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: There’s no wrong door! 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 Program Managers Project identification, assessment & development Monitoring Program Managers Review overall project Ensure program objectives can be met Craft award documents Project oversight Credit Staff Credit analysis, underwriting Financing options

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 Smith Manager, Office of Economic Development

Organizational Processes Potential Project Initial Project Assessments (DCA) and Pre-Apps (OGA) Market Successful Concepts Local Community & Economic Development Needs Application Development & Submission Monitor & Audit Manage Projects Review & Underwrite Application Award / Denial Final Structure of Assistance

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? Initial Project Assessment (DCA)/ Pre-Application (OGA) PACA Provides guidance for application development Application Development and submission 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. Completeness Letter

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 Morris Office 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 Annual Competition CDBG-ED application Employment Incentive Program Redevelopment Fund Program 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

CDBG Funds from U.S. Housing and Urban $36.2 million CDBG allocation Available Funding CDBG Funds from U.S. Housing and Urban Development (HUD) Annual Competition $36.2 million CDBG allocation EIP $8 million set-aside RDF $1.5 million set-aside Immediate Threat $500,000 set-aside

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 County Sub-Recipient – General Mill’s southeast distribution facility Grant Amount - $500,000 Project – public rail spur Private Investment - $42 Million Jobs – Create 112, 100% L/M

Source and Use – Walton County Amount Use EIP $ 500,000 Rail spur construction OGA EDGE M&E GDOT $ 315,000 Roadway construction EDA $ 1,619,000 Water & sewer construction County $ 556,000 Rail construct, Eng, Admin $ 410,772 Road construct, Eng, Acq DAWC $ 28,500 Legal, grant writing, admin City $ 779,404 W&S, eng, apps prep Gen Mills $42,009,470 Land, building, M&E, F&F $ 42,009,470 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 TILLMAN Office 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 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 Loan Disbursement All 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 Amount Use EIP $ 500,000 Land/Building Acquisition $ 470,000 Grant Administration $ 30,000 F and M Bank $ 2,210,574 $1,210,574 Working Capital $1,000,000 Owner’s Equity $ 430,147 Building Acquisition $ 211,175 Equipment $ 197,972 $ 21,000 OneGeorgia Equity $ 350,000 $ 350,000 Clinch County RLF $ 110,000 Grant Consulting City of Homerville RLF $ 220,000 City Audit $ 220,000 Total $3,820,721 December 11-12, 2013

City of Homerville Success – Okefenokee Berry Center

REDEVELOPMENT FUND

REDEVELOPMENT FUND Categories Eligible 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 VanBrunt Field Representative Office of Economic 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 Amount Use RDF $500,000 Renovations $425,000 Architectural Services $ 50,000 Grant admin. $25,000 City of Braselton $985,000 Building (donated) $835,000 $137,000 $13,000 Companies $322,000 Value of business (existing) 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 Cities No population limit 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 $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 Haygood Director, 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