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Recovery Zone Facility Bond Program Update Development Committee August 17, 2010
Recovery Zone Facility Bonds Purpose: Intended to stimulate the economy by providing low-cost financing for business-related capital improvements. Eligible Uses: May be used to help finance: - Acquisition, construction, and/or rehabilitation of property - Purchase of equipment Type: Recovery Zone Facility Bonds are “private-activity” bonds. Proceeds are exempt from the gross income of obligation holders for federal tax purposes. - Facility Bonds are not general obligations of the county - Not payable from taxes or any other revenues of the county - Facility Bonds are repaid from project revenues
Frozen Foods, LLC Established in 1946, On-Cor is the originator of family-sized frozen entrees. On-Cor will relocate Chicago operations to Geneva’s east side. Millard Refrigerated Services will undertake $12 -14 million expansion of existing facility.
Frozen Foods, LLC Use of Bond Proceeds: Acquisition of manufacturing equipment. - Cook Kettles - Mixers - Hold tanks - Heat Exchangers - Flour Systems - Extruders, Conveyors, and Fillers - Spiral Freezers - Cartoners - Palletizers - Wrappers Total Equipment Cost: $13, 000 Funds from Other Sources: $2, 750, 000 Bond Issue Requested: $10, 250, 000
Frozen Foods, LLC Responsiveness to Evaluation Criteria Overall Economic Impact: Excellent - New employer choosing to locate in Kane County - Facility will allow for company’s growth (incl. new product lines) Job Creation: Excellent - 100 -120 construction jobs - 130 new permanent jobs (84 relocated + 46 new positions) Project Readiness: Excellent - Applicant has site control (lease with Millard Refrigerated Services) - Development approvals have been obtained for new addition - Bond purchaser has been identified (GE Government Finance) Community Benefit/Support: Excellent - Maximizes use of existing facility with convenient access to highways - Consistent with municipal plans and economic development objectives
Recovery Zone Facility Bond Program Summary/Approval Process Summary: On-Cor’s application involves bringing a new employer to Kane County. Will create an estimated 230 -250 jobs. The project is ready to proceed. Kane County’s Facility Bond Allocation: $25, 230, 000 Total Bond Issue Requested by On-Cor: $10, 250, 000 Possible Approval Timeline: The EDAB has endorsed On-Cor’s application and forwarded it to the Kane County Board for consideration. Bond Inducement Resolution scheduled for Finance Committee’s August 19 th meeting. Assuming September Board approval, bond closing could occur in late September.