Private developers in Winston-Salem may be able to use tax-exempt bonds established by the American Recovery and Reinvestment Act to reduce the cost of their projects - provided they are ready to act quickly.
The city has been authorized to endorse up to $12.28 million in Recovery Zone Facility Bonds for commercial and industrial development projects, but interested developers must contact the city by Nov. 20 and have their project financing in place by April 15, 2010.
One project already is being considered for the bonds. The City Council’s Finance Committee has recommended that Birch Development Inc. be authorized $1.96 million in bond financing for a daycare center it plans to build in cooperation with the Liberty Street Community Development Corp. at the corner of Northwest Boulevard and Liberty Street. The City Council will consider this request Nov. 16.
The bonds can be used to finance for-profit projects at a non-profit interest rate; thus resulting in cheaper borrowing costs. Eligible projects include construction, reconstruction, renovation or acquisition of industrial/manufacturing facilities; shopping centers; distribution/warehouse facilities; hotels; restaurants; or offices. They may not be used for working capital, refinancing existing debt, or such projects as residential rental property, health clubs or golf courses and country clubs.
To qualify for these bonds, a project must be determined by the N.C. Local Government Commission to be financially viable, be located within the city limits and be eligible for financing no later than April 15, 2010.
The bonds are not backed by the credit of the city of Winston-Salem, but by the credit of the borrower or a letter of credit provided by a bank on behalf of the borrower.
Nationwide, the American Recovery and Reinvestment Act authorized $15 billion of Recovery Zone Facility Bonds, of which $12,280,000 may be issued on behalf of the city of Winston-Salem.
For more information, contact Deputy City Manager Derwick Paige at 747-7473 no later than Nov. 20.
Information about the Recovery Zone Bonds [pdf/84kb/6p]