County officials are working on how to allocate $22 million in economic development and infrastructure bonds it received as part of the federal stimulus package Congress passed in February.
Bethany Dentler, executive director of the Medina County Economic Development Corp., said two types of government bonds will be issued: Recovery Zone Economic Development Bonds and Recovery Zone Facility Bonds.
Public and private projects can qualify for the tax-exempt, low-interest bonds, county Commissioner Sharon Ray said. The bonds were included in the 2009 American Recovery and Reinvestment Act and may be issued until Dec. 31, 2010.
About $8.8 million of the bonds are Recovery Zone Economic Development Bonds. RZEDBs allow the county to borrow at a lower interest rate than traditional tax-exempt financing. Although interest on the bonds is taxable, the federal government would reimburse the county for 45 percent of interest paid.
RZEDBs are used to promote development or other economic activity, including public infrastructure, the construction of public facilities or job training.
The county also received about $13.2 million in Recovery Zone Facility Bonds. RZFBs allow the county to provide tax-exempt financing to projects that historically would not qualify, such as manufacturing plants, distribution centers or hotels.
Before any bonds can be issued for a specific project, county commissioners must declare an area a recovery zone, Ray said. An area qualifies as a recovery zone if it is in significant economic distress, including unemployment, foreclosures or poverty, she said.
“We could declare the entire county a recovery zone,” as others in the country have, Ray said, adding commissioners will work until a consensus it reached.
After an area is declared a recovery zone, a business or developer can apply for the bonds. Guidelines for recovery zones and bonds are currently being written and clarified by the Medina County Economic Development Corp., Ray said.
At least one developer in the area has expressed interest in obtaining recovery zone bonds: Chippewa Landing Partners LLC, the developer of Chippewa Landing, a hotel, resort, spa and culinary school that will be built on the site of the former Chippewa Lake Amusement Park in Lafayette Township.
“As the economy, banking and equity markets have yet to return to what might be considered normal, we are seriously exploring these bond programs,” said Gary Sills, managing partner of Chippewa Partners.
Overall, the federal government allocated $25 billion in recovery zone bonds based on the each state’s decrease in employment compared with the national rate. In turn, the state allocated the bonds according to each county’s unemployment rate compared with that of the state.
Ohio’s unemployment rate was 11.1 percent in June; Medina County’s was 9.3 percent. The county’s jobless rate was 6.6 percent in June 2008.
Ray said commissioners want to make the process consistent and fair.
“We want to make the process as transparent as possible,” Ray said. “We’re looking forward to working with businesses and moving the process forward.”
Contact Lisa Hlavinka at (330) 721-4048 or lhlavinka@ohio.net.
