A.
ECONOMIC
DEVELOPMENT PROGRAM
The Economic Development program (EDP) provides communities
with gap funding to
assist identified businesses in the creation/retention of jobs for low-and
moderate-income persons.
1.
Eligible EDP Activities and Maximum Grant and Loan Awards:
(a)
Activity Breakdown:
Applicants may apply in only one specific
grant activity group. Applicants for
Activity Group Numbers 2 below may also utilize the DF Loan Activity for the
same project but are limited to a total of $400,000 in EDP assistance.
|
Activity Group
Numbers
| Maximum Award |
| 1)
Grants to
Municipalities: for acquisition, relocation, demolition, clearance,
construction, reconstruction, installation and rehabilitation
associated with
public infrastructure
projects such as water and sewer facilities, flood and drainage improvements,
publicly- owned commercial and industrial buildings, parking, streets, curbs,
gutters, sidewalks, etc. All public infrastructure must be owned by the
municipality or public or private utility and be in support of an identified
business. | $300,000 |
| 2) Grants to Municipalities for Direct Business
Support: for non-capital equipment, land and site improvements,
rehabilitation or construction of commercial or industrial buildings, working
capital and capital equipment. | $200,000 |
| 3) Development Fund Loan (DF): for
acquisition of existing facilities, land and site improvements necessary for
the construction of a new facility, rehabilitation or construction of
commercial or industrial buildings, structures, non-capital equipment, capital
equipment, working capital and real property improvements. | $300,000
|
Economic Development Program funds cannot
be used to refinance existing debt.
2.
Threshold
Criteria:(a)
Project Benefit:
All projects must document that at a minimum, 51% of all jobs created or
retained as a result of the funded activity must be taken/held by persons of
low and moderate income as defined by HUD. Jobs created/retained must be in the
community applying for the EDP award, new jobs to that community and not
associated with any other branches of the assisted business
located in another community. Transfer positions cannot be
counted toward the job creation/retention requirements. In the event that
job creation requirements are not met, the applicant community will be
responsible for immediate repayment to DECD of all CDBG funds expended on the
project.
(b)
Job Creation Threshold Requirements:
Each job created
with EDP assistance must meet or exceed the Per Capita Income earnings listed
in the published schedule contained on the EDP Letter of Intent for the Maine
County where the EDP project will take place. "Earnings" means the base pay
paid by the qualified business, plus any overtime, incentives or commissions
paid. Projects not meeting the job creation threshold requirement will be
removed from competition during the Letter of Intent process. EDP Letters of
Intent in support of bona fide job retention are not required to meet the Per
Capita Income earnings threshold.
(c)
Program Dollars Per Job: The
maximum CDBG participation per job created or retained with EDP funds for
non HUB Zone business is $20,000. The
maximum CDBG participation per job created or retained with EDP funds for a
certified Pine Tree Development Zone
business and/or a business located in a HUB Zone is $30,000.
Pine Tree Development Zone certified means that the business
has been certified as a Pine Tree Development business by the Department of
Economic and Community Development at the time of EDP
application.
(d)
Full Time permanent Jobs:
In determining CDBG National Objective compliance with jobs created or
retained only Permanent jobs may be counted; temporary jobs may
not. Full time jobs require a worker to work at least 1750 hours per year. Part
time jobs require a worker to work at least 875 hours but less than 1750 hours
per year. Part-time jobs must be converted to Full Time
Equivalents (FTE). An FTE is defined as two part time jobs.
Seasonal jobs may count only if the
seasonal job lasts long enough and provides sufficient income to be considered
the employee's principal occupation. (Contact OCD prior to counting seasonal
jobs towards LMI benefit.) All permanent jobs created by the
project must be counted, regardless of funding source(s). Jobs indirectly
created by the project (i.e., remote location, "trickle down" jobs) do not
count.
(e)
Minimum EDP
Application Amount: $50,000
(f)
Maximum Project Size for Utilizing
EDP Funds: $5,000,000 Phasing of projects to make the total cost appear
to be below the maximum project size is expressly forbidden.
(g)
Minimum Per Capita Income
Requirement: All
jobs created with EDP assistance must meet or exceed the Per Capita Income
earnings established for the Maine County where the EDP project will take
place.
(h) All EDP activities must
be in support of an identified business; speculative activities are
prohibited.
3.
