Georgia Department of Community Affairs CDBG Economic Development

1
Georgia Department of Community AffairsCDBG
Economic Development

• Annual Competition and Set-Aside Programs
• EIP and RDF and Capitalized RLF

2

• GENERAL OVERVIEW

3
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.

4
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

5
Available Funding

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

6
Features of Economic Development Programs
7
Who Can Apply?

Eligible Non-Entitlement Cities Counties
Ineligible Entitlement (Metro/Urban) Cities
Counties
8
Ineligible CDBG/EIP/RDF Activities

• Working Capital
• Refinancing
• Speculative Projects
• General Conduct of Government
• Project Not Meeting Federal Guidelines

9

• GETTING STARTED

10
Getting Started EIP RDF

• Have an Idea? Call DCA early!
• Initial Project Assessment ED representative
  will visit.
• PACA pre-agreement cost approval does not
  guarantee funding.
• Application Reviewed by panel.

11
The CDFD Finance Team

• Field Staff
• Project identification, assessment and
  development
• Compliance monitoring

Program Manager Review overall project Ensure
program objectives can be met Craft award
documents Project oversight
Credit Unit Credit analysis, underwriting Financin
g options
12
OED Project Development
Potential Project
Application Development Submission
Initial Project Assessment
Review Underwrite Application
Market Successful Concepts
AwardFinal Structure of Deal
Monitor Audit
Manage Projects
Denial
13
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

14
Four Routes to ED with CDBG

• Annual Competition ED application
• Employment Incentive Program
• Redevelopment Fund Program
• Local Revolving Loan Fund (generated by EIP/RDF
  loans)

15

• SPECIFIC PROGRAMS

16

• EIP GRANT - PUBLIC
• INFRASTRUCTURE

17
EIP Infrastructure Grants

• 7,000,000 annual CDBG set-aside
• 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

18
EIP Infrastructure Grants

• Key Factors to Remember
• EIP Application Supplements
• PER or ADR
• Commitment Letter(s)
• Letter of Credit or Surety Bond
• Source-and-Use Statement
• Rating and Selection Criteria
• Demographics, Feasibility, Impact Strategy
• Infrastructure Capacity Analysis (IFCA)
• Economic Development Construction Agreement

19
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

20
Source and Use - Bibb County
21

• EIP GRANT LOAN TO PRIVATE FOR-PROFIT BUSINESS

22
EIP Loans

• 7,000,000 annual CDBG set-aside
• 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

23
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

24
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

25
Source and Use Atkinson County
26

• REDEVELOPMENT FUND

27
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

28
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

29
Source and Use City of Rebecca
30
City of Rebecca - Crankys
31

• LOCAL REVOLVING LOAN FUND (RLF)

32
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

33
Local Revolving Loan Funds

• Administered by local government with DCAs
  oversight and guidance (as needed)
• Currently 61 RLFs 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

34
Sample RLF Projects

• Retail
• Daycare
• Manufacturing
• Telecommunications
• Workforce Development Centers
• Public Infrastructure

35

• THINGS TO
• REMEMBER

36
Things to Remember

• Describe your project and jobs created/retained
• Document need, costs and support of banks
  businesses
• Debt credit underwriting and terms

37
Program Manager Contacts

• Andy Yarn - EIP Infrastructure Public
  Facilities
• [phone] ayarn_at_dca.state.ga.us
• Jonathan Corso - EIP Loans
• [phone] jcorso_at_dca.state.ga.us
• Joanie Perry - RDF Program
• [phone] jperry_at_dca.state.ga.us
• Michael Casper Local RLF Coordinator
• [phone] mcasper_at_dca.state.ga.us

38
ED Representative Contacts

• Jennifer Fordham Southeast Georgia
• [phone] jfordham_at_dca.state.ga.us
• David Shellhorse Northeast Georgia
• [phone] dshellho_at_dca.state.ga.us
• Ron Thompson Southwest Georgia
• [phone] rthompso_at_dca.state.ga.us
• Glenn Misner Field Services Office Manager
  (NWGA)
• [phone] gmisner_at_dca.state.ga.us