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Pennsylvania Economic Development Application RequirementTHE PENNSYLVANIA INDUSTRIAL DEVELOPMENT AUTHORITY 1. A general description of the industrial development project to include the size of the project, the general type of construction, type of zoning, and other uses for which the building could be utilized. 2. Legal description of the project site and a sketch or an engineering drawing showing the location of the building. If site is more than 10 acres, please justify. (The engineering survey will be mandatory prior to the loan closing.) 3. The attached Breakdown of Project Cost, PIDA Form 4, must be completed. If acquisition of land and/or building, attach Sales Agreement. If acquisition of existing building, supply two complete as-is appraisals or one appraisal prepared by an MAI (Member, American Institute of Real Estate Appraisers-MAI designated) along with attached Appraisal Brief. The appraisals must be no more than six months old. 4. Method of financing industrial development project—Attach (a) commitment letter from first mortgagee including interest rate and term, (b) statement of the community's participation—interest rate and term if applicable, (c) rate and term of other funds to be used for the project, and (d) even though not part of the PIDA project cost, describe any other governmental assistance which will be utilized for this project. 5. State the amount of any service fee charged by the industrial development agency. 6. Comprehensive description of occupant—Attach a history including where and when incorporated. If not a publicly held corporation, include a statement showing a complete breakdown of the stock ownership of occupant and Beneficial Owner. Attach short resume of owners. List all other facilities, their locations and number of full-time equivalent employees. (See Special Note.) 7. If this project is for the construction or acquisition of a new facility—list the size of the current facility, location, distance between facilities, ownership, disposition, and reason for relocation. If acquisition, state present owner; if vacant, how long. If this project is for an addition to an existing facility, list the size of the current facility, ownership, and if there is an existing mortgage, a letter from the mortgagee noting the original amount, balance and purpose of the mortgage, and one appraisal of the premises must be submitted with the application. 8. Marketing information—List primary geographical marketing area, 4 or 5 major customers and percent of sales to each, number of total customers, major suppliers, major competitors and their locations, and sales method(s). 9. Describe each product briefly in detailed laymen's terms and give specific examples of its use. 10. Have any of the company's principals ever been convicted of a criminal offense or are any criminal charges pending against any of the company's principals? (Exclude minor traffic violations.) If yes—explain in detail. Each officer and major stockholder must sign the attached PIDA Form 5. 11. The attached PIDA Form 6 or 7 regarding existing and new employment must be completed and executed. If applying for a loan for job retention, you must a) state and substantiate the criteria you meet as a "quality firm"; and b) attach the most recent four UC-2 reports (Employer's Report for Unemployment Compensation) that were submitted to the PA Dept. of Labor & Industry. 12. If a company—or any affiliate—is delinquent on any taxes due the Commonwealth of Pennsylvania, the application will not be considered until the taxes are paid in full or evidence is presented noting a satisfactory arrangement agreed to by all parties or the funds in question are placed in an escrow account in form and substance satisfactory to PIDA. The attached PIDA Form 8 authorizing PIDA to obtain tax data must also be completed and executed by the company and each affiliate. 13. The attached PIDA Form 9 regarding the type of agreements to be entered into between the industrial agency and the industrial occupant must be completed. 14. The two certifications attached (PIDA Form 10 & 11) must be completed and executed by applicant and/or occupant. Please note that one certification may require the completion and attachment of an addendum concerning Section 103 and delinquent loans and/or pollution violations. Only the attached certifications will be accepted. DO NOT RETYPE. 15. Attach the latest certified financial statement of applicant (industrial development agency). 16. Attach financial statement of the proposed occupant, parent company, and any other proposed guarantors, if any, for the last three years of operation, said statement to be prepared by an independent certified public accountant. One copy of the said statements should be in the accountant's bound folder and include the accountant's report, and all footnotes to the financial statements. If the company is closely held by a single individual or a few individuals, then current personal financial statements of those individuals should be provided. These personal financial statements may be prepared by an independent certified public accountant or by the individuals themselves using standard forms available at most banks. If they are prepared by the individual, they must be prepared on a joint husband and wife basis and one original signed and dated copy must be furnished. The latest statements should not be more than six months old. If the project is for a new company, the pro-forma balance sheets and projected statements of income and cash flow prepared by an independent certified public accountant for at least the first three full years of operation should be furnished along with current financial statements of the major investors. If statements prepared by an independent certified public accountant are not available, please contact the PIDA office. The below additional information should be furnished with the PIDA application where the circumstances exist which are applicable to the proposed project. 1. If the financial statements submitted with the application are compiled by a C.P.A., rather than audited or reviewed, complete Federal income tax returns of the company for the last three years should be furnished. 2. If a new company is being formed, the sources and amounts of equity investment in the new company should be listed along with a breakdown of the percentage of ownership of the stockholders. 3. If the company is moving out of rented facilities into the proposed project, the amount of rent paid for the existing building for the most recent fiscal year should be included. 4. Indicate how much new equipment will be necessary to complete the project and how such equipment would be financed. If there is a bank commitment for equipment financing, a copy should be furnished. If no new equipment is necessary, it should be so stated and the reason why no equipment is needed should be outlined. Itemized Project Cost Estimate
Basis of Costs (attach copy): _________ Bids _________ Engineering or Architectural Estimates _________ Contractor Estimates _________ Other Are any of the expected contractors related to the principals of the Occupant or Beneficial Owner?
