Georgia Department of Community Affairs CDBG Economic Development Annual Competition and Set-Aside Programs EIP, RDF and Capitalized RLF

GENERAL OVERVIEW

Page 3Presentation name | date 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.”

Page 4Presentation name | date 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

Page 5Presentation name | date Available Funding CDBG Funds from U.S. Housing and Urban Development (HUD) CDBG$30 million CDBG allocation EIP$7 million set-aside RDF$1.5 million set-aside

Page 6Presentation name | date Features of Economic Development Programs Maximum Grant$500,000 Primary PurposeExpand employment opportunities for L/M income people Low/Moderate Income Benefit 51% of jobs created and/or retained Eligible UsesPublic facilities, infrastructure, business loans, elimination of Slum and Blight (RDF)

Page 7Presentation name | date Who Can Apply? Eligible: Non-Entitlement Cities & Counties Ineligible: Entitlement (Metro/Urban) Cities & Counties

Page 8Presentation name | date Ineligible CDBG/EIP/RDF Activities Working Capital Refinancing Speculative Projects Capacity Building General Conduct of Government Project Not Meeting Federal Guidelines

GETTING STARTED

Page 10Presentation name | date Getting Started – EIP & RDF 1.Have an Idea? Call DCA early! 2.Initial Project Assessment – ED representative will visit. 3.PACA – pre-agreement cost approval does not guarantee funding. 4.Application – Reviewed by panel.

Page 11Presentation name | date The CDFD Finance Team Field Staff Project identification, assessment and development Compliance monitoring Credit Unit Credit analysis, underwriting Financing options Program Manager Review overall project Ensure program objectives can be met Craft award documents Project oversight

OED –Project Development Monitor & Audit Manage Projects Award Final Structure of Deal Review & Underwrite Application Application Development & Submission Initial Project Assessment Market Successful Concepts Potential Project Denial

Page 13Presentation name | date Application Process Application Forms (DCA 1- DCA 13) Supplemental Information & Documentation Public Infrastructure or Loan attachments Refer to: EIP or RDF Application Manuals and CDBG Applicants & Recipients Manuals

Page 14Presentation name | date Four Routes to ED with CDBG 1.Annual Competition ED application 2.Employment Incentive Program 3.Redevelopment Fund Program 4.Local Revolving Loan Fund (generated by EIP/RDF loans)

SPECIFIC PROGRAMS

EIP GRANT - PUBLIC INFRASTRUCTURE

Page 17Presentation name | date EIP Infrastructure Grants * $500,000 maximum grant; up to 6% for admin costs/contracts * Local governments may apply for funds at any time * Projects must create/retain jobs primarily for low- and moderate-income persons * Eligible activities include - Public Infrastructure (water/sewer lines & facilities; roads; rail spurs, and other “public” infrastructure) - Public Facility (workforce development centers, child care, etc) * Federal restrictions on using funds to relocate businesses

Page 18Presentation name | date EIP Infrastructure Grants Key Factors to Remember: EIP Application Supplements PER or ADR Commitment Letter(s) Letter of Credit or Surety Bond Source-and-Use Statement Rating and Selection Criteria Demographics, Feasibility, Impact & Strategy Infrastructure Capacity Analysis (IFCA) Economic Development & Construction Agreement

Page 19Presentation name | date Bibb County - Bass Pro Outdoor World, LLC Recipient - Bibb County Sub-Recipient – Bass Pro Outdoor World, LLC Grant Amount - $500,000 Project – water and sewer Private Investment - $43 Million Jobs – 200

Page 20Presentation name | date SourceAmountUseAmount EIP OGA EDGE Georgia DOT Bibb County MBCIA Private Total $ 500,000 $ 1,500,000 $ 1,635,920 $ 6,000,000 $ 499,450 $ 43,029,500 $53,164,870 Water & Sewer Grant Administration Site Preparation Road Construction Road & Sewer Land Acquisition & Site Prep Professional Services Water & Road Professional Services Building Construction Equipment Lease Natural Gas Professional Services $ 475,000 $ 25,000 $ 1,500,000 $ 1,635,920 $ 1,926,380 $ 3,905,420 $ 168,200 $ 356,068 $ 143,382 $ 25,000,000 $ 18,000,000 $ 27,500 $ 2,000 $53,164,870 Source and Use - Bibb County

EIP GRANT – LOAN TO PRIVATE FOR-PROFIT BUSINESS

Page 22Presentation name | date EIP Loans * $500,000 maximum grant; up to 6% for admin costs/contracts * Local governments may apply for funds at any time * Projects must create/retain jobs primarily for low- and moderate-income persons * Eligible activities include - Loans to for-profit entities for purchase of fixed assets * Federal restrictions on using funds to relocate businesses * Loan repayments may be placed into a local RLF

Page 23Presentation name | date Loan Structures 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

Page 24Presentation name | date Atkinson County – First String Space, Inc. Recipient – Atkinson County Sub-Recipient –First String Space, Inc. Grant Amount - $500,000 Project – Building Acquisition Private Investment - $1,391,642 Jobs – 50

Page 25Presentation name | date SourceAmountUseAmount EIP SEGa Financial Private Total $ 500,000 $ 100,000 $ 1,291,642 $1,891,642 Building Acquisition Grant Administration Building Acquisition M&E FF&E Inventory Working Capital Total $ 470,000 $ 30,000 $ 100,000 $ 335,006 $ 169,427 $ 6,834 $ 175,375 $ 605,000 $1,891,642 Source and Use – Atkinson County

REDEVELOPMENT FUND

Page 27Presentation name | date REDEVELOPMENT FUND $1,500,000 Annual set-aside $500,000 Maximum grant (up to 6% for Admin) May apply at any time Projects must alleviate a “slum or blighted” condition Any new jobs must be available to low- and moderate- income persons Eligible Activities: ▪Public infrastructure, public facilities ▪Loans to acquire and alleviate blighted buildings/facilities ▪Loan/lease payments may be capitalized into a local RLF

Page 28Presentation name | date Is the Proposed RDF Activity Eligible? Acquisition Clearance Relocation Historic Preservation Building Rehabilitation

Page 29Presentation name | date City of Rebecca Recipient – City of Rebecca Sub-Recipient – Crawford Brothers, Inc. Grant Amount - $210,000 Project – Renovate blighted gas & convenience store Private Investment - $210,000 Jobs – 10

Page 30Presentation name | date SourceAmountUseAmount Redevelopment Bank Financing Private Total $ 210,000 $ 127,000 $ 83,000 $420,000 Construction Clearance Administration Construction FF&E Acquisition FF&E Total $ 171,000 $ 29,000 $ 10,000 $ 62,000 $ 65,000 $ 10,000 $ 73,000 $420,000 Source and Use – City of Rebecca

Page 31Presentation name | date City of Rebecca - Cranky’s

LOCAL REVOLVING LOAN FUND (RLF)

Page 33Presentation name | date Local Revolving Loan Funds EIP/RDF loan payments capitalize local RLF RLFs can be used for local economic development needs Must be CDBG-eligible Opportunities available to partner with local banks to finance eligible activities (same as EIP) that create employment for L/M persons

Page 34Presentation name | date Local Revolving Loan Funds Administered by local government with DCA’s oversight and guidance (as needed) Currently 61 RLF’s throughout Georgia, with: ▪$31 million in RLF assets ▪$10 million in cash ▪$21 million in loan receivables RLF must be used in a timely manner – at least one new loan every five (5) years For RLF cash balances greater than $125k, cash balance should be maintained at less than 30% of total RLF assets

Page 35Presentation name | date Sample RLF Projects Retail Daycare Manufacturing Telecommunications Workforce Development Centers Public Infrastructure

THINGS TO REMEMBER

Page 37Presentation name | date Things to Remember Describe your project and jobs created/retained Document need, costs and support of banks & businesses Debt – credit underwriting and terms

Page 38Presentation name | date Program Manager Contacts: Andy Yarn- Employment Incentive Program (404) Joanie Perry - RDF Program (404) Michael Casper – Local RLF Coordinator (404)

Page 39Presentation name | date ED Representative Contacts: Jennifer Fordham – Southeast Georgia (912) David Shellhorse – Northeast Georgia (706) Ron Thompson – Southwest Georgia (478) Jonathan Corso – Northwest Georgia (404) Glenn Misner – Field Services Office Manager (404)