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CDBG Economic Development . Annual Competition and Set-Aside Programs (EIP and RDF). Three Routes to ED with CDBG. Annual Competition ED application Employment Incentive Program Redevelopment Fund Program. Features of ED Programs. Available Funding. - PowerPoint PPT Presentation
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CDBG Economic Development
Annual Competition and Set-Aside Programs (EIP and RDF)
Three Routes to ED with CDBG
1. Annual Competition ED application
2. Employment Incentive Program
3. Redevelopment Fund Program
Features of ED Programs
Maximum Grant $500,000
Primary Purpose Expand employment opportunities for L/M income people
Low/Moderate Income Benefit
51% of jobs created and/or retained
Eligible Uses Public facilities, infrastructure, business loans, elimination of Slum and Blight (RDF)
Available Funding
Community Development Block Grant (CDBG) Funds from U.S. Housing and
Urban Development (HUD)
CDBG-ED $37 million CDBG allocation
EIP $7 million set-aside
RDF $1.5 million set-aside
The CDFD Finance Team
Field Staff – project identification, assessment, development and monitoring
Credit Unit
Credit analysis, underwriting
Financing options
Program Manager
Review overall project
Ensure program objectives can be met
Craft award documents
Project oversight
Who Can Apply?
Eligible:
Non-Entitlement Cities & Counties
Ineligible:
Entitlement (Metro/Urban) Cities & Counties
Getting Started – EIP & RDF
1. Have an Idea? Call DCA early!2. Initial Project Assessment – ED
representative will visit.3. PACA – pre-agreement cost
approval does not guarantee funding.
4. Application – Reviewed by panel.
Application Process
Application Forms (DCA 1- DCA 13)
Supplemental Information & Documentation
Public Infrastructure or Loan attachments Refer to: EIP or RDF Application Manual
and CDBG Applicants & Recipients Manuals
Canton-UAC
Canton-UAC
Source Amount Use Amount EIP Grant $ 500,000 Rail spur const. $ 500,000EDA $ 928,870 Rail spur const. $ 821,750 (City/DACC/UAC) Water and sewer ext. $ 31,000
Contingencies $ 76,120DACC $ 226,803 Rail spur construction $ 120,213
Contingencies $ 57,090ROW acquisition $ 49,500
DACC/City $ 71,600 Pre-eng. assessment $ 10,275Engineering fees $ 59,500NEPA environ. $ 1,825
City $ 31,000 Water and sewer ext. $ 31,000UAC $ 99,467+ Rail spur construction $ 80,437
Contingencies $ 19,030Bldg exp, M&E $ NA
Total $ 1,857,740 + Total $ 1,857,740 +
Canton-UAC
Loan Structures
DCA Grant to a Local Government:
Direct loan to a private business. Loan to a development authority who then makes a
direct loan to a private business.
Quality Industries, LLC
Quality Industries, LLC
Quality Industries, LLC
Direct loan from Hart County to Quality $283,176 loan for M&E Saved 23 jobs Created 7 new jobs $2 million in private investment
Source and Use
Source Amount Use Amount EIP $ 295,176 Machinery & Equipment $ 283,176
Administration $ 12,000
Pinnacle/SBA $1,540,000 Land and Building $1,440,000Working Capital $ 100,000
Quality equity $ 345,000 Land and Building $ 160,000Machinery & Equipment $ 138,504Working Capital $ 46,496
Total $2,180,176 $2,180,176
Loan Activities
YES Land Buildings Rehabilitation Machinery & Equipment
NO Working Capital Refinancing Speculative Projects General Conduct of Government Project Not Meeting Federal Guidelines
Credit Worthiness
The State takes “informed risk” Funding the Grey Area
Look for positives Make the project work Work with Program Manager
Five C’s of Credit
CapacityCapital
CharacterCollateralConditions
Revolving Loan Funds
It’s (mostly) Your Money Loan payments capitalize local RLF RLFs can be used for local economic
development needs Must be CDBG eligible
Sample RLF Projects
Retail Daycare Manufacturing Telecommunications Workforce Development Centers Public Infrastructure
Redevelopment Fund
City of Washington – Fitzpatrick Hotel
RDF – Fitzpatrick Hotel
Vacant and Dilapidated (the tree!)
Rear wall, roof and second floor required emergency stabilization
Extensive repairs required Declared a ‘blight’
RDF – Fitzpatrick Hotel
Rehabilitate the hotel to historic preservation standards
Place back in commercial use Full service hotel with 16
rooms and suites 3 commercial storefronts
on first floor Restaurant Conference facilities
RDF – Fitzpatrick Hotel
RDF Provided: ‘Gap’ financing Subordinate to primary lender Favorable terms
.875% rate 20-year term Repayment deferred until
construction complete and certificate of occupancy issued
Source and Use
Source Amount Use Amount RFP Grant $250,000 Building Rehabilitation $250,000
SunTrust $976,000 Building Rehabilitation $751,817Furniture & Fixtures $119,585Interest $ 90,000Architect & Engineering $ 14,598
Fitzpatrick $205,666 Building Acquisition $130,000Operating Capital $ 39,620Opening Supplies $ 28,246Insurance & Taxes $ 7,800
Total $1,431,666 $1,431,666
Things to Remember
Describe your project and jobs created/retained
Document need, costs and support of banks & businesses
Debt – credit underwriting and terms
Contact:
Andy Yarn EIP Infrastructure & Public Facilities
(404) 679-1589 Jonathan Corso EIP Loans
(404) 327-7909 Stefanie Dye RDF Program
(404) 679-1738
