The Grand Rapids City Commission on Tuesday followed the lead of Kent County by designating the city in its entirety as a Recovery Zone under the American Recovery and Reinvestment Act.
The move makes the city eligible to access $25 million in federal funds, which it can use to issue tax-exempt bonds in support of eligible development projects. The city became qualified for the designation because of its recent spike in unemployment – topping 17 percent – and home foreclosures.
City economic development director Kara Wood says Grand Rapids will issue the bonds in support of projects that offer substantial job creation and long-term growth potential, as well as an increase in city tax revenue.
Unlike longstanding laws governing state-authorized tax abatements, Recovery Zone projects are not limited to the manufacturing sector.
“This program invites, or allows, for the tool to be used on much more than manufacturing,” Wood says. “Projects have to be credit-worthy, and they have to have a financing commitment from a bank or underwriter, so it’s not going to help with getting financing.” Once financing is in hand, the tax-exempt bonds can lower the cost for the borrower.
Enjoy this story?
Sign up for free solutions-based reporting in your inbox each week.