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HomeMy WebLinkAboutPre-LegislationCity of Miami Legislation Resolution: R-09-0298 City Hall 3500 Pan American Drive Miami, FL 33133 www.miamigov.com File Number: 09-00608 Final Action Date: 6/18/2009 A RESOLUTION OF THE MIAMI CITY COMMISSION, WITH ATTACHMENT(S), APPROVING THE CITY OF MIAMI DEPARTMENT OF COMMUNITY DEVELOPMENT'S ECONOMIC DEVELOPMENT LOAN FUND PROGRAM POLICIES, TO PROVIDE BUSINESSES WITH FINANCIAL ASSISTANCE TO SUPPORT THE RETENTION AND CREATION OF JOBS FOR LOW TO MODERATE INCOME CITY OF MIAMI RESIDENTS, AS DESCRIBED IN EXHIBIT "A", ATTACHED AND INCORPORATED; AUTHORIZING THE CITY MANAGER TO EXECUTE THE NECESSARY DOCUMENTS FOR THE IMPLEMENTATION OF SAID PROGRAM. WHEREAS, pursuant to Resolution No. 08-0688, adopted December 11, 2008, the City Commission approved the allocation of future Community Development Block Grant (CDBG") Program Income funds to include Housing and Economic Development activities as deemed necessary by the City Manager; and WHEREAS, the City of Miami ("City") established the Economic Development Loan Fund ("EDLF") Program which will be administered by the Department of Community Development ("CD"); and WHEREAS, the EDLF program is designed to fill the financing gap between private debt financing and private equity and funds are provided to create economic benefit through increased revenues and the creation and retention of jobs in the City; and WHEREAS, the EDLF Program is available to businesses located or planning to locate within the City boundaries and priority will be given to businesses in the Neighborhood Development Zones; and WHEREAS, the EDLF Program policies will ensure that all commercial loans provided by CD are consistent with Federal regulations and all eligible businesses are treated equally in the evaluation and terms of the loans; and WHEREAS, the Administration requests the approval of the EDLF Program Policies which will provide businesses with financial assistance to support the retention and creation of jobs for low to moderate income City residents, as described in Exhibit "A", attached and incorporated; NOW, THEREFORE, BE IT RESOLVED BY THE COMMISSION OF THE CITY OF MIAMI, FLORIDA: Section 1. The recitals and findings contained in the Preamble to this Resolution are adopted by reference and incorporated as if fully set forth in this Section. Section 2. The City's CD EDLF Program policies which will provide businesses with financial assistance to support the retention and creation of jobs for low to moderate income City residents, as described in Exhibit "A", attached and incorporated, are approved. City of Miami Page 1 of 2 File Id: 09-00608 (Version: 1) Printed On: 10/10/2018 File Number: 09-00608 Enactment Number: R-09-0298 Section 3. The City Manager is authorized{1} to execute the necessary documents for the implementation of said program Section 4. This Resolution shall become effective immediately upon its adoption and signature of the Mayor.{2} Footnotes: {1}The herein authorization is further subject to compliance with all requirements that may be imposed by the City Attorney, including, but not limited to, those prescribed by applicable City Charter and Code provisions. {2} If the Mayor does not sign this Resolution, it shall become effective at the end of ten calendar days from the date it was passed and adopted. If the Mayor vetoes this Resolution, it shall become effective immediately upon override of the veto by the City Commission. City of Miami Page 2 of 2 File Id: 09-00608 (Version: 1) Printed On: 10/10/2018 CITY OF MIAMI Economic Development Loan Fund Program GUIDELINES, FORMS, SCOPE OF WORK, AND ATTACHMENTS City of mityni • department or onmunit' Development Last Revision: June 2009 Economic Development Loan Fund ("EDLF") Program Lending Policies and Guidelines The City of Miami has established an Economic Development Loan Fund ("EDLF") Program in accordance with the goals and objectives outlined herein. The EDLF Program, which will be administered by the City of Miami ("City") Department of Community Development ("CD"), will be capitalized using Community Development Block Grant ("CDBG") funds authorized under 24 CFR 570. • C; Purpose The goal of the Economic. Development Loan Fund:.:PiogrAi•is to provide businesses with -financial assistance to support the retention and creation of jobs f609w to moderate income City residents. The EDLF Program is designed., to,. ,fill the financinglap between. private debt financing and private equity. Funds are provided to create economicli4nefit through increased revenues and the creation and the retention ofj bli&in the City. Eligible Area The EDLF Program is available to thisiOSSeSlocated or planning to locate within the boundaries •••J,.ii • ,k0,-...t, „ of the City. Priority will be given to Usinewssekin the Neighborhood Development Zones as •,,mt.,.]