JobsOhio Programs Western Ohio December 17, 2013

JobsOhio Programs

Western Ohio

December 17, 2013

Today’s Overview

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• JobsOhio Philosophy • Project Management • JobsOhio Programs

– Economic Development Grant– Workforce Training Grant– Growth Fund Loan

• Additional Project and Program Details• Discussion

Philosophy

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• JobsOhio Philosophy

– Promote economic development, business expansion, and job creation

– Key factors: job creation, created payroll, fixed-asset investment commitment, project return on investment, and project location

– Funds: fixed asset investment, infrastructure, and workforce

– Fiscal Year July 1 – June 30

Revitalization Growth Fund Loan

Workforce Grant

Economic Development

Grant

Project Management Process

Project VettingDeal Structuring

Deal Management

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• Deal TeamEvery project in the system has an assigned deal team including:– Lead Project Manager (either: JobsOhio or JobsOhio Network Partner)– Secondary Project Manager (either: JobsOhio or JobsOhio Network Partner)– JobsOhio Managing Director (as it relates to Project’s Industry Sector)– JobsOhio Credit Analyst– Project Coordinator

• Lead Project Manager The lead project manager is determined with the following criteria:– Point of entry– Company’s project location (statewide or region specific)– Company’s presence in Ohio – Company or industry knowledge (relationships)

JobsOhio Project Flow 7

Sales &ProjectVetting

Offer

Application

Approval

Agreem

entsent to com

pany

Agreem

entExecuted

FundsD

isbursed

JobsOhio Loans

JobsOhio Grants

JCTC & Data Center Tax Exemption

IOLF

166 Direct & R&D Loans

629 Grants

Technical Review

(Early Stage)

JobsOhio & DSA Project Review

Draft Term Sheet

Loan Review

Final Term Sheet, Outside Counsel

Appointed, Organizational Call

M/W/F PM Call

JO Panel;JO investment committee or

Board


M/W/F PM Call


M/W/F PM Call

Technical Review


Draft Term Sheet

Loan Review



M/W/F PM Call

Controlling Board


Draft Term Sheet

Loan Review



M/W/F PM Call

Controlling Board


M/W/F PM Call

Controlling Board

JO Panel;JO investment committee or

Board

Tax Credit Authority

Deal Structuring Process

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• Collect all pertinent company and project info • Develop initial recommended deal structure

– If financing is an option financials should be uploaded• Schedule time for MWF Project Call• JO PM updates JO MD • JO PM presents project at JO Project Review Meeting

– Monday at 1:00 pm and Thursday at 9:30 am– DSA also present to approve state program recommendations– JO and DSA leadership scrutinize each project – Unanimous consent of deal structure required

• Offer Letter signed, uploaded to Salesforce• Lead PM sends Offer Letter to project contact

Project Vetting

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• Critical Information to Gather– Metrics: Jobs created, created payroll, jobs retained, retained payroll,

capital investment, training budget and number to be trained– Company details: Company legal structure (subsidiaries, parent, etc.), filing

structure, financials of the company and pro-forma (if private), key executives/board of directors

– Project details: Project description and location, sources and uses for project including partners (banks, investors etc), collateral / security, project barriers

– Contact details– Market information– Major factor statement / justification for support (Ohio’s competition for

project)– Training plan *

Be Nosy / Ask Questions

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Questions to ask• What is the biggest challenge the

company faces, or most difficult obstacle

• What factors ultimately will drive this project decision

• What keeps you awake at night as it relates to your business

• What are the other locations for the company– What do they make / produce– Is there extra capacity at those

locations– Do these other facilities serve the

same markets as the Ohio facility

• What is driving the growth for the company / product– New contract, if yes with who and

length– New product, if yes what are the

growth projections and who is the customer(s)

– How does the company transport raw materials and finished product

– Consolidation from other locations– Market entry to Midwest / East

• Project Decision Process– How is this decision going to be made– Who will be making the decisions– Will it need to be approved by a

board– Timing of the decision

Be Nosy / Ask Questions

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• Project Timing– When will investments begin– When will the project be complete

• Workforce– How do you plan to get your

workforce– Training the workforce?

