The City of Mondovi is utilizing Tax Increment Financing for the acquisition and development of the Mondovi Industrial Park. As a result, the City is in the position of providing an attractive loan acquisition package. The City proposes that the acquisition of the land be structured as a fully subordinated mortgage, interest free for three years. At the end of those three years, the land cost will be written down by an amount equal to $5,000 per employee. Financing of the balance of the site acquisition costs will be at 8 percent for seven years.
This process provides the best of both worlds for industries that construct a facility in the Mondovi Industrial Park. The land and development costs justify the acquisition price. However, the City is willing to provide direct, subordinated financing, which will be treated as equity from a lender’s perspective on an interest free basis. In addition, the City of Mondovi will agree to reduce the purchase price of the land at the end of the three year period as a project “employee grant”.