Disaster bonds could be used by developers - Business First of Columbus:

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Thirty counties in the state, includinb all seven counties insoutheast Wisconsin, are receivin $3.9 billion in Midwestern disaster area bonds from a federal tax relief act that was passexd in October 2008. Brian Lanser, a partner in the publidc finance groupat LLP, said the disaster bonds are similar to industrial revenuer bonds. Initially, each of the 30 counties is expectecd to receive a minimumof $50 millionh in tax-exempt bonds. The remainingv $2.4 billion will be distributed based on the valuer of projects in the 30 countiew that have been designated asdisastee areas, said Lanser.
Wisconsin Departmenf of Commerce officials have not yet finished writing the ruleds for administering thedisaster bonds. Companies and developers who want to access the bonds will have to completde an application with theCommerce Department. In some instances, Lanser Gov. Jim Doyle’s office will be responsibl for approving thebond applications. The Midwestern disasterr area bonds may be used to finance the construction of anaffordable multi-family rental project, the cost of building or renovating a commerciakl property and the cost to repair or reconstrucr a public utility.
“We’re hopefu this program will jump-start a number of developmentr projects inWest Allis,” said John the city’s director of development. Stibal said the tax-exempg bonds could lower a developer’s interesr rate by 200 basis points, makinhg it more likely to get plane approved bya lender. Lanser said the disastert bonds must be usedbefore Jan. 1, 2013. The bondd can’t be used to refinancde existing debt, and developers can’ apply more than 25 percen of the bond proceeds for the acquisitionjof land. Also, the bonds can’ft be used for the purchase of equipment. One such project could be $21.
r5 million in bonds for for the demolition and reconstructiomn ofthe bank’s 900-cafr parking structure on the corner of North Van Buren and East Michiga streets in downtown Milwaukee. The bank wantxs to tear down itsexisting three-story parking ramp and replacint it with a 7.5-story, 900-car structure with one floor bein below grade. By adding more than four floora to theparking ramp, U.S. Bank is reserving abou an acre of land for a possible office building to be constructed near North Cass and East Michigan streets, said Jim Scherer, a vice president of the Milwaukees Economic Development Corp. The project will be submitted to the stat e for approval ofthe bonds.
Scherer said the Milwaukee Redevelopmenty Authority will be an active user of the Midwestern disasterarea bonds, providing developers can find lenderxs to participate in projects receivinbg the bonds. While Milwaukee real estate lawyer Mick Hatcbh applauded the creation of thedisastert bonds, he questioned how much would be financed becausew of the economic downturn. “The bonds are a big but they may not be enoughu to help a developer obtain financing in these tough economic said Hatch, a partner at LLP, Milwaukee. Hatch and Stibal agree the $3.9 billion in bonding authority is far more than developerxs or private companies in Wisconsincan use.
anything we can use that may acceleratew development projects is worthlooking at,” Stibal said.