865-RICR-10-00-1
865-RICR-10-00-1. Rules and Regulations for the I-195 Redevelopment Project Fund (version Adoption, 02/01/2016 to 02/01/2016)
The I-195 Redevelopment District Commission
Rules and Regulations for the I-195 Redevelopment Project Fund
Effective Date: February 2, 2016
The I-195 Redevelopment District Commission
Rules and Regulations for the I-195 Redevelopment Project Fund
Table of Contents
Page
Rule 1.
Purpose. ........................................................................................................................ 2
Rule 2.
Authority. ...................................................................................................................... 2
Rule 3.
Scope. ........................................................................................................................... 2
Rule 4.
Severability. .................................................................................................................. 3
Rule 5.
Definitions. ................................................................................................................... 3
Rule 6.
Funding Guidelines....................................................................................................... 6
Rule 7.
Application. .................................................................................................................. 7
Rule 8.
Fees. .............................................................................................................................. 9
Rule 9.
Review Process. ............................................................................................................ 9
Rule 10. Discretion and Judicial Review. ................................................................................. 10
Rule 11. Commission Approval. ............................................................................................... 10
Rule 12. Financing Agreement. ................................................................................................ 12
Rule 13. Administration and Examination of Records. ............................................................ 13
Rule 14. Inspection Rights. ....................................................................................................... 14
Rule 15.
Land Acquisition, Public Infrastructure, and Public Facilities. .................................. 14
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Rule 1.
Purpose.
These rules and regulations (the “Rules”) are promulgated to set forth the principles,
policies, and practices of the I-195 Redevelopment District Commission in providing financing
pursuant to Chapter 64.24 of Title 42 of the Rhode Island General Laws, the I-195
Redevelopment Project Fund Act (the “Act”).
Rule 2.
Authority.
These Rules are promulgated pursuant to Chapter 64.24 of Title 42 of the General Laws.
These Rules have been prepared in accordance with the requirements of the Rhode Island
Administrative Procedures Act, Chapter 35 of Title 42 of the General Laws.
Rule 3.
Scope.
These Rules shall apply to the provision of financing from the I-195 Redevelopment
Project Fund. Notwithstanding anything contained in these Rules to the contrary, the I-195
Redevelopment District Commission shall have and may exercise all general powers set forth in
the Act that are necessary or convenient to effect its purposes, and these Rules shall be liberally
construed so as to permit the I-195 Redevelopment District Commission to effectuate the
purposes of the Act, the public interest, and other applicable state laws and regulations.
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Rule 4.
Severability.
If any provision of these Rules, or the application thereof to any person or circumstance,
is held invalid by a court of competent jurisdiction, the validity of the remainder of the Rules
shall not be affected thereby.
Rule 5.
Definitions.
(1)
“Act” means Chapter 64.24 of Title 42 of the General Laws known as the I-195
Redevelopment Project Fund Act.
(2)
“Affiliate” means an entity that directly or indirectly controls, is under common
control with, or is controlled by an Applicant that is a Business. Control exists in all cases in
which the entity is a member of a controlled group of corporations as defined pursuant to section
1563 of the Internal Revenue Code of 1986 (26 U.S.C. § 1563) or the entity is an organization in
a group of organizations under common control as defined pursuant to subsection (b) or (c) of
section 414 of the Internal Revenue Code of 1986 (26 U.S.C. § 414). A taxpayer may establish
by clear and convincing evidence, as determined by the Commission, that control exists in
situations involving lesser percentages of ownership than required by those statutes.
(3)
“Applicant” means a Developer or Occupant applying for I-195 Fund Financing
under the Act and the Rules.
(4)
“Business” means a corporation as defined in Section 44-11-1(4) of the General
Laws or a partnership, an S corporation, a non-profit corporation, sole proprietorship or a limited
liability company.
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(5)
“Capital Investment” in a Project means costs or expenses by a Business or any
Affiliate of the Business incurred after Application for: site preparation and construction, repair,
renovation, improvement, equipping, or furnishing on real property or of a building, structure,
facility, or improvement to real property; or obtaining and installing furnishings and machinery,
apparatus, or equipment, including but not limited to material goods for the operation of a
business on real property or in a building, structure, facility, or improvement to real property.
(6)
“Commission” means the I-195 Redevelopment District Commission established
pursuant to Chapter 42-64.14 of Title 42 of the General Laws.
