Business

DuPage Co. to offer $69 million in low-interest loans to businesses

Posted September 30, 2009 11:00 pm

Jake Griffin

Businesses looking to build or expand in the area may qualify for a federal program offering tax-exempt borrowing that could shave millions of dollars in costs off those projects.

The companies can utilize the borrowing power of counties and large cities to help finance the projects, while the taxing bodies don't have to worry about any liability for the debt issued. The program allows the companies to borrow money at a point to a point and a half less than normal interest rates, which could result in savings of millions of dollars on major projects.

"Everything over a million dollars will see a benefit of savings," said Josh Grodzin of Choose DuPage, the county's economic development arm.

Every county in the state has access to the program, but only cities with populations of more than 100,000 can participate. Aurora can offer assistance on up to $13.7 million worth of bonds, while Chicago's threshold is nearly $200 million. Naperville could offer up to $11.9 million, but city officials said no decision has been made about whether to participate in the program.

Aurora has begun marketing the program and promoting it to businesses interested in building in the city. Development Services Director Bill Wiet said the city is also looking at partnerships with each of the four counties the city sits in to get the most out of the program.

"We've added this program into our economic development strategy," he said.

The only projects that don't qualify are residential construction, golf courses, country clubs and race tracks.

St. Charles City Administrator Brian Townsend is hoping the city can utilize the program through Kane County for its stalled First Street redevelopment project. However, the massive downtown revitalization effort includes a residential component that may disqualify it. Townsend was unsure how much of the county's $25.2 million bonding power they'd need.

"We think it's an opportunity and we're not going to let it pass by without taking a look at it," he said. "The county hasn't established an application process yet, but we've been tracking their progress and keeping in touch."

Few taxing bodies have determined an application process yet. Each one is responsible for determining how the borrowing power will be divided, if at all. The only other mandate from the federal government is that construction bonds be issued by Jan. 1, 2011.

Initially, DuPage County was going to offer the assistance on a first-come-first-served basis, but county board members worried that better projects might get shut out just because it could take some developers a few days longer to line up financing than others. Instead, the county board's economic development committee will set a deadline for applicants and pick the best from the crop, said board member Paul Fichtner. But it's unlikely a cap will be set on how much one project can utilize of the county's $69.1 million.

"Conceivably, if it's an ultra-good project they can take a big chunk," he said. "We're looking for shovel-ready projects that are going to bring new high-paying jobs to the area."

In McHenry County, Equity One Sports is seeking $15 million of the county's $27.5 million allocation to help build a minor-league baseball stadium in Woodstock. Deputy County Administrator John Labaj said the group's financing isn't secured yet. The project would still have to be approved by the county board once financing is lined up.

"We've got about six to eight others that have requested applications," Labaj said.

The county would handle allocation of the $69 million worth of bonds, but not be liable for any of the debt issued.

The program would allow businesses to borrow at a point to a point and a half less than normal interest rates, which could shave millions of dollars off major projects.

Choose DuPage, the economic development arm of the county, is accepting applications, and the county board's economic development committee will make the final determination in the coming weeks of which projects receive the lower-interest loans, said county board member Paul Fichtner.

Applications will be judged on how quickly work can begin, how many jobs will be created and how high-paying those jobs will be.

For more details, check back later at dailyherald.com or read Friday's Daily Herald.

Borrowing power Here's how much each county and large city in the area are allowed in tax-exempt bonding for private businesses as part of federal economic stimulus program. Chicago: $199.7 million Cook County: $196.8 million DuPage County: $69.1 million Lake County: $59.5 million Will County: $41.1 million McHenry County: $27.5 million Kane County: $27.5 million Aurora: $13.7 million Naperville: $11.9 million Source: U.S. Department of Treasury

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