• Who will be doing the training; in house, vendor, outside trainer

• Financing– Who is the Borrower– What are uses of funds (Real Estate

or M&E )– What are sources of funds– Who is your current lender

• Fixed Asset InvestmentReal Estate– Is it new construction or expansion of

the building– Does the company lease or own their

current building– Is it a special purpose building– Is there a mortgage on the building– Will the company lease or own the

building they're considering– Expected lease or construction costs– What is the construction timeframe M&E– Expected M&E investment– What type of M&E is going to be

purchased– Life of the asset– When will the company order the

M&E and what is the lead/delivery time needed for the M&E

Project Determination and Deal Structuring

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• Key Component to Project– Clearly defined competitive project with job creation and/or capital investment

• Other Components • Amount of funds per job created (or

employee trained)

• Number of new jobs created• Created payroll (median salary of

project greater than county median wage)

• Number of jobs retained (unaffected by the project)

• Retained payroll (median salary of project greater than county median wage)

• Retained jobs at risk• Retained payroll at risk• Capital investment for project (land,

building, machinery and equipment)

• Project Break Even Point

• Relocation of employees within Ohio• Number of employees trained (new and

retained)

• Project location in the State of Ohio (county unemployment rate and Median Wage)

• Local Participation in the deal • Improvement of operational efficiencies

and production expansion• Industry sector• Financial strength of company• Previous assistance: either active or

within a reasonable amount of time from expiration and performance during such time

JobsOhio ProgramsEligible Applicants

Economic Development GrantWorkforce Grant

Growth Fund Loan

Program Determination and Deal Structuring

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• Eligible Applicants– Aligns with targeted industry and / or business function– For–Profit Company (C-Corporation, sole proprietorship, limited

liability company, partnership, and an S-Corporation) – Public Entity– Average wage at least 150% federal minimum wage

• Ineligible Applicants– Retail – Population-driven Companies– Non-Profit Entity– Pre-Revenue Company

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• Eligible Costs– Building : e.g., building new, purchasing existing building or leasehold improvements – Land: e.g., purchase of land, site development costs– Machinery and equipment: e.g. purchase of new machinery and equipment – Moving and relocation costs of machinery and equipment related to the project;

including freight shipping, furniture and fixtures, tooling, etc. required for project (limited to a 3 month timeframe)

– Infrastructure: (including utility, telecommunications, information technology) – Demolition of building and other structures– Installation or relocation of on-site water, storm water and sanitary sewer lines, water

and wastewater treatment facilities, pump stations, water storage mechanisms, and other similar equipment or facilities

– Construction of roads, bridges, traffic control devices, parking lots, and facilities; and utility infrastructure such as natural gas, and electric

Economic Development Grant

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• Eligible Costs– Improvement to rail access– Technological improvements; Information Technology, Software/Hardware, Fiber

optics, Instruments and controls used in the upgrade and/or installation of industrial or research and development infrastructure

– Utility Improvements: Electrical Infrastructure, Substation, Redundant Power, Gas line– Fees and material costs related to planning or feasibility studies – Engineering Services


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• Ineligible Costs– Administrative costs (including salaries and travel expenses) – Bonds or other debt instruments issued by company to finance completion of the site

improvement project shall not be retired or otherwise serviced with grant funds – Contributions and donations by the company to individuals or to other organizations– Costs resulting from violation of or failure to comply with federal, state, and local laws

and regulations– Goods and services for personal use by the company’s officers, directors, board

members, and/or employees – Interest on borrowed money – Lease and rent payments– Organized fundraising– Relocation expenses such as long-term housing and personal living expenses for

officers, directors, board members, and employees may be ineligible– Rolling stock (defined as anything that has to be registered with a government entity

and/or travels on a public right-a-way)– Taxes – Travel expenses, meals and entertainment


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• Eligible Costs– Information technology: training in the use of the company's information technology

systems (e.g., specific software, programming, support, maintenance, and administration of internal systems)

– Maintenance: training in a specialized area or expertise (e.g., skilled trades, electronics, manufacturing systems, material science, mechanical, hydraulics, etc.)

– Leadership: training to improve the ability and effectiveness of employees to lead, manage, and supervise projects and teams (may include communication skills)

– Product knowledge: training about the products and services of the company– Quality: training in company’s quality management and processes (e.g., business

process re-engineering, benchmarking, 6-Sigma, LEAN) – Safety: industry specific safety training– Technical: training that focuses on the company's technical processes and procedures – On-the-job training: training that is structured, takes place at the work site and is

supervised by a manager or experienced coworker – Equipment: equipment costs associated directly with training – Materials: material costs specific to eligible training (e.g., practice welds)– Transportation: transportation costs associated directly to eligible training activity, either

domestic or international

Workforce Grant

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• Ineligible Costs– General equivalency diploma (GED) or college degrees– Meals and entertainment – Preparation or travel time– Compliance and regulatory training (e.g., Occupational Safety an Health Administration –