•,.. .,.., described in the 2009-2014.City of Miant Ponsolidatea..pan andier Special Target Areas. ,.i:,..!:•::•.. • .. 4';'-s;,,Z '":',,CIIN;j;".....4.. 1 Loans are Evaluatid"basectOn a Prolps ... • ?:Vx:, • Financial viability. • :. • ". • 40.2yarip,..,.._ . •. • • PotenplUpreate or ietaiiijObS x•ra ' '‘IhIg.*31‘.,, • lttinagement qual pp. '...."'• :: . .f,,N, ‘ • ;,!:::i;7; . • CO 416. ity econonaink act :1'.:'...:',::• ,J, • CapacityWeverage funefrom other sources 104 ,-,•,L.,. IM-81 • 'IC* -411,4 • Potential to increase sates -land economic development vp.,,gs ..M.:-.„..„ • Ability to repay loarfik • Readiness to proceed Eligible Use of Funds and Activities Loan funds can be used for: • Purchase and Installation of machinery, equipment, furniture, fixtures • Leasehold improvements or expansions • Technology infrastructure • Renovation, improvement and expansion • inventory Note: The use of funds for construction activities such as renovation, improvement and x,�. expansion will trigger a requirement that prevailu'gwages be paidfor all labor (Davis Bacon Wage Rates). Ineligible Use of Funds Funds cannot be used for the purpose of:... • Paying off a creditor or creditors of the applicant,who areadequately secured and are in a position to sustai .. oss, • Providing fun for distriblt on or payment to the owner, partners, or shareholder of the applicant. • mg a` debt;owed' tc%Tvrnall business investment company. • rag of any tax lienox Jiabi' • Refinancj1oans made bother lenders. • Projects whicl are__not,d ..nsistent with the City's economic development program, Eligibility Criteria A business may qualify for consideration provided it meets the following criteria: • Business is located or locating within the boundaries of the City of Miami. 2 • Business and/or Principals demonstrate that financing is not otherwise available on terms or conditions that would permit completion and/or successful operation or accomplishment of the project activities to be financed. • Business is an equal opportunity employer. • Business is not relocating jobs, except where the loan applicant is forced to relocate due to cixcnmstances beyond their control (i.e. government intervention, building demolition, etc.). • Project involves no negative environmental impacts. • Project impacts an adequate number of jobs, as` efined`by 24 CFR 209 (b)(1)(i), to be created and/or retained for low to moderate income people. • All applicants shall grant City of 1Vliamitesidents hiring preferenceoyer all applicants for any jobs created as a result of the loan. • The business ability to repay- titian. • Applicant must be willing to comply regulations; guidelines and policies as they relate to the program., Loan Criteria Job Creation nt' owns will rege applicant to create or retain one, full time, permanent job for every $2. 00.00, or partstthereof,1oan.ed. • At leas T one percei 51%) of ll jobs created or retained must be made available to low and moderate income ersons as defined by HUD under Section 8. } Job Creation • Jobs must b ;Seated within six (6) months of the loan closing if loan is not used for rehabilitation or leasehold improvements or the total project does not include rehabilitation or leasehold improvements. • Jobs must be created within eighteen (18) months of the loan closing if loan is used' for rehabilitation or leasehold improvements or six (6) month after the completion of the rehabilitation/improvements, whichever is less. 3 Job Retention • The applicant must give details on. why the borrowed funds are required to retain the jobs and demonstrate that without the assistance, the jobs would be lost. Loan Amount Minimum' $20,000.00 Maximum: $80,000.00 • A HUD environmental review disbursing funds. Note: Higher loan amounts may be approved Commission. Loan Terms Repayment term shall be as follows: must be conducted and completed prior to in :a case by case, basis by the City of Miami • a) Equipment: Up to;e„nomic life of the assets involved, not to exceed the IRS depreciation limits (See nstrictions for Forth 4562) and not longer than seven (7) years. '.> . ' ` .,: b) Others: ,:.::' Fully amortized beRveen� thre e (3).ta: seven (7) years c) Special Circuznsta ices Longer repayments aay'b onsidered on a case by case basis N Interest Rates The interesx ,rats -:;of the Ci cash flocvafe bus.ess. Match guirements- All loam ni be: arr,r's EDLF ldas shall be 0% - 3% per annum, based on the e matched by e applreait's funds. Matching participation requirements will Capital: Applioagt ust math a minimum of 20% of capital needed for project. Equity: Applicant .must have at least 20% equity in business. Special Target Areas Special Target Areas as defined in the City of Miami Consolidated Plan or approved by the City of Miami Commission for this loan program may have different from thee ones detailed above. 