215 Martin Luther King Jr.
Joe Gromacki, 267-8724 ext. 307
MADISON CAPITAL REVOLVING FUND (MCRF)
All proposals will be reviewed for compliance with the following Criteria which were originally based on the Report of the Madison Capital Revolving Fund Task Force approved by the Common Council on May 19, 1987.The Objectives listed below describe the Program. Following the Objectives, is the General Criteria for the Capital Revolving Loan Fund with subsequent details.
Encouraging the expansion of new and existing business enterprises that create jobs for unemployed and under employed people.
Preserving and expanding the housing supply within the City, including market rate housing and affordable housing for low and moderate-income households.
Redeveloping blighted and underutilized properties for uses consistent with a strategy for neighborhood and downtown revitalization.
CRITERIA FOR CAPITAL REVOLVING
1. The evaluation of all projects shall consider how rapidly debt service and the term of the proposed loan replenish the Madison Capital Revolving Fund for future projects.
2. The evaluation of all projects shall consider the amount of equity provided by the project sponsor, and the extent that public financing from all sources leverages private resources.
3. The evaluation of all projects shall consider the City’s loan security and risk exposure. The total loan-to-value ratio for all debt in the project shall not exceed 90 percent.
4. The maximum loan per project will be $250,000. The minimum loan per project will be $50,000. Interest rates and loan payback terms are flexible.
5. The evaluation of all projects shall include consideration of the developer’s capacity to commence and carry out a project in a timely manner.
6. The evaluation of all projects shall include consideration of the projects feasibility and viability.
7. The evaluation of all projects shall include consideration of whether the property meets State codes pertaining to energy.
8. The evaluation of projects, especially residential development, shall include consideration of the degree to which facilities are accessible to persons with physical disabilities.
9. Madison Capital Revolving Loan Funds are to be used for end loan financing following project completion.
10. All projects must comply with Madison General Ordinance Section 3.72 concerning accessibility requirements for persons with disabilities and the Americans with Disabilities Act, where appropriate. Priority will be given to projects serving a special needs population.
11. All projects shall comply with applicable local, State, and federal provisions concerning Equal Opportunity and Fair Housing.
12. The borrower shall provide a personal guarantee for the full amount of the MCRF loan.
SPECIFIC ECONOMIC DEVELOPMENT
The evaluation of economic development and commercial rehabilitation projects may consider the extent the project advances specific public objectives such as the City’s economic development strategy for commercial district revitalization and job creation matching the skills and training of the resident labor force.
The evaluation of economic development projects may consider the degree to which new primary sector jobs are created. The evaluation shall include the degree to which primary sector jobs are linked with training programs and projects involving basic industries.
The evaluation may include consideration of the number of the new permanent basic sector jobs created. The acceptability of favorable loan terms and rates increases in relation to the generation of new permanent basic sector jobs.
A basic sector business is defined as one which receives a majority of its earnings from customers outside the Madison-Dane County area, or business customers outside the Madison-Dane County area, or manufacturing a product that would otherwise be imported from outside Dane County.
SPECIFIC HOUSING CRITERIA:
Low and moderate-income housing developments that are integrated with market rate housing will receive priority consideration.
The evaluation of infill housing and residential rehabilitation projects shall include consideration of the number of additional new housing units created or substantially rehabilitated as a result of the project, and the total cost, amount of public financing and public subsidy needed per unit. The loan amount per unit may increase as interest rates and payback terms approach conventional lending standards.
SPECIFIC BLIGHT REMOVAL CRITERIA:
The evaluation of property rehabilitation projects shall include consideration of the extent that the property exerts a blighting influence on the surrounding neighborhood, and the extent to which the rehabilitated property is likely to be a catalyst for substantial private effort to upgrade other properties in the immediate area.
The evaluation of a project shall include consideration of the number of jobs resulting from the project including non-basic jobs and jobs shifted from other locations. The acceptability of favorable loan terms and rates increases in relation to the generation of jobs.
ITEMS TO BE INCLUDED IN LOAN
Provide a description of
2. Provide the name, responsibility, and experience of development team members.
3. Provide the name, address, and telephone number of principal contact person.
4. Describe the form(s) of security to protect the City’s loan participation.
5. Indicate the requested loan amount, interest rate, and payback terms.
6. Provide a source and use of funds statement.
7. Provide a ten-year pro forma indicating income and expenses, debt service, and cash flow.
8. For economic development and blight removal projects, indicate the number of new basic sector and/or non-basic sector jobs to be created as a result of the project.
9. For housing projects, describe the accommodations within the dwelling units that will be made for persons with physical disabilities.
10. For non-housing projects, indicate what accommodations will be incorporated in the construction or renovation of the project to provide accessibility to persons with physical disabilities.
