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

2. GENERAL OVERVIEW

3. Page 3 Economic Development | 12-07-10 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.”

4. Page 4 Economic Development | 12-07-10 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.

5. Page 5 Economic Development | 12-07-10 Available Funding CDBG Funds from U.S. Housing and Urban Development (HUD) Annual Competition $30 million CDBG allocation EIP$8 million set-aside RDF$1.5 million set-aside

6. Page 6 Economic Development | 12-07-10 Features of Economic Development Programs Maximum Grant$500,000 Primary PurposeExpand employment opportunities for L/M income people Low/Moderate Income Benefit At least 51% of jobs created and/or retained Eligible UsesPublic facilities, infrastructure, business loans, elimination of Slum and Blight

7. Page 7 Economic Development | 12-07-10 Differences of Economic Development Programs Set-Asides (EIP/RDF) Anytime submission Compete against rating and review process Complete application with second change Processing time – 45 days to complete application review Annual Competition (CDBG-ED) One annual submission Compete against rating and review process and other applications Complete Application without exceptions Processing time – 5 months

8. Page 8 Economic Development | 12-07-10 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 (There are Restrictions)

9. GETTING STARTED

10. Page 10 Economic Development | 12-07-10 Getting Started – Annual Competition, EIP & RDF 1.Have an Idea? Call DCA early! 2.PACA Request (CDBG-ED) or Initial Project Assessment (EIP/RDF) – Field Services representative will visit. 3.PACA – pre-agreement cost approval does not guarantee funding. 4.Application – Reviewed by panel.

11. Page 11 Economic Development | 12-07-10 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

12. Page 12 Economic Development | 12-07-10 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 www.dca.ga.gov

13. Page 13 Economic Development | 12-07-10 Four Routes to ED with CDBG 1.Annual Competition CDBG-ED application 2.Employment Incentive Program 3.Redevelopment Fund Program 4.Local Revolving Loan Fund (generated by CDBG-ED, EIP or RDF loans)

14. SPECIFIC PROGRAMS

15. ANNUAL COMPETITION and/or EIP GRANT PUBLIC INFRASTRUCTURE

16. Page 16 Economic Development | 12-07-10 Infrastructure Grants - Eligible Activities Public Infrastructure Acquisition, construction and rehabilitation of: -Water: lines, tanks, wells, treatment plants; -Sewer: gravity lines, forcemains, pump stations, treatment plants, land application “spray fields;” -Roads: access, turn lanes, accel/decel lanes, paving; -Stormwater drainage: ditches, pipes, culverts, ponds;

17. Page 17 Economic Development | 12-07-10 Infrastructure Grants - Eligible Activities -Rail spurs: switches, track, track base, derails, stops; and -Other: wastewater pretreatment plant, gas lines (“red”). Public Facilities -Workforce development centers / Child care facilities.

18. Page 18 Economic Development | 12-07-10 Walton County – General Mills’ Southeast Distribution Facility Recipient – Walton County Sub-Recipient – General Mills’ southeast distribution facility Grant Amount - $500,000 Project – public rail spur Private Investment - $42 Million Jobs – Create 112, 100% L/M

19. Page 19 Economic Development | 12-07-10 Source and Use – Walton County SourceAmountUseAmount EIP$ 500,000Rail spur construction$ 500,000 OGA EDGE$ 500,000M&E$ 500,000 GDOT$ 315,000Roadway construction$ 315,000 EDA$ 1,619,000Water & sewer construction$ 1,619,000 County$ 966,722Rail spur & road$ 966,722 DAWC$ 28,500Legal, grant writing, admin$ 28,500 City$ 673,525W&S, eng, apps prep$ 673,525 Gen Mills$42,009,470Land, building, M&E, F&F$ 42,009,470 Total$ 46,612,217Total$ 46,612,217

20. Page 20 Economic Development | 12-07-10 Walton County Success! - General Mills’ Southeast Distribution Facility EIP Rail Spur

21. Page 21 Economic Development | 12-07-10 Infrastructure Grants Areas of Concern: DCA-4 Description of Needs to be Addressed: Needs for improvement of existing conditions (more than just project) 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/architect and grant administration by ED activity codes and other public /private funding

22. Page 22 Economic Development | 12-07-10 Infrastructure 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 and Documentation

23. Page 23 Economic Development | 12-07-10 Infrastructure Grants Rating and Selection Criteria Feasibility Impact Strategy For EIP set-aside the funding scoring threshold is 300.

24. Page 24 Economic Development | 12-07-10 Infrastructure Grants Infrastructure Fund Capacity Analysis (IFCA) ▪Examine financial capacity of local government ▪Calculate operating and coverage ratios Economic Development & Construction Agreement

25. EIP GRANT – LOAN TO PRIVATE FOR-PROFIT BUSINESS

26. Page 26 Economic Development | 12-07-10 EIP Loans – Eligible Activities * Loans to for-profit for purchase of fixed assets Acquisition, construction and rehabilitation of commercial or industrial land, building(s), machinery and equipment and other real property improvements * Loan repayments may capitalize or be placed into a local RLF

27. Page 27 Economic Development | 12-07-10 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

28. Page 28 Economic Development | 12-07-10 City of Cairo – Turner Furniture Company of Tallahassee, Inc. Recipient – City of Cairo Sub-Recipient – Turner Furniture Company of Tallahassee, Inc. Grant Amount - $ 350,000 Project – Land and existing building acquisition Private Investment - $ 3.27 million Jobs – 35, 60% L/M

