Industrial Revenue Bond Financing Plan 6/27/1979MASSACHUS1:,TTS INDUSTRIAL R IA /J- NUE BOND FINANCING PLAN
The A;assachusetts Industrial Finance Agency (N.I.F.A. ), successor
to the former State Industrial Finance Board, has provided us with ad—
ditional data relative to this financing mechanism. Excerpt follows:
THE BENEFITS OF BONDS
A. To the Borrower:
1. Interest rates are considerably lower than conventional financin4
2. Up to 100% financing is possible;
3. Terms can be negotiated to meet individual needs;
4. Large financings can include a $1,000,000 bond without being
subject to the capital expenditure restrictions;
5. Lower debt service makes more business opportunities feasible;
6. Savings banks can now legally purchase revenue bonds;
7. Pollution Control facilities are eligible.
B. To the Bond Investor:
1. Interest income is tax — exempt from both federal and state in—
come taxes;
2. May provide higher effective yield than conventional mortgage,
depending on tax bracket;
3. Mortgage insurance is available for additional collateral, if
needed. •
C. To the Community:
1. Stimulation of local industry;
2. Creation of jobs;
3. Expansion of municipal tax base;
4. New incentive for commercial revitalization of downtown area;
5. Enhances feasibility of solid waste disposal facilities.
December 15, 1178
` Norilratsrpboft RedevelopAice Authority
Ct y Hall
• Northampton, Mss. 01060 • (413) 585 -1045
Northampton Industrial Park
June 27, 1979
Massachusetts Industrial Revenue Bond Financing Plan
SALIENT POINTS BY WALTER J. MURPHY
1. Plan was adopted December 6, 2967
2. Purpose of Plan
a. Creation of new jobs
b. Stimulation of local business
C. Expansion of municipal tax base
d. Development of natural resources
e. The multiplier effect, the start of one industry may induce the
start of additional industry
3. Advantages of Industrial Bond Financing
1. 100% Financing - 100% of the funds required for the acquisition
of land, building, machinery, and equipment, plus the cost of
issuing the bonds can be financed.
2. Lower Interest Rates.- The purchaser of the bond issue receives
interest which is tax - exempt from federal and Massachusetts in-
come taxes. As a result of this tax - exemption, the interest
rate on the loan is considerably lover than comparable conven-
tional loan rates.
4. Northampton Financial Limitations
Industrial revenue bonds are issued on the credit of the industrial
tenant and such other security as he may furnish such as a mortgage
of the project or a guaranty by another of his obligations. The
municipality does not pledge its faith, credit or financial obliga-
tion to an industrial revenue bond. In the event of default, the
bondholder looks only to the security furnished by the Industrial
tenant to satisfy the obligation represented by the bonds.
G
A /tairptojj Redevelop -fort Authority
City Hall
5. Current Limitation Per Company
$10,000,000
6. Sale of Bonds
7. Title
The municipality acting by and through the Industrial Development
Financing Authority retains title until bond issue is fully paid.
8. Lease
• Northampton, Mass 01050 • (413) 536 -1045
Bonds are sold on market with proceeds placed with a corporate
trustee (A Massachusetts Trust Company Or bank having the po wer of
a trust company)
Project is leased (or sold through installment payments) covering
interest, repayment of principal, and carrying charges.
9. Taxes
Property is taxed in same manner as such land and building would
be taxed to lessees if they were the owner.
10. Northampton Industrial Development Financing Authority
a. N.I.D.F.A. was appointed February 1, 2968
b. Current Members
Samuel Goldman 1979
Gordon Murphy 1980
Joseph Fennessey 1981
Richard Covell 1982
Shirley LaRose 1983
11. A State Industrial Finance Board has responsibility for final re-
view and approval of all revenue bond applications.
12. Time
The time elapsed from the manufacturer's application until the bond
issue is sold is approximately 60 days.
Sources of Information
lk Dept. of Commerce & Development
Massachusetts Industrial Revenue Bond Statute
Massachusetts Gene al Law - Chapter 40 D
Office of City Clerk, Northampton, MA
Northampton Industrial Park
r
ti
The following application should be submitted by the manufacturer to the
municipal industrial Development Financing Authority.
If a subject is not applicable to a particular project, insert Not applicable ".
Name of Company:
Address:
Initial Application for 1r,rlustria] RevLnue Bond Financing_
1. Description of the project:
A. Site - general description of the Iand - location, acreage.
B. Buildings or additions to buildings to be constructed or
acquired. Provide a general description of such buildings
or additions so as to show the type, structure size, and
general characteristics of the project. (Attach plans
if available).
C. Improvements to existing building. Provide a general
description of improvements to existing buildings to show
type and general characteristics of changes. (Attach
plans if available).
D. Machinery and Equipment. Describe the machinery to be
installed in the new facility or in the existing facility..
2. Estimated Cost of Project:
1, Land
2. Building
3. Machinery and Equipment
4. Legal and Underwriting Expenses (if available).
Total
3. Description of Product(s) to be Manufactured:
4. Employment:
Initial;
5 year projection
5. History of Company. (financial statements if available).
•