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ALLEGHENY COUNTY

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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ALLEGHENY COUNTY

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  1. ECONOMIC DEVELOPMENT FUND ALLEGHENY COUNTY

  2. 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

  3. 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)

  4. 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

  5. TYPES OF ELIGIBLE PROJECTS /ACTIVITIES

  6. 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

  7. 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

  8. EDF LOAN APPLICATION PROCESS

  9. EDF LOAN APPROVAL PROCESS

  10. 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

  11. EDF IN-HOUSE LOAN SERVICING PROCESS

  12. SUCCESSFUL LOANS

  13. $86.5 MILLION OF LOANS ISSUED • $5.1 MILLION IN DEFAULTS • APPROXIMATELY 6% TO DATE

  14. SUB-COMPONENT OF EDF LOAN PROGRAM TARGETING MWDBE CONTRACTORS MWDBE CONTRACTOR WORKING CAPITAL LOAN FUND

  15. 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

  16. 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

  17. SUCCESSFUL LOANS

  18. Jack Exler, Deputy Director Allegheny County Economic Development jexler@alleghenycounty.us 412-350-1036 QUESTIONS?

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