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Recycling Market Development Zone

The Recycling Market Development Zone (RMDZ) program combines recycling with economic development to fuel new businesses, expand existing ones, create jobs and divert waste from landfills.

 

The RMDZ program was established by the State's Department of Resources, Recycling and Recovery (CALRecycle) to stimulate recycling-based manufacturing businesses and create jobs.  

 

The RMDZ program is a collaborative effort between the City of Los Angeles, the Los Angeles business community and CALRecycle to enable Los Angeles to continue to move forward towards meeting zero waste goals while promoting positive economic growth.  Since designation, the RMDZ Revolving Loan Program has provided over eleven  million dollars in loan financing to LA businesses.  

City of Los Angeles Recycling Market Development Zone

The Recycling Market Development Zone (RMDZ) program combines recycling with economic development to fuel new businesses, expand existing ones, create jobs, and divert waste from landfills.

To participate in the program, business must use materials from the waste stream to manufacture their products and be located in a zone.  Zones cover roughly 88,000 square miles of California from the Oregon border to San Diego.  Los Angeles was designated a Zone in 1993.

 

The program provide the following to eligible businesses:

  • Attractive loans
  • Technical assistance
  • Free product marketing

 

FAQs

 

Q.  What is the purpose of the Recycling Market Redevelopment Zone (RMDZ) Loan Program?

A.  California State Law AB 939 requires that all cities divert 50% of their solid waste stream by the year 2000 and AB 341 sets a statewide 75% recycling goal by the year 2020.  The City of Los Angeles, in an effort to reduce solid waste disposal, has exceeded the State's goal and is moving towards its own "Zero Waste" goal of 90% by the year 2025.  Many green businesses have encountered difficulties in obtaining funds to create and develop markets for products made in part from secondary (post-consumer or post-industrial) waste materials.  The California RMDZ program (SB 122) creates partnerships among local and state government and businesses to help achieve the recycling goal by providing technical assistance and low-interest loans to eligible green businesses.

 

Q.  Who is eligible?

A.  The entire City of Los Angeles is designated as a Recycling Market Redevelopment Zone.  Private businesses and not-for-profit organizations located in a Zone are eligible.  

 

Q.  How much can the program lend?

A.  The RMDZ program can fund a maximum of 75% of costs directly attributed to an eligible project, or up to a maximum of two million dollars, whichever is less.

 

Q.  How may the funds be used?

A.  Funds may be used for the following:

  • Machinery and equipment
  • Working capital
  • Real estate purchase (maximum of one million dollars)
  • Real estate improvements
  • Refinancing of onerous debt that results in increased waste diversion
  • Financing loans - closing points

 

Q.  What are the rates and terms?

A.  Interest rates are fixed for the term of the loan, but are no less than 4.00%.  The term of the loan is not to exceed ten years (15 if secured by commercial real estate).

 

Q.  What are some examples of eligible projects?

A.  Some examples of eligible projects are:

  • Modifying equipment or processes to make products using less raw material or packaging
  • Separating construction and demolition debris by material for sale
  • Projects using anaerobic digestion to convert organics into high-value products
  • Producing recycled-content plastic pellets, flakes, or chips

 

In addition to the RMDZ Revolving Loan Program, the RMDZ program can provide eligible business with the following:

  • Tax incentives
  • Low-interest financing
  • Work source centers
  • Employment training
  • Business assistance
  • Industrial Development Bond Financing
  • Small Business Financing
  • State Enterpise Zone, Federal Empowerment Zone and Renewal Community tax incentives