MassDevelopment MassDevelopment MassDevelopment MassDevelopment
Home > Financing > Bond Financing > Tax-Exempt Bonds

Tax-Exempt Bonds

Because they are exempt from federal taxes and in certain cases state taxes, tax-exempt bonds are usually the lowest interest rate option for real estate projects and new equipment purchases.  Tax-exempt bonds can be sold in the capital markets or directly to your bank or another financial institution.

Projects financed must be eligible for tax-exempt financing under the federal tax code and include:

  • 501(c)3 nonprofit real estate and equipment
  • Affordable rental housing
  • Assisted living and long term care facilities
  • Public infrastructure projects
  • Manufacturing facilities and equipment
  • Municipal and governmental projects
  • Solid waste recovery and recycling projects

Case Study – Greater Boston Food Bank

The Greater Boston Food Bank, Inc., is a nonprofit organization that provides food for more than 320,000 people annually in nine counties in eastern Massachusetts.  With proceeds from a $21,595,000 tax-exempt bond issued by MassDevelopment, the Food Bank acquired land on South Bay Avenue in Boston and constructed a new 100,000-square-foot headquarters and distribution center to enhance its operations.  Prior to construction, MassDevelopment provided a $36,000 brownfields site assessment award for environmental evaluation of the site.

Case Study – The Beacon Companies

The Charles R. Wilbur School, located in the center of Sharon, was vacant for nearly 30 years.  With a $14,100,000 tax-exempt bond issued by MassDevelopment and 4% housing tax credits, the Beacon Companies is transforming the old school into 75 rental apartments, 15 of which are designated affordable.  The development, which incorporates green design principles and is registered under LEED for homes, will welcome its first residents in spring 2010.

Case Study – Methuen Assisted Living

MassDevelopment has a long relationship with Methuen Assisted Living, LLP.  In 2002, we provided $25,000 for  predevelopment permitting and an architectural and engineering study.  We also funded a $50,000 brownfields site assessment of the property and a $300,000 loan to remediate the site.  When Methuen Assisted Living was ready to redevelop the property, MassDevelopment issued a $15,650,000 tax-exempt bond on behalf of the organization.  What was once an industrial mill building is now home to 91 new assisted rental units – 23 of which are affordable.

Case Study – LTI Smart Glass

LTI Smart Glass manufactures a wide variety of glass and polycarbonate laminates, including ballistic and privacy glass, for commercial, industrial, and residential use.  With the proceeds from a $5,000,000 tax-exempt industrial development bond issued by MassDevelopment and purchased by TD Banknorth, LTI bought and renovated a vacant manufacturing building in Pittsfield.  The renovation included a 40,000-square-foot addition to the building as well as the purchase of new equipment.

Case Study – Devens Recycling Center, LLC

With the proceeds from a $12,000,000 tax-exempt bond issued by MassDevelopment, Devens Recycling Center built a 90,000-square-foot waste recycling facility and transfer station.  The Center processes construction and demolition waste, reducing the use of landfills for waste.

See Also: