The Suffolk County Economic Development Corporation (EDC) is a local development corporation of the State of New York created in 2010. The primary purpose of the EDC is to promote economic development in Suffolk County by assisting not-for-profit corporations in their acquisition of capital projects.The mission of the Suffolk County Economic Development Corporation is to promote the economic welfare, employment opportunities and quality of life of the residents of Suffolk County. In order to promote economic development, the EDC provides financial assistance through the issuance of tax-exempt or taxable bonds. The EDC provides this assistance for not-for-profits that either wish to locate or expand their operations in Suffolk County. Typical projects eligible for financing include the purchase and rehabilitation of existing buildings, the construction of new buildings, or the construction of additions to existing facilities. Equipment may also be financed through the EDC.
The key to completing an EDC tax-exempt bond issue is to have a financial institution purchase the bonds. The EDC does not have its own funds to loan; instead, it acts as a financial conduit by which the financial institution “makes the loan” to the applicant. Typically, a bank or an investment banking firm will purchase the tax-exempt bonds and, in effect, make the loan. This means that EDC approval of a project does not automatically result in funding being available. The financial institution reviews the project and makes the credit decision as to whether or not to purchase the bonds. In addition, the applicant and the financial institution negotiate the terms and conditions of the loan independently of the EDC.
There are four types of financial assistance available through the EDC:
- Tax-Exempt Bonds: Not-for-profit facilities can be financed with tax-exempt bonds.
- Taxable Bonds: Not-for-profit projects qualify for taxable bonds.
- Tax-Exempt and Taxable Bonds: A combination of tax-exempt and taxable bonds can be issued for projects.
- Refunding Bonds: Projects which were previously assisted with tax-exempt bonds are allowed to repay/refund the outstanding principal amount of the “old” bonds with new tax-exempt refunding bonds bearing a lower interest rate but only for the same term remaining on the original tax-exempt issue.
- Tax-Exempt Bonds: The interest on a tax-exempt bond is wholly or partially exempt from federal, state and local income taxes, while the interest on a taxable bond is exempt from New York State personal income tax only.
- Exemption from Mortgage Recording Tax: If a mortgage is used to finance the project it is exempt from mortgage recording tax.