RESPONSIBLE CITY AGENCY: Community and Economic Development
KEYWORDS: Loan, gap financing, guarantee, relocation, expansion, retention, interest, buy-down, assistance, financial, finance, community.
1. General
1.1 Salt Lake City Corporation uses the Economic Development Revolving Loan Fund to promote employment opportunities and commercial enterprise within its corporate boundaries.
1.2 To participate in the Revolving Loan Fund, projects must be within the corporate limits of Salt Lake City. The fund can be used, however, to assist business relocation into the City where the revitalization and preservation of residential neighborhoods and/or job creation can be demonstrated.
1.3 The Department of Community and Economic Development administers the Economic development revolving Loan Fund. The Capital Planning and Programming Division administers, monitors, and tracks the assistance programs.
1.4 Definitions:
A. Incentives and Grants Review Committee: A committee chaired by the Director of Capital Planning and Programming, consisting of the Directors of the Community and Economic Development Department, the Planning Division, the Redevelopment Agency, the Executive Director of the City Council, the City Treasurer, and a representative of the City Attorney’s Office.
B. Gap financing: A secured loan to supplement conventional financing and/or investment financing in instances where other funds are not sufficient to capitalize the project.
C. Conventional loan guarantee: A loan enhancement provided by a secured guarantee of the conventional loan.
D. Business relocation, expansion, or retention assistance: A short term secured loan used in tandem with financing from a private lending institution or other investment partner to offset infrequent and extraordinary circumstances where, without the loan, considerable adverse impact will accrue to the community or neighborhood.
E. Conventional loan interest buy-down: Loan subsidy provided through an interest rate reduction of the institutional financing portion of the financing package. repayment of the loan shall be made from the distribution of profits on sale of the project.
2. Financial Assistance
2.1 The types of financial assistance available through the Revolving Loan Fund include gap financing, conventional loan guarantees, business relocation, expansion, or retention assistance, and conventional loan interest buy-down.
2.2 Loans are negotiated to the best mutual interest of Salt Lake City Corporation and the loan applicant. Interest rates are related to the need for development assistance and may be fixed or graduated.
2.3 Short term loans will generally be for up to five years. No loan will be for a term longer than ten years.
2.4 Uses of Revolving Loan Fund resources may be restricted by requirements of programs which support the Revolving Loan Fund, such as the Urban Development Action Grant program or the Community Development Block Grant program.
2.5 The Incentives and Grants Review Committee reviews and scores loan applications and then recommends loans to the City Council for final approval.
2.6 The City Council may pass resolutions authorizing the Mayor to execute appropriate loan documents.
2.7 Awards are made to the highest scoring projects until funding is depleted, and unfunded projects may re-apply without preference. The City is not obligated to fund any project and makes funding available at its discretion.
3. Criteria for Award
3.1 Highest priority is given to loans that create growth and/or new jobs, or provide a needed service to the community.
3.2 Services or amenities created by projects must provide an essential element in enhancing the preservation or revitalization potential of a particular neighborhood.
3.3 Projects must meet criteria defined in the City’s Development Incentives policy.
CURRENT REFERENCES: Development Incentives administrative rule
PRE-1995 REFERENCES: City policy 6.01.100
6.01.200
EFFECTIVE DATE: October 1, 1995
DATE APPROVED BY CABINET: September 6, 1995