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HomeMy WebLinkAbout[05c] Financial Incentives p+IIALASskA'-1-1\i\tet* CITY OF NT.J(LSBPH EDA Agenda Item 105cl MEETING DATE: January 18,2017 AGENDA ITEM: Financial Incentives SUBMITTED BY: Administration BOARD/COMMISSION/COMMITTEE/COUNCIL RECOMMENDATION: PREVIOUS EDA ACTION: In 2008 the EDA started some small grant programs for the business districts. The grant programs included: Demolition Grant,Business Façade,and Revolving Loan Fund. BACKGROUND INFORMATION: Over the past eight years the EDA has received various funding requests through the available grant programs. A summary of funding throughout the 8 years has been provided as well as the program details. It is a good time to look at the program goals and see if they are still meeting the needs of the EDA and if the program served the need. BUDGET/FISCAL IMPACT: ATTACHMENTS: Request for EDA Action— Program Details Summary of Funding's REQUESTED COUNCIL ACTION: Discussion ST. JOSEPH BUSINESS DISTRICT FACADE ARCHITECTURAL DESIGN GRANT PROGRAM PURPOSE The St. Joseph Business District Façade Architectural Design Grant Program provides incentives to stimulate visible investment in St. Joseph businesses. Property owners are encouraged to consider improvements that incorporate the surrounding community including but not limited to aesthetics, environment, cultural and historic elements, and architecture. These improvements should create a cohesive, inviting environment. The program provides a matching grant for actual design and construction costs, up to $1,000 per property address, per calendar year. Qualifying projects must be of an approved design, be applied for by commercial property owners and/or merchants, and be applicable to exterior building, landscape improvements, and other similar improvements visible from a public right-of-way. Approved projects will be funded on a first- come/first-served basis until all funds are expended. In addition, the opportunity exists that the St. Joseph Economic Development Authority's revolving loan program could be available to assist with construction costs associated with the implementation of façade designs. ELIGIBILITY 1. All work must be done on the exterior of the building/property and/or result in a publicly visible improvement. 2. All work done must be in accordance with the City of St. Joseph Code of Ordinances, the Downtown Revitalization Plan and subsequent design guidelines, and the building code. All required permits must be obtained. Work shall include the correction of any known exterior building code violations. 3. Work in progress or performed prior to project approval will typically not be eligible for funding unless the EDA finds significant underlying purposes for work beginning prior to project approval. 4. Funds may be used for the design of exterior building improvements, awnings, windows, doors and/or site landscaping, other than sod or seed, resulting in a publicly visible improvement and for actual construction costs related to an approved improvement. Other uses may also be eligible if prior approval is granted by the St. Joseph Economic Development Authority. 5. Signs are eligible for this program but must be in connection with a façade improvement project. 6. The following types of property are not eligible: • Tax delinquent • Special Assessment delinquent • Property in litigation • Property in condemnation or receivership • Tax exempt properties • Exclusively residential buildings • Properties zoned industrial • New construction projects on lots previously undeveloped (redevelopment and/or rehabilitation projects remain eligible) • Property considered non-conforming to the City's Code of Ordinances, unless the proposed improvements are intended to correct all the non-conforming issues. PROJECT APPROVAL GUIDELINES Program oversight and authority for grant approval is delegated to the City of St. Joseph Economic Development Authority. The Economic Development Authority will review and approve all grants based on the following guidelines: 1. A project for which an application has been received will only be reviewed if it is filled out completely. Photographs illustrating subject building(s) and property and proposed site changes/improvements may be required by the EDA. 2. Multiple property owners must submit separate applications for each property/project. 3. Any business owner under a lease who submits and application must obtain and provide written consent of the property owner. 4. Preference will be given to projects which: • Will positively contribute to the City revitalization/renewal efforts • Will eliminate a blighting influence • Will result in a visible improvement that would not be made otherwise • Demonstrate a ratio of private investment to public investment greater than 2:1 5. Project is consistent with the Comprehensive Plan, transportation plans, and other applicable plans. 