Regulatory training)– Membership dues and license fees– Infrastructure – JobsOhio reserves the right in certain circumstances and with pre-approval by JobsOhio

President/Chief Investment Officer to include the below as eligible training costs:• Trainees wages: during training, maximum of eight hours per day (ineligible;

overtime, bonuses)• Co-Op• Apprenticeship• Hotel

Workforce Grant

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Examples• Workforce Grant

Company Project – Ohio is only US operation– Creating 39 jobs, investing

$9MProject Driver / Need– FinancingStructure– JCTC already in place– JOW requested

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Examples• Workforce Grant

Company Project – Significant company in Ohio– Creating 45 jobs, investing

$28MProject Driver / Need– Workforce and Cost of doing

business vs competition Structure– JCTC– JOW to address Operator

training, the company’s biggest issue

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Examples

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Examples• JobsOhio Economic

Development Grant

Company Project – Company creating

72 new jobs, investing $4.2M for expansion project

Project Driver / Need– Infrastructure Structure– Infrastructure

Estimate received– ARC and JOG to

cover infrastructure costs

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Financing Continuum

166 Direct Loan Program*Ohio Enterprise Bond Program*R & D Investment Loan Fund*

Early Stage Growth Stage Late Stage

JobsOhio Growth Fund Loan

Innovation Ohio Loan*

*State of Ohio Capital ProgramsCommercial Acceleration Loan Fund

Targeted Investment ProgramCollateral Enhancement Program

Capital Access Program

Minority Direct LoanEnergy Efficiency Loans

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• Eligible Costs – Building: building purchase, construction, renovation, and long-term leasehold

improvements; • if the project involves new construction, the company must occupy at least two-

thirds of the premises • if the project involves the purchase of an existing building, the company must

occupy more than half of the premises– Land– Machinery and equipment (e.g., purchase of new) – Capitalized costs directly related to a fixed-asset purchase


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• Program Details– Funds: $500,000 to $5,000,000– Percent of Investment: up to 50 %– Term: 15 years Building, 10 years M&E– Interest Rate: Based on risk, fixed at closing – Borrower Contribution: 10 % or greater

• Program Fees– Processing fee $10,000– Annual servicing fee .25%– No Pre-Payment penalty


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• Security / Collateral– Senior or shared-senior lien position– Second mortgage and/or subordinate lien position may be considered– Additional Collateral may include:

Personal guarantees from owners of the company Corporate guarantees from related companies Full or partial letter of credit Life insurance on key business owners and/or managers Other types of credit enhancement (if necessary)


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• Deal Structuring with Loan Who is the borrower? Income Statement, balance sheet and cash flow statement for most recent three years

(audited financial statements preferred) and accompanying notes If audited financial statements are not available then reviewed, compiled or internally

generated financial statements (in that order) would be sufficient for initial financial review of company

Most recent year-to-date income statement, balance sheet and cash flow statement Project description including

Description of assets to be financed (type of equipment, is it special purpose etc.) Timing of proposed investment (when are funds required) Estimated life of proposed asset

Proposed sources of funds Name of other lenders involved in project funding Sources of funds with commitment levels, conditions and financial terms Conditional bank commitment and/or term sheet (if available)


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Revitalization Program Guidelines

Eligibility

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Eligible Applicantsa. Businesses including developers, non-profits, and local

governments b. Cannot be responsible for environmental contamination c. Must have legal access to the property

Eligible Sites An eligible site is an abandoned or under-utilized contiguous property where redevelopment for the immediate and primary purpose of job creation and retention are challenged by significant redevelopment constraints.

Three Program Tracks

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1. Phase II Assessment

2. Asbestos & Lead Paint Abatement

3. Revitalization Loan & Grant Fund

Program Tracks

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1. Phase II Assessmenta. Grants up to $200,000 per project b. Phase I must be complete

2. Asbestos & Lead Paint Abatement a. Grants up to $500,000b. End user commitment of job creation c. Industrial, commercial, or mixed use w/office

3. Revitalization Loan & Grant Fund a. Site improvement loans of up to $5 million

i. Payment deferral during site revitalization ii. Up to 75% of eligible costs up to 15 years, fixed rate TBD

b. Site improvement gap grants up to $1 millioni. Awarded based on demonstration of need ii. Must be coupled with site improvement loan

Phase II Assessment Fund

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Amount Up to a maximum $200,000

Eligible Applicants

Business, non-profit or local government where a potential end user has expressed clear interest in reuse of the project site.

Job Creation

Must demonstrate job creation or retention is highly likely if environmental risks can be understood. Priority given to projects in JobsOhio targeted industries.

