The New York Observer

Through most of the 1990s and 2000s, nonprofits could count on low-cost financing issued through the state’s industrial development agencies to develop buildings, facilities and other infrastructure and construction projects. The bonds didn’t expose the state to any credit risk; rather the vehicle allowed lenders to avoid being taxed on the proceeds in the investment, which in turn incentivized them to accept lower interest rates on the debt. But in 2007, the State Legislature failed to renew the vehicle, cutting off NFPs from an important pipeline of funds. Now, in December, the city’s Economic Development Corporation is planning to roll out a new financing vehicle that will allow lenders to issue low-interest rate tax-free debt to NFPs. The city estimates that at least $700 million worth of projects that had been backlogged could now have access to funds. The Commercial Observer spoke with Steven Polivy, an attorney with law firm Akerman Senterfitt LLP about the upcoming vehicle as well as the impasse that has prevented the IDAs from providing tax free financing in recent years. Mr. Polivy specializes in arranging real estate financing and development transactions that utilize government incentive and financing programs.
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