Georgia Department of Community Affairs

CDBG Economic Development

Annual Competition and Set-Aside Programs

CDBG, EIP, RDF and Capitalized RLF

Brock Smith, Manager OED

Gabe Morris, EIP Program Manger

Staci Tillman, EIP Program Manager

Rusty Haygood, Director Field Services

December 4, 2014

Core Values of DCA:

Respect for bottom-up, locally driven solutions

Help in bringing the appropriate resources to the table

Creativity and flexibility

Responsiveness

Effectiveness and Efficiency

Team-Player attitude

There’s no wrong door!

Core Values of DCA:

DCA focuses on bottom-up solutions

As many approaches to community development as there are communities

Local problems – Local solutions

Community Finance Division

Composed of 4 units: Office of Community Development Office of Economic Development Office of Field Services OneGeorgia Authority

Most of DCA’s financial assistance programs are in CDFD

The OED Finance Team

Field Staff • Project identification,

assessment & development • Monitoring

Credit Staff

• Credit analysis, underwriting

• Financing options

Program Managers

• Review overall project

• Ensure program objectives can be met

• Craft award documents

• Project oversight

Forms of CDFD Resource Delivery

Annual CDBG Competition &

ITD

• Merit-Based• Transparent

• Local Governments

Threshold Based

“Competition”

• Employment Incentive Program

• OneGeorgia Equity

• DD RLF, Redevelopment,

etc, etc.• Local

Governments Authorities,

Non-Profits, For-profits

Prospect Driven Incentive

Grant/Loan

• REBA• OneGeorgia EDGE• Life Sciences Loan• Authorities, For-

Profits, Local Governments

Brock SmithManager, Office of

Economic Development

Organizational Processes

Monitor & Audit

Manage Projects

Award / Denial

Final Structure of Assistance

Review & Underwrite Application

Application Development & Submission

Initial Project Assessments (DCA) and Pre-Apps (OGA)

Market Successful Concepts

Local Community & Economic

Development Needs

Potential Project

What exactly is this IPA or Pre-app?

Initial Project Assessment (DCA)

Pre-Application (OneGeorgia)

• The Who, What, Why, When and Where of a Project• Determines and Preserves Eligibility of activities and costs• Enables Pre-Agreement Cost Approval (PACA) which is especially important for federal funds• Ensures all available funding sources are considered• Provides an idea how competitive your project might be

Process - What happens after I submit an IPA or Pre-App?

Completeness Letter

Application Development and

submission

PACAProvides guidance

for application development

Initial Project Assessment (DCA)/

Pre-Application (OGA)

• Completeness letters help identify shortcomings in the application

• Applications often miss something

• Since most DCA ED and OGA funding is “threshold-based”, allows for Technical

Assistance to get applications to funding range.

In other words, this is how it works:

Community contacts DCA Field Representative about a potential project. In some cases, various funding sources may be considered for funding on a large-scale project.

Ideally, DCA conducts an Initial Project Assessment or Pre-Application visit to assist a potential applicant in understanding process & programs.

DCA reviews IPA Pre-App and recommends eligible financing strategy in written response.

Community prepares and submits application for DCA and/or OGA review. If the application is incomplete, the applicant is notified in writing of items needed to allow for a competitive application.

How it works, continued:

Application reviewed based on rating and selection criteria.

Award or denial of application.

Grant/loan management processes start – technical assistance provided through site visits.

Monitors project at intervals to ensure compliance with Award.

Partnerships and Collaboration

Win - Win for everyone.

Everyone has expertise to bring to the table.

Also gets buy-in from various groups.

Not all partnerships are financial, but draw on expertise in areas such as scientific vetting from scholars in the University System or Georgia Technology Authority.

ANNUAL COMPETITION

and/or

EIP GRANT

PUBLIC INFRASTRUCTURE

Gabe MorrisOffice of

Economic Development

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.”

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;▪ Immediate Threat & Danger.

Four Routes to ED with CDBG

1. Annual Competition CDBG-ED application

2. Employment Incentive Program

3. Redevelopment Fund Program

4. Local Revolving Loan Fund (generated by CDBG-ED, EIP or RDF loans)

Differences of Economic Development Programs

Annual Competition (CDBG-ED)

One annual submission

Compete against rating and review process and other applications

Complete Application without exceptions

Processing time – 5 months

Set-Asides (EIP/RDF)

Anytime submission

Compete against rating and review process

Complete application with second change

Processing time – 45 days once complete application

Available Funding

Annual Competition

$36.2 million CDBG allocation

EIP $8 million set-aside

RDF $1.5 million set-aside

Immediate Threat

$500,000 set-aside

CDBG Funds from U.S. Housing and Urban

Development (HUD)

Features of Economic Development Programs

Maximum Grant $500,000

Primary Purpose Expand employment opportunities for L/M income people

Low/Moderate Income Benefit

At least 51% of jobs created and/or retained

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

Economic Development Grants

Rating and Selection Criteria:

