The Benefit of PABS is to lower interest cost on borrowed funds for many years!
The Industrial Development Board of the City of Minden (“IDBM”) serves as a conduit between the company/ borrower and their investors or bankers. Before approaching the IDBM with a proposal to issue bonds, the private company seeking to finance a development generally arranges for a bank or other investor to purchase the bonds for their project and negotiate the terms of the financing. Actual preparation of bond documents cannot begin until the company and bond purchaser’s agreement on such terms and conditions are evidenced by a commitment letter or term sheet.
In connection with the bond issuance, the company will enter into a lease agreement, loan agreement or financing agreement with the IDBM whereby it is obligated to make payments to the IDB that match the principal and the interest due on the bonds. The bonds are then issued by the IDBM and sold to the company’s investors or bankers based solely on the company’s credit. A bond trustee is appointed by the IDBM to handle the collection of debt service payments from the company, payment of debt service to the bondholders, and enforcement of any covenants and/or remedies against the company.
PABs do not include any governmental guarantee or grant. The PABs or bonds are payable strictly from moneys provided by the company/borrower for which the bonds are issued and backed by collateral put up by the company. No public funds may be used to pay the PABs and neither the IDBM nor the City of Minden in any way guarantees payment of the bonds.
Eligible projects generally include those involving the acquisition, construction and/or substantial renovation of facilities suitable for manufacturing, warehousing, research and development and other industrial purposes. Certain commercial projects, office facilities and machinery and/or equipment may also be financed. Bonds proceeds may not be used for working capital purposes.
Non commencement Rule: No expenditures or commitments for expenditures on the project, other than preliminary site preparation, or utility work, should be made prior to project approval by the IDBM.
Under federal law (specifically the Internal Revenue Code of 1986) the IDBM can issue tax-exempt bonds to finance certain projects, including:
Title VII of the Civil Rights Act prohibits employment discrimination. No company receiving the benefits of an IDBM bond issue shall be engaged in employment practices that are contrary to Title VII of the Civil Rights Act of 1964 with its amendments.
If an employer who receives this incentive is deemed guilty of employment practices that violate Title VII of the Civil Rights Act of 1964 and its amendments by a U.S. court of jurisdiction, then the Incentive Agreement will be terminated immediately and the subject property will be conveyed back to the employer.
51% of the net new jobs created by the project and jobs retained thereafter must be held by Minden City residents or by individuals that will become City residents within the first 8 months of employment.
If qualified Minden-based job applicants cannot be identified for hire, other job applicants may be hired provided that they establish residency within Minden City limits within eight (8) months of being employed.
A non-refundable $500 application fee must accompany all Tax-Exempt Bond program applications submitted to the IDBM.
Applicants for bonds issued through the IDBM must pay the costs and fees of all professionals, including bond counsel, special counsels to the IDBM in connection with the negotiation and implementation of the bonds, and other professionals needed in connection with the issuance of the bonds, such as financial analysts, trustee, underwriters, credit enhancement providers, rating agencies and their respective counsels, including the cost of any necessary feasibility reports. These costs will be estimated by the IDBM at the beginning of the bond approval process. The cost of these items can be recouped by including them in the project’s cost.
For each bond issue, the beneficiary must pay a closing fee. The closing fee must be sufficient enough to cover the cost of actual utilized services stated in the aforementioned paragraph.
Annual Administrative Fee
For the purpose of determining the annual administrative fee, project costs shall be determined on the basis of the “Total Budgeted Capital Cost“ for a project (including all expenditures that will be, or could be with a proper election, capitalized for federal income tax purposes). The proposed budget set forth in any application shall be deemed to be a certification by the applicant that the budget set forth therein is a reasonable estimate of all project costs.
An updated budget may be requested at the time of closing of the bond issue. An annual administrative fee equal to 1/20 of 1% of the Total Budgeted Capital Cost. The annual administrative fee is due annually thereafter until the bonds are fully discharged.
FOR MORE INFORMATION PLEASE CONTACT THE CITY OF MINDEN, DEPARTMENT OF ECONOMIC DEVELOPMENT.
Storm Water Systems, Collection and Detention, Pumps, Sanitary Sewers and Lines
Water, Electricity, Gas/Sewer Lines
The concentrated application of economic development incentives in specific geographic areas of Minden allows the community to direct scare resources in a highly focused and impactful manner. Nevertheless, the issuance of bonds or PABs is not limited to Economic Development Districts.
Economic Development District #1 This district is comprised mainly of downtown properties. Along with the district’s development focus is the following:
Economic Development District #2 This district is an area that is motor vehicle friendly. Product distribution primarily via commercial trucking exists within the area. The district’s development focus is the following:
Economic Development District #3 This district is an area that is primarily characterized as the community’s Interstate Road Frontage Property. This district is prime real estate positioned to attract new spending dollars to the community from commercial and noncommercial motor vehicle travelers. The development focus is the following:
Economic Development District #4 This district is the major Southeastern by-pass that separates the downtown commercial corridor from the northwest from the primarily residential area to the Southwestern part of the community. Once a site primarily known for mechanical/vehicle repair and warehousing, this district is now being targeted for new industries with the district’s development focus as follows: