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2013 Economic Development Incentives

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We've updated our popular presentation to reflect the current incentives that may be available for economic development projects during 2013 in Webster City Iowa. Whether your relocating your …

We've updated our popular presentation to reflect the current incentives that may be available for economic development projects during 2013 in Webster City Iowa. Whether your relocating your business, expanding your business, acquiring an existing facility, or building a new facility, there are potential incentives that may be available for your project. Webster City Economic Development is there to help your business find incentives for your project. Contact us today and let us help you with selecting a site and moving your project forward. *Note: incentives are subject to review of both project and financial information and decisions on incentives are subject to approval by their respective providers.

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  • 1. Iowa Incentive Programs By David Toyer, Economic DeveloperWebster City Economic Development 2013
  • 2. Who We AreWebster City Economic Development exists to support expanding andrelocating businesses in Webster City, Iowa.It’s our goal to help you identify and secure financial incentives for yourproject. This document is meant to provide an overview of incentiveprograms offered in Iowa at the local, regional and state level. Read More About Us How To Contact Us Take Our City’s Tour Take a Building Tour
  • 3. Disclaimers• All incentives are subject to approval by the program administrator (city council, board, state agency, administrator)• Incentive programs and eligibility requirements may change after the date of publication due to legislative changes or availability of funds• Please contact your local economic developer to discuss your project and obtain a more in-depth review of available incentives
  • 4. Table of Contents• Getting Started: What We Need From • Rural Economic Development Grant You • Community Facilities Loan• Current Wage Thresholds • Hamilton County Revolving Loan Fund• Enterprise Zone • Rural Business Enterprise Grant• Public Facilities Set Aside • MIDAS Revolving Loan Fund• Physical Infrastructure Assistance • Webster City Area Development Program Revolving Loan Fund• High Quality Jobs Program • USDA Business & Industry Guaranteed• Corn Belt Power Fund Loans• Intermediary Relending Program • Rail Revolving Loan and Grant Program• Rural Business Opportunity Grant • Railroad Rehabilitation and Improvement• Rural Economic Development Loan Financing
  • 5. Table of Contents• Iowa Microloan Program • Urban Renewal Program• 260E Iowa Industrial New Jobs • Industrial Property Tax Exemption Training • Municipal Support of Projects• 260F Iowa Jobs Training • Land Grants• New Jobs Tax Credit • Local Financial Assistance• Urban Revitalization Tax Exemption • Municipal Utility Assistance Program• Energy Efficiency Loan Program • Links to More State Incentives
  • 6. Back to Table of Contents Getting Started: What We Need From You We can help you evaluate potential incentives for your project. Here’s the information we need in order to start our evaluation:  Brief description of the project  A summary of the estimated number of new jobs to be created or jobs to be retained and the timing of such actions  Details on the types of jobs to be created and their estimated starting wages  A summary of the benefits provided to your employees  An estimate of your total project capital expenditure The easiest way to provide us with this information would be to fill out an Iowa New Project Questionnaire.
  • 7. Back to Table of Contents Current Wage Thresholds Meeting certain wage and benefit thresholds is often a qualifying criteria for the granting of project incentives. The following are the most current wage thresholds for Webster City, Iowa: 90% of Average Wage - $13.87 120% of Average Wage – $18.49
  • 8. Back to Table of Contents Grow Iowa Values Fund • Available As • Eligibility – Loans or forgivable loans – Must be located in Iowa – Must create jobs that meet the 130% county wage threshold • Can Be Applied Towards – Must have a company capital – Building construction or investment into the projects remodeling – Must have a demonstrated need – Land or building acquisition – Must contribute to employee – Site preparation medical coverage – Machinery and equipment – Must not start project prior to purchases approval of the application for – Furniture and fixtures funding
  • 9. Back to Table of Contents Enterprise Zone • Eligibility • Limitations – Must be located in a designated – Can’t be a retail business whose Enterprise Zone entry is limited by membership or – Must make a minimum qualifying coverage card investment (building, land, – Business can’t close in one part of machinery, equipment, the state and relocate the same computers) of $500,000 over 3 business to an Enterprise Zone. years – Application must be approved by – Must create or retain 10 full time local Enterprise Zone Commission jobs over 3 years and maintain for and IDED prior to initiation of the 2 more years project – Must provide medical and dental benefits or a monetarily equivalent package – Must meet 90% county avg. wage
