Dane County Awarded Recovery Zone Bonds To Help Local Businesses Create Jobs
January 25, 2010
Joshua Wescott, Office of the County Executive (608) 267-8823 or cell (608) 669-5606
Dane County Executive Kathleen Falk today announced that the County has been awarded $12.8 million of Recovery Zone Facility (RZF) bonds that will help companies considering locating to or expanding in Dane County create local, good-paying jobs.
“While I am optimistic that our national economy is getting back on track, many Dane County businesses are still having some trouble weathering the greatest economic downturn since the great depression resulting in too many people without jobs,” said Dane County Executive Kathleen Falk. “These tax-exempt bonds could be that one thing that makes the difference in a company moving forward to create new jobs.”
The Federal government through the American Recovery and Reinvestment Act economic stimulus program has created an incentive for projects in communities experiencing economic and fiscal distress. The program allows private companies to borrow using RZF bonds to finance projects to create local jobs. The Dane County Board of Supervisors and County Executive formally designated the County as an Recovery Zone by resolution in September, 2009.
This program provides access to tax exempt financing for certain projects that would historically not qualify for tax exempt financing. The bonds are “private activity bonds” and allow private developers to access the tax-exempt municipal bond market to lower their borrowing costs.
The risk is not borne by the County, but by the borrower and the lender. The RZF bonds must be issued by December 31, 2010. The cost of bond issuance, bonding costs and other administrative charges will be borne by the applicant. Because of bond fees, and processing costs, projects with an estimated cost of less than $2,000,000 generally are not cost effective.
The first potential use of the bonds may be Dane County’s manure digester project in Waunakee. Dane County is working with the project’s private owner SCC Americas and developer Clear Horizons on the project’s financing plan.
A number of businesses have approached Dane County in the past several weeks alone seeking economic assistance with development and expansion of their businesses. These tax-exempt bonds could be used to assist these businesses with their project financing.