1. Georgia Department of Community Affairs CDBG Economic Development Annual Competition and Set-Aside Programs CDBG, EIP, RDF and Capitalized RLF Brock Smith, Gabriel Morris, Staci Tillman December 3, 2015

2. Brock Smith, Manager OED Gabe Morris, EIP Program Manager Staci Tillman, EIP Program Manager Brock Smith, Gabriel Morris, Staci Tillman December 3, 2015

3. Brock Smith Manager, Office of Economic Development Brock Smith December 3, 2015

4. Core Values of DCA:  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!

5. Core Values of DCA:  DCA focuses on bottom-up solutions  As many approaches to community development as there are communities  Local challenges – Local solutions

6. Community Finance Division  Composed of 4 units:  Office of Community Development  Office of Economic Development  Office of CDBG Field Services & NSP  OneGeorgia Authority  Most of DCA’s financial assistance programs are in CDFD

7. The OED Finance Team Field Staff Project identification, assessment & development Monitoring Credit Staff Credit analysis, underwriting Financing options Program Managers Review overall project Ensure program objectives can be met Craft award documents Project oversight

8. 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. Local Governments Authorities, Non-Profits, For-profits Prospect Driven Incentive Grant/Loan REBA OneGeorgia EDGE Life Sciences Loan Authorities, For-Profits, Local Governments

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

10. 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

11. Process - What happens after I submit an IPA or Pre- App? Completeness Letter Application Development and submission PACA Provides guidance for application development Initial Project Assessment (DCA)/ Pre-Application (OGA) 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.

12. 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.

13. 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.

14. 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.

15. ANNUAL COMPETITION and/or EIP GRANT PUBLIC INFRASTRUCTURE Gabriel Morris December 3, 2015

16. Gabe Morris Office of Economic Development Gabriel Morris December 3, 2015

17. 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.”

18. Overview (Cont.) Local governments can implement a broad range of activities as long as they further the National Objectives of the Act Three 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.

19. 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)

20. 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

21. Available Funding Annual Competition $36.5 million CDBG allocation EIP$8.0 million set-aside RDF$1.5 million set-aside Immediate Threat $500,000 set-aside CDBG Funds from U.S. Housing and Urban Development (HUD)

22. 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

23. Economic Development Grants Rating and Selection Criteria:  Demographics  Feasibility  Impact  Strategy

24. 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)

25. 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;

26. CDBG ED Grants - Eligible Activities (continued) - Rail spurs: switches (excluding mainline switch), track, track base, derails, stops; and - Other: wastewater pretreatment plant. Public Facilities

27. EIP Infrastructure Grants  Infrastructure Fund Capacity Analysis (IFCA)  Examine financial capacity of local government  Calculate operating and coverage ratios  Revolving Loan Fund Capacity

28. 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. Project Timetables  Environmental Assessment (including SHPO, Tribal Consultation, Floodplain);  Acquisition – URA guidelines must be followed; and  Section 3 and Project Bid.

29. 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)

30. City of Monticello – Norton Packaging  Recipient – City of Monticello  Sub-Recipient – Norton Packaging  Grant Amount – $420,000  Project – public rail spur  Private Investment – $2.6 Million  Jobs – Create 42, 22 L/M

31. Source and Use – City of Monticello SourceAmountUseAmount EIP$ 420,000Rail spur construction$ 420,000 DA$ 1,006,000Land & Improvements$ 1,006,000 OGA EDGE$ 50,000Site Improvements$ 50,000 USDA$ 85,000Building$ 85,000 RLF$ 80,000Rail Spur Construction$ 80,000 City$ 10,997Engineering$ 10,997 Norton$ 2,670,588Land, building, M&E, F&F$ 2,670,588 Total$ 4,322,585Total$ 4,322,585

32. Special Conditions – Inherent to Rail Spur Projects  Bid documents, Bid specifications, signed contract and Bid Bonds.  Evidence of OneGeorgia funding  Documentation certifying Rail Company has approved the final plans for the design for the rail spur.  Railroad permits  “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.  Economic Development and Construction Agreement  Letter of Credit (Surety)

33. City of Monticello Success! – Norton Packaging Facility EIP Rail Spur

34. STACI TILLMAN Office of Economic Development Staci Tillman December 3, 2015

35. EIP GRANT – LOAN TO PRIVATE FOR-PROFIT BUSINESS Staci Tillman December 3, 2015

36. EIP Direct Loan Program  Purpose-Provide low-interest rate loans to small and medium sized businesses that are purchasing or improving fixed-assets.  Basic Factors to Determine Eligibility:  # Jobs created and/or retained  Within 2-yr period, 1 job /$50k of EIP funds  Owner’s Equity and Private Financing  10% minimum equity contribution  At least 40% funded by 3 rd party lender  Evidence of Need  Ability to repay debt  CDBG-Eligible Activity

