legislation was approved. Payments derived from the increased assessed value of any improvement to real property beyond that amount are directed towards a separate fund to finance the construction of public infrastructure defined within the TIF legislation. Hamilton has enacted legislation to utilize TIF financing and often works with potential development to allow parcels to benefit from TIF financing.

Connect With Us

Joshua Smith City Manager

513-785-7002 joshua.smith@hamilton-oh.gov

Jody Gunderson D i r e c t o r, E c o n o m i c Development

513-785-7073 jody.gunderson@hamilton-oh.gov

Mallory Greenham Small Business Development Specialist

513-785-7096 mallory.greenham@hamilton-oh.gov