1. (1) The corporation may make loans and grants, as set forth below and within available appropriations, for tourism destination projects. A tourism destination project is a project that:

   1. (i) significantly contributes to the development of a recreational, educational, cultural or historic location or facility that is likely to attract a significant number of visitors from outside the region (a tourism destination); and

   2. (ii) either:

      1. (a) involves construction of a new facility that will encourage investment in an area where a shortage of tourism-related facilities, attractions or services has deterred business growth and where the proposed facility would significantly increase overall business activity and the marketability of the location as a tourism destination; or
      2. (b) improves an existing recreational, educational, or cultural or historical facility where the proposed improvement would significantly increase overall business activity and the marketability of the location as a tourism destination.

2. (2) Loans.

   1. (i) Tourism destination project loans shall not exceed one third of total project cost or $500,000, whichever is less, and may be used for:

      1. (a) working capital;
      2. (b) the purchase or leasing of machinery and equipment;
      3. (c) land acquisition;
      4. (d) acquisition, renovation or construction of facilities; and
      5. (e) related ancillary costs including, without limitation, legal expenses, appraisal costs, brokerage commissions, interest costs, survey expenses, architectural and engineering fees and site preparation and relocation expenses.

   2. (ii) Tourism destination project loans shall not be used for:

      1. (a) expenses incurred before the initiation of the REDPP application process; or
      2. (b) tax or employee benefit arrearages.

3. (3) Grants.

   1. (i) Tourism destination project grants may be used for:

      1. (a) interest subsidies, to reduce the cost of financing projects that meet the requirements for and would qualify as tourism destination projects and that demonstrate an inability to occur without subsidy; provided, however, that no such grant shall exceed one third of total project cost or $400,000; and
      2. (b) studies of the feasibility of the transfer of ownership of a company to local interests; provided, however, that no such grant shall exceed $40,000.

   2. (ii) Tourism destination project grants may not be used for:

      1. (a) expenses incurred before the initiation of the REDPP application process; or

      2. (b) tax or employee benefit arrearages.

         (b) Eligibility.

         To be eligible for tourism destination project assistance, the project must:

4. (1) be consistent with the regional strategic plan, as evidenced by the certification of the regional council or the corporation, as the case may be, in accordance with section 4211.11(b) of this Part;

5. (2) create or retain substantial permanent private-sector jobs taking into consideration the following factors:

   1. (i) the nature of the industry of the applicant;
   2. (ii) the total number of jobs available, and the level of unemployment in the area in which the proposed project is located;
   3. (iii) the overall level of business activity in such area; and
   4. (iv) such other aspects of the local economy as the corporation deems appropriate;
6. (3) be reasonably likely to be completed within the time and cost estimates presented in the proposal;
7. (4) be unable to obtain sufficient funding on reasonable terms from other public or private sources to permit the project to proceed without the requested assistance; and

8. (5) satisfy one of the following:

   1. (i) the project is located in an economic development zone, has firm commitments from all other financing sources for the total project cost and a tourism-related company or entity has indicated an interest in the project; or

   2. (ii) the project is located outside of an economic development zone and has firm commitments from a tourism-related company or entity to occupy or otherwise participate in the project and from all other financing sources for the total project cost.

      (c) Preferred projects.

      Preference shall be given to tourism destination projects which:

9. (1) will attract a significant number of visitors from outside the State; or

10. (2) are located in a distressed area.

    (d) Ineligible projects.

11. (1) Tourism destination project assistance may not be provided to projects that involve any of the following:

    1. (i) businesses providing legal, medical or nursing services;
    2. (ii) newspaper, broadcasting or other news media company;
    3. (iii) debt refinancing;
    4. (iv) the relocation of a business from one municipality to another municipality unless all municipalities from which the business will be relocated are notified in writing of the corporation's approval of funding for the project and the chief executive officers of the municipalities do not object in writing to the corporation within 20 days of receipt of such notification, or unless they waive their right to such notification; and

    5. (v) the provision of financial assistance, directly or indirectly, by the corporation to:

       1. (a) the State, or any agency, department, authority, public benefit corporation or political subdivision thereof; or
       2. (b) a full-time employee of the State or of any State agency, department, authority, public benefit corporation, or political subdivision (a State employee); or
       3. (c) any entity that is controlled or a majority of which is owned by a State employee.

12. (2) Tourism destination project assistance shall not be provided to projects consisting solely of overnight lodging facilities or retail businesses; provided, however, that nothing herein shall prohibit the corporation from providing assistance to tourism destination projects that include such facilities or businesses and, in such cases, costs associated with such facilities or businesses may be taken into consideration in calculating total project cost.

    (e) Business terms.

13. (1) Within the limitations established hereunder, terms and security arrangements will be flexible, depending on the type of loan and the particular characteristics of the tourism destination project under consideration. Tourism destination project loans that provide permanent financing and are secured by fixed assets will be preferred.
14. (2) No tourism destination loan shall be disbursed without firm commitments from all other funding sources. Construction loans approved by the corporation hereunder will not be funded before secure commitments for permanent financing have been obtained.
15. (3) Interest rates on tourism destination project loans will be set at the time directors approve an application. Rates and terms will be fixed based upon what is necessary to make the project feasible, and will reflect market conditions, the applicant's ability to repay and project requirements. Generally, a 10 percent equity contribution to the project on the part of the project applicant and a personal guaranty of a principal of the project applicant or beneficiary will be required. Interest rates may be increased during the term of the tourism destination loan if the recipient fails to create and/or retain specified employment levels approved by the corporation.
16. (4) For certain tourism destination project loans, an additional return to the corporation may be required, based on the recipient's projected performance.

17. (5) Tourism destination project loans will be made for the following terms:

    1. (i) loans made to finance the acquisition of real property or the acquisition, renovation or construction of facilities generally may be made for a term not to exceed 20 years. In a co-equal and coordinate mortgage situation, a mortgage granted to the corporation will match the term of the other mortgagee;
    2. (ii) loans made to finance the acquisition of machinery and equipment generally may be made for a term of from three to seven years or the useful life of the collateral, whichever is less;
    3. (iii) working capital loans generally will be made for a term of from one to four years; and
    4. (iv) construction loans generally will not exceed 24 months.
18. (6) Standard repayment terms will generally include level debt service payments over the term of the tourism destination project loan. In certain circumstances, deferred or graduated payments may be permitted, provided that the tourism destination project loan is fully amortized over the remainder of the loan term.

(a) Assistance available.