Georgia Department of Community Affairs CDBG Economic Development

Georgia Department of Community AffairsCDBG Economic Development

Annual Competition and Set-Aside Programs

EIP, RDF and Capitalized RLF

GENERAL OVERVIEW

Presentation name | date

Overview

Community Development Block Grant (CDBG) enacted by Congress as Title I of Housing and Community Development Act of 1974

The primary objective of CDBG is “the development of viable communities through improvement of living conditions, housing and the expansion of economic opportunities in cities and counties, principally for persons of low and moderate income.”


Overview (Cont.)

Local governments can implement a broad range of activities as long as they further the National Objectives of the Act

National Objectives are:▪ Majority benefit to low- and moderate-income

persons through services and job creation▪ Prevention or elimination of slum and blight▪ Immediate Threat & Danger


Available Funding

CDBG Funds from U.S. Housing and Urban Development (HUD)

CDBG $30 million CDBG allocation

EIP $7 million set-aside

RDF $1.5 million set-aside


Features of Economic Development 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)


Who Can Apply?

Eligible:

Non-Entitlement Cities & Counties

Ineligible:

Entitlement (Metro/Urban) Cities & Counties


Ineligible CDBG/EIP/RDF Activities

• Working Capital

• Refinancing

• Speculative Projects

• Capacity Building

• General Conduct of Government

• Project Not Meeting Federal Guidelines

GETTING STARTED


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.


The CDFD Finance TeamField Staff

Project identification, assessment and development

Compliance monitoring

Credit Unit

Credit analysis, underwriting

Financing options

Program Manager

Review overall project

Ensure program objectives can be met

Craft award documents

Project oversight

OED –Project Development

Monitor & Audit

Manage Projects

AwardFinal Structure

of Deal

Review & Underwrite Application

Application Development & Submission

Initial Project Assessment

Market Successful Concepts

Potential Project

Denial


Application Process

• Application Forms (DCA 1- DCA 13)

• Supplemental Information & Documentation

• Public Infrastructure or Loan attachments

Refer to: EIP or RDF Application Manuals and CDBG Applicants & Recipients Manuals


Four Routes to ED with CDBG

1. Annual Competition ED application

2. Employment Incentive Program

3. Redevelopment Fund Program

4. Local Revolving Loan Fund (generated by EIP/RDF loans)

SPECIFIC PROGRAMS

EIP GRANT - PUBLIC

INFRASTRUCTURE


EIP Infrastructure Grants

* $500,000 maximum grant; up to 6% for admin costs/contracts

* Local governments may apply for funds at any time

* Projects must create/retain jobs primarily for low- and moderate-income persons

* Eligible activities include - Public Infrastructure (water/sewer lines & facilities; roads;

rail spurs, and other “public” infrastructure)- Public Facility (workforce development centers, child care,

etc)

* Federal restrictions on using funds to relocate businesses


EIP Infrastructure Grants

Key Factors to Remember:

EIP Application SupplementsPER or ADRCommitment Letter(s)Letter of Credit or Surety Bond

Source-and-Use Statement

Rating and Selection CriteriaDemographics, Feasibility, Impact & Strategy

Infrastructure Capacity Analysis (IFCA)

Economic Development & Construction Agreement


Bibb County - Bass Pro Outdoor World, LLC

• Recipient - Bibb County

• Sub-Recipient – Bass Pro Outdoor World, LLC

• Grant Amount - $500,000

• Project – water and sewer

• Private Investment - $43 Million

• Jobs – 200


Source Amount Use Amount

EIP

OGA EDGE

Georgia DOT

Bibb County

MBCIA

Private

Total

$ 500,000

$ 1,500,000

$ 1,635,920

$ 6,000,000

$ 499,450

$ 43,029,500

$53,164,870

Water & Sewer

Grant Administration

Site Preparation

Road Construction

Road & Sewer

Land Acquisition & Site Prep

Professional Services

Water & Road


Building Construction

Equipment Lease

Natural Gas


$ 475,000

$ 25,000

$ 1,500,000

$ 1,635,920

$ 1,926,380

$ 3,905,420

$ 168,200

$ 356,068

$ 143,382

$ 25,000,000

$ 18,000,000

$ 27,500

$ 2,000

$53,164,870

Source and Use - Bibb County

EIP GRANT – LOAN TO PRIVATE FOR-PROFIT

BUSINESS


EIP Loans

* $500,000 maximum grant; up to 6% for admin costs/contracts

* Local governments may apply for funds at any time

* Projects must create/retain jobs primarily for low- and moderate-income persons

