Poughkeepsie… Dutchess County is working to create a new economic development mechanism, the formation of a Local Development Corporation (LDC), to help local not-for-profit organizations invest in expansion. The goal is to promote capital and facilities investment creating new construction and permanent jobs as well as retaining existing local jobs. LDCs utilize private financing to support local investment, no tax dollars are used.
Under New York State law, county governments can create Local Development Corporations for the public purpose of issuing tax exempt bonds for not-for-profit 501(c) (3) organizations. Tax exempt bonds benefit both private investors and not-for-profit borrowers, with private investors receiving the benefits of tax free bonds and not-for-profit borrowers seeking the lower debt service costs the bonds provide, making potential projects more financially competitive and viable since these bonds are generally a lower cost than any other option.
The proposal to create the new entity is a joint effort of the Dutchess County Economic Development Corporation, the Dutchess County Industrial Development Agency, and County Executive William R. Steinhaus.
“Our top priority is to use every tool available to create new investment in our county that helps retain existing jobs and to create new jobs for local families,” said County Executive Steinhaus. “This Local Development Corporation proposal does exactly that.”
The Dutchess County Industrial Development Agency had previously provided this funding mechanism for local non-for-profit investment. However, the New York State Legislature allowed the legislation to sunset and the IDA’s authority to lend to not-for-profits expired in 2008. According to Mike Tomkovitch, Chairman of the Dutchess County Industrial Development Agency (IDA), “The new LDC will mirror the IDA structure in many ways to give us a unique mechanism for local not-for-profits to finance expansion saving money on debt service expenses. It will allow us to again use the tool we have so successfully used in the past to incent tens of millions in new construction expansion at institutions such as Trinity Pawling School, Marist and Bard Colleges, Saint Francis Hospital and others.”
John MacEnroe, Dutchess County Economic Development Corporation (DCEDC) President and CEO said, “When we talk to organizations about financing expansion costs, the lower the cost of debt service, the better the chance we have of the project happening. The LDC will give us an invaluable resource that we need to grow the Dutchess County economy.”
Formation of the new LDC will be considered for authorization by the County Legislature. Legislative leaders will begin to be briefed on the proposal starting this week with the necessary legislation being more fully discussed and considered at upcoming Legislative committee meetings. Legislator Angela Flesland, Republican Majority Whip and IDA board member, will steward the legislation through the approval process.
County Executive Steinhaus explained the proposed makeup of the LDC board. “The LDC proposal would appoint the current IDA board members as the new LDC board members since the mission and purpose of the IDA is almost identical to the new authority granted the LDC,” he said. “Many of the IDA board members have past experience with these type economic development projects with this type of financing.”
DCEDC President and CEO MacEnroe added, “Our EDC staff will provide the staff support for the LDC Board members when it is considering projects just as we have with “private for profit” projects financed through the IDA.”
“We look forward to the formation of the LDC. This proposal strengthens our job development efforts and helps our overall economy move in a positive direction,” County Executive Steinhaus concluded.