December 16, 2021

Port Authority finances $11M of Bitwise technology center

The Toledo-Lucas County Port Authority board voted Thursday to loan $11 million to support the Toledo Innovation Center, a partnership between ProMedica and Bitwise in creating new technology business and training in downtown Toledo.

The port board’s action is part of a complicated $28.3 million package to support the conversion of a vacant former post office and later Toledo Public Schools building into an incubator site for start-up technology companies, offering low-income residents training and open work space for innovators.

Board member John Szuch, who chairs the board’s finance and development committee, said the loan is secured by collateral and is further guaranteed for the first seven years by ProMedica and Bitwise and after that by Bitwise only.

The financing is designed to help the project be exempt from sales and use taxes that might otherwise apply to the purchase of building and construction materials and also to obtain new markets tax credit and historic tax credits.

“We put a lot of transactions together in order to obtain some of these [tax] credits and other things. It probably is the most complicated structure of any transaction that I can remember the Port Authority being involved with,” Mr. Szuch said.

He called it a “major, major transformative project for the city of Toledo.”

Three of the 13 board members abstained because their employers were involved — Sharon Speyer, regional president of Huntington National Bank; Robin Whitney, ProMedica’s chief of strategic planning and real estate, and Kim Cutcher, executive director of LISC Toledo. The measure then passed with a bare majority of seven votes because three members were absent.

This is the second time in as many months that the port authority board has stepped up to finance a ProMedica project. In October, the port board voted to acquire ProMedica’s parking garage near Promenade Park for about $27 million, freeing up money ProMedica needed to make debt payments.

The port authority’s $11 million in taxable revenue bonds is part of a total financing package of $28.3 million, with other financing from the Development Finance Authority of Summit County and JobsOhio, among others. The project’s total budget is $38 million.

The board also approved a resolution to make the Port Authority the leaseholder of the project at 1300 Jefferson Ave., but didn’t indicate the cost, if any.

The 110-year-old vacant former Jefferson Center, which housed vocational rehabilitation programs for Toledo Public Schools, is set to be transformed by Bitwise Toledo. 

Bitwise plans to bring nearly 400 full-time jobs, train diverse populations for high-paying jobs in the technology sector, and generate more than $20 million in new annual payroll. The company also plans to use the stately-looking landmark building as a civic center of sorts that will benefit the surrounding community.

According to Ms. Whitney, approval from the port authority is the last piece needed to close financing and move the project forward. Once finalized in January, construction could begin in February, she added.

Randy Oostra, ProMedica president and chief executive officer, said that getting behind the project supports the “anchor-institution concept” in which a nonprofit uses its “balance sheet for the greater good.”

“We think that this has the potential to really add an element to the region that we have not had to this extent before, so we are excited about that,” he said.

He credited the cooperative effort from several entities that has gotten this project off the ground.  

“The real work to make cities better and to make communities better is neighborhood work,” he said. “The potential to do something interesting for our neighborhood and provide an opportunity that traditionally aren’t in these kinds of careers, is very, very positive.”

Bitwise will open up temporary space early next year and they are recruiting new students for their training classes. The first class is underway in an online format.

As part of a social determinants of health initiative, ProMedica has focused efforts on other neighborhood projects within the Jefferson Center area including the addition of a grocery store, teaching kitchen and financial counseling, and workforce housing to help lift people, Ms. Whitney said.

“The idea is that if you lift social issues, you will improve their health,” she said.

Built as Toledo’s central post office in 1911, the structure was purchased by the nonprofit health care system in 2019 for $1.2 million.

Blade staff writer Nancy Gagnet contributed to this report.