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Mayor Michael R. Bloomberg today announced plans to create a new entity focused on helping non-profit organizations receive access to low-cost, tax-exempt financing to expand or upgrade facilities, eliminating significant obstacles presently facing many organizations across the City. Since January 2008, the New York City Industrial Development Agency (NYCIDA) has been unable to issue tax-exempt financing on behalf of non-profit organizations because its authority to issue these bonds was not renewed in the State Legislature. The inability of the City to assist these non-profits has in some cases needlessly raised the non-profits’ costs or forced them to forgo projects that would create jobs and offer additional educational, health or artistic resources to New Yorkers. Approximately 470,000 people are employed at more than 42,000 health, human services and cultural nonprofit organizations in New York City.
“New York City is home to tens of thousands of nonprofits that are looking to expand, create jobs or move into new facilities, but for the past few years they have faced more expensive financing costs, while some have had to forgo expansion altogether,” said Mayor Bloomberg. “This new entity will make it easier and more inexpensive for our critical non-profit sector to grow and expand.”
Since June 2009, over 13 institutions in New York City have had to seek assistance from out-of-state and out-of -city issuers to finance and refinance projects totaling more than $337 million. There are now about 20 known ready-to-go nonprofit capital projects in the pipeline, of more than $400 million in value, that have yet been unable to identify a source for access to tax-exempt financing and we believe there to be many more that have not come forward because the city does not have a local mechanism to help them.
“This is excellent news for the non-profits of New York City, especially those that do not have any other access to tax-exempt financing,” said Richard J. Bosch, Deputy Executive Director of the Interagency Council of Developmental Disabilities Agencies.
“I applaud Mayor Bloomberg for a smart, creative approach to addressing a real need in the not-for-profit community,” said Elizabeth H. Berger, president of the Downtown Alliance. “At a time when many not-for-profits are struggling to make ends meet amid the nation’s fiscal woes, this new issuer will serve to strengthen and support an increasingly important sector in our city’s economy. In Lower Manhattan, not-for-profits represent a vital and growing sector, and this action recognizes their value.”
“For over three years, non-profits like ours have faced far too many obstacles in obtaining financing to grow and expand,” said Sisi Kamal, Chief Financial and Operating Officer at the Friends Seminary School. “The ability to locally access necessary financing in an efficient and cost-effective manner would be a significant investment in the future of our organization and that of many others serving the residents of New York City.”
“We at Nightingale have been fortunate to educate our girls under one roof for more than 90 years, but as our curriculum expands and adapts to the modern world, we must develop increasingly sophisticated educational spaces—which also means increasingly expensive educational spaces.,” said Dorothy A. Hutcheson, head of school. “We welcome a new entity aimed at helping institutions like ours finance our future.”
The new entity, a local development corporation, will be created in the next four to six months and will be able to issue triple-tax exempt financing to eligible entities subject to board approval. As is the case with the IDA, the Borough Presidents and the Comptroller will have an opportunity to nominate directors to serve on the board of the new entity.
New York City Economic Development Corporation is the City's primary vehicle for promoting economic growth in each of the five boroughs. NYCEDC's mission is to stimulate growth through expansion and redevelopment programs that encourage investment, generate prosperity and strengthen the City's competitive position. NYCEDC serves as an advocate to the business community by building relationships with companies that allow them to take advantage of New York City's many opportunities. Find us on Facebook or follow us on Twitter, or visit our blog to learn more about NYCEDC projects and initiatives.