Redevelopment Assistance Capital Program (RACP)

The Redevelopment Assistance Capital Program (RACP) is a state-funded economic development initiative administered by the Pennsylvania Office of the Budget. It provides grants for the acquisition and construction of regional or multi-jurisdictional projects that generate substantial increases or sustain current levels of employment, tax revenue, or other measures of economic activity. These projects may also have cultural, historical, recreational, or civic significance. The RACP is established under the Redevelopment Assistance section of a Pennsylvania Capital Budget Itemization Act and serves as a funding resource when other state programs such as PENNDOT, PENNVEST, or the Department of Community and Economic Development cannot provide primary funding. Importantly, while infrastructure components like housing or water systems may be included, they must not be the primary focus unless funded through specific legislative allocations. Eligible applicants for RACP funding include redevelopment authorities, industrial development authorities, general purpose units of local government, local development districts with signed agreements, public authorities under Pennsylvania law, and certified industrial development agencies (or their tax-exempt subsidiaries). RACP projects must be included in an active Capital Budget Project Itemization Act with unused allocations and must qualify for financing with federally tax-exempt bonds. Funding can only be used for eligible capital expenses such as construction, land acquisition, permitted equipment, and interest during construction. Notably, construction must always be the primary focus of the project scope. Projects must meet strict match funding criteria. At least 50% of total project costs must come from non-state sources, and half of the matching funds must be secured at the time of submission. Only land and fixed assets with substantial useful life can qualify as non-cash match. Federal funds passed through state agencies (e.g., CDBGs) may be acceptable, but general state funds are not. Some counties can use gaming/casino funds as match. All projects must have a minimum total cost of $1,000,000 to qualify. The application process begins with submission of an e-Application during an open funding round. Once the application is deemed complete and eligible, the Office of the Budget forwards it to the Administration for award consideration. A 30-day public comment period follows the submission window. Selected applicants receive an Award Letter, which triggers the next step: submission of a Project Management Proposal (PMP) within six months. Only after the PMP is reviewed and a grant agreement is executed can reimbursements begin. The grant agreement must be signed and returned within 20 days of transmittal; failure to meet this deadline disqualifies the applicant. Once the agreement is in place, grantees have six months to meet all conditions specified in the grant, including the submission of supporting documentation. Projects operate under a reimbursement system controlled by a funding accumulation schedule and a proportional reimbursement model (defined by the distribution factor). Construction costs must be paid and incurred before reimbursement begins. Reimbursement requires submission of completed Payment Request forms with proof of payment and supporting documentation. Facilitation meetings can be requested by the grantee and are encouraged once construction begins. Throughout the project’s life cycle, monitoring is conducted by the Office of the Budget or its consultants. A final close-out audit is required, and up to 10% of grant funds may be withheld pending audit results. Grantees must maintain records for at least seven years and provide access to state auditors. Any ineligible costs identified during the audit must be repaid with interest unless otherwise directed. The Office of the Budget is the primary contact for the RACP program and manages all stages from pre-award through project close-out.