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Industrial
Revenue Bonds
(Back)
Industrial
Revenue Bond financing is a method of financing in which the
City of Fort Wayne can assist private business development and
expansion by issuing low-interest tax-exempt bonds. The
low-interest feature of industrial revenue bond financing is
attributed to the fact that the interest on the bonds is exempt
from federal and state income taxes.
All Industrial
Revenue Bond Programs must be approved against the State of
Indiana's "pooled" allocation through the Indiana
Development Finance Authority:
Tax
Exempt Bonds
THE
PROGRAM
Legislation
enacted by the State of Indiana authorized the creation of economic development commissions and the issuance of
Industrial Revenue Bonds. The Fort Wayne Economic Development
Commission (EDC) was established in 1972 with the authority to
issue tax exempt revenue bonds to assist industrial and
commercial development. Operating under Bylaws
in accordance with the Indiana Code, the EDC
Board consists of five members with staggered
terms.
The
maximum bond amount available is $10 million per project, with
maturity as long as 40 years. Interest rates from 65% to 75% of
the prime market rate are anticipated. The actual rate is
negotiated between the buyer and the seller of the bonds.
Bonds are
available for 100% financing of the project, with no
equity injection required. In certain cases, bonds can
be used in conjunction with tax abatements.
ELIGIBLE
EXPENSES
|
Land
acquisition |
Site
preparation |
|
Building
acquisition |
Machinery |
|
Equipment |
Construction |
|
Renovation |
Restoration |
|
Remodeling |
Preliminary
expenses - e.g. legal, architectural, etc. (subject
to percentage limitation) |
ELIGIBLE
PROJECTS
Bonds
may be used for the purchase, construction, renovation or
improvement of:
-
Manufacturing
plants and ancillary facilities
-
Pollution
control facilities
-
501(c)(3)
organization bonds
-
Qualified
residential rental projects
ADVANTAGES
THE
APPLICATION PROCESS
After
completing an application obtained from the Department of
Economic Development, the Fort Wayne EDC holds a public hearing
and makes a recommendation to City Council. City Council then
adopts an inducement resolution. Final approval and issuance of
the bonds may occur within 30-60 days. Per Commission policy
Inducement Resolutions are granted for a maximum of 180 days
before final approval is requested.
CLICK HERE
FOR 2004 SCHEDULE OF
EDC MEETINGS AND APPLICATION SUBMISSION DATES.
THE
STEPS IN THE APPLICATION PROCESS
-
Submit
Application to Department of Economic Development
Submit
Application to the Indiana Development Finance Authority
Legal Notice
Published (14 days before EDC meeting)
Inducement
introduced to City Council (second and fourth Tuesdays of each
month)
EDC passes
Inducement Resolution
City Council
passes Inducement Resolution (second or fourth Tuesday of the
month)
Publication
of Legal Notice (10 days before EDC meeting)
EDC passes
Final Resolution
City Council
Approves Final Resolution (second or fourth Tuesday of the
month)
Closing
PROJECT
REVIEW
Due to the
expenses incurred by the City of Fort Wayne during the bond
process, a fee of 50 cents for every $1,000 of the bond issue is
required. One-half is paid at the time of the application, while
the remainder is due at closing. This fee is non-refundable.
The Department
of Economic Development can help you meet your technology,
job-training, or financing needs. There are numerous
low-cost and no-cost services available to businesses through
various local, state, and federal agencies.
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last
updated:
12/06/2004
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