New York Codes, Rules and Regulations
Title 21 - Miscellaneous
Chapter L - New York State Urban Development Corporation
Part 4211 - Regional Economic Development Partnership Program
Section 4211.4 - Tourism destination projects
Universal Citation: 21 NY Comp Codes Rules and Regs ยง 4211.4
Current through Register Vol. 45, No. 52, December 27, 2023
(a) Assistance available.
(1) The corporation may make loans and
grants, as set forth below and within available appropriations, for tourism
destination projects. A tourism destination project is a
project that:
(i) significantly contributes to
the development of a recreational, educational, cultural or historic location
or facility that is likely to attract a significant number of visitors from
outside the region (a tourism destination); and
(ii) either:
(a) involves construction of a new facility
that will encourage investment in an area where a shortage of tourism-related
facilities, attractions or services has deterred business growth and where the
proposed facility would significantly increase overall business activity and
the marketability of the location as a tourism destination; or
(b) improves an existing recreational,
educational, or cultural or historical facility where the proposed improvement
would significantly increase overall business activity and the marketability of
the location as a tourism destination.
(2) Loans.
(i) Tourism destination project loans shall
not exceed one third of total project cost or $500,000, whichever is less, and
may be used for:
(a) working
capital;
(b) the purchase or
leasing of machinery and equipment;
(c) land acquisition;
(d) acquisition, renovation or construction
of facilities; and
(e) related
ancillary costs including, without limitation, legal expenses, appraisal costs,
brokerage commissions, interest costs, survey expenses, architectural and
engineering fees and site preparation and relocation expenses.
(ii) Tourism destination project
loans shall not be used for:
(a) expenses
incurred before the initiation of the REDPP application process; or
(b) tax or employee benefit
arrearages.
(3) Grants.
(i) Tourism destination project grants may be
used for:
(a) interest subsidies, to reduce
the cost of financing projects that meet the requirements for and would qualify
as tourism destination projects and that demonstrate an inability to occur
without subsidy; provided, however, that no such grant shall exceed one third
of total project cost or $400,000; and
(b) studies of the feasibility of the
transfer of ownership of a company to local interests; provided, however, that
no such grant shall exceed $40,000.
(ii) Tourism destination project grants may
not be used for:
(a) expenses incurred before
the initiation of the REDPP application process; or
(b) tax or employee benefit
arrearages.
(b) Eligibility.
To be eligible for tourism destination project assistance, the project must:
(1) be consistent
with the regional strategic plan, as evidenced by the certification of the
regional council or the corporation, as the case may be, in accordance with
section
4211.11(b)
of this Part;
(2) create or retain
substantial permanent private-sector jobs taking into consideration the
following factors:
(i) the nature of the
industry of the applicant;
(ii) the
total number of jobs available, and the level of unemployment in the area in
which the proposed project is located;
(iii) the overall level of business activity
in such area; and
(iv) such other
aspects of the local economy as the corporation deems appropriate;
(3) be reasonably likely to be
completed within the time and cost estimates presented in the
proposal;
(4) be unable to obtain
sufficient funding on reasonable terms from other public or private sources to
permit the project to proceed without the requested assistance; and
(5) satisfy one of the following:
(i) the project is located in an economic
development zone, has firm commitments from all other financing sources for the
total project cost and a tourism-related company or entity has indicated an
interest in the project; or
(ii)
the project is located outside of an economic development zone and has firm
commitments from a tourism-related company or entity to occupy or otherwise
participate in the project and from all other financing sources for the total
project cost.
(c) Preferred projects.
Preference shall be given to tourism destination projects which:
(1) will attract a significant
number of visitors from outside the State; or
(2) are located in a distressed
area.
(d) Ineligible projects.
(1) Tourism
destination project assistance may not be provided to projects that involve any
of the following:
(i) businesses providing
legal, medical or nursing services;
(ii) newspaper, broadcasting or other news
media company;
(iii) debt
refinancing;
(iv) the relocation of
a business from one municipality to another municipality unless all
municipalities from which the business will be relocated are notified in
writing of the corporation's approval of funding for the project and the chief
executive officers of the municipalities do not object in writing to the
corporation within 20 days of receipt of such notification, or unless they
waive their right to such notification; and
(v) the provision of financial assistance,
directly or indirectly, by the corporation to:
(a) the State, or any agency, department,
authority, public benefit corporation or political subdivision thereof;
or
(b) a full-time employee of the
State or of any State agency, department, authority, public benefit
corporation, or political subdivision (a State employee); or
(c) any entity that is controlled or a
majority of which is owned by a State employee.
(2) Tourism destination project assistance
shall not be provided to projects consisting solely of overnight lodging
facilities or retail businesses; provided, however, that nothing herein shall
prohibit the corporation from providing assistance to tourism destination
projects that include such facilities or businesses and, in such cases, costs
associated with such facilities or businesses may be taken into consideration
in calculating total project cost.
(e) Business terms.
(1) Within the limitations established
hereunder, terms and security arrangements will be flexible, depending on the
type of loan and the particular characteristics of the tourism destination
project under consideration. Tourism destination project loans that provide
permanent financing and are secured by fixed assets will be
preferred.
(2) No tourism
destination loan shall be disbursed without firm commitments from all other
funding sources. Construction loans approved by the corporation hereunder will
not be funded before secure commitments for permanent financing have been
obtained.
(3) Interest rates on
tourism destination project loans will be set at the time directors approve an
application. Rates and terms will be fixed based upon what is necessary to make
the project feasible, and will reflect market conditions, the applicant's
ability to repay and project requirements. Generally, a 10 percent equity
contribution to the project on the part of the project applicant and a personal
guaranty of a principal of the project applicant or beneficiary will be
required. Interest rates may be increased during the term of the tourism
destination loan if the recipient fails to create and/or retain specified
employment levels approved by the corporation.
(4) For certain tourism destination project
loans, an additional return to the corporation may be required, based on the
recipient's projected performance.
(5) Tourism destination project loans will be
made for the following terms:
(i) loans made
to finance the acquisition of real property or the acquisition, renovation or
construction of facilities generally may be made for a term not to exceed 20
years. In a co-equal and coordinate mortgage situation, a mortgage granted to
the corporation will match the term of the other mortgagee;
(ii) loans made to finance the acquisition of
machinery and equipment generally may be made for a term of from three to seven
years or the useful life of the collateral, whichever is less;
(iii) working capital loans generally will be
made for a term of from one to four years; and
(iv) construction loans generally will not
exceed 24 months.
(6)
Standard repayment terms will generally include level debt service payments
over the term of the tourism destination project loan. In certain
circumstances, deferred or graduated payments may be permitted, provided that
the tourism destination project loan is fully amortized over the remainder of
the loan term.
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