JobsOhio Programs Western Ohio December 17, 2013
description
Transcript of JobsOhio Programs Western Ohio December 17, 2013
JobsOhio Programs
Western Ohio
December 17, 2013
2
Today’s Overview
3
• JobsOhio Philosophy • Project Management • JobsOhio Programs
– Economic Development Grant– Workforce Training Grant– Growth Fund Loan
• Additional Project and Program Details• Discussion
Philosophy
4
• JobsOhio Philosophy
– Promote economic development, business expansion, and job creation
– Key factors: job creation, created payroll, fixed-asset investment commitment, project return on investment, and project location
– Funds: fixed asset investment, infrastructure, and workforce
– Fiscal Year July 1 – June 30
Revitalization Growth Fund Loan
Workforce Grant
Economic Development
Grant
Project Management Process
Project VettingDeal Structuring
Deal Management
6
• Deal TeamEvery project in the system has an assigned deal team including:– Lead Project Manager (either: JobsOhio or JobsOhio Network Partner)– Secondary Project Manager (either: JobsOhio or JobsOhio Network Partner)– JobsOhio Managing Director (as it relates to Project’s Industry Sector)– JobsOhio Credit Analyst– Project Coordinator
• Lead Project Manager The lead project manager is determined with the following criteria:– Point of entry– Company’s project location (statewide or region specific)– Company’s presence in Ohio – Company or industry knowledge (relationships)
JobsOhio Project Flow 7
Sales &ProjectVetting
Offer
Application
Approval
Agreem
entsent to com
pany
Agreem
entExecuted
FundsD
isbursed
JobsOhio Loans
JobsOhio Grants
JCTC & Data Center Tax Exemption
IOLF
166 Direct & R&D Loans
629 Grants
Technical Review
(Early Stage)
JobsOhio & DSA Project Review
Draft Term Sheet
Loan Review
Final Term Sheet, Outside Counsel
Appointed, Organizational Call
M/W/F PM Call
JO Panel;JO investment committee or
Board
JobsOhio & DSA Project Review
M/W/F PM Call
JobsOhio & DSA Project Review
M/W/F PM Call
Technical Review
JobsOhio & DSA Project Review
Draft Term Sheet
Loan Review
Final Term Sheet, Outside Counsel
Appointed, Organizational Call
M/W/F PM Call
Controlling Board
JobsOhio & DSA Project Review
Draft Term Sheet
Loan Review
Final Term Sheet, Outside Counsel
Appointed, Organizational Call
M/W/F PM Call
Controlling Board
JobsOhio & DSA Project Review
M/W/F PM Call
Controlling Board
JO Panel;JO investment committee or
Board
Tax Credit Authority
Deal Structuring Process
8
• Collect all pertinent company and project info • Develop initial recommended deal structure
– If financing is an option financials should be uploaded• Schedule time for MWF Project Call• JO PM updates JO MD • JO PM presents project at JO Project Review Meeting
– Monday at 1:00 pm and Thursday at 9:30 am– DSA also present to approve state program recommendations– JO and DSA leadership scrutinize each project – Unanimous consent of deal structure required
• Offer Letter signed, uploaded to Salesforce• Lead PM sends Offer Letter to project contact
Project Vetting
9
• Critical Information to Gather– Metrics: Jobs created, created payroll, jobs retained, retained payroll,
capital investment, training budget and number to be trained– Company details: Company legal structure (subsidiaries, parent, etc.), filing
structure, financials of the company and pro-forma (if private), key executives/board of directors
– Project details: Project description and location, sources and uses for project including partners (banks, investors etc), collateral / security, project barriers
– Contact details– Market information– Major factor statement / justification for support (Ohio’s competition for
project)– Training plan *
Be Nosy / Ask Questions
10
Questions to ask• What is the biggest challenge the
company faces, or most difficult obstacle
• What factors ultimately will drive this project decision
• What keeps you awake at night as it relates to your business
• What are the other locations for the company– What do they make / produce– Is there extra capacity at those
locations– Do these other facilities serve the
same markets as the Ohio facility
• What is driving the growth for the company / product– New contract, if yes with who and
length– New product, if yes what are the
growth projections and who is the customer(s)
– How does the company transport raw materials and finished product
– Consolidation from other locations– Market entry to Midwest / East
• Project Decision Process– How is this decision going to be made– Who will be making the decisions– Will it need to be approved by a
board– Timing of the decision
Be Nosy / Ask Questions
11
• Project Timing– When will investments begin– When will the project be complete
• Workforce– How do you plan to get your
workforce– Training the workforce?
