Lease Purchase Bond Guidelines or Economic Development

Transcription

1 Lease Purchase Bond Guidelines or Economic Development ECONOMIC DEVELOPMENT AND PUBLIC INTEREST CRITERIA Invest Atlanta will issue lease-purchase bonds for new capital investment that leads to job creation or retention in the City of Atlanta. In Fulton County, the typical abatement is based on the following ten-year tax payment schedule, with abatement of taxes starting at 50%. Abatement Year Percent of Ad Valorem Taxes Due Year 1 50% Year 2 55% Year 3 60% Year 4 65% Year 5 70% Year 6 75% Year 7 80% Year 8 85% Year 9 90% Year 10 95% Year % Invest Atlanta will issue lease-purchase bonds for a minimum of $10 million in new capital investment. Exceptions to this may be made by Invest Atlanta at its own discretion if a compelling economic reason is presented. There is no maximum amount per project. This incentive is available City-wide. The project for which the lease-purchase bonds are issued must demonstrate clear economic benefit to the community, in keeping with the economic development purpose: To develop and promote trade, commerce, industry and employment opportunities for the public good and the general welfare of the State. Clear economic benefit is shown by the creation of new jobs and retention of existing jobs. Other economic benefits may be considered, such as attraction of a target industry, capital investment and infrastructure development. In other words, the tool will provide a public benefit that would otherwise have not been available to the community. The Lessee must also comply with the following policies, procedures and public interest criteria of Invest Atlanta: Invest Atlanta Bond Program Page 1

2 A. Invest Atlanta will not issue bonds unless Invest Atlanta shall have first determined that the financing meets the following public interest criteria:. 1. The financing is for a project or a use in the City of Atlanta. 2. The Lessee is capable of meeting obligations incurred under relevant agreements relating to the bonds issued by Invest Atlanta. 3. The proposed financing is appropriate for the specific project. 4. The project is consistent with any existing local or regional comprehensive plan. 5. The project is compliant with the City in regards to historic preservation code and regulations. 6. During the evaluation, Invest Atlanta will consult with the Council Member in which the project is located and discuss any potential NPU issues and/or concerns. B. Invest Atlanta requires a defined economic development benefit before it is willing to act as an issuer for lease-purchase bonds. The following represent supplemental economic development and public interest criteria required of the Lessee: 1. The issuance of bonds must demonstrate clear economic benefit to the community. This will be demonstrated by the creation of net new jobs, retention of existing jobs, investment in capital to support target industries in the City s Economic Development Strategy, investment in new capital for emerging industries or enabling industries. Any economic activity that took place in the prior use of the real estate in question will be taken into account in determining the net jobs effect of the proposed project. Invest Atlanta will take into account the commercial vacancy rates across the city in its evaluation of the application. 2. The issuance of bonds must support new capital investment in real property, personal property or both by an owner or tenant. For commercial buildings, the capital investment should result in net new permanent jobs or provide a public benefit such as providing discounted office space for non-profits or disadvantaged business entities for the length of the Lease Purchase benefit. Tax abatement bonds will not be issued for refinancing of existing buildings unless a compelling economic reason is presented by the Owner or Lessee. 3. Projects must show clear economic, environmental or other public benefits to the City, such as increased local revenues, improvements to infrastructure, expansion of the local economy, job creation or retention, or other specific local goals and objectives. Invest Atlanta Bond Program 8/19/2013 Page 2

3 4. Housing projects must have a clear public benefit in terms of supporting the expansion of affordable workforce housing. The affordable housing benefits should comprise of a minimum of 10% of the units set aside for people at 60% of the area median income with a rent to income cap of 35% for the period of the Lease Purchase benefit. 5. Invest Atlanta will not issue lease-purchase bonds for real property on projects receiving funding that are located in a tax allocation district unless a compelling economic reason is presented. 6. Invest Atlanta will issue lease-purchase bonds in Urban Enterprise Zones for personal property. C. Projects financed with bond proceeds of a subsequent series of an original issuance of lease-purchase bonds will not be subject to a supplemental economic development and public interest criteria review as listed in the section above, except to the extent that the project scope and specifics have changed from the original application. D. Bond proceeds received from Invest Atlanta may be used for the following project types within the City of Atlanta: 1. Any one or more buildings or structures to be used in the production, manufacturing, processing, assembling, storing, or handling of any agricultural, manufactured, mining, or industrial product or any combination of the foregoing, in every case with all necessary or useful furnishings, machinery, equipment, parking facilities, landscaping, and facilities for outdoor storage; 2. The acquisition, construction, leasing, or equipping of new industrial facilities or the improvement, modification, acquisition, expansion, modernization, leasing, equipping, or remodeling of existing industrial facilities located or to be located within the City; 3. The acquisition, construction, improvement, or modification of any property, real or personal, which any industrial concern might desire to use, acquire, or lease in connection with the operation of any plant or facility located or to be located within the City; 4. The acquisition, construction, improvement, or modification of any property, real or personal, used as air or water pollution control facilities which any federal, state, or local agency having jurisdiction in the premises shall have certified as necessary for the continued operation of the industry or industries which the same is to serve and which is necessary for the public welfare, provided that for the purposes of this subparagraph, the term "air pollution control facility" means any property used, in whole or in substantial part, to abate or control atmospheric pollution or contamination by removing, altering, disposing of, or storing atmospheric pollutants; Invest Atlanta Bond Program 8/19/2013 Page 3

