Port Authority uses “impact investing” to drive industrial revitalization


The Port of Greater Cincinnati Development Authority has raised $8.8 million from social impact investments to fund the acquisition of underutilized urban industrial sites to be repositioned for advanced manufacturing. This unique combination of “locavesting” and impact investing is a groundbreaking and innovative approach in achieving sustainable growth for Hamilton County. The Patient Capital Note Structure is the first time that an impact investment has been used to facilitate manufacturing. This financing tool has been a source of significant national recognition to the Port Authority.



Like many communities, Hamilton County has a nationally attractive set of infrastructure assets to offer companies interested in locating in or expanding within the region:

  • Central location along the Ohio River and the I‐75 freight corridor
  • Intermodal transportation infrastructure
  • Extensive supplies of reasonably priced water and power
  • Robust supply chain network

The major reasons we do not have a competitive eligible site is not amenities. The reasons we do not have competitive sites are:

(1) Size – Companies are searching for sites of 20, 30, 50 or more acres, and we simply do not have available inventory.
(2) Timing – Companies are looking for sites that are development ready today. As a county that is almost entirely built out, no site is ready for development today unless someone has spent many months and a significant sum of money removing what was there and the effects of previous users.

Investment into blighted urban industrial properties is not financially feasible for private sector developers and lenders. This lack of investment continues to perpetuate the underemployment of our workforce, which diminishes returns to the local tax base and increases the challenge of attracting targeted industries to our region. Our region is losing out on opportunities to attract new business and investment.

As the Port of Greater Cincinnati Development Authority – we believe it is clear we should have a role to play in solving this economic development real estate problem.  Historically, the Port Authority has improved a number of former industrial sites or brownfields.  In fact, we have been really successful at this. In partnership with private sector land owners, from 2001 through 2010, we cleaned up over a dozen sites, at a total cost of $35 million, $17 million of which came from the public sector.

Now, as we consider the challenge of a lack of large, development-ready sites, our Board of Directors stepped in, approving a full-blown comprehensive strategic approach. In 2015, the Board set an audacious goal: assemble 500 acres of publicly owned industrial land – and get it acquired, repositioned, and on the market in 7 years.

With this plan, the Port Authority has moved from the “transactional” to the “transformational” and developed this impact metric: 500 = 8,000 = 565 million. Five hundred acres = 8,000 new jobs = $565 million in new tax revenue.


Impact investing brings private capital to the table to help solve our community’s greatest problems. It links the social consciousness of philanthropy with the market principles of business.



So, how do we get the money to buy these sites? As a public agency, the typical approach would be grants from various levels of government. But the local governments we contacted, while supportive of the initiative and willing to contribute financially to site remediation, did not want to pay for acquisition. And so we began to consider strategies to attract private capital to share in the costs of implementing this transformational strategy. And, because we needed the private capital to acquire the sites, it would need it to come first.

Private capital is raised by or for private sector developers and that private capital is used to implement that private sector developer’s vision. But the Port Authority was looking for was a way to raise private capital to support public ownership of the property – to implement our vision.
Impact investing brings private capital to the table to help solve our community’s greatest problems.

Impact investing links the social consciousness of philanthropy with the market principles of business ‐ it generates measurable and beneficial social impacts alongside financial returns.

The practice of impact investment is defined by four core characteristics:

  • Financial return expectations – At a minimum, investments are expected to return capital. Earnings can be at market or below market. Notice that impact investment does not require a below market return. It can, but there are plenty of market rate impact investments as well.
  • Intentionality – The investor must intend to have a positive social impact through the investment.
  • Range of asset classes – Investments can be structured across asset classes from debt to equity and everything in‐between.
  • Measurement – Obligation to measure and report on the social impact performance


This seemed like a possible solution. We had well‐located soon to be vacant land. That had value.  Not the kind of value that a commercial bank or traditional public finance investor likes, but some value.

And we had a vision for impact, if not proof of impact: the Patient Capital Note:

  • 5 year “bond anticipation” note, bullet maturity
  • Accredited Investors only
  • Use of proceeds is limited to capital projects related to site acquisition and repositioning, but is otherwise broad and expansive
  • Pooled mortgage security on all sites
  • 15 bps per year in interest, taxable, payable at maturity (Port Authority would pledge non‐tax revenues)

Two items that make this really unique:

  • One financial covenant: Amounts invested cannot exceed the expected sale values (site specific or portfolio basis);
  • Note “converts” to a 5 year Bond if all property is not sold within the 5 year window.


To date, the Port Authority has sold $8.8 million of Patient Capital Notes. Who bought these notes? Locavestors.  Locavesting, or “local investing,” is built around the idea that a small shift in investment away from global stock exchanges and multinationals toward locally owned enterprises can reap enormous economic and social benefits for individuals and their communities.

When we began we didn’t know any impact investors or  locavestors. We had to start by educating the broader community on the value of investing locally and the idea that they might trade off social impact for financial return. Now, we have 10 investors – and they range from the large corporations, to large foundations, to mid‐sized corporates interested in the revitalization of manufacturing, to high net worth individuals.



In 2016, the Port Authority purchased the first 75-acres of the targeted 500-acres using Patient Capital Notes.  Boldly launching this strategy has created the opportunity to diversify and grow our economy, and capture our fair share of family‐supporting jobs.

Site selectors have told REDI Cincinnati that the #1 most preferred owner of a site is the public sector. In large part because public sector owners do not act like real estate speculators and they are aligned with the business on economic development objectives.

It was clear that implementing this strategy would require an enormous sum of money. And that meant we would need both public and private capital to invest in this work. Therefore, we needed to prioritize making the business case for investment.

When it comes to commercial and industrial property, the challenge in Cincinnati is not blight, abandonment or foreclosure, it is underutilization. The challenge is not “find a site” but is instead – how do we disrupt the market and transform property back to its highest and best use. That means fair market purchase, often in a competitive context.

And how have we used these funds to drive our vision?

In 2016, the Port Authority acquired 75 industrial acres, including a 56-acre site in Amberley Village that was the former headquarters of Gibson Greeting Cards and the 19-acre former Cincinnati Gardens site in the City of Cincinnati neighborhood of Bond Hill.

The Gibson Greeting site, located at 2100 Section Road, is a former corporate headquarters turned warehouse and light assembly. At its height, over 900 people were employed at the site. When we acquired the property, the most recent tenant had had 75 jobs, mostly in the warehouse and distribution space, and was paying under $1.20 a square foot.

The second site we acquired, the former Cincinnati Gardens site, is a functionally obsolete arena and performance venue with few jobs – but situated on 19 acres in close proximity to the TechSolve advanced manufacturing park.



  1. The Port’s fundamental change from being transactional to transformational is disrupting the market and delivering obsolete industrial property back to its highest and best use;
  2. Locavesting taps into shared community values around rebuilding sustainable communities by investing in places within 50 miles of where you live.


“Our region has experienced incredible accomplishment in recent years, and we firmly believe the Port Authority led work to increase the inventory of sites ready for immediate development by end users will accelerate the pace of progress and build a solid economic development platform that will serve us well in the future.”

– Jill P. Meyer, President & CEO, Cincinnati USA Regional Chamber