37. EIP Direct Loan Program Eligible ActivitiesIneligible Activities  Acquisition of land and buildings  New construction  Renovation to existing buildings  Acquisition of M&E  Limited soft costs* *Costs d irectly related to the fixed asset expenditure. Examples include: architectural/engineering costs; installation costs for machinery; and financing costs for bank loans.  Working capital  Capacity building  Refinancing  Inventory/receivable financing  Speculative real estate development  Relocation costs  Office equipment, small tools, supplies  General conduct of government

38. EIP Direct Loan Program  Loan Terms  Up to 20 years for financed real estate  Up to 10 years for financed machinery/equipment  The interest rate is fixed at or below market rates  Security/Collateral  1 st or shared 1 st priority mortgage and/or lien position on project costs/uses financed  Personal guaranties from owners (>20% ownership)  Corporate guaranties from related companies  Repayment  EIP Loan repayments must capitalize or be placed into a local Revolving Loan Fund (RLF)

39. EIP Loan Disbursement  Loan Disbursement  Disbursement agreement included in the EIP loan agreement.  The Borrower’s other public and/or private financing will be disbursed on a pro-rata basis with the EIP loan proceeds. GRANT TO APPLICANT LOAN TO LOCAL DEVELOPMENT AUTHORITY LOAN TO SUB-RECIPIENT BUSINESS

40. Berrien County– Coyote Manufacturing Recipient – Berrien County Sub-Recipient – Coyote Manufacturing Grant Amount – $500,000 Project – Purchase Machinery & Equipment Private Investment – $6 48,628 Local RLF – $160,000 Jobs Creation – 100, 100% L/M

41. Source and Use – Berrien County December 3, 2015 SourceAmountUseAmount EIP$ 500,000Equipment $ 470,000 Grant Administration $ 30,000 Owner’s Equity$ 148,002Leasehold Improvements $ 140,000 Machinery & Equipment $ 8,002 Bank of Alapaha Line of Credit $ 500,626Machinery & Equipment Soft Costs $ 500,626 Berrien County RLF$ 160,000Machinery & Equipment$ 160,000 Total$1,308,628Total$1,308,628

42. Berrien County Success – Coyote Manufacturing

43. Funding Opportunities for Downtown Projects Downtown Development Revolving Loan Fund Georgia Cities Foundation CDBGRedevelopment Fund Eligible Applicants Cities < 100,000 population Counties < 100,000 population Cities No population limit Cities Counties 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

44. LOCAL REVOLVING LOAN FUND (RLF) Brock Smith December 3, 2015

45. 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.

46. Local Revolving Loan Funds  An estimated 69 active RLF’s throughout Georgia, with:  $35 million in RLF assets  $13 million in cash  $22 million in loan receivables  $5.5 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.

47. Corinne Thornton Office Director, Community Services Division Corinne Thornton December 3, 2015

48. Community Services Regional Representatives: Patrick Vickers – Region 1 (404) 679-3151 patrick.vickers@dca.ga.govpatrick.vickers@dca.ga.gov Kathy Papa – Region 2 (770) 362-7078 kathy.papa@dca.ga.govkathy.papa@dca.ga.gov John VanBrunt – Region 3 (706) 825-1356 john.vanbrunt@dca.ga.govjohn.vanbrunt@dca.ga.gov Corinne Thornton – Region 4 (706) 340-6461 corinne.thornton@dca.ga.govcorinne.thornton@dca.ga.gov Beth Eavenson – Region 5 (404) 387-6977 beth.eavenson@dca.ga.govbeth.eavenson@dca.ga.gov Tonya Mole – Region 6 (404) 852-6876 tonya.mole@dca.ga.govtonya.mole@dca.ga.gov Tina Hutcheson – Region 7 (478) 278-9434 tina.Hutcheson@dca.ga.govtina.Hutcheson@dca.ga.gov Jo Childers – Region 8 (404) 227-2860 jo.childers@dca.ga.govjo.childers@dca.ga.gov Lynn Ashcraft – Region 9 (478) 484-0321 lynn.Ashcraft@dca.ga.govlynn.Ashcraft@dca.ga.gov Gina Webb – Region 10 (404) 387-1429 gina.webb@dca.ga.govgina.webb@dca.ga.gov Kelly Lane – Region 11 (229) 896-4259 kelly.lane@dca.ga.govkelly.lane@dca.ga.gov Jennifer Fordham – Region 12 (912) 865-4212 jennifer.fordham@dca.ga.govjennifer.fordham@dca.ga.gov

50. Program Manager Contacts: Brock Smith – Manager, Office of Economic Development (404) 679-1744 brock.smith@dca.ga.govbrock.smith@dca.ga.gov Staci Tillman – EIP Loan and RDF (404) 679-0668 staci.tillman@dca.ga.govstaci.tillman@dca.ga.gov Gabe Morris – EIP Infrastructure (404) 679-3174 gabriel.morris@dca.ga.govgabriel.morris@dca.ga.gov Corinne Thornton – Office Director, Community Services Division (706) 340-6461 corinne.thornton@dca.ga.govcorinne.thornton@dca.ga.gov