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November 10,  2010

County plans two more
stimulus bond issues

County government intends to give two more businesses the ability to sell 'recovery zone' bonds to help finance expansions. Ordinances introduced into County Council on Nov. 9 and likely to be enacted when Council next meets would permit sale of up to $10 million worth to finance a six-story 120-unit Sheraton Comfort Inn motel on Old Baltimore Pike and up to $3.75 million so United Electric Supply Co. can acquire a building on Bellecor Drive for a new headquarters. Karl Kalbacher, director of economic redevelopment, said the hotel would provide 85 new jobs after it is built and the project would employ 250 workers during construction. Electric Supply, he said, plans to add 14 people to its headquarters staff.

Because they are issued in the name of a local government, 'recovery zone' bonds command lower interest rates. However, they are instruments of so-called conduit financing, which means the county has no obligation to repay them or service the debt. It also receives an administrative  fee of 0.5% of the principal amount. The bonds program is part of the federal government's job-creation efforts. New Castle County can authorize up to $76 million worth of private financing assistance. The pending issues would bring the total authorized so far to $64 million. Kalbacher told Delaforum that other projects under consideration would account for the remaining $12 million if approved before the federal program expires at the end of the year.

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Read previous Delaforum article: County bonds to help renovate Public Building for law firm

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