Hurricane recovery act offers boost to area business
Published 12:00 am Saturday, February 11, 2006
Rick Couch / News Editor
Representatives from Morgan Keegan and Maynard Cooper and Gale P.C. came to Demopolis Thursday to give prospective business owners, or those looking to expand their services a better idea of how the Gulf Opportunity Zone Act could work for them.
The act, which was announced by President George W. Bush in December, allots $2.1 billion in bond issues for 11 Alabama counties including Hale, Sumter, Greene and Marengo.
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How the money is divided, is up to Gov. Bob Riley, so naturally, one of the biggest questions regarding the act is how the funds will be dispersed. Currently, there is no concrete plan. The plan could be divided by counties or on a first come first serve basis.
Because the Black Belt counties seem to have the greatest need for an economic shot in the arm, most local leaders hope Riley will keep this in mind when the decision comes.
Demopolis Mayor Cecil P. Williamson said because of the emphasis Riley has put on improving the Black Belt, they will have his attention.
“I am hoping that the governor will realize that he has already made the Black Belt Action Commission for this area and he is not going to go in there and say this goes to the Gulf Coast,” Williamson said. “We hope he realizes that there is a need for this in the Black Belt. There is a need for this kind of plan and it is a great opportunity.”
Vickie Locke, Black Belt Action Commission Project Manager, said there was no doubt this plan could lead to big things for the Black Belt.
“I think this is a tremendous opportunity for small business to finance,” Locke said. “I think this can be an excellent opportunity for people in the Black Belt because it does hit a number of those counties. I think that any small company that is looking at expanding, if they don’t take a look at this, they have no excuse whatsoever to say there is no funding.”
Locke also said she hoped Riley would take a close look at the Black Belt when the money is put to use.
“I would hope so,” Locke said. “I obviously don’t speak for the governor, but I can tell you that he has been very impressed with the work that the Black Belt Action Commission has done and there are other efforts to try to generate opportunities to the Black Belt. This would be right on target to make that happen.”
Financing through GOZA, is a lot like financing with tax exempt funding normally available only to governmental borrowers and non-profit corporations. Interest is exempt from federal and state of Alabama taxes, which make interest rates, lower than conventional financing.
Will Davenport, a representative of Morgan Keegan and company, said there is a time limit to put GOZA to work.
“There is a time frame involved, because after four years it goes away,” Davenport said. “If the $2.1 billion hasn’t been used before 2010, the show is over. Part of the public awareness is letting people know about that.”
The act leaves a lot of possibilities. It can be used for retail stores, warehouses, manufacturing facilities, industrial plants, office buildings, bank branches, hotels, motels, restaurants, physician office buildings, medical hospitals and clinics.
But, there are restrictions. The act does not apply to private or commercial golf courses, country clubs, massage parlors, hot tub facilities, suntan facilities, racetracks or any other facility used for gambling or the sale of alcohol for consumption off premises.
Presently, Davenport said, the act is young so there is no official application process.
“There is no formal application,” Davenport said. “We are just working with folks to see who, what, when, where and how much and sending down to the governor’s office.”
For more information on how to qualify and who may qualify, a new website, www.gozonebonds.com, is set to launch today.