1. Abandonment of Property
    • According to the Mortgage Bankers Association of America, this term is defined as a property status indicating that 1) the property has been surrendered and is
    • not being maintained, and 2) the property is not offered for sale or rent
    • with a broker.
  2. Absolute Advantage
    Term used when comparing two economies.  An economy has an absolute advantage over another when it can produce more of a product, simply because it has more resources.  Absolute advantage says nothing of efficiency, nor opportunity cost.  (See also Comparative Advantage.)
  3. Absorption
    Absorption is the rate at which space is leased or sold
  4. Accounts Payable
    Represents the claims of suppliers related to goods or services they have furnished to an entity but for which they have not yet been paid.  It is part of the current liabilities (balance sheet) of an entity.
  5. Accounts Receiveable
    Money owed to the entity by its customers.  It is part of the current assets (balance sheet) of an entity.
  6. Accruals
    Money owed to providers of goods or services for which typically no bill exists or is ever sent.  This includes wages, payroll taxes, interest due on loans, and rent.  (balance sheet?)
  7. Ad Valorem Tax
    A tax levied on the value of the taxed item.  Local property taxes are generally ad valorem taxes.
  8. Adaptive Reuse
    The rehabilitation of old property for a new purpose e.g. from warehouse to residential.
  9. Advertising
    Any paid form of non-personal mass media presentation of image, goods or services by an identified sponsor.
  10. AFDC
    Aid to families with Dependent Children provides income assistance to low income families.  This has been replaced by TANF, Temporary Assistance to Needy Families.
  11. Affordable Housing
    Housing which consumes no more than 30% of household income.
  12. Agricultural Zoning
    Zoning that protects agricultural land from development, by restricting lot size, formulating design criteria, etc.
  13. Air Rights
    The right to ownership of space above and/or below the physical surface of a parcel of land.
  14. Amortization
    The liquidation (payment) of a debt over a specified schedule of payments.
  15. Anchor Tenant
    The most important tenant, often the largest, in a development project whose lease is usually instrumental in securing financing for the project and in attracting other tenants.
  16. Angel Investor
    An investor who provides equity investment to start-up businesses.
  17. Appraisal
    An opinion of the monetary value of a specific property, as of a specific date, supported by relevant and factual data.
  18. Appreciation
    An increase in value; the opposite of depreciation. . . . That results from inflation or direct investment that enhances the value or growth.
  19. Assessed Valuation
    The monetary worth of a property for the purposes of taxation.  Total assessed valuation denotes the sum of the monetary worth of all taxable properties within a jurisdiction.
  20. Asset Management
    Includes ongoing, big picture property management activities such as capital improvements, refinancing, and sale of property.
  21. Assets
    Business property acquired at a measurable cost, the use of which is related to the business operations. (See also Fixed Assets.)The economic resources owned by an entity that have commercial or market value.
  22. Balance Sheet
    A financial statement that summarizes the financial position of an entity by outlining its assets and liabilities and equity.  Assets must equal liabilities and equity.
  23. Balloon Payment
    The last payment on a loan that is substantially larger than subsequent payments.
  24. Bankable
    A person (or business?) who can qualify for a loan at a commercial lending institution.
  25. Base Industry
    Also known as “export” or “primary” industries, base industries sell or export their products and services outside the community and bring new dollars into the community, increasing the total dollars that circulate within the community and that are spent on non-base industries.
  26. Basis
    The dollar amount that the Internal Revenue Service attributes to an asset.  It is used for a variety of tax purposes, including determining annual depreciation and the gain or loss on the sale of a property.  It is derived by adding the cost of acquiring a property to the value of any capital improvements, minus any depreciation on that property.
  27. Benchmarking
    Quantifiable measures of economic competiveness and quality of life that can be collected on a regular basis.  They are used to measure a region’s economic status and progress against comparable regions.
  28. Big Box
    A large-format store, typically one that has a plain, box-like exterior.  Big box stores are typically standalone or in power centers, located near highway interchanges or exits, and are supported by vast surface parking areas
  29. Bond Banks
    State-level agencies that assist local governments in acquiring capital financing, usually through debt issuance.  In other words, local governments issued bonds bought by a state-established bond bank, thereby lowering the costs of issuance for the individual jurisdiction by sharing fixed issuance costs with the other members of the bond pool.  Bond banks are especially helpful to smaller communities that typically have lower budgets and cannot afford the true costs of bond issuance.  Protecting many bond banks is the provision that they may intercept state aid to a local government if that government defaults on its obligation to the bond bank.
  30. Bond Rating
    An estimation of the relative credit-worthiness of a corporation or governmental unit.  Private investment service companies make such estimates, generally designating the most credit-worthy borrowers as triple A (AAA.)
