FINANCING & INCENTIVES

AN OVERVIEW OF AVAILABLE PROGRAMS

LOCATED ALONG THE MISSISSIPPI RIVER IN

SOUTHEAST IOWA, THE GREATER BURLINGTON

AREA IS A GROWING REGIONAL CENTER THAT’S

HOME TO OVER 40,000 PEOPLE, DIVERSE

INDUSTRIES, AND A BUSINESS SAVVY THAT STANDS

OUT TO COMPANIES EXPANDING IN THE MIDWEST.

WE INVITE YOU TO JOIN OUR COMMUNITY

Open Spaces

Four-Lane Highways

River Terminals Available Sites

Major Employers

Rail Infrastructure

TABLE OF CONTENTS

• Our Team

• What We Do

• At the Center of Commerce

• Disclaimers

• Getting Started: What We’ll Need

from You

• Current Wage Thresholds

• High Quality Jobs Program

• Enterprise Zone

• Targeted Jobs Withholding Tax

Credit

• 260E Iowa Industrial New Jobs

Training Program

• 260F Iowa Jobs Training Program

• New Jobs Tax Credit

• Tax Abatement

• Tax Increment Financing

• Burlington Area Development

Fund

• Iowa Micro Loan Program

• SEIRPC Revolving Loan Fund

• Contact Us

OUR TEAM

David K. Toyer,

Director of Economic Development

Jason Hutcheson, CEdC

President/CEO

WHAT WE DO

• SITE SELECTION ASSISTANCE

– Identify area available buildings & sites that meet your needs

• SITE LOCATION ANALYSIS

– Research information on zoning, utilities, infrastructure, permits and approvals, local suppliers, and more

• FINANCIAL INCENTIVES

– Analyze options & facilitate the application process

• RELATIONSHIP BUILDING

– Lead introductions to local financial & educational institutions, local permitting and regulatory staff, contractors, local suppliers, and more

• RESOURCE IDENTIFICATION

– Pinpoint available programs and services, including workforce development, job training, and more

500 Miles

AT THE CENTER OF

U.S. COMMERCE

1000 Miles

DENVER

DALLAS

KANSAS

CITY

MINNEAPOLIS

CHICAGO

ATLANTA

NEW YORK

OMAHA

LOS ANGELES

DISCLAIMERS

• All incentives are subject to approval by their respective program administrator (city council, board, state agency or administrator)

• Incentive programs and eligibility requirements do change from time to time and the information contained herein is the most accurate as of the date of its publication

• By publishing this information, we are neither extending an offer of benefits nor providing any guarantee of benefits that may be awarded to a project

• Please contact our economic development team to discuss your project and obtain a more in-depth review of incentives that may be available for your project

GETTING STARTED:

WHAT WE NEED FROM YOU

In order to provide you with a thorough and accurate review of potential incentives, as

well as alternative financing opportunities, we will need the following information:

Brief description of the project

A summary of the number of jobs to be created and/or retained

Details on the types of jobs and their estimated starting wage

A summary of the employee benefits that you will provide

An estimate of your total project capital expenditure

The easiest way to provide us with this information would be to fill out an Iowa New

Project Questionnaire.

WAGE THRESHOLDS

Many of Iowa’s local, regional and state incentive programs have a wage

threshold that must be met obtained in order to qualify. This threshold is

typically based on the average county or laborshed wage and varies depending

on each incentive program's criteria. Current wage thresholds for our

communities as of November 2013:

Threshold Wage

85% of average $12.78

90% of average $13.54

100% of average $15.04

120% of average $18.05

HIGH QUALITY

JOBS PROGRAM

• Summary– Provides qualifying businesses with tax benefits

and direct financial assistance to off-set some of the costs incurred to locate, expand or modernize in Iowa.

• Determining Awards– Award amounts depend on business’ level of need,

quality of the jobs, percentage of high quality jobs relative to total job creation, and the economic impact of the project.

• Eligibility– Jobs created must pay 100% of the current wage

threshold and 120% by project completion

– Retained jobs must pay at least 120% of the current wage threshold through project completion

– Business must provide sufficient benefits package to all full time employees, defined as:

• Business pays 80% of medical premiums for single coverage plans; OR

• Business pays 50% of medical premiums for family coverage plans; OR

• Business pays for some level of medical coverage and provides the monetary equivalent value through other employee benefits

• Maximum Awards– There is a maximum tax incentive award available

to a business based on the qualifying jobs, wages and investment.

