Where to Apply EDC Finance Corporation markets and administers the Recovery Zone Facility Bond Program for Lancaster County. Call 717-397-4046 for additional information or with questions: David Nikoloff, president John Biemiller, vice president Lyle Hosler, project manager

RZFB Program Summary

The Recovery Zone Facility Bond (RZFB) program is a limited time tax-exempt financing vehicle for privately owned economic development projects.

Created by the federal government through the American Recovery and Reinvestment Act of 2009 (Stimulus Package), Lancaster County’s allocation is designated for economic development projects located within a defined “Recovery Zone” as established by the county. Lancaster County is proposing to designate all existing and previously defined Urban Growth Areas as Lancaster’s eligible “Recovery Zones." (map )

 

Amount

• $14,137,000 is the total dollars available for all Lancaster County projects.

 

Deadline

• Financing must be closed before December 31, 2010.

 

Benefit

• Interest paid on Recovery Zone Facility Bonds (RZFBs) is exempt from gross Federal Income Tax purposes. A typical bank lending rate is reduced to approximately 70-80% of the normal taxable rate.

 

Eligibility

• Almost any trade or business, with the exception of residential rental properties. Mixed-use projects must have 20% of the gross rental revenue come from commercial tenants
• Project must be located in a “Recovery Zone." (map )
• Project costs related to construction, reconstruction, renovation or acquisition that were incurred after January 27, 2010, the date of “Recovery Zone” designation
• Any depreciable property generally qualifies
• Examples of projects financed with RZFBs include: downtown commercial redevelopment, commercial and retail buildings, manufacturing facilities, grocery stores, mixed-use projects, hotels, arts centers, theaters, hospitals, college campuses, high-tech and biotech facilities, etc.
• Priority projects will create new jobs; stimulate additional capital investment in areas of high unemployment, significant poverty, or high rate of home foreclosures; redevelop existing urban growth area properties currently vacant or underutilized

 

Note

• Due to the fixed closing costs associated with a Recovery Zone project, a bank loan in excess of $2,000,000 will likely receive the greatest benefit from the program. 

Ineligibility

• Residential rental properties
• Debt refinancing
• Projects primarily considered “shopping centers”
• Golf courses, country clubs, race tracks, gambling facilities
• Massage parlor, hot tub, suntan facilities
• Stores involving the sale of alcoholic beverages for consumption off-premise
  

 

Program Administration

• EDC Finance Corporation, a Lancaster County not-for-profit economic development financing organization, plans to aggressively market the program to Lancaster County projects. Upon EDC Finance Corporation approval, a project will be taken before the County Commissioners for final review, authorization and approval in the form of a resolution, prior to being sent to the Redevelopment Authority of Lancaster County for final issuance. The Redevelopment Authority will be the conduit issuer for the Recovery Zone Bond Financing.

• Deadline for closing of project financing is December 31, 2010. EDC Finance Corporation staff will meet with project participants to make sure that all projects can be understood, underwritten and closed prior to the established deadline.