Retooling Iowa’s Economic Development Programs

PresentersDerek Lord - moderatorCommunity Investments Team LeaderIowa Economic Development AuthorityDes Moines, Iowa

Brian WilliamsonAssistant Commissioner for Community DevelopmentGeorgia Department of Community AffairsAtlanta, Georgia

Terry MarlinCDBG Economic Development SpecialistRural Development DivisionKansas Department of CommerceTopeka, Kansas

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Agenda The Importance of CDBG in State Economic Development Efforts Overview of Iowa’s CDBG Economic Development Programs Retooling CDBG Economic Development Programs for Success Celebrating Accomplishments Through Target Marketing Using CDBG to Fill the Financing Gap Economic Development Challenges of 2011 Overview of Georgia’s Economic Development Programs Examples of How CDBG Can Make a Difference Evolution of Kansas’s CDBG Economic Development Program Importance of Staff and Capacity Building The Impact of the Environmental Review on Economic Development Projects Creating a Positive Image for your CDBG Program

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Economic Development and CDBG/HUD

Regular CDBG Program• Public Facilities• Commercial Rehabilitation (clearance, reconstruction,

construction)• Microenterprise Assistance• Economic Development Assistance to For-Profit Business• Assistance to Non-Profits

Section 108 Loan Guarantee Program HUD – Economic Development Initiative (EDI) Brownfield Economic Development Initiative (BEDI)

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National Impact of CDBG on Job Creation

CDBG Program provides approx. $840 million annually to rural cities and towns through states – supporting 8,500 direct jobs (HUD)

Since 2004, CDBG produced 259,346 jobs and provided housing services to 866,00 low-income households (COSCDA)

In 2010 alone, CDBG produced 19,292 jobs and assisted 109,000 households with safe, affordable, sanitary housing (HUD)

ONLY 7% of CDBG funds used for economic development Greater than 25% spent on housing and infrastructure (HUD)

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Now is the Time, Don’t Wait Any Longer

Job creation is a priority at all levels of government Perfect opportunity to establish/retool ED programs to

maximize internal and external benefits Necessary to demonstrate benefits of program to insure

long-term program funding Flexibility built into existing program

Incorporate into your new economic development strategy Help meet your state’s goals Gain foothold by using CDBG for gap incentive financing

State of Iowa CDBG Program

2011 Funding = $23,877,960 20%, or Approx. $4,750,000, for Economic Development

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Iowa’s Economic Development Programs Economic Development Set-Aside (EDSA)

For-profit loan assistance tied directly to job creation Maximum $10,000 per job, maximum award $1 million 51% of jobs must be LMI No match requirement, but an evaluation criteria

Public Facilities Set-Aside (PFSA) Assistance to cities/counties for infrastructure that will lead to job creation Maximum $10,000 per job, maximum award $500,000 51% of jobs must be LMI 50% match required

Career Link – job training program Interim Financing (float loan)

Iowa’s Program Statistics

Why the Decrease in Program Activity?

Change in personnel/lack of understanding of program Other, higher priorities (disaster recovery) National and local economic challenges “Easier” programs with sufficient funding Red tape can be frightening No internal or external marketing plan Program didn’t have established image in state Policy changes affected partnerships

Retooling for Success/Increasing Participation

Dedicated staff with CDBG & economic development experience Must understand CDBG regulations Sympathetic to the needs of businesses Able to talk the talk and deliver results

Appropriate division/department has a huge impact Internal/external partnerships key

Increase emphasis, make it a priority Incorporate into state’s economic development strategy Need to be committed to making it a success

Retooling for Success (cont’d)

Marketing strategy is necessary to create awareness, sell programs and deliver results Participate in business development meetings Hit the speaking circuit Simple marketing materials for internal/external users Early, on-site visits provide comfort level Combined & streamlined application process (simple & timely) Catchy name goes a long way

Economic Development Set-Aside or Small Cities Jobs Fund?

Retooling for Success (cont’d)

Marketing (cont’d) Provide real examples and references Utilize partnerships to sell and deliver

Council of Governments Professional Developers/Economic Development Association Entrepreneur’s Summit Banks/Micro lending Institutions

Align rules and policies with program objectives Reconsider minimum wage thresholds Why match local program interest rates?

Celebrate Success of CDBG Program

Data, data, data Plan for data collection up front

jobs, leverage, taxes, payroll, etc.

If it has an economic impact, report it! Downtown revitalization isn’t just blight elimination

jobs, new businesses, occupancy rates, leverage, taxes, momentum

Annual reports more important than ever for all stakeholders Photos, testimonials, personal stories, impact, data

Target Marketing to Key Stakeholders

Economic development professionals/partners State and local elected officials Federal congressional delegation Other (internal) economic development agency

departments

It’s ok to brag if it means increasing program participation, enhancing image of program, recognition of efforts, and long-term funding for program!

Questions & Answers

Derek LordIowa Economic Development Authority

Derek.Lord@iowa.gov515.725.3081