  • 10. Back to Table of Contents Enterprise Zone Benefits • Property tax exemption of up to 100% for up to 10 years • Additional funding for new employee training beyond the new jobs training program • Refund of state sales, service or use taxes paid to contractors or sub contractors during construction • For distribution center projects, a refund of sales, service and use taxes paid on shelving, racks and conveyor equipment • Investment Tax Credit of up to 10% of the qualifying investment amortized over 5 years. Credit is earned when the qualifying asset is placed in service and can be carried forward up to an additional 7 years or until depleted
  • 11. Back to Table of Contents Economic Development Set Aside • Purpose • Eligibility – To create jobs for low and – Must be located in Iowa and meet moderate income individuals county wage thresholds – Used to leverage other financing – Business must make a capital investment and demonstrate a need • Available As – Advanced manufacturing, – Loans biosciences and IT systems targeted – Forgivable Loans • Criteria • Can Be Applied Towards – Quality of jobs and impact on the – Land or Building Acquisition community and in-state competitors – Construction or Reconstruction • Limitations – Equipment Purchases – Special consideration to start ups – Operating and Maintenance and modernization Expenses – Communities less than 50,000 – Site Development population targeted – Working Capital – $1 million of traditional assistance
  • 12. Back to Table of Contents Public Facilities Set Aside • Type of Assistance • Match Requirements – Grants – Local match of at least 50%; higher % of match increases • Limitations application score – Cities less than 50,000 population – Must be tied to businesses • Application Process creating jobs – Funding decisions can be made in – 51% of persons benefitting must 60 days. If awarded, be low to moderate income environmental review must be completed within 30 days • Can Be Applied Towards: • Other Information – Sanitary sewer improvements – Priority given to projects that – Water improvements create manufacturing jobs, add – Street improvements value to Iowa resources and/or – Storm sewer improvements increase out of state exports
  • 13. Back to Table of Contents Physical Infrastructure Assistance Program (PIAP) • Available As • Eligibility – Loans – Iowa cities – Forgivable Loans – New or Existing Business – Cost Indemnification Agreements • Other Requirements • Can Be Applied Towards – Must meet applicable wage – Capital intensive infrastructure thresholds as set by the state projects that create high quality, high wage jobs. This includes – Must demonstrate that the project remediation and redevelopment to will have a statewide impact create potential opportunities.
  • 14. Back to Table of Contents High Quality Jobs Program • Available As • Type of Incentives – Tax Credits or Exemptions – Local property tax exemption up to 100% for up to 20 years • Can Be Applied Towards – Refund of state sales, service or – Cost of locating, expanding or use taxes paid to contractors and modernizing an Iowa facility subs during construction • Eligibility – Refund of state sales, service and – Must meet 120% of county use taxes on shelving, racks and average wage threshold conveyor equipment – Not applicable to retail or service – Investment tax credit based on % businesses of qualifying investment over 5 year period • Evaluation Criteria – Doubling of the State’s refundable – Quality of the jobs research activities credit if – Level of assistance requested applicable
  • 15. Back to Table of Contents Cornbelt Power Fund • Available As • Evaluation Criteria – Technical Assistance – Jobs created, diversification of the – Low Interest Loans local economy, skill development of the workforce, public • Can Be Applied Towards infrastructure upgrades – Financial Assistance • Acquisition, construction or • Other Limitations expansion costs, equipment and – Minimum $50,000, Max $150,000 machinery purchases, start-up – Can not exceed 49% of project operating costs, and working capital – Loan terms of 3-10 years – Technical Assistance – Interest rates set relative to prime • Site Selection, Financial Packaging, Marketing Assistance, Business – Ag, Community Cable Systems Support Services and Financial Services Ineligible • Eligibility – New and expanding business, local governments, non-profits
  • 16. Back to Table of Contents Intermediary Relending Program (IRP)• Available As • Evaluation Criteria – Loans for revolving loan – Other funds and programs available programs at 1% interest – Availability of IRP funds• Can Be Applied Towards – Median household income served – Revolving loan fund programs – Local unemployment rate operated by non-profits that provide – Equity and experience loans for business facilities and – Community Representation development in rural areas • Limitations• Eligibility – Must be authorized to carry loan, give – Private non-profit corporations, security, and repay public agencies, state or local – Proven track record of success governments, Indian groups and – Staff expertise and sufficient capital certain cooperatives – No delinquent debt to Federal Govt – 51% of ownership must be US citizens – $2 million with 25% local match
