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DEVELOPMENT BONDS

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Background

The Industrial Development Board of the City of New Orleans is a completely self-supporting, non-profit public corporation, created to promote economic development within New Orleans, with members appointed by the Mayor and City Council. One of the major incentives we offer is low-interest bonds to developers of qualified projects. Since its creation in 1973, the IDB has issued approximately $550 million of bonds for more than 80 different commercial and residential projects. Since Hurricane Katrina, the IDB has issued over $120 million of bonds (including five issues of “Gulf Opportunity Zone Bonds” or GO Zone Bonds” totaling almost $25 million) to finance several new retail and commercial developments and about 2,200 new apartment units.

After KATRINA, Congress created a new category of tax-exempt bonds, known as GO Zone Bonds, to be issued ty economic development authorities like the IDB as an incentive to stimulate economic development by private developers in the areas affected by the storms.

Unlike traditional tax-exempt bonds that are issued for public projects such as streets, utilities and public schools, GO Zone bonds are not payable from taxes or any other public funds whatsoever, but instead are payable solely by the private developer for whom the bonds are issued. The developers must arrange to sell or place the GO Zone bonds for their project based solely on their own creditworthiness and collateral, because there is absolutely no public guarantee, subsidy or investment of public money. Since interest on GO Zone Bonds is tax-exempt to investors, the program reduced the borrowing costs to the developers, usually by about 2%. That is the only “incentive” that the GO Zone Bond program offers.

The IDB can also issue non-GO Zone tax-exempt bonds for a few other very limited purposes, including manufacturing facilities, multi-family housing and certain dock and wharf facilities, to name a few. These are not subject to the GO Zone limitations or deadlines.

Shortly after the initiation of the program, the Louisiana State Bond Commission set aside approximately $1.3 billion of the state-wide authority for projects in New Orleans. Of that amount, only $55.6 million of GO Zones bonds have actually been issued for eight New Orleans projects and another $497 million has been earmarked to developers who hope to complete financing of their projects in the near future.

 
 
 
 
 

 

 

 

 

 

         

INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF NEW ORLEANS, LOUISIANA, INC.

Contact Us:
Sharon Martin - Administrator
Industrial Development Board of the City of New Orleans
1340 Poydras Street, Suite 1114
New Orleans, Louisiana 70112
Telephone: 504 658-4242 · FAX: 504 617-6514
E-mail: mail@idbcno.com
Mail To:

P.O. Box 19996
New Orleans, Louisiana 70179