Greater Cleveland has gained some major employers in its transition from an economy that was dependent on manufacturing. But that doesn’t mean it has given up on manufacturing. It does mean that it needs more tools to attract employers of all kinds and in existing communities that the region’s labor pool can access (Google). CLICK IMAGES TO ENLARGE THEM.
Port creates new Economic Growth Fund
Once upon a time, Cleveland was the nation’s center of industrial innovation and small, new-start businesses that resulted from it. Perhaps you’ve heard of a few of them — Standard Oil, General Electric Lighting, Sherwin-Williams, TRW, Cleveland-Cliffs, Lincoln Electric, Parker Hannifin to name a few.
They grew into major employers thanks not only to capital investment, but to investors who were willing to take a chance on as-yet unproven technologies and processes that might change the world or at least a part of it.
And that’s missing for many young potential job-creators — enough of them that the Port of Cleveland’s board of directors voted today to help remedy it by launching a new Economic Growth Fund.
Port officials described this fund as a financing tool as expanding the Port’s ability to support business attraction, manufacturing, housing, site readiness, and other catalytic efforts across Northeast Ohio.
The new fund complements the Port’s nationally recognized A- rated Bond Fund by providing targeted credit support for projects that generate significant economic and community benefits but fall outside the Port’s traditional investment-grade financing criteria.
The new Economic Growth Fund will not just be financing new jobs but filling a gap in financing to build more competitive housing close to jobs to improve access to those jobs (Harrison Whittaker).
Port leaders say the initiative responds to a growing need for capital across Northeast Ohio as communities pursue projects that create jobs, attract employers and redevelop underutilized properties but face financing challenges because of limited operating history, appraisal gaps or other market constraints.
“At the Port, we’re focused on helping move projects forward before opportunities pass us by,” said Jeff Epstein, President and CEO of the Port of Cleveland, he said in a written statement.
“The Economic Growth Fund gives us another way to proactively help communities compete for investment, prepare sites for new employers, and unlock projects that otherwise might not happen,” he added. “It’s about giving Northeast Ohio the tools to win more opportunities, create more jobs, and grow our economy.”
“Cleveland’s ability to compete depends on having the right tools to move transformational projects from vision to reality,” said Cleveland Mayor Justin Bibb.
“The Port’s new Economic Growth Fund strengthens our regional economic development toolbox by helping unlock investment that creates lasting opportunity for our residents,” Bibb noted. “This is the kind of partnership that helps our region compete for jobs, attract private investment, and build a stronger economy for the future.”
The location investment decisions of employers leads the population and depopulation of those locations. The Opportunity Corridor was once one of Cleveland’s most densely populated neighborhoods because employers first chose to locate here. And when the jobs left, so did the population (Google).
The Port will initially capitalize the fund with a $3 million investment from its own balance sheet and intends to grow the fund through partnerships with financial institutions, philanthropic organizations, and other mission-driven investors.
Once fully capitalized at a target of $10 million, Port officials estimate the fund could leverage between $30 million and $50 million in financing capacity for eligible projects.
The Economic Growth Fund is designed to revolve over time. As participating projects repay their financing, capital can be redeployed to future projects, creating a permanent economic development resource for the region.
Eligible projects include business attraction, manufacturing expansion, industrial redevelopment, site readiness, housing, public infrastructure, minority business growth, neighborhood scale mixed-use development, waterfront revitalization and transit-oriented development.
“Smart, creative capital for promising but nontraditional deals can unlock opportunities for new industries, new companies, and civic prosperity,” said Brad Whitehead, managing director of the Site Readiness for Good Jobs Fund.
Employers stay away from problematic sites like the old National Acme plant in Glenville even if they’re surrounded by an underutilized supply of labor. They’ll favor clean-and-green lands at the urban fringe and lead the movement of labor to them — unless the urban lands are expensively cleared and cleaned (NEOtrans).
“When combined with shovel-ready sites and a prepared work force, the Port’s Economic Growth Fund will help Cleveland realize its full economic potential,” Whitehead continued.
All projects supported through the Economic Growth Fund will be reviewed by the Port through its existing underwriting and Board approval process. Port officials described that process as “rigorous.”
In addition to financial analysis, projects will be evaluated based on their economic impact, including job creation, private investment leveraged, payroll growth, tax base expansion, and alignment with regional priorities.
“This investment transforms visionary concepts into tangible realities for our community,” said Cuyahoga County Executive Chris Ronayne.
Even old factories like the American Sugar Refining on Carnegie Avenue that are in good condition with few environmental issues are often unmarketable to employers that want to build-to-suit their own contemporary floor layouts (Google).
“Through the Economic Growth Fund, the Port will secure a powerful driver to expand housing, attract businesses, and create jobs,” Ronayne added. “By delivering these critical projects, we are unlocking new opportunities for our residents and building a more resilient, prosperous Cuyahoga County.”
The fund is structured to strengthen the Port’s existing Bond Fund. By creating a dedicated reserve for eligible projects, the Economic Growth Fund expands financing capacity while preserving the Bond Fund’s investment-grade credit quality.
Following Thursday’s approval, the Port will begin establishing the fund through a supplemental bond indenture and work with its financial advisor, bond counsel and rating agencies to finalize the structure before financing its first projects.
The Economic Growth Fund reflects the Port’s expanding role as a regional economic development partner – providing not only access to capital, but also innovative financial tools that help communities compete for jobs, investment, and long-term economic growth.
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