HAMMOND | If approved by the Hammond City Council, the $35 million tax-exempt bond sought by fire-ravaged Jupiter Aluminum Corp. will be only the second such bond since 1999, officials say.
Prior to Jupiter's interest, the only company within the federal Gary-East Chicago-Hammond empowerment zone to take advantage of the program was Gary's County Market Plaza at Grant Street and 25th Avenue, said Scott Upshaw, the zone's interim executive director.
"We're definitely encouraging businesses to use them," he said. "Businesses just don't recognize the benefit."
Upshaw said the tax-exempt bonds are "really just an instrument to reduce the cost of financing."
"Hammond had a maximum of $25 million allocated for that bond issue," said Richard Calinski, Hammond's executive director of planning and development. "The other $10 million had to be approved by the other cities in the zone."
Calinski said approving the bond will have no adverse effect on the city.
"This bond will be paid through Jupiter," he said.
But because of the city's tax-exempt capacity to issue the bond, Jupiter will be able to negotiate reduced interest rates from its lender.
Until now, the city's $25 million allocation for the program has not been used, Calinski said.
"This, in my opinion, is a great project," Calinski said. "Unfortunately the fire did major damage to Jupiter. They've been a good citizen. They've continued to pay employees through the layoffs, and they're trying to reinvest."
While the bond must go through the steps covered by any industrial revenue bond, including public hearing and approval by the City Council, Upshaw said typically the process is a mere formality.
"The initial approval sets everything into motion," he said.
The Hammond Economic Development Commission approved a resolution supporting Jupiter's bond June 26, and the empowerment zone's coordinating council approved the additional $10 million two days later, Upshaw said.
The measure is now awaiting the signatures of the three mayors within the zone as required by law, he said.
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