Disaster bonds could be used by developers - Business First of Columbus:

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Thirty counties in the state, including all sevem counties insoutheast Wisconsin, are receiving $3.9 billion in Midwesternn disaster area bonds from a federal tax relief act that was passerd in October 2008. Brian Lanser, a partnetr in the public finance groupat LLP, said the disaster bonds are similar to industrial revenued bonds. Initially, each of the 30 countiesd is expected to receive a minimumof $50 million in tax-exempt The remaining $2.4 billion will be distributed based on the value of projectzs in the 30 counties that have been designated as disastedr areas, said Lanser.
Wisconsin Department of Commerce officials have not yet finished writing the rulesa for administering thedisaster bonds. Companiezs and developers who want to access the bonds will have to completre an application with theCommerce Department. In some instances, Lanse said, Gov. Jim Doyle’s office will be responsibl e for approving thebond applications. The Midwestermn disaster area bonds may be used to financed the construction of anaffordable multi-family rental project, the cost of building or renovating a commercial property and the cost to repai r or reconstruct a public utility.
“We’re hopeful this program will jump-star a number of development projects inWest Allis,” said John the city’s director of development. Stibal said the tax-exempty bonds could lower a developer’s interestt rate by 200 basis points, making it more likely to get planse approved bya lender. Lanser said the disaste bonds must be usedbefore Jan. 1, 2013. The bondsa can’t be used to refinance existing anddevelopers can’t apply more than 25 percent of the bond proceeds for the acquisition of Also, the bonds can’t be used for the purchasew of equipment. One such project could be $21.
5 millionb in bonds for for the demolition and reconstruction ofthe bank’s 900-caf parking structure on the cornerd of North Van Buren and East Michigan street in downtown Milwaukee. The bank wants to tear down itsexistingh three-story parking ramp and replacinb it with a 900-car structure with one floor beingg below grade. By adding more than four floors to theparkiny ramp, U.S. Bank is reserving about an acre of land for a possibl office building to be constructed near North Cass and EastMichigabn streets, said Jim Scherer, a vice president of the Milwaukee Economic Development Corp. The project will be submitte d to the state for approval ofthe bonds.
Scherer said the Milwaukeew Redevelopment Authority will be an activwe user of the Midwestern disaster area providing developers can find lenderse to participate in projects receiving the While Milwaukee real estate lawyefr Mick Hatch applauded the creation of thedisastedr bonds, he questioned how much would be financexd because of the economic downturn. “The bonds are a big but they may not be enough to help a developedr obtain financing in these toughyeconomic times,” said Hatch, a partnerf at LLP, Milwaukee. Hatch and Stibaol agree the $3.9 billion in bondingy authority is far more than developerss or private companies in Wisconsincan use.
anything we can use that may accelerate development project is worthlooking at,” Stibal said.