What is UCDC?
The Ulster County Development Corporation (UCDC) is a non-profit (501(c)3) created in accordance with New York State law. Its mission is to promote quality jobs and business in Ulster County.
How is it funded?
It is funded through private fundraising, grants, and contracts with Ulster County and the Ulster County Industrial Development Agency.
What is an IDA?
An Industrial Development Agency (IDA) is an organization empowered by New York State law to provide financial assistance to eligible projects through tax incentives. The projects helped by an IDA must benefit the economic welfare and/or provide recreational opportunities to the local populace. Ulster County has an IDA, namely the Ulster County Industrial Development Agency (UCIDA).
How are the UCIDA and UCDC related?
UCDC administer UCIDA projects pursuant to a contract between the two. Under this contract, the President of UCDC is named the Chief Executive Officer of UCIDA. UCDC staff assist applicants and review applications. The UCIDA CFO is responsible for the financial administration of UCIDA projects. Applications for the programs are reviewed for approval and decided upon by the UCIDA board, which is a distinct board appointed by the Ulster County Legislature and separate from the UCDC board.
The UCIDA website is: http://www.ulstercountyida.com.
What are incentives?
Incentives are a series of programs offered to attract new or growing businesses to invest in an area. Businesses needing assistance to retain existing jobs may also qualify for incentives. They are usually in the form of tax exemptions or reductions.
The UCIDA is authorized to issue taxable and tax-exempt industrial development revenue bonds for qualified projects, which also may receive additional tax benefits. Qualified projects include manufacturing and certain types of projects for the not-for-profit sector. The UCIDA can also to “lease-back” projects involving tax incentives for qualified commercial and tourism. The source of financing for IDA projects is generally bond holders or banks.
Tax exempt UCIDA bond financing offers lower interest rates. If the project is for a manufacturing facility, a not-for-profit facility, or an exempt facility (i.e. airport, dock or wharf, mass commuting facility, solid waste disposal facility or hazardous waste facility) as defined by the Internal Review Code, the use of tax-exempt IDA bonds could lower the borrowing interest rate by 2 to 3% per year. Bond projects must be “bankable” by the usual standards of investors and financial institutions.
A UCIDA project involving a new mortgage is exempt from New York State mortgage recording tax , which in Ulster County is 3/4% of the amount of the loan secured by the mortgage. On a project involving a mortgage securing a UCIDA bond or lease back in the amount of $1,500,000, the mortgage recording tax exemption would result in a saving of $11,250.
A UCIDA project would also normally exempt purchases from the local and State sales and use tax of 8% This exemption extends to all equipment purchased by the benefited company for the UCIDA project and all materials incorporated into the facility for the same. On a project where $1,000,000 of project costs is subject to sales and use tax, the sales tax exemption would result in a saving of $82,500.
IDA bond financing also provides the project with an abatement of real property taxes. By entering into a Payment in Lieu of Taxes (PILOT) agreement with the IDA a company will receive abatement consistent with the UCIDA’s Uniform Tax Exemption Policy. These payments will be paid directly to the affected taxing jurisdiction (normally, the host municipality, school district, and the County). A PILOT agreement typically provides for an abatement schedule that effectively offers heavier effective property tax discounts in the earlier years of the schedule, scaling back the exempted portions over time so that at the end of the 10 or 15 year PILOT schedule the normal property tax rate will apply. It should be noted that the PILOT agreement applies only to the new assessed real estate value created by the project, i.e., normally to the new construction only. The normal property tax rates apply to the pre-existing land and structures.
UCIDA can assist with access to public capital markets. By using letter of credit-backed taxable or tax-exempt industrial development revenue bonds, companies can sell their debt in the public market without incurring the cost of registration with the Securities and Exchange Commission, allowing them to obtain affordable long-term, fixed rate financing.
More information is available on UCIDA programs at www.ulstercountyida.com.
What is an RLF?
A Revolving Loan Fund (RLF) is a loan program aimed at providing gap financing for local businesses. The underlying source of funds is usually the U.S. Department of Housing and Urban Development (HUD), and loans from HUD-sourced funds are subject to its policies and requirements, such as the the requirement that jobs be available to “low and moderate income” persons and that the cost per job not exceed a certain amount. Loans from this program are usually usually offered at an interest rate lower than that of banks. There is an application fee. As the loans are repaid the money is loaned back out to other local businesses. The RLF loan committee gives priority to job creation, especially “value added”, higher paying sectors such as manufacturing and technology. Agribusiness is also a priority. Several local municipalities have also revolving loan funds, some administered by UCDC. The criteria vary according to the municipality. Some municipalities include loanas that offer rehabilitation of blighted properties or Main Street revitalization.
How do I apply for an IDA project?
Review the programs, policies and forms on the UCIDA website and contact the UCDC staff to discuss your project.
How do I apply for an RLF?
You must have a business plan in order to apply. The Mid-Hudson Small Business Development Center (SBDC) offers free assistance in developing a business plan. Depending on which RLF you apply to there will be a $100 or $200 fee. Instructions and an application form can be found here:
Do you give out grants for businesses?
With very few exceptions, UCDC does not give out grants. Staff may be able to assist businesses in locating grant programs. Generally the applicant is responsible for carrying out the application process. The UCIDA occasionally provides grants. UCIDA grant program information can be found by clicking here.