Economic DevelopmentRoadshow

Spring, 2015

Roadshow Map

• Purpose is to raise general awareness

• Use five areas noted in Resource Guide

• Use Guide, website (http://www.mn.gov/deed/) and contacts for specific questions

Minnesota’s Economic Honors

• In 2014, DEED spurred:• $850 million investment• 1.8 million square feet• 3,500 new jobs

• 3.7% unemployment rate (2/15)

• Well positioned for future growth

DEED Spurring Growth

Selected Recent Program Activity in Southwest Regions Funded by DEED

Contamination Clean-Up Grants $492,000

Redevelopment Loan/Grants $83,000

Small Cities $6.4 million

Emerging Entrepreneur Fund $480,000

SBDC $474,000

Special Appropriations $1.0 million

Minnesota Investment Fund $1.6 million

Job Creation Fund $1.5 million

Business Development

Business Financing

Tax Credits and Benefits

Community Financing

Additional Resources

Business Development Assistance• Location and Expansion Assistance

– Help business located and expand– Industry expertise– Business Service Specialists– Shovel-ready certification

• Minnesota Location One – GIS-based website selection tool to assist businesses seeking land and buildings to

start up or expand within the state of Minnesota– DEED encourages cities, counties, port authorities and tribes to list available land

• Minnesota Marketing Partnership – Public-private alliance of economic developers, utilities, private firms, and DEED – Alliance works to strategically market Minnesota and its business economy as a great

place to do business nationwide– Online director of MN products and supplies

• Minnesota Business First Stop– Coordinates states agencies that have a role in development process

• A point of first and continuing contact for questions about start-up, operations, management, taxation, regulation

• A publisher of topic specific publications on small business issues. Available in hard copy, on CD, or downloadable from the DEED website

• In 2014, the office handled 32,000 transactional inquiries for information and distributed 134,272 publications in hard copy and on CD

Small Business Assistance Office

Small Business Development Centers (SBDC)

• Our Mission is to help entrepreneurs start and grow businesses that succeed

– Funded through a partnership of the U.S. Small Business Administration, State of MN, host colleges and universities, and local stakeholders

– Celebrating more than 35 years of a program that WORKS!

– Minnesota’s SBDC is for ALL small businesses

• All stages, all types, all industries - all across the state

SBDC Helps Entrepreneurs 3 Ways

• Consulting

• Training

– Accounting, social media, law, affordable health care, exporting, and more

• Access to Capital

– Finding and accessing capital for purchase, operations and growth

• Services available at no cost to the client

Export Assistance

Minnesota Trade Office

The Minnesota Trade Office (MTO)

MTO Mission

• To be an advocate for Minnesota businesses pursuing international markets

• To promote, assist and enhance exports and foreign direct investment that contribute to the growth of Minnesota’s economy

MTO Vision

• To be the first place Minnesota companies call when they need export assistance

Shared State Responsibility

Why Export?

Compelling business implications• Less likely to go bankrupt• Mitigate market fluctuations• Extend product life-cycle

Benefits workforce and state• Higher wages and benefits • Increased tax base

In Minnesota …

About

68,000Manufacturing Jobs

Depend

On Exports!

Minnesota’s Top 10 Export MarketsMinnesota exported goods worth $21.4 Billion to 207 countries in 2014

MTO Core Services

• Export counseling & technical assistance

• Export education & training

• Export promotion

• Foreign Direct Investment (FDI) attraction

• State Trade & Export Promotion (STEP) Grants

• Protocol assistance

State of Minnesota Foreign Offices

Minnesota

Brazil

Europe/Germany

ChinaSouth Korea

State Trade & Export PromotionProgram (STEP)

• Export assistance for small business

• $7,500 matching grant

– Trade missions

– Trade shows or exhibits

– Translations

– Website internationalization

– Business matchmaking

– Industry specific certification i.e (CE Marking)

• Priority: New exporters & new market development

STEP Funding Streams

• State FY 2015

– $300,000 allocated for SMEs to participate in export projects of their choice

• 2015 funds exhausted

• New funds proposed starting July 1, 2015

• Federal - Sept 30, 2014 - Sept 29, 2015

– $200,000 allocated for NEW Exporters and New to Market SMEs to participate in targeted trade missions

