Agenda - Council - 10/25/1983 - Laserfiche WebLink

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competitive disadvantage relative to the rest of the nation. That kind of change must occur nationally. NEED The proposed business financing policy states that the Council will encourage the expanded use of financing programs to make more capital available to businesses located in the Region's MUSA and Freestanding Growth Centers. The Availability of Investment Capital paper discussed the needs of businesses, but not WHo was atte~pti'ng to audress these problems or how° The Council, in proposing to address the problem with the 503 and IRB programs, asked the question. The major purpose behind the programs is to make financing opportunities more available throughout the Region. Therefore, it is important to know how many communities are taking advantage of these programs currently and how many are not. The Council is~interested in seeing these used only within the MUSA or Freestanding Growth Centers; thus, the figures presented below count only those communities. SBA 503 Program There are only three municipalities in the Region with SBA 503 certified development companies (CDCs): Chaska, Coon Rapids and Sto Paulo Minneapolis is in the process of establishing a 503 CDC. There are three regions in the state with 503 programs; four have applications pending. Recently, a state program was certified by the Small Business Administration. Around the country, 110 of approximately 600 regional councils have 503 programs. Industrial Revenue Bonds Between i970 and 1982, 71 communities within the Region's MUSA issued IRBs; 14 of them were Freestanding Growth Centers. That means 31 municipalities have not yet used this economic development tool (see tables in Appendix B). Judging from the numbers, there is opportunity for regional programs to be useful. With respect to the proposed IRB program, there is another advantage to the regional approach besides simply making it available to communities not already using IRBSo Part of the program can be described as a "credit enhancement" effort--the metropolitan reserve system. By pooling reserves, it may be possible to secure issues with a large reserve and reduce the borrowing costs. Small communities simply do not have enough projects to build a sufficiently large pool. In addition, a composite bond program would be difficult for an individual community to undertake. A regional program could allow a number of communities to take advantage of the program without the high set-up costs. AUTHORITY The Metropolitan Council has the authority to support the activities of a regional 503 program and to issue revenue bonds, commonly called industrial revenue bonds (IRBs), under Minn. Stat., Ch. 474 and Sec. 473.193-473.201. The programs being proposed and guidelines for making them consistent with other Council policies are described in the two sections that follow. 18 m i m m m m m m m m m m m I I I I m m