Georgia Department of Community Affairs CDBG Economic Development by wyf14327

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									Georgia Department of Community Affairs
     CDBG Economic Development




   Annual Competition and Set-Aside Programs
        EIP and RDF and Capitalized RLF
GENERAL OVERVIEW
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.”

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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



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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




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Features of Economic Development
Programs
 Maximum Grant     $500,000

 Primary Purpose   Expand employment opportunities
                   for L/M income people

 Low/Moderate      51% of jobs created and/or retained
 Income Benefit

 Eligible Uses     Public facilities, infrastructure,
                   business loans, elimination of Slum
                   and Blight (RDF)

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Who Can Apply?

 Eligible:                    Ineligible:


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

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



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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.




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The CDFD Finance Team
      Field Staff
      Project identification,
      assessment and
      development
      Compliance monitoring
                                  Program Manager
       Credit Unit                Review overall project
       Credit analysis,           Ensure program
       underwriting               objectives can be met
       Financing options          Craft award documents
                                  Project oversight
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OED –Project Development

 Potential Project                                          Application
                                Initial Project
                                 Assessment                Development
                                                           & Submission


                                                            Review &
    Market                                                  Underwrite
   Successful                                               Application
   Concepts

                                             Award
   Monitor &         Manage              Final Structure           Denial
    Audit            Projects               of Deal
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



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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)


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SPECIFIC PROGRAMS
EIP GRANT - PUBLIC
 INFRASTRUCTURE
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

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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

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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




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Source and Use - Bibb County
   Source         Amount                   Use                  Amount

EIP           $     500,000    Water & Sewer                  $    475,000
                               Grant Administration           $     25,000
OGA EDGE      $    1,500,000   Site Preparation               $ 1,500,000
Georgia DOT   $    1,635,920   Road Construction              $ 1,635,920
Bibb County   $    6,000,000   Road & Sewer                   $ 1,926,380
                               Land Acquisition & Site Prep   $ 3,905,420
                               Professional Services          $    168,200
MBCIA         $     499,450    Water & Road                   $    356,068
                               Professional Services          $    143,382
Private       $ 43,029,500     Building Construction          $ 25,000,000
                               Equipment Lease                $ 18,000,000
                               Natural Gas                    $     27,500
                               Professional Services          $      2,000
Total         $53,164,870                                     $53,164,870

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EIP GRANT – LOAN TO
PRIVATE FOR-PROFIT
     BUSINESS
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

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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




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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




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Source and Use – Atkinson County

      Source     Amount                  Use              Amount

EIP              $   500,000   Building Acquisition   $    470,000
                               Grant Administration   $     30,000
SEGa Financial   $ 100,000     Building Acquisition   $    100,000
Private          $ 1,291,642   Building Acquisition   $    335,006
                               M&E                    $    169,427
                               FF&E                   $      6,834
                               Inventory              $    175,375
                               Working Capital        $    605,000
Total            $1,891,642 Total                     $1,891,642




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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




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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



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Source and Use – City of Rebecca
    Source        Amount             Use       Amount

Redevelopment    $ 210,000   Construction     $ 171,000
                             Clearance        $ 29,000
                             Administration   $ 10,000
Bank Financing   $ 127,000   Construction     $ 62,000
                             FF&E             $ 65,000
Private          $ 83,000    Acquisition      $ 10,000
                             FF&E             $ 73,000
Total            $420,000    Total            $420,000




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City of Rebecca - Cranky’s




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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



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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
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Sample RLF Projects
•   Retail
•   Daycare
•   Manufacturing
•   Telecommunications
•   Workforce Development Centers
•   Public Infrastructure



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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




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Program Manager Contacts:
Andy Yarn - EIP Infrastructure & Public Facilities
     (404) 679-1589 ayarn@dca.state.ga.us
Jonathan Corso - EIP Loans
     (404) 327-7909    jcorso@dca.state.ga.us
Joanie Perry - RDF Program
     (404) 679-3173 jperry@dca.state.ga.us
Michael Casper – Local RLF Coordinator
     (404) 679-0594 mcasper@dca.state.ga.us
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ED Representative Contacts:
Jennifer Fordham – Southeast Georgia
     (912) 865-4212 jfordham@dca.state.ga.us
David Shellhorse – Northeast Georgia
     (706) 955-7505 dshellho@dca.state.ga.us
Ron Thompson – Southwest Georgia
     (478) 934-3845 rthompso@dca.state.ga.us
Glenn Misner – Field Services Office Manager (NWGA)
     (404) 679-3138 gmisner@dca.state.ga.us

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