Presentation on theme: "CDAP Economic Development"— Presentation transcript:
1CDAP Economic Development Grant Administration WorkshopCDAP Economic DevelopmentIntroductionDave GobenDepartment of Commerce & Economic Opportunity
2National Goals / Objectives Assist in building the financial and operational capacity of communities to carry out local economic developmentLocational ArgumentFinancial Gap ArgumentNational Goals / Objectives
3Low and Moderate-Income Persons "Low and Moderate-Income Persons" shall mean those individuals in a family whose income is less than 80% of the median income of the area.Low and Moderate-Income Persons
4CDAP Economic Development $5.0 million allocationMaximum Grant amount $750,000RF’S MUST REPORT TWICE A YEAR
5CDBG-Community Development Block Grant How the REVOLVING FUND was established.CDBG-Community Development Block GrantHUD-US Dept. of Housing & Urban Development DCEO-Dept. of Commerce & Economic Opportunity
6Purpose Economic Development Financial projects Job creation with 51% LMIJob retention with 51% LMILoan AgreementPublic Infrastructure in Support of BusinessParticipation AgreementPurpose
7PurposeThe primary objective of program is to enable grantees to carry out local economic development activities in a way that will expand economic opportunity, principally for low and moderate-income persons. Each project shall result in private sector job creation or retention. At least 51% of such jobs shall be filled or retained by persons of low and moderate-income.Primary Objective
8Eligible Borrowers Private for-profit Not-for-profit entities Sub recipients must directly create or retain jobs; indirect jobs (employed by other than the borrower) are not sufficient to meet program guidelines.Eligible Borrowers
9Eligible Grant Recipients Only units of general local government (i.e. cities, villages, townships and counties) as defined by the Illinois State Constitution may apply for funding. Municipalities must be 50,000 or less in population and must not be located in an urban county that receives “entitlement” funds.private for-profit or not-for-profit entities.Ineligible Borrowers
10Federal Regulations/Title 1 Job Creation/Retention with 51% LMI BenefitEnvironmental ReviewRequired prior to loan closingDavis-BaconRequired for construction work using Program fundsUniform ActRequired when real property is acquired or persons displacedFederal Regulations/Title 1
11Policy Guidelines Finance no more than 50% of project Not to exceed $15,000 for every FTE created/retainedNo speculative financing51% LMI benefitEconomic Development grant request may be reduced by balance of RFDepartment Retail PolicyE/D – PAY DOWN RF…. CANNOT BE COUNTED AS LEVERAGE …. YOU CAN USE IN PROJECT BUT, AGAIN NOT AS LEVERAGE.
12Eligible Use of Funds Site development/infrastructure extension Construct new facility/additionRenovation of existing facilityLeasehold improvementsPurchase of machinery or equipmentWorking CapitalEligible Use of Funds
13Ineligible Use of Funds General government expensesForgivable financial assistance projectsCosts of operating and maintaining public facilities and servicesServicing or refinancing of delinquent or defaulted existing debt.Ineligible Use of Funds
14Ineligible Use of Funds Relocation of business from one area of the state to anotherExceeding HUD’s threshold of pirating jobsViolation of HUD’s underwriting provisionsIneligible Use of Funds
15COLLATERAL Security COLLATERAL COLLATERAL This wouldn’t apply to investments, royalty agreements, etc., as equity risks offer greater returns-without security-then loans.
16SecurityAll financial assistance projects to businesses shall be securedFinancial assistance agreement, mortgage, security agreement, promissory note, UCC, financing statement or other assignment of rights of the assets of assisted firms.DCEO will underwrite each project.This wouldn’t apply to investments, royalty agreements, etc., as equity risks offer greater returns-without security-then loans.
17Employee Income Certification Forms Use current Section 8 HUD income guidelinesJobs and investment created by 24th monthCertification Forms
18-WARNING-Failure to comply with State or Federal Regulations could result in:Pending, future grant requests will not be considered;Payment requests for active grants suspended;recovery procedures by DCEO.-WARNING-
19Revolving Fund Program DCEO WebsiteDefault.aspxDCEO Website
20Contact InformationDave Goben, Economic Develoment ManagerDepartment of Commerce & Economic Opportunity500 E. Monroe St, R-2Springfield, IL(217)Contact Information
21Questions??? Comments!!! Concerns~~~ Thank you and good luck!