Wednesday, March 31, 2010

Cincinnati designated as Recovery Zone

Cincinnati City Council has designated the entire City as a Recovery Zone, making it eligible for state credits that can help fund public and private development projects at a lower cost.

The State of Ohio has been allocated more than $1.06 billion of $25 billion in 2009 federal economic stimulus (ARRA) for the Recovery Zone Economic Development Bond and Recovery Zone Facility Bond program, which it plans to begin allocating to counties and large municipalities designated as Recovery Zones next month.

These taxable, municipal bonds allow governments to borrow at a significantly lower cost, as 45 percent of the coupon interest payable on each bond is subsidized by the U.S. Department of the Treasury.

First established by the Internal Revenue Code of 1986, Recovery Zones are areas defined as:

  • having significant poverty, unemployment, rate of home foreclosures, or general distress;
  • being economically distressed due to base closure or realignment due to the Defense Base Closure and Realignment Act of 1990; or
  • being designated as an Empowerment Zone or renewal community as of the effective date of the ARRA.