Connecticut has designated 62 communities as eligible to use the state’s $225 million allocation of recovery zone bonds, Gov. M. Jodi Rell announced last week.
The U.S. government allocated $90 million of recovery zone economic development bonds and $135 million of recovery zone facility bonds to the state’s largest municipalities and counties.
“This new stimulus program is an opportunity to build upon the progress we have made on Connecticut’s responsible growth agenda by jump-starting many worthwhile projects,” Rell said in a press release.
Both programs require that the bonds be sold within “Recovery Zones,” which are areas designated by state and local issuers as having significant poverty, unemployment, home foreclosures, or economic distress.
Also eligible are areas currently designated as enterprise zones, renewal community areas, or areas experiencing economic distress due the closure of a military base.
Connecticut designated its zones based on existing criteria for federal entitlement communities, public investment communities, enterprise zones, distressed municipalities, and enterprise corridor zones. The bonds must be issued by the end of next year.
Recovery zone economic development bonds are taxable bonds that a municipality can issue for an array of economic development projects. Issuers can receive a subsidy equal to 45% of interest costs from the U.S. Treasury Department for the bonds.
The recovery zone facility bonds are tax-exempt private-activity bonds that can be sold for certain construction or renovation projects.
The largest county allocation went to Fairfield County, which was allocated a combined $67.1 million of both types of bonds. The city of Waterbury received a $13.5 million allocation of both types of bonds, making it the largest allocation to a city.
The Connecticut Development Authority and the Department of Economic and Community Development will jointly administer the program.
The CDA posted additional details on its Web site, www.ctcda.com.