IRS Releases Recovery Zone Bond Allocations Under the American Recovery and Reinvestment Act of 2009
Real Estate Alert 06/15/09 Isaac J. Roang
We recently presented information regarding opportunities for real estate developers to finance new development projects using Build America Bonds and Recovery Zone Bonds under the American Recovery and Reinvestment Act of 2009 ("ARRA"). At that time, we were still awaiting guidance from the IRS regarding Recovery Zone Bonds and the allocation of the $25 billion authorized nationally by the ARRA for the two Recovery Zone Bonds programs.
Recovery Zone Bonds Allocations
On Friday, June 12, 2009, the IRS issued interim guidance on the two Recovery Zone Bonds programs: Recovery Zone Economic Development Bonds ("RZEDBs") and Recovery Zone Facility Bonds. The IRS also released the state-by-state allocations of the $10 billion for RZEDBs and the $15 billion for Recovery Zone Facility Bonds, which were based on 2008 employment declines on the state and local level.
A detailed chart of all allocations, broken down by state, county and large municipalities, can be accessed here or by following the "IRS Releases Guidance on ARRA Bond Provisions" link on the following IRS Web site: http://www.irs.gov/site-index-search?search=taxexempt+bond&field_pup_historical_1=1&field_pup_historical=1.
Please see the following list of allocations for selected states, counties and cities in which we practice:
State/County/City |
Economic Development |
Recovery Zone Facility |
|
Arizona |
90,000,000 |
135,000,000 |
|
City of Phoenix |
21,347,000 |
32,019,000 |
|
City of Tucson |
0 |
0 |
|
Maricopa County* |
3,664,000 |
5,496,000 |
|
Pima County* |
0 |
0 |
|
Florida |
538,485,000 |
807,727,000 |
|
City of Tampa |
8,045,000 |
12,068,000 |
|
City of St. Petersburg |
6,227,000 |
9,340,000 |
|
Collier County |
14,184,000 |
21,276,000 |
|
Pinellas County* |
13,609,000 |
20,413,000 |
|
Pasco County |
9,584,000 |
14,376,000 |
|
| Illinois | 666,972,000 |
1,000,457,000 |
|
City of Chicago |
133,180,000 |
199,770,000 |
|
City of Rockford |
11,076,000 |
16,614,000 |
|
City of Aurora |
9,164,000 |
13,745,000 |
|
City of Naperville |
7,977,000 |
11,965,000 |
|
City of Joliet |
7,104,000 |
10,657,000 |
|
City of Elgin |
5,680,000 |
8,520,000 |
|
City of Peoria |
1,466,000 |
2,198,000 |
|
Cook County* |
131,209,000 |
196,814,000 |
|
DuPage County* |
46,036,000 |
69,054,000 |
|
Lake County |
39,721,000 |
59,581,000 |
|
Will County* |
27,424,000 |
41,137,000 |
|
Kane County* |
16,820,000 |
25,230,000 |
|
Winnebago County* |
11,631,000 |
17,447,000 |
|
Peoria County* |
1,021,000 |
1,532,000 |
|
Wisconsin |
158,811,000 |
238,217,000 |
|
City of Milwaukee |
17,286,000 |
25,930,000 |
|
City of Madison |
8,112,000 |
12,168,000 |
|
Waukesha County |
13,745,000 |
20,618,000 |
|
Milwaukee County* |
12,307,000 |
18,461,000 |
|
Dane County* |
8,533,000 |
12,799,000 |
|
Racine County |
6,475,000 |
9,712,000 |
|
Kenosha County |
4,911,000 |
7,367,000 |
* Denotes residual amount after allocation to large municipalities.
Sources: I.R.S. Notice 2009-50 (to appear in IRB 2009-26, dated June 29, 2009); www.irs.gov (last accessed June 12, 2009).
Next Steps
Recovery Zone Facility Bonds offer direct opportunities for private real estate development, and the RZEDB program also has the potential to catalyze projects that involve private real estate development. Now that the IRS has issued guidance on these two programs, real estate developers should be poised to apply for financing as counties and large municipalities begin designating "Recovery Zones" and developing application procedures. Indeed, we are aware of some local governments that have already begun taking applications.
* * *
For additional information regarding these and other real estate development financing options, please contact . . .
Michael J. Ostermeyer
Real Estate Practice Group
414-277-5521 / [email protected]
Jeffrey D. Peelen
Public Finance Practice Group
414-277-5773 / [email protected]
Ann K. Comer
Tax-Assisted Development Team
414-277-5509 / [email protected]