County action allows businesses to apply for loansUnder an agreement approved by the County Board last week, St. Croix County’s Economic Development Corporation will review private business requests for economic stimulus bonds.
By: Judy Wiff, Hudson Star-Observer
Under an agreement approved by the County Board last week, St. Croix County’s Economic Development Corporation will review private business requests for economic stimulus bonds.
The EDC will charge the applicant a fee of one-tenth of one percent of the amount requested.
The fee, said EDC Executive Director Bill Rubin, will “separate pretenders from contenders.”
The EDC will set allocation criteria, including potential increase in local tax base, number of jobs created or retained, wages and benefits and realistic timelines.
The Recovery Zone Facility Bonds are tax-exempt bonds that can be used by private businesses to finance a range of depreciable capital projects. St. Croix County has been allocated $5.04 million of the bonds.
The county’s financial advisor predicts the bonds will allow companies to borrow money at an interest rate about 25 percent lower than otherwise available.
Rubin said businesses will be asked to submit an application form that’s already used by the regional loan fund.
After an analysis by West Central Regional Planning Commission staff, requests will go to the EDC’s loan review committee.
A recommendation from that committee will go to the County Board’s Finance Committee and then to the County Board, which will be asked to allocate part of the $5 million to the town, city or village where the project will occur.
The Facility Bonds are “conduit bonds” and would be issued by the local municipality, but the responsibility for repaying the loan lies with the business.
By having the municipal government’s name on the bond it is considered tax exempt, meaning it is offered at a lower interest rate to the business and whoever buys the bond or mortgage won’t report interest earnings as taxable income, said Rubin.