Demographics

Feasibility

Impact

Strategy

Ineligible CDBG-ED/EIP/RDF Activities

Working Capital Refinancing Speculative Projects Capacity Building General Conduct of Government Project Not Meeting Federal Guidelines Using Federal Funds to relocate businesses (Piracy -

There are Restrictions)

CDBG ED Grants - Eligible Activities

Public Infrastructure

Acquisition, construction and rehabilitation of:

- Water: lines, tanks, wells, treatment plants;

- Sewer: gravity lines, force mains, pump stations, treatment plants, land application “spray fields;”

- Roads: access, turn lanes, accel/decel lanes, paving;

- Stormwater drainage: ditches, pipes, culverts, ponds;

CDBG ED Grants - Eligible Activities (continued)

- Rail spurs: switches (excluding mainline switch), track, track base, derails, stops; and

- Other: wastewater pretreatment plant.

Public Facilities- Workforce development centers.

EIP Infrastructure Grants

Infrastructure Fund Capacity Analysis (IFCA) Examine financial capacity of local government Calculate operating and coverage ratios

Revolving Loan Fund Capacity

CDBG ED Grants

Areas of Concern:

EIP Application Supplements

Preliminary Engineering Report or Preliminary Architectural Report;

Project Cost Estimate; Source-and-Use Statement; Commitment Letter(s) – all public and private sources of

project funding; Letter of Credit or Surety Bond; and Economic Development and EIP Supplemental Information

CDBG ED Grants

Areas of Concern: DCA-2: Proposed Accomplishments (Funds Leveraged)

DCA-4: Description of Needs to be Addressed:

Needs for improvement of existing conditions

DCA-5: Description of Activities:

Specific project activities with codes and timetable to

meet program relative needs addressed in DCA-4

DCA-8: Budget Analysis:

CDBG funded construction, engineer and grant

administration by ED activity codes and other public /

private funding

Economic Development & Construction Agreement (ED&C)

Walton County – General Mill’s Southeast Distribution Facility

Recipient – Walton CountySub-Recipient – General Mill’s southeast distribution facility

Grant Amount - $500,000Project – public rail spurPrivate Investment - $42 Million

Jobs – Create 112, 100% L/M

Source and Use – Walton County

Source Amount Use Amount

EIP $ 500,000 Rail spur construction $ 500,000

OGA EDGE $ 500,000 M&E $ 500,000

GDOT $ 315,000 Roadway construction $ 315,000

EDA $ 1,619,000 Water & sewer construction $ 1,619,000

County $ 556,000 Rail construct, Eng, Admin $ 556,000

County $ 410,772 Road construct, Eng, Acq $ 410,772

DAWC $ 28,500 Legal, grant writing, admin $ 28,500

City $ 779,404 W&S, eng, apps prep $ 779,404

Gen Mills $42,009,470 Land, building, M&E, F&F $ 42,009,470

Total $ 46,718,096 Total $ 46,718,096

Special Conditions – Inherent to Rail Spur Projects

Special Condition #1: Bid documents, Bid specifications, signed contract and Bid Bonds.

Documentation certifying Rail Company has approved the final plans for the design for the rail spur.

“Intergovernmental Agreement” between local government and Development Authority.

“Siding” / “Side Track Agreement” – Title varies according to Railroad Company.

“Industrial Track Agreement” - Title varies according to Railroad Company.

Walton County Success! - General Mills’ Southeast Distribution Facility EIP Rail Spur

STACI TILLMANOffice of

Economic Development

EIP GRANT – LOAN TO

PRIVATE FOR-PROFIT

BUSINESS

EIP Loans – Eligible Activities

Fixed-Assets The Direct Loan EIP program is designed to assist small to medium-sized businesses by lending against fixed-assets.

Eligible Activities include: Acquisition of machinery and equipment, including delivery and installation,

limited to items directly related to the operation of the business. Acquisition of commercial or industrial land. Improvements to real property including construction, rehabilitation, or

installation of commercial or industrial buildings or structures. Loan proceeds may not be used for: refinancing existing debts; working capital;

real estate speculation; capacity building; general conduct of business; business relocations; or distribution or payment to the owners, partners, shareholders, or beneficiaries of the applicant or members of their families.

Projects that do not need funding will not receive EIP Direct Loan consideration. EIP Loan repayments must establish or capitalize a local Revolving Loan Fund

(RLF) to be used in other eligible projects.

Loan Structure & Disbursement

Loan StructureDCA 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

Loan DisbursementAll funds for the project will be governed by a

disbursement agreement included in the EIP loan agreement among all participating lenders and the Borrower.

The Borrower’s other public and/or private financing will be disbursed on a pro-rata basis with the EIP loan proceeds.

