Economic and Industrial Development Finance
Hawkins Delafield & Wood LLP is an industry leader in Economic Development Finance, having served in many capacities in financings aggregating billions of dollars throughout the country for a multitude of economic development projects. From traditional industrial development revenue bond financings to sophisticated developer driven project financings, the Firm has expertise in all areas of economic development.
Highlights of our Economic Development and Industrial practices include the following:
Job Retention Incentives
In recent years, Hawkins has increasingly represented state and local governmental entities in developing and negotiating economic incentive packages of tax, utility and other abatements to induce corporations to commit to relocate or to retain minimum levels of jobs and operations in a given jurisdiction.
Qualified Zone Academy Bonds
Tax credits are federal and, in some instances, state incentives to invest in a particular manner. Generally a tax credit creates an entitlement of the holder to an offset of federal (or state, as applicable) income tax liability. Hawkins served as Bond Counsel to the City of Newport News, Virginia, in 2003 for an issue of Qualified Zone Academy Bonds (QZAB’s), the proceeds of sale of which were used to finance renovations to a local school. This innovative tax credit program enabled the City to borrow interest-free for a term of 15 years. Further, because under the federal income tax laws QZAB’s are not tax-exempt obligations, the City was able to structure the QZAB’s as a single bullet maturity with annual sinking fund installments deposited under a time deposit agreement with a locked-in rate of return. Thus, the City’s principal amortization obligations were reduced by amounts corresponding to the guaranteed earnings under the time deposit agreement resulting in a significant additional benefit to the City.
Tax Increment Financings
Tax increment financing is a well-established vehicle for securing debt and the Firm has acted as bond counsel on numerous such financings throughout the country. Tax increment financing uses the portion of the taxes on properties derived from the increase in assessed value resulting from a project to secure payments on debt issued to finance the project.
Historic Tax Credits, New Markets Tax Credits, and Brownfield Redevelopment Tax Credits
Historic Tax Credits, New Markets Tax Credits and Brownfield Redevelopment Tax Credits are all vehicles for creating tax incentives to invest in particular types of projects or enterprises. Historic Tax Credits are a percentage of rehabilitation costs for historic buildings, with a smaller tax credit being available for rehabilitations of non-historic non-residential buildings constructed before a certain date. New Markets Tax Credits were established in late 2000 to provide an incentive for investment in Community Development Entities. A Community Development Entity is a corporation or partnership that is a vehicle for the provision of loans, investments or financial counseling in low income communities. Brownfield Redevelopment Tax Credits are incentives for the voluntary remediation and reuse of contaminated urban and industrial sites. These incentives were developed to promote the redevelopment and reuse of aging, abandoned and contaminated sites that might otherwise not be economically viable.