SBIF. Small Business Improvement Fund. City of Chicago Department of Housing & Economic Development Andrew Mooney, Commissioner

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1 Small Business Improvement Fund SBIF Presenter: Derek Walvoord, SomerCor 504, Inc. City of Chicago Department of Housing & Economic Development Andrew Mooney, Commissioner

2 What is TIF? What is SBIF? Presentation Focus Who is eligible? What are eligible expenses? What s the application process? What are the requirements/restrictions? What s the payment process?

3 TIF: Tax Increment Property Tax $ After TIF - Property Tax $ Before TIF Tax Increment $ TIF $ Frozen EAV Tax Districts

4 TIF: How it works Long term investment (23 years) Funds improvements & development Public works projects Business retention/attraction SBIF Program TIF Works

5 SBIF District Area Map N

6 SBIF Organization Chart CITY OF CHICAGO City Council HED Local Agencies SomerCor 504 SBIF Applicants

7 SBIF Building improvements in TIFs Rebate 25% to 75% of SBIF-eligible costs $100,000 max per commercial applicant or landlord $150,000 max per industrial applicant $250,000 max per multi-tenant buildings, 50,000 max per applicant Selection by lottery or waiting list

8 SBIF Eligible Applicants Property Owner: max $6m net worth & $500k liquidity Commercial Lessee: max $5m annual sales past or projected 3 years, leasehold interest, owner approval Industrial Lessee: max 100 employees Property/Business Owner: property and lessee requirements apply Vacant Property: min 60% lease-up; 100% ground floor lease-up

9 Sliding Scale Eligibility: Landlord Landlord- no ownership interest in the business leasing the commercial space If the applicant has net worth: -Greater than or equal to $6 Million, ineligible -Greater than or equal to $4.5 Million, but less than $6 million; eligible for 25% -Greater than or equal to $2.5 Million, but less than $4.5 million; eligible for 50% -Less than $2.5 Million; eligible for 75% Net Worth is defined as Assets minus Liabilities; what is owned minus what is owed.

10 Sliding Scale Eligibility: Tenant Tenant- leasing for a minimum of three years from a building owner of no financial relationship If the applicant shows sales: -Greater than or equal to $5 Million, ineligible -Greater than or equal to $4 Million, but less than $5 million; eligible for 25% -Greater than or equal to $3 Million, but less than $4 million; eligible for 50% -Less than $3 Million; eligible for 75% Sales are defined as gross receipts as filed on a tax return; if business is new, these are projected gross receipts

11 Sliding Scale Eligibility: Owner Occupied Owner Occupied- has ownership interest in business and property -The schedules above for both net worth -The schedules above for both net worth and sales apply. If the applicant should fall within different eligibility ranges for net worth and sales (i.e. 75% /50%), then the applicant will be eligible for the lesser of the two percentages (i.e. 50%).

12 NOT SBIF Eligible Nat l. chains (food, bank branches, etc.) Currency exchanges, pay day loan stores Liquor stores, bars Astrology, palm readers Hotels and motels Trailer storage, junk yards Similar uses

13 SBIF Eligible Costs Roof & façade HVAC & mechanical systems Permanent signs & awnings Floor and interior build-out Environmental remediation Land purchase Parking facility paving Beautification ADA compliance as needed

14 ADA Tax Benefits Small Businesses with less than 30 employees and less than $1 million total revenues can take advantage of up to $5,000 is Federal Tax savings for ADA renovations. Any business, up to $15,000 per year for ADA barrier removal. Questions:

15 Going Green with SBIF Remember, high efficiency furnaces and water heaters will dramatically cut down energy costs. Look for EnergyStar ratings. Insulation will cut down HVAC bills. High efficiency lighting will cut down electrical bills.

16 SBIF Eligible Costs Before After Custom Built Construction 3046 W. Armitage Ave.

17 SBIF Eligible Costs Before After Ritchie s Restaurant W. 111 th St.

18 SBIF Eligible Costs Before After B&G Painting 4159 N. Western

19 SBIF Eligible Costs Before After Macdaddy Salon 1035 W. Lake Street

20 SBIF Eligible Costs Before After Friendship Chinese 2830 N. Milwaukee Ave.

21 SBIF Eligible Costs Before After TNT Vending 3120 W. 111 th St.

22 SBIF Eligible Costs Before After Pastorelli Food Products, Inc. 162 N. Sangamon St.

23 SBIF Eligible Costs Before After Northern Greenhouses 1800 W. Lake Street

24 NOT SBIF Eligible Costs New construction Minor repairs/improvements (e.g. painting) Equipment related expenses (e.g. phone) Planters surrounding/affixed to building Perimeter security fencing Work on residential unit interiors Impermanent elements (e.g. furniture)

25 Compliance Façade design requirements Valid City business license No City Debt Economic Disclosure Statement Grant Recipient Affidavit (e.g. relocation) Proof of land ownership or min 3 yr. Lease Other City Funding During Prior 3 yrs. Deducted from Eligible Grant Amount, excluding TIF Works

26 SBIF TIMELINE Application Deadline: Open/Closed SBIF Districts Within 20 DAYS: Furnish Additional Documents to Complete Application Within 120 DAYS: Construction Planning & Cost Estimate Submittal Within 300 DAYS: Complete Construction 3 YEARS from date of Rebate: Eligible Again for SBIF

27 Payment Proof of payment: Invoices Cancelled checks Waivers of lien Site visit 4-6 weeks for payment from City

28 Other SBIF Criteria Contractor licensed by City and insured M/WBE contractor list provided Technical Assistance by SomerCor

29 Contact Info Derek Walvoord SomerCor 504, Inc. Ph Silvia Sanchez SomerCor 504, Inc. Ph Joe Lewis SomerCor 504, Inc. Ph Jake Stern SomerCor 504, Inc. Ph Annie Coakley Dept. of Housing & Economic Development Ph

30 THANK YOU Questions City of Chicago Department of Housing & Economic Development Andrew Mooney, Commissioner