4 Application Fee There will be a non-refundable application fee of $100.00. This application fee must accompany the loan application package. The application fee will be cashed when the package is accepted for underwriting. Program Requirements: • Applicants and their spouses shall sign Unlimited Guaranties, even if the spouse is not part of the Company requesting the funds. • Commercial Insurance Policies naming the City ,of Miami as loss payee in an amount acceptable to the City of Miami Risk Department. All policies shall provide the City with mandatory 30 days written notices in cases of cancellation or material change. • Unless otherwise approved by the lousing and Loan Committee and/or the City of Miami Commission, all loans will require a_ collateral position of any:and all real property or equipment pledge as security for the loan'Y°°w• • Loans for equipment will require U.CC-1 filings. • Once the loan is closed, recipient may not`pledge, tr n sfe -,hypothecate, encumbrance or dispose of any asse urchased, in'whole or an. arr, witl`'ds from the City of Miami, without the vaenapprol from the Citypf; • The City of Miai .ay impose late feesifthe business does not pay on a timely manner. • L a > usiuess:des not •meet its m;n-um employment requirements, then the City shall the loan paaahle with5.0 days. Non-recozr vended Loans,, Loans will generallpn.ot be recommended for approval for the following reasons: • • If the requesteands. are otherwise available on reasonable terms: a) From the' at a fair price of assets not required by the applicant in the conduct of its'boral usiness or not reasonably necessary to its potential growth, b) Through the use of personal credit and/or resources of the owner, partners, management, or principal stockholders of the applicant, c) From other Government agencies which provide credit specifically for the applicants' type of business, or d) From other known sources of credit; • For unsatisfactory credit history during the Iast twelve (12) months. 5 • If a bankruptcy was discharged during the last twenty four (24) months. • If the loan will provide funds for speculation in any kind of property, real or personal, tangible or intangible; • If the applicant is a charitable institution or non-profit enterprise, except for cooperatives which carry on a business activity for the purpose of obtaining pecuniary benefit for their members in the operations of their otherwise eligible small business concern; • If the applicant is a newspaper, book publishing ,conmpany, magazine, or similar enterprise; • If any of the gross income of the applicant, (Or any of`lts,principal owners) is derived • from gambling activities, except for those small firms whiclz4`9btain less than one third of their gross income from income or commission from the sateof official state lottery tickets under a state license; • If the purpose of the loan is o. provide funds to an, enterprise primar ly engaged in the business of lending or inves :e ts.;ox to any otherw se eligible enterprise for the purpose of financing investments not rer ed or,+essential to the enterprise. • If the purpose of;the.loan is to finance the acq%siton of real property or land. • If the Applicant`andlor its principals areIiebted to the -City of Miami. • If t121.Applicant and!or. it a € fee I, state pounty or.loc rincipals have, been debarred from doing business with governments.rf • proceeds oftl<e oan wi be used for moving an eligible business when the move is s,for the purposf obtarrng the benefits of borrowing from the EALF. Appeal Process Applicants will have 10 business days from the receipt of the letter not recommending the loan to appeal the decision. The applicant can provide additional documents at that time for consideration of the underwriting committee. If the loan is not recommended a second time, there will be no further appeal entertained from the applicant. 6 Loan Approval All loans made strictly under the policies of the EDLF program will be recommended for approval by the Housing and Commercial Loan Committee. If the Housing and Loan Committee denies a loan application, the applicant. will be advised in writing with an explanation as to why the loan was denied. All loans not meeting the EDLF program guidelines will require an additional approval by the City Comroission. 7