6. Projects must be completed within a timely manner from date of official project approval (i.e. one year with a maximum extension of an additional six months). As indicated, dollars are limited and reimbursement will be made after project improvements are completed, and reimbursement requested. 7. Grant Disbursement Awarded loan funds will be dispersed to the contractor or vendor upon submittal of receipts or invoices for supplies purchased and inspection which certifies the work completed is in accordance with the EDA approval and other city ordinances. 8. Projects utilizing grant funds may not begin prior to the approval of the grant or issuance of a building permit, if applicable. PROPERTY OWNER REQUIREMENTS Upon the application submittal for a project, the Applicant will play an important role in a partnership that includes the City of St. Joseph and the Economic Development Authority. The following may be required to review plans depending on the scope of the project: City staff, the Planning Commission, the EDA and the City Council. Those required to review the plans and/or grant application will review design drawings, proposed work specifications, and the architectural materials. Below are items that will be required of as part of completing your project. 1. Attendance at an informational meeting which will outline the entire project procedure. 2. Property owners' attendance at various meetings, reviews etc. with representatives of either the City or EDA to expedite various stages of the project. 3. All work to be done on the project shall be the sole responsibility of the property owner. The City of St. Joseph/EDA administers the grant program herein and the City/EDA is not responsible for any work undertaken as a result of the grant. The owner hereby holds the City and EDA harmless for any and all liability commencing out of any work constructed and paid for the design grant herein. APPLICATION FOR ST. JOSEPH BUSINESS DISTRICT FACADE ARCHITECTURAL DESIGN GRANT PROGRAM **Please read attached program criteria carefully before completing the application ** **Please remember to include photos of your building(s)and/or property as they relate to the types of improvements indicated on this application. ** Business Name: Property Address: Business Owner(s): Property Owner(s): Mailing Address: Phone Number: Fax Number: E-Mail Address: 1. On the attached page, please identify the specific improvements you are proposing for the building(s)and/or property. 2. Based on the proposed improvements identified, please provide your best estimate of the entire project cost: $ 3. If the project cost comes in at, or exceeds your estimate, do you have private funds readily available to complete the proposed the project? Yes No If No, by what means will you secure funding and still complete the project within a timely manner 4. If your project is approved, does completing the project timely pose any concerns for you? Yes No If yes, Please list those concerns: PROJECT DESCRIPTION Please provide an accurate and thorough summary of your project. The photographs taken of your building(s) and property will assist in a visual manner to further support your written project description. Based on the description of your project and your motivation for wanting to make these improvements, please place a check mark next to those project preference item you feel your project meets. Will positively contribute to the City's revitalization/renewal efforts. Will eliminate a blighting influence. Will result in a visible improvement that would not be made otherwise. Result in a ratio of private investment to public investment greater than 2:1. Building Permits& Inspections Applicant is responsible for obtaining appropriate building permits, per the Building Code and/or City of St. Joseph Zoning Ordinance. In the case of improvements that do not require a city- issued building permit, the applicant must submit the name and state license number of the contractor completing the work and agree to an inspection of the work by a city building official. Grant Disbursement Awarded loan funds will be dispersed to the contractor or vendor upon submittal of receipts or invoices for supplies purchased and inspection which certifies the work completed is in accordance with the EDA approval and other city ordinances. Certification City staff or an authorized representative shall have the right to inspect the property to be improved at any time from the date of application upon giving due notice to the owner and to occupants. I/We understand that any intentional misstatements will be grounds for disqualification. I/We authorize program representatives the