In 2019, $150 million of capital grant funding was made available to Empire State Development (ESD) from the Regional Council Capital Fund. This grant provides funds annually for regional and local economic development across New York State.
ESD grant funding is available for capital-based economic development projects intended to create or retain jobs; prevent, reduce or eliminate unemployment and underemployment; and/or increase business or economic activity in a community or Region.
Grant funding will be allocated among the ten regions, each represented by a Regional Council, based on each Regional Council ‘s development and implementation of a five-year strategic plan. Funding will be allocated to projects, including priority projects identified by the Regional Councils, identified as significant, regionally supported and capable of stimulating economic investment.
Eligible applicants include: for profit businesses, not-for-profit corporations, business improvement districts, local development corporations, public benefit corporations, economic development organizations, research and academic institutions, incubators, technology parks, municipalities, countries, regional planning councils, tourist attractions, and community facilities.
Generally, applicants should not apply for, nor will be considered for, more than twenty percent (20%) financing for any particular project based on the eligible total project cost. ESD requires that the Applicant contribute a minimum of ten percent (10%) total project cost in the form of equity contributed after Applicant’s acceptance of ESD’s incentive proposal.
Applicants must complete and submit a Consolidated Funding Application (CFA) for review by ESD and the Regional Council for the region in which the proposed project is located. The last grant cycle closed on July 26, 2019.
Business Investment: Business investments are capital expenditures that facilitate an employer ‘s ability to create new jobs in New York State or to retain jobs that are otherwise in jeopardy. Five-year job commitments will be required of all award recipients because it is by underwriting these job commitments that ESD is best able to forecast the economic benefits of providing assistance to any particular project.
Note: Applicants will be required to commit to the number of jobs at risk (of relocation or loss) that will be retained by the proposed project, the number of net new full-time jobs that will be created by the project, and the average salaries of each. Failure to achieve or maintain these employment commitments will subject a funding recipient to potential recapture of awarded grant funds.
Infrastructure Investment: Funds may be used to finance infrastructure investments in order to attract new businesses and expand existing businesses, thereby fostering further investment. Infrastructure investments are capital expenditures for infrastructure including transportation, parking garages, water and sewer, communication, and energy generation and distribution. Infrastructure Investment projects may also include planning or feasibility studies relating to a specific capital project or site. Infrastructure investment projects that are able to provide job commitments will be viewed favorably.
Note: (1) few infrastructure investment projects are anticipated to be able to provide job commitments and (2) if the employer will be an entity other than the Applicant, a third party guarantee of the Applicant‘s job commitment must be provided by the prospective employer and both the prospective employer and the third party guarantor must be found by ESD to be creditworthy.
Economic Growth Investment: An Economic Growth Investment initiative fosters economic growth through cultural activity, higher education activity, regional revolving loan and grant programs, agribusiness initiatives, other local or regional initiatives, planning or feasibility studies relating to a specific capital project or site, improvements to facilities in highly distressed areas, commercial revitalization activities in central business districts or commercial strips, or other types of projects that may not have direct job creation goals. Economic Growth Investment projects that are able to provide direct job commitments will be viewed favorably.
How Funding May Be Used
Funds may be used for:
Acquisition of land, buildings, machinery and/or equipment;
Demolition and environmental remediation;
New construction, renovation or leasehold improvements;
Acquisition of furniture and fixtures;
Soft costs of up to twenty-five percent (25%) of total project costs; and
Planning and feasibility studies related to a specific capital project or site.
Examples of Projects utilizing ESD grant funds
ESD grant funds have been used to help fund a wide range of innovative projects around New York State.
For example, in 2018, City Harbor LLC was awarded a $1,355,018 ESD grant for construction/renovation to help develop a multi-phase waterfront redevelopment project at the Southern Tip of Cayuga Lake in Ithaca. The Project will include new housing, a restaurant, seawall construction, new boat slips, broadened marina functions, connections to trails and a medical office building.
Additionally, in 2018, Damiani Wine Cellars was awarded three ESD grants, for 1) $200,000 for construction and renovation, 2) $34,000 for equipment and machinery, and 3) $324,400 for property acquisition. These funds are being used to grow three area wineries (Damiani, Osmote, and Nine-Four Wineries), allowing them to increase production and storage of cased goods. The property acquired for the project will be conditioned and planted to high-value grapes, which will be sold to Finger Lakes wineries.
For more information about the ESD grant, or for inquiries related to its potential benefits or how to apply, please contact Mindy L. Zoghlin, Esq. at The Zoghlin Group, PLLC.
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