Jacksonville is now able to take advantage of a new program, the Recovery Zone (RZ) bond program, to promote job creation and investment within distressed and underutilized areas. This program was created under Obama administration's American Recovery and Reinvestment Act (ARRA) or the stimulus package.
The program allows local governments to designate areas with significant poverty, unemployment, rate of home foreclosures or general distress, as a Recovery Zone. The Jacksonville City Council has passed legislation, introduced by the Jacksonville Economic Development Commission (JEDC),that designates the Enterprise Zone, Empowerment Zone, Community Redevelopment Areas and the former Naval Air Station Cecil Field, as Jacksonville's RZ.
Designation of an RZ will allow the City of Jacksonville and the State of Florida to issue Recovery Zone bonds for private and public projects that promote job creation and economic recovery. The two types of RZ bonds are:
RZ Facility Bonds:
- Traditional tax-exempt private activity bonds have lower interest rates as the interest is tax-exempt to the investors for federal tax purposes.
- These bonds do not count against the state volume cap.
- These bonds can be used by private businesses for depreciable capital projects (buildings and equipment) in active businesses in Recovery Zones.
RZ Economic Development Bonds:
- Can be used by governmental entities for public capital projects in Recovery Zones and for job training and education.
- Conventional taxable bonds allow states and localities to obtain financing at lower borrowing costs since the Treasury Department pays the state or locality a direct payment subsidy equal to 45 percent of the coupon interest on the bonds.
North Florida Shipyards, located on Talleyrand, is working with the JEDC to utilize RZ Facility Bonds to provide supplementary financing for new equipment to allow them to add 246 new jobs to Jacksonville. North Florida Shipyards has received $3.3 million through the federal stimulus package and are proposing to invest $7 million in new capital in the Enterprise Zone area.
Jacksonville was allocated $16,346,000 in RZ Economic Development Bonds and $24,518,000 in RZ Facility Bonds.
RZ Bonds must be issued by January 1, 2011. Interested parties are encouraged to contact Lindsey Ballas, JEDC Business Development Chief, at (904) 630-2940 or firstname.lastname@example.org