  • 17. Back to Table of Contents Rural Business Opportunity Grant • Available As • Evaluation Criteria – Grants – Sustainability • Can Be Applied Towards – Improvements to quality of economic activity and commitment – Money for technical assistance for of other sources of funding business and economic development in rural areas – Natural disaster designation – Poverty levels, long term population • Application Deadlines decline, long term job deterioration – Typically in March or April – A new best practice • Eligibility • Limitations – Public bodies – Must be reasonable, be able to be – Cooperatives measured for success, consistent – Private, non-profit corporations with local plans and obtainable within 2 years. – $50,000 maximum
  • 18. Back to Table of Contents Rural Economic Development Loans • Available As • Evaluation Criteria – Zero Interest Loans – Type of project and number of jobs to be created within 3 years • Can Be Applied Towards – Supplemental funds – Start up venture costs – Per capita personal income – Business expansions – Rural location and population decline – Business incubator – Loss of major employer, long term – Technical assistance unemployment – Feasibility studies – Located in disaster area – Advanced telecom – Consistency with USDA plan – Community facilities • Limitations • Eligibility – Nationally competitive process – Rural Electric/Telephone Borrowers – Up to $740,000 with 10 year term – Utility is guarantor – Monthly payments
  • 19. Back to Table of Contents Rural Economic Development Grants • Available As • Limitations – Grant – Grant to utility must be lent out to a non-profit public project with • Can Be Applied Towards focus on health or education – Technical assistance – $300,000 limit – Feasibility studies – 20% local match required – Advanced telecom – Grant can be used to fund up to – Community facilities 80% of a project, but target range • Eligibility is 5% to 35% – Rural Electric/Telephone • Terms of Loan Borrowers – 0% interest – 10 year term, 2 years deferred
  • 20. Back to Table of Contents Community Facilities Loan • Available As • Limitations – Loans – Repayment period limited to the – Loan Guarantees useful life of the facility up to a max of 40 years • Can Be Applied Towards – Interest rates set based on – Public entities, non-profit and median household income tribal governments for essential – Loan guarantees are for up to community facilities (health care, 90% with eligible lenders child care, community buildings, fire stations, equipment, etc..) – Security required – Must apply with USDA Rural • Eligibility Development Office – Population less than 20,000 – Public use – Financial soundness
  • 21. Back to Table of Contents Hamilton County Revolving Loan Fund • Available As • Evaluation Criteria – Priority to job creation and – Low interest loans – Addition to tax base • Can Be Applied Towards – Preference to creating the most jobs – Construction, purchase or with the least amount of assistance improvements to land and – Conventional financing must have buildings been declined – Equipment – Working Capital • Limitations – Can not apply to costs incurred • Eligibility before application – Non-agricultural, private, for-profit – Refinancing of debt excluded businesses located or locating in – Maximum of 30% of project cost Hamilton County – Minimum loan of $5,000 – Development Organizations – 5% interest with 5 year term – Collateral Required
  • 22. Back to Table of Contents Rural Business Enterprise Grant • Available As • Evaluation Criteria – Grants – Must support development of small and emerging business • Can Be Applied To enterprises in a rural area of less – Acquisition, development, than 50,000 population easements, rights-of-way – Must be able to show specific – Construction, conversion, benefit to small business enlargement, repairs and – Population, economic conditions, modernization of buildings unemployment, applicant’s – Loans for operating costs experience, commitment of non- – Technical assistance federal funding sources • Eligibility – Evidence of a need – Public bodies – Included in a community plan – Rural Areas – Size of grant
  • 23. Back to Table of Contents MIDAS Revolving Loan Fund • Available As • Evaluation Criteria – Gap financing – Need and impact of the project • Can Be Applied Towards – Ability of the applicant to repay – Fixed asset financing for land, – Number of jobs per $’s requested buildings, equipment and – % of other funds in the project inventory – Quality and completeness of • Eligibility application materials – Local business • Limitations – Must have a primary loan – Amount from $5,000 to $70,000 – Industrial projects preferred – Can not exceed 15% of the project – Owner must have at least 10% equity in the project – Up to 10 year term with fixed rates not less than 4%, but below prime
  • 24. Back to Table of Contents Webster City Area Development Revolving Loan Fund • Available As • Limitations – Low interest loans – Loans average $25,000 but could be for more depending on the • Can Be Applied Towards project and jobs to be created – Gap financing or equity investment – Fixed assets (machinery, equipment, land, buildings) • Eligibility – Must be located in Webster City