Contact the Minnesota Trade Office

332 Minnesota Street, Suite E200Saint Paul, MN 55101 USA

Trade Assistance Help Line: (651) 259-7498

DEED Business Finance Principles

• Strategic

• Modest and budget responsible

• Transparent

• Accountable

• Performance-based

Angel Loan Fund

• No-interest federally-funded loans of up to $250,000

• Loan may be up to 10% of equity raised; payments deferred for 7 years

• Sales agreement mitigates risk by allowing state to benefit from increased value of business

• 20 applications approved requesting $3.4 million, expecting to leverage $53.5 million

Emerging Entrepreneur Fund

• Federal funds supports micro-enterprises and small businesses with $6 million in loan funds

• Focus of program are businesses owned and operated by a woman or a minority, or located in economically distressed areas throughout Minnesota

• DEED provides funds to nonprofit lenders which provide loans to start-up and expanding businesses

Indian Business Loan

• Supports the development of Indian-owned and operated businesses and promotes opportunities for Indian people throughout Minnesota

• DEED evaluates all applications and forwards a recommendation to the appropriate tribal council for final consideration

Tourism Septic Tank Program

• Low-interest financing to tourism-related businesses that provide overnight lodging and need to replace a failed septic system

• Participation loans in cooperation with financial institutions can be made for up to 50 percent of the total cost of the project

Minnesota Investment Fund

• Grants provided to local governments who then make loans to businesses

• Interest rate/terms vary; may be forgiven in limited cases

• $14.1 million awarded in FY14-15 leveraging $415 million and creating 1,900 jobs

• Ice Castles in Pine River recent recipient• Federally-funded MIF funds available in non-

entitlement areas

Brad Simenson – 6W, 6E, 8651-259-7428Brad.Simenson@state.mn.us

Abdullahi (Moe) Mohamed - 9 651-259-7456 Abdullahi.Mohamed@state.mn.us

Loan Officers

Job Creation Fund• Performance-based program

• Generally up to $1 million total available

$500K in Job Creation Awards

$500K in Capital Investment Rebates

• Create at least 10 full-time jobs, have $500,000 in capital expenditures and be in an eligible industry to participate

• $13.8 million awarded in FY14-15 leveraging $251 million and 1,400 jobs

• Ikonics, TEAM Industries and Axis recent recipients

• Emily.A.Johnson@state.mn.us or 651-259-7450

Office of Broadband Development

Border to Border Broadband Development Grant Program Update

Recent steps inMN broadband policy-making

2008-10

•2008 - First broadband taskforce created

•2009 - First broadband map created (prior to federal mapping program)

•2010 - Broadband goals established

2011-13

•2011 – Current broadband taskforce created

•2013 - Office of Broadband Development was created within DEED

2014-15

•2014 - Border to Border Broadband Infrastructure Grant created

•2015 – Taskforce appointments being renewed

Where we stand today

MinnesotaBroadband Goals (2010)

By 2015, all households and businesses have access to broadband at speeds of 10 to 20 Mbps down and 5-10 Mbps up

Figure 1. Connect Minnesota study ( MN DEED website)

2014 Border to Border Grant• $20M one-time appropriation (up to 3% avail for admin and mapping)

• Distributed in single competitive grant round

• Technology must be scalable to at least 100 Mbps Up/Down

• Cap of $5M per grant award

• At least 1 to 1 match (50% of eligible expenses) required (More points awarded for higher match)

• Grant awards to be geographically dispersed

• Eligible locations had to be unserved (no broadband at 4/1) or underserved (less than 10/5)

Applications Received

• 40 applications filed

• All areas of the state represented– except the Southeast

• Applicants included telephone companies, cable companies, cooperatives, municipalities, counties, fixed wireless, and newly created entities

• Grants requested = $44,215,482

• Total eligible project costs = $99,917,339

Application Evaluation CriteriaUnserved households and businesses passed: 0 to 25 points• Percentage and total number Grant request amount: 0 to 10 points• Percent of grant request compared to eligible project costs Readiness: 0 to 25 points• Demonstration of project readiness • Comprehensive proposal • Initial five year service offering (speed tiers and pricing) Sustainability: 0 to 25 points• Financial soundness and efficiencies • Organizational capability • Technical demonstration Community support/partnership: 0 to 20 points• Evidence of community support • Benefits to community anchor institutions • Evidence of health and public safety benefits Economic Review: 0 to 10 points• Is project area economically distressed?• Does the project demonstrate economic development impacts? Adoption Assistance: 0 to 10 points• Technical support and training provided • Information on promoting adoption • Is there a low income assistance program?