Program Requirements:(a) EDP
Letter of Intent Due Dates for Activity Group Numbers 1-2 ONLY: 4:00PM
on February 11, 2011, May 20, 2011 and August 12, 2011.
(b)
EDP Application Due Dates for
Activity Group Numbers 1-2 ONLY: 4:00PM on March 25, 2011, July 15, 2011
and September 23, 2011.
(c)
EDP Application Due Dates for Activity Group Number 3 ONLY:
Due the first Friday of every month by 4:00 p.m. If that day is a
recognized State Holiday or State shutdown day the due date would then be the
following regular business day by 4:00 p.m.
(d)
Necessary and Appropriate:
EDP assistance to a business must be for projects that are necessary and
appropriate. The application must describe the need for program assistance,
reasonableness of the amount requested, the repayment plan (DF only), and
assurance that the assistance provided is commensurate with the community
benefits that will accrue from the project. Documentation must be
provided that the project cannot proceed without program participation and that
program funds provide gap financing.
(e)
Compliance with Benefit
Certification Requirements: The business and the applicant community,
under the direction of the Program Manager assigned to the project, must comply
with documentation requirements for jobs created/jobs retained on a project
including but not limited to benefit surveys, income verification and periodic
reporting that the Office of Community Development may require.
(f)
EDP Matching Funds
Requirements: Communities applying for Economic Development Program
funds must certify that they will provide a
100% cash match of the total EDP award. Matching funds
must be directly related to the activities undertaken with EDP
funding.
(g) Exclusions:
Communities receiving an EDP award may not receive any other EDP award
for the same project or business during the same program year or for the same
project or business from a prior program year that has not met final closeout
status.
(h)
EDP Projects in
Support of Retail Businesses: OCD may accept an EDP application in
support of a
retail business activity only under the
following limited conditions:
(i) The retail
business represents the provisions of new products and services previously
unavailable in the community or is a tourism-related business; and
(ii) The development or expansion of the
retail business represents a net economic gain for the community and the
region. Applications supporting a retail business or businesses are required to
certify that the development represents a new overall gain for the region
economy and not a shift from existing established businesses to a new or
expanded one; and
(iii) The retail
business is located in either a downtown district meeting the definition of PL
776 enacted by the 119th legislature; or a
designated local growth area contained in an adopted and consistent
comprehensive plan; and
(iv) At
least 50% of the jobs created by the retail business must be full time
jobs.
4.
Special Program Requirements for Grants to Municipalities then Loaned to
an Identified Business (Activity Group 3 only):
(i)
Loan: The DF program is a
grant to the unit of general local government. The recipient must use the funds
as a loan to the identified business. The loan must be provided under the terms
stated in a DF Program Letter of Commitment and the contract between the DECD,
the community and the business.
(ii)
Repayment Terms:
Justification for the repayment terms relate to filling the financing
gap, identifying the rate of return allowed through
the repayment terms, or specifying the cost differentiations and the benefit
derived from the assistance and must be approved by the DECD. The interest rate
for Development Fund loans is up to 5% for a term not to exceed 10 years. A
special interest rate of 2% will be available for projects located in a
downtown area as defined in PL 776 enacted by the
119th legislature.
5.
Selection Process for Activity
Groups 1 and 2: The selection process will consist of three phases, a
letter of intent (does not apply to the Development Fund Loan activity), an
application phase and a project development phase.
6.
Review Team Analysis - 45 Points
(to be completed by applicant)
Members of the OCD Review Team will assign a Review Point
Total for each application reviewed. Review Point Totals will consist of the
sum of the three scoring areas below and be determined by the total of each
sub-scoring area. The following criteria will be used:
a.
Problem Statement (15
points) -Describe the problem facing the community/business
as it relates to job creation/retention activities and document why the
community/business is unable to finance the proposed project on its own, or
with available assistance from other sources.
Scope of Problem (5 points)
Detail the problems or needs facing the
community/business to be assisted.
Tell how these problems relate to job creation or job
retention activities.
Describe how the overall financial viability of the
community/business is affected by the problems or needs.
Impact on Community and Region (5 points)
Identify how employment opportunities for persons of
low/moderate income are negatively affected by the identified
problems.
Emphasize the importance of the affected business in
relation to the stability of the community/region and its current financial
well being including property tax analysis before and after the proposed
activities.
