Exempt Facilities Bond Program
Companies developing facilities described as "exempt facilities" under the Internal Revenue Code can access triple tax-exempt bond financing. Reductions in mortgage recording tax may also be available.
Eligible Borrowers and Projects
Private companies may be able to use triple tax-exempt bonds to finance the construction, renovation and equipping costs associated with the following types of projects:
Dock and wharf facilities
Solid waste disposal facilities
Other projects eligible for qualified private activity bond financing pursuant to the Internal Revenue Code
Triple Tax-Exempt Financing
Compared with conventional loans, advantages of triple tax-exempt bonds can include reduced interest rates, longer financing terms, lower equity contributions, and, depending on the project, the ability to obtain construction and permanent financing in a single loan.
To assist borrowers in assessing the cost-effectiveness of financing their proposed projects with tax-exempt bonds, Build NYC staff works with borrowers during their decision-making process prior to accepting applications.
Borrowers obtain lower interest rates due to the fact that purchasers of triple tax-exempt bonds receive exemptions from Federal, State and City income taxes on interest payments received.
The cost of the project and the borrower's debt repayment capacity dictate the amount borrowed. Borrowings under $5 million may not be cost-effective.
Borrowers work with investment banks or institutional lenders of their choosing to identify bond purchasers and to structure the proposed debt.
Build NYC debt can be structured with variable, fixed, or auction interest rates. Maturities typically depend on the useful life of the asset to be financed.
Bond purchasers may require the debt to be secured by the organization's available collateral among other forms of security. Build NYC debt is not an obligation of the City or the State, or any subdivisions of either.
Except for public offerings, Build NYC does not require bond issues to be rated by bond credit rating agencies.
Requests for other benefits, including waivers of mortgage recording and sales taxes, will be evaluated based on need.
All Build NYC benefits are discretionary. Selection considerations include, but are not limited to, need for financial assistance and the impact of the proposed project on New York City’s economy.
Applicants must provide financing commitments for their proposed projects.
The environmental condition of the project site(s) and the company’s liability and other insurance coverages must be satisfactory to Build NYC prior to closing.
Applicants must make a commitment to the HireNYC Program and providing a living wage (if it applies).