Cook County Economic Development staff spoke to a packed house of bankers and financial experts on Tuesday as part of its outreach effort to connect businesses with more than $196 million in bonds through the federal government’s American Recovery and Reinvestment Act, or ARRA.
Last June, the U.S. Treasury Department announced the availability of $25 billion for two new types of Recovery Zone Bonds – Recovery Zone Economic Development Bonds and Recovery Zone Facility Bonds. County Board President Todd Stroger announced the availability of close to $200 million in those bonds for businesses last fall. All of Cook County has been designated a ‘recovery zone’ – making any business that fits the criteria of the bonds eligible to compete for funding.
The Recovery Zone Facility Bonds tackle two key issues: the high cost of debt for many companies seeking to borrow to establish or expand economic activity, and the difficulty many companies have in procuring longer-term debt. Many banks have been unwilling to extend loans to companies for more than two or three years in today’s economic climate, while Recovery Zone Facility Bonds can be financed over twenty years or more.
Cook County is serving as the conduit for the facility bonds, and will assess applications based on a number of key criteria, including the number of jobs expected to be created by the project, projected real estate and sales tax revenue, location in areas of particular economic need, and projected economic impact on local communities.
“Facility bonds represent a tremendous opportunity for businesses to access attractively priced financing to build their companies, and we’ve been aggressively marketing the program to local municipalities, individual lenders and bond underwriters,” said Cook County Chief Financial Officer Jaye Williams. “It made sense to bring the financial services community together as a group to discuss the benefits of the program and help them identify transactions that qualify for the program.”
Recovery Zone gacility bonds offer a financing tool to help companies undertake new projects in areas hard hit by the nation’s economic crisis and enhance job growth and economic activity throughout Cook County. Since the program was announced last fall, two projects have been been advanced for approval, and the projects combined are expected to create several hundred jobs paying between $40,000 - $60,000 in the south suburbs.
“Our goal is to work with companies, their financial institutions and their bond counsels to ensure that these funds go to areas of greatest need, and fit with our larger economic development goals to support communities that are seeking to turn the tide against joblessness and disinvestment,” says John Schneider of the Cook County Department of Economic Development.
Applications for this round of facility bonds are due by May 3, but applications will be reviewed and approved as they come in to Cook County. For more information, businesses should go to www.cookcountygov.com, click on the ‘Agencies’ hotkey in the upper right of the frontpage, click on the ‘Planning and Development’ link, and scroll down for more information and access to the application. Calls should be directed to John Schneider at 312-603-1070.