Need for Funds (5 points)
Identify reasons why the community/business is unable
to finance the proposed project on its own, or with assistance from other
sources.
Include a narrative that highlights any recent efforts
by the community/business to assist job creation/retention
activities.
b.
Proposed Solution (20 points) - Describe
the activities that will be undertaken with EDP funds to resolve the stated
problem/need, how the project will proceed to completion within 12 months from
the date of a contract award with the DECD and the effect the project will have
on the ability of the business to create/retain quality jobs for LMI persons.
Project Description (10 points)
Detail the activities that the community/business will
undertake using EDP funds to resolve the problems/needs presented in the
Problem Statement.
Identify, in detail, the
specific acquisition, equipment, real property
improvements and/or fixtures that will be installed, modified, and upgraded,
etc., with EDP funds.
Explain how the solution directly solves the
identified problems/needs.
Include a firm figure of the number of jobs to be
created or retained as a result of the project, and how these jobs relate to
persons of low/moderate income.
Clearly state the amount of EDP funds sought and how
they will fit into the overall financing for the project.
Include a graphic description (aerial photo, map, and
sketch) of the sites involved. Provide a generalized location of the site
relative to the community and a copy of a floodplain map showing the project
location. Include existing and proposed site and/or building
improvements.
Effect on Assisted Business (5 points)
Describe the effect the EDP award and completion of
the project, as a whole, will have on the ability of the community/business to
remain competitive, and create/retain quality jobs.
Describe the market including identification of
competitors, price structure, resource availability, operating/manufacturing
costs, transportation costs, demand, and other factors influencing the
marketability of the product or service proposed. Also identify all project
risks and the extent of the risks.
Project Timeline and Feasibility (5
points)
Describe how the project is assured of successful
completion within 12 months.
Identify what work, such as pre-engineering,
construction and improvements, or fixture purchases that have been completed,
or are in process, and exactly how these relate to the proposed ED
project.
Provide background information (including resumes) for
the owners and/or managers of the business and specific information about the
skills and experiences of the owners and/or managers as related to the
successful management of the business and proposed project.
Include a concise timetable for project
implementation.
c.
Citizen Participation (10 Points)
-
Describe how business groups, local citizens, community groups and others were
involved in the identification of the problems/needs and solutions discussed in
the application. Local citizens, groups, boards, agencies, etc. are essential
to any successful project. It is important that you show how these various
groups were involved in bringing problems or needs to the attention of the
community. The OCD views the involvement of local citizens in focusing on
problems/and solutions as a key element in a successful program application as
well as in successful implementation of a project. Review is divided into two
areas. Following each area are topics, information, or ideas that must be
included in Citizen Participation.
Public Hearing Process (5 points)
Describe how citizen participation contributed to the
actual development of this application, including how the required public
hearing contributed to the process.
(Submit a public hearing record
consisting of the published public hearing notice, hearing minutes, and
attendance list with the original and all three copies of the
application.)
Business/Local Involvement (5 points)
Outline other input from businesses, chambers of
commerce, development organizations, local groups and individuals have had in
increasing the citizen participation process for the proposed
project.
Highlight how the use of any media (TV, radio,
newspapers, etc.) increased public awareness and participation in the EDP
project.
d.
Numerical Analysis - 55 Points (The applicant is not responsible for
providing any additional information for this analysis.) OCD staff will
review each EDP application and calculate the score for this section based upon
information provided in the EDP Letter-of-Intent and this application. The
following factors will be used to determine the score in this section:
Strategy Priority (5 points) How the proposed
EDP activity is aligned with the State's economic development strategy and
supports at least one of the State's targeted technology sectors, specifically
one of the following: Precision Manufacturing Technology, Biotechnology,
Aquaculture and Marine Technology, Composite Materials Technology,
Environmental Technology, Advanced Technologies for Forestry and Agriculture or
Information Technology.
Natural Resource Based (5 points) Will be based
on information received in the EDP Application.
Project Significance (25 points) Each
application will be evaluated in relation to all others. Scores will be based
on a maximum of 6.25 points in each of the following nine areas:
Number of jobs to be created/retained
EDP dollars per job created/retained
Quality of jobs created/retained based on wages and
fringe benefits
% non EDP funding in project
Community Evaluation Factor (20 points) A
Community Evaluation Factor with a maximum point total of 20 has been
pre-determined by an independent authority for each community in Maine and is
published in the 2011 Proposed Program Statement.
f.
