Development Finance Tool Kit
Port KC offers access to an array of financing tools.
Conduit Bond Finance Structure
Port KC can serve as the issuer of RSMO Chapter 68 Port Authority Revenue Bonds. Port KC can own the facility and lease it to the borrower. Port KC would issue Chapter 68 Port Authority revenue bonds.
- Rated or non-rated bonds sold in capital markets or private placement.
- Sales tax exemption on construction materials.
- Property tax exemption (Based upon illustrated need, financial analysis, economic and fiscal impact).
- Lease options customized for project needs
- Fixed interest rates that are based on taxable or tax-exempt bond issuances.
Port Improvement District (PID) Port Authority Tax
The Port Improvement District (PID) is a Port Authority sales, use and or property tax. The PID was created to fund qualified project costs in furtherance of its mission as a port authority. Qualified project costs include reasonable costs incurred by a port authority during a port improvement project. Examples include the cost of studies, plans, architectural, engineering, legal, marketing, administrative costs, and real property rights.
- Levy of a maximum of one percent (1%) of sales and use, and/ or real property tax within the boundaries of the designated PID.
- Costs eligible to be paid with these tax revenues can include but are not limited to studies, plans, surveys, professional services, administrative fees, land acquisition, demolition, grading, construction of new buildings, rehabilitation of old facilities, repair, financing costs, relocation costs, and other expenses (RSMo 68.205). There is not necessarily a maximum time period for the redirection taxes to run.
Port Improvement Districts (PID):
- PID 1- Berkley Riverfront Park
- PID 2- Isle of Capri Casino
- PID 3- Board of Trade Building
- PID 4- Corrigan Station
For more information on Port Improvement Districts, please click this link (pdf).
Mid-Continent EB-5 Regional Center
Port KC has established a relationship with an EB-5 Regional Center to allow use of the EB-5 foreign investment finance program as an option for qualifying, job-creating capital projects in Kansas City.
The Mid-Continent Regional Center, originally called the Ozark Mountains Regional Center, has operated as a federally designated EB-5 Regional Center for several years. This partnership will promote measurable economic growth and capital infusion through the provision of debt and/or equity financing.
The EB-5 Immigrant Investor program is a federal program administered by the U.S. Citizenship and Immigration Services (USCIS) and is a unique financing tool providing a supplement or alternative to traditional sources of funds. It was created to encourage international investment into approved projects to help drive job creation within the United States. The purpose of an EB-5 program is to stimulate the U.S. economy through low-cost, non-recourse, five-to eight-year term financing for construction and development of new projects which offers a number of advantages to developers.
- Qualified foreign investors receive priority status for permanent visa if they make a minimum investment of $1 million in a commercial enterprise that creates at least 10 new direct/indirect U.S. full-time jobs.
- In rural areas with high unemployment, investors must invest at least $500,000 and create 10 direct/indirect U.S jobs within two years and will receive expedited consideration for U.S. residency.
- Assists in filling a funding gap and provides a new and vital source of capital while creating and supporting U.S. jobs.
EB-5 has proven to be a popular tool for developers seeking capital. Therefore, if you are a developer with a project in Kansas City, Missouri, and are interested in alternative low-cost, non-recourse, five-to eight-year term financing please contact Zoraya Rowlands, Director of Strategic Initiatives, at email@example.com with your inquiries to obtain additional information on the program.
Advanced Industrial Manufacturing (AIM) Zones
Port authorities located in Missouri are authorized to establish advanced industrial manufacturing (AIM) zones, which consists of 50% of state withholding tax on new jobs within the zone after development or redevelopment has been initiated. The purpose of the AIM zone is to expand, develop and redevelop zones identified by the port authority to expand job creation and increase economic throughput within the region.
Proceeds of the AIM Zone Fund can be utilized within its designated area as long as it is toward infrastructure, improvements and construction within the designated development area. A zone can be created within any portion of a port authority’s port district. Multiple zones may exist within the authority’s jurisdiction.
- Up to 50% of state withholding tax from new jobs for redevelopment, development, operations, infrastructure and utility installation, facility improvements, as well as demolition and construction of facilities. New jobs must be at or above state average.
- Dedicated resource for revenue bond issuance or commercial lending.
Transportation Facilities Tax Incentive
An income tax deduction for entities transporting cargo through water port and airport facilities. Cargo shipment through a water port facility or by airplane through an airport located within the port district may be eligible for a deduction. The entity must increase their volume of cargo by 5% through a port facility over the prior year’s total. A 5% increase requirement will be waived if cargo is transported through a new port facility with at least 25,000 twenty-foot equivalent unit (TEU) in its first calendar year.
Baseline requirements consist of transport of at least 75 net tons of cargo to be eligible for deduction.
- Cargo shipment Incentive
- Deduction of $50 per TEU over prior year’s cargo volume.
- Deduction of $50 per TEU for cargo transported through new port facility.
- Maximum benefit per entity is $250,000.
- International Trade Facilities Incentive
- Entity operating an international trade facility may qualify for deduction based on the amount of cargo transported by airplane, rail, truck or barge.
- Deduction is $25 per TEU.
- International Trade Facility Operations
- Must increase volume by 10% over prior year.
- Deduction will equal amount to $3,500 per new full-time employee or 2% of capital investment made into facility.
- Increase in employees or capital investment must be directly related to increase in trade activity.
- To be eligible, the entity must increase volume by 10% over prior year.
- No more than $500,000 in deduction may be claimed in a fiscal year.