Georgia Department of Community Affairs CDBG Economic Development

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Georgia Department of Community AffairsCDBG
Economic Development

• A session devoted to the topic of Redevelopment
  Opportunities

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• GENERAL OVERVIEW

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• Joanie Perry
• Director, Office of Economic Development
• Georgia Department of Community Affairs

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Overview

• Redevelopment in general is a very relevant topic
  given todays economic conditions.
• DCA is very actively promoting redevelopment
  through a variety of programs and a new
  initiative that is focusing attention on the 100
  Main Street and Better Hometown cities.

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Local governments can implement a broad range of
redevelopment activities

• DCAs interest and focus
• Opportunity Zones is one of 3 strategic goals for
  the department goal is to have Opportunity Zones
  in 50 communities by 6-30-11. To date, there are
  46 Zones in 37 communities.
• CDFD has placed major emphasis on redevelopment
  with the Opportunity Zone Program, Revitalization
  Area Strategy (RAS) and the Redevelopment Fund
  (RDF) set-aside.
• Commissioner Beatty creates the BoomTown
  Initiative to celebrate 30 years of Main Street
  with a strategic focus on redevelopment
  incentives the department can offer.

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(No Transcript)
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• Burke Walker
• Northeast Georgia
• Regional Commission

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Source and Use Elberton W.O. Jones Building
Source Amount Use Amount
DD RLF 192,492 Rehabilitation 192,492
RDF 500,000 Rehabilitation 480,000
Grant Administration 20,000
DDA 151,946 Equity (building) 151,946

Total 844,438 Total 844,438
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Elberton Community Timeline

• 1990 Elberton Mainstreet established
• 1998 Elberton DDA established
• 2001 Elberton W.O. Jones storefront purchased
• 2003 Elberton W.O. Jones building available for
  purchase
• 2004 HSR / Conditions Assessment completed
• 2005 RDF Application / City Resolution

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Elberton W.O. Jones Building
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Elberton W.O. Jones Building Before
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Elberton W.O. Jones Building After Success!
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• John Kingery
• Credit Manager
• Georgia Department of Community Affairs

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The Art Science of Credit Analysis

• Science - Ratio Calculations and Number
  Crunching
• Art - Interpretation and Decision Making
  

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The State takes informed risk

• Public financing for economic development is most
  typically gap financing.
• State economic development programs take risks
  many private lenders will not take, or will not
  take alone.
• However, as stewards of taxpayer resources, the
  State must invest the limited funds available for
  economic development in VIABLE projects that will
  actually create jobs and generate private
  investment.
• ITS A DELICATE BALANCE!

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Funding In the Grey Area Look for Positive
Attributes
? Strong Management ? Marketplace Opportunities ?
Access to Capital ? Cash Flow ? Strong Commitment
by Local Leadership
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Making it work

• Underwriting public financing requires
• Flexibility
• Keeping an eye open for potential
• Remembering the public purpose
• Looking at the whole project
• Not a rigorous quantitative scoring method!

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Credit Indicators

• Sales Trends
• Profitability
• Management
• Cash Flow Trends
• Working Capital Adequacy
• Capitalization
• Industry Conditions
• Years in Business

• Business Plan
• DB Rating
• Equity Injection into project
• Bank Participation in project
• Cash reserves/lines of credit
• Personal credit of principals

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• Things to
• Remember

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Things to Remember

• Describe your project and jobs created/retained
• Document need, costs and support of banks
  businesses
• Debt credit underwriting and terms

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Program Contacts

• Joanie Perry Director of Economic Development
• [phone] joanie.perry_at_dca.ga.gov
• Nyanza Duplessis EIP Loan and RDF Program
• [phone] nyanza.duplessis_at_dca.ga.gov
• John Kingery Credit Manager
• [phone] john.kingery_at_dca.ga.gov
• Brock Smith Employment Incentive Program
• [phone] brock.smith_at_dca.ga.gov