12/18/2023 0 Comments Gap loanIf a Locality’s deficiency is proven, the Developer must secure all the lending required to finance the project, with the agreement that the State, Locality and Developer will each pay an equal third of the Developer’s gap financing loan to the gap Lender The Developer assumes all debt with Lenders. The purpose of the program is to provide a gap financing mechanism for projects that cannot, otherwise, find 100% funding or lending for a project In the TDFP program, the Locality is the Applicant, not the Developer Before the project begins construction, the Applicant/Locality must receive TDFP certification.Once a certified project is open and generating revenue, a Locality, the Developer and the State divert and contribute future sales tax revenues towards the Developer’s debt with the Lender.Much like TIF (Tax Incremental Financing,) TDFP is a program where both Municipality and State divert and contribute future sales tax revenues towards the Developer’s debt with the Lender.The State and Municipality collect new tax, and give back a portion toward the project’s gap debt.The Developer acquires all the lending they need, opens and generates revenue.Projects collecting only admissions tax are not eligible, since the State does not collect admissions tax, therefore, nothing to contribute to the project. Prospective projects filling such deficiencies must generate Virginia sales and use tax, such as lodging, dining, meeting space rental and catering. These deficiencies are well researched and substantiated in a community’s Comprehensive Community Plan, a Local Tourism Development Plan and through independent Market Studies. Virginia Excise Tax Rates and Collections.Workshops and Educational Opportunities.
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