• Who will be doing the training; in house, vendor, outside trainer
• Financing– Who is the Borrower– What are uses of funds (Real Estate
or M&E )– What are sources of funds– Who is your current lender
• Fixed Asset InvestmentReal Estate– Is it new construction or expansion of
the building– Does the company lease or own their
current building– Is it a special purpose building– Is there a mortgage on the building– Will the company lease or own the
building they're considering– Expected lease or construction costs– What is the construction timeframe M&E– Expected M&E investment– What type of M&E is going to be
purchased– Life of the asset– When will the company order the
M&E and what is the lead/delivery time needed for the M&E
Project Determination and Deal Structuring
12
• Key Component to Project– Clearly defined competitive project with job creation and/or capital investment
• Other Components • Amount of funds per job created (or
employee trained)
• Number of new jobs created• Created payroll (median salary of
project greater than county median wage)
• Number of jobs retained (unaffected by the project)
• Retained payroll (median salary of project greater than county median wage)
• Retained jobs at risk• Retained payroll at risk• Capital investment for project (land,
building, machinery and equipment)
• Project Break Even Point
• Relocation of employees within Ohio• Number of employees trained (new and
retained)
• Project location in the State of Ohio (county unemployment rate and Median Wage)
• Local Participation in the deal • Improvement of operational efficiencies
and production expansion• Industry sector• Financial strength of company• Previous assistance: either active or
within a reasonable amount of time from expiration and performance during such time
JobsOhio ProgramsEligible Applicants
Economic Development GrantWorkforce Grant
Growth Fund Loan
Program Determination and Deal Structuring
14
• Eligible Applicants– Aligns with targeted industry and / or business function– For–Profit Company (C-Corporation, sole proprietorship, limited
liability company, partnership, and an S-Corporation) – Public Entity– Average wage at least 150% federal minimum wage
• Ineligible Applicants– Retail – Population-driven Companies– Non-Profit Entity– Pre-Revenue Company
15
• Eligible Costs– Building : e.g., building new, purchasing existing building or leasehold improvements – Land: e.g., purchase of land, site development costs– Machinery and equipment: e.g. purchase of new machinery and equipment – Moving and relocation costs of machinery and equipment related to the project;
including freight shipping, furniture and fixtures, tooling, etc. required for project (limited to a 3 month timeframe)
– Infrastructure: (including utility, telecommunications, information technology) – Demolition of building and other structures– Installation or relocation of on-site water, storm water and sanitary sewer lines, water
and wastewater treatment facilities, pump stations, water storage mechanisms, and other similar equipment or facilities
– Construction of roads, bridges, traffic control devices, parking lots, and facilities; and utility infrastructure such as natural gas, and electric
Economic Development Grant
16
• Eligible Costs– Improvement to rail access– Technological improvements; Information Technology, Software/Hardware, Fiber
optics, Instruments and controls used in the upgrade and/or installation of industrial or research and development infrastructure
– Utility Improvements: Electrical Infrastructure, Substation, Redundant Power, Gas line– Fees and material costs related to planning or feasibility studies – Engineering Services
Economic Development Grant
17
• Ineligible Costs– Administrative costs (including salaries and travel expenses) – Bonds or other debt instruments issued by company to finance completion of the site
improvement project shall not be retired or otherwise serviced with grant funds – Contributions and donations by the company to individuals or to other organizations– Costs resulting from violation of or failure to comply with federal, state, and local laws
and regulations– Goods and services for personal use by the company’s officers, directors, board
members, and/or employees – Interest on borrowed money – Lease and rent payments– Organized fundraising– Relocation expenses such as long-term housing and personal living expenses for
officers, directors, board members, and employees may be ineligible– Rolling stock (defined as anything that has to be registered with a government entity
and/or travels on a public right-a-way)– Taxes – Travel expenses, meals and entertainment
Economic Development Grant
18
• Eligible Costs– Information technology: training in the use of the company's information technology
systems (e.g., specific software, programming, support, maintenance, and administration of internal systems)
– Maintenance: training in a specialized area or expertise (e.g., skilled trades, electronics, manufacturing systems, material science, mechanical, hydraulics, etc.)
