Rockland”™s Industrial Development Agency and its newly formed Economic Assistance Corp. are another vehicle that can help manufacturers and nonprofits get needed low-cost financing.
Ron Hicks, executive director of the IDA and president and CEO of the Rockland Economic Development Corp., along with the REDC staff gave bankers from M&T, Provident, TDBank, HSBC, Bank of America and Greater Hudson Bank an in-depth presentation recently of what it can offer businesses at a luncheon at the Manhattan Club in West Nyack.
The county”™s IDA can obtain financial relief, including state and local sales tax exemptions, PILOT (payment in lieu of taxes) programs, mortgage recording tax exemptions and other incentives to help finance the relocation or the growth of an existing Rockland company.
Steve Porath, the REDC”™s economic development director, gave bankers a few examples of companies that benefited by working with the agency. “Intercos, a global cosmetic manufacturer with a facility in Congers, was an existing business looking to expand its operation. The IDA got involved by providing them with state and local sales tax exemption on $4 million, which it used to buy equipment and renovate the building. Intercos also benefited from a grant from Empire State Development and the Empire Zone program due to job creation that will occur as a result of its expansion,” Porath said.
But it doesn”™t have to be a multimillion-dollar financing deal a company is looking for, he said. “DER Specialty products, flooring manufacturers who relocated to Rockland to the former Journal News building in West Nyack and added 18 new jobs in the process, needed $750,000 for the move and renovation. We were able to provide it.”
He encouraged bankers to have a conversation with the IDA on behalf of their customers.
“It”™s an informal meeting to discuss the project to see if it is eligible. We do a cost-benefits analysis, since we are a fee-based organization. We look at the project to see if it has a potential for a PILOT or other exemptions and determine if it makes sense for them to do business with us. In some cases, it may not, but it will help to make a bottom line business decision.”
Attorney Anthony Montalbano of Montalbano, Condon & Frank P.C. of White Plains has been instrumental to the Rockland IDA in helping get through the legal process involved in receiving incentives through the county. “The potential client makes a presentation to the board. If the IDA feels it qualifies, an inducement resolution is created.
“The IDA requires a copy of the title report, proof the taxes have been paid and up to date, appropriate certificates of occupancy and any environmental reports done on the property. We do not want to be caught in a situation where the property has environmental issues,” Montalbano said.
If the documents pass muster, the IDA issues an authorizing resolution approximately 30 days after the inducement resolution is given. Then, it”™s off to the county executive for final approval.
The IDA must establish an ownership interest in the property or in the project itself. It is done through a lease mechanism or fee title, Montalbano said.
“Some feel the IDA process can slow things down ”“ if certain items have not been negotiated with the bank or they have not resolved outstanding issues, it can happen ”“ but it does not happen frequently.”
Can existing debt be refinanced? For not-for-profits looking to refinance a taxable mortgage loan, the answer is yes. For-profit businesses are not eligible unless they come to the IDA before they incur the taxable debt and the IDA approves an inducement resolution. If they get interim taxable financing and later do a tax exempt bond issue, they can then refinance it.
Hicks told bankers that Rockland”™s IDA is unique “because we require prevailing wage for construction; and if the applicant does not the meet terms of agreement, we recapture 100 percent of the benefit with penalty and interest. We do that to maintain the integrity of our IDA.”
Unlike other counties, Rockland”™s IDA negotiates PILOTs with the school districts and municipalities and reaches an agreement with both before granting them to a business.
“You”™ve probably read horror stories about IDAs and Empire Zones that did not do the right thing ”“ although we were last to get EZ and had a short time to use it, we did do the right thing and took it very seriously,” Hicks said. “We are very proud that Comptroller Tom DiNapoli considers us an example of best practices. If your client needs to get something done, come to us and ask us for special accommodations,” Hicks told bankers. “We really want to help you get your deals done.”
Frank Micalizzi, group manager for commercial banking at M&T Bank in Tarrytown, enjoyed the informative overview. “I”™ve done business with Rockland in the past, and it”™s always been a sincere, cooperative team effort for the client. …I”™m very pleased to do business with Ron and his staff.”
“It”™s wonderful that Governor Cuomo gave us an on-time budget ”¦ His administration has promised to make economic development his number one priority. Now, that”™s what we need to see happen,” Hicks said.
