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For additional information about a specific permit, license, tax, or incentive,
please call 311 and ask for the issuing Agency.
For assistance using NYC Business Express, visit our Help page,
email us, or call 311 and ask for NYC Business Express.
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South Bronx Empowerment Zone Facilities Bond Program and Section 179 Deduction Benefit |
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South Bronx Empowerment Zone Facilities Bond Program and Section 179 Deduction Benefit |
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| Housing and Urban Development, Department of |
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Empowerment Zones (EZs) were created by the Department of Housing and Urban Development (HUD) to encourage business growth in targeted communities. The South Bronx portion of the New York City EZ is administered through the Bronx Overall Economic Development Corporation (BOEDC). EZ benefits are available through 12/31/09.
I. Facilities Bond Program
Companies planning major capital investments within the South Bronx EZ may be able to finance these projects with triple tax-exempt bonds issued by New York City Industrial Development Authority (NYCIDA). Triple tax-exempt bonds allow borrowers to receive exemptions from federal, state and city income taxes on interest payments.
Bond proceeds can be used to finance acquisition, construction, renovation and equipping of facilities.
Eligible businesses include developers of commercial, industrial and retail facilities. Additional eligibility requirements are as follows:
- Locating the project in the EZ.
- At least 50 percent of the gross business income is derived from activity within the EZ.
- At least 35 percent of the facility's employees are EZ residents.
- Less than 5% of the tax basis of the assets of the borrower consists of securities or similar instruments (other than reasonable amounts of working capital held as cash or cash equivalents)
Contact the Bronx Overall Economic Development Corporation BOEDC directly to begin the application process.
II. Section 179 Deduction
Certain Empowerment Zone businesses can elect to deduct an additional $35,000 over the standard IRS Section 179 deduction on the cost of qualifying property in the year it is placed in service, instead of recovering that cost through depreciation over time. Complete instructions and the application form for filing for increased Section 179 deduction are included under Links to Application Materials below under IRS Publication 954 (Empowerment Zone Tax Incentives). |
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| No online process available |
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1.
Applicant should contact the BOEDC directly to begin the application process. The BOEDC will conduct a pre-screening of each applicant and assist in the completion of an application if eligible.
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After review, the EZ Bond Application is presented to the Board of the BOEDC for approval.
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If approved by the BOEDC Board, the project is reviewed by the New York Empowerment Zone Corporation (âNYEZCâ), a collection of public and other officials who represent New York City. Acceptance of an EZ Bond Application, or any other action by the BOEDC, the NYEZC, the City of New York or the State of New York, shall not assure final acceptance or approval by the IDA.
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If approved by the NYEZC, the project is presented to the IDA. If the project meets all IDA criteria, the bonds are issued.
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The designation by the City of New York will expire within twelve (12) months of the date of BOEDC approval unless the Bonds are issued within such period, or unless the Project is re -approved by BOEDC and the NYEZC.
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Applicable New York State General Municipal Law and Federal Tax Law requirements relating to the Bonds will govern the contract for the project.
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Applicant will provide the BOEDC, the NYEZC and the IDA with any changes or supplements to the EZ Bond Application, or such additional information as may be required by BOEDC, the NYEZC or the IDA.
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Applicable financing fees are payable to the NYCIDA. There is a BOEDC financing fee of 0.5% of the face value of the bond amount up to $5 million and 0.35% of the bond amount above $5 million.
The foregoing fees do not include the bond issuance fees payable to the State of
New York or fees payable by Applicant to the other parties to the transaction and their counsel, including, but not limited to, reasonable and customary fees and disbursements for the services of BOEDC counsel, Bond Counsel, the Bond Trustee and the Bond Trustee’s counsel.
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Financing a project with triple tax-exempt bonds enables borrowers to initiate needed capital improvements at the lowest available cost and to better manage the timing of their capital investments. Compared with conventional loans, advantages of triple tax-exempt bonds can include reduced interest rates, longer financing terms, lower equity contributions, and the possibility of obtaining construction and permanent financing in a single loan.
Borrowings under $2 million may not be cost-effective. Borrowers work with investment banks of their choosing to identify bond purchasers and to structure the proposed debt.
Additional questions can be directed to the NYCIDA at (212) 312-3600 or via email to nycidabonds@nycedc.com.
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This page provides general information only. The information does not address all relevant regulatory requirements of City, State or Federal Agencies, nor does it address requirements with which the business must comply on an ongoing basis. It is the business owner's responsibility to meet all City, State and Federal requirements. Failure to comply with all applicable laws and regulations may result in fines or in the suspension and/or revocation of licenses or permits, or other penalties as allowed by law.
Please note that this information is not legal advice; you can only obtain legal advice from a lawyer. For more information or assistance, please contact the issuing Agency, using the contact information above, or call 311 (or 212-NEW-YORK if outside of New York City).
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