Breadbox Keeps Communities Building
The 118 Challenge
Section 118 of the 2017 Tax Act makes economic development grants from public entities taxable as ordinary income. The result: a tax rate as high as 54% for individual owners and 31% for corporations. The law, which applies to any development agreement entered into after December 22, 2017, has the potential to limit public/private partnerships and future development.
The Breadbox Opportunity
Breadbox is a turnkey lending program that provides a long-term, nonrecourse, non-interest bearing loan to private real estate developers in lieu of a taxable grant. Since Breadbox is a loan, the funds from public entities are not taxed as ordinary income. Breadbox manages repayment of the economic development loan through a long-term trust fund. After funding, there are no further obligations for the developer or the community. Only opportunity.
What People Are Saying
“We are actively working with developers and Breadbox to solve the 118 problem. The Breadbox program has become an important component of our economic development bond underwriting and the success of our clients.
— Jim Lahay, Managing Director and Lead Banker, Stifel
Let’s Talk
Whether it’s email, on the phone, or over coffee, we’re here to talk when you’re ready