cdbg economic development guidelines
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ECONOMIC DEVELOPMENT WITH COMMUNITY DEVELOPMENT
BLOCK GRANT (CDBG) FUNDS
Economic Development Department
February 11, 2016
FY 2016 Grant Amounts
CDBG: $1,002,441$1,002,492 last year
HOME: $349,208$401,912 last year
National Objectives• Benefit low/moderate
income persons• Elimination of slum and
blight• Meet an urgent need
While CDBG funds may be used for a variety of community development activities, HOME funds may only be used for affordable housing activities.
Cooner Street Rehab
CDBG Investment in Northgate
Program Overview• There are many types of economic development
activities possible under CDBG • Purpose - expand employment opportunities for
Low and Moderate income (LMI) people • Mechanism - provide “gap financing” with favorable
terms
Low and Moderate Income Persons
2015 Income Limits – 80% AMIHousehold Size Income Limit
1 $34,1002 $39,0003 $43,8504 $48,7005 $52,6006 $56,5007 $60,4008 $64,300
Ways To Be Eligible• Create or retain one or more full time equivalent
(FTE) job(s)• Job retention - job(s) would be lost or business
would close but for the CDBG funds • At least 51% of created or retained jobs must be
people at or below 80% AMI• Project must comply with Federal Regulations
Eligible Projects• Business Incubators• Public Facilities• Commercial/Industrial Rehabilitation• Job Readiness, Skills Training, and Job Replacement
Programs• Etc.
Example 1: Texarkana• Loaned $100,000 to Pecan Point Brewing Co. to
improve their vacant Main Street property (new venture) • 10 year term• Interest rate - 1% over the rate for 10 year Treasury
notes (adjustable by City) • Jobs Created - 15
Example 2: Houston• Loaned $1.7 million to Pyburn’s Farm Fresh Foods
for predevelopment, land acquisition, construction, and equipment• $3.2 million from other sources• Made healthy food available in “food desert” • Created 47 jobs, 95% live within two-mile radius of
store• Jobs created - 47
Example 3: LA Tech Business Incubators – Port Tech • PortTechLA – maritime tech incubator • 2012 - Awarded $1.5 million in CDBG funds• Operated by a coalition consisting of the City , Port
of Los Angeles and Chambers of Commerce• Funds used to purchase and renovate facility for
office space• Purchase price of building paid back within specified
time period• 72 jobs created
Example 4: LA Tech Business Incubator – Clean Tech• Clean Tech “focused” Business Incubator • 2012 - Awarded $3 million in CDBG funds • Part of City’s Clean Tech Corridor • Funds used to renovate and lease office space,
provide coaching and mentoring services, and financing assistance for businesses• Provides flexible office space for venture firms and
startups
Future Next Steps• Direction to Staff• Guidelines – February 25th, 2016 • Tool for Job Creation
Job Creation Requirements• One FTE (1,750 staff hours per year) created or
retained for each $35,000 of CDBG investment• Provide payroll documentation to show creation• Minimum of 51% of jobs created or retained in City
portfolio must be LMI
Example: Texarkana• Loan of up to $100,000• Terms up to 10 years• Loan recipients must be located in target area
Example 2: Houston• Flexible guidelines• Allow any type of economic development project
that meets requirements• Managed by Houston Redevelopment Authority
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