right to access the property to be improved for the purpose of the grant program and to take photographs of the structure before and after rehabilitation. I/We further understand that I/we will make the final selection of the improvements to be made with the loan funds and that the contract for improvements will be solely between myself and the contractor(s). The administering agency will not be liable for the inadequate performance of the contractor(s). The information on this application is accurate. I have read, understand, and agree to comply with the program criteria for the St. Joseph Business Façade Architectural Design Grant Program. Authorized Agent: Date: Title: Mail or Deliver to: St. Joseph Façade Architectural Design Grant Program, City of St. Joseph Economic Development Authority 25 College Avenue North, P.O. Box 668 St. Joseph MN 56374 St. Joseph, MN - Official Website - Economic Incentives Page 1 of 2 Engage your community-connect to news,events and information you care about. View more information... Sign in • IUSOUR.CES LCAT G bUSLIJESS LEI'Fl.k!'iv4El fl GOV1 IctJMLi.4 !' How Lc) 1? ® You are here:Home>Departments>Community Development>Economic Development>Economic Incentives Search St.Joseph (:) a p © m Economic Incentives Online&Free Services Assistance And m ccii i.. Small Business 'meq Administration �a \111♦ _ ,th .. .0 61, lop aa The St.Joseph Economic Development Administration(EDA)has a history of providing technical and financial assistance to assist existing and new businesses accomplish their corporate goals.The EDA is pleased to offer local businesses access Dito the following incentives and information resources. Business Facade Architectural Grant Program The Business Facade Architectural(BFA)program provides an incentive to stimulate visible(re)investment in St.Joseph businesses.The program provides a matching grant for actual design and construction costs,up to$1,000 per property address per year.Qualifying projects must be of an approved design,be applied for by commercial property owners and/or merchants,and be applicable to exterior building improvement,landscape improvements,and other similar improvements visible from a public right of way.Signage is an eligible expense when combined with another improvement. Demolition Grant Program An incentive is available for St.Joseph commercial property owners with outdated buildings.The Demolition Grant Program will match up to$2,500 in demolition costs per property.Additional expenses relating to lead paint and/or asbestos removal may qualify for additional assistance.The intent of the grant is to create vacant build-able parcels in existing concentrated business districts by removing structures exceeding their useful life. Tax Increment Financing Tax increment financing(TIF)is a tool which allows the city/EDA to reimburse the company or land owner a portion of the new property taxes which are generated as a result of an expansion project.The amount of financial assistance available (TIF)is dependent upon a number of factors including but not limited to the assessed market value of the building and the financial need of the company.Several types of TIF districts are authorized by state law. Tax Abatement Like TIF,tax abatement is a tool which allows the city/EDA to reimburse the company a portion of property taxes which are generated within a specified period of time.The difference between TIF and tax abatement is that with tax abatement the county and/or school district have an option to participate(with TIF participation is mandatory).The amount of the tax abatement available depends on a number of factors,including,but not limited to the financial needs of the company and participation by county and school entities. Industrial Revenue Bonds Industrial Revenue Bonds(IDB)are private activity bonds(small issue manufacturing bonds)issued by cities or EDAs on behalf of private borrowers to finance the fixed costs of manufacturing facilities.IDBS may be utilized if the company owns or is leasing the facility.The bonds are marketed on their financial strength.Financial statements of the company do not need to be disclosed to investors.If the company is interested in this option,the city/EDA would proceed with requesting an allocation for funds from the state of Minnesota,following submittal of the required pre-application. Small Business Development Loan Program This state program is available to manufacturing or industrial small businesses(500 employees or less)which create a significant number of new jobs.Eligible projects include business expansions with funding for acquisition of land,building, equipment,and/or building construction or renovation.This state issued IDB requires a minimum$500,000 and maximum $6,000,000 project.Interest rates depend on the