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CDBG Economic Development

CDBG Economic Development . Annual Competition and Set-Aside Programs (EIP and RDF). Three Routes to ED with CDBG. Annual Competition ED application Employment Incentive Program Redevelopment Fund Program. Features of ED Programs. Available Funding.

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CDBG Economic Development

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  1. CDBG Economic Development Annual Competition and Set-Aside Programs (EIP and RDF)

  2. Three Routes to ED with CDBG • Annual Competition ED application • Employment Incentive Program • Redevelopment Fund Program

  3. Features of ED Programs

  4. Available Funding Community Development Block Grant (CDBG) Funds from U.S. Housing and Urban Development (HUD)

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

  6. Who Can Apply? Eligible: Non-Entitlement Cities & Counties Ineligible: Entitlement (Metro/Urban) Cities & Counties

  7. 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.

  8. Application Process • Application Forms (DCA 1- DCA 13) • Supplemental Information & Documentation • Public Infrastructure or Loan attachments Refer to: EIP or RDF Application Manual and CDBG Applicants & Recipients Manuals

  9. Canton-UAC

  10. Canton-UAC Source Amount Use Amount EIP Grant $ 500,000 Rail spur const. $ 500,000 EDA $ 928,870 Rail spur const. $ 821,750 (City/DACC/UAC) Water and sewer ext. $ 31,000 Contingencies $ 76,120 DACC $ 226,803 Rail spur construction $ 120,213 Contingencies $ 57,090 ROW acquisition $ 49,500 DACC/City $ 71,600 Pre-eng. assessment $ 10,275 Engineering fees $ 59,500 NEPA environ. $ 1,825 City $ 31,000 Water and sewer ext. $ 31,000 UAC $ 99,467+ Rail spur construction $ 80,437 Contingencies $ 19,030 Bldg exp, M&E $ NA Total $ 1,857,740 + Total $ 1,857,740 +

  11. Canton-UAC

  12. Loan Structures • DCA Grant to a Local Government: • Direct loan to a private business. • Loan to a development authority who then makes a direct loan to a private business.

  13. Quality Industries, LLC

  14. Quality Industries, LLC

  15. Quality Industries, LLC • Direct loan from Hart County to Quality • $283,176 loan for M&E • Saved 23 jobs • Created 7 new jobs • $2 million in private investment

  16. Source and Use Source Amount Use Amount EIP $ 295,176 Machinery & Equipment $ 283,176 Administration $ 12,000 Pinnacle/SBA $1,540,000 Land and Building $1,440,000 Working Capital $ 100,000 Quality equity $ 345,000 Land and Building $ 160,000 Machinery & Equipment $ 138,504 Working Capital $ 46,496 Total $2,180,176 $2,180,176

  17. Loan Activities YES • Land • Buildings • Rehabilitation • Machinery & Equipment NO • Working Capital • Refinancing • Speculative Projects • General Conduct of Government • Project Not Meeting Federal Guidelines

  18. Credit Worthiness • The State takes “informed risk” • Funding the Grey Area • Look for positives • Make the project work • Work with Program Manager

  19. Five C’s of Credit Capacity Capital Character Collateral Conditions

  20. Revolving Loan Funds • It’s (mostly) Your Money • Loan payments capitalize local RLF • RLFs can be used for local economic development needs • Must be CDBG eligible

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

  22. Redevelopment Fund City of Washington – Fitzpatrick Hotel

  23. RDF – Fitzpatrick Hotel • Vacant and Dilapidated (the tree!) • Rear wall, roof and second floor required emergency stabilization • Extensive repairs required • Declared a ‘blight’

  24. RDF – Fitzpatrick Hotel • Rehabilitate the hotel to historic preservation standards • Place back in commercial use • Full service hotel with 16 rooms and suites • 3 commercial storefronts on first floor • Restaurant • Conference facilities

  25. RDF – Fitzpatrick Hotel RDF Provided: • ‘Gap’ financing • Subordinate to primary lender • Favorable terms • .875% rate • 20-year term • Repayment deferred until construction complete and certificate of occupancy issued

  26. Source and Use Source Amount Use Amount RFP Grant $250,000 Building Rehabilitation $250,000 SunTrust $976,000 Building Rehabilitation $751,817 Furniture & Fixtures $119,585 Interest $ 90,000 Architect & Engineering $ 14,598 Fitzpatrick $205,666 Building Acquisition $130,000 Operating Capital $ 39,620 Opening Supplies $ 28,246 Insurance & Taxes$ 7,800 Total $1,431,666 $1,431,666

  27. Things to Remember • Describe your project and jobs created/retained • Document need, costs and support of banks & businesses • Debt – credit underwriting and terms

  28. Contact: Andy Yarn EIP Infrastructure & Public Facilities (404) 679-1589 Jonathan Corso EIP Loans (404) 327-7909 Stefanie Dye RDF Program (404) 679-1738

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