If yes, explain how related and list name of contractor. DO NOT RETYPE STATEMENT OF CRIMINAL HISTORY (To be completed and signed by each officer and major stockholder) Have you ever been convicted of a criminal offense or are any charges pending? (Exclude minor traffic violations.) _________(Yes or No) If Yes, complete the following:
NAME _________(Print) SIGNATURE _________ POSITION WITH COMPANY _________ DATE _________ DO NOT RETYPE Possible Structures of PIDA Loan Transactions—Check appropriate box
CERTIFICATION THE PENNSYLVANIA INDUSTRIAL DEVELOPMENT AUTHORITY DEPARTMENT OF COMMERCE 480 FORUM BUILDING HARRISBURG, PENNSYLVANIA 17120
Gentlemen: In connection with the above captioned proposed loan, please be advised that Applicant and Industrial Occupant respectively certify to you in the following manner. The establishment of the project will not cause the removal of an industrial or manufacturing plant or facility or research and development facility from one area of the Commonwealth to another area of the Commonwealth. Industrial Occupant certifies that it has not been cited, except as stated in the attached addendum, by any governmental agency for causing pollution in the Commonwealth and the project has been designed so as not to cause pollution in violation of existing standards. (Any exceptions must be stated in the addendum attached). With respect to the establishment of the project, construction or acquisition of the project has not commenced nor will not commence prior to the approval of the application by the Board of PIDA. Applicant certifies that, except as stated in the attached addendum, there are no outstanding obligations described in Section 103 of the Internal Revenue Code of 1954, the proceeds of which were used with respect to facilities for which the applicant (or any related person or other principal user or a substantial user of the said facilities) is the principal user and which are located in the same incorporated municipality as the project to be financed by PIDA or the same county (but not in any incorporated municipality). Any exceptions must be stated. The project will be processed by an agreement between Applicant and Industrial Occupant which agreement will be a true lease, financing lease, agreement of sale or installment agreement of sale. Industrial Occupant certifies that, except as stated in the attached addendum, there are no outstanding obligations described in Section 103 of the Internal Revenue Code of 1954, the proceeds of which were used with respect to facilities for which the company (or any related person or other principal user of the said facilities) is the principal user and which are located in the same incorporated municipality as the industrial development project to be financed by PIDA or the same county (but not in any incorporated municipality). Any exceptions must be stated. Applicant certifies that it has adopted the PIDA Code of Ethics and has given a copy thereof to Industrial Occupant. Industrial Occupant certifies that it has received and examined, and will abide by the PIDA Code of Ethics heretofore delivered to it by Applicant. Applicant certifies that, except as stated in the attached addendum, it does not have any outstanding loans from PIDA that are delinquent. (Any exceptions must be stated in an addendum attached hereto). Applicant and Industrial Occupant respectively certify that they shall not discriminate against any employee or against any application for employment because of race, religion, color, national origin, sex or age. This provision shall include, but not be limited to, the following: employment, upgrading, demotion or transfer, recruitment or recruitment advertising, layoff or termination, rates or pay or other forms of compensation, and selection for training including apprenticeship. DO NOT RETYPE The Applicant certifies that it has delivered to the Industrial Occupant copies of all relevant PIDA-related material. This project shall receive the approval of all governmental agencies having jurisdiction over the work and occupancy. Proof of such approvals shall be submitted to the PIDA Engineer for review and acceptance. All construction shall meet the Engineering Guidelines for PIDA funded projects and workmanship standards of the industry. Two phases of approval are required: Preliminary and Final. The required information is detailed in the PIDA Regulations and Statement of Policy, which Occupant certifies has been reviewed. _________(State here the date and name of PIDA Engineer with whom Occupant had initial discussion.) The foregoing certification is based on facts obtained through a diligent investigation of all pertinent facts attendant to the project. Very truly yours, _______________ (Industrial Development Agency) By _________(President) By _________(Executive Director) By _________(Industrial Occupant) By _________(President) Date INDUSTRIAL DEVELOPMENT AGENCY CERTIFICATION The undersigned duly authorized officers of Applicant hereby certify that the filing of this application was duly authorized by its Board of Directors (governing body), that the statements made in the foregoing application and in all exhibits and documents (including those pertaining to job projections) submitted in connection therewith are true and correct and that such statements are intended to be relied upon by The Pennsylvania Industrial Development Authority. NAME OF APPLICANT _________(Industrial Development Agency)