(7)
“Developer” means a person, firm, corporation, partnership, limited liability
company, association, political subdivision, or other entity that proposes to divide, divides, or
causes to be divided real property into a subdivision or proposes to build, or builds a building or
buildings or otherwise improves land or existing structures, which division, building, or
improvement of land qualifies for benefits under the Act and these Rules.
(8)
“Developer’s Toolkit” means the Commission’s published Developer’s Toolkit,
as amended from time-to-time. The Developer’s Toolkit is available on the Commission’s web
site.
(9)
“I-195 Fund” means the fund established pursuant to Section 42-64.24-4 of the
General Laws.
(10)
“I-195 Fund Financing” means financing of a Project from the I-195 Fund.
(11)
“I-195 Land” means the surplus land within the city of Providence owned by the
I-195 Redevelopment District and any land within one-quarter mile of said surplus land.
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(12)
“Occupant” means a Business as a tenant, owner, or joint venture partner,
occupying space pursuant to a lease or other occupancy agreement on the I-195 Land or in a
Project developed on such land.
(13)
“Personal Property” means furniture, fixtures and equipment, except
automobiles, trucks or other motor vehicles, or materials that otherwise are depreciable and have
a useful life of one year or more, that are utilized for the Project for any given phase of the
Project inclusive of a period not to exceed six (6) months after receipt of a certificate of
occupancy for the given phase of the development.
(14)
“Project” means a specific construction project or improvement, including lands,
buildings, improvements, real and personal property or any interest therein, including lands
under water, riparian rights, space rights and air rights, acquired, owned, leased, developed or
redeveloped, constructed, reconstructed, rehabilitated or improved, undertaken by a Developer,
owner or tenant, or both, at least a portion of which is contained on I-195 Land.
(15)
“Project Cost” means the costs incurred in connection with a Project by an
Applicant or an Affiliate of an Applicant until the issuance of a permanent certificate of
occupancy (less adjustments for pre-completion revenue), including, but not limited to, costs
incurred for lands, buildings, improvements, real and personal property or any interest therein,
including the site, space or air rights, acquired, owned, developed or redeveloped, constructed,
reconstructed, rehabilitated or improved, and any environmental remediation costs, plus
reasonable soft costs as determined by the Commission, and, ancillary infrastructure projects and
infrastructure improvements as permitted in the sole discretion of the Commission.
(16)
“Project Financing Gap” means
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(i)
the part of the Project Cost that remains to be financed after all other sources of
capital have been accounted for (such sources will include, but not be limited to, Developer-
contributed capital), including, but not limited to, Applicant’s equity in the Project, a reasonable
assumption of debt on the Project, and any other capital source that is reasonably available given
the nature of the Project; or
(ii)
the amount of funds that the State may invest in a Project to gain a competitive
advantage over a viable and comparable location in another state by means described in the Act
and these Rules.
(17)
“Request for Financing” means the request for I-195 Fund Financing submitted
by an Applicant in compliance with the Act and these Rules.
Rule 6.
Funding Guidelines.
(a)
In the case of Applicants seeking I-195 Fund Financing for (i) Capital Investment
requirements for anchor institutions (as owners or building project tenants) or other catalytic
project components that can be instrumental in achieving some or all of the economic
development and quality of life goals for the I-195 Land that are set forth in Section 2 of the
selection criteria contained in the Developer’s Toolkit; or (ii) filling project financing gaps for
real estate projects, an Applicant must demonstrate in its Request for Financing that its Project
satisfies at least one of these purposes in order to be eligible for I-195 Fund Financing, in
addition to the following conditions:
(1)
A Project seeking I-195 Fund Financing must be located on the I-195 Land;
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(2)
I-195 Fund Financing may only be used to finance Capital Investment or other
Project Costs; and
(3)
If applicable, the Applicant will, at the discretion of the Commission, commit to
applying for a tax stabilization agreement with the City of Providence for the Project.
(b)
I-195 Fund Financing is available in the form of debt financing, equity financing,
or grants. The Commission prefers that a Project not receive a lump sum distribution of the full
amount of I-195 Fund Financing until the Applicant’s equity has been fully applied to the
Project; the disbursement of funds will be pursuant to an agreed-upon schedule of deliverables
and contingent upon achievement of Project milestones.
(c)
A Project may apply for both I-195 Fund Financing and other incentives available
under federal or state law.
Rule 7.
Application.