Priority Areas Bonus (5
points) Applications assisting a business located in an identified HUB
Zone or a labor market area with an unemployment rate exceeding the state
average by at least 50% will receive a 5 point bonus.
g.
Final Application Score Each
application will receive a Final Application Score consisting of the average of
the scores assigned by members of the OCD Review Team added to the Numerical
Analysis and applicable Priority Area Bonus. Starting at the top of the scoring
list, applicants will be invited to proceed to the Project Development Phase as
funds allow. There is no minimum Final Application Score required for an
application to be considered for funding.
7.
Review Process for Activity Group 3
(DF Loan): Each application for DF assistance will be submitted through
an OCD Development Fund Loan Application and must include all attachments
required in the 2011 application directions.
Completed applications will be reviewed by the OCD Review
Team who will make a recommendation to the Commissioner of Economic and
Community Development. The following criteria will be considered during the
application phase:
(i) Detailed
description of project being financed.
(ii) Detail of the sources and uses (include
itemized description of work and costs) of all financing.
(iii) Business' Federal tax return for the
previous three years and/or complete accountant prepared financial statements
(income statement and balance sheet and notes).
(iv) Interim financial statements (if the
most recent financial information is older than 90 days).
(v) Personal Financial Statement and Federal
Income Tax Returns of all owners and guarantors with 20% or more
ownership.
(vi) One-year pro forma
balance sheet, income statement and monthly cash flow statement with supporting
assumptions.
(vii) Copies of signed
commitment letter from other financing sources as applicable.
(viii) Completed Employment Plan.
(ix) Supplemental information such as
collateral appraisals, marketing plans, resumes, site assessments, and aging of
accounts receivable/payable may be requested by OCD. If these materials are
readily available they should be included with the application
package.
(x) Priority
AreasDFApplications assisting a business located in an identified Empowerment
Zone, HUB Zone or a labor market area with an unemployment rate exceeding the
state average by at least 50% will receive priority for funding.
8.
Project Development
Phase: The project development phase must be completed within 3 months
from the date of award. The goal of this phase is a grant contract for CDBG
funds. During this phase an OCD Development Program Manager will be assigned to
work with the community to finalize their project. OCD reserves the right to
rescind the CDBG program award of the community is not under contract within
this time. The Director of the Office of Community Development may grant
waivers for just cause.
B.
COMMUNITY ENTERPRISE GRANT
PROGRAM
The Community Enterprise Grant (CE) Program provides grant
funds to assist in innovative solutions to problems faced by micro-businesses,
promote business façade programs and make streetscape improvements in
downtown and village areas. Assistance to businesses may be in the form of
grants or loans at the discretion of the community.
1.
Threshold Criteria and Program
Requirements: CE Program funds will be distributed through an annual
grant application selection process.
(a)
Eligible Activities:
Eligible activities under the Micro-Enterprise
Grant/Loan category are grants or loans to for-profit businesses,
façade grants to for-profit or non-profit businesses for exterior
improvements, including signage, painting, siding, awnings, lighting, display
windows and other approved exterior improvements (interior improvements
are not allowed) and streetscapes including pocket parks, benches,
street lighting, tree plantings, signage, traffic calming improvements,
sidewalks and other approved improvements; eligible planning activities
necessary to complete the Project Development Phase. Sewer, water, storm
drainage, parking, roads or streets and other infrastructure improvements and
buildings solely for residential use are not eligible. All
streetscape improvements must take place on publicly owned
property.
(b)
Downtown Revitalization Program
Prohibition - Communities applying for a CE grant may not apply for,
receive, or benefit from a Downtown Revitalization Program (DR) grant in the
same program year.
(c)
Maximum CE Grant Amount: $150,000 - Applicants may apply to address one
or any combination of eligible activities listed in Section B (1) (a) above but
are limited to a total of $150,000 in CE funds.
(d)
Maximum Amount of Community
EnterpriseGrant/Loan Assistance to Businesses:$25,000
(e)
Project Benefit:
(i)
Micro-Enterprise Grant/Loan:
Existing or developing businesses that have, or will have five or fewer
employees, one of whom owns the enterprise, and whose family income is LMI will
meet the project benefit. Employees are not considered in meeting project
benefit.