(Application must be executed by President and attested by Secretary of Applicant.) 1. Name of responsible party to be contacted by the PIDA Consulting Engineer. _______________ 2. Name of Industrial Development Agency counsel, address and phone number to be contacted by PIDA Attorney. _______________ 3. Name of Company counsel, address and phone number to be contacted by PIDA Attorney. _______________ APPRAISAL BRIEF Date _________ I. LOCATION Street Address City, Twp., Boro, County _________ Zip _________ II. LAND DETAILS: Topography _______________ Area _________ Ac/Sq. Ft. Dimensions _________ Present Zoning _________ Flood Condition _________ Comments _______________ III. BUILDING DETAILS: Date Constructed Remaining Economic Life Building Size _________ Total Sq. Ft. _________ Construction _________ Condition _________ Stories _________ Ceiling Hgt. _________ Column Spacing _________ Last Occupant Comments _______________ IV. SERVICES & FACILITIES DETAILS: Sprinkler ( ) Air Conditioning ( ) Electric ( ) Water: Public ( ) Private ( ) Sewerage: Public ( ) Private ( ) Gas ( ) Truck Docks ( ) RR Siding ( ) Cranes ( ) Heating Proximity to Highways Parking Facilities & No. of Cars Total Annual Real Estate Taxes $_____ Actual ( ) Estimated ( ) Highest and Best Uses of Bldg. V. APPRAISAL DETAILS: (Values Derived by Three Basic Approaches—Assume that the building is in as-is condition, vacant at time of sale, and includes no machinery or equipment) Market $_____ Income $_____ Cost $_____ Appraisal Value as of _________ $_____ Land Value $_____ Per Ac/Sq. Ft. $_____ Building Value $_____ Per Sq. Ft. $_____ Complete appraisal of this property made by _________(Signature) _________(Name of Firm) (Over for specifics on Appraisal Preparation) CHECKLIST OF REQUIREMENTS FOR A COMPLETE AND COMPREHENSIVE INDUSTRIAL APPRAISAL Two independent appraisals of an acquisition project or one prepared by an MAI (Member, American Institute of Real Estate Appraisers) are required. The appraisals must be of the "as is" property, and should not presume any improvements thereto. Value of cranes and other equipment must be deleted. Appraised value should presume that the building will be vacant at the time of sale. Each appraisal should contain the customary certification, limiting conditions, and appraiser's qualifications. The complexity of the appraisal would depend on the size, value, and complexity of the property, but each appraisal should contain these essential elements: 1. Regional Data—Location, Accessibility, General economic picture 2. Site Data—Property description, Zoning, Accessibility, Parking, Available utilities 3. Building Data—Complete building description, to include outside dimensions, area, number of floors, type of foundation (if known), structural framing, exterior treatment, interior finishes, ceiling and roof heights, mechanical facilities, electrical facilities, and additional features (vaults, craneways, elevators, dumbwaiters, scales and the like). Age of building and quality of maintenance. Assessment and taxes. Highest and best use. 4. Plans, sketches, and pictures are helpful, but not required. 5. Property Value—Each appraisal should consider the three customary approaches to value, as described by Marshall Valuation Service, Boeckh Building Valuation Manual, or equivalent. If any of these approaches are not considered valid, the appraiser should state his reasons for this conclusion. Separate values should be listed for land and improvements. a). Cost Approach, or Reproduction Cost Approach, with allowance for physical depreciation, and functional and economic obsolescence. An estimate of the reproduction cost new is made, with subtraction for depreciation due to wear and tear, design and plan, and neighborhood defects. This gives the depreciated cost of the building. The market value of the land, plus the value of land improvements, are added to this depreciated cost in order to arrive at the indicated value of the property. b). Income Approach, used in the valuation of properties which are bought and sold primarily on the basis of the income produced. Capitalization of anticipated net income indicates the investment required to produce that income. The gross income less a vacancy allowance is called the effective gross income. The deduction of operating expenses from effective gross income leaves the net income before depreciation. The net income expectancy is then capitalized into market value by the use of a capitalization rate obtained from market data. c). Market Data Approach, or Comparable Sales. Comparable properties are compared with the subject property. Dollar adjustments are made for the difference between the comparables and the subject, to indicate the most probable sale price for the subject property.
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