Economic Development & Entrepreneurship Fund

The Economic Development & Entrepreneurship Fund provides up to $1,250,000 in Community Development Block Grant (CDBG) assistance for projects that significantly impact regional economic development. The primary objectives of this funding are job creation, business start-up or expansion, and alignment with strategic economic restructuring efforts. Projects must demonstrate credible benefit projections, specifically in job creation, with CDBG participation capped at $35,000 per job created. Eligible activities include individual development account programs, loan funds supporting economic restructuring, entrepreneurship development, heritage tourism projects, multi-purpose community centers, adaptive reuse, and support for small-scale, local manufacturing and production businesses. To qualify for CDBG assistance, projects must address gaps in access to capital and financial assistance. This can include loan funding, equity funding, or working capital for business start-up or expansion, as well as innovative business financing mechanisms like peer lending pools and individual development accounts. An industry commitment letter is required for all Community Economic Development (CED) applications. This letter must outline the need for improvements, the business's commitment to locating or expanding in the locality, private investment details, job creation and retention numbers, and plans for job training and applicant screening. Prior to grant contract execution with the Department of Housing and Community Development (DHCD), grantees must execute agreements with private firms receiving grant assistance. These agreements must stipulate completion of all committed actions and be reviewed by DHCD and the locality's legal counsel. The agreements should cover construction, investment, employment, training requirements, recordkeeping, federal compliance, and monitoring. CDBG funding is limited to improvements consistent with identified needs, and private investment is required for construction and equipment installation. Documentation of private investment is necessary, and final closeout of the project depends on DHCD's review and approval. Sanctions may be imposed if assisted businesses fail to meet hiring, investment, or wage/benefit commitments. This could result in recapturing CDBG funds, reducing grant awards, or requiring repayment of grant expenditures. Substitutions of businesses are not permitted without DHCD's prior written approval. All CDBG funds used for site improvements must be repaid to the locality, secured by a mortgage or promissory note. Off-site improvements must be available to other users unless repaid by the industry. A Data Universal Numbering System (DUNS) number is required for businesses receiving CDBG assistance. CDBG eligibility is established by creating job opportunities for low- and moderate-income (LMI) persons, with at least 51% of new jobs accessible to individuals with no more than a high school degree. Job creation must occur within two years of private investment completion. Projects using CDBG funds for water/wastewater services must connect low- to moderate-income households to the new service. CDBG assistance will not support relocation of Virginia firms unless substantial evidence is provided, nor will it support non-Virginia firms relocating to Virginia if it results in significant job loss elsewhere. Ineligible activities include general community promotion, assistance to professional sports teams, and acquisition of land without a specific purpose. DHCD must be notified of additional businesses benefiting from CDBG improvements. Localities may apply for a waiver of the $2.5 million open contract limit for critical projects. Compliance with federal and state laws is required, and DHCD will conduct on-site visits to ensure project compliance and job creation.

CDBG eligibility is established by creating job opportunities for low- and moderate-income (LMI) persons, with at least 51% of new jobs accessible to individuals with no more than a high school degree. Job creation must occur within two years of private investment completion.