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ECONOMIC DEVELOPMENT FUND. ALLEGHENY COUNTY . Created in 1995 Key Financing Vehicle of the Redevelopment Authority of Allegheny County Using Proceeds from Issuance of $25 Million Special Tax Development Bonds Second $25 Million Bond deal in 1999 Used for Low Interest Loans.

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Presentation Transcript
economic development fund edf background

Created in 1995

  • Key Financing Vehicle of the Redevelopment Authority of Allegheny County
  • Using Proceeds from Issuance of $25 Million Special Tax Development Bonds
    • Second $25 Million Bond deal in 1999
  • Used for Low Interest Loans
Economic development fund (EDF)BACKGROUND
purpose of the economic development fund edf

Principal Objective

    • Creation of a diverse economic & industrial community
    • Establishment of new industries & expansion of existing business that will enhance the taxable base of properties in Allegheny County
  • Principal Focus
    • Development of industry & encouragement of high technology enterprises.
PURPOSE OF THE ECONOMIC DEVELOPMENT FUND (EDF)
debt service payment

Paid with Portion of Allegheny County’s Regional Asset District (RAD) Tax

    • Earmarked for Economic Development
    • RAD Tax is a 1% additional sales tax imposed by Allegheny County
      • Pennsylvania Sales Tax – 6%
      • Allegheny County Sales Tax – 7%
DEBT SERVICE PAYMENT
edf loan terms

Must be less than or equal to the term of private lender, but not to exceed 20 years

  • Not to exceed:
    • 24 months for new construction or rehabs
    • 10 years or remaining depreciable life for used equipment
  • May be made in conjunction with an acceptable private lender
  • Requires 10% equity, total lending sources not to exceed 100% of costs
  • Must be secured with lien positions on the asset or other acceptable collateral
  • Interest rate generally 75% of then current published Wall Street Journal prime rate
EDF LOAN TERMS
edf loan fees

Financing Application Fee

    • $750
  • Loan Origination Fee
    • 1.0% to 2.0% of original principal
  • Annual Administrative Fee
    • 0.1% of original principal for life of loan
EDF LOAN FEES
edf in house loan servicing process

Performed by ACED Staff

    • Project Management
      • Underwriter on Staff
      • Review EDF Loan Applications
      • Determine Eligibility
      • Present Loan Application to Loan Committees & RAAC Board of Directors
    • Accounting Staff
      • Create Loan Amortization Schedule
      • Track Monthly / Yearly Payments in QuickBooks
      • Send out Monthly / Yearly Invoices
      • Notify Key Personnel / Legal of any Defaults
      • Prepare Monthly Reports
EDF IN-HOUSE LOAN SERVICING PROCESS
to date

$86.5 MILLION OF LOANS ISSUED

  • $5.1 MILLION IN DEFAULTS
    • APPROXIMATELY 6%
TO DATE
mwdbe contractor working capital loan program

Revolving Loan Fund of $500,000

  • Purpose
    • Fill the void for short term working capital needed by MWDBE businesses for contracts with a government entity or other contract funded with government dollars
  • Must be Certified as an MWDBE
  • To Date
    • Over $2.1 Million in loan commitments have been issues
MWDBE Contractor Working Capital Loan Program
program limits

Maximum Loan 80% of contract amount of $100,000 whichever is higher

Interest Rate is Prime Rate Floating currently at 3.25%

Maximum 1 Year Loan Term or term of contract whichever is less

Program Limits
questions
Jack Exler, Deputy Director

Allegheny County Economic Development

jexler@alleghenycounty.us

412-350-1036

QUESTIONS?