TITLE
Recommendation to receive supporting documentation in the record, conclude the public hearing, and adopt resolution designating the City of Long Beach Recovery Zone for purposes of sections 1400U-1, 1400U-2 and 1400U-3 of the Internal Revenue Code of 1986. (Citywide)
DISCUSSION
As part of the American Recovery and Reinvestment Act (ARRA), Congress added new provisions to the Internal Revenue Code (Code) for the establishment of Recovery Zones that enable state and local governments to provide additional capacity for public and private bond financing. These bonds are intended to positively stimulate the economy in Recovery Zones.
In order to be eligible for Recovery Zone designation, the area must be identified as having significant poverty, high unemployment, a high rate of home foreclosures or general distress; any area designated by the issuer as economically distressed by reason of the closure or realignment of a military installation pursuant to the Defense Base Closure and Realignment Act of 1990; and any area for which a designation as an empowerment zone or renewal community is in effect as of the effective date of ARRA, February 17, 2009. ARRA does not specify more definitive criteria and provides the issuer with latitude in making the designations.
Due to the current high rate of unemployment, the current rate of home foreclosures and the general economic distress in the City of Long Beach (City), staff proposes to adopt the entire territory within the City as the Long Beach Recovery Zone for the purposes of Section 1400U-1 (b) of the Code. The designation of the Long Beach Recovery Zone will enable staff to provide additional access to capital in a highly constrained market and to explore the viability of utilizing the City's allocation for qualifying projects.
Recovery Zone Bonds consist of two categories, Economic Development and Facility Bonds. Economic Development Bonds are taxable governmental bonds, which can be utilized for the promot...
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