See Tax Incentive and Award Schedule

• Potential Tax Incentives– A local property tax exemption based of the value

added to the property may be available

– An investment tax credit equal to a percentage of the qualifying investment, amortized over five years. The credit is earned when the asset is placed in service and can be carried forward for up to seven additional years or until depleted, whichever occurs first

– A refund of state sales, service or use taxes paid to contractors or subcontractors during construction

– For distribution center projects, a refund of sales, service and use taxes paid on racks, shelving and conveyor equipment

– The state’s refundable research activities credit may be increased while the business is participating in the program

ENTERPRISE ZONE

• Eligibility– The business must make a minimum qualifying

investment of $500,000 over a three year period. Qualifying investment includes the cost of land, buildings, improvements to buildings, manufacturing machinery and equipment, and/or computer hardware.

– The business must create at least 10 full-time, project-related jobs over a three year period and maintain them for an additional two years.

– The business must provide all full time employees with a standard medical and dental insurance plan of which the business pays 80% of the premiums for employee-only coverage, pays 50% of the premiums for family coverage, or provides a monetarily-equivalent benefit package.

– The business must pay new employees a starting wage which is equal to or greater than 90% of the average laborshed wage.

• Limitations & Restrictions– The business can not be a retail establishment or a

business limited by cover charge or membership

– The business can not close in one area of the state and relocate substantially the same operation in an Enterprise Zone.

– The local Enterprise Zone Commission and the Iowa Economic Development Authority (IEDA) must approve an application for incentives prior to project initiation.

• Incentives– Property tax exemption of 100% for up to 10 years

based on the value added to the property

– Additional funding for job training programs in conjunction with 260E

– Refund of sales, service or use taxes paid to contractors or subs during construction

– Distribution center projects get a refund of sales, service and use taxes on shelving, racks and conveyors

– Up to 10% investment tax credit on the qualifying project investments amortized over 5 years.

TARGETED JOBS

WITHHOLDING TAX CREDIT

• Eligibility

– A business that is locating to the community from

another state and creating targeted jobs within an

urban renewal area; or

– An existing Iowa business that is creating ten new

targeted jobs or making a qualifying investment

greater than $500,000 within an urban renewal

area.

• ‘Targeted Job’

– A 'targeted job' is defined as a job with a business

that is or will be located in an urban renewal area

and that pays a minimum wage equal to the

county average wage

• Benefit

– Under this program, a withholding agreement

between the city and the employer allows up to

3% of the gross wages paid by the business to be

directed to the city on a quarterly basis. The city

must then match these funds dollar for dollar and

use the funds in an urban renewal project related

to the employer

• Other Details

– Burlington is one of five pilot communities in the

State of Iowa that have this program available

260E IOWA INDUSTRIAL

NEW JOBS TRAINING PROGRAM• What is it?

– Diversion of Iowa withholding tax to compensate

a local community college for providing job

training programs to businesses

– Administered locally by Southeast Community

College in West Burlington, Iowa

• How can it be used?

– Training for new employees

• Eligibility (Business)

– Must be in or locating to Iowa

– Must be engaged in interstate commerce

(manufacturing, processing, assembling,

warehousing, wholesaling or conduction research)

– Service providing businesses must have non-Iowa

customers

• Eligibility (Employee)

– Must be a new position

– Must pay withholding tax

– Must occupy a position that did not existing 6

months prior to engagement

• Evaluation (Criteria)

– Contact Brenda Ruby at CBIZ

• Limitations

– Depending on the wages paid to the employees,

the company would divert either 1.5% or 3% of

their Iowa withholding for each qualifying

position

– Cannot have closed one Iowa location to reopen

another in Iowa with substantially the same

business operations

260F IOWA JOBS

TRAINING PROGRAM

• What is it?

– Reduced to no cost job training for existing employees of qualifying Iowa businesses

• How can it be used?

– Customized job training programs, employee training

• Eligibility (Business)

– Must be located in Iowa.

– Must be engaged in interstate or intrastate commerce for the purpose of manufacturing, processing, assembling products, warehousing, wholesaling, or conducting research and development

– Service-providing businesses must have customers outside of Iowa

– Within the 36-month period prior to the date of applying for program services, a business cannot have closed or reduced its employment base by more than 20 percent at any of its other business sites in Iowa in order to relocate substantially the same operation to another area of the state

• Eligibility (Employee)

– Must be currently employed by the business

– Must pay Iowa withholding tax

• Additional Information

– Contact Brenda Ruby at CBIZ

IOWA NEW

JOBS TAX CREDIT

• What is it?

– Per “new” employee tax credit

• What does it do?