– Leadership: training to improve the ability and effectiveness of employees to lead, manage, and supervise projects and teams (may include communication skills)
– Product knowledge: training about the products and services of the company– Quality: training in company’s quality management and processes (e.g., business
process re-engineering, benchmarking, 6-Sigma, LEAN) – Safety: industry specific safety training– Technical: training that focuses on the company's technical processes and procedures – On-the-job training: training that is structured, takes place at the work site and is
supervised by a manager or experienced coworker – Equipment: equipment costs associated directly with training – Materials: material costs specific to eligible training (e.g., practice welds)– Transportation: transportation costs associated directly to eligible training activity, either
domestic or international
Workforce Grant
19
• Ineligible Costs– General equivalency diploma (GED) or college degrees– Meals and entertainment – Preparation or travel time– Compliance and regulatory training (e.g., Occupational Safety an Health Administration –
Regulatory training)– Membership dues and license fees– Infrastructure – JobsOhio reserves the right in certain circumstances and with pre-approval by JobsOhio
President/Chief Investment Officer to include the below as eligible training costs:• Trainees wages: during training, maximum of eight hours per day (ineligible;
overtime, bonuses)• Co-Op• Apprenticeship• Hotel
Workforce Grant
20
Examples• Workforce Grant
Company Project – Ohio is only US operation– Creating 39 jobs, investing
$9MProject Driver / Need– FinancingStructure– JCTC already in place– JOW requested
21
Examples• Workforce Grant
Company Project – Significant company in Ohio– Creating 45 jobs, investing
$28MProject Driver / Need– Workforce and Cost of doing
business vs competition Structure– JCTC– JOW to address Operator
training, the company’s biggest issue
22
Examples
23
Examples• JobsOhio Economic
Development Grant
Company Project – Company creating
72 new jobs, investing $4.2M for expansion project
Project Driver / Need– Infrastructure Structure– Infrastructure
Estimate received– ARC and JOG to
cover infrastructure costs
24
Financing Continuum
166 Direct Loan Program*Ohio Enterprise Bond Program*R & D Investment Loan Fund*
Early Stage Growth Stage Late Stage
JobsOhio Growth Fund Loan
Innovation Ohio Loan*
*State of Ohio Capital ProgramsCommercial Acceleration Loan Fund
Targeted Investment ProgramCollateral Enhancement Program
Capital Access Program
Minority Direct LoanEnergy Efficiency Loans
25
• Eligible Costs – Building: building purchase, construction, renovation, and long-term leasehold
improvements; • if the project involves new construction, the company must occupy at least two-
thirds of the premises • if the project involves the purchase of an existing building, the company must
occupy more than half of the premises– Land– Machinery and equipment (e.g., purchase of new) – Capitalized costs directly related to a fixed-asset purchase
JobsOhio Growth Fund Loan
26
• Program Details– Funds: $500,000 to $5,000,000– Percent of Investment: up to 50 %– Term: 15 years Building, 10 years M&E– Interest Rate: Based on risk, fixed at closing – Borrower Contribution: 10 % or greater
• Program Fees– Processing fee $10,000– Annual servicing fee .25%– No Pre-Payment penalty
JobsOhio Growth Fund Loan
27
• Security / Collateral– Senior or shared-senior lien position– Second mortgage and/or subordinate lien position may be considered– Additional Collateral may include:
Personal guarantees from owners of the company Corporate guarantees from related companies Full or partial letter of credit Life insurance on key business owners and/or managers Other types of credit enhancement (if necessary)
JobsOhio Growth Fund Loan
28
• Deal Structuring with Loan Who is the borrower? Income Statement, balance sheet and cash flow statement for most recent three years
(audited financial statements preferred) and accompanying notes If audited financial statements are not available then reviewed, compiled or internally
generated financial statements (in that order) would be sufficient for initial financial review of company
Most recent year-to-date income statement, balance sheet and cash flow statement Project description including
Description of assets to be financed (type of equipment, is it special purpose etc.) Timing of proposed investment (when are funds required) Estimated life of proposed asset
Proposed sources of funds Name of other lenders involved in project funding Sources of funds with commitment levels, conditions and financial terms Conditional bank commitment and/or term sheet (if available)
JobsOhio Growth Fund Loan
29
Revitalization Program Guidelines
Eligibility
30
Eligible Applicantsa. Businesses including developers, non-profits, and local
governments b. Cannot be responsible for environmental contamination c. Must have legal access to the property
Eligible Sites An eligible site is an abandoned or under-utilized contiguous property where redevelopment for the immediate and primary purpose of job creation and retention are challenged by significant redevelopment constraints.
Three Program Tracks
31
1. Phase II Assessment
2. Asbestos & Lead Paint Abatement
3. Revitalization Loan & Grant Fund
Program Tracks
32
1. Phase II Assessmenta. Grants up to $200,000 per project b. Phase I must be complete
2. Asbestos & Lead Paint Abatement a. Grants up to $500,000b. End user commitment of job creation c. Industrial, commercial, or mixed use w/office
3. Revitalization Loan & Grant Fund a. Site improvement loans of up to $5 million
i. Payment deferral during site revitalization ii. Up to 75% of eligible costs up to 15 years, fixed rate TBD
b. Site improvement gap grants up to $1 millioni. Awarded based on demonstration of need ii. Must be coupled with site improvement loan
Phase II Assessment Fund
33
Amount Up to a maximum $200,000
Eligible Applicants
Business, non-profit or local government where a potential end user has expressed clear interest in reuse of the project site.
