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 City of Muskegon Community Development Block Grant (CDBG)Community Development Block Grants are federal grant funds that are administered by the City. They provide financial assistance in three broad categories, namely: economic development, housing, and public works. The City can use these funds to stimulate eligible projects with private sector involvement, including land acquisition, construction, demolition and rehabilitation. However, jobs created by the use of these funds should, in large part, benefit low and moderate-income individuals. City of Muskegon Tax Exempt Facility BondsThrough its federal Enterprise Community Zone designation, qualified private corporations are eligible to issue tax exempt bonds for the construction or rehabilitation of buildings and facilities or for the purchase of tools and equipment. The business must be located within the Enterprise Community Zone. These bonds offer below market interest rates for borrowing up to $3 million. Tax Exempt Industrial Development Revenue Bonds (IDRB)The Michigan Strategic Loan Fund (or a local government economic development corporation) can provide the maximum allowable use of IDRB financing. IDRBs lower the cost of borrowing to approximately 70% to 80% of prime rate for eligible capital expenditures. This is due to the federal tax exemption on interest paid to the bond borrower (and state taxes in certain cases). Use of bond proceeds is limited to acquisition of land, machinery and equipment; and construction, renovations or acquisition of buildings. Michigan Strategic FundThe Michigan Strategic Fund (MSF) offers a variety of funding programs to spur business innovation and help entrepreneurs flourish in Michigan. The MSF responds to the financing gaps in research and development, high risk pre-venture "seed capital" start-ups, venture capital and middle-risk financing which contains more risk than banks can fund. Rates and terms are negotiated with the private funding entities. Michigan Economic Growth Authority (MEGA)The Michigan Economic Growth Authority can provide exemptions from the Single Business Tax and Sales Tax on purchases of goods by businesses for their own use. For businesses located within the Enterprise Community Zone, the minimum job creation threshold is 25. Companies moving into Michigan with more than 150 jobs qualify for the Single Business Tax break, while Michigan firms qualify if 75 new jobs are created. State Venture CapitalThe Alternative Investments Division of the Michigan Department of Treasury offers a pool of venture capital for qualified, fast-growing companies seeking equity funding. Typically, the venture capital program is used to support new, high-tech companies on the cutting edge of industrial technology. Capital BIDCO Gap FinancingThe Capital BIDCO offers mezzanine or gap financing loans to qualified companies at negotiated rates. Employee Training ProgramsThrough the local Private Insurance Council (PIC), qualified companies may receive grant funds to assess and train employees through area colleges and school districts. Special, relaxed employee eligibility criteria are available to those companies located in or employees living within the City’s Enterprise Community Zone. Industrial Tax AbatementIndustrial Facility Tax (IFT) Tax Abatements are granted by the City. The abatements reduce property tax liability on buildings, machinery and equipment by 50% for new facilities and by 100% of the new value of a rehabilitation of existing property. These abatements are available for up to 12 years, or 6 years for personal property. Payment in Lieu of TaxesThe City offers Payment in Lieu of Taxes (PILOTS) to certain residential developments that serve either low and moderate-income individuals or senior citizens. The annual payment is 4% of adjusted rental income. LDFA’s and DDA’sThe City operates four Local Development Finance Authority Districts (LDFA), one in each industrial park; and a Downtown Development Authority (DDA) within the central business district. The districts capture incremental taxes for reinvestment back into the district. When capacity is available, these authorities can help firms secure bond financing. Each authority also assists businesses with land assembly. Tax Free Foreign Trade ZonesTo stimulate economic expansion and the movement of goods, the City can offer businesses the advantages of duty and tax deferred or avoidance movement of imported goods through one of several Foreign Trade subzones. Economic Development Administration (EDA)The U.S. Department of Commerce, Economic Development Administration provides grant assistance to the City, primarily for infrastructure improvements associated with industrial prospects that create and retain full-time permanent jobs. Small Business Administration (SBA)Through the Muskegon Economic Growth Alliance and local banks, the U.S. Small Business Administration provides several sources of business funding alternatives including gap funds, guaranteed loans and start-up assistance. Michigan Transportation Economic Development Fund (TEDF)Funds are available to the City and the State for road project needs associated with economic development. Land AssemblyThe City employs a full time professional to assist businesses with locating, assembling and purchasing land for residential, commercial and industrial purposes. In addition, the City maintains an inventory of property of all land use types generally available at, or below market rates. The City has two Industrial Parks, namely: The Port City Industrial Park which is a State of Michigan certified park; and The Medendorp Industrial Center. Land is available in both parks. Site Assessment and Remediation AssistanceThe City recognizes that many of its sites are classified as "brownfields," which may increase the cost of redevelopment. For this reason, the City may assist businesses, on large industrial sites, with environmental investigations and remediation. Want more information?Call the Department of Economic Development at (231) 724-6702 or the City Manager's Office at (231) 724-6724 or can write to us at:
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