Sun Prairie Hosts Regional Economic Development Professionals Meeting (City of Sun Prairie Office of Economic Development)

Economic Development professionals from the 8 county THRIVE region met at Wisconsin Distributors in the Sun Prairie Business Park on March 24th for their first meeting of 2011. Hosts were Neil Stechschulte, Economic Development Director for the City of Sun Prairie and Shane McPeak, Human Resources Director for Wisconsin Distributors. Mr. McPeak provided a brief overview of Wisconsin Distributors' operations in Wisconsin. Mr. Stechschulte gave a brief presentation on economic development activities in Sun Prairie.

Special guest for this meeting was Mr. Larry Schwenn from Wisconsin Business Development Inc., who came and presented on their 504 loan program, as well as some other forms of assistance that WBD can provide.

THRIVE's Brad Elmer also provided an overview of their pursuit of Economic Development District status and the creation of the EDA required Comprehensive Economic Development Strategy planning document.

Betsy Lundgren of THRIVE provided a sneak peak at the proposed updated to THRIVE's website, which will feature images and testimonials from area companies that help showcase successful companies doing business in the Madison region. It will also feature direct links to the Capital Connections Inventory, the Located in Wisconsin buildings and sites database, and the region's retention program called Business Link.

THRIVE's Jenn Post Tyler then facilitated an open forum for attendees to provide general project updates for anyone who had something to share.

The group meets quarterly to share information and to network. The next meeting is tentatively set for June 2011.

City Seeks Projects for New Markets Tax Credit Area (City of Sun Prairie Office of Economic Development)

In 2000, Congress passed legislation encouraging investment in income qualified census tracts. This included the New Markets Tax Credit (NMTC) program, which is operated through the Community Development Financial Institution (CDFI) Fund, a division of the U.S. Department of the Treasury. The program provides investors a credit against federal income tax liability for a qualified investment. The credit provided to the investor totals 39% of the cost of the investment and is claimed over a 7-year credit allowance period.

Eligible projects include:

• Loans and investments in operating businesses located qualified census tracts
• Development of commercial, industrial and retail real estate in qualified census tracts
• Mixed-use projects are okay where commercial income exceeds 20 percent of the gross income of the property

Potential benefits to businesses include:

• Provides gap financing for projects that would otherwise not be able to move forward
• The weighted average interest rate paid by the borrower is below market rate
• Advance rates on collateral exceeds market rate
• Business receives patient capital with some interest-only payments and longer than market amortization period.
• Some forgiveness of the “B Note” (net tax credit equity)likely depending on economic impact of project

The area in Sun Prairie that is eligible for this program is a triangle that has U.S. 151 to the north, Bristol St to east, and Main St. to the south (see below).

Note that a significant portion of this area is also a part of the City's TIF 10, so additional incentives may be available for qualified projects.

For additional information or assistance in evaluating New Market Tax Credits for a project in this area, contact either of these financial consultants familiar with the qualified Sun Prairie tract:

Kate Crowley, Manager

Baker Tilly

608-240-6718

kate.crowley@bakertilly.com

or

Carol Maria, President
Wisconsin Business Growth Fund, Inc.
262-436-3016
cmaria@wbd.org