Real Estate Tax Update | Mountjoy Chilton Medley

Low Cost Financing Opportunity: Midwest Disaster Bonds

Some Midwestern hotel developers and medical office builders may now be able to obtain tax-exempt financing for certain 2012 projects.

In October 2008, Congress passed ?The Disaster Act?, which created a new category of federally tax-exempt bonds called Midwestern Disaster Area Bonds (?Disaster Bonds?). Disaster Bonds are designed to finance capital expenditures for business that suffered a loss caused by these disasters or are designated by the Governor as a trade or business that could have suffered a loss caused by these disasters. The window for issuing Disaster Bonds closes on December 31, 2012.

Disaster Bonds can be used to finance:

• Acquisitions, constructions, reconstructions or renovations of non-residential real property (land, buildings and fixtures)
• Multi-family rental properties for low and moderate income individuals
• Repairing or reconstructing public utility property

It should be noted that The Disaster Act also limited the amount of Disaster Bonds that may be issued in the designated counties of the affected states. The following chart details this:

State	Allocation	Designated Counties
Illinois	$1.5?billion	Adams, Calhoun, Clark, Coles, Crawford, Cumberland, Douglas, Edgar, Hancock, Henderson, Jasper, Jersey, Lake, Lawrence, Mercer, Rock Island, Whiteside, and Winnebago
Indiana	$3.0 billion	Adams, Bartholomew, Brown, Clay, Daviess, Dearborn, Decatur, Gibson, Grant, Greene, Hamilton, Hancock, Hendricks, Henry, Huntington, Jackson, Jefferson, Jennings, Johnson, Knox, Lawrence, Madison, Marion, Monroe, Morgan, Owen, Parke, Pike, Posey, Putnam, Randolph, Ripley, Rush, Shelby, Sullivan, Tippecanoe, Vermillion, Vigo, Washington, and Wayne
Missouri	$1.4 billion	Adair, Andrew, Barry, Callaway, Cass, Chariton, Clark, Gentry, Greene, Harrison, Holt, Jasper, Johnson, Lewis, Lincoln, Linn, Livingston, Macon, Marion, Monroe, Newton, Nodaway, Pike, Putnam, Ralls, St. Charles, Stone, Taney, Vernon, and Webster

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