  • 25. Back to Table of Contents USDA Business & Industry Guaranteed Loans• Available As • Evaluation Criteria – Loan guarantee – Borrower eligibility, repayment assurance, sufficient collateral &• Can Be Applied Towards equity – Loans by eligible lenders to businesses – Eligible loan’s purpose benefitting rural areas less than 50,000 population • Limitations – Must finance: business or industrial – $25 million maximum acquisitions, construction, repair, – Pre-approval review required modernization, development costs, – Fixed loan to value limitations based equipment, supplies, start up costs, on appraised value of asset working capital, and etc. – 10% equity requirement for existing• Eligibility companies, 20% for new companies – A legal entity, individual, public or – Personal and corporate guarantees private organization, or federally required recognized tribe – Appraisals required
  • 26. Back to Table of Contents Rail Revolving Loan & Grant Program • Available As • Evaluation Criteria – Loans or grants – Announced when notice of funding availability and application • Can Be Applied Towards is made by the State – Building spurs, building or rebuilding sidings, purchasing or • Limitations rehabilitating existing rail, other – Limited funding, not funded every rail development year • Eligibility – Required local matches of 50% for grants, 20% for loans – Targeted job creation projects – Loans are for 10 years at 0% – Jobs must be created or retained interest within 2 years of the project – Must meet 100% of county average wage
  • 27. Back to Table of Contents Rail Rehabilitation and Improvement Financing • Available As • Evaluation Criteria – Loans – Must submit an application • Can Be Applied Towards – NEPA review – Acquire, improve or rehabilitate – Contact administrator for more intermodal rail equipment of information facilities including tracks, track • Limitations components, bridges, yards, – Applicant with need to provide buildings and shops loan fees, including any premium – Refinancing existing debt for and investigative fees purposes listed above – Direct loans can be for up to – Developing or establishing new 100% of cost. intermodal rail facilities – Terms up to 35 years • Eligibility – Interest based on what it costs the – State and local government government to borrow money
  • 28. Back to Table of Contents Iowa Micro Loan Program • Available As – Micro Loan • Evaluation Criteria – Contact Craig Downs, Loan – Technical Assistance Administrator at 515-212-0182 • Can Be Applied Towards • Limitations – Financing of a start up, expansion, – Total loan must be for less than or refinancing of micro business in $35,000 Iowa – Approvals in ten working days • Eligibility – Interest rates higher than – Must be Iowa resident conventional financing, but less – Must be an Iowa based business than credit cards – 18 years or older – Grants for technical assistance – Denied by financial institution are also available of up to $500 – No more than 5 full time per year per client employees
  • 29. 260E Iowa IndustrialBack to Table of Contents New Jobs Training• Available As • Eligibility (Employee) – Diversion of Iowa withholding tax to – Must be a new position compensate the community college – Must pay withholding tax for the training program – Must occupy a position that did not• Can Be Applied Towards exist 6 months prior to engagement – Training for new employees • Evaluation Criteria• Eligibility (Business) – Contact Iowa Central Community – Must be in or locating to Iowa College – Must be engaged in interstate • Limitations commerce (manufacturing, – Depending on wages paid to the processing, assembling, employees, the company would divert warehousing, wholesaling or either 1.5% of 3% of their Iowa conducting research) withholding for each qualifying position – Service providing businesses must – Cannot have closed one Iowa location have non-Iowa customers to reopen in another
  • 30. Back to Table of Contents 260F Iowa Jobs Training Program • Available As • Eligibility (Business cont.) – Reduced or no cost job training – Business must not have reduced its employment base by more than • Can Be Applied Towards 20% in the 36 month period prior – Job training for existing to application employees • Eligibility (Employee) • Eligibility (Business) – Must be currently employed by the – Must be located in Iowa and company engaged in interstate commerce – Must pay Iowa withholding tax for manufacturing, processing, assembling, warehousing, • Additional Information wholesaling or conducting – Contact Iowa Central Community research and development College – Service business must have non- Iowa customers
  • 31. Back to Table of Contents New Jobs Tax Credit • Available As • Evaluation Criteria – Per employee tax credit – Contact Iowa Central Community • Can Be Applied Towards College – Iowa corporate income tax • Limitations • Eligibility – One time credit – Companies that have entered into – Up to $1482 per employee (FY a New Jobs Training Agreement 20011) (260E) and expanded their – Unused credits can be carried employment base by more than forward for up to ten years 10% – Credit depends on wages a company pays in the year they first claim the credit
  • 32. Back to Table of Contents Urban Revitalization Tax Exemption • Available As • Limitations – Property tax exemption in – Owner must separately apply for accordance with Iowa Code the exemption after the project is Section 404 completed • Can Be Applied Towards – Application must be before February 1 of assessment year in – New or expanded facilities in which the exemption will be first designated “urban revitalization claimed areas” – Full Exemption is 100% for 3 • Process Required years – Urban revitalization plan must be – Partial Exemption is a sliding adopted separate from the project scale over 10 years – Project must be approved as conforming to plan
