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MassDevelopment
• Quasi-public finance and development authority for Massachusetts
• Serving businesses, nonprofits, and municipalities
• Primary tools• Planning and development services• Loans and guarantees• New Markets tax credits• Tax-exempt bonds
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What We Do
Utilizing tax-exempt bonds; loans and guarantees; and real-estate planning and development services, MassDevelopment offers customized financing and development solutions focusing on housing, job creation, real-estate development, and urban revitalization.
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Real Estate Projects and Programs
• Redevelopment of public buildings and land• Planning• Pre-development• Due diligence• Assistance to cities and towns (including 43D)
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Finance Programs
• Cultural Facilities Fund• Brownfields Redevelopment Fund• Direct Loans and Guarantees
– Emerging Technology Fund– Community Service 501(c)3 Loan Fund– Manufacturing Innovation Programs
• New Markets Tax Credits• Tax-exempt Bonds
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Cultural Facilities Fund
• Since 2007, $37M investment in 224 capital projects for nonprofit institutions that attract visitors to and create jobs in Mass.
• Run in partnership with Mass. Cultural Council
EcoTarium in Worcester
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Brownfields Redevelopment Fund
• Fund recapitalized with $30M in 2006 to revitalize & redevelop neglected areas:– up to $100K interest-
free financing for site assessment
– up to $500K in flexible financing for cleanup loans
Forbes Park in Chelsea
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Emerging Technology Fund
• Fund recapitalized in 2006 & 2007 with $25M
• Loans from Fund encourage creation and expansion of production facilities by emerging technology (“teenage”) companies
• 20 companies financed to date
E Ink in Cambridge
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Community Service 501(c)3 Loan Fund
• 501(c)(3) nonprofit social, youth or family service provider with annual operating budget of less than
$5 million • Funds may be used for owned or leased facilities to
repair, renovate, construct or acquire real property• Loans of $100,000-$500,000• Flexible financing terms and competitive interest rates
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Manufacturing Innovation Programs
• Planning Loans up to $50,000 to pay for consultant services to evaluate and improve demand, fulfillment and strategic leadership
• Implementation Initiation Loan up to $500,000 to implement improvements resulting from strategic planning to include reconfiguring operations, upgrades to plant and equipment, product development
• Real Estate and Equipment Loans
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New Markets Tax Credits• Tax credit subsidizes private investments in low-income
census tracts
• Credits can create equity in real estate projects and can combine with tax-exempt bonds
• Annual competition by U.S. Department of Treasury
• ARRA created additional $3 billion capacity
• Total $5 billion awarded in October 2009
• MassDevelopment is an allocator of NMTC and received $55 million for use in MA in October 2009
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MassDevelopment Tax-Exempt Bonds
Encouraging capital investment by lowering borrowing costs for:
• Small manufacturing facilities• 501(c)3 nonprofits• Waste disposal & recycling• “Recovery Zone” projects• Public Infrastructure• Affordable rental housing
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Recovery Zone Facility Bonds
• New category of “private activity bond” authorized under ARRA
• To promote development in distressed areas
• Projects must be in designated “Recovery Zones”– Areas designated by issuers as having certain distress
factors including poverty, unemployment, home foreclosures or general distress
– Area must have Recovery Zone designation before project is commenced
• Recovery Zone Bonds must be issued by 12/31/2010
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Enhanced Bank Purchasing
• Banks can deduct interest expense associated with tax exempt bonds
• Only for bonds issued in 2009 and 2010• Up to 2% of bank assets • only non-bank corporations had this benefit previously• MA banks may still prefer “separate entity” securities
corporations
• Expanded eligibility for “Bank Qualified” bond status• Not subject to disallowance of interest expense• Issuer limit raised to $30,000,000 • For 501(c)3 nonprofits, limit applies to borrower, not conduit
issuer
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Other Bond Enhancements
• Expanded definition of “manufacturing”– Allows tax-exempt “industrial development bonds”
for facilities and equipment to produce intangible property
– Eliminates requirements on percentages of bond proceeds that must be used for “core” manufacturing
– $20MM maximum capital expenditure and $10MM bond limits still apply
– Examples include facilities for software development, biotech R&D, and recording studios
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For additional information, contact
Bonnie Sullivan
508-898-8692
George Craddock
617-330-2003