Recovery Zone bonds back in play

A tiny yet potentially tangible aspect of a federal economic stimulus package has had a hard time finding a home in Sarasota.

The program in search of a qualified company is known as Recovery Zone financing. The plan is to provide tax-free bonds to businesses that will use them to buy equipment, construct a new building or renovate an existing facility.

The bonds, part of the larger Federal Economic Recovery Program, have been available since last fall and are designed to help small businesses struggling to survive the recession.

Lee and Charlotte counties, in addition to Sarasota, are among the Gulf Coast counties that have participated in the program.

But two companies in Sarasota essentially had to give back the bonds before they could benefit from any stimulus, says Joan McGill, an official with the Economic Development Corp. of Sarasota County, which coordinates the program and the application process. That has left nearly $14 million in bonds available again.

One firm, Finergy Development, couldn't secure financing for its planned project, which was the construction of a 100-room Hilton Garden Inn in south Sarasota County. Sarasota County had previously approved the company, which specializes in hotel development, to borrow up to $10.4 million for the project.

“They just couldn't get anyone to buy the bonds,” McGill tells Coffee Talk.

A similar financing issue surfaced at Nexring, an Internet firm developing a virtual call center and other online marketing tools. That company had to give back about $3 million in potential bonds.

While McGill and other EDC officials lament those lost opportunities, they still believe the program could be a big boost for the right company. “We are particularly excited that this financing is available to types of businesses that would not usually qualify for traditional industrial development bonds,” EDC President and CEO Kathy Baylis says in a statement.

One local business, online marketing firm IntegraClick, for example, used Recovery Zone bonds last year when it bought a 79,000-square-foot corporate headquarters.

For more information on the program or to apply for the bonds, contact the EDC's Joan McGill at (941) 309-1200 ext. 107 or [email protected].