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Bloomberg - Ohio Will Use $1.4 Billion from Revenue Bond Sale for Development Agency

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Location: Unknown

By Mark Niquette

Ohio (STOOH1) will use about $1.4 billion from the sale of long-term bonds backed by future liquor profits to pay for an agency created to keep and attract jobs, said Tim Keen, the state budget director.

The state is transferring its wholesale liquor-distribution enterprise for 25 years to JobsOhio, a private, nonprofit entity the Legislature brought into being last year at the behest of Republican Governor John
Kasich. Ohio doesn't have government- run liquor stores; it buys and distributes alcohol to retailers.

"This model that we are creating in the state of Ohio is one that's going to be studied across the country," Kasich said during the call. "If we do it right, it will be one that will be envied."

Liquor profits averaged $221.9 million annually from fiscal 2008 to 2010, the Ohio Department of Commerce has said. The state projects about $100 million will be available each year for job creation
and retention after debt service on new bonds, said Mark Kvamme, JobsOhio's interim chief investment
officer. That would be larger than similar arrangements in Michigan, Kentucky and California, and would
be one of the biggest such dedicated funding sources in the U.S., the International Economic Development Council in Washington said last year.

Bond Sale Coming

JobsOhio will pay the state $500 million for the transfer and use an estimated $750 million to pay off existing debt backed by the liquor money plus $150 million for economic revitalization projects, Keen told reporters in a conference call today.

The agency expects to issue revenue bonds during the first quarter, said Kvamme, a former Silicon Valley
venture capitalist. He said a final amount of the issuance is being determined.

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