Job Creation
Must demonstrate job creation or retention is highly likely if environmental risks can be understood. Priority given to projects in JobsOhio targeted industries.
Eligible Costs
Environmental testing, lab fees and work completed by certified professionals toward completion of an Ohio EPA Voluntary Action Program Phase II property assessment.
Asbestos & Lead Paint Abatement
34
Amount Up to a maximum of $500,000
Eligible Applicants
Businesses, non-profits, or local governments where an end user has a formal agreement and has a business plan, financing, and schedule for redevelopment and job creation.
Job Creation
Should create or retain at least 20 jobs. Priority will be given to the following projects:1. In JobsOhio’s targeted industries2. Investment of additional capital capital beyond
redevelopment, or 3. Projects with higher than average wages
Eligible Costs
• Demolition• Disposal of universal waste• Abatement of asbestos• Site preparation • Lead based paint abatement only if coupled with asbestos
abatement
Site Revitalization Loans
35
Amount Up to 75% of eligible project costs, Maximum $5M
Term Up to 15 years
Rate Fixed, negotiated
Collateral To be negotiated
Payment deferral
Principle & interest deferred during cleanup and/or site revitalization, repayment begins upon occupancy or after 5 years, whichever comes first
Possible principle reduction
Outstanding loan principle may be reduced annually or on a negotiated basis based on performance
Additional Project and Program DetailsProject TimingAgreements
ReimbursementsCompliance
Project Timing and Dates
37
• Effective Date: the date in which the Agreement is effective; the application submitted date (or prior approved date); DSA State Programs this is the formal approval date (TCA, CB)
• Metric Evaluation Date: the date in which the Grantee/Borrower will attain all Metric Commitments; always December 31st
• Metric Expiration Date: the date in which the Grantee/Borrower will maintain all Metric Commitments (typically 2 calendar years after the Metric Evaluation Date; however, JobsOhio reserves the right to use discretion) – As it pertains to a Grantee the Metric Expiration Date depicts the closure of the
Agreement and Metric Commitment obligations– As it pertains to a Borrower the Metric Expiration Date depicts the end of Metric
Commitment obligations; however, repayment obligations are open until final loan repayment is made back to JobsOhio
• Loan Expiration Date: the date in which the Borrower is required to make final repayment of loan back to JobsOhio
Project Timing and Dates
38
Application and Approval
39
• Application– EPA and Taxation Clearances validation statement in application (as well as
agreement)– Relocation of Employees within Ohio– Program Beneficiaries
• Approval– DSA programs go to either TCA or CB– JO Independent Review Panel and/or JobsOhio Investment Committee, Board
• Agreement– Agreements will be emailed to the company point of contact indicated in the application – The company must execute agreement by electronic signature. Agreement must be
signed by the Company’s chief elected official, chief executive officer, or other authorized signatory to act on behalf of Grantee/Borrower.
– Failure to return agreements within a reasonable amount of time may result in cancellation of proposed assistance
– Agreements must be executed by both parties prior to disbursement of funds – Once Agreement is fully executed the company becomes Grantee/Borrower and
Program Funds will be encumbered
Reimbursement and Reporting
40
• Reimbursement Details– Request for Reimbursement form– Eligible Costs between Effective Date and Metric Evaluation Date– Sufficient Documentation; (copies of checks, payroll records, electronic fund transfers,
receipts etc) – Up to 3 Request for Reimbursement– Request required to be minimum of $50,000 (except for final disbursement) – JobsOhio Growth Fund; take-out financing
• Annual Report Details– Annual Report from Effective Date through Metric Expiration Date– Report must be submitted no later than March 1st for previous (or partial) calendar year– JobsOhio will default to the DSA annual report if applicable
Compliance
41
• Compliance Determination– Metric Commitments (attain/maintain)
• Total jobs (jobs created plus jobs retained)• Total payroll (created payroll plus retained payroll)• Total Capital Investment
– Submits annual report by deadline of March 1st
– Maintains significant operations at project site – Failure to follow agreement representations and warranties at any time during the
agreement– Timely repayment of JobsOhio Growth Loan Fund; if at any point during the term of the
JobsOhio Growth Fund Loan the Borrower is late with repayment Borrower will be determined to be in default
• Compliance Details – Compliance Considerations – Remedial Action
What is Different ?
42
• Sustainable Funding• Flexibility• SalesForce.com • Deal Team• Application Process Streamlined • Performance Date Consistency• Approvals• Disbursements • Process Overhaul• Break Even Philosophy
Discussion
41 S. High Street, Ste. 1500 | Columbus, OH 43215(614) 224-6446 | jobs-ohio.com
43