DOWNTOWN DEVELOPMENT REVOLVING LOAN FUND (DD RLF) ______________________________________________ GEORGIA CITIES FOUNDATION (GCF)

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DOWNTOWN DEVELOPMENT REVOLVING LOAN FUND (DD
RLF)_____________________________________________
_GEORGIA CITIES FOUNDATION (GCF)
October 18, 2007
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DOWNTOWN DEVELOPMENT REVOLVING LOAN FUND
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DD RLF ProgramPurpose________________________
______________

• To assist Cities, Counties and Development
  Authorities in their efforts to revitalize and
  enhance downtown areas by providing below-market
  rate financing to fund capital projects.

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Loan Terms, etc._________________________________
_________

• Maximum Loan Amount 250,000
• Interest Rate Below Market Rate (currently 3)
• Repayment Period 10-year term with 15-year
  amortization

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Loan Terms, etc. ________________________________
______

• Minimum Equity injection 10 of project cost
  (average is 20)
• Most projects require commercial financing as
  part of overall financing structure

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DD RLF projects must be located
within______________________________________

• The core historic commercial district and
  adjacent historic neighborhoods where DD RLF will
  spur commercial redevelopment.
• In Municipalities or Counties with a Population lt
  100,000

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Ultimate user of funds may be__________________
____________________

• Private Business
• Developer
• Public Entity such as City or Development
  Authority
• (All funds flow through Development Auth.)

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Eligible Applicants___________________________
_____

• Municipalities
• Counties
• Development Authorities

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Eligible Activities_____________________________
_________

• Real Estate Acquisition
• Building Rehabilitation
• New Construction
• Green Space/Parks
• Purchase of Equipment (on limited basis)

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Ineligible Activities ________________________
______________

• Working Capital
• Refinancing of Permanent Loans
• Operating Expenses
• Administration
• Local Revolving Loan Funds

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Successful DD RLF Applications Must
Demonstrate_____________________________________
________________________

• Broad Based Community Support for Downtown
  Revitalization
• Project fits in with Communitys plans for
  Downtown Revitalization
• Project will have Positive Impact on Downtown
• Project is Feasible and Sound

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DD RLF Projects Funded to Date_________________
_____________________

• 66 DD RLF loans
• Totaling 12.4 Million
• DD RLF Investment
• Leveraging 43 Million in
• Private Investment

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Loan Security___________________________________
_______________

• Project Collateral and Personal Guarantees
• Ultimate user of funds must undergo Credit
  Underwriting to determine creditworthiness

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Concentration of Assets_________________________
_________________________

• A Community is limited to no more than 15 of DD
  RLFs Total Assets

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GEORGIA CITIES FOUNDATION
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Georgia Cities Foundation

• What We Are
• The Georgia Cities Foundation, established in
  1999 as a 501(c)(3) organization, is a non-profit
  subsidiary of the Georgia Municipal Association
  (GMA).
• Purpose
• To assist cities in their efforts to revitalize
  and enhance downtown areas by serving as a
  partner and facilitator in funding capital
  projects through a revolving loan fund.

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GCF Revolving Loan Program

• Funding Sources
• Robert W. Woodruff Foundation
• Pledged 9 million for RLF program
• Contingent on equal match from State of Georgia
• To date, 8.675 million received from Woodruff
  Foundation, based on State appropriations to DCA
• Other Foundations, Corporations, Individuals
• To date, 2.4 million received from other sources
  (including loan repayments)

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Loan Structures

• Loan to a DDA
• Loan to a DDA with
• A loan to a owner/developer
• A lease to a private business owner
• An IG agreement with city

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GCF Loan Structure

• Why a loan to the DDA? Why not to the city?
• In Georgia, a city cannot directly give its
  general obligation to a nongovernmental loan
  without a voter referendum.
• DDA has clearer and more straightforward powers
  concerning downtown development.

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GCF RLF Program

• Loan Terms
• Up to 250,000 per project
• Interest Rate Below Market Rate (presently
  3.0)
• Repayment Period 10 years, with 15 year
  amortization

• Other Information
• Collateral Project Property
• 2nd lien position behind bank
• Personal guaranties are normally required
• Permanent Financing as opposed to Interim /
  Construction Financing
• 50-40-10 Financing Structure

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GCF Loan Terms

• 50-40-10 Financing Structure
• Example 1,000,000 Project Cost
• Acquisition 350,000
• Rehabilitation 650,000
• Conventional Financing (Bank) 500,000
• Low-Interest Loan (GCF/DD RLF) 400,000
• Owner/Developers Equity 100,000

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GCF RLF Program

• Eligible Projects
• Land acquisition
• Rehabilitation of existing building
• New construction
• Green Space/Parks
• Combinations

• Ineligible Projects
• Operating expenses
• Local revolving loan funds
• Streetscape and façade projects
• Essential governmental buildings (city halls,
  fire stations, etc.)

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GCF Concentration of Assets Policy

• A Community is limited to no more than 15 of
  GCFs Total Assets

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Application Process

• DDA application/local government certification
• Project description
• Project budget
• Supporting Documentation

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Eligibility Considerations

• Local support
• Approach to downtown development
• Project budget and time frame for completion
• Underwriting review

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GCF RLF Program

• Desired Public Benefits
• Rehabilitation of dilapidated structures
• Historic preservation
• New business creation
• Business expansion / retention
• New job creation
• Downtown housing
• Cultural facilities

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City of Watkinsville10 North Elm Street Project

• Project Cost
• 635,000
• DDRLF
• 250,000
• Bank
• 300,000
• Owner Equity
• 85,000

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City of Watkinsville10 North Elm Street Project
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Rome--Old Cherokee Lodge

• Source Amount
• DD RLF 250,000
• GCF 250,000
• Owners Equity 177,000
• Bank Loan 1,088,886
• TOTAL 1,765,886
  

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Rome--Old Cherokee Lodge
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City of MaconCapitol Theatre Project

• Project Cost 1,387,142
• GCF
• 250,000
• Tax Credit
• 150,000
• In-kind donation
• 771,892
• Bank loans
• 215,250

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City of MaconCapitol Theatre Project
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Fayetteville--Travis House
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Fayetteville--Travis House

• DD RLF 225,000
• GCF 225,000
• Local bank 500,000
• Owners equity 180,000
• Total 1,130,000

• When I crunched the numbers, it only made
  financial sense to restore a historic property IF
  we could qualify for the GCF/DD RLF financing.
  We would not have undertaken such an extensive
  and expensive restoration project had those funds
  not been available to us.

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For More Information

• GCF
• Perry Hiott
• phiott_at_gmanet.com
• [phone]
• __________________________________________________
  _______
• DD RLF
• Alan Dickerson
• adickers_at_dca.state.ga.us
• [phone]