Economic Development

Eligible Activities

An activity may be assisted in whole or in part with CDBG funds if the activity is defined as eligible under Section 105(a) of Title I of the Housing and Community Development Act of 1974, as amended, {current law 42 USC 5305}. The Economic Development set-aside is to be used to provide grants to local governments for infrastructure improvements which will facilitate the location of a particular business. Examples include sewer, water, and street/road access on public property to the private industrial/business site boundaries.

The State also allows funding for program administration.

Ineligible Activities

Federal legislation has mandated that CDBG assistance will not be available to assist directly in the relocation of any industrial or commercial plant, facility or operation from one area to another if the relocation is likely to result in a significant loss of employment in the labor market area from which the relocation occurs.

Projects in which an elected official or a member of her/his immediate family has a financial interest as the project developer are ineligible.

Funds cannot be used to acquire, construct or rehabilitate a building or to create a general industrial park project with the hope of attracting future businesses/industries.

Funding Criteria

Awards are made continuously from April 1 through March 31 of each program year, subject to the availability of funds.

Economic Development requirements:

• A pre-application meeting must be held with the Office of Community Development-Local Government Assistance.
• A firm financial commitment from the private sector. The private funds/public funds ratio must not be less than 1:1.
• Cost per new, full-time job created must not exceed $35,000 for a grant.
• A minimum of 10 jobs created or retained.
• Employment of a minimum of 51 percent of persons whose household income at the time of employment is within low-to-moderate income limits.
• Documentation on the management, marketing, financial and economic feasibility for the proposed activities.

The review factors consist of the following: project creditworthiness; sufficient developer equity; the ratio of private funds to public funds; the number of jobs that will result in proportion to the money invested; and the applicant's performance with any prior CDBG grants or loans from the State.

Economic development activities must be consistent with the current Consolidated Annual Action Plan.

Allocation

CDBG funds provide grants to eligible recipients for infrastructure improvements that will assist for-profit businesses. For further information, please contact Janelle Dickey by phone at 225.342.7412 or by email at Janelle.Dickey@la.gov.

The amounts available are limited by the number of new, permanent, full time jobs created based on a maximum of $35,000 per job for publicly-owned infrastructure. Includes up to $100,000 for program administration, including pre-agreement costs. A maximum of $9,000 can be paid for pre-agreement costs if the ERR is submitted prior to application submittal or a maximum of $4,000 for pre-agreement costs if the ERR is not submitted prior to application submittal.

New or Startup Businesses:

• $700,000 (including administrative and pre-agreement costs) grant for publicly-owned infrastructure
• $700,000 (including administrative and pre-agreement costs) for purchase, rehabilitation or construction of a publicly-owned building

Expansion of Existing Businesses:

• $1,100,000 (including administrative and pre-agreement costs) grant for publicly-owned infrastructure
• $1,100,000 (including administrative costs) for purchase, rehabilitation or construction of a publicly-owned building.

Application

Economic Development Application - Contact the Office of Community Development to arrange a meeting for the local government, the private business and the Office of Community Development prior to completing the application.

LCDBG Economic Development Pre-Application Workbook

Employee Survey Form (Attachment B)

Employee Characteristics Record (Attachment C)

Quarterly Status Report Form (Attachment D)