Retooling Iowa’s Economic Development Programs

Presenters Derek Lord - moderator Community Investments Team Leader Iowa Economic Development Authority Des Moines, Iowa Brian Williamson Assistant Commissioner for Community Development Georgia Department of Community Affairs Atlanta, Georgia Terry Marlin CDBG Economic Development Specialist Rural Development Division Kansas Department of Commerce Topeka, Kansas 2

Agenda  The Importance of CDBG in State Economic Development Efforts  Overview of Iowa’s CDBG Economic Development Programs  Retooling CDBG Economic Development Programs for Success  Celebrating Accomplishments Through Target Marketing  Using CDBG to Fill the Financing Gap  Economic Development Challenges of 2011  Overview of Georgia’s Economic Development Programs  Examples of How CDBG Can Make a Difference  Evolution of Kansas’s CDBG Economic Development Program  Importance of Staff and Capacity Building  The Impact of the Environmental Review on Economic Development Projects  Creating a Positive Image for your CDBG Program 3

Economic Development and CDBG/HUD  Regular CDBG Program Public Facilities Commercial Rehabilitation (clearance, reconstruction, construction) Microenterprise Assistance Economic Development Assistance to For-Profit Business Assistance to Non-Profits  Section 108 Loan Guarantee Program  HUD – Economic Development Initiative (EDI)  Brownfield Economic Development Initiative (BEDI) 4

National Impact of CDBG on Job Creation  CDBG Program provides approx. $840 million annually to rural cities and towns through states – supporting 8,500 direct jobs (HUD)  Since 2004, CDBG produced 259,346 jobs and provided housing services to 866,00 low-income households (COSCDA)  In 2010 alone, CDBG produced 19,292 jobs and assisted 109,000 households with safe, affordable, sanitary housing (HUD)  ONLY 7% of CDBG funds used for economic development  Greater than 25% spent on housing and infrastructure (HUD) 5

Now is the Time, Don’t Wait Any Longer  Job creation is a priority at all levels of government  Perfect opportunity to establish/retool ED programs to maximize internal and external benefits  Necessary to demonstrate benefits of program to insure long-term program funding  Flexibility built into existing program  Incorporate into your new economic development strategy  Help meet your state’s goals  Gain foothold by using CDBG for gap incentive financing

State of Iowa CDBG Program  2011 Funding = $23,877,960  20%, or Approx. $4,750,000, for Economic Development 7

Iowa’s Economic Development Programs  Economic Development Set-Aside (EDSA)  For-profit loan assistance tied directly to job creation  Maximum $10,000 per job, maximum award $1 million  51% of jobs must be LMI  No match requirement, but an evaluation criteria  Public Facilities Set-Aside (PFSA)  Assistance to cities/counties for infrastructure that will lead to job creation  Maximum $10,000 per job, maximum award $500,000  51% of jobs must be LMI  50% match required  Career Link – job training program  Interim Financing (float loan)

Iowa’s Program Statistics  2001 = 4  2002 = 16  2003 = 16  2004 = 16  2005 = 8  Total Amt. = $19,093,482  Total # of Jobs = 6,800  2006 = 20  2007 =9  2008 = 5  2009 = 0  2010 = 1

Why the Decrease in Program Activity?  Change in personnel/lack of understanding of program  Other, higher priorities (disaster recovery)  National and local economic challenges  “Easier” programs with sufficient funding  Red tape can be frightening  No internal or external marketing plan  Program didn’t have established image in state  Policy changes affected partnerships

Retooling for Success/Increasing Participation  Dedicated staff with CDBG & economic development experience  Must understand CDBG regulations  Sympathetic to the needs of businesses  Able to talk the talk and deliver results  Appropriate division/department has a huge impact  Internal/external partnerships key  Increase emphasis, make it a priority  Incorporate into state’s economic development strategy  Need to be committed to making it a success

Retooling for Success (cont’d)  Marketing strategy is necessary to create awareness, sell programs and deliver results  Participate in business development meetings  Hit the speaking circuit  Simple marketing materials for internal/external users  Early, on-site visits provide comfort level  Combined & streamlined application process (simple & timely)  Catchy name goes a long way  Economic Development Set-Aside or Small Cities Jobs Fund?

Retooling for Success (cont’d)  Marketing (cont’d)  Provide real examples and references  Utilize partnerships to sell and deliver  Council of Governments  Professional Developers/Economic Development Association  Entrepreneur’s Summit  Banks/Micro lending Institutions  Align rules and policies with program objectives  Reconsider minimum wage thresholds  Why match local program interest rates?

Celebrate Success of CDBG Program  Data, data, data  Plan for data collection up front  jobs, leverage, taxes, payroll, etc.  If it has an economic impact, report it!  Downtown revitalization isn’t just blight elimination  jobs, new businesses, occupancy rates, leverage, taxes, momentum  Annual reports more important than ever for all stakeholders  Photos, testimonials, personal stories, impact, data

Target Marketing to Key Stakeholders  Economic development professionals/partners  State and local elected officials  Federal congressional delegation  Other (internal) economic development agency departments It’s ok to brag if it means increasing program participation, enhancing image of program, recognition of efforts, and long-term funding for program!

Questions & Answers Derek Lord Iowa Economic Development Authority