11. Provide a description of the management plan and who will carry it out.
12. Provide development timetables.
13. Provide a description of the degree to which Madison Capital Revolving Loan Funds are needed in order for the project to be accomplished.
14. Indicate if site control has been obtained.
15. Indicate if the relocation of individuals or businesses will be required as a result of the development. usinesses will be
required as a result of the
(Please also note that a list of typical Madison Capital Revolving Fund Loan conditions appears on Attachment A of this document)
APPROVAL REQUIREMENTS FOR THE
MADISON CAPITAL REVOLVING FUND:
The Common Council has designated the Community Development Authority (CDA) as agent of the City of Madison for the operation and administration of the MCRF Loan Program.
2. Staff is required to review all loan applications for financial assistance to find, if appropriate, that the proposed project meets the objectives and Criteria of the MCRF and so report to the CDA and Common Council.
3. The loan request must be approved by the CDA.
4. The loan request must be approved by the Common Council and authorize the Mayor and City Clerk to execute all documents necessary to close the loan.
5. The Common Council has directed that the Community Development Authority act as the City’s agent in closing and administering this loan and in resolving any issues that may arise over the terms and conditions of the loan.
TYPICAL MADISON CAPITAL REVOLVING
FUND (MCRF) LOAN CONDITIONS:
The project to be constructed must conform to the application and plans submitted by the borrower. Any changes to the size, use, or value of the project which is less than proposed will subject this loan commitment to reconsideration by the Community Development Authority (CDA).
2. Prior to beginning construction, final plans and specifications must be provided which indicate conformity to the project description as described in the application to the CDA.
3. The borrower shall provide a personal guarantee for the full amount of the MCRF loan.
4. Prior to loan closing, the borrower must provide certification that the renovations have been completed and satisfactory evidence that all contractual work will be paid by the borrower.
5. The borrower agrees to cooperate with the CDA to assure that the facility will be accessible to persons with physical disabilities. The proposed renovations/development shall comply with Madison General Ordinance Section 3.72, the Americans With Disabilities Act, where appropriate, and the Objectives outlined in the “City of Madison Accessibility Design Checklist for City Facilities and City Funded Projects.”
6. The borrower shall make ____ apartment units affordable to households whose income does not exceed 80 percent of Dane County’s median income. Annual certification of compliance to this condition will be required.
7. Prior to loan closing, evidence must be provided that a property insurance policy of the proper type and amount of coverage to protect the City of Madison’s loan participation has been obtained. The policy will name the City of Madison as an additional insured. The CDA shall receive annually, renewed certificates of insurance.
8. At loan closing, the borrower must provide a title insurance policy of the proper type and amount of coverage to the City of Madison. The City of Madison shall receive a lender’s policy.
9. Prior to loan closing, the borrower shall submit an appraisal acceptable to staff indicating a project value that provides a total loan-to-value ratio not to exceed .90.
10. \At loan closing, the borrower must provide evidence that 10 percent of the value of the project represents borrower’s equity.
11. If the project is declared exempt from real estate taxes, the loan shall become immediately due and payable.
12. The loan closing must occur prior to ______________, 200__. If the developer believes this date cannot be met as it approaches, the developer may request an extension in writing, providing the request be submitted to the CDA prior to ____________________, 200___, with a detailed explanation of the conditions and the reason for the request.
13. The borrower agrees to sign a mortgage note, a mortgage guarantee agreement, and loan agreement. All documents including the note, mortgage guarantee agreement, loan agreement, and any other document deemed necessary to protect the City of Madison’s security interest shall be approved by the City Attorney’s Office of the City of Madison.
14. The borrower and its contractors/subcontractors must comply with all applicable provisions of Madison General Ordinance Section 3.58(8), concerning contract compliance requirements. The borrower shall contact the City’s Affirmative Action Office to assure that the borrower is in compliance with aforementioned requirements. The borrower shall assist and actively cooperate with the Affirmative Action Office in obtaining the compliance of contractors and subcontractors with such applicable provisions of the Madison General Ordinance. The developer / contractor / borrower shall allow the maximum feasible opportunity to minority / disadvantaged / women business enterprises to compete for any subcontracts entered into pursuant to this contract.
15. The borrower agrees to erect a sign on the site to include the following language in print of the same size, color, and type as that identifying the other project financing sources: “Financing provided in part by the City of Madison Capital Revolving Fund.”
16. The borrower shall comply with all applicable local, State, and federal provisions concerning Equal Opportunity and Fair Housing.
17. Section 8. Borrower agrees to not refuse to lease or otherwise make unavailable units in the Project solely because any applicant for a unit is a direct recipient of a federal, state or local government-housing subsidy. Borrower shall comply with the provisions of Section 32.12(13) Madison General ordinances, for as long as the loan remains outstanding.