– Is applied as an offset to corporate income tax

• Eligibility

– Available to companies that have entered into an

Iowa New Jobs Training Agreement (260E) and

expanded their employment base by more than

10%

• Evaluation Criteria

– Contact Brenda Ruby at CBIZ

• Limitations

– One time credit

– Unused credits can be carried forward for up to

ten years

– The amount of this one-time tax credit will depend

upon the wages a company pays and the year in

which the tax credit is first claimed

– The maximum tax credit in 2013 will be $1,560

per new employee

– The tax credit may be claimed on Form IA 133

found on the Iowa Department of Revenue

Website

TAX ABATEMENT

• Eligibility & Applicability

– To incentivize new construction and the expansion

of existing facilities, the Cities of Burlington and

West Burlington have adopted two commercial

property tax abatement schedules that abate taxes

based on the incremental value added to the

property

– A project owner can indicate a preference for

which of these abatement schedules they'd prefer

• Abatement Schedules

– 100% Abatement Option

• 100% exemption - 3 Years

– 10-Year Sliding Scale Option:

• 80% - Year 1

• 70% - Year 2

• 60% - Year 3

• 50% - Year 4

• 40% - Years 5 & 6

• 30% - Years 7 & 8

• 20% - Years 9 & 10

TAX INCREMENT

FINANCING (TIF)

• Eligibility & Applicability

– Certain projects may be eligible on a case-by-case

basis to receive Tax Increment Financing (TIF)

– TIF can be used as either an incentive for

construction new facilities or as an offset to the

cost of constructing new or expanding existing

infrastructure

• TIF Explained

– Tax increment financing (TIF) is a method of

reallocating property tax revenues that are a result

of an increase in taxable valuation above a "base

valuation".

– Until the tax increment debt within an area has

been repaid, tax revenues produced by property

tax levies imposed on the increased taxable

valuation are all allocated back to the jurisdiction

(city, county or community college) that

established the tax increment area, and must be

spent by that jurisdiction for projects within that

area.

BURLINGTON AREA

DEVELOPMENT FUND

• Eligibility & Applicability– Businesses eligible for this local economic

development incentive fund, and given priority, are for-profit businesses that are:

• Manufacturing

• Warehouse/distribution centers

• Teleservices

• Corporate headquarters

• Transportation

• Financial services

– Must invest a minimum of $650,000 in new real property in the Flint Ridge Business Park

– Create a minimum of 5 new full-time equivalent (FTE) jobs within 24 months and maintaining them for a minimum of 36 months

– Pay an hourly wage equal to at least 85% of the average county wage for Des Moines County

– Existing companies in Burlington/West Burlington that expand into Flint Ridge Business Park must stay current on property taxes for a period of time equal to the remaining term of the tax increment financing (TIF) district

• Type of Incentive– A per job award based on the number of jobs

being created and their anticipated wages

• Form of Incentive– The incentive may be in the form of a forgivable

loan, an interest rate buy-down, or land. All incentives will be secured contractually in the form of a loan agreement. The loan will be will called if the company does not meet the performance targets.

IOWA MICRO

LOAN PROGRAM

• What is it?

– IowaMicroLoan provides a source of capital for

micro-enterpreneurs who are seeking a direct loan

of $5,000 to $50,000, or a co-financing

arrangement up to $150,000

– Applicants must have applied for a traditional

credit source and been denied

• Loans, Financing & Services Offered

– Loans for start-up, expansion and refinancing of

small business entrepreneurs

– A technical assistance plan of work tailored to the

needs of a small business

– A technical assistance grant up to $500/client/year

to assist in cost of accessing technical resources

– Access to local, regional and statewide

development mentors, coaches and professionals

– Assistance to improve a businesses credit score to

allow for future utilization of traditional credit

resources

• Loan Terms

– $5,000 minimum

– $50,000 maximum

– 8.125% Interest

– 6 Year Term

– Electronically debited loan payments in

accordance with a cash flow budget/plan

– IowaMicroLoan funds may not be used for the

purchase of real estate or as a line of credit

– Co-financing opportunities to work with local

lenders and loan pools up to $150,000

• Application Process

– Visit www.iowamicroloan.org

SEIRPC

REVOLVING LOAN FUND

• What is it?

– A revolving loan pool established by the southeast

Iowa region to assist new and existing businesses

to develop and expand

– Funds are used as gap financing in conjunction

with a primary lender

• Eligibility

– New or expanding business in Southeast Iowa

(Des Moines, Henry, Lee or Louisa counties)

– Applicant must be creating or retaining jobs

– Applicant must demonstrate the need for gap

financing

– Application proposal will support and enhance the

regional economy

• Loan Terms

– Maximum award of $125,000

– Loan award per job of $5,000

– 5-7 year term on fixed assets

– 10 year maximum on real property loans

– Minimum interest rate will be 4 points below

prime with a floor of 4% (USDA funds) or 75% of

prime (EDA funds)

– Loan closing fee of 1.5% of the loan award

CONTACT US

Greater Burlington Partnership

Economic Development

610 N. 4th Street, Suite 200

Burlington, Iowa 52601

319-752-6365

dtoyer@greaterburlington.com

@GBPartnership

#GBPecondev

www.greaterburlington.com