Revenue bonds can be used to finance:
- Industrial, commercial and medical facilities
- Multifamily rental housing
- Nursing homes
- Some nonprofit activities
They can fund projects like:
- Land acquisition
- New-facility construction
- Additions to existing facilities
- Purchase and renovation of existing structures
- Production and equipment purchases
State and local government agencies may issue tax-exempt or taxable revenue bonds on behalf of private borrowers to provide lower interest rates on long-term financing.
- Revenue bonds for industrial/manufacturing, medical facility, 501(c)(3) nonprofit or nursing-home projects are generally tax-exempt
- Revenue bonds for commercial projects are taxable
You can apply to this program if you are a:
- Business or business owner in Minneapolis
- Business owner or developer planning to locate in Minneapolis
- Business with facilities outside Minneapolis, primarily if they are Minneapolis-based firms with facilities both in and outside the city or for projects that serve a public purpose.
- Bars, restaurants, entertainment facilities and start-up firms are not eligible
- Revenue bonds are marketed to either institutional investors - insurance companies, banks and pension funds or sold to the general public through a public offering. This results in interest-cost savings to borrowers.
- Bond underwriting firms will prepare an official statement to market the bonds to the public.
- Revenue bonds are issued either free-standing or through the Minneapolis Common Bond Fund (CBF).
- Free-standing revenue bonds are issued with the strength of the project dictating terms and conditions of financing and interest rate.
- Bonds issued through the CBF are investment-grade with an "A+" municipal-bond rating based on the security provided by the CBF, resulting in lower interest rates.
Rates, terms and fees
- Revenue bond issuance expenses include bond counsel, underwriter, corporate counsel, inspecting architect, title insurance and other fees. These fees may be financed through the revenue bond up to certain limits.
- Tax-exempt revenue bonds can be issued below commercial market interest because interest earnings to the purchaser are generally exempt from federal, state and local income taxes.
- Revenue bond financing can be fixed rate, with terms of 20 to 30 years, often at interest rates below or equal to market interest.
- A City of Minneapolis staff person will handle your revenue bond request from initial inquiry through post-closing monitoring.
- The complete public approval process takes about 90 days.
- The City of Minneapolis approve revenue bond projects based on financial strength; credit worthiness; public purpose served, such as preserving and creating jobs; and increasing the real estate tax base.
- Narrative on the company and owner(s)
- Financial statements for the past three years and any interim statements
- Personal financial statements of anyone owning more than 20 percent of the company
- General description of the proposed project, plans and estimates of project costs
- Appraisals and environmental reports about the proposed project