Finance
For more than 30 years, Ohio Port Authorities have provided businesses and public entities with special financing opportunities.
Small and Medium-Sized Businesses
Port Authorities can assist in gaining access to the national capital market as if the company was rated. Only about 5% of the companies in the U.S. have a rating, and these bond fund programs, which are rated investment grade, can provide credit-worthy businesses with long-term, fixed rate financing for land, buildings, and equipment.
Larger Businesses
Port Authorities can provide financing lease structures for projects which could result in the exemption of state sales taxes on construction materials. Typically, 50% of the costs of a building are labor which is not subject to sales taxes. The remaining half of the costs would represent construction materials. Of the 88 Ohio counties, 53 have 7.25% sales tax rates; 16 have 6.75%; 13 have 7%; 3 have 6.5%; 2 have 7.5% and 1 has 8% tax rate. Port Authorities also participate in projects involving capital leases.
Energy Efficiency Improvements
Businesses and governments can finance energy efficiency improvements such as roofs, windows, HVAC, insulation or LED lights through Property Assessed Clean Energy (PACE). Property owners petition for a special assessment against their property to provide sufficient funds to pay back bonds issued by a Port Authority for 100% of the costs of the improvements. The energy savings should be greater than the assessment and the term of the assessment could be for 25 years based on the life of the asset.
Bonds & Bond Funds
Port Authorities may issue tax-exempt or taxable revenue bonds for eligible projects. Proceeds from such bonds may be used to finance land, buildings and equipment. The bonds may be privately placed with qualified investors or banks, or sold on the open market. Typically Port Authorities do not provide credit enhancement for such conduit, stand-alone bond issues. Several Ohio Port Authorities have created stand-alone Bond Funds which can help entities borrow funds at long-term, fixed interest rates. Bond buyers of these Bond Fund bonds may rely only on a series of reserves to cure a default if a borrower fails to make payments. The bond buyers have no claim on any assets of the Port Authority.