[HISTORY: Adopted by the City Council of the City of Harrisburg
by Ord. No. 11-1987; amended by Ord. No. 31-1991; 6-8-2010 by Ord. No.
5-2010. Other amendments noted where applicable.]
A.
The Mayor's Office of Equal Economic Opportunity (MOEEO) is
responsible for the development, administration and implementation
of the Community Development Block Grant Revolving Loan Program (RLP).
The RLP provides low-interest financing to firms in the City which
will in turn strengthen existing jobs, create new employment opportunities,
stabilize or increase the tax base, and increase private investment.
Funding for the RLP can be appropriated only by the action of Council.
B.
The Mayor's Office of Equal Economic Opportunity is responsible
for the development, administration and implementation of the Special
Projects Revolving Loan Program (SPRLP). The SPRLP provides low-interest
financing for small business startup or expansion; small business
contracting with Fortune 500 companies or governmental agencies; and
fixed asset acquisition (construction).
C.
Repayment of loans, both as principal and interest, and all application
and processing fees shall be returned to a separate RLP or SPRLP account,
as appropriate, for use in making additional loans so long as the
program remains in effect.
As used in this chapter, certain terms are defined as follows;
some terms may be found in the Glossary:
Any business, other than an industrial or service enterprise,
which by its nature or size has created, or offers reasonable likelihood
of creating, substantial employment opportunities. The term may include
wholesale, retail and other mercantile activities, office buildings
(if not in violation of other prohibitions, i.e., no investor/developers),
department stores (also if not otherwise in violation) and international,
national and regional headquarters facilities.
Includes the acquisition, erection, extension, renovation,
enlargement, or substantial repair of structures utilized in, or related
to, eligible business projects. The term does not include cost of
demolition or removal of structures.
Any commercial, industrial or service business locating or
expanding in the City.
Activities undertaken by an eligible business and conducted
pursuant to the definition of "use of funds," as well as expense related
to inventory and working capital. The latter, however, are not considered
as eligible use of funds. In the case of a mixed-use structure, the
costs associated with renovation of the residential portion of the
structure may be counted as eligible project costs, but RLP funds
are limited to costs associated with the business portion of the project.
Any bank, savings and loan or similar institution, one of
whose primary business functions is the making of loans to business
enterprises.
A business, other than a commercial or service enterprise,
which by its nature or size requires substantial capital and which
by its nature or size has created or offers a reasonable likelihood
of creating substantial employment opportunities. The term may include
manufacturing activities and research and development as well as warehouse
facilities, distribution facilities, and international, national and
regional headquarters facilities.
Any person engaged in the development of a project to be
occupied by a person or persons other than the loan recipient.
The committee of five members appointed by the Mayor and
confirmed by City Council, consisting of two representatives of the
community and three representatives of the business community. The
LRC will reflect the demographic makeup of the community at large.
Term of office shall be three years. Terms of office shall be staggered.
A person falling within the low- and moderate-income guidelines
as defined by the United States Department of Housing and Urban Development.
The giving of new shapes, new qualities or new combination
to matter by the application of skill and labor thereto through the
use of equipment or otherwise.
Any person who is:
African American: All persons having origins in any of the black
racial groups of Africa, the West Indies or the Caribbean Basin;
Hispanic American: All persons of Mexican, Puerto Rican, Cuban,
Central or South American, or other Spanish culture or origin, regardless
of race;
Asian American: All persons having origins in any of the original
peoples of the Far East, Southeast Asia and the Indian Subcontinent;
Native American: All persons having origins in any of the original
peoples of North America and who maintain cultural identification
through tribal affiliation or community recognition; or
American Aleut: All persons having origins in any of the original
peoples of the Pacific Islands.
A sole proprietorship, partnership, joint venture, corporation,
or other entity run and controlled by minorities wherein:
At least 51% of the enterprise is owned by minorities;
Minority owners share in the risks and profits of the enterprise
to the extent of their individual holdings;
Control by the minority owners of the enterprise is active and
not passive, and such control is not wholly dependent on the consent
of majority group members who also have holdings in the enterprise;
and
The minority owners provide the primary input into the day-to-day
operation of the business.
Any person, partnership or corporation engaged in an industrial,
commercial, service, or retail enterprise and determined by the LRC
to be financially responsible to assume all obligations prescribed
by the LRC (and this chapter) in the lease, sale and operation of
an eligible project.
A position or positions providing not less than 25 hours
of gainful employment per week for a period of at least three years.
Any enterprise, other than a commercial or industrial enterprise,
that provides essential and necessary services to the business and
residential community and which by its nature offers reasonable likelihood
of creating substantial employment opportunities. The term includes,
but is not limited to, legal counsel, engineering, architectural,
investment, and counseling services.
Includes the expense of construction and of acquisition of
all structures, land and other property rights and interests in land
necessary to the project. The term does not include the expense of
demolishing, removing or relocating any buildings or structures on
land, machinery and equipment, financing charges, cost of engineering,
financial and legal services, plans, specifications, studies, surveys
necessary to determining the feasibility of a project, administrative
expenses, reserves for interest and for extensions of payment thereof,
enlargements, additions and improvements, and other such expenses
that may be necessary to the project. Use by investor/developers is
not permitted.
A sole proprietorship, partnership, joint venture, corporation,
or other entity run and controlled by women wherein:
At least 51% of the enterprise is owned by women;
Women owners share in the risks and profits of the enterprise
to the extent of their individual holdings;
The control of the women owners in the enterprise is active
and not passive, and such participation is not wholly dependent on
the consent of men who also have holdings in the enterprise; and
The women owners provide the primary input into the day-to-day
operation of the business.
