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 Number 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, $400,000
demolition, clearance, construction, reconstruction, installation and
rehabilitation
associated with
public infrastructure projects such as water and
sewer improvements, 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.
2
Grants to Municipalities for Direct
Business Support: $200,000 for non-capital equipment, land and site
improvements, rehabilitation or construction of commercial or industrial
buildings, working capital and capital equipment.
3
Development Fund Loan (DF):
for acquisition of $300,000 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.
The Office of Community Development, at its discretion, may waive the repayment
terms once the LMI benefit has been documented.
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)
Program
Dollars per Job: The maximum CDBG participation per job created or
retained with EDP funds is $30,000.
(c)
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.
(d)
Minimum EDP Application Amount:
$50,000
(e)
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.
(f) 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: Due the
first Friday of every month by 4:00 p.m. If that day is a recognized State
Holiday the due date would then be the following regular business day by 4:00
p.m.
(b)
EDP Application Due
Dates for Activity Group Numbers 1-2 ONLY: By invitation only as a
result of accepted Letter of Intent.
(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 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 a 100% cash match of the total EDP award will be
provided. 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's
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; 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. The Office of Community Development, at its
discretion, may waive the repayment terms once the LMI benefit has been
documented.
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 - 100 Points
Members of the 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
(40
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 (15 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 (10
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 (15 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 (40 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
(15
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 (15 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 (10
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 EDP
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 (20 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 (10 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
(10
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.
Final Application Score Each application will receive a Final
Application Score consisting of the average of the scores assigned by members
of the Review Team 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.
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 2012 application directions.
Completed applications will be reviewed by the 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 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 Enterprise Grant/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 Title 30-A M.R.S.A. §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 February 10,
2012.
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 February 10, 2012
according to the requirements set forth in the 2012 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 30, 2012. Each application will be rated in
relation to all others in a two-stage process.
Stage 1: Review Team Analysis
- Members of the Review Team will assign a Point Total for each
application reviewed. 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 Review
Team. Starting at the top of the scoring list, applicants will be invited to
proceed to the Project Development Phase as funds
allow.
(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)
Program
Dollars per Job: The maximum CDBG participation per job created or
retained with EDP funds is $30,000.
(c)
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.
