WHAT PROJECTS ARE ELIGIBLE FOR FINANCING?

Qualified Projects are limited by the Internal Revenue Code of 1986, as amended (the "Code"), the Arizona Revised Statutes (including but not limited to A.R.S. Section 35-701 on ward - the Industrial Development Financing Act and A.R.S. Section 35-901 - onward - the "Allocation of Private Activity Bonding Authority Act") and by the IDA's policies. An eligible Applicant could be any public, private, or nonprofit organization.

Generally speaking, the proceeds of Bonds can be used for either the purchase or lease of land, buildings, machinery or equipment suitable for:

- Manufacturing, processing, or assembling of manufactured or agricultural products.
- Storing, warehousing, distributing, or selling of industrial, agricultural, or mining products, or for related research and     development.
- Buildings that serve as company headquarters or regional offices.
- Adaptive reuse for offices of buildings listed on the National Register of Historic Places.
- Rehabilitation of residential buildings located in a registered historic neighborhood.
- Healthcare institutions as defined in Arizona Revised Statutes.
- Multifamily rental housing, with a portion reserved for low and moderate income persons.
- Single family owner-occupied housing.
- Convention or trade show facilities.
- Facilities for airports, docks, mass commuting, parking, storage, or related training.
- Facilities for solid waste or sewage disposal, electric energy, gas, or water.
- Industrial park facilities.
- Air or water pollution control facilities.
- Educational institutions operated by a nonprofit organization which is nationally accredited and not funded by state monies or any educational institution established under Arizona law as a charter school and owned by a nonprofit organization.
- Research and development facilities.
- Commercial enterprises, including office, recreational, hotel, motel, and service uses if facility is located in a “designated area” (generally a “redevelopment area,” a HUD “pocket of poverty” or “neighborhood strategy area”).
- Certain child welfare agencies owned and operated by a nonprofit organization.
- Certain transportation facilities.
- Museums operated by a nonprofit organization.
- Facilities owned or operated by a nonprofit organization that is primarily engaged in delivering community services on that property consisting of fitness programs, camping programs, health and recreation services, youth programs, child care, senior citizen programs, individual and family counseling, employment and training programs, service for individuals with disabilities, meals, feeding programs or disaster relief.

The use of Bonds for these purposes is affected by changes in state and federal laws. IDA’s Legal Counsel should be consulted prior to submitting an Application.

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TERMS/INTEREST RATES

(a) The IDA merely acts as a "conduit" for the issuance of the Bonds.

(b) The IDA is not responsible for making any payments on the Bonds from the IDA's own funds or assets.

The IDA does not provide funds to an Applicant. Funds are provided by the bond purchaser. It is the responsibility of the Applicant to provide a purchaser for the IDA's Bonds, which, in many cases, will be commercial banks or, in the event the Bonds are to be sold to the public, an investment banker. IDA Bonds are not a direct lending or government guarantee program. Applicants must secure a purchaser of the Bonds on the merits of the Project and the financial standing of the Applicant.

An Applicant receiving a commitment from a lender or underwriter to purchase the Bonds must negotiate the terms of the Bonds, including loan amount, maturity, and interest rate, with that lender or underwriter. Interest rates charged to finance the Project will be lower than conventional commercial rates because of the tax-exempt status of the interest on the Bonds.

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APPLICATION PROCESS

Applicants should contact the IDA for application information. Applicants should also consult the IDA's Legal Counsel regarding the eligibility of the proposed Project for Bond financing. If eligible, the following process must then be followed:

Step No. 1. Application is made to the IDA for preliminary approval.
Step No. 2. A preliminary resolution (or inducement resolution) is considered by the IDA. The remainder of this outline will assume approval by the IDA and passed by the IDA.
Step No. 3. If necessary, a request for private activity bond volume cap is made to the Arizona Department of Commerce ("Commerce").
Step No. 4. Final Approval of the IDA is considered by the IDA. The remainder of this outline will assume approval by the IDA.
Step No. 5. If required under Code - Section 147(f), a notice of public hearing is published.
Step No. 6. A public hearing is held (at least 14 days after notice is given by publication).
Step No. 7. The Mayor and City Council approve the issuance of the Bonds by the IDA.
Step No. 8. If necessary, an application is made to Commerce for review of the Bonds under Section 35-726 of the Act.
Step No. 9. If necessary, a hearing under Section 35-726 is held, and Commerce approves the issuance of the Bonds.
Step No. 10. The Bonds are sold (either privately or publicly).
Step No. 11. The transaction closes.

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FEES

A non-refundable application fee must be paid by the Applicant, with $500 due upon submission of the Application and an additional $2,000 payable within 10 days after the IDA has granted preliminary approval to the Application. Each Applicant shall also be responsible for all of the IDA's Advisor and Legal Counsel fees incurred in connection with the issuance of Bonds to finance the Applicant's Project (whether or not incurred before or subsequent to the closing of the bond issue). Additionally, Applicants are obligated to pay a roughly proportionate share of the IDA's Administrative Expenses annually, in the following amounts:

For-profit Borrowers:

• 9 basis points on the portion of the outstanding principal amount of the bonds from $0 - $10,000,000; plus

• 6 basis points on the portion of the outstanding principal amount of the bonds from $10,000,001 - $20,000,000; plus

• 3 basis points on the portion of the outstanding principal amount of the bonds above $20,000,000.

Non-profit Borrowers:

• 8 basis points on the portion of the outstanding principal amount of the bonds from $0 - $10,000,000; plus

• 5 basis points on the portion of the outstanding principal amount of the bonds from $10,000,001 - $20,000,000; plus

• 2 basis points on the portion of the outstanding principal amount of the bonds above $20,000,000.

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FOR ADDITIONAL INFORMATION, CALL OR WRITE