HomeMy WebLinkAboutR40-Economic Development Agency
ECONOMIC DEVELOPMENT AGENCY
OF THE CITY OF SAN BERNARDINO
FROM: Gary Van Osdel,
Executive Director
SUBJECT:
GROW AMERICA FUND
AMENDMENT
DATE:
February 16,2000
ORIGINAL
Synopsis of Previous Commission/Council/Committee Action(s):
On November I, 1999, the Community Development Commission approved a Capital Grant Participation Agreement
between the Redevelopment Agency and Grow America Fund, Inc., establishing the Grow San Bernardino Fund for
purposes of providing small business loans.
On February 10, 2000, the Redevelopment Committee recommended that this item be forwarded to the Community
Development Commission for approval.
Recommended Motion(s):
(Community Development Commission)
MOTION:
That the Community Development Commission approve the use of $300,000 in land sales proceeds to
increase the Agency's level of investment in the Grow San Bernardino Fund Program.
Contact Person(s): Gary Van Osdel/
Project Area(s) All
Phone:
663-1044
Ward(s):
1-7
Supporting Data Attached: IliI Staff Report 0 Resolution(s) 0 Agreement(s)/Contract(s) 0 Map(s) 0 Letter/Memo
FUNDING REQUIREMENTS Amount: $ 300,000
Source:
Land Sales Proceeds
SIGNATURE:
Requested
Commission/Council Notes:
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GVO:lag:02-22-00 GAF Amendment
COMMISSION MEETING AGENDA
Meeting Date: 02/22/2000
Agenda Item Number: Rl/O
ECONOMIC DEVELOPMENT AGENCY
STAFF REPORT
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Grow America Fund Amendment
BACKGROUND
On April 8, 1999, the Mayor and Common Council approved the City's 1999/2000 Consolidated
Plan, which included in the list of projects to be funded with CDBG funds, a proposed $200,000
business incentives loan program intended to provide a resource to meet the mortgage and capital
fmancing needs of growing businesses in the community.
In as much as the Agency does not have the manpower to provide the intensive portfolio
management necessary to insure viability of a commercial lending program, and in order to
stretch the impact of the $200,000 in Agency's funds through leveraging, staff recommended
that the Agency participate in the National Development Council's Grow America Fund as the
means for providing a business incentives loan program.
On November I, 1999, the Community Development Commission adopted Resolution
CDC/1999-39 approving a Capital Grant Participation Agreement between the Redevelopment
Agency and Grow America Fund, Inc., establishing the Grow San Bernardino Fund for purposes
of providing small business loans. It may be recalled that Grow America Fund, Inc. is a wholly-
owned subsidiary of the National Development Council (NDC) and was created as a Small
Business Lending Company to increase access to capital and to meet the small business
financing challenges within NDC's client communities. To assist the Agency in launching it's
"Grow San Bernardino Fund" lending unit, the NDC set aside $200,000 of unrestricted capital to
match the Agency's investment of $200,000 in 1999/2000 CDBG funds. At that time, it was
anticipated that when taken together these funds would leverage approximately $1,600,000 in
loans for small businesses in the City.
CURRENT ISSUE
Although the Grow San Bernardino Fund Program has yet to be formally marketed, preliminary
requests for loan assistance already total well over $1 million. It would appear that demand for
business loan assistance is greater than originally thought and that the Grow San Bernardino
Fund is under capitalized. Thus, staff is recommending that $300,000 in proceeds from the sale
of the property at 701 north "E" Street (total receipts $780,000) be invested in the Grow San
Bernardino Fund, effectively leveraging an additional $1,200,000 in small business loans. It is
important to point out that allocated monies remain on hand with the Agency until needed by the
Program to fund new loans.
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GVO:lag:02-22-00 GAF Amendment
COMMISSION MEETING AGENDA
Meeting Date: 02/22/2000
Agenda Item Number: Riff)
Economic Development Agency Staff Report
Grow America Fund Amendment
February 16,2000
Page Number -2-
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FISCAL IMPACT
The proceeds resulting from the Agency's sale of the office building at 701 North "E" Street are
currently on deposit, have not been appropriated for any other purpose and are available for the
recommended use.
RECOMMENDATION
That the Community Development Commission approve the use of $300,000 in land sales
proceeds increase the Agency's level of investment in the Grow San Bernardino Fund
Pro
Gary ~ n Osdel,
Exec tive Director
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GVO:lag:02-22-00 GAF Amendment
COMMISSION MEETING AGENDA
Meeting Date: 02/22/2000
Agenda Item Number:
R1JD