$1.4 Billion From Development Agency’s Bond Sale
organization created to keep and attract jobs will lease Ohio
liquor-distribution enterprise using $1.4 billion from long-term bonds
by its profits, said Tim Keen, the state budget director.
is transferring its wholesale liquor enterprise for 25 years to
private, nonprofit entity the Legislature brought into being last year
behest of Republican Governor John Kasich. Ohio doesn’t have
liquor stores; it buys and distributes alcohol to retailers.
that we are creating in the state of Ohio is one that’s going to be
across the country,” Kasich said during a conference call with
“If we do it right, it will be one that will be envied.”
profits averaged $221.9 million annually from fiscal 2008 to 2010, the
Department of Commerce has said. The state projects about $100 million
available each year for job creation and retention after debt service
bonds, said Mark Kvamme, JobsOhio’s interim chief investment officer.
would be larger than similar arrangements in Michigan, Kentucky and
and would be one of the biggest such dedicated funding sources in the
International Economic Development Council in Washington said last year.
will pay the state $500 million for the transfer plus an estimated $750
to pay off existing debt backed by the liquor money and $150 million
economic revitalization projects, Keen told reporters in a conference
will make additional deferred payments equal to 75 percent of all
liquor-profit growth above 3 percent, as well as $43 million per year
economic revitalization projects, according to a fact sheet from
expects to issue revenue bonds during the first quarter, said Kvamme, a
Silicon Valley venture capitalist. He said a final amount of the
will contract with the Ohio Department of Commerce to continue
liquor distribution and with the state’s existing development
provide job-creation work, Kvamme said.
entity will have a dedicated funding source for development projects
subject to variations in state funding from year to year, and it and
able to complete deals more quickly and creatively than a state agency
Kvamme has said.
the arrangement, including Good Jobs First, a Washington-based center
tracks economic-development deals, have said private entities that seek
government’s behalf lack accountability and transparency.
led by a nine-director board appointed by Kasich, including Bob
president and chief executive of Cincinnati-based Procter &
Gary R. Heminger, president and chief executive of Marathon Petroleum
(MPC), based in Findlay, Ohio; and Steven A. Davis, chief executive
Bob Evans Farms Inc. (BOBE) in Columbus.
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