market rate of interest at the time bonds are sold.Terms are typically 20 years for real estate and 10 years or 80%of the useful life for equipment.Projects must be completed within two years.The Minnesota Agricultural and Economic Development Board(MAEDB)review applications monthly. Minnesota Investment Fund(MIF) The Minnesota Department of Employment and Economic Development(DEED)offers a program,which is a grant to the community that in turn makes a low interest loan to a company for land,buildings,equipment,and infrastructure improvements. http://www.cityofstjoseph.com/index.aspx?NID=136 1/16/2017 I St. Joseph EDA Revolving Loan The St. Joseph Economic Development Authority's (EDA's) Revolving Loan Program has been established to stimulate St. Joseph's economy by providing low interest secured loans to small and , , • medium sized businesses. ' ' !i;r, ; ,iri ; i IPKII Revolving loan funds can be used for business start- Odst( 5Iet1 ( ups, expansion, and retentions where jobs are created • or retained. Eligible applicants include most industrial , • .............. businesses, commercial businesses and technological - '�, l4 ' service businesses. ,\ � s coffee 6h p b wine bor b lunches _nvQ m ,,,L f: ��d ,eaao Application Process --• Applicant meets with St. Joseph EDA staff to discuss proposed project and loan program guidelines. If project meets program objectives, applicant submits: ■ Statement describing business and proposed ELIGIBLE LOAN ACTIVITIES plans; ■ Project description— purpose of loan and • Loan funds may be used for acquisition of land expected benefits. Itemize and provide cost and/or buildings(s), rehabilitation of building(s), estimate for building improvements and/or reconstruction, new construction, site equipment; improvements, utilities or infrastructure, and purchase of industrial equipment in connection ■ Sources/Uses proforma for the project; with starting a new business or expanding an ,,; • Complied profit and loss statement for the existing business. ! past two (2) years (if applicable); ■ Land and building must be privately owned, L ,_ ■ Personal financial statement(s) (for use in taxable property and proposed for commercial ' connection with applicant's equity and/or industrial activities. requirement); ■ Other pertinent data • If building(s) are being purchased or rehabilitated with funds from the Revolving Loan Fund any/all A sub-committee reviews the application to determine building code violations must be remedied. The ,, whether or not it is complete. If the application is project must comply with the St. Joseph City Code !`'' determined to be complete, the subcommittee including standards relating to land use. formulates a recommendation to the full EDA. ■ Revolving loan fund assistance can be for no more The St. Joseph EDA reviews the application and than one-half of the cost of the project for projects makes a recommendation to the City Council. Upon approval, a Development Agreement and all other in excess of$50,000 in value. Projects estimated necessary documents in connection with the loan are at $50,000 or less may be exempted from this prepared and executed. standard at the sole discretion of the EDA. Mt Applications available at • Ineligible activities include the operation or www.cityofstjoseph.com expansion of a casino, sports facility when the 320-363-7201 principal tenant is a professional sports team, cstrack@municipaldevelopmentgroup.com housing projects and operating expenses. ST. JOSEPH ECONOMIC DEVELOPMENT AUTHORITY REVOLVING LOAN PROGRAM PURPOSE The overall goal for the St. Joseph Economic Development Authority's (EDA's) Revolving Loan Program is to stimulate St.Joseph's economy by providing low interest loans to small and medium sized businesses. Revolving loan funds are to be used for business start-ups, expansion, and retentions where jobs are created or retained. This may be accomplished by the following means: 1. Creation or retention of permanent private sector jobs in order to create above average economic growth; 2. Stimulation or leverage of private investment to ensure economic renewal and corn petitiveness; 3. Increase in local tax base; 4. Improvement of employment and economic opportunity for citizens in the region to create a reasonable standard of living; 5. Stimulation of productivity growth through improved manufacturing or new technologies. ADMINISTRATION The St. Joseph EDA and City Council are the policymaking and loan approval bodies for the Revolving Loan Program. The EDA is responsible for revising guidelines and recommending loan approval to the City Council. The City Council is responsible for authorizing loan. EDA staff and their assigns will be responsible for day to day administration,working with applicants on proposed projects, collecting data, performing pre-loan analysis, overseeing loan processing, preparing agreements and monitoring projects progress. ELIGIBLE APPLICANTS Eligible applicants include most industrial businesses, commercial businesses and technological service businesses. ELIGIBLE LOAN ACTIVITIES 1. Loan funds may be used for acquisition of land and/or buildings(s), rehabilitation of building(s), reconstruction, new construction, site improvements, utilities or infrastructure, and purchase of industrial equipment in connection with starting a new business or expanding an existing business. 