Projects Selected

• 17 projects

• Total grant funding = $19,400,972

• Total local match = $25,798,388

• Total investment value of projects = $45,199,360

In total, for grants:6095 passings• 3823 Unserved• 2272 Underserved

List of Awarded Projects• Big Stone County $3.9 million• CTC/Region 5 $2 million• Arvig-North Sauk Lake $537,000• Rock County BB Alliance $5 million• Sjoberg Cable-Roseau Co $262,000• Otter Tail Telecom-3 proj. $653,000• Wikstrom Telco $425,000• RS Fiber Coop $1 million• Interstate Tel.-Hendricks $700,000• NESC/Frontier/IRRRB $1.9 million• Halstad Telco $1.6 million• Mediacom (Hibbing area) $138,000• Palmer Wireless $152,000• Dunnell Telco $625,000• CenturyLink $383,000

2014 Border to Border Broadband Grant Awardees

Looking forward on grant program

• Governor recommending $30M for FY2016 in biennial budget proposal with no policy changes

• Once we have certainty that there will be another grant round, we will get that underway

• In the meantime, our office is available for assistance/questions on how to improve broadband in your area

Q & A

Danna MacKenzie, Executive Director, 651-259-7611danna.mackenzie@state.mn.us

Diane Wells, Telecommunications Manager, 651-259-7613 diane.wells@state.mn.us

Jane Leonard, Grants Administrator, 651-259-7635jane.leonard@state.mn.us

http://mn.gov/deed/broadbandSubscribe to the MN Broadband E-Blasts to receive more information as it becomes available

Minnesota Job Skills Partnership

MJSP Purpose

Provide workers with skills

businesses need to compete

Develop capacity in our training

institutions

Provide training that offers long-

term professional growth and economic

opportunity for workers

Catalyze partnerships between training institutions and businesses by providing matching grants that:

Five MJSP ProgramsPartnership

Pathways

Low Income Worker

Special Incumbent Worker

NEW Job Training Incentive Pilot

Program Descriptions• Business/training institution partnership

• 1:1 business match requirement

• Business specific, customized training

• New or incumbent workers

Partnership

• Business/training institution partnership

• .5:1 business match requirement

• Business specific, customized training

• Low income workers

Pathways

• No business partner

• No match requirement

• Existing training programs for occupations in demand with advancement opportunities

Low Income Worker

Program Descriptions (cont.)

• Same as Partnership program, except geared specifically to incumbent workers

• Funded from Workforce Dev. Fund, when sufficient funds exist

Special Incumbent

Worker

• Training grants for new or expanding businesses

• More flexible than Partnership program

• Tiered business match requirement based on business size (.5:1 to 1:1)

Job Training Incentive Pilot

Funding OutlookMJSP Allocations

(in millions)

$4.2 $4.2

$1.2

$4.2

$7.0

$4.7

FY 2014 Stats

Awarded 49 grants totaling $8.7 million

Leveraged $20.5 million in contributions from businesses

Grants awarded will assist 64 businesses

10,394 individuals to receive training

Average award of $177,696

Average MJSP cost per trainee of $838

Minnesota Job Skills Partnership

• MJSP works with business and educational institutions to:–Train/retrain workers

–Expand work opportunities

–Keep high-quality jobs in Minnesota

• Provides grants to offer offset training-related expenses incurred by business, industry and educational institutions

• Projects generally join business with educational institutions

Angel Tax Credit Program

• 25% credit for investors; $125,000 maximum per individual; credit can be refundable

• Business - HQ in MN, 25 or fewer employees, less than $4 million in equity, less than 10 years in operation; proprietary is key to eligibility

• “Insiders” no longer eligible for the credit

• $15 million in tax credits per year; $7.5 million in credits reserved for investments in women-owned, minority-owned and Greater Minnesota