City of Homerville – Okefenokee Berry Center

•Recipient – City of Homerville

•Sub-Recipient – Okefenokee Berry Center

•Grant Amount - $500,000

•Project – 3.5 acres of land and 36,000 sq. ft. building acquisition

•Private Investment - $712,717

•Jobs – create 149, 100% L/M

Source and Use – City of Homerville

December 11-12, 2013

Source Amount Use Amount

EIP $ 500,000 Land/Building Acquisition $ 470,000

Grant Administration $ 30,000

F and M Bank $ 2,210,574 Land/Building Acquisition $1,210,574

Working Capital $1,000,000

Owner’s Equity $ 430,147 Building Acquisition $ 211,175

Equipment $ 197,972

Grant Administration $ 21,000

OneGeorgia Equity $ 350,000 Equipment $ 350,000

Clinch County RLF $ 110,000 Grant Consulting $ 110,000

City of Homerville RLF

$ 220,000 City Audit $ 220,000

Total $3,820,721 Total $3,820,721

City of Homerville Success – Okefenokee Berry Center

REDEVELOPMENT FUND

REDEVELOPMENT FUND

CategoriesEligible activities must meet one of the following criteria: Prevent or eliminate slums and blight on an “area

basis”; Prevent or eliminate slums and blight on an “spot

basis”; or Be in an urban renewal area.

REDEVELOPMENT FUND

Eligible Activities: Projects must alleviate a “slum or blighted” condition

Public infrastructure, public facilities Loans to acquire and alleviate blighted buildings/facilities

Loan/lease payments may be capitalized into a local RLF

Any new jobs must be available to low- and moderate-income persons

Samples of RDF Eligible Activities

Acquisition and clearance of blighted property;

Renovation and reuse of abandoned historical buildings;

Commercial revitalization through façade improvements;

Removal of environmental contaminants on property to enable it to be redeveloped for a specific use.

John VanBruntField Representative

Office ofEconomic Development

City of Braselton

Recipient : City of Braselton Grant Amount : $500,000

City of Braselton

City of Braselton

City of Braselton[Before]

City of Braselton: Source and Use

Source Amount Use Amount

RDF $500,000 Renovations $425,000

Architectural Services $ 50,000

Grant admin. $25,000

City of Braselton $985,000 Building (donated) $835,000

Renovations $137,000

Architectural Services $13,000

Companies $322,000 Value of business (existing) $322,000

TOTAL $1,807,000 TOTAL $1,807,000

City of Braselton: Progress

City of Braselton

Triumph

Funding Opportunities for Downtown Projects

Downtown Development

Revolving Loan Fund

Georgia Cities Foundation

CDBG Redevelopment Fund

Eligible Applicants

• Cities < 100,000 population

• Counties < 100,000 population

• CitiesNo population limit

• Cities• Counties

• Cities• Counties

Program Focus Assist communities with revitalizing downtowns by providing funding for quality

downtown projects

Projects that primarily benefit low/moderate

income persons

‘Elimination of slum and blight’

Funding Limit $250,000/project $250,000/project $500,000/project $500,000/project

LOCAL REVOLVING LOAN FUND (RLF)

Local Revolving Loan Funds

EIP/RDF loan repayments capitalize local RLF loan. The repayments (including interest), and bank account interest retain federal identity. This is considered program income.

RLFs may be used for local CDBG eligible economic development needs.

Opportunities available to partner with local banks to finance eligible activities (same as EIP) that create employment for L/M persons.

50/40/10 Rule: Project funded with 50% RLF, 40% local bank, and 10% private funding.

Local Revolving Loan Funds

An estimated 70 active RLF’s throughout Georgia, with: $32 million in RLF assets $13 million in cash $19 million in loan receivables

$5+ million cash returned to DCA over past 6+ years for non-compliance.

Encourage Local RLF’s to use RLF funds as a funding gap for large projects – may request DCA waiver, if necessary.

Rusty HaygoodDirector, Office of

Field Services

ED Representative Contacts:

Rusty Haygood – Field Services Office Manager & Northeast Georgia

(404) 977-1429 rusty.haygood@dca.ga.gov

Jennifer Fordham – Southeast Georgia(912) 865-4212 jennifer.fordham@dca.ga.gov

Kelly Lane – South Georgia (229) 896-4259 kelly.lane@dca.ga.gov

Tonya Mole – Southwest Georgia(404) 852-6876 tonya.mole@dca.ga.gov

Patrick Vickers – Northwest Georgia(404) 679-3151 patrick.vickers@dca.ga.gov

John VanBrunt – ????(706) 825-1356 john.vanbrunt@dca.ga.gov

Program Manager Contacts:

Brock Smith – Manager, Office of Economic Development

(404) 679-1744 brock.smith@dca.ga.gov

Staci Tillman – EIP Loan and RDF(404) 679-0668 staci.tillman@dca.ga.gov

Gabe Morris – EIP Infrastructure(404) 679-3174 gabriel.morris@dca.ga.gov

Rusty Haygood – Director, Office of Field Services(404) 977-1429 rusty.haygood@dca.ga.gov