The Economic Development Corporation of the City of Detroit (EDC) has adopted an inducement resolution for up to $15 million in tax exempt Recovery Zone Facility Bonds to finance construction of a medical office building near the Wayne State University campus. Queen Lillian, LLC, has proposed building the office, research and clinical facility on a site near Mack Ave. and St. Antoine St. and lease it to the WSU School of Medicine.

 

"The inducement resolution is an important first step toward issuing the bonds. The EDC and Detroit City Council still have to receive, review and approve additional information before bonds are issued," said Art Papapanos, DEGC Vice President, Board Administration. "This vote tells the developer it has a good chance of receiving final approval if it meets all the requirements spelled out by law."

 

Congress granted the authority to states and municipalities to issue tax exempt Recovery Zone Facility Bonds when it passed the American Recovery and Reinvestment Act of 2009. Detroit is allowed to issue up to $73 million in the Facility Bonds this year, and is actively seeking applications. The bonds are attractive to investors because they are tax-free. No public funds are directly tied to the bonds. They will be repaid from Wayne State University's lease payments for space in the building.

 

Art Papapanos, said the bonds are similar to the $462 million of private activity bonds the EDC has issued in the past to support major expansion of industrial and commercial projects, including the Greater Detroit Resource Recovery Facility, the three Detroit casinos and the 36th District Court Building.

 

Projects funded by Recovery Zone Facility Bonds must create new jobs or have some other related public purpose, and they generally cannot be used to move jobs from one city to another within Michigan. The Queen Lillian project is projected to maintain 119 jobs and will eventually add 31 more.

 

The sale of Recovery Bonds must close by the end of this year. Other project requirements are spelled out in law and explained in documents available at DEGC. Developers of other projects interested in applying for Recovery Bonds should contact Art Papapanos, VP, Board Administration, 313-237-4638.

 

Detroit Economic Growth Corporation is a non-profit organization that serves as the lead implementing agency for business retention, attraction and economic development initiatives in the city of Detroit. DEGC is led by a 60-member board comprised of business, civic, labor and community leaders. Its 35 professionals provide staff services for key public authorities that offer tax credits and other forms of financing for projects that bring new jobs or economic activity to the city. Among them: the Downtown Development Authority (DDA), Detroit Brownfield Redevelopment Authority (DBRA), Economic Development Corporation (EDC), Neighborhood Development Corporation (NDC), Local Development Finance Authority (LDFA), and Tax Increment Finance Authority (TIFA). The DEGC also provides planning, project management and other services under contract to the City of Detroit.

www.degc.org