Allocation of Recovery Zone Facility Bonds
Placer County is requesting applications from businesses interested in obtaining low-interest, tax-exempt financing through a federal economic-stimulus program.
The county has been allocated $6.8 million from the Recovery Zone Facility Bond Program, which was created through the American Recovery & Reinvestment Act of 2009.
Placer County’s allocation will be used to provide financing to one or two businesses located in the county. Generally, the federal bond program is targeted at businesses requesting at least $3 million in financing.
Bond proceeds can be used by businesses for either:
- Construction projects that call for building new facilities or upgrading existing facilities or
- Purchasing new equipment for business-development activities.
To be eligible, projects in the first category must be able to start construction within the next two years. Projects will be considered shovel-ready if no major entitlement, permitting or other obstacles stand in the way of construction.
Bond proceeds may also be used to finance the purchase of recently completed buildings that have not previously been occupied.
Undeveloped land, residential rental properties and some other types of property do not qualify for funding through the program. Federal guidelines also do not allow participation by some types of projects, including golf courses and casinos. Refinancing of existing debt also is not an eligible activity.
To qualify for financing through the program, projects must demonstrate potential for near-term job creation and long-term regional economic benefits. Borrowers must be creditworthy and demonstrate their ability to repay the proposed debt.
The Board of Supervisors cleared the way for Placer County to receive its $6.8 million allocation by voting unanimously Nov. 3 to declare the entire county a ‘recovery zone.’ Placer County’s participation in the bond program is a joint effort by the Office of Economic Development and Redevelopment Agency.
‘Financing through the program may be the most-competitive option available because it provides a method to access private capital markets at tax-exempt rates,’ said Chairman Rocky Rockholm of the Placer County Board of Supervisors.
Interested parties are encouraged to submit project summaries. Each application should include:
- A description of the project and its current status, including entitlements;
- An outline of project costs and a proposed project timeline;
- A detailed description of the business and the products or services it provides; and
- A brief description of the economic impact the project will have on the community, including the number and types of jobs it will create.
The deadline for submitting applications is 4 p.m. Friday, December 18, 2009.
Under the program, decisions about which projects to fund must be made early next year and projects should be fully funded by 2013.
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