  31. Bond
    A certificate of debt issued by a government or corporation, guaranteeing payment of the original investment, plus interest by a specified future date.
  32. Book Value
    The historic price paid for an asset less total accumulated depreciation to date.  This is compared to market value.
  33. BOT's (Build, Operate and Transfer)
    Process in which a private company finances, builds, and operates an infrastructure system for a fixed time, during which the government has a regulatory and oversight role.  At the end of a project, usually 15 to 25 years, the system is transferred back to the government.
  34. Brownfields
    Commercial or industrial sites that are abandoned or underutilized, and have real or perceived environmental contamination. Real property, the expansion, redevelopment, or reuse of which may be complicated by the presence or potential presence of a hazardous substance, pollutant, or contaminant.
  35. Building Efficiency
    The ratio between net square feet (or gross leasable area) and gross square feet.
  36. Build-to-suit development
    Development ink which a business retains a contractor or developer to build a customized structure.  Typically the business secures long-term financing and owns and managers the building.  The needs of the end-user guide the design of the facility as opposed to anticipated real estate market needs.
  37. Business Assistance Center
     A one-stop center for streamlining local permitting, licensing, and fee payment processes and facilitating the decision-making processes.
  38. Business Climate
    Usually referred to as the attitude of a local government toward business, but can also consider attitudes of the labor force, and local business networks.
  39. Business Improvement District (BIDs): 
    Legally defined entities formed by property and business owners, where an assessment or a tax is levied for capital or operating improvements, as a means of supplementing city funding.  The district is created by the public law or ordinance, but is administered by an entity responsible to the district’s members, or to the local governing body.  Some states authorize non-governmental, non-profit corporations to administer the district.  Recent BID programs include economic and social development, transportation, parking management, and conversion of redeveloped commercial buildings for residential use.
  40. Business Incubator
    Entity that nurtures and supports young companies until they become viable, providing them with affordable space, technical and management support, equity and long-term debt financing, and employment.  The three basic objectives in creating an incubator are 1) to spur technology-based development; 2) to diversify the local economy; and 3) to assist in community revitalization.
  41. Business Recrutiment and Attraction
    Traditional approach to economic development to entice companies to relocate or to set up a new branch plant or operation in a state or locality; often referred to as “smokestack chasing.”
  42. Business Retention
    Systematic effort designed to keep local companies content and their present locations, which includes helping companies cope with changing economic conditions and internal company problems.
  43. Callable
    An option held by the issuing entity of a bond to redeem the bond before the maturity date.
  44. Capacity Building
    Developing the ability of a community-based neighborhood organization to effectively design economic development strategies through technical assistance, networks, conferences, and workshops.
  45. Capital Gains (loss)
    The difference between the price an investor paid for an investment and the proceeds from the sale of that investment.
  46. Capital Gap
    The difference between the supply of private sector financial capital and the demand for that capital.
  47. Capital Projects Fund
    Money that accounts for the acquisition of capital facilities.  This money can be raised through bond issues or grants.
  48. Capital
    Costs of investment in major physical improvements, infrastructure and equipment, such as buildings, roads, and machinery.
  49. Capitalization Rate
    The rate of return that deems investment in development project reasonable, often referred to as the “cap rate.”A rate of return used to calculate the value of a property based on the relationship between income and sale prices of comparable properties. For the comparable properties, it is the first stabilized year net operating income (NOI) divided by a property's market value or sales price.
  50. Capitalize
    To supply with capital of investment funds.
  51. Cash
    Often in finance, cash has a broader definition that includes actual cash (money) and highly liquid short-term investments such as money market funds and Treasury bills.
  52. Cash Flow
    A financial statement showing all actual cash receipts and disbursements of an entity for a specified period of time.
  53. Cash Flows
    The amount of income remaining after expenses another obligations have been paid.  Depreciation and other non-cash charges are not counted in cash flows.  It represents internally generated long-term funds available to a company or developer
  54. Category Killers
    Stores that offer tremendous selection in a particular merchandise category at low prices
  55. CBD
    The central business district of a locality.  Usually this is an area with the highest concentration of businesses, including financial institutions, shops, offices, theaters, and restaurants.
  56. CDBG: Community Development Block Grant
    Under Title 1 of the Housing and Community Development Act of 1974, eight former categorical grant and loan programs were replaced by a system of unified block grants under which communities with more than 50,000 people are entitled to receive funding, while other communities may apply for discretionary funding.  Its purpose is to expand housing opportunities for low- and moderate-income persons.  The three primary goals of CDBG are to serve low- and moderate-income people, to eliminate slums and blight, and to address other community development needs that pose a serious and immediate threat to health and welfare of the community.
