2.22.10
Council to vote on stimulus money for business development
www.bizjournals.com
Columbus City Council will vote Monday night on the city becoming part of a new financing program aimed at pumping federal stimulus funding into private business development.

If approved, the legislation would authorize the city to partner with the Columbus-Franklin County Finance Authority to act as the issuer for $24.5 million in federal recovery zone bonds, a new category of tax-exempt private activity bonds created by the American Recovery and Reinvestment Act of 2009.

A release from city council said the bonds provide tax-exempt financing for privately funded projects in areas designated as recovery zones. The bonds will give private developers access to capital financing at a much lower cost than would otherwise be available with a goal of encouraging business expansion and economic development.

“It’s not cash but an allowance of federal tax-exempt financing for eligible projects,” said City Councilman Andrew Ginther. “The federal government is providing an opportunity (for businesses) to access capital financing at much lower costs than financing that is available elsewhere.”

He said qualifying businesses will repay the bond debt. In the case of default, the federal government – not the city or finance authority – will be responsible for payments to bond holders.

No projects have been selected yet, said Jean Carter Ryan, executive director of the Columbus-Franklin County Finance Authority. She said qualifying projects must close by the end of this year, so the finance authority has been with working with city and county officials to identify “strong credit-worthy projects.”

Formed by the city and Franklin County in 2006, the finance authority provides long-term financing to businesses, non-profits and local governments.

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