The County of Lewis Industrial Development Agency (LCIDA) usually participates by taking title to, or a leasehold interest in, the real and/or personal property involved in the project. The LCIDA then: leases the property under a lease agreement, or sells the property under an installment sale agreement, to the Company undertaking the project.

• when financial assistance is limited to the issuance of a tax exempt bond and/or a mortgage tax exemption, the LCIDA need only stay in title for as short a period as one day,
• when providing a sales tax exemption, the LCIDA needs to stay in title through the construction or installation period,
• the LCIDA will stay in title for longer periods when offering a real property tax abatement.

1. Mortgage Recording Tax Exemption
Whenever a county clerk records a mortgage in New York State, the mortgagor must pay a 1.00% mortgage recording tax -- a significant expense. The LCIDA can, however, qualify a Company for a mortgage recording tax exemption, if the LCIDA is in title at the time the mortgage is recorded.

2. Sales and Use Tax Exemption
The Sales and Use Tax in Lewis County is 7.75%. All purchases made by the LCIDA or its agents are exempt from the Sales and Use Tax. The LCIDA can issue a sales tax exemption letter to the Company, authorizing it to act as an agent of the LCIDA. The Company can then purchase the equipment, materials and services needed to acquire, construct, reconstruct and/or equip the project without having to pay sales and use taxes.

3. Real Property Tax Abatement
In New York State, property owners pay a real property tax based on the assessed value of improvements to a site. Any real property owned or controlled by the LCIDA is not subject to ad valorem real property taxes.  When the LCIDA takes title to or a leasehold interest in real property, the property becomes 100% exempt from ad valorem real property taxes. To accommodate the needs of the local taxing jurisdictions, however, the IDA generally enters into a Payment in Lieu of Tax Agreement ("PILOT Agreement") with the Company.

4. Lower Interest Rates for Debt Incurred as Part of the Project (2 - 3% lower than the conventional cost of borrowing) 
The LCIDA is authorized by New York State law to issue bonds and notes. The LCIDA can issue tax exempt bonds, subject to the limitations imposed by the Internal Revenue Code of 1986. The proceeds of these tax exempt bonds can be used to fund all, or substantially all, of the costs of a project. The LCIDA provides no credit enhancement, and issues bonds on a non-recourse basis. For that reason the ability to sell the bonds depends solely on the creditworthiness of the Company. The lending institution reviews the project and makes the credit decision as to the purchase of the bonds. In addition, the Company and financial institution negotiate the terms and conditions of the loan independently of the IDA. Normally, the loan is secured by a mortgage on the facility financed with the bonds. However, additional guarantees and collateral may be required by the lending institution - similar to requirements of conventional financing. Therefore, IDA approval of a project does not automatically result in funding being available. The applicant is responsible for the bonds.   Neither the Agency, County or State guarantee any such indebtedness.

*These benefits are subjects to change and need Agency Counsel and LCIDA Board approval.

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