29. Page 29 Economic Development | 12-07-10 Source and Use – City of Cairo SourceAmountUseAmount EIP$ 350,000Acquisition Land & Bldg.$ 329,000 Grant Administration$ 21,000 Sub-Total EIP$ 350,000 BB&T Bank$ 3,271,000Acquisition Land & Bldg.$ 771,000 Bldg. construction$ 2,500,000 Sub-Total Private Sector$ 3,271,000 Total$ 3,621,000Total$ 3,621,000

30. REDEVELOPMENT FUND

31. Page 31 Economic Development | 12-07-10 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

32. Page 32 Economic Development | 12-07-10 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.

33. Page 33 Economic Development | 12-07-10 City of West Point Recipient – City of West Point Grant Amount - $500,000 Project – Renovate two blighted storefront and alleviated deteriorated building conditions in historic section of downtown. Private Investment (West Point 2100, Inc.) - $374,888 Jobs – 10.

34. Page 34 Economic Development | 12-07-10 Source and Use – City of West Point SourceAmountUseAmount RDF$ 500,000Building Stabilization$ 425,000 Architect / Fees$ 45,000 Grant admin.$ 30,000 West Point 2100$ 374,888Property Value$ 67,888 Building Stabilization$ 100,510 Renovations$ 146,490 Contingencies$ 60,000 City$ 1,000Audit$ 1,000 TOTAL$ 875,888TOTAL$ 875,888

35. Page 35 Economic Development | 12-07-10 City of West Point – Success!

36. LOCAL REVOLVING LOAN FUND (RLF)

37. Page 37 Economic Development | 12-07-10 Local Revolving Loan Funds EIP/RDF loan payments capitalize local RLF loan. The payments (including interest), and bank account interest retain federal identity. 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.

38. Page 38 Economic Development | 12-07-10 Local Government RLF Responsibilities Local Government is charged with maintaining adequate control over the RLF. This includes: ▪Maintaining an accounting and financial management system that complies with HUD regulations, DCA’s Local Revolving Loan Funds Policy and Procedures Guide, and GAAP; ▪Ensuring a well documented application and selection process (Loan Review Committee);

39. Page 39 Economic Development | 12-07-10 Local Government RLF Responsibilities (continued) ▪The capacity to review and analyze funding requests to determine whether such projects represent prudent investments (Loan Review Committee underwriting capabilities); ▪Maintenance of a loan servicing and monitoring system which ensures loan payments are collected, loan covenants are enforced, and loan secured assets are maintained (UCC filings, etc.); and ▪Sustaining RLF records so that local administrators can assess the RLF’s loan portfolio status and quickly identify any areas needing attention.

40. Page 40 Economic Development | 12-07-10 Local Revolving Loan Funds Currently 65 active RLF’s throughout Georgia, with: ▪$33.4 million in RLF assets ▪$ 9.8 million in cash $152K average ▪$23.6 million in loan receivables $363K average $3.3 million cash returned to DCA over past 5 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.

41. Page 41 Economic Development | 12-07-10 Local Revolving Loan Funds Compliance Administered by local government with DCA’s oversight and guidance (as needed). Must adhere to DCA’s Local Revolving Loan Fund Policy and Procedure Guide (available online at: http://www.dca.ga.gov/communities/CDBG/publicati ons/RLF_Policies.pdf ) http://www.dca.ga.gov/communities/CDBG/publicati ons/RLF_Policies.pdf 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.

42. THINGS TO REMEMBER

43. Page 43 Economic Development | 12-07-10 Things to Remember Describe your project and jobs created/retained Document need, costs and support of banks & businesses Debt – credit underwriting and terms

44. Page 44 Economic Development | 12-07-10 Program Manager Contacts: Brock Smith – Employment Incentive Program (404) 679-1589 brock.smith@dca.ga.govbrock.smith@dca.ga.gov Nyanza Duplessis – EIP Loan and RDF Program (404) 679-0668 nyanza.duplessis@dca.ga.govnyanza.duplessis@dca.ga.gov Michael Casper – Local RLF Coordinator (404) 679-0594 michael.casper@dca.ga.govmichael.casper@dca.ga.gov John Kingery – Credit Manager (404) 679-1586 john.kingery@dca.ga.govjohn.kingery@dca.ga.gov

45. Page 45 Economic Development | 12-07-10 ED Representative Contacts: Jennifer Fordham – Southeast Georgia (912) 865-4212 jennifer.fordham@dca.ga.govjennifer.fordham@dca.ga.gov Kelly Lane – South Georgia (229) 896-4259 kelly.lane@dca.ga.govkelly.lane@dca.ga.gov John VanBrunt (interim) – Northeast Georgia (404) 327-6871 john.vanbrunt@dca.ga.govjohn.vanbrunt@dca.ga.gov Vacant – Southwest Georgia Patrick Vickers – Northwest Georgia (404) 679-3151 patrick.vickers@dca.ga.govpatrick.vickers@dca.ga.gov Glenn Misner – Field Services Office Manager (404) 679-3138 glenn.misner@dca.ga.govglenn.misner@dca.ga.gov