2. Land and building must be privately owned,taxable property and proposed for commercial and/or industrial activities. 3. If building(s)are being purchased or rehabilitated with funds from the Revolving Loan Fund any/all building code violations must be remedied. The project must comply with the St. Joseph City Code including standards relating to land use. 4. Revolving loan fund assistance can be for no more than one-half of the cost of the project for projects in excess of$50,000 in value. Projects estimated at $50,000 or less may be exempted from this standard at the sole discretion of the EDA. City of St.Joseph—Revolving Loan Fund Guidelines Page 1 5. Ineligible activities include the operation or expansion of a casino, sports facility when the principal tenant is a professional sports team, housing projects and operating expenses. APPROVAL CRITERIA The grant or loan shall be based on the following criteria: 1. A gap in project financing is demonstrated. 2. The business must locate, remodel or expand within the corporate limits of the City of St. Joseph. 3. The project will result in the creation or retention of existing jobs. 4. The project will result in an increase in tax base. 5. The project can demonstrate that the investment of public dollars induces private funds. 6. The project can demonstrate an excessive public infrastructure or improvement cost beyond the means of the affected community and private participants in the project. 7. The project provides higher wage levels to the community or will add value to current workforce skills; 8. Assistance is necessary to create new or retain existing businesses. 9. Job/wage goals must be consistent with the City of St. Joseph Business Subsidy policy. SECONDARY LOAN ACTIVITIES Loans may not be used for refinancing existing indebtedness or projects begun prior to loan application. LOAN TERMS/CONDITIONS Financial assistance from the Revolving Loan Program is designed to make projects economically feasible. Loan terms and conditions are determined by the information submitted in the loan application. The following are the loan conditions: 1. Loan Amount— Maximum loan amount is 90% of the available RLF balances but shall at no time exceed the gap demonstrated in project funding. 2. Interest Rate—The interest rate shall be set at the time of issuance and dependent upon qualifications. 3. Term — Machinery/equipment: up to seven years. Land/buildings: up to 15 years. Terms for other purposes will be flexible. 4. Equity—There shall be minimum ten (10) percent equity(cash or fixed assets) investment of total project costs required of all applicants requesting loan amounts greater than $25,000. City of St.Joseph—Revolving Loan Fund Guidelines Page 2 5. Security—The business owner will be required to provide personal guarantees for the loan amount. 6. Proiect Initiation—All loan funds must be expended within six(6) months from the date of the loan approval. An applicant may request a six(6) month extension. 7. Loan Fees—A processing fee of 1%of the total loan amount is payable at closing. Loans may be prepaid without penalty or additional charge. The Revolving Loan Program is intended to be flexible and assistance is customized to meet the particular needs of individual projects. APPLICATION PROCESS The City of St. Joseph shall process and administer each loan in a manner which is usual and customary with regard to other loans under similar circumstances. The basic steps for securing a loan are as follows: 1. Applicant meets with St. Joseph EDA staff to discuss proposed project and loan program guidelines. If project meets program objectives and other eligibility items, then applicant completes the attached application which includes: A. Statement describing nature of business and proposed plans; B. Project description—purpose of loan and expected benefits. Itemize and provide cost estimate for building improvements and/or equipment; C. Sources/Uses proforma for the project; D. Complied profit and loss statement for the past two(2)years(if applicable); E. Personal financial statement(s) (for use in connection with applicant's equity requirement); F. Any other pertinent data 2. A sub-committee comprised of the St. Joseph Finance Director, at least one but not more than two members of the EDA and the EDA Director shall review the application to determine whether or not it is complete. The EDA at its sole discretion may require a loan officer or a member of senior management from an FDIC insured lender join the Loan Review Committee. If the application is determined to be complete,the subcommittee shall formulate a recommendation to the full EDA concerning the fiscal impact (if any) on the City and the appropriateness of the amount of assistance requested. 