Town of Berlin Economic Development Infrastructure Loan/Grant Fund Program Guidelines
A. Program Description
This fund is to provide monies for the construction of necessary public infrastructure improvements associated with new job-creating development opportunities. The Town policy is that projects must involve real property improvements for at least one of the following: (1) for office use; (2) for manufacturing use; (3) for warehouse, storage or distribution use; (4) for information technology or research and development use; or (5) for redevelopment of existing retail properties that involve substantial renovations or restoration of the exterior of the building and improvements to landscaping. Other uses for which tax abatement is permitted by State Statute will not generally be eligible unless the applicant demonstrates that the project will have a special benefit to the community. Retail establishments are generally not eligible except as provided under section (5) above. The purpose of this fund is to entice new job creating businesses to Berlin and to assist the growth of existing businesses. Funds are to be used to pay for public infrastructure improvements that are needed to support the business development projects. Public improvements can include water and sewer line extensions, electric and telephone extensions, public sidewalks, road improvements, installation of traffic control devices, street lighting, downstream drainage improvements, sewer and water hook up fees, etc. The share of the total cost of these improvements to be paid for through the Loan Program shall not exceed three years’ worth of anticipated local tax revenues from the project, as determined by the town’s Tax Assessor. In addition the loan will not be for more than 50% of the cost of the proposed infrastructure project.
Infrastructure loans will generally be for terms of not more than 3 tax years following the issuance of a certificate of occupancy for the project at an interest rate of 6%. Town infrastructure loan/grant may be subordinate to other debt subject to a demonstration by the applicant that it has the ability to repay the debt. Principal and interest on infrastructure loans/grants shall be forgiven if the project generates an increase in net real property taxes equal to, or greater than, the loan/grant amount within the first three tax years following the issuance of a certificate of occupancy. The amount of the loan/grant in excess of the incremental real property tax payments received by the Town in the first three tax years shall be due and payable in full by the October 31 following the July in which the tax payment for the third year is due.
The following is a listing of general guidelines which are to be used by staff for preliminary proposal evaluation. Applications are to be received by the Economic Development Director’s Office and referred to the Town’s Economic Development Commission for their recommendation to the Town Council.
Applications will be evaluated against the following criteria:
• Those projects that will involve significant real property improvements that will generate a return for the Town in future tax revenues will be given priority.
• Those business ventures providing the largest economic multiplier impact in the community will receive preference. In addition, the number of jobs to be created vis-à-vis the amount of the development assistance requested will be considered.
• If the use of loan funds will bring about the installation of previously identified community facilities/improvements that are documented in the Town’s Capital Improvement Program, Plan of Development, and/or other Town-sponsored studies, and reports, the project will receive preference. In addition, those infrastructure improvements/extensions and/or evaluations that benefit not only the applicant, but others, will be given a higher priority.
• Those requesting assistance must be the actual user or developer to benefit from the proposed infrastructure improvement. Funds will not be used to support speculative ventures
The Town reserves the right to modify these guidelines for projects producing special economic benefits to the community. Actions on all applications will be subject to availability of funds. Applications for Economic Development Funds are to address the above noted guidelines. The Economic Development Director, Town Manager, Economic Development Commission, and Town Council reserve the right to reject all applications and/or request additional documentation from the applicant. Funds are to be dispersed on a reimbursement basis only and the Town reserves the right to request and receive any, and all, documents required to verify the expenditure. In addition, the Town may also require credit information from the applicant(s) after a preliminary finding of project eligibility is made.
The applicant is requested to submit an application for an infrastructure loan/grant to the Economic Development Commission. The Commission will review the application and make a recommendation to the Town Council. The Town Council will make the final determination on the approval and amount of funding provided, if any, to the applicant.
For further information, contact:
Economic Development Director
Town of Berlin
240 Kensington Road
Berlin, CT 06037
Application for both the Tax Abatement and Infrastructure Loan Fund programs