(ii)
Business Facade
Grants: Projectbenefit will be metwhen exterior improvements and signage
on an existing business take place in a designated slum/blight area, or
documentation exists that a business qualifies under a spot blight
basis.
(iii)
Streetscapes:
Projectbenefit will be metwhen streetscapes take place in a designated
slum/blight area or the applicant community where the project will take place
is 51% or greater LMI as determined by HUD and the U.S. Census.
2.
Special
Program Requirements
Demonstration of National Objective: Applicants
must demonstrate that the project meets the National Objective of 1) benefiting
51% or greater low/moderate income persons, 2) preventing or eliminating slum
or blighting conditions, or 3) existing or developing businesses that have, or
will have five or fewer employees, one of whom owns the enterprise, and whose
family income is LMI. Census information, a certified target area survey, an
officially adopted declaration of slum/blight conditions conforming to the
requirements of MRSA Title 30-A, Chapter 205, 5202 and HUD, or assurances of
spot blight designation or micro-enterprise eligibility must be submitted to
OCD. These demonstrations must be made as part of the
Letter of Intent and Verification of CDBG National Objective
submitted to OCD on or before 4:00pm on Friday January 7,
2011.
3.
Selection Process: The selection process will consist of three
phases; a letter of intent, an application phase and a project development
phase.
(a)
Letter of Intent and
Verification of CDBG National Objective: All communities wishing to
submit a CE application must submit a Letter of Intent and Verification of CDBG
National Objective to OCD on or before 4:00PM on Friday January 7, 2011
according to the requirements set forth in the 2011 CE application
package.
(b)
Application: The maximum length of an application is
four pages,
not counting required attachments. The application deadline for the CE
Program is 4:00PM on March 4, 2011. Each application will be rated in relation
to all others in a two-stage process.
Stage 1: Review Team Analysis
- Members of the four-person OCD Review Team will assign a Review Point
Total for each application reviewed. Review Point Totals will consist of the
sum of the three scoring areas below and be determined by the total of each
sub-scoring area. A maximum of 100 points is obtainable.
(i)
Impact
(40 points):
*State the problems then present the scope and magnitude of
the identified problems. - 6 points
*Explain how the problems negatively impact the local economy
and the viability of existing downtown or village area. - 8 points
*Clearly define how the problems negatively affect LMI
persons and/or contribute to slum/blight conditions. - 10 points
*Describe the obstacles to overcoming the identified
problems. - 6 points
*Explain why CE funds are necessary for the project; describe
efforts to secure other grant or loan funds, and tell why they are not are
available locally to assist businesses or
local government with their development and site improvement needs. - 10
points
(ii)
Development Strategy (40 points):
*List the specific activities to be undertaken in the
project. For streetscapes include location, size and design features. - 5
points
*Identify the specific use of CE funds and the specific tasks
or activities to be funded with each other source of funds. - 5 points
*Provide Identification and description of potential business
grant/loan applicants and their needs; or
provide details of how areas in need of streetscape improvements were
identified and prioritized. - 5 points
*Explain how the CE project will stimulate business in the
downtown or village area and assist in improving the area's long-term
viability. - 6 points
*Describe how the CE funded activities will have a positive
impact on LMI persons and/or on alleviation of the slum/blight conditions. - 6
points
*Provide a project timeline; list activities or actions
completed to date. - 4 points
*Describe the capacity and experience of the administrator to
market and conduct a grant/loan program
or streetscape improvement effort; and
describe how CE funds will be expended in a timely manner. - 5 points
*Budget Summary Review - 4 points
(iii)
Citizen
Participation (20 points):
*Effective use of any media (newspapers, radio, TV, etc) to
further public awareness and participation. - 4 points
*Relevance of listed meeting/hearing activities/comments (not
counting required public hearing) and the overall citizen participation process
in application and project development. - 4 points
*Involvement of downtown and local businesses, Chambers of
Commerce, development groups or other business related organizations in
identification of problems and development of the application and project. - 4
points
*Involvement of potential LMI project beneficiaries in
development of the application and project and how the required public hearing
relates to the application development and citizen participation process. - 4
points
*How other local resources (cash and in-kind) are directly
related to the project and the establishment of a cash value equivalent for all
in-kind commitments. - 4 points
Stage 2: Final Application
Score
- Each application will receive a Final Application
Score consisting of the average of the scores assigned by members of the
4-person OCD Review Team. Starting at the top of the scoring list, applicants
will be invited to proceed to the Project Development Phase as funds allow.
