Financing Options
Background
The Portage County Port Authority (PCPA) has an
agreement with the Summit County Port Authority (SCPA) to provide
financing for projects within Portage County. Financing options
include Fixed-Rate Bond Fund Finance and Off-Balance Sheet Financing
for both public and private projects. Some projects may qualify for
tax exempt bond financing.
Fixed-Rate Financing Program (Bond Fund)
- The SCPA Bond Reserve Fund offers long-term,
fixed-interest-rate financing for qualified
industrial, commercial and public projects.
- Projects from $1 to $6 million; expansion or
construction of new facilities in Summit County and
Northeast Ohio.
- Fixed interest rate based on taxable or
tax-exempt bond rate at time of sale.
Financing for credit-worthy small and medium-sized
companies and non-profit agencies.
- Sales tax exemption for all construction and
building materials.
- The $5 million Bond Reserve Fund has an
investment-grade credit rating of BBB+ by Fitch IBCA.
The Port Authority offers lease financing to
qualified borrowers. Projects must be new construction
or conversion of existing facilities purchased for the
project by the SCPA, which acts as the lessor.
The loan, a low-cost, long-term financing
alternative, can be structured as fixed or floating rate
and has a simplified closing process. The lessee
maintains total control of the property, from design to
operation, and can deduct depreciation from its federal
income tax as if it owned the building.
Lease financing:
- Provides flexibility: Can be structured
according to the nature of the project and the goals
of the lessee.
- Improves balance sheet ratios: Lease financing
does not appear on the lessee’s books (according to
FASB 13 Rules).
- Provides significant sales tax savings: All
construction and building materials are tax-exempt.
- Enables lessee to deduct lease payments: Reduces
annual occupancy cost because lease/rent expense is
a business cost deduction.
- May exempt interest on bonds from state tax:
Exemption reduces lease cost.
Enables lessee to capture any upside appreciation of
value.
The Port Authority provides conduit financing
agreements to support community development projects.
These agreements offer long-term financing solutions for
government and private non-profit community development
projects:
- Stadiums & sports facilities
- Art and cultural facilities
- Convention and recreation centers
- Historic preservation facilities
- Community centers
- Housing
Port Authority financing offers 501(c)3
organizations substantial benefits:
- Tax-exempt interest rates are on average
one-third lower than conventional bank interest
rates.
- Conduit financing bridges the gap between
construction costs and receipt of pledged funds,
allowing construction to begin early.
A complete list of SCPA projects and project
descriptions are available at:
http://www.summitportauthority.org/project_financing.htm
For More Information,
contact:
Diana
Fierle, Assistant Secretary
128 North Prospect Street - Ravenna, Ohio 44266
Phone: 330-297-3470 Fax: 330-297-3472
E-Mail:
dfierle@portageco.com
Last modified:
December 07, 2006
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