  57. CDC (Bank CDC)
    Bank-sponsored community development corporations are a way for banks to contribute to economic revitalizing by investing in local businesses and real estate investment projects that benefit low- and moderate-income groups.  A community can establish a bank CDC by working with one or more local banks, the Federal Reserve, the Comptroller, and its respective state financial institutions’ regulators. In the case of consortium bank CDCs, where several banks join together, the investors do not have to be just local banks.  Bank CDCs can purchase, construct, or rehabilitate property.
  58. CDC (Certified development Company)
    The originating and administrating body for the SBA 504 loans.  The program provides long-term, fixed-rate financing to small business to acquire real estate, machinery and equipment for the expansion of business or modernization of facilities.
  59. CDC (community Development Corporation) 
    Organizations, typically non-profit 501 (c)(3), which can obtain federal and private support.  They are governed by local residents, businesses, and community leaders through a board of directors that is in most cases elected from the CDC membership or the community.  Some CDCs perform only economic development services, but provide technical assistance and financing and are committed to serving the impoverished people of America.
  60. CDFI (Community Development Financial Institution)
     A specialized financial institution which works in market niches that have not been adequately served by traditional financial institutions.  CDFIs provide a wide range of financial products and services, including mortgage financing, commercial loans, financing for community facilities, and financial services needed by low income households.  Some CDFIs also provide technical assistance.  To be certified as a CDFI by the CDFI Fund of the Department of Treasury, an institution must engage in community development, serve a targeted population, provide financing, have community representatives on its board, and be a non-governmental organization.
  61. CHAS (Comprehensive Housing Affordability Strategy)
    A federally mandated five-year low-and moderate-income housing plan, describing needs, outlining strategies, and listing resources, which is required, with annual updates, for state and local governments to receive federal housing funds.
  62. CHDO (Community Housing Development Organization) 
     A federally defined type of nonprofit low- and moderate-income housing provider eligible to receive 15 percent of all federal HOME Investment Partnership funds for housing development and 5 percent of HOME funds for operating costs.
  63. Class A Office Space
    Most prestigious buildings competing for premier office users with rents above average for the area.  Buildings have high quality standard finishes, state of the art systems, exceptional accessibility and a definite market presence.
  64. Class B Office Space
    Buildings competing for a wide range of users with rents in the average range for the area.  Building finishes are fair to good for the area and systems are adequate, but the building does not compete with Class A at the same price.
  65. Class C Office Space
    Buildings competing for tenants requiring functional space at rents below the average for the area.
  66. Closing Costs
    Various expenses and fees charged to both the buyer and the seller of real estate at the time of the property transfer.  Costs can include brokerage commissions, lender discount points, deed recording fees, inspection and appraisal fees, and attorney fees.
  67. Collateral
    Real or personal property pledged by a borrower to protect a lender against default.  In real estate lending, collateral usually refers to the property pledged or mortgaged by a borrower to a lender to secure the loan
  68. Commercial Bank
    A private, for-profit financial institutions that specializes in short and medium-term business, personal and real estate loans.
  69. Common Area Maintenance (CAM)
    Charges that office, retail, and warehouse tenants and condominium owners often pay, on a proportionate basis, to collectively reimburse the landlord for certain agreed upon expenses that relate to such items as maintenance, and in case of retail centers, advertising and promotion.
  70. Compensaing Balances
    A demand deposit usually required by a commercial bank as a condition for extending a line of credit or a bank loan.
  71. Competitive Grant
    A grant that requires applicants to compete against one another in terms of need or appropriateness for the funding.
  72. SUPERFUND aka Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA)
    (also Superfund) a 1980 federal act that has several objectives:  1) to provide a means of identifying and ranking hazardous waste sites; 2) to create a source of funds to finance site clean up; and 3) to establish liability for both damage caused and cleanup among site owners, businesses generating the waste, waste haulers, and waste disposal operations. 
  73. Comprehensive Plan
    A plan that describes the desirable ways in which a community should develop over a 10 to 20 year period.  It includes a set of written development goals and policies, supplemented by maps.  It may be advisory or legally binding depending on state enabling statutes.
  74. Condemnation
    A legal process that permits a city to acquire title to property for a public purpose, including the elimination of blight, for just compensation.  It is sometimes used for economic development for job creation purposes without designation of blight.  This process is also used for assuming property for the construction of roadway, sewer line, etc.
  75. Construction Loan
    A short-term loan that enables a developer to pay contractor's fees and other expenses incurred before and during the construction period.