(a)
An Applicant seeking I-195 Fund Financing for a Project must submit to the
Commission and to the Executive Office of Commerce an application as described in the
Developer’s Toolkit. This requirement applies even if no part of the Applicant’s Project is
located on land within the jurisdiction of the Commission.
(b)
Simultaneous with or after submission of an application as described in the
Developer’s Toolkit, an Applicant seeking I-195 Fund Financing must submit to the Commission
and the Executive Office of Commerce a Request for Financing, in a form prescribed by the
Commission. The Commission expects that the information submitted by an Applicant in a
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Request for Financing will meet the standards of a prudent equity investor or senior or junior
creditor seeking such information.
(c)
The Request for Financing shall contain the following information, in addition to
any other information the Commission deems appropriate or necessary:
(1)
the amount of I-195 Fund Financing requested, and the form (debt, equity, grant)
in which the I-195 Fund Financing is sought;
(2)
a schedule for the disbursement of the I-195 Fund Financing;
(3)
a detailed description of the Project’s financing including a sources and uses of
funds;
(4)
a list all federal, state, and local incentives, grants, tax credits or other aid
(including a tax stabilization agreement with the City of Providence) that will or may be received
or requested for the project, and the status of the application for each;
(5)
a detailed line item breakdown of Project Cost;
(6)
a demonstration that the Project satisfies at least one of the two purposes set forth
in Rule 6(a), as more fully described below:
(i)
for an Applicant proposing an anchor institution or other catalytic project
component, the Applicant must provide (A) a demonstration that the Project can be instrumental
in achieving some or all of the economic development and quality of life goals for the I-195
Land that are set forth in Section 2 of the selection criteria contained in the Developer’s Toolkit
and (B) a statement of need demonstrating why I-195 Fund Financing in the amount sought is
necessary to bring the Project to fruition; or
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(ii)
for an Applicant seeking to fill a Project Financing Gap, the Applicant must
provide (A) a demonstration of the Project Financing Gap, which shall include, but is not limited
to, the submission of Project pro forma, and (B) a certification from the Applicant’s chief
executive officer or equivalent officer that a Project Financing Gap exists on the Project.
Rule 8.
Fees.
(a)
An Applicant shall be charged a one-time, non-refundable application fee by the
Commission. The Commission shall annually publish a fee schedule on its website.
(b)
An Applicant may be required to pay to the Commission the full amount of direct
fees and costs paid to third-parties by the Commission in relation to the consideration and/or
approval of the Applicant’s Request for Financing.
Rule 9.
Review Process.
(a)
Each Request for Financing shall be reviewed by the Commission and, because
the Secretary of Commerce must concur in the provision of any I-195 Fund Financing, by the
Executive Office of Commerce as well.
(b)
Each Request for Financing shall be reviewed to confirm compliance with the Act
and these Rules, and the Commission may reject any incomplete or deficient Request for
Financing.
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(c)
The Commission may require the submission of additional information in
connection with any Request for Financing or the revision of a Request for Financing, and may
permit the resubmission of a Request for Financing rejected as being incomplete or deficient.
(d)
Prior to approving financing for a Project that claims a Project Financing Gap, the
Commission shall review the Request for Financing to determine if a Project Financing Gap
exists. This review shall include testing the validity of the Applicant’s financial information and
assumptions through the use of financial models and, to the extent deemed necessary or desirable
by the Commission, seeking input from third-party consultants.
(e)
The Commission may from time to time set deadlines for Requests for Financing.
Such deadlines will be published on the Commission’s web site.
Rule 10.
Discretion and Judicial Review.
(a)
Neither the Commission nor the Secretary of Commerce shall have any obligation
to make any award or grant any benefits under the Act or these Rules.
(b)
A review of a Request for Financing shall not constitute a “contested case” under
the Administrative Procedures Act, Section 42-35-9 of the General Laws, and no opportunity to
object to a Request for Financing shall be afforded, nor shall judicial review be available from a
decision rendered in connection with any Request for Financing.
Rule 11.
Commission Approval.
(a)
No I-195 Fund Financing may be provided without approval of the Commission.
