COLUMBUS, Ohio — A $700 million renewal of Ohio Third Frontier — the 10-year, $1.6 billion project to re-energize Ohio’s economy by investing in emerging technologies — is on its way to the May 4 ballot, thanks to bipartisan support of a compromise resolution by state Senate and House members on Wednesday.
Gov. Ted Strickland “is pleased to see that all sides have come together to reach a bipartisan agreement to renew the Third Frontier,” spokeswoman Amanda Wurst said. “This bipartisan agreement is the strongest validation of the successful economic development program that has already created tens of thousands of jobs. This is a significant investment in Ohio’s economy and cornerstone of Ohio’s economic growth strategy.”
The Ohio Senate voted 30-2 to ask voters to extend Third Frontier — slated to end in fiscal 2012 — for four more years with a bond issue of $700 million, said Senate spokeswoman Maggie Ostrowski. The Ohio House passed the joint resolution 83-14, said House spokesman Keary McCarthy.
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The resolution was filed with Ohio Secretary of State Jennifer Brunner, meeting the Feb. 3 deadline to make it onto the May ballot. However, the Ohio Ballot Board must review the language of the resolution before it is certified for the ballot, said Jeff Ortega, spokesman for the secretary of state’s office. That review likely will occur on Feb. 9, Ortega said.
On Wednesday, Third Frontier stakeholders celebrated the passage of the ballot initiative, which not only would renew funding for the project, but raise its annual grant-making ability to $175 million from about $160 million a year. In addition, the bond funding would not be subject to state budgetary issues, as is two-thirds of Third Frontier’s current budget.
“I applaud Gov. Strickland and the Ohio General Assembly for this powerful endorsement of the Ohio Third Frontier,” Eric Fingerhut, chancellor of the Ohio Board of Regents and Third Frontier Commission member, said in a statement. “Even during a difficult financial period, this commitment to not only renew but expand the program speaks clearly of Ohio Third Frontier’s proven track record of rapid, sustained job creation.”
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The effort to renew the state’s most ambitious economic development project began late last year when two legislators proposed issuing $1 billion in bonds to fund an additional five years. Third Frontier invests in technology research, development, commercialization and entrepreneurship in five industries. Two weeks ago, the Ohio House trimmed that to a $950 million bond issue. Last week, the Ohio Senate halved the original bond issue to $500 million.
“Today, we reached bipartisan agreement to continue a program that has a proven record of creating jobs and which wisely harnesses the talents of one of our state’s greatest assets — our state colleges and universities,” said Senate President Bill Harris, an Ashland Republican, in a written statement.
Third Frontier already is succeeding, even though the project is a long-term investment. By one independent analysis, the project created an economic impact of $6.6 billion, 41,300 jobs and a return on the state’s investment of 10-to-1 in its first seven years. A recent analysis led by business people who sit on the Third Frontier’s commission and advisory board concluded the project likely would pay back taxpayers by 2014 — with just sales and payroll taxes generated by businesses and industries it helped.
The resolution vote “sends a very strong signal to the technology community that Ohio is committed to the success of this industry,” said Baiju Shah, president and chief executive of BioEnterprise, the bioscience venture developer in Northeast Ohio. “Obviously, we still have to make the case to the voters. “I’m convinced that voters will support extending the Third Frontier program.”
Created in 2002 by Gov. Bob Taft, Third Frontier already has been vetted by Ohio voters. In 2005, voters approved issuing $500 million in bonds to raise money to support the program — after turning down a similar bond issue in 2003. Supporters have been quietly raising money, forming a committee and planning a strategy for a voter campaign on the ballot initiative, said Dorothy Baunach, special adviser on the Third Frontier to the Ohio Business Roundtable.
The $700 million compromise “was what we could afford,” and spending that money within four years instead of five puts it into the state’s struggling economy faster, said Lisa Patt-McDaniel (pdf), director of the Ohio Department of Development. Patt-McDaniel was appointed development director and Third Frontier commissioner last year.
“Serving on the commission, the more convinced I am that this is an investment in our future,” she said. “These industries and projects we’re investing in are where we’re seeing the most job growth. We’re investing in projects from research and commercialization all the way through to mass production.”
Tom Waltermire, chief executive of company attraction organization Team NEO and a Third Frontier Advisory Board member, was hoping for $200 million a year to “do more for Ohio. Nonetheless, $175 per year is still a strong program that will allow Ohio to make more much-needed progress in transforming its economy and creating attractive jobs for its people,” Waltermire said.
If Third Frontier is renewed by voters, “Ohio stands to pull into a leadership position in its investment in catalyzing technology and in innovation-related economic development” said Rebecca Bagley, executive director of Nortech, the technology economy development organization in Cleveland.
A renewal could “increase the level of support for entrepreneurs and start-up companies in Ohio,” said Ray Leach, chief executive of JumpStart Inc., the venture developer in Northeast Ohio that receives a significant part of its funding from Third Frontier. “With national economists forecasting that a significant percentage of net new job growth in the U.S. must come from companies that are five years old or younger, providing entrepreneurs and young companies with the resources they need to grow is one of the best ways to create jobs for Ohioans.”
Bob Schmidt, chairman of Cleveland Medical Devices, which has received several Third Frontier grants to commercialize its medical devices, said now is the time to invest in the state’s economy. “Having $175 million a year available for new business opportunities is a good thing to do in these tight economic times,” Schmidt said.
