Explanation
BACKGROUND: Issuance of Recovery Zone Bonds was authorized by the American Recovery and Reinvestment Act of 2009 (ARRA). The City received an allocation of $24,500,000.00 in Recovery Zone Facility Bonds that must be issued by December 31, 2010. Recovery Zone Facility Bonds are a new category of tax-exempt private activity bonds. Facility Bonds allows projects to be financed tax-exempt which prior to the ARRA were not eligible for tax-exempt financing. Tax-exempt financing provides a lower cost of money for the borrower. Almost any type of capital investment project in a designated Recovery Zone is eligible. Examples include commercial projects, office complexes, hotels and warehouses. Ineligible projects include residential rental properties, golf courses, massage parlors, and stores that sell alcoholic beverages to be consumed off-site as its primary product. The entire City has been designated a Recovery Zone by Resolution 0159x-2009.
The City is currently working in partnership with the Columbus-Franklin County Finance Authority to identify eligible private commercial development which is eligible to issue Recovery Zone Facility Bonds. Both entities are confident that the entire bond allocation will be expended within the given timeframe.
This legislation will designate the Columbus-Franklin County Finance Authority as the issuer of the Recovery Zone Bonds for the City of Columbus. The Finance Authority is also acting as the bond issuer for the Franklin County Recovery Zone Bond allocation.
This ordinance will repeal ordinance number 0262-2010, passed February 24, 2010 because the Columbus-Franklin County Finance Authority was referred to not only as the issuer but also as the "ultimate beneficiary" of the bonds and it was recently determined that the City needs instead to designate the Columbus-Franklin County Finance Authority as the City's "agent" for purposes of issuance
Emergency action is requested to allow the transfer of the...
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