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CDAP Economic Development

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Presentation on theme: "CDAP Economic Development"— Presentation transcript:

1 CDAP Economic Development
Grant Administration Workshop CDAP Economic Development Introduction Dave Goben Department of Commerce & Economic Opportunity

2 National Goals / Objectives
Assist in building the financial and operational capacity of communities to carry out local economic development Locational Argument Financial Gap Argument National Goals / Objectives

3 Low 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

4 CDAP Economic Development
$5.0 million allocation Maximum Grant amount $750,000 RF’S MUST REPORT TWICE A YEAR

5 CDBG-Community Development Block Grant
How the REVOLVING FUND was established. CDBG-Community Development Block Grant HUD-US Dept. of Housing & Urban Development DCEO-Dept. of Commerce & Economic Opportunity

6 Purpose Economic Development Financial projects
Job creation with 51% LMI Job retention with 51% LMI Loan Agreement Public Infrastructure in Support of Business Participation Agreement Purpose

7 Purpose The 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

8 Eligible 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

9 Eligible 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

10 Federal Regulations/Title 1
Job Creation/Retention with 51% LMI Benefit Environmental Review Required prior to loan closing Davis-Bacon Required for construction work using Program funds Uniform Act Required when real property is acquired or persons displaced Federal Regulations/Title 1

11 Policy Guidelines Finance no more than 50% of project
Not to exceed $15,000 for every FTE created/retained No speculative financing 51% LMI benefit Economic Development grant request may be reduced by balance of RF Department Retail Policy E/D – PAY DOWN RF…. CANNOT BE COUNTED AS LEVERAGE …. YOU CAN USE IN PROJECT BUT, AGAIN NOT AS LEVERAGE.

12 Eligible Use of Funds Site development/infrastructure extension
Construct new facility/addition Renovation of existing facility Leasehold improvements Purchase of machinery or equipment Working Capital Eligible Use of Funds

13 Ineligible Use of Funds
General government expenses Forgivable financial assistance projects Costs of operating and maintaining public facilities and services Servicing or refinancing of delinquent or defaulted existing debt. Ineligible Use of Funds

14 Ineligible Use of Funds
Relocation of business from one area of the state to another Exceeding HUD’s threshold of pirating jobs Violation of HUD’s underwriting provisions Ineligible Use of Funds

This wouldn’t apply to investments, royalty agreements, etc., as equity risks offer greater returns-without security-then loans.

16 Security All financial assistance projects to businesses shall be secured Financial 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.

17 Employee Income Certification Forms
Use current Section 8 HUD income guidelines Jobs and investment created by 24th month Certification 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-

19 Revolving Fund Program
DCEO Website Default.aspx DCEO Website

20 Contact Information Dave Goben, Economic Develoment Manager Department of Commerce & Economic Opportunity 500 E. Monroe St, R-2 Springfield, IL (217) Contact Information

21 Questions??? Comments!!! Concerns~~~ Thank you and good luck!

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