  76. Costs of Goods Sold
    Direct costs incurred in the production of goods sold by an entity.
  77. Costs of the Work
    Costs of construction, which relate to the work performed on the construction site.  This is different from work done in the general contractor's main office, for example.
  78. Cost Per Thousand (CPM)
    The cost of a single insertion divided by the number of target market members.
  79. Cost Plus Contract
    A building contract, setting the builder's profit at a set percentage of the actual cost of labor, materials, and an agreed-upon overhead.
  80. Counter Cyclical
    Any event or factor that counterbalances the peaks and troughs of the business cycle (example?)
  81. Credit Risk
    The chance that the return on an investment will be less than expected or that the borrower will not meet the terms of the loan or investment and that secondary repayment resources such as collateral will be insufficient to cover the losses.
  82. CRO (Community Reuse Organization)
    Organization which oversees the transition of a US Department of Energy facility from governmental to civilian/commercial use.
  83. Current Assets
    Cash and other assets often called cash equivalent (such as inventory, accounts receivable, and pre-paid expenses) that are reasonably expected to be realized in cash or sold or consumed within 12 months.
  84. Curretn Liabilities
    Obligations of a company that are expected to be satisfied (paid) either by the use of the current assets or by the creation of other current liabilities within 12 months.  This includes accounts payable and current portion of long-term debt.
  85. Debenture
    A bond backed by the general credit or reputation of a business rather than a specific lien on assets
  86. Debt Capital
    Money loaned to be paid back in fixed installments on a fixed schedule.  It reduces the amount of equity and thus magnifies or leverages the rate of return on equity investment.
  87. Debt Limit
    A constitutional or legislative restriction on the amount of funds that state or municipal government can borrow, usually expressed as a specific sum of money or a fixed percent of the assessed value of all taxable property within the government's jurisdiction.
  88. Debt Service
    The cash required in a given period, usually one year, for payment of interest and the current payments of loan principal on outstanding debt.  Also, the borrower's ability to meet debt and interest obligations.
  89. Deed of Trust (Trust deed)
    A security instrument used in place of a mortgage in some states.  The deed transfers the title to the real estate to a third party who acts as a trustee.  The trustee holds the real estate as collateral security for the debt, with the condition that the trustee shall re-convey the property to the debtor/owner upon the full payment of the debt.  The trustee has the ability to sell the property and pay the debt in the event of a default by the debtor.
  90. Deed Restrictions
    Clauses in a deed limiting the future uses of the property.  Deed restrictions can take many forms.  They may limit the density of buildings, dictate the types of structures that can be erected, prevent buildings from being used for specific purposes or used at all, and limit the resale price, etc.
  91. Default
    Failure to pay financial obligations.
  92. Deferred Loan
    A type of loan in which payment is put off until some later date.  If all conditions are met at this later date, the loan may be forgiven and reclassified as a grant.  The conditions of a seven-year deferred loan, for example, might specify that the property not be sold during this time and that it remains the principal residence of the purchaser.
  93. Demolition
    Clearance or removal of a structure in order to carry out redevelopment.
  94. Density Bonus
    It is used to alter height and bulk (density) regulations to encourage certain land uses and project features.  Typically, it is used to obtain public benefits such as ground floor retail, affordable housing, open space, transit connections, and art and cultural amenities in exchange for greater density.
  95. Depreciation
    A decrease in value through age, wear, or deterioration.  It is important for tax assessments.  The rate of deprecation can be manipulated to effectively raise or lower tax paid on the value of an asset.
  96. Development Authority
    An agency independent of city government that usually possesses special powers beyond those of city government.  Such powers could include eminent domain authority to issue special types of bonds, special taxing powers, and regulatory powers.
  97. Development Fees
    (also builder fees) monies charged by the developer for development services.
  98. Development Standards
    Part of zoning code, dealing with measurable constraints such as density, building heights, setbacks, and parking spaces.
  99. Development Standards
    The provision of own funds by a lender to a borrower without going through another organization, typically used in terms of governments, foundations and non-profits.  See Indirect Financing.
  100. Discount Rate
    A: A weighted rate of return that accounts for inflation and other risks associated with an investment.

    B: The rate the Federal Reserve charges member banks for inter-bank loans.  The interest rates that banks charge customers are based on the Discount Rate.  This is not to be confused with a discount rate for a development project which reflects the opportunity cost with risk involved in the project.
  101. Dividend
    The share of profits of an entity distributed to its shareholders.  Dividends may be paid in cash, stock, or other security.
  102. Due Diligence
    Evaluation of an entity's financial statements or portfolio of loans to determine its credit worthiness and other risk factors.
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