Angel Success Through 2014

• 284 businesses received investments through program

• 8 minority-owned; 14 women-owned (2013)

• Greater Minnesota:

- 18 headquarters (2014)

• $248 million in investments; $61 million in credits (2010-2014)

• Violette.Mpagazihe@state.mn.us or 651-259-7434

Job Expansion Program

• Sales tax refunds for growing Greater MN businesses– Up to $2 million available annually per firm; up to $10 million total

benefits per firm over 7 years

• Create 2 jobs or 10% increase, whichever is greater, and be an eligible industry to participate

• $7 million in refunds available annually

• 7 projects approved creating 35 jobs and valued at $800,000 in refunds

• David.J.Heyer@state.mn.us or 651-259-7441

Other Provisions

• Data centers

• R & D tax credit

• TIF

• Capital Equipment Sales Tax Exemption

Community Finance Programs

• Small Cities Development Program (SCDP)

• Business Development Public Infrastructure Grant (BDPI)

• Innovative Business Development Public Infrastructure Grant (IBDP)

• Transportation Economic Development Program (TED)

Small CitiesDevelopment Program (SCDP)

Eligible Applicants

• Cities with combined populations of under 50,000 and in an eligible county

• Counties and townships with unincorporated populations of fewer than 200,000

• Non-eligible entitlements – Anoka, Dakota, Hennepin, Ramsey, St. Louis and Washington Counties. Cities of Mankato/North Mankato, Moorhead, Rochester, and St. Cloud

Type of Applications

• Single Purpose – Housing (owner-occupied or rental rehabilitation or public facilities: $600,000 (includes administration)

• Comprehensive – 2 or more activities – aggregate of $1.4 million - $600,000 per activity. Rental and owner-occupied housing rehabilitation are not two different activities

Federal Requirements

• Environmental Review: Includes public comment periods and historical clearance

• Davis-Bacon

• Fair Housing/Equal Opportunity

• Annual reporting

• On-going monitoring for compliance

Federal Objectives

• Benefit to low and moderate income people on a household basis (80% of county median income) for housing and area benefit (51% or better LMI) for public facilities

• Alleviation of slums and blight for commercial rehabilitation. Must designate a slum and blight area (TIF or HRA definition)

Competitive Annual Application Cycle

• Preliminary proposals due mid-November, 2015

• Those with competitive proposals will be asked to submit applications due the end of February, 2016

• One proposal per eligible community

http://mn.gov/deed/government/financial-assistance/community -funding/

2016 Funding Expectation

• Small decrease in each of the last two years

• 15% set-aside for economic development (MIF)

• Expect around $14 million after set-aside for about 30 grants

Activities

• Owner-occupied housing rehabilitation

• Rental housing rehabilitation

• Commercial rehabilitation

• Public facilities (Generally municipal water and wastewater systems)

Public Facilities Criteria

• Generally to fund gaps to complement Rural Development and/or Public Facilities Authority packages

• Clear physical and financial need indicated and on PPL and/or IUP (unless no previous system or unique)

• Generally storm sewers are not competitive

Business DevelopmentPublic Infrastructure (BDPI)

BDPI Purpose

• BDPI provides financial assistance to greater MN communities to stimulate new economic development and the creation of jobs by investing in public infrastructure needs

BDPI Funding

• Provided through State General Obligation Bonds

• Funds are currently available

• Applications accepted on an on-going pipeline

BDPI Goals

• Create or retain jobs in a local area

• Increase a city’s tax base

• Create or expand new economic development opportunities

BDPI Eligible Applicants

• Cities and counties outside the 7 county metro area (Hennepin, Ramsey, Dakota, Anoka, Washington, Scott and Carver)

BDPI Applications• Business creation/expansion

• Industrial park development

BDPI Eligible Projects

• Manufacturing

• Technology

• Warehousing and distributing

• Research and development; agriculture processing

• No retail, office or housing

BDPI Eligible Projects

Publicly owned infrastructure that supports economic development projects, including wastewater collection and treatment, drinking water, storm sewers, utility extensions, and streets

BDPI Matching FundsApplicants must provide 50% or more of the capital costs for the public infrastructure project

