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June 11, 2018 <br />December 12, 2011 Mounds <br />View Business Growth Toolbox <br /> <br /> <br />4) Bonds used for Development <br />Per State law, cities can issue bonds. These debt instruments can be taxable or <br />tax-exempt. Not all bonds are general obligation. Pure revenue bonds are also <br />common, especially for development. Bonds can be used to pay project costs <br />and for the first two or three years of interest payments. This reduces the need <br />for short-term revenue. There are several types of bonds the City could consider <br />for development projects: <br /> <br />a) Revenue Bonds – These are used to finance industrial, commercial <br />and medical facilities, multifamily rental housing, nursing homes and <br />some nonprofit activities. <br />b) Industrial Revenue Bonds – These allow cities to issue tax-exempt <br />bonds to finance fixed assets. In the typical transaction, the city issues <br />the bonds and becomes the legal owner of the asset (e.g. building). <br />The City then leases back or sells the asset to the company. The <br />firm’s repayment coincides with bond payback. <br />c) Essential Function Bonds − Certain types of economic development <br />are considered by the state to be “essential functions” of a city. <br />Sometimes called “housing revenue bonds”, these bonds are not <br />general obligation bonds backed by the full faith and credit of the City. <br />Revenues generated by the project pay the bond and can be used for <br />a variety of housing options (market and nonmarket rate). <br />d) Common Bond Revenue Bonds − State and local governments may <br />issue tax-exempt or taxable revenue bonds on behalf of private <br />borrowers to provide lower interest rates on long-term financing. In <br />general, manufacturing, medical facility, nonprofit or nursing home <br />projects are eligible for tax-exempt revenue bonds and those issued for <br />commercial projects are taxable. Bonds issued through the Common <br />Bond Fund are investment-grade instruments with a rating based on <br />the security provided by the fund. <br />e) Bank Qualified Bank Direct Tax-Exempt Loans − These are cost- <br />effective tax-exempt financing for capital projects for small <br />manufacturing companies and nonprofit organizations. <br /> <br />5) Business Improvement Partnership Loan Program <br />Purpose: <br />The City’s Economic Development Authority has a vested interest in helping <br />Mounds View businesses thrive and prosper while improving the aesthetics of <br />the commercial, industrial and retail sectors of the community. Accordingly, the <br />Mounds View Business Improvement Partnership Loan Program has been <br />established to partner with local businesses by providing 2% interest loans for <br />exterior and interior building improvements. Details regarding this program are <br />attached as Appendix B. <br /> <br />Who can apply? <br />Any business owner who has operated a facility or property located in Mounds <br />View for a minimum of two years.