American Recovery and Reinvestment Act

Information re the Notice of Funding Availability (NOFA) from the Illinois Commerce and Economic Opportunity (DCEO) re the Community Development Assistance Program (CDAP) as it pertains to the American Recovery and Reinvestment Act of 2009 ("ARRA") which has an application deadline of June 5, 2009 –

This discussion is limited to the economic component of the program:

CDAP grants are available only to units of general local government that are not “entitlement” communities (in the Peoria MSA that includes the cities of Peoria and Pekin).  In Illinois, only municipalities, townships and counties are eligible to receive CDAP funds.  Those entities can pass through funds to special purpose districts for eligible projects, but the applications must be identified “on behalf of” to avoid the risk of not being disqualified. 

After reading the synopsis of the situation below, any interested party is urged to contact the EDC for a quick evaluation of a potential project.  A determination would have to be made on a case-by-case basis whether a project may be eligible and satisfy the rating criteria. Also, it is important to point out that it is will be infeasible to prepare but very few applications because of the short time available.

For economic development projects, some of the rules have been relaxed, but not all.  The requirement for LMI (determined differently from the infrastructure program above) will not be imposed and neither will the dollar-per-job apply. However, the requirement for matching funds still applies.  The funds can be used on many things, but refinancing of existing debt is not one of them. Whether what a business might want to do with the funds qualifies would have to be determined on a case-by-case basis.  Consultation would be required.  The basic applicant eligibility mentioned above applies to all CDAP components. 

A list of eligible activities includes:

 

Financial assistance to pay for the expansion of a factory or commercial business, or the establishment of a new facility or business. Under this provision, there are no restrictions for how this financial assistance might be structured. For example, the CDBG funds could be given to the company with which to:

✓ Purchase land;

✓ Construct a building or other improvements;

✓ Renovate an existing building to accommodate the business;

✓ Construct tenant improvements/finishes;

✓ Lease space in or purchase an existing building;

✓ Purchase capital equipment;

✓ Purchase inventory;

✓ Use as working capital;

✓ Provide employees with higher wages or fringe benefits (such as health insurance) that the company would not otherwise provide; and

✓ Provide job training to newly-hired employees who otherwise would not qualify for those jobs. 

Activities that are ineligible include:

 

Activities generally prohibited under regulations governing the regular CDBG (CDAP) program, are also excluded under ARRA, including:

·         Construction of buildings or portions thereof

·         Facilities used predominately for the general conduct of government (e.g., city halls, courthouses, jails, police stations)

·         General government expenses

·         Operation and maintenance costs

·         Servicing and refinancing of debt

For more information on the program or to discuss a potential project, please contact us at: 

Jim Cummings, 495-5957 or Sally Hanley at 495-5953.