BDPI SpeculationApplications that do not have an identified business or can not show an immediate need for additional industrial park lots usually do not score well

Application Info

• Application available online

• Most awards are between $150,000 - $500,000

Innovative Business DevelopmentPublic Infrastructure (IBDP)

IBDP Purpose

IBDP program focuses on job creation and retention through the growth of innovative businesses

Innovative Definition"Innovative Business" is a business that is engaged in, or is committed to engage in innovation in Minnesota in one of the following:

1. Using proprietary technology to add value to a product, process, or service in a high technology field

2. Researching or developing a proprietary product, process or service in a high technology field

3. Researching, developing, or producing a new proprietary technology for use in the fields of tourism, forestry, mining, transportation, or green manufacturing

Proprietary Technology

“Proprietary technology” is the technical innovations that are unique and legally owned or licensed by a business and includes, without limitation, those innovations that are patented, patent pending, a subject of trade secrets, or copyrighted

IBDP Funding

• Provided through state general obligation bonds

• Funds are currently available

• Applications accepted on an ongoing pipeline

IBDP Eligible Applicants

Local governmental units (city, county, town, special district, public higher education institution, or other political subdivision or public corporation) are eligible to apply for a grant

IBDP Eligible Projects

• The projects must be of publicly ownedinfrastructure related to development projects that target:– Manufacturing– Technology– Warehousing and distribution– Research and development– Innovative business incubator– Agricultural processing – Industrial, office, or research park development that

would be used by an innovative business

IBDP Eligible Activities

• Water, sewer, roads

• Telecommunications

IBDP Matching Funds

Applicants must provide 50% or more of the capital costs for the public infrastructure project

Application Tips

• Application available online• Very rarely used for speculative industrial park

development• Limit of $1 million, but most applications are much

smaller

Transportation EconomicDevelopment Program (TED)

TED• Collaboration between MnDOT and DEED for highway

and local road improvement projects that support economic development

• Seeking projects that will assist development of new businesses or expand existing businesses in Minnesota– Target industries: manufacturing, technology, warehousing and

distribution, research and development, agricultural processing, bioscience, tourism/recreation, or does it support industrial park development or mixed use-high density multimodal development

• Looking for projects that will improve the statewide transportation network

TED• RFP expected this summer

• Type of projects determined by the type of funds available– $10 million (maybe more) Trunk Highway bonds must be used

on eligible costs in a MN trunk highway

– $?? BDPI must be used in greater Minnesota

– $?? IBDP must be used for projects benefiting innovative businesses

– $?? TED – No fund currently available for projects outside trunk highway without BDPI and IBDP

TED

• $7 million maximum award

• Up to 70% of total infrastructure project costs– Max grant could be less, based on state law and policies

• Remaining funds from private and other sources

• Funding split between Metro and Greater MN– Greater MN proposals reviewed separately from Metro

• BDPI/IBDP/TED funds required to be spent outside trunk highway

TED Project Example - Perham

• Better access to Barrel O’Fun, Tuffy’s Pet Foods, Kenny’s Candies and a new hospital

• Creation of 240 jobs

• $270,000 of private funds

• $4 million of TED funds

• Total project cost is $6,711,762

TED Project Example - Perham

Contact Information

Patrick Armon - 1, 2, 3, 5651-259-7455

Jeremy LaCroix - 4, 6W, 6E, 7W, 7E, 11 651-259-7457

Christine Schieber - 8, 9, 10651-259-7461

Community FinanceRegional Representatives

Office of Brownfields and Redevelopment

• Contamination Cleanup and Investigation Grant Program

• Cleanup Revolving Loan Program

• Redevelopment Grant Program

• Demolition Loan Program

The purpose of these programs is to reduce the costs of developing previously used sites

Demolition and cleanup costs would not be present on a site with no prior history

Contamination Cleanup and Investigation Grant Program

• Eligible applicants are:

– Cities

– Counties

– HRAs

– EDAs

– Port Authorities

Eligible Sites

• Both privately-owned and publicly-owned sites

• Known or suspected contamination

• Expected development – create jobs, increase taxes, or other public benefits

• Resolution from applicant body and municipality (if different)

