TO: Mayor and Members of City Council
THRU: Telly C. Whitfield, Ph.D. - Assistant City Manager
FROM: Christopher Cauley, MPA - Economic & Community Development Director
Kelly Olivera - Budget & Evaluation Director
DATE: June 13, 2022
RE:
Title
Adoption of Special Revenue Fund Project Ordinance 2022-14 for a North Carolina Department of Commerce Rural Economic Development Grant for ChenMed, LLC
end
COUNCIL DISTRICT(S):
Council District(s)
District 5
b
Relationship To Strategic Plan:
Strategic Operating Plan FY 2022- 2026
Goal II: Responsive City Government Supporting a Diverse and Viable Economy
• 2.2: To invest in community places to ensure revitalization and increase quality of life
Goal VI: Collaborative citizen and Business Engagement
• 6.2: To ensure trust and confidence in City government through transparency and high-quality customer service
• 6.3: To inform and educate about local government by enhancing public outreach and increasing community dialog, collaboration, and empowerment
Executive Summary:
The City has been awarded a $300,000 Rural Economic Development Grant from the North Carolina Department of Commerce (NCDOC) for a Building Reuse grant for ChenMed, LLC. The Fayetteville-Cumberland Economic Development Corporation (FCEDC), in partnership with the Economic and Community Development Department (ECD), is assisting ChenMed, LLC with funding for the substantial rehabilitation of an existing commercial facility. The company will undertake substantial renovations of its property at 4101 Raeford Road, and in turn, guarantee the creation of 30 full-time jobs.
The grant requires that the City provide a 5% or $15,000 cash match for the project. Special Revenue Fund Project Ordinance 2022-14 will appropriate $300,000 of grant proceeds and the City’s $15,000 match for the project.
Background:
The Building Reuse Program, under the Rural Grants/Programs Section of the North Carolina Department of Commerce, provides grants to local governments. Three categories of funding are available for 1) the renovation of vacant buildings, 2) the renovation or expansion of a building occupied by an existing North Carolina company wishing to expand in their current location and 3) the renovation, expansion or construction of health care entities that will lead to the creation of new, full-time jobs.
The amount of state funding approved in the grant is $300,000 based upon the number of jobs that will be created in the specified timeframe of the grant. At the time of the application for the grant, it was projected that total investment by ChenMed, LLC in the rehabilitation project would reach $1,482,500.
The program delivers the funding to the recipient in the form of a forgivable loan. The ChenMed, LLC project will be required to create 30 full-time jobs, and maintain them in existence for six consecutive months prior to the termination date of the agreement with NCDOC. If the terms of the agreement are not met, the funding must be repaid by the recipient to the City, and subsequently back to the grantor agency.
Issues/Analysis:
Documents required to move this agreement forward include the Grant Agreement between the City and the NCDOC, Loan Agreement, and Legally Binding Commitment between the City and ChenMed, LLC. The company will also be required to execute a promissory note and deed of trust on the property to secure the City’s position.
Budget Impact:
The City’s contribution for this project is $15,000, which will be provided by a General Fund transfer. There is sufficient funding available in the ECD general fund budget for the fiscal year 2022 to accommodate this grant match.
Options:
1) Adopt Special Revenue Fund Project Ordinance 2022-14, and authorize the City Manager to execute the required documents to accept the grant and execute the agreements.
2) Do not adopt Special Revenue Fund Project Ordinance 2022-14 and provide additional direction to staff.
Recommended Action:
Staff recommends that the City Council move to adopt Special Revenue Fund Project Ordinance 2022-14 and to authorize the City Manager to execute appropriate documents to accept the grant and execute the agreement with ChenMed, LLC.
Attachments:
• Special Revenue Project Ordinance 2022-014
• ChenMed, LLC - Grant Agreement
• ChenMed, LLC - Reuse Application