4 5. The acquisition, construction, improvement, or modification of any property, real or personal, used as or in connection with a sewage disposal facility or a solid waste disposal facility which any federal, state, or local agency having jurisdiction in the premises shall have certified as necessary for the continued operation of the industries which the same is to serve and which is necessary for the public welfare; 6. The acquisition, construction, improvement, or modification of any property, real or personal or both, used as a peak shave facility, provided that "peak shave facility" shall have the meaning generally accepted and understood in the natural gas distribution industry as that term is generally understood to describe a storage facility for the purpose of avoiding undesirable consequences in the distribution system during peak periods of consumption; and any project involving a "peak shave facility" may be undertaken as otherwise provided in this chapter; 7. The acquisition, construction, leasing, improvement, or modification of any facilities and any property, real or personal or both, useful or necessary in the transportation of persons or property by air, provided that such projects shall not include the creation of airports or airport terminal facilities or improvements thereon, except as incidentally related to the furnishing of transportation of persons or property by air as provided in this subparagraph; 8. The acquisition, construction, improvement, or modification of any property, real or personal, which shall be suitable for or used as or in connection with: a. Sports facilities, including private training and related office and other facilities if such sports facilities promote trade, commerce, industry, and employment opportunities by hosting regional, state-wide, or national events; b. Convention or trade show facilities; c. Airports, docks, wharves, mass commuting facilities, parking facilities, or storage or training facilities directly related to any of the foregoing; d. Facilities for the local furnishing of electric energy or gas; e. Facilities for the furnishing of water, if available, on reasonable demand to members of the general public; f. Hotel and motel facilities for lodging which also may provide meals, provided that such facilities are constructed in connection with and adjacent to convention, sports, or trade show facilities. No project as defined by this division shall be exempt from any ad valorem taxation; g. Amphitheaters and any facilities directly related to the operation of such amphitheaters, if such amphitheaters promote trade, commerce, industry, and employment opportunities by hosting regional, state-wide, or national events; Invest Atlanta Bond Program 8/19/2013 Page 4

5 h. Housing projects with an affordable workforce housing component. 10% of the units should be set aside for persons at 60% of the area median income (AMI) for the length of the lease purchase benefit. 9. The acquisition or development of land as the site for an industrial park; 10. The acquisition, construction, leasing, or financing of: a. An office building facility and related real and personal property for use by any business enterprise or charitable corporation, association, or similar entity which will further the development of trade, commerce, industry, or employment opportunities in this state and which shall be adjacent to or used in conjunction with any other existing or proposed project defined in this paragraph; or b. A separate office building facility and related real and personal property for use by any business enterprise or charitable corporation, association, or similar entity which will further the development of trade, commerce, industry, or employment opportunities in this state. c. No such office building facility as defined in this subparagraph shall be undertaken by an authority unless the authority determines that the business enterprise or charitable corporation, association, or similar entity to use such facility will be the primary tenant; 11. Any one or more buildings or structures used or to be used as a skilled nursing home or intermediate care home subject to regulation and licensure by the Department of Human Resources and all necessary, convenient, or related interests in land, machinery, apparatus, appliances, equipment, furnishings, appurtenances, site preparation, landscaping, and physical amenities; 12. The acquisition, construction, design, engineering, improvement, leasing, maintenance, modification, rebuilding, and repair of any facilities and any property utilized in connection with a community antenna television system or any combination of the foregoing, including all necessary or useful land or rights in land and all necessary or useful furnishings, machinery, vehicles, equipment, and parking facilities; 13. The acquisition, construction, equipping, improvement, modification, or expansion of any property, real or personal, for use as or in connection with research and development facilities; and 14. The acquisition, construction, installation, modification, renovation, or rehabilitation of land, interests in land, buildings, structures, facilities, or other improvements and the acquisition, installation, modification, renovation, rehabilitation, or furnishing of fixtures, machinery, equipment, furniture, or other property of any nature whatsoever used on, in, or in connection with any such land, interest in land, building, structure, facility, or other improvement, Invest Atlanta Bond Program 8/19/2013 Page 5

