Downtown Development Revolving Loan Fund

Transcription

1 Downtown Development Revolving Loan Fund

2 DD RLF (Downtown Development Revolving Loan Fund) Program What Is It? Financing program designed to help local governments revitalize and enhance downtown areas with below-market interest rates for eligible capital projects Benefits and Opportunities Low interest rates Subordinated debt position to private bank financing Technical Assistance provided

3 Downtown Development Revolving Loan Fund Purpose to assist local governments and development authorities with the revitalization of downtown areas Must be located within the core historic commercial district and any adjacent historic neighborhoods where DD RLF will spur commercial redevelopment. The Baldwin Lofts Milledgeville, Georgia Eligible in municipalities and counties below 100,000 in population Amoss Pharmacy Building Fairburn, Georgia

4 Typical eligible activities Land acquisition Building acquisition New construction Renovation Historic downtown public buildings Combinations

5 Ineligible Activities: Working Capital Operating Expenses Refinancing of Permanent Loans Administration Local Revolving Loan Funds

6 Typical Loan Terms Maximum loan amount: $250,000, not to exceed 40% of total eligible project costs Interest Rate: Below Market (presently 2% DD RLF for Main Street cities in good standing) Repayment Period: 10-year term with a 15-year amortization Equity injection and commercial financing are normally required (e.g ) No application fees or loan origination fees

7 Ultimate User Private Business Developer Public Entity (All funds flow through the City or an Authority of the City)

8 Successful DD RLF Applications Must Demonstrate: Broad Based Community Support for Downtown Revitalization Project fits in with Community s plans for Downtown Revitalization Project will have Positive Impact on Downtown Project is Feasible and Sound

9 How to Apply for a DD RLF Loan

10 Potential Project Market Success Initial Project Assessment Manage Project / Project Closing DD RLF Application Process Application Development & Submission Award/Denial Review & Underwrite Application (30-45 bus. days)

11 Applications Accepted year-round Available at Available for download DD RLF Fact Sheet DD RLF Initial Project Assessment (IPA) DD RLF Application DD RLF Regulations

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13 Completing the Application 3 Major Sections General Project Information Financial and Company Information Supporting Cost Documents, Site Control, etc.

14 General Project Information Synopsis of Project Who / What / When / Where / How? Project Impact Created or Retained Jobs / New Businesses / Residential Units / Sq. Feet Improved Downtown Feasibility / Marketing Analysis & Plan Source and Use Statement Resumes of principals Plans, Specifications, Renderings and/or Architectural Drawings Property Management Plan

15 Financial and Company Information Personal Financial Statement Personal and/or Corporate Tax Returns Pro-forma Schedule of Debts Lease Agreements Cash Flow Analysis Audited Financial Statements (local governments only)

16 Supporting Cost Documentation Key Cost Documents Purchase agreements / Purchase Option / Sales Agreement / Warranty Deed Closing statements Contractor cost estimates Vendor quotes Bank Commitment Letter(s) Commitment Letters (businesses or tenants)

17 CREDIT-WORTHINESS: A critical factor in a competitive application

18 The Four C s vs. The Five C s

19 CHARACTER What is management s reputation? What kind of track record does the business have in the industry? How trustworthy are you to repay?

20 CAPACITY Can you repay the debt? Debt-to-Income Ratio the lower your ratio, the more confident creditors will be in your capacity to repay

21 CAPITAL How well capitalized is your company? What assets does the business own? What are the liabilities? How much you own - How much you owe = Net Worth

22 COLLATERAL What is the secondary source of repayment? Real Estate Marketable Securities

23 CONDITIONS What are the trends for your industry? Local Market Competition

24 Success Stories

25 Grassroots Coffee Company

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27 Financing for the Grassroots Coffee Company Source Amount Use Amount DD RLF $150,000 Acquisition / Renovation $150,000 Bank $187,507 Acquisition / Renovation $187,507 Equity $ 37,507 Acquisition $ 37,507 Total $ 375,014 $ 375,014

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30 Mystic Grill - Covington

31 Financing for the Mystic Grill

32 Mystic Grill - Interior

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36 Mystic Grill - Covington 40 jobs

37 Georgia Downtown Renaissance Fund Act Passed this session, the act will provide $5 million in funding for four years to provide technical assistance and loans to municipal corporations as they carry out downtown redevelopment initiatives. Anticipated date for public hearings this fall. "Healthy downtowns reflect the strong spirit of entrepreneurship in Georgia and attract economic development Governor Deal

38 Regions 1, 3, 4 Patrick Vickers, patrick.vickers@dca.ga.gov Regions 2, 5, 7 North John VanBrunt, john.vanbrunt@dca.ga.gov Regions 6, 8, 9 West Tonya Mole, Regions 7 South, 9 East, 12 Jennifer Fordham, jennifer.fordham@dca.ga.gov Regions 10, 11 Kelly Lane, kelly.lane@dca.ga.gov

39 Contact Information: Kimberly Carter Downtown Development Revolving Loan Fund Program Manager (404)