Dave GobenDepartment of Commerce & Economic Opportunity

2014 CDAP 2014 CDAP Grant Administration WorkshopGrant Administration Workshop

CDAP Economic DevelopmentCDAP Economic Development

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National Goals / ObjectivesNational Goals / Objectives

• Assist in building the financial and operational capacity of communities to carry out local economic development

– Locational Argument

– Financial Gap Argument

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Low and Moderate-Income PersonsLow and Moderate-Income Persons

"Low and Moderate-Income Persons" shall mean those individuals in a family whose income is less than 80% of the median income of the area.

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CDAP Economic DevelopmentCDAP Economic Development

• $5.0 million allocation

• Maximum Grant amount $750,000

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FEDERAL CDBG HUD $$’s

STATE (DCEO) CDBG $$’s

CDBG LOAN TO BUSINESS

CDBG LOAN REPAYMENTS (PROGRAM INCOME) TO ULG REVOLVING FUND

ECONOMIC DEVELOPMENT GRANT CDBG $$’s to Unit of Local Government (ULG)

LOANS MADE FROM PROGRAM INCOME BY ULG REVOLVING FUND

CDBG-Community Development Block Grant

HUD-US Dept. of Housing & Urban Development DCEO-Dept. of Commerce & Economic Opportunity

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PurposePurpose• Economic Development Financial projects

– Job creation with 51% LMI– Job retention with 51% LMI– Loan Agreement

• Public Infrastructure in Support of Business – Participation Agreement– Job creation with 51% LMI– Job retention with 51% LMI

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PurposePurpose

The primary objective of program is to enable grantees to carry out local economic development activities in a way that will expand economic opportunity, principally for low and moderate-income persons. Each project shall result in private sector job creation or retention. At least 51% of such jobs shall be filled or retained by persons of low and moderate-income.

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Eligible BorrowersEligible Borrowers

• Private for-profit

• Not-for-profit entities

Sub recipients must directly create or retain jobs; indirect jobs (employed by other than the borrower) are not sufficient to meet program guidelines.

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Eligible Grant RecipientsEligible Grant Recipients

Only units of general local government (i.e. cities, villages, townships and counties) as defined by the Illinois State Constitution may apply for funding. Municipalities must be 50,000 or less in population and must not be located in an urban county that receives “entitlement” funds.

• private for-profit or not-for-profit entities.

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Federal Regulations/Title 1Federal Regulations/Title 1• Job Creation/Retention with 51% LMI Benefit• Environmental Review

– Required prior to loan closing• Davis-Bacon

– Required for construction work using Program funds

• Uniform Act– Required when real property is acquired or

persons displaced

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Policy GuidelinesPolicy Guidelines

• Finance no more than 50% of project• Not to exceed $15,000 for every FTE

created/retained• No speculative financing• 51% LMI benefit• Economic Development grant request may be

reduced by balance of RF• Department Retail Policy

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Eligible Use of FundsEligible Use of Funds

• Site development/infrastructure extension• Construct new facility/addition• Renovation of existing facility• Leasehold improvements• Purchase of machinery or equipment• Working Capital

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Ineligible Use of FundsIneligible Use of Funds

• General government expenses• Forgivable financial assistance projects• Costs of operating and maintaining public

facilities and services• Servicing or refinancing of delinquent or

defaulted existing debt.

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Ineligible Use of FundsIneligible Use of Funds

• Relocation of business from one area of the state to another

• Exceeding HUD’s threshold of pirating jobs

• Violation of HUD’s underwriting provisions

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SecuritySecurity

COLLATERAL

COLLATERAL

COLLATERAL

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SecuritySecurity

• All financial assistance projects to businesses shall be secured– Financial assistance agreement, mortgage,

security agreement, promissory note, UCC, financing statement or other assignment of rights of the assets of assisted firms.

• DCEO will underwrite each project.

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Employee Income Certification FormsEmployee Income Certification Forms

• Use current Section 8 HUD income guidelines

• Jobs and investment created by 24th month

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-WARNING--WARNING-

• Failure to comply with State or Federal Regulations could result in:– Pending, future grant requests will not be

considered;

– Payment requests for active grants suspended;

– recovery procedures by DCEO.

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Revolving Fund Program Revolving Fund Program

DCEO Website

http:wwwga.illinois.gov/dceo/pages/

Default.aspx

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Contact InformationContact InformationDave Goben, Economic Develoment Manager

Department of Commerce & Economic Opportunity500 E. Monroe St, R-2Springfield, IL 62701

(217) 785-6117David.goben@illinois.gov

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• Questions???

• Comments!!!

• Concerns~~~

Thank you and good luck!

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