The RLP and SPRLP are available generally to a project which
involves the investment of private capital in the fixed assets of
a business venture within the City. They are intended to finance projects
which would have a positive impact on the City by leveraging a significant
amount of private investment and creating new employment opportunities
for City residents or strengthening existing jobs. At least 51% of
all jobs created or retained must be provided to low- and moderate-income
persons who are residents of the City of Harrisburg. Loans are permitted
for both job retention as well as job creation. For every three jobs
retained, one new job must be created.
A.
All development undertaken with proceeds of the RLP or SPRLP must conform to the requirements set forth in the Affirmative Action Cooperation Agreement as amended and readopted. (See Chapter 2-903.)
B.
A minimum goal of 20% of the total dollar volume of RLP loans awarded
in any calendar year shall go to qualified minority business enterprises.
A minimum of 5% of the total dollar volume of RLP loans awarded in
any calendar year shall go to qualified women-owned business enterprises.
The application process shall consist of the following steps:
A.
Completion of an application and submission to MOEEO staff for review.
An application fee of $50 must accompany an RLP application; the fee
for an SPRLP application is $100. Loan applications will be evaluated
by MOEEO staff prior to submission to the Loan Review Committee. Applications
will be considered by the LRC at its regularly scheduled meeting.
B.
Review and consideration of application by MOEEO and the LRC at a
public meeting.
C.
Issuance of a preliminary approval letter to the applicant following
approval by the LRC.
D.
Execution of a loan agreement with required evidentiary materials,
following approval by the City Solicitor.
E.
Receipt by MOEEO of loan funds approximately two weeks following
approval of the Solicitor and receipt of approved expenditures.
A.
The application fee is nonrefundable.
B.
A nonrefundable processing fee of 1% of the total amount of City
financing will be charged by MOEEO, plus the cost of filing fees with
government offices, with a minimum RLP fee of $250 and a maximum of
$1,500 and a minimum SPRLP fee of $1,000 to a maximum of $10,000.
The processing fee is payable at the time of settlement. The borrower
will also be responsible for all legal fees and expenses of legal
counsel for the City incurred during the processing of the loan, as
well as any other extraordinary expenses the City may incur which
are directly related to the implementation of the loan. The LRC may
waive the processing fee if, in its sole judgment, the circumstances
warrant such action relative to the program objectives.
Applicants will be evaluated individually by the LRC to determine
creditworthiness, project feasibility, the ratio of new, permanent
jobs to be created per dollar borrowed, the number of City residents
to be hired as a result of the project, the retention of jobs for
low- or moderate-income individuals, the ability of the project to
leverage private investment and tax revenues, and other benefits generated.
All applications will be reviewed on a first-come-first-served basis.
All official notifications, approvals, rejections, and other communications
to the applicant will come from the LRC.
A.
The amount of any RLP loan made for a project cannot exceed $10,000
per single permanent job created or retained in the City within three
years of the date of the loan; within one year of the date of the
loan, at least 50% of the permanent jobs to be created or retained
must be in existence with the remainder to be in existence at the
end of the three-year period. In no case will the RLP provide more
than 40% of the financing for an eligible project.
B.
A minimum of 5% of the project cost, in real assets (either cash
or property), is required for all RLP loans. The investment itself,
however, can be made in either program eligible expenditures or in
working capital.
C.
Firm commitments for participatory funding of the investment proposal,
both debt and equity, other than the program loan funds requested,
must be in place at the time a program loan application is submitted.
All loan applications must include the participation of a conventional
lender except where the applicant is able to:
D.
Part of the application must include a statement demonstrating the
need for assistance through the program.
E.
The term of the loan for projects under this program is dependent
upon the nature of the items financed:
F.
The applicant shall enter into a collateral security agreement with
the City, which shall be the secured party therein, which agreement
shall note the execution and delivery of a judgment note to the City
evidencing the indebtedness of the applicant to the City. The agreement
shall be in such form as approved by the City Solicitor and shall
include but not be limited to:
(1)
A security interest in all inventory, equipment, fixtures, receivables,
additions, improvements, and substitutions;
(2)
Provisions for the protection of collateral by prohibition of
transfer or encumbrance without the written consent of the City and
the maintenance of insurance coverage satisfactory to the City;
(3)
Indicia of default by the borrower; and
(4)
The rights and remedies of the City upon default by the applicant/borrower.
G.
The applicant/borrower shall also execute and deliver to the City
a suretyship guaranty agreement in such form as approved by the City
Solicitor.
H.
Security statements, liens, or other similar documents will be filed
by the City to fully secure any and all loans.
I.
Interest rate.
(1)
RLP: for the first five years, 1/2 of the New York Prime Rate,
with a four-percent minimum interest rate as of the date of approval
by the LRC. Loans with terms in excess of five years shall be renegotiated
at the end of the five-year period but shall not be less than 1/2
the New York Prime Rate or higher than the same.
(2)
SPRLP: 80% of the New York Prime Rate.
A.
Subject to the RLP guidelines, the LRC has the power to:
B.
The decisions of the LRC are final. No appeal may be taken.
C.
Only the LRC will announce program availability and program application
deadlines, and applications for the program will only be accepted
during such announced periods. Applications submitted in other than
authorized periods will be returned to the applicant for resubmitting
at the appropriate time.
The LRC will adopt guidelines for action in cases of noncompliance
with these requirements by the borrower. In such cases, the interest
rate on the loan awarded shall be recalculated at the New York Prime
Rate from the date of the loan or from the date of discovery of the
noncompliance, whichever is later. The guidelines adopted by the Loan
Review Committee will further explain this program element.
The LRC will submit to City Council an annual report on program
status. Such report shall include a review of loans made during the
reporting period as well as payment progress on loans made in prior
reporting periods.
