File #: 15-036    Version: 1 Name:
Type: Action Item Status: Regular Business
File created: 1/15/2015 In control: City Council
On agenda: 1/27/2015 Final action:
Title: Communication from the City Manager and the Community Development Director with a Request to APPROVE the COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) ECONOMIC DEVELOPMENT PROGRAM and to Allocate $463,860.00 to the Program. (Generally Council Districts 1, 2, & 3)
Indexes: Goal 2 - Safe Peoria, Goal 3 - Beautiful Peoria, Goal 4 - Grow Peoria, Grow employers and jobs., Reinvest in neighborhoods
Attachments: 1. Wellness Map
ACTION REQUESTED:  
Title
Communication from the City Manager and the Community Development Director with a Request to APPROVE the COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) ECONOMIC DEVELOPMENT PROGRAM and to Allocate $463,860.00 to the Program. (Generally Council Districts 1, 2, & 3)
 
Body
BACKGROUND:
As an investment of the City's Federal resources and to further the Council's goal to grow employers and job opportunities, $250,000 was allocated from the 2013 CDBG entitlement funds and $163,860 was allocated from the 2014 CDBG entitlement funds for an economic development program.  Upon approval of the draft 2015 HUD budget, an additional $50,000 will also be allocated from CDBG funds.  A total of $463,860 in CDBG funds will be available for the program.
 
Staff has attended HUD trainings, researched HUD regulations and statutes, and reached out to other communities with similar programs to craft guidelines that are in compliance with Federal rules and regulations and that meet a need in the City.
 
Below is an outline of the programmatic guidelines for the program using CDBG funds:
 
1.      The eligible applicant must be a for-profit business who is in good standing with the State of Illinois and eligible to receive Federal fund assistance.
2.      Program proceeds can be used for an applicant's project that includes code compliance updated, building renovations/expansions and parking updates.
3.      The applicant must create at least one full-time equivalent (FTE) job and the employment position must meet the regulations of the CDBG program related to low-income benefit.  City Staff will assist with determining if job creation requirements and low-income benefit meet the CDBG regulations.
4.      For each FTE position created, an applicant is eligible to receive $35,000 of assistance.  A minimum amount of assistance requested must be at least $10,000 with a maximum amount of assistance at $210,000 per project.
5.      Program proceeds are provided as a forgivable grant with a job retention requirement based upon the amount of assistance.  A pro-rated amount of the total funds provided will be forgiven each month the job retention requirement is met by the applicant. The forgivable period will begin once all CDBG funds are disbursed to the applicant and the project is closed.
i.      $0 to $75,000 of funds provided:             job retention period of 12 months
ii.      $75,001 to $100,000 of funds provided:      job retention period of 24 months
iii.      $100,001 to $210,000 of funds provided:      job retention period of 36 months
6.      The amount of CDBG assistance provided cannot exceed 80% of the total project costs.  The applicant must contribute at least 20% of the total project costs in the form of either cash or private financing secured by the applicant.  
7.      Prioritization of funding will be made available to businesses located in the City of Peoria Neighborhood Wellness Plan Areas 1 and 2.  Maps of Wellness Areas will be provided by City Staff.
8.      Applicants must comply with all zoning, permitting, licensing and approval requirements of the City. No waivers from the City code may be approved unless agreed to by the City.  
9.      All contractors employed on a CDBG funded project must pay project construction employees Federal Davis-Bacon wages, and comply with Equal Opportunities laws.
10.      Applicants must be operating the business with the required jobs posted or hired within six (6) months of signing the program agreement, unless an extension is approved by the City.
11.      City staff will review all submitted applications for CDBG compliance and project feasibility.  Only those applications that met the program guidelines will be submitted to City Council for final approval.
12.      Variations from these guidelines may be approved on a project basis or program basis by the City Council.
 
Once approved, staff will begin to market the program to businesses and a formal application will be distributed.  Each application that meets the program guidelines will be brought before the City Council for final approval.
 
Through the use of CDBG funds for this program, the City will help create a public/private partnership with the business community and further the City's goal of growing businesses as well as providing job opportunities.  
 
FINANCIAL IMPACT:  A total of $413,860 from project numbers 13ED00 ($250,000) and 14ED00 ($163,860) is currently available for the program from previous year grant awards (2013 and 2014).  An additional $50,000 could be available based upon the approval of the draft 2015 HUD budget as well as the actual grant allocation received by the City.
 
NEIGHBORHOOD CONCERNS:  The City receives numerous calls for assistance to improve and rehab businesses.  This program would be a welcomed resource to support business improvements and create job opportunities in the City.
      
IMPACT IF APPROVED: An economic development program would be created and made available in 2015.  
 
IMPACT IF DENIED:  No economic development program would be created and subsequent planning and relocation of HUD funds will be required.  
 
ALTERNATIVES: None at this time.
 
EEO CERTIFICATION NUMBER: Not applicable at this time.  Applicants approved for program funding will be required to maintain an EEO certificate from the City.
 
WHICH OF THE GOALS IDENTIFIED IN THE COUNCIL'S 2014 - 2029 STRATEGIC PLAN DOES THIS RECOMMENDATION ADVANCE?
 
1. Grow Peoria: Businesses, Jobs, and Population      
2. Attractive Neighborhoods with Character: Safe and Livable
3. Vibrant Downtown: Riverfront/ Central Business District/ Warehouse District
 
WHICH CRITICAL SUCCESS FACTOR(S) FROM THE COMPREHENSIVE PLAN DOES THIS RECOMMENDATION IMPLEMENT?
 
1. Grow employers and jobs.      
2. Reinvest in neighborhoods.      
3. Support sustainability.      
 
DEPARTMENT: Community Development