* Eligible activities include

- Loans to for-profit entities for purchase of fixed assets

* Federal restrictions on using funds to relocate businesses

* Loan repayments may be placed into a local RLF


Loan Structures

• DCA Grant to a Local Government▪ Local Government then provides:

• Direct loan to a private business

or, A loan to a development authority who

then makes a direct loan to a private business


Atkinson County – First String Space, Inc.

•Recipient – Atkinson County •Sub-Recipient –First String Space, Inc.

•Grant Amount - $500,000•Project – Building Acquisition•Private Investment - $1,391,642•Jobs – 50



EIP

SEGa Financial

Private

Total

$ 500,000

$ 100,000

$ 1,291,642

$1,891,642

Building Acquisition

Grant Administration



M&E

FF&E

Inventory

Working Capital

Total

$ 470,000

$ 30,000

$ 100,000

$ 335,006

$ 169,427

$ 6,834

$ 175,375

$ 605,000

$1,891,642

Source and Use – Atkinson County

REDEVELOPMENT FUND


REDEVELOPMENT FUND

• $1,500,000 Annual set-aside

• $500,000 Maximum grant (up to 6% for Admin)

• May apply at any time

• Projects must alleviate a “slum or blighted” condition

• Any new jobs must be available to low- and moderate-income persons

• Eligible Activities:▪ Public infrastructure, public facilities▪ Loans to acquire and alleviate blighted buildings/facilities▪ Loan/lease payments may be capitalized into a local RLF


Is the Proposed RDF Activity Eligible?

• Acquisition

• Clearance

• Relocation

• Historic Preservation

• Building Rehabilitation


City of Rebecca

•Recipient – City of Rebecca

•Sub-Recipient – Crawford Brothers, Inc.

•Grant Amount - $210,000

•Project – Renovate blighted gas & convenience store

•Private Investment - $210,000

•Jobs – 10



Redevelopment

Bank Financing

Private

Total

$ 210,000

$ 127,000

$ 83,000

$420,000

Construction

Clearance

Administration

Construction

FF&E

Acquisition

FF&E

Total

$ 171,000

$ 29,000

$ 10,000

$ 62,000

$ 65,000

$ 10,000

$ 73,000

$420,000

Source and Use – City of Rebecca


City of Rebecca - Cranky’s

LOCAL REVOLVING LOAN FUND (RLF)


Local Revolving Loan Funds

• EIP/RDF loan payments capitalize local RLF

• RLFs can be used for local economic development needs

• Must be CDBG-eligible

• Opportunities available to partner with local banks to finance eligible activities (same as EIP) that create employment for L/M persons


Local Revolving Loan Funds

• Administered by local government with DCA’s oversight and guidance (as needed)

• Currently 61 RLF’s throughout Georgia, with:▪ $31 million in RLF assets▪ $10 million in cash▪ $21 million in loan receivables

• RLF must be used in a timely manner – at least one new loan every five (5) years

• For RLF cash balances greater than $125k, cash balance should be maintained at less than 30% of total RLF assets


Sample RLF Projects

• Retail

• Daycare

• Manufacturing

• Telecommunications

• Workforce Development Centers

• Public Infrastructure

THINGS TO

REMEMBER


Things to Remember

• Describe your project and jobs created/retained

• Document need, costs and support of banks & businesses

• Debt – credit underwriting and terms


Program Manager Contacts:

Andy Yarn - Employment Incentive Program

(404) 679-1589 [email protected]

Joanie Perry - RDF Program


Michael Casper – Local RLF Coordinator



ED Representative Contacts:

Jennifer Fordham – Southeast Georgia(912) 865-4212 [email protected]

David Shellhorse – Northeast Georgia


Ron Thompson – Southwest Georgia(478) 934-3845 [email protected]

Jonathan Corso – Northwest Georgia(404) 327-7909 [email protected]

Glenn Misner – Field Services Office Manager(404) 679-3138 [email protected]

Georgia Department of Community Affairs CDBG Economic Development

Documents

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