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(b)
In considering whether to provide I-195 Fund Financing to a Project, the
Commission may take into account, in consideration with other factors deemed relevant by the
Commission:
(1)
the evaluation of the Applicant’s pro forma and other financial information,
including, but not limited, to the availability of third-party equity or debt capital commitments
and the status of development cost estimates provided by contractors and service providers;
(2)
the Project’s catalytic impact on development on or near the I-195 Land,
including impact on private investment, employment, and state and local revenues, and other
criteria set forth in Section 2 of the selection criteria contained in the Developer’s Toolkit;
(3)
the Project’s relationship to other existing or anticipated Projects located on or
near the I-195 Land;
(4)
whether the Project furthers the purposes of Chapter 42-64.14 of the General
Laws;
(5)
the risks of providing financing to the Project and any measures that mitigate such
risks; and
(6)
whether there exists an opportunity for the State of Rhode Island or the
Commission to recoup or receive a return on all or portion of I-195 Fund Financing provided to
an Applicant.
(c)
In approving I-195 Fund Financing for an Applicant, the Commission may set
terms and conditions on the receipt of Fund Financing as it deems appropriate, including but not
limited to approving Fund Financing in an amount lesser than that sought in the Request for
Financing.
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(d)
No approval of 195 Fund Financing by the Commission shall be effective until
and unless the Secretary of Commerce of the Executive Office of Commerce concurs with the
provision of I-195 Fund Financing in the contemplated amount and under the contemplated
terms and conditions.
Rule 12.
Financing Agreement.
(a)
Upon approval of I-195 Fund Financing for an Applicant by the Commission, the
Commission and the Applicant will enter into a Financing Agreement prior to the issuance of
any I-195 Fund Financing to the Applicant.
(b)
In order to safeguard the expenditure of public funds and ensure that the
disbursement of funds furthers the objectives of the Act, the Financing Agreement shall include,
among others, the following terms:
(1)
the maximum amount of I-195 Fund Financing awarded;
(2)
a schedule for the disbursement of the I-195 Fund Financing;
(3)
a provision delineating the permissible uses of the I-195 Fund Financing
provided;
(4)
reasonable evidence that the Applicant is in good standing with the Division of
Taxation at the time of execution of the Financing Agreement, meaning that the (1) the taxpayer
is current on all outstanding filings and declared tax liabilities subject to audit; (2) the taxpayer
and the Division of Taxation have a workout payment agreement or other settlement with respect
to any known delinquent tax liability and the taxpayer is current on that workout payment
agreement or settlement; or (3) the taxpayer has timely commenced or is engaged in an
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administrative or judicial proceeding concerning a tax liability the status of which would
otherwise preclude the issuance of a letter of good standing from the Division of Taxation;
(5)
events of default and remedies including events, if any, that would trigger
forfeiture, revocation and/or repayment of the I-195 Fund Financing provided;
(6)
indemnification, insurance and other customary protective requirements;
(7)
reporting requirements including, but not limited to, any requirements under the
Act;
(8)
the imposition of such restrictions or covenants upon the Project as may be
necessary to ensure continued compliance with the Act, the Rules, and any terms and conditions
on the provision of I-195 Fund Financing that the Commission deems appropriate;
(9)
at the Commission’s discretion, a provision requiring the Applicant to pay the
Commission’s reasonable attorneys’ fees incurred in connection with the negotiation, execution
and enforcement of the Financing Agreement; and
(10)
any other provisions the Commission deems appropriate.
Rule 13.
Administration and Examination of Records.
The Commission may examine any books, papers, records or memoranda bearing upon
the approval of any financing awarded under the Act, and may require the attendance of any
person executing any application, report or other statement, or the attendance of any other
person, and may examine such person under oath respecting any matter which the Commission
deems pertinent or material in determining eligibility for financing sought under the Act.
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Rule 14.
Inspection Rights.
The Commission shall have the right to make an inspection and to enter upon any
property that is the subject of a Request for Financing during the application process or term of
any Financing Agreement to verify compliance with the Act, these Rules and such other
conditions imposed in the Financing Agreement or by the Commission.
Rule 15.
Land Acquisition, Public Infrastructure, and Public Facilities.
The provision of financing from the 195 Fund for any uses other than those set forth in
Sections 42-64.24-4(b)(1) and (2) of the Act, including for the financing of land acquisition in
areas adjacent to and proximate to the I-195 Land, including street rights of way and
abandonment costs, or financing public infrastructure and public facilities to support or enhance
development including, but not limited to, transportation, parks, greenways, performance venues,
meeting facilities, community facilities, and public safety precincts, shall be done in accordance
with the terms of the Act.