  • 33. Back to Table of Contents Urban Renewal Program • Available As • Limitations – Tax increment financing – Tax increment financing agreement required • Can Be Applied Towards – Council approval needed – Acquisition and disposition of real property – Construction or reconstruction of public improvements – Demolition and removal of buildings • Eligibility – Must be in a designated urban renewal area
  • 34. Back to Table of Contents Industrial Property Tax Exemption • Available As • Exemption Schedule – Partial property tax exemption for – Year 1: 75% actual value added to industrial – Year 2: 60% real estate – Year 3: 45% • Can Be Applied Towards – Year 4: 30% – New construction of industrial real – Year 5: 15% estate, research-service facilities, – Council may adopt a different warehouses, distribution centers, schedule, but cannot give more and machinery or equipment (total) than permitted above assessed as real estate • Limitations • Eligibility – Does not include reconstruction or – See Iowa Code Section 427B replacement – Requires public hearing – Requires City Council approval
  • 35. Back to Table of Contents Municipal Support of Projects • Available As • Eligibility – To “acquire by construction, – Manufacturing, processing or assembling purchase, gift or lease and to – Storing, warehousing or distribution improve and equip one or more – National, regional or division projects; buy, sell or lease headquarters of a multi-state business property; enter into loan agreements; or issue bonds to – Beginning business person with total finance or retire debt of certain assets of less than $100,000 projects” • Other Information • Can Be Applied Towards – Equipment included by this section – Interest in land, building or applies to machinery, HVAC, fixtures, improvements whether existing utilities and building service equipment or not • Limitations – Public hearing must be held before any bonds can be issued
  • 36. Back to Table of Contents Land Grants • Available As • Evaluation Criteria – Direct or indirect financial – Review by Economic assistance Development • Can Be Applied Towards – Review by City Council – Property acquisition or • Other Information assemblage – City can gift, lease or sell property • Eligibility – City can acquire property on – Project must create jobs in behalf of a project Webster City – City can provide financial – Preference to projects with the assistance to buy down highest and best use of property, acquisition costs especial with municipal owned properties
  • 37. Back to Table of Contents Local Financial Assistance • Available As • Evaluation Criteria – Grants – Number of jobs to be created – Loans or forgivable loans – Financial need of the company • Can Be Applied Towards – Size of the project – Very flexible, but generally: • Limitations • Land or building acquisition – Must create jobs within 3 years • Tenant improvement permits and retain them for another 2 • Equity to leverage other financial years assistance – Loans require collateral and a 1st • Job training or shared 1st position is desired • Eligibility – Company must submit information – Must create new jobs or retain on its finances, business plan, and existing jobs in Webster City other items requested for review – New or existing businesses by City
  • 38. Back to Table of Contents Municipal Utility Assistance Program • Available As • Technical Support – Technical support – Commercial or industrial rate • Thermography customer • Load and demand management – By request analysis • Efficiency reviews • Efficiency Rebates – Energy efficiency rebates – See program requirements – Rate credits – Applies to light • Eligibility • Rate Credits – Must be a customer of Webster – See program requirements City’s municipal utility – Applies to new, large and no- – Must meet program eligibility, agricultural loads only including any requirements established by the Cooperative
  • 39. Back to Table of Contents Energy Efficiency Loan Program • Terms • Technical Support – A loan up to $50,000 – City can assist with helping the – 0% interest business evaluate potential – Repaid in 12 equal installments projects • Eligibility • Efficiency Rebates – Must be a commercial or industrial – Applicable energy rebates may customer of Webster City’s still also apply municipal utility and have a • Deadline demand > than 50 KW/month – Although this program expired in – Must have a qualifying energy 2012, the City would consider efficiency project reauthorizing it for a specific – Must not have started the project project.
  • 40. Back to Table of Contents Links to More State Incentives • Financial Incentives, including the demonstration fund, targeted small business program, entrepreneurial assistance and more. • Tax Incentives, including brownfield tax credits, Endow Iowa, investor tax credits, and more.
  • 41. Back to Table of Contents Contact Us Email info@buildwebstercity.com Phone (515) 832-9151 Address PO Box 217 – 400 Second Street Webster City, Iowa 50595 Website www.buildwebstercity.com Blog blog.buildwestercity.com Twitter @WebsterCityIA Facebook BuildWebsterCity