• Cleanup Grants applicants need MPCA-approved Response Action Plan (RAP)

180-Day Rule

Cleanup costs incurred prior to award date must have been incurred after RAP approval and the RAP approval date must be within 180 days of application due date

Grant Awards

• Up to 75% of eligible cleanup/investigation costs

• $50,000 max award for investigation grants

• Required match = 25% of eligible cleanup/investigation costs

– 12% must come from unrestricted fund source

• Competitive process – compete against other applicants

• Request what you need

Applications

• Due at DEED offices May 1st and November 1st by 4:00 PM

• Template and instructions can be found at mn.gov/deed

• Apply when project is ready to go

Program Results

• 427 grants awarded since program created in 1993

• Nearly $149 million in Cleanup and Investigation grants awarded

• Leveraged $4.6 billion in private investment

• Created and retained 44,000 jobs

• Constructed over 13,600 housing units

• Increased local tax base by over $93 million

Cleanup Revolving Loan Program

• Eligible applicants are:

– Cities

– Counties

– HRAs

– EDAs

– Port Authorities

– Private entities

– Non profits

Eligible Sites

• Completed all appropriate inquiries

• Own or have access to property

• MPCA-approved RAP

• Applicant cannot be responsible for contamination

• Have ability to repay loan

Eligible Costs

• Costs already incurred are not eligible for loan funds

• Cleanup costs only eligible after project is determined to be eligible and plan is approved by appropriate agencies

Loan Awards

• Applications accepted throughout the year

• Up to 78% of eligible cleanup costs

• 22% local match must come from a non-Federal source

• Rate and term negotiable

Redevelopment Grant Program

• Eligible applicants– Same as Contamination

Cleanup Grant – local units of government

• Eligible activities– Demolition and interior

abatement

– Infrastructure improvements

– Environmental infrastructure

– Geotechnical soil correction

Eligible Sites

• Previously been developed

• End use which will create jobs, taxes, or other public benefits

• Resolution from applicant body and municipality (if different)

Grant Awards

• 50% match requirement

• Match can be from any available source

• 50/50 split between Metro and Greater MN

• Competitive process – compete against other applicants

Applications

• Due at DEED offices February 1st and August 1st

by 4:00 PM

• Template and instructions can be found at mn.gov/deed

• Apply when project is ready to go

Program Results

• 167 grants awarded since first grant awarded in 1998

• About $64 million in Redevelopment grants awarded

• Leveraged over $2 billion in private investment

• Created and retained over 25,000 jobs

• Constructed over 4,800 housing units

• Increased the local tax base by over $35 million

Demolition Loan Program

• Eligible applicants

– Cities

– Counties

– HRAs

– EDAs

– Port Authorities

Eligible Sites

• Applicant must own property and structures

• Structures have been vacant at least one year

• Not listed on the National Register of Historic Places

• Constitute a threat to public safety

• Expectation of future development and economic benefits

– Immediate plans not needed

Other Loan Information

• Same application deadlines as Redevelopment

• May pay up to 100% of acquisition and demolition costs, maximum loan amount of $1,000,000

• 2% interest rate for up to 15 years

• Interest free for first two years

• If development occurs, up to 50% of the remaining principal and interest could be forgiven based on development benefits

DEED AssistanceFor more information on Office of Brownfields and Redevelopment Grant Programs visit our website at:

mn.gov/deed/government/financial-assistance/cleanup/index.jsp

or call 651-259-7449

Other Assistance

SciTechsperience Internship

Greater Minnesota Internship Tax Credit Program

Innovation Vouchers

DEED Program Director Contacts

• Small Business Assistance – Charles Schaffer, 651-259-7477

• SBDC – Bruce Strong, 651-259-7420

• MTO – Kathleen Motzenbecker, 651-259-7489

• Business Finance – Bob Isaacson, 651-259-7458

• Broadband – Danna MacKenzie, 651-259-7611

• MN Job Skills Partnership – Paul Moe, 651-259-7522

• Community Finance – Tom Gast, 651-259-7425

• Redevelopment – Meredith Udoibok, 651-259-7454

Visit our website at

mn.gov/deed

and our guide at

mn.gov/deed/guide

for more information about our programs