There is no minimum Final Application Score required for an application to be
considered for funding.
D.
NON-PROFIT DEVELOPMENT GRANT
PROGRAM
The Non-Profit Development Grant Program (NPDG) provides
funding for communities forming partnerships with local non-profit development
organizations to carry out activities in blighted areas located in designated
downtown areas which will foster community economic development initiatives
leading to the elimination of slum and blight and increased job opportunities
for LMI persons.
1.
Special
Threshold Criteria and Requirements: NPDG Program funds will be
distributed through an annual grant submission and review process
(a)
Eligible Activities:
Eligible activities in the NPDG Program are: demolition, site clearance,
structural stabilization, removal of environmental contaminants, installation
of security devices, including sprinkler systems and smoke detectors, energy
conservation measures, including replacement of heating and cooling equipment,
removal of architectural barriers, and replacement of landscape materials,
sidewalks and driveways where it is incidental to rehabilitation of the
property; and eligible planning activities necessary to complete the Project
Development Phase.
(b)
Match: All communities applying for NPDG funds must certify that a cash
match of at least 20 percent of the total grant award
will be injected into the project activities. This match may consist of all
non-CDBG loans, grants, endowments, etc contributed to the project.
(c)
Maximum NPDG Grant Amount:
$250,000
(d)
Project
Implementation: Implementation of all project activities must be carried
out by a non-profit development organization that has established a contractual
relationship with the applicant community.
(e)
Bona-fide Non-Profit Development
Organization: NPDG activities may only be carried out by bona-fide
non-profit development organizations that meet the Internal Revenue Service
definition as a non-profit, and are organized under state or local
law to carry out community and economic development needs of the applicant
community. Examples of bona-fide non-profit development organizations include
but are not limited to: Neighborhood-Based Non-Profit Organizations, Local
Development Corporations, SBA Section 504 C ertified Development Companies,
Small Business Investment Companies organized under
15
USC Section 681 and Community Action
Agencies.
(f)
Ownership of
Project Site: The non-profit development organization must own the site
on which all NPDG activities will take place.
(g)
Demonstration of National
Objective: Applicants must demonstrate at the time of application that
the project meets the National Objective of preventing, or eliminating slum or
blighting conditions. An officially adopted declaration of slum/blight
conforming to the requirements of MRSA Title 30-A, Chapter 205, 5202 and HUD
must be submitted with the application. For spot blight activities
documentation must be submitted substantiating the condition of the structure
as "blighted."
2.
Selection Process: The selection process will consist of two phases an
application phase and a project development phase.
(a)
Letter of Intent and Verification
of CDBG National Objective: All communities wishing to submit a NPDG
application must submit a Letter of Intent and Verification of CDBG National
Objective to OCD on or before 4:00PM on Friday January 21, 2011 according to
the requirements set forth in the 2011 NPDG application package.
(b)
Application: The
application deadline for the NPDG Program is 4:00PM EST on March 25, 2011. The
OCD review team will rate each application in relation to all others.
(c)
Rating Criteria: The
following rating criteria will apply to all NPDG applications:
(i) Documentation of bona-fide status for
Non-Profit Development Organization carrying out NPDG activities: 10
points
(ii) Verification of
property ownership of project site by Non-Profit Development Organization:
10 points
(iii)
Documentation that project site is in a designated downtown area as defined in
an adopted and consistent comprehensive and/or an approved downtown
revitalization plan; and that proper slum/blight designation exists for the
site: 15 points
(iv)
Project Summary - A maximum 2-page summary of all project activities funded
with NPDG and matching funds: 25 points
(v) Budget Summary & Matching Funds
Review - a review of the Budget Summary Page, Matching Funds Table and required
documentation and how they assure the project is fully funded and ready to
proceed: 15 points
(vi) Summary of potential jobs, which may be
created for LMI persons as a result of the NPDG project: 10
points
(vii) Assurances that
NPDG activities will be completed within 12 months of CDBG contract award;
including a summary of any financial, permitting, political, environmental or
contracting concerns which could delay project: 15 points
(c)
Application
Approval: The OCD Review Team will forward their recommendations for
funding to the Director, Office of Community Development. A minimum Final
Rating of 75 points will be required for an application to be considered
for funding. Starting at the top of the scoring list, applicants will be
invited to proceed to the Project Development Phase as funds
allow.
