Improvement District (ID) bond financing
We have solutions for Developers who need cash
For Developers building large construction projects, securing the initial equity down payment can be very challenging as most lenders require “skin in the game” and most equity raises are extremely expensive and require large profits to be given up.
We recognize how crucial the “equity” piece is for any project and how costly it can be. That’s why at Ambro Funds we provide a bond service that provides developers down payment money (in the form of a bond) that they can use as equity without affecting any Senior Lender’s 1st lien position.
In hopes of achieving 100% financing for the Client! This program allows us to offer financing in the form of free equity. Best part is, the Client retains all equity and ownership for themselves.
Program Summary
The City bond program is called an “Improvement District”. Created by the State and governed by state statutes to benefit the Cities & Counties.
An Improvement District is a specific area within a municipality where property owners pay additional property taxes to fund development.
State statutes grant Cities and Counties the authority to levy assessments against properties in their district to fund new construction. This program is designed to help the municipality create new development by enticing you to build there.
Program Requirements: Project Approval from the City & Project must be beneficial to the Community.
Structure
– Bond Size $5M+ (Total Project Size $20M+).
– Project must be 10 acres or more (435,600 sq ft at minimum).
– Non Recourse.
– Typically, 60-90 Day Closing Timeline.
– Land Acquisitions Are Included.
– There is no debt from bond proceeds. The bond keeps the property free & clear! Generating free equity by lowering the cost to build, Increasing the bottom-line profit margin by 2x – 3x.
Parameters
– Typically, the bond covers around 20% – 25% of total project costs. The bonds are repaid from an increased rate in property tax (1.5%) over the next 25 years. Not from selling or refinancing the property, which is how it creates the free equity.
– The bond can be the “first money in” for the project. The rest of the capital stack is not required.
– The bond can also reimburse for past projects and give you cash on hand!
– The bond can be done anytime throughout the construction timeline. In the beginning, middle, or end.