6 all for the essential public purpose of the development of trade, commerce, industry, and employment opportunities. Amount of Loan Available per Development The minimum project size is $10 million. Exceptions to this may be made by Invest Atlanta at its own discretion if a compelling economic reason is presented. There is no maximum amount per project. Staff will evaluate each request and make recommendations based on funding availability, other funds leveraged and overall project worthiness. Priorities/Principles for Funding Decisions: Program Purpose- All Proposed Projects must support the purpose of Invest Atlanta, which is to issue its revenue bonds to develop and promote trade, commerce, industry, and employment opportunities for the public good and the general welfare and to promote the general welfare of the State of Georgia. Project Readiness- Preference/priority will be given to Proposed Projects that demonstrate an immediate ability to move forward with the development and a targeted closing date. Factors such as site control, zoning approvals, City permit status and commitment of other funding sources needed for a successful project will be considered. CITY OF ATLANTA EQUAL BUSINESS OPPORTUNITY GOALS Developers will use best efforts to comply with the City s Equal Business Opportunity Program with respect to the participation of minority business enterprises, female enterprises, disadvantaged business enterprises and business enterprises located within the City of Atlanta, in all business opportunities which relate to the Project. Developers will use best efforts with the City s First Source Job Policy, with respect to the hiring and training of low-income City of Atlanta residents, as administered by the Atlanta Workforce Development Agency. FINANCING TEAM APPROVAL Invest Atlanta shall approve all financing team members and related professional fees, as recommended by the Lessee. EXEMPTIONS AND WAIVERS Invest Atlanta retains the right to entertain exemptions or waivers to those portions of the policies and procedures not required by law. If an exemption or waiver is requested of Invest Atlanta, additional time may be required for the application process. Invest Atlanta Bond Program 8/19/2013 Page 6

7 TIMELINE Applications should be received prior to initiating the project. If the project has begun, an explanation for the need of the incentive must be provided. Upon review and acceptance of the Application, an inducement resolution will be prepared by issuer s counsel and presented at the next meeting of the Board of Directors of Invest Atlanta, followed by a bond resolution to be prepared by Bond Counsel to be presented to the Board of Directors of Invest Atlanta at a subsequent meeting. Following adoption of the inducement resolution and bond resolution, validation proceedings will be filed and commenced. For lease-purchase transactions, a process for valuing the property by the Fulton County Tax Assessor s office must also begin. Upon receipt of the order of Superior Court of Fulton County and, in the case of leasepurchase transactions, a favorable valuation by the Tax Assessor s office, the closing can proceed. The bonds will be issued by IA. LEGAL COUNSEL The applicant has a choice to utilize its own qualified Georgia law firm as bond counsel and utilize the Issuer s designated Issuer s Counsel. The applicant may request the use of the Issuer s lease purchase program documentation which will be prepared by the Issuer s designated lease purchase program bond counsel. Use of program documents and program counsel eliminates the need for separate Issuer s Counsel and generally results in lower over-all costs of issuance. All legal fees are paid by the applicant at the closing of the bond transaction. These fees cover transaction fees only and do not cover any fees for any required expert witness or court interventions, other contest or litigation. FEES Application Fee A fee in the amount of $2,500 is payable to Invest Atlanta at the time a Bond Application is submitted to Invest Atlanta Any Bond Application submitted without the full application fee is deemed incomplete. The application fee is non-refundable. Issuer s Fee An Issuer s Fee of the greater of 1/8 of 1% ( ) or $25,000, is payable to Invest Atlanta as consideration for engaging in this transaction. Of this amount, a Commitment Fee of $25,000 must be paid within 30 days of bond inducement. This Commitment Fee is credited against the Issuer s Fee. The balance of the Issuer Fee is paid from the bond proceeds at the time of the bond closing. Invest Atlanta Bond Program 8/19/2013 Page 7

8 Annual Administrative/Compliance Fee If the application has a housing component with an income restriction, an Annual Administrative Fee/Compliance Fee totaling a minimum of $ 50,000 ($5,000 for each year of the tax abatement) will be payable to Invest Atlanta from the bond proceeds at the bond closing. The fee will be based in part on the anticipated compliance requirements of the project by Invest Atlanta over the anticipated life of the lease. At its sole discretion, Invest Atlanta may increase, lower or waive the Annual Administrative Fee/Compliance Fee. Invest Atlanta Bond Program 8/19/2013 Page 8