Keystone Communities Development Grants (KCDG)

Keystone Communities Development Grants (KCDG)

All development activities previously funded under the former Housing and Redevelopment Assistance Appropriation and the New Communities Appropriation are now eligible for funding under this component of the Keystone Communities Guidelines.

This component provides financial assistance for a wide variety of physical improvements including housing, residential and building construction, improvements or redevelopment, infrastructure, property acquisition, grant-to-loan assistance, and costs related to any of the eligible activities. Also included are activities that support Keystone Main Street, Keystone Elm Street, and Keystone Enterprise Zone communities. While funding priority will be given to communities undertaking Main and Elm Street physical improvements, communities and applications without designation status are eligible for most of these grants.

The proposed improvement must have a documented beneficial impact on the community demonstrating public purpose otherwise the funds must be in the form of a loan with re-payment provisions.

These grants can include the revitalization of a neighborhood, downtown or specific location; development of a housing project; provision of site improvements to support the new construction of housing units; acquisition, rehabilitation, and/or new construction of housing which results in homeowner or rental opportunities; rehabilitation of owner-occupied residential properties; acquisition, rehabilitation, and resale of housing units; public improvements to support the rehabilitation of housing units; street improvements,

including streetscape improvements; water and sewer improvements; infrastructure; structural improvements; acquisition, provided there is evidence to support market values, such as an appraisal or recent comparable sales and provided there is funding to implement immediate reuse of the parcel/building; the construction of public site improvements that provide direct benefit to other coordinated community improvement efforts; the rehabilitation or restoration of older or under-utilized buildings for immediate reuse that will support other community development goals; the extension of service through public rights-of-way (i.e., paving or widening of access roads and upgrading water, sanitary or storm sewers); the demolition of a blighted structure (when a reuse plan has been adopted by the community for the cleared site and there is a commitment for private and/or public development).

Some examples of these grants are listed below but not limited to the following:

1. Keystone Façade Grant Funding

The Keystone Facade Grant is designed to stimulate private investment in properties, foster an attractive environment and preserve the architectural heritage of properties. A community-requesting Keystone Facade Grant funding is not required to be a designated Keystone Community; however, funding priority is given to designated communities. The application limit is $50,000 for Main Street and negotiable for other programs. A fee to administer the grant by the applicant is not an eligible expense unless approved by DCED.

 a. Keystone Facade Grant Funding Program Requirements:

• These grants are for exterior building improvements in a specific downtown or neighborhood.

• The Keystone Facade Grant limit is $5,000 per facade (home or store front).

• Must be matched dollar-for-dollar by the individual owner of the property for all programs except Elm Street.

• A strong demand for facade funding must be documented in the application.

• The following activities are eligible for reimbursement: Sign programs (storefronts), paint programs, design assistance (refers to uniformity (all) and compliance with the Secretary of Interior Standards (usually Main Street), and building facades (housing and commercial).

b. Elm Street Match Requirements

• A dollar for dollar match is required except for Elm Street projects which require a 10% match as described below.

• Elm Street Match Requirements

– A 10% match from local, private or public sources is required.

– Match can be cash and/or documented in-kind services or goods. Applications are

enhanced in the competitive review when match is provided above the required amounts.

• Keystone Elm Street Facade Grant Match Requirements

– Facade improvements for homeowners must be matched dollar-for-dollar for owners whose income is above 120% of the median income for the community.

– At least a 10% match (cash or in-kind) is required for homeowners whose income is less than 120% of the median.

- Other grant programs such as HOME, CDBG or local funds, may be used to match façade improvements for homeowners whose income is less than 120% of the median income.

– In-kind match must be documented per property.

2. Anchor Building Grants

Generally, Anchor Building grants are renovations to a significant downtown building, usually provided as a grant to the applicant and as a loan to the developer. These grants are generally limited to $500,000 or 30% of project costs, whichever is less. A fee to administer the grant is not an eligible expense by the applicant. A fee to pay for the audit is eligible. These grants-to-loans are repaid to a local Revolving Loan Fund. The municipality where the Anchor Building project is located must be a participant in the

Revolving Loan Fund that receives the loan repayments.

3. Redevelopment Grant-to-Loan

These grants usually support the rehabilitation and/or new construction of a structure(s) on previously developed sites or locations experiencing blighting conditions where a for-profit entity or private sector firm will own the improved building or site after the work is completed.

The funds benefiting private sector individuals or entities must be loaned from and repaid to the local agency receiving DCED Keystone Communities Development Grant funding. DCED must review and approve the financial underwriting of the loan and all loan terms and conditions. The reuse of these loan repayments must be approved by DCED and be consistent with the KC Program. Grants are generally limited to $500,000 or 30% of project costs, whichever is less. A fee to administer the grant is not an eligible expense by the applicant. A fee to pay for the audit is eligible.

Redevelopment Grant-to-Loan Program Requirements

• Identify the project by describing the site location, scope of work, and community benefit.

• Identify the borrower by name, address, organization.

• Describe the grant recipient’s ownership status (e.g. corporation, LLP and the proportional equity of the principals.

• Grant funds may be used

– For building improvements/renovations

– For new building construction

– For site improvements

– For infrastructure

– For the cost of prepared business lease space

– To pay for the cost of a Phase I environmental assessment for projects that involve the acquisition of real property.

– To pay for the cost of hazardous waste testing if financing is not available from conventional sources. The lack of conventional financing must be documented.

• Provide the proposed terms and conditions of the loan.

– Annual interest rate.

– Amortization period.

– Description and value of collateral.

– Position of real estate encumbrance.

• Describe the business history of the proposed grant recipient.

• Financial documentation from the borrower evidencing the borrower’s ability to pay back the loan must be submitted with the application.

4. Public Improvement Grant

State financial assistance is available to all Pennsylvania municipalities for a variety of development projects to help eliminate decline, provide gap financing for proposed projects, and assist in a community’s emergency efforts to recover from a natural disaster. Funding priority is given first to communities recovering from a natural disaster and second, to all Keystone designations. DCED will review each proposal on its own merit and determine whether it clearly serves the public purpose, has a strong local financial commitment, is part of a cooperative partnership, and is ready to go. The ultimate owner/user of these grants must be a public entity, a charitable nonprofit, or an income-eligible homeowner. Income-eligible homeowners include low, moderate and middle-income homeowners whose income is up to 120% of the area median income.

Grants are generally limited to $500,000 and require at a minimum a dollar-for-dollar match. Up to 10% of the grant may be used to administer the project. The cost to audit the project must be included within the 10%. Homeowners/renters whose income is up to or less than 120% of the median income in the area are eligible to receive benefits.