Reuse of Minnesota Investment Funds

Transcription

1 Reuse of Minnesota Investment Funds Carol Pressley Office of Business Finance Business & Community Development Division Department of Employment and Economic Development MIF History Program began in funding sources: HUD 15% of MN CDBG (federal) allocation is set-aside for Economic Development $72 million to date 300 projects Minnesota Legislature (state) $112 million to date 600 projects MIF MIF process: DEED awards the financing to a local unit of government, who then provides one of the following: 1. A loan to the business that is repaid to the LGU who retains part or all for the establishment of a RLF to further economic development in the community 2. A loan to the business that is forgiven if all objectives are met 3. Publicly owned infrastructure that is needed for the business development Numbers 2 and 3 -- No repayment, so no RLF 1

2 REVOLVING LOAN FUNDS HUD is requiring more tracking, monitoring and reporting on the use of RLF s generated from CDBG funds 50 LGU s reporting on their use of RLF s (attached) Over $13 million in unused funds were reported as of 9/30/12 Reasons for Non-Use Need Staff capacity to underwrite and service the loans Fear of complex federal requirements Not knowing what is eligible DEED recognizes the need to provide training to the LGU s that have RLF s. We are in the process of developing guidelines and training. Three Ways to Use Funds 1. RLF for Business Assistance 2. Other CDBG Eligible Activities 3. Assistance to a Local Development Organization 2

3 1. RLF Assistance to Businesses RLF must be used to continue the same activity economic/business development only. ALL CDBG requirements must be followed: National Objective (LMI), Environmental Review, Davis-Bacon/ Labor Standards, Acquisition/Relocation, Citizen Participation, Public Standards, etc. etc. Federal identity is never lost. RLF Assistance to Businesses Eligible Activities Loans, grants, loan guarantees to businesses to assist with start up or expansion Technical assistance to businesses Microenterprise Development Commercial Rehabilitation Public Facilities and Improvements Job Training 2. Other CDBG Eligible Activities Any activity eligible for the competitive program administered by DEED s Small Cities staff Must follow non ED CDBG requirements Federal identity is never lost Contact DEED Loan Officer Technical assistance and tracking provided by DEED s Small Cities staff Pat Armon, Christine Schreiber, or Jeremy LaCroix 3

4 Other CDBG Eligible Activities Some of the Eligible Activities: Housing Rehabilitation Publicly owned infrastructure including, but not limited to: Streets, curb and gutter, sewers, sidewalks, utility lines Housing shelters: nursing homes, hospitals, shelters for victims of domestic violence. Historic Preservation Planning and capacity building 3.Assistance to a Local Development HUD has recognized the need to lessen the burden on LGU s that administer CDBG ED funds. Developed a method to Defederalize the funds. LGU is allowed to grant their award to a non-profit organization that serves the development needs of the community/area. Assistance to a Local Development Process: LGU applies for MIF funds LDO is identified in the application. LGU enters into an agreement with the LDO to grant the funds to them and to carry out the project. LDO is the lender Loan repayments are made to and kept by the LDO LGU cannot recall the funds unless the LDO does not comply with the requirements of the program. FUNDS ARE NOW DEFEDERALIZED!!!! 4

5 Assistance to a Local Development Who is eligible to be an LDO: A non-profit organization that serves the economic development needs of the community or area Meets IRS definition of non-profit SBA 504 Certified Development Companies Community Action Agencies Community Development Corporations Local Development Corporations Small Business Investment Companies Assistance to a Local Development Examples: Initiative Foundations Greater Jobs, Inc., Albert Lea Brainerd Lakes Area Development Corp., Brainerd Cass County Economic Development Corporation, Backus Community and Economic Development Associates, Chatfield Existing RLF s can be granted to the LDO, however, all CDBG requirements apply to the first use of the funds. Dan Dorman, Executive Director, Greater Jobs, Inc. Established LDO through Freeborn County Office of Business Finance MIF Staff Bob Isaacson, Director bob.isaacson@state.mn.us Bart Bevins, Sr. Loan Officer bart.bevins@state.mn.us Regions: 4 & Metro Lisa Dargis, Sr. Loan Officer lisa.dargis@state.mn.us Regions: 7W & 9 Emily Johnson, Sr. Loan Officer emily.a.johnson@state.mn.us Regions: 1, 2, 3, & 5 Carol Pressley, Sr. Loan Officer carol.pressley@state.mn.us Regions: 7E & 10 Brad Simenson, Sr. Loan Officer brad.simenson@state.mn.us Regions 6W, 6E & 8 5

6 SMALL CITIES ECONOMIC DEVELOPMENT SET- ASIDE REVOLVING LOAN FUNDS BY INITIATIVE FOUNDATION REGION 9/30/2012 Southwest Minnesota Initiative Foundation West Central Initiative Foundation Little Falls, MN Fergus Falls, MN Hutchinson, MN Baxter $ 370,152 Alexandria $ 124,767 Clara City $ 107,726 Brainerd $ 204,039 Detroit Lakes $ 274,095 Edgerton $ 192,173 Cold Spring $ 677,567 Glenwood $ 50,294 Granite Falls $ 116,894 Deerwood $ 72,304 Lowry $ 46,801 Hector $ 151,015 Elk River $ 704,739 Morris $ 219,601 Heron Lake $ 172,151 Howard Lake $ 53,986 Morris EDA $ 273,809 Hutchinson $ 153,018 Maple Lake $ 289,319 Perham $ 785,641 Lac Qui Parle Cty $ 148,826 North Branch $ 171,485 Wadena $ 262,430 Marshall $ 201,664 Rockford $ 123,440 $ 2,037,438 Meeker County $ 349,784 $ 2,667,336 Sauk Rapids $ 305 Mountain Lake $ 544,943 $ 899,605 $ 2,667,336 Southern Minnesota Murray County $ 82,860 $ 2,037,438 Initiative Foundation Nobles County $ 533,843 $ 2,178,881 Northwest Minnesota Owatonna, MN Olivia $ 393,342 $ 5,557,567 Foundation Albert Lea $ 188,583 Pipestone $ 18,815 $ 105,205 Bemidji, MN Faribault $ 283,603 Wabasso $ 137,073 $ 13,446,032 Bagley $ 112,399 Madison Lake $ 196,984 Windom $ 604,173 Bemidji $ 238,402 New Prague $ 471,580 Winsted $ 598,645 Fosston $ 160,166 Owatonna $ 276,974 Worthington $ 1,050,622 Park Rapids $ 388,638 Pine Island $ 13,039 $ 5,557,567 $ 899,605 Red Wing $ 216,667 Waseca $ 254,763 Winona $ 276,688 City of Prior Lake Northland Foundation $ 2,178,881 Duluth, MN $ 105,205 $0.00 6