Wednesday, January 11, 2012
Fulton Area Development Corporation President Bruce Hackmann encouraged the city council to consider developing a policy for use of what he described as an important tool to assist in economic development: Chapter 100 Industrial Revenue Bonds.
At Tuesday night’s council meeting, Hackmann explained that state law allows municipalities to issue the bonds to companies seeking to come into the community to finance a wide range of things from construction and machinery to equipment.
He said businesses would have to present detailed plans to the council in order to be approved for the bonds, which provide tax abatement for real and personal property taxes on the building and equipment for the life of the bonds.
“The city would retain ownership of the building and equipment (paid for with the bond) and lease it back through the life of the bond,” Hackmann said.
Emphasizing that the bonds would not be a credit risk for the city — the city is not financially responsible — he said while the company was making bond payments, it would be required to provide a detailed accounting to the city, “so there would be oversight.”
“You’re not giving up anything you have, you’re giving up part of what you would get,” Hackmann said. “(Chapter 100 Industrial Revenue Bonds) is a tool you almost have to have to play the game in economic development.
“Without it you won’t be as competitive.”