E.
INTERIM FINANCE PROGRAM
The Interim Finance Program (IFP) utilizes funds not
disbursed in the State's Letter of Credit for grants to communities to assist
businesses or developers in creating housing and job opportunities for low and
moderate-income people through short-term loans. The duration of loans will be
dependant on availability of CDBG funds.
1.
Threshold Criteria:
(a) The proposed activities must meet the low
and moderate-income objective as described below:
(i) At a minimum, 51% of the jobs created or
retained as a result of the IFP project must be taken by persons of low and
moderate income. Jobs created/retained must be in the community applying for
the IFP, be new jobs to that community, and not be associated with any other
branches of the assisted business located in another community. Transfer
positions cannot be counted toward the job creation/retention requirements.
In the event that job creation requirements are not met, the applicant
community will be responsible for immediate repayment of all CDBG funds to the
State.
(ii) The maximum cost
per job created or retained with IFP funds is $20,000. The maximum cost per job
created or retained with IFP funds for a Certified Pine Tree Development Zone
or HUB Zone business is $30,000.
(iii) At least 51% of the housing units
created by the IFP project must be occupied by low and moderate-income
households, or
(iv) The IFP
expenditures reduce the development costs for new multi-family, non-elderly
housing construction where not less than 20% of the units will be occupied by
low and moderate-income households at affordable rents and the
proportion of the total cost of developing the project to be borne by the IFP
funds is no greater than the proportion of units in the project that will be
occupied by low and moderate-income households.
(b) Complete the required IFP application
materials.
(c) The application
amount must be between $500,000 and $5,000,000. The Commissioner of DECD may
waive the $500,000 minimum requirement if OCD determines it is in the best
interest of the State and if OCD incurs no additional administrative costs as a
result of the smaller award. Eligible planning activities necessary to complete
the Project Development Phase are also an allowable expense.
2.
Special Program
Requirements: IFP applicants must also comply with the following:
(a)
Need for Financing: There
must be a demonstrated need for an IFP loan in order for the project to be
funded. The need may be based upon either a gap in available funding for the
project or on a determination that the costs of financing so adversely affect
the project's rate of return that the project would not be undertaken without
additional assistance. IFP grantees must demonstrate the proposed rate and term
have been set to ensure that assistance provided is the minimum needed and the
proposed assistance is necessary and appropriate to carry out the economic
development project.
(b)
Commitment of Non-CDBG Funds: The business being assisted must
demonstrate that all non-CDBG financing, both permanent and interim, necessary
for the project's completion has been secured.
(c)
Community Benefit: The
project must result in substantial benefit to the community: job
creation/retention, tax revenue increases, new housing opportunities, or public
facility improvements relative to the public dollar investment.
(d)
Surety: The business being
assisted by the IFP grantee must secure an unconditional, irrevocable letter of
credit for the full amount of the Interim Financing Loan (principal plus any
accrued interest to term) from a lending institution acceptable to DECD which
will be assigned to the State. The State may accept a FAME guarantee in lieu of
an irrevocable letter of credit, or other surety instrument deemed acceptable
by DECD.
3.
Selection Process: Applications may be submitted on an open basis. IFP
grants will be made on a first come, first served basis. Projects that meet
requirements may be awarded IFP grants until the amount of funds available in
the State's letter of credit has been committed. Following full commitment of
the IFP, the State will maintain a waiting list of eligible projects to be
funded. If projected funds will not be available for a minimum of six months,
the State reserves the right not to accept any additional
applications.
4.
Approval
Process: Through its Technical Assistance Providers, direct mailings,
and other marketing methods, the State will advertise the availability of funds
within the IFP. Communities interested in applying will: notify the State of
their intent to apply, identify the proposed loan recipient and provide an
application describing the project. Following the acceptance of a complete
application by the State, the DECD or its designee will conduct a financial
analysis of the project, DECD will determine if the IFP loan is needed, if all
non-CDBG permanent and interim funds are committed, and if an irrevocable
letter of credit is in place. The DECD staff will recommend the loan terms and
interest rates to the Director, Office of Community Development. The State will
review all other program requirements. If these requirements are met, the
Commissioner of the DECD will make a grant award based on the project meeting
all program requirements.