Eligible Costs

Environmental testing, lab fees and work completed by certified professionals toward completion of an Ohio EPA Voluntary Action Program Phase II property assessment.

Asbestos & Lead Paint Abatement

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Amount Up to a maximum of $500,000

Eligible Applicants

Businesses, non-profits, or local governments where an end user has a formal agreement and has a business plan, financing, and schedule for redevelopment and job creation.

Job Creation

Should create or retain at least 20 jobs. Priority will be given to the following projects:1. In JobsOhio’s targeted industries2. Investment of additional capital capital beyond

redevelopment, or 3. Projects with higher than average wages

Eligible Costs

• Demolition• Disposal of universal waste• Abatement of asbestos• Site preparation • Lead based paint abatement only if coupled with asbestos

abatement

Site Revitalization Loans

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Amount Up to 75% of eligible project costs, Maximum $5M

Term Up to 15 years

Rate Fixed, negotiated

Collateral To be negotiated

Payment deferral

Principle & interest deferred during cleanup and/or site revitalization, repayment begins upon occupancy or after 5 years, whichever comes first

Possible principle reduction

Outstanding loan principle may be reduced annually or on a negotiated basis based on performance

Additional Project and Program DetailsProject TimingAgreements

ReimbursementsCompliance

Project Timing and Dates

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• Effective Date: the date in which the Agreement is effective; the application submitted date (or prior approved date); DSA State Programs this is the formal approval date (TCA, CB)

• Metric Evaluation Date: the date in which the Grantee/Borrower will attain all Metric Commitments; always December 31st

• Metric Expiration Date: the date in which the Grantee/Borrower will maintain all Metric Commitments (typically 2 calendar years after the Metric Evaluation Date; however, JobsOhio reserves the right to use discretion) – As it pertains to a Grantee the Metric Expiration Date depicts the closure of the

Agreement and Metric Commitment obligations– As it pertains to a Borrower the Metric Expiration Date depicts the end of Metric

Commitment obligations; however, repayment obligations are open until final loan repayment is made back to JobsOhio

• Loan Expiration Date: the date in which the Borrower is required to make final repayment of loan back to JobsOhio

Project Timing and Dates

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Application and Approval

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• Application– EPA and Taxation Clearances validation statement in application (as well as

agreement)– Relocation of Employees within Ohio– Program Beneficiaries

• Approval– DSA programs go to either TCA or CB– JO Independent Review Panel and/or JobsOhio Investment Committee, Board

• Agreement– Agreements will be emailed to the company point of contact indicated in the application – The company must execute agreement by electronic signature. Agreement must be

signed by the Company’s chief elected official, chief executive officer, or other authorized signatory to act on behalf of Grantee/Borrower.

– Failure to return agreements within a reasonable amount of time may result in cancellation of proposed assistance

– Agreements must be executed by both parties prior to disbursement of funds – Once Agreement is fully executed the company becomes Grantee/Borrower and

Program Funds will be encumbered

Reimbursement and Reporting

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• Reimbursement Details– Request for Reimbursement form– Eligible Costs between Effective Date and Metric Evaluation Date– Sufficient Documentation; (copies of checks, payroll records, electronic fund transfers,

receipts etc) – Up to 3 Request for Reimbursement– Request required to be minimum of $50,000 (except for final disbursement) – JobsOhio Growth Fund; take-out financing

• Annual Report Details– Annual Report from Effective Date through Metric Expiration Date– Report must be submitted no later than March 1st for previous (or partial) calendar year– JobsOhio will default to the DSA annual report if applicable

Compliance

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• Compliance Determination– Metric Commitments (attain/maintain)

• Total jobs (jobs created plus jobs retained)• Total payroll (created payroll plus retained payroll)• Total Capital Investment

– Submits annual report by deadline of March 1st

– Maintains significant operations at project site – Failure to follow agreement representations and warranties at any time during the

agreement– Timely repayment of JobsOhio Growth Loan Fund; if at any point during the term of the

JobsOhio Growth Fund Loan the Borrower is late with repayment Borrower will be determined to be in default

• Compliance Details – Compliance Considerations – Remedial Action

What is Different ?

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• Sustainable Funding• Flexibility• SalesForce.com • Deal Team• Application Process Streamlined • Performance Date Consistency• Approvals• Disbursements • Process Overhaul• Break Even Philosophy

Discussion

41 S. High Street, Ste. 1500 | Columbus, OH 43215(614) 224-6446 | jobs-ohio.com

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JobsOhio Programs Western Ohio December 17, 2013

Documents

Transcript of JobsOhio Programs Western Ohio December 17, 2013