CHARLOTTE COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY
The Charlotte County Industrial Development Authority was established in 2006 under Part III of Chapter 159, Florida Statutes, to foster and encourage industrial and business development in Charlotte County, Florida. The IDA is a seven-member board appointed by the Board of County
Commissioners of Charlotte County. Each IDA board member is appointed to a four-year term.
The Charlotte County Economic Development Office serves as staff to the IDA, and the IDA has a represenative in the Enterprise Charlotte Economic Council, a public-private partnership that advises the Charlotte County Commissioners on economic development issues.
The IDA encourages companies interested in locating to Charlotte County as well as companies presently located in Charlotte County to explore the use of IDRBs to finance projects.
What are Industrial Development Revenue Bonds?
Industrial Development Revenue Bonds (IDRBs), also known as “private activity bonds,” are an alternative method of financing. There are two types of bonds, taxable and tax exempt. Although both kinds of bonds may be issued, it is generally the tax-exempt bonds that are of interest to a
The Internal Revenue Code is what creates tax-exempt
bonds, which provide a source of long-term, belowmarket-
rate financing. IDRBs are securities sold to investors with the proceeds used to fi nance the project. The borrower
pays the principal and interest on the debt. Because the
interest is exempt from federal income tax, the rate on this
type of fi nancing is generally lower than conventional debt
financing. Tax-exempt IDRBs allow certain types of business
the opportunity to finance facility construction and related
costs at an interest rate typically two or three percent below conventional financing rates. The bonds can be used for construction, demolition, new machinery and equipment, land purchase (up to 25% of the bond value), and other specified items.
How do you apply for IDRBs?
The IDA serves as the initial entry point into the IDRB application process in Charlotte County. To apply, a company submits an application to the IDA. The Charlotte
County IDA requires the proposed project be capable of
producing tangible economic benefi ts in the form of new
employment, the preservation of existing employment,
new capital investment, or a combination of those benefits.
The IDA receives an application fee of $1,500 for bond issues up to $5 million and $2,500 for bond issues more than $5 million. The applicant then works with a private lender or underwriter to sell the bonds to the public. If the project receives approval and is funded, a financing fee is paid to the IDA. The fi nancing fees are: 1/2% of the first $5 million ($5,000 per $ Million); 1/4% of the second $5 million ($2,500 per $ Million); and 1/8% thereafter ($1,250 per $ Million) of the value of the bond issue. The IDA uses the income it receives from IDRBs to support economic
development efforts in Charlotte County.
The IDA assists with the issuance of bonds by approving an Inducement Resolution and Memorandum of Agreement between the IDA and the company requesting the use of IDRBs. Once the IDA approves the project, it must be confirmed by a Resolution of the Board of County
Commissioners of Charlotte County. It is recommended
the company seek approval of the Inducement Resolution
prior to commencing work on the project or acquiring land,
materials or equipment. Otherwise the cost of such work
may not be reimbursable from the IDRBs proceeds.
Once approved, the bonds technically become special obligations of the IDA, however neither the IDA, Charlotte County, nor the State is responsible for repayment or guarantee of the bonds. The bonds are paid solely from revenues generated by the project or by the company receiving the funds.