The Town Board and the Guilderland Industrial Development Agency approved a three-year extension of a $5.24 million bond for the Guilderland YMCA. The bond was originally issued in 2000, and currently has $3.4 million in principal that will be paid off by 2020.
Fred Denefrio, vice president for finance of the Capital Region YMCA, said that at the time the bond was issued in September 2000, Keybank Corp. was only willing to grant the YMCA a 10-year bond, however, the bank allowed the YMCA to pay the bond as if it were a 20-year bond.
Denefrio said the bank would not issue a 20-year bond because of the uncertainty of financial conditions over a 20-year period. The extension, approved by the IDA, is only a three-year extension. Denfrio said that economic conditions contributed to the short term of the extension, and the YMCA will have to appear in front of the IDA again in three years to extend the bond again.
He said that the rate on the bond extension is slightly higher than the rate on the bond from 2000 but it is a small increase and will not have any impact on membership rates, or the programs and services offered to members.
It’s not an unusual transaction, said Donald Csaposs, the chief executive officer of Guilderland’s IDA. `No one does 20- or 25-year loans any more,` he said.
Csaposs said it is unusual for an IDA to provide funding for a fitness facility.
`The main focus of an IDA is to fund projects that contribute to the industrial base of a community,` said Csaposs, adding the YMCA was able to get funding through the agency because of a provision in state law that allowed IDAs to fund civic facilities.
The civic facility provision established in 1986 that allowed IDAs to fund nonprofit projects like the YMCA expired in 2008. Csaposs said that the IDA is able to extend the loan granted to the YMCA, but it cannot grant a loan to a new civic facility project.
He said the Guilderland YMCA was able to reap a number of benefits by receiving funding through the agency.
`If you go through the IDA, you get an exemption on all materials used in construction,` he said.
The YMCA used $2 million worth of materials when constructing the Guilderland facility and saved $160,000 in taxes. The facility was also exempt from the mortgage recording tax, for a savings of $39,000, and it saved an additional $26,000 due to the fact that transactions done through IDAs are tax exempt.
`We are starting to add up to real money here,` said Csaposs.
Csaposs said that legislation was proposed that would extend the provision to allow IDAs to fund civic facilities but it was delayed due to the Senate coup in June.
Currently, there is legislation in both houses of the legislature (Assembly Bill 5700a and Senate Bill 2898a) that would extend the provision; however, the bills are awaiting consideration in the Local Governments Committee of each house.
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