County looks to funnel low-interest loans from feds

A key McHenry County Board committee on Tuesday endorsed plans to designate the county an economic "Recovery Zone," a move that would give it authority to help local business and governments obtain as much as $60 million in low-interest loans.

The funds, under the plan approved 7-0 Tuesday by the board's finance and audit committee, would be made available for projects expected to stimulate job growth in the county.

"The real purpose of this program is putting people back to work," committee Chairman Marc Munaretto said.

The funding is part of the American Reinvestment and Recovery Act, the $789 billion federal stimulus plan.

The county, through an undetermined application and approval process, would issue bonds to help other governments or local businesses pay for capital projects. Investors in those bonds would receive a 45 percent refund on income taxes off them, effectively reducing the interest rates for borrowers.

That reduced rate may be the difference between a job-spurring project being financially feasible or not, said Tim Stratton, the county's bond counsel on the program.

The bonds would be issued through private banks, meaning the county would not pay any costs or bear any risk should a lender default.

Munaretto said he already has heard from prominent local business interested in obtaining funding through the program. The McHenry County Mental Health Board also is interested in tapping into the program to expand its Crystal Lake facility and potentially build a new facility elsewhere, its executive director, Sandy Lewis, said Tuesday.

Jean Schober, interim president for the McHenry County Economic Development Corp., said the program is being well received in the business community.

"We've received many requests in the last four months from companies that are looking for help," she said. "This is an opportunity to help our manufacturing and business community."