As a public benefit corporation, the Nassau County IDA is a tax-exempt entity that is empowered to acquire property to assist with financing projects that promote the economic welfare and prosperity of the county. In carrying out its mission to assist with economic development, the IDA offers various forms of financial assistance, including low cost financing and real estate tax abatements. These tools can amount to dramatic savings in the cost of expansion, relocation, retention or redevelopment projects. With IDA assistance, qualified companies can also receive taxable, tax-exempt bond financing, straight lease financing, mortgage recording tax abatement and sales tax exemptions.

Taxable Exempt & Taxable Bond Financing

Industrial Development Bonds (IDBs) are revenue bonds issued by an industrial development agency to finance or refinance the construction or purchase of certain manufacturing, warehousing, industrial or commercial facilities which are then leased or sold to a private user. An IDB is a “conduit financing” because the security for the bonds, and the party responsible for repayment, is the private user. The IDA enters into a lease or sale agreement with the user of the facility at a rental equal to debt service on the bond and for a term equal to the maturity of the securities. There are other types of tax-exempt bonds issued for project such as multi-family residential rental facilities and qualified 501(c)(3) bonds issued on behalf of charitable non-profit corporations. These bonds are technically not “IDB’s” and, although similar in many respects possess different characteristics and are subject to different rules imposed by the Internal Revenue Code.

Real Property Tax Abatement

The level and term of the abatement varies with locality and the type of project being undertaken.

Sales Tax Exemption

All construction materials, furniture, fixtures and equipment purchased with bond proceeds are eligible for an exemption from sales and use tax in New York State.

Mortgage Recording Tax ExemptionsS

Since the property is held in the name of the IDA, a tax-exempt entity, there is no mortgage recording tax assessed.

Eligible Tax Exempt Borrowers

Bond proceeds may used to finance “manufacturing facilities”, where at least 75% of the bond proceeds must be expended on actual production space (“core manufacturing”) with the balance used to finance facilities that are “ancillary but integrally related to the manufacturing operation”. This could include storage space for raw materials and finished goods and space used by the production staff.

Non-Profit Corporations

Private colleges, cultural institutions, senior citizen housing facilities, and charitable non-profit corporations (501c (3)s) could all qualify for tax-exempt bond financing.

Other Exempt Facility Bonds

Other uses that could qualify for tax-exempt financing include solid waste disposal and airport related facilities.

Financing Opportunities for Existing Bond Issues Refunding

Many IDB’s issued at higher fixed rates may be refinanced on either a fixed or a variable rate. Refinancing of existing tax-exempt bonds maybe permitted for uses that are no longer eligible for tax-exempt financing, such as warehouse and distribution space, commercial office buildings, and retail space.