Helping Businesses Grow for 30 Years
The Town of Concord IDA can offer a variety of programs to assit companies in expanding in the Town of Concord.
These programs are available whether an existing company already in the Town of Concord is looking to expand in the Town of Concord or a new company is moving into the Town of Concord. These programs can assist you in the purchase and improvement of land, the construction of new facilities the acquisition and renovation of existing buildings and the acquisition and installation of machinery and equipment, furnishings and fixtures. The underlying basis for the assistance by the Town of Concord Industrial Development Agency is that projects undertaken by the Agency are exempt from real property taxes, sales taxes, mortgage recording taxes, state income taxes and, in the case of eligible manufacturing projects, federal income taxes. The programs are designed to provide these advantages. The Agency does not provide funding to applicants. In order to provide the advantages set forth, it is necessary for the Agency to technically take title of the project.
There are Financing-Based Programs and Non-Financing-Based Programs.
1) Industrial development revenue bonds.
There are two types of industrial development revenue bonds available.
A) Tax-exempt IRB’s, are available only for certain qualifying manufacturing projects and for civic facilities. The interest on such bonds is exempt from federal income taxes and state income taxes (for State residents only). In addition, the Agency can offer real property tax abatement, sales tax abatement and mortgage recording tax abatement.
B) Taxable industrial development revenue bonds. The eligibility requirements for these bonds are not limited to manufacturing projects. They offer all the same incentives as the tax-exempt IRB’s except for the federal tax exemption. In both cases, the Agency does not lend or give its own money to the applicant. It takes title to the project and issues bonds to the lender. The applicant itself guarantees repayment of the bonds and the lender provides the financing.Read More...
What The Agency does is act as a conduit, reducing the cost to the applicant of doing business and thus facilitating the transaction.
2) The mortgage transaction.
The Agency can take title to the project and joins with the applicant to place a mortgage on the project to finance the project. In this instance, the applicant itself delivers a promissory note to the lender and agrees to repay the mortgage. The lender then loans the money to the applicant. The Agency again acts as a conduit. This type of transaction provides real property tax abatement, sales tax abatement and mortgage tax abatement.
1) Lease-only transaction.
The Agency takes title of the project and leases it back to the applicant. By taking title, the Agency is able to provide real property tax abatement and sales tax abatement. The Ageny then remains in title for as long as is necessary for the applicant to receive the tax incentives offered. Typically this would be until the end of the real property tax abatement period.
The Agency can also provide assistance where the applicant is acquiring title to equipment. The Agency can do an equipment only lease. In this situation, the equipment is acquired in the name of the Agency resulting in sales tax abatement on equipment purchases.
2) Installment sale transactions.
The Agency can also enter into an installment sale transaction to accomplish the same thing although in the case of an installment sale, the Agency generally does not retain title to the equipment for as long a period of time.
Agency assistance does; however, add to the cost of the transaction. The Agency charges an administrative fee for its services. In addition, there are significant legal fees associated with an Agency transaction. The Agency administrative fees and legal fees are in accordance with the fee schedule contained in this publication. In addition, you have to anticipate additional legal fees for lenders and your own counsel due to the additional complexity of and IDA transaction. There is no exact minimum size below which Agency assistance is not beneficial. A cost analysis should be undertaken before the applicant elects to proceed. The Agency will assist you in making your analysis.Read More...
For transactions involving new construction of $350,000 or more there are clearly financial advantages. There may be advantages at project costs significantly less than that amount, but it is important to carefully analyze the costs of such transactions to insure there are sufficient advantages before proceeding.
To get an estimate of potential benefits, please use the Erie County benefits Calculator.