Questions & Answers

COMMON QUESTIONS AND ANSWERS RELATED TO REVENUE BOND FINANCING
 
WHAT IS AN IDA?
The Industrial Development Authority of the County of Maricopa (the " AUTHORITY ") was created in accordance with Arizona law to provide lower financing for qualified Projects through the issuance of revenue bonds (the " BONDS "). The Authority's Bonds are exempt from Arizona income taxation. Similarly, the bonds can be tax-exempt from federal taxation, provided that they are issued in compliance with the Internal Revenue Code of 1986 , as amended.
 
WHO IS THE IDA?
The Authority's Board of Directors is comprised of private, volunteer citizens appointed by the Maricopa County Board of Supervisors. The Board of Directors meets monthly or as otherwise necessary. Directors serve a 6-year term. The Authority's Board of Directors is comprised of 9 Directors.
 
WHICH IDA SHOULD I USE?
As a general rule, the Authority will entertain Applications for Projects to be located in Maricopa County. It is important for all Applicants to realize that the Authority's jurisdiction may overlap with that of another issuing body. As an example, the Arizona Health Facilities Authority has the ability to issue bonds to finance healthcare institutions throughout the entire State of Arizona. Similarly, many municipalities within Maricopa County have formed their own industrial development authorities which would have the power to issue bonds for any Project to be located within the individual municipality.
 
WHAT PROJECTS ARE ELIGIBLE FOR FINANCING?
Qualified Projects are limited by the Internal Revenue Code of 1986 , as amended, the Arizona Revised Statutes and by the Authority's policies. An eligible Applicant could be any public, private, or nonprofit organization.
 
Generally speaking, the proceeds of the Bonds can be used for either the purchase or lease of land, buildings, machinery or equipment which is suitable for:
  • Manufacturing, processing, or assembling of manufactured or agricultural products.
  • Storing, warehousing, distributing, or selling of industrial, agricultural, or mining products, or for related research and development.
  • Buildings that serve as company headquarters or regional offices.
  • Adaptive reuse for offices of buildings listed on the National Register of Historic Places.
  • Rehabilitation of residential buildings located in a registered historic neighborhood.
  • Healthcare institutions as defined in Arizona Revised Statutes.
  • Educational institutions operated by a nonprofit organization which is nationally accredited and not funded by state monies.
  • Multifamily rental housing, with a portion reserved for low and moderate income persons.
  • Single family owner-occupied housing.
  • Convention or trade show facilities.
  • Facilities for solid waste or sewage disposal, electric energy, gas, or water.
  • Industrial park facilities.
  • Air or water pollution control facilities.
  • Facilities for airports, docks, mass commuting, parking, storage, or related training.
The use of the Bonds for these purposes is affected by changes in state and federal laws. The Authority's Representative should be consulted prior to submitting an Application.

TERMS/INTEREST RATES
The Authority does not provide funds to an Applicant. Funds are provided by the bond purchaser. It is the responsibility of the Applicant to provide a purchaser for the Authority's bonds, which, in most cases, will be a financial institution or, in the event the bonds are to be sold to the public, an investment banker.

The Bonds are not a direct lending or government guarantee program. Applicants must secure a purchaser of the Bonds on the merits of the Project and the financial standing of the Applicant. The Authority merely acts as a " conduit " for the issuance of the Bonds.
 
An Applicant receiving a commitment from a lender or underwriter to purchase the Bonds must negotiate the terms of the Bonds, including loan amount, maturity, and interest rate, with that lender or underwriter. Interest rates charged to finance the Project will be lower than conventional commercial rates because of the tax-exempt status of the Bonds.
 
SPECIAL CONDITIONS
In addition to state and federal guidelines, the Authority has set the following criteria for approving a Project for the Bonds financing:
  • The Project will provide additional employment or preserve existing jobs. 
  • The Project is not inconsistent with development plans of the applicable municipality or Maricopa County.
  • The Project is not a speculative investment of capital in real or personal property.
  • The tax-exempt financing will not provide an unfair local competitive advantage to the Applicant. 

APPLICATION PROCEDURE
Applicants should contact the appropriate the IDA for application information. Applicants should also consult the Authority's Representatives regarding the eligibility of the proposed Project for the Bonds financing. If eligible, a written Application must then be submitted to the Authority for Preliminary and Final Approval. The Maricopa County Board of Supervisors must also approve the proposed bond issue.

FEES
The complete fee for filing the Application is $3,000 (non-refundable). $1,000.00 made payable to the Authority along with an original Application and 11 copies , or (b) a check for $1,300.00 made payable to the Authority along with 1 original Application for review by the members of the Authority, the Authority's Advisors and Legal Counsel. The Application must be received at least 10 business days prior to the date of the meeting of the Authority at which it will be considered. The balance ( $2,000 ) within 10 days from the date the Authority grants preliminary approval to the proposed financing of the Project. If preliminary approval is denied, no further Application fees beyond the initial $1,000 or $1,300 will be required unless the Application is resubmitted.

If the Applicant elects to provide the Authority only one original of its Application, then the Applicant does so with the understanding that for a $300 fee the Authority will take responsibility for making the requisite copies of the Application for Distribution to its Board of Directors, Counsel and Review Advisors.

In addition to the Application fee ( $3,000 ) , the Applicant must agree to pay all costs and expenses incurred by the Authority, its Directors, officers, Counsel, Review Advisors, and agents related to the Bonds or the Project, including, but not limited to, the fees and expenses of the Authority's Counsel and Review Advisors whether incurred before or after the sale of the proposed Bonds. The Authority's Counsel and Review Advisors may require that an Applicant or Guarantor enter into a separate written fee agreement on terms and conditions acceptable to the Authority and its Counsel or Review Advisors.

If the Applicant requests an extension of preliminary approval, an additional nonrefundable fee of $500 may become payable, at the discretion of the Authority, by the Applicant to the Authority at the time the extension is granted.

Additionally, as a condition to the issuance of the Bonds, the Applicant must agree to pay an annual administration fee calculated at a rate up to 10 basis points on the outstanding principal amount of the Bonds.