Industrial Revenue Bonds Brochure
Industrial Revenue Bonds Application
Tax exempt financing is available to qualifying companies issued through the Port of Bellingham’s Industrial Development Corporation. This financing mechanism offers manufacturing and processing companies the advantage of below market interest rates for purchased land, constructing buildings, upgrading existing facilities, and purchasing new machinery or equipment.
Benefits:
- Tax exempt means interest rates up to 2 percentage points below market
- Bond amounts range from $1 million to $10 million
- Fixed or variable rate features, long-term repayment
- Projects can be located anywhere in Whatcom County
Bond Security
The IDC serves as a conduit agency for non-recourse bonds. Security to the bond purchase is provided by the borrower working through a bank or other lending institution.
Eligible Uses and Limitations
Manufacturing and processing facilities are the most common types of IRB issues. Other qualifying industrial development facilities include transportation, airports, docks/shipping facilities, solid waste or industrial sewage facilities, and research facilities for nonprofit organizations.
Bonds are normally used to:
- Buy land
- Construct buildings
- Upgrade existing facilities
- Buy new machinery or equipment
At least 95% of the funds must be spent on qualifying new capital expenses. Up to 2% may be used to pay issuance costs. An IRB may not be used for inventory or working capital.
For manufacturing or processing, at least 75% of the funds must be used directly for the process. Only 25% can be used for related expenses like land, landscaping, storage areas or office space.
The maximum size of a manufacturing IRB and other aggregate capital expenditures is $20 million. For manufacturing IRB’s, this maximum can be spent in capital expenditures within the Port’s jurisdiction during a six-year period which starts three years before the bond issue date. The $20 million limit applies to all capital expenditures, bond-financed or not.
Some other activities may also qualify for tax-exempt financing, without the dollar limits that apply to manufacturing facilities, including water, solid waste and wastewater treatment plans, power generating plants, airports, docks and wharves. The methods for financing these types of projects are somewhat different rules that described here.
Professional Assistance
The Port retains bond counsel to help determine if the proposed project meets the requirements and to assist with the application details. This service is provided at no charge to prospective borrowers
The Costs
The applicant is responsible for paying a $1000 application fee to the IDC. The IDC is not involved in administering a bond issue after funds go out. Fees associated with financing are generally paid from bond proceeds, up to a limit of 2% of the total bond amount. Once the bonds are issued the applicant will pay an annual administrative fee of 1/10th of 1% of the outstanding balance. This account is used to toward economic development activities by Port .
The First Step
If you are a manufacturer considering locating or expanding in Whatcom County, contact John Carter or Dodd Snodgrass at 360-676-2500 or by email at
