Economic Development Success Stories

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Economic Development Success Stories
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• EIP GRANT
• PUBLIC INFRASTRUCTURE

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Upson County Innoware Plastics, Inc.

• Recipient Upson County
• Sub-Recipient Innoware Plastics, Inc.
• Grant Amount - 375,000
• Project rail spur
• Private Investment - 7.1 Million
• Jobs 30 jobs

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Source and Use Upson County
Source Amount Use Amount
EIP 375,000 Rail Spur Construction 352,500
Grant Administration 22,500
OGA Equity 500,000 Site Preparation 200,100
Land Acquisition 194,112
Rail Spur Construction 105,788
TUCIDA 500,000 Rail, Road, Eng, Land Acq, Admin 500,000
NSV 80,000 Rail Switch/Turnout 80,000
Innoware 7,081,400 Building Upgrades, ME 6,600,000
Rail, site Prep, Eng, Admin, Env 481,400
Total 8,536,400 Total 8,536,400
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Upson County
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• EIP GRANT LOAN TO PRIVATE FOR-PROFIT BUSINESS

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City of Harlem Lucky Lady Pecans, Gifts
More, Inc.

• Recipient City of Harlem
• Sub-Recipient Lucky Lady Pecans, Gifts and
  More, Inc.
• Grant Amount - 157,058
• Project Machinery Equipment
• Private Investment - 253,504
• Jobs 20

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Source and Use City of Harlem
Source Amount Use Amount
EIP 157,058 Equipment 147,658
Grant Administration 9,400
Private 253,504 Equipment 253,504
City 1,000 Audit 1,000
Total 411,562 Total 411,562
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Making it work

• Underwriting public financing requires
• Flexibility
• Keeping an eye open for potential
• Remembering the public purpose
• Looking at the whole project
• Not a rigorous quantitative scoring method!

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CREDIT INDICATORS

• Sales Trends
• Profitability
• Management
• Cash Flow Trends
• Working Capital Adequacy
• Capitalization
• Industry Conditions
• Years in Business

• Business Plan
• DB Rating
• Equity Injection into project
• Bank Participation in project
• Cash reserves/lines of credit
• Personal credit of principals

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Business Plan

• Description of Business
• Form, type, product/service
• Marketing Plan
• Customers, market analysis and trends,
  competition
• Management Plan
• Background, experience of principals, personnel
  needs, employee benefits
• Financial Plan
• Budget, working capital adequacy, break-even
  analysis, historical and projected financial
  statements

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So where do you draw the line?
SOLVENCY
GREY AREA
Solid Credit
PROFITABILITY
High Risk
GREY AREA
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Positive Attributes of a Successful Project
?Strong Management ? Access to Capital ?
Marketplace Opportunities ? Targeted Industry ?
Strong Commitment by Local Leadership
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• REDEVELOPMENT FUND

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City of Donalsonville

• Recipient City of Donalsonville
• Grant Amount - 150,918
• Project Demolition and Clearance of the vacant
  dilapidated building in historic downtown.
• Private Investment - 23,000
• City - 113,281

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Source and Use City of Donalsonville
Source Amount Use Amount
RDF 150,918 Demolition 129,000
Engineering 12,867
Grant Administration 9,051
Holley Estate 23,000 Donated Land/Bldg. 23,000
City 113,281 Parking Lot construction 89,075
Engineering 8,941
Contingencies 15,265
TOTAL 343,591 TOTAL 343,591
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City of Donalsonville