Apply for Saginaw County Economic Development Recovery Bonds!
Deadline approaching
As a response to the overwhelming need for public and private financing, the federal government provided Michigan with up to $2b in bond financing capability.
Economic Development Recovery Bonds – for public projects (road, sewer water, etc.) - $16,950,000 (with a 45% interest credit or refund)
Recovery Zone Facility Bonds – private tax exempt bonds - $25,462,000 (new facility construction or renovation, equipment) for businesses such as office, retail, distributors and wholesale (some exemptions apply)
The first step in the process is for the County Government to designate an area (or the entire county as a Recovery Zone. Recovery Zone Means any area:
- Designated by the issuer as having significant poverty, unemployment, rate of home foreclosures or general distress
Designated by issuer as economically distressed by reason of the closure or realignment or a military installation
Designated as an empowerment zone or renewal community
This does not have limited or fixed districts – they are flexible and permit the county to determine whether the project constituting the qualified economic development purpose will be located in an area having significant poverty, unemployment, rate of home foreclosures or other general distress.
County of Saginaw is considering a Resolution to Designate the Entire County as a Recovery Zone at its May 18, 2010 meeting. This means that projects may occur in any community in Saginaw County.
Recovery Zone Facility Bonds
- Tax Exempt Private Activity Bond which can be issues to finance certain capital projects for the benefit of private companies located (or to be located) in a Recovery Zone
Difference between these bonds and typical Industrial Development Revenue Bonds
- A qualified business means any trade or business (except residential rental property, golf course, country club, massage parlor, hot tub facility, suntan facility, racetrack, casino)
- DRB’s are available only to Manufacturers
County has $25.4m in volume cap available for issuance
- County may waive any portion of the volume cap allocation received – back to the State, which would then reallocate the volume cap in any reasonable manner it determines is in good faith
Important information: If Facility Bond proceeds are used to finance equipment, Straight Line Depreciation must be used on equipment, no more than 25% of bond proceeds can be used to finance land acquisition, no more than 2% of proceeds can be used to finance costs of issuance, average life of the bonds cannot exceed 120% of weighted average life of the project assets.
Interested companies need to
- Complete Application and submit to Saginaw Future Inc. (
jcrary@saginawfuture.com) by June 4, 2010.
Economic Development Corporation of the County of Saginaw will meet the week of June 7 to review applications and pass a resolution to induce projects and submit to the County Services Committee.
Saginaw County Services Committee meets June 15th and recommends resolution to the County Board.
County Board Resolution on June 22nd
- Inducement & intent to issue bonds, proceed with project, appoint bond counsel, designate project area, recommend project district area and request appointment of 2 additional directors from the community where project is located
July-December
- Proceed with project, prepare project plan, hold public hearings – at local community, then at County Board of Commissioners. Issue bonds prior to 12/31/10
Saginaw County Economic Development Facility Bond Application
Additional Recovery Bond Information