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City attempts to get GRIP on state grants
(by Sue Reid - November 12, 2009)
City attempts to get GRIP on state grants
By SUE REID
An ordinance rescinding the Growth and Revitalization Program agreement with a Solon business led one councilman to encourage the city to seek an opinion from the Ohio Attorney General's Office.
Councilman Edward K. Suit said he objected to revoking the agreement with Hartville Professional Center Inc., which was offered a grant of $60,000 by the city and is revitalizing a vacant building on Solon Road that once housed the Solon Athletic Club.
"I think Hartville is entitled to the GRIP grant under Ohio law," Ms. Suit said.
The developer declined the grant due to additional costs associated with having to pay prevailing wage. Those costs would outweigh the benefit from the grant, according to representatives for the developer.
This issue stemmed from new policy guidelines put in place last October from the Ohio Department of Commerce, which oversees prevailing wage. They stated that not only public projects, but private projects that received public funding, would be subject to prevailing wage.
Following this ruling, the city began incorporating into its GRIP agreements that if a business would accept the grant funding, it would be responsible for reporting to the state prevailing wage and would have to submit proof of it to the city before the grant is issued, Peggy Weil-Dorfman, Solon's director of economic development, said.
Ms. Weil-Dorfman said that based on a recent Supreme Court ruling, the Ohio Department of Commerce revised its guidelines stating if a grant is related to a private construction project, then prevailing wage still needed to be paid.
The Ohio Department of Commerce also issued an opinion on this directly to Hartville Professional Centre Inc. and advised it would have to pay the prevailing wage, Ms. Weil-Dorfman said.
Although the decision said private projects do not have to pay prevailing wage if they are not related to construction, Ms. Weil-Dorfman said, there was some gray area to the decision.
Mr. Suit requested the planning department contact the Ohio Attorney General's Office to determine if the city is in agreement with the Ohio Department of Commerce that construction-related projects on private property still have to pay prevailing wage. City Council also tabled the ordinance in order to obtain this information.
Ms. Weil-Dorfman said the city has contacted the Ohio Attorney General's Office and hopes to get a response back.
Because of the fact that GRIP grants are clearly tied to construction, this ruling "emasculates" the program, Mr. Suit said.
"The real question is, is this an accurate interpretation by the department of commerce to still require the prevailing wage be paid for construction-related projects in light of the recent Supreme Court ruling?" Ms. Weil-Dorfman said.
Ms. Weil-Dorfman also said that, in general, every little bit helps the bottom line of a project in regards to the funding.
"Very often, when we're talking to a property owner about upgrades, the GRIP grant can make the difference for better upgrades," she said. "We have a vision of what we want the city to look like. If the grip money can help convince a property owner to upgrade a building more than they might have otherwise, then "it helps to further the city's goals."
Although a project may move forward with or without the grant, it might not be the same project without the additional funding. "Our applicants need to weigh that in light of the policy," Ms. Weil-Dorfman said.
She said the Hartville project would have been an example of a "perfect use" of GRIP funds and what the city had envisioned in creating the program. The developer is taking a vacant building and converting it to an office use, bringing in a new tenant and totally renovating the building, she said.
The purpose of the GRIP program, which the city created in June 2006 is to encourage the redevelopment or improvements to city buildings or in some cases the demolition of obsolete or either fully or partially vacant industrial offices and commercial buildings. The incentive program is meant to assist the property owner to make those upgrades through a one-time grant, Ms. Weil-Dorfman said.
The grant, which is graded on a point system by the city's enterprise zone committee, could be anywhere from $10,000 to $70,000. Since the program's inception, 10 agreements have been completed with local property owners and payments have been made to seven in the total amount of $338,935. The others are still in progress, Ms. Weil-Dorfman said.
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