3. The St. Joseph EDA will review the application and make a recommendation to the City Council. Upon approval, a Development Agreement and all other necessary documents in connection with the loan will be prepared by the St.Joseph EDA staff and shall be executed by the Director of the EDA. The City/EDA may work with a conventional lender to review the creditworthiness of the applicant and the loan application. RLF POLICIES RLF policies shall be as approved by the EDA and City Council. City of St.Joseph—Revolving Loan Fund Guidelines Page 3 TIMETABLE Applications may be submitted at any time. City of St.Joseph—Revolving Loan Fund Guidelines Page 4 BFA Grant & Revolving Loan Fund Disbursements Revolving Loan Applicant Loan Start Date Amount Allocated Amount Need for Loan Remaining Local Blend 12/15/2009 $ 2400.00 $ - Makeover of Storefront, signage Purchase of freezers/coolers,purchase of point of sale software system, rehabilitate wood flooring, purchase of inventory MN Street Market/Prego Properties 11/1/2011 $ 261000.00 $ 71992.84 Sliced on College Ave 6/15/2015 $ 1200.00 $ 9,193.43 Remodel building for dine in take out restaurant Jeff& Stacy Engholm 6/15/2015 $ 351000.00 $ 31,802.72 Facade Loan Facade Distribution 2015 Amount Amount EDA Approved Reimbursed Approved Use of Funds Babygiriz Boutique $ 100.00 $ 100.00 8/26/15 installation of windows/soffit/signage Bad Habit Brewing Company $ 11000.00 $ 11000.00 7/22/15 replace windows with glass overhead door Kurtcrete $ 100.00 $ 100.00 3/16/15 exterior repair to 15 MN ST W Gary's Pizza $ 11000.00 $ 11000.00 5/27/15 signage,repainting of the building awning Prego Properties,LLC [Engholm] $ 100.00 $ 100.00 6/24/15 27 MN St W, exterior repair Scenic Specialties 11000.00 000.00 8/26/16 remodeling of a facade on a metal building adjacent p $ $00 1 to CR 133 Sliced on College Avenue $ 100.00 $ 100.00 8/26/16 store front signage Facade Distribution 2014 Sisters&Co1 000. 0.00 3/26/14 31 MN St W,replacing existing window with larger $ $ 00 00 1 store front window. St. Joe Action Group $ 11207.97 $ 11207.97 3/26/16 flower basket brackets Facade Distribution 2013 Retail Therapy Grant to match 501 $ 225.18 7/24/13 paint,brick sealing, signage,planters/landscaping St. Joe Action Group $ 11350.00 $ 11350.00 5/22/13 flower basket brackets Facade Distribution 2012 Bello Cucina $ 500.00 $ - 10/24/12 NA Chiropractic Connection $ 11000.00 $ - 2/22/12 50%must be landscaping Closet to Closet $ 200.00 $ 200.00 5/23/12 exterior signage Cone Castle $ 11000.00 $ 11000.00 7/25/12 landscaping trees & shrubs Floral Arts $ 100.00 $ 100.00 3/28/12 exterior signage Scenic Specialties $ 11000.00 $ 11000.00 8/22/12 window facade Flower Baskets $ 100.00 $ 100.00 5/23/12 NA Millstream Villages/Collegeville $ 498.74 $ 498.74 12/19/12 exterior signage, 15 MN St E Ste 104 Kays Kitchen $ 100.00 $ 100.00 11/28/12 exterior mural sign Facade Distribution 2011 Cone Castle $ 100.00 $ 100.00 3/30/11 building design/construction Scenic Specialities $ 11000.00 $ 11000.00 11/30/11 fencing St. Joseph Meat Market $ 100.00 $ - 3/30/11 NA MN Street Market [Engholm] $ 1 000.00 $ 1 000.00 3/30/11 exterior improvements & signage [ g ] > BFA Grant & Revolving Loan Fund Disbursements Facade Distribution 2010 Kay's Kitchen $ 100.00 $ 100.00 4/28/10 outdoor landscaping improvements Silver's Equestrian Outfitters architectural services &costs relating to facade q redevelopment&landscaping $ 11000.00 $ 11000.00 5/26/10 St. Joseph Meat Market $ 100.00 $ 100.00 4/28/10 Expansion of 3,002 sq ft to existing structure Millstream Shops/Lofts $ 11000.00 $ 11000.00 11/24/10 purchase &installation of street front/door access Ehlert, 29 MN St E $ 1,3 00.00 $ 1,3 00.00 11/24/10 facade revovation&landscaping improvements Facade Distribution 2009 Local Blend1 000.00 1000.00 10/28/09 replacement of storefront windows,removal of $ $ 1 wood &signage u dates plywood, p Russell Eyecare &Associates $ 11000.00 $ 654.27 8/26/09 signage Stonehouse $ 100.00 $ - 11/18/09 LED message center sign Gohman Construction1 000.00 1/28/09 design services relating to new signage& $ $000.00 1 landscaping improvements p g p Facade Distribution 2008 Scenic Specialties $ 100.00 $ 100.00 10/22/08 exterior design Kurt&Joanne Schneider $ 11000.00 $ - 8/27/08 NA