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Concord NY IDA - Non Financing Based Programs
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There are also programs available where the Agency can offer assistance where the applicant does not need financing. The first of these programs is a Lease-only transaction.
The Agency takes title to the project and leases it back to the applicant. By taking title, the Agency is able to provide real property tax abatement and sales tax abatement. The Agency them remains in title for as long as is necessary for the applicant to receive the tax incentives offered. Typically this would be until the end of the real property tax abatement period.
The Agency can also provide assistance where the applicant is acquiring title to the equipment. The Agency can do an equipment only lease. In this situation, the equipment is acquired in the name of the Agency resulting in sales tax abatement on equipment for as long a period of time.
The Agency can also enter into an installment sale transaction to accomplish the same thing although in the case of an installment sale, the Agency generally does not retain title to the equipment for as long a period of time.
Agency assistance does, however, add to the cost of the transaction. The Agency charges an administrative fee for its services. In addition there are significant legal fees associated with an Agency transaction. The Agency administrative fees and legal fees are in accordance with the fee schedule contained in this publication. In addition you have to anticipate additional complexity of and IDA transaction. There is no exact minimum size below which -Agency assistance is not beneficial. A cost benefit analysis should be undertaken before the applicant elects to proceed. The Agency will assist you in making your analysis. For transactions involving new construction of $350,000 or more there are clearly financial advantages. There may be advantages at project costs significantly less than that amount, but it is important to carefully analyze the costs of such transactions to insure there are sufficient advantages before proceeding.
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