SMALL BUSINESS IMPROVEMENT FUND SBIF Presenter: SomerCor 504, Inc. CITY OF CHICAGO DEPARTMENT OF PLANNING & DEVELOPMENT ANDREW MOONEY , COMMISSIONER
Presentation Focus • What is TIF? • What is SBIF? • Who is eligible? • What are eligible expenses? • What’s the application process? • What are the requirements/restrictions? • What’s the payment process?
TIF: Tax Increment Financing Property Tax $ After TIF - Property Tax $ Before TIF Tax Increment $ TIF $ Frozen EAV Tax Districts
TIF: What does it do? • Long term investment (23 years) • Funds improvement projects & development • Public works projects • Business retention/attraction • SBIF Program • TIF Works TIF $ Tax Districts
SBIF Districts An Aerial View N
SBIF Organization Chart CITY OF CHICAGO City Council DPD SomerCor 504 Local Agencies SBIF Applicants (NBDCs)
SBIF Overview • Permanent building improvements in TIFs • Rebate 25%, 50% or 75% of SBIF-eligible costs • $100,000 max per commercial applicant or landlord • $150,000 max per industrial applicant • $50,000 max per applicant in multi-tenant property with limit of $250K per property
SBIF Eligible Applicants • Property Owner: Personal Net Worth (cumulative), Liquid Assets (cumulative) • Commercial Lessee: Annual Sales Requirement/Limits (“gross receipts”) • Industrial Lessee: Max 100 FTE Employees • Property & Business Owner: Both Property Owner and Commercial Lessee requirements apply • Vacant Property: Min 60% lease-up; 100% ground floor lease-up by “SBIF - qualified” tenants
Sliding Scale Eligibility: Landlord Landlord - no ownership interest in the business leasing the commercial space . All individuals with 7.5% or greater ownership interest are evaluated. Net Worth (cumulative between all owners) • Greater than or equal $6 Million ineligible • $4.5 - $6 Million 25% • $2.5 - $4.5 Million 50% • Less than $2.5 Million 75% • Additional eligibility considerations: Cumulative liquid assets (500K), Lease-up requirement (must be SBIF qualified tenants) • Applicable to industrial property owners that lease any part of property to 3 rd party tenant
Sliding Scale Eligibility: Tenant Tenant - leasing for a minimum of three years from a building owner of no financial relationship • No overlap with property ownership. Sales Requirements (gross receipts as filed on tax returns) • Greater than or equal to $5 Million ineligible • $4 - $5 Million 25% • $3 - $4 Million; eligible for 50% • Less than $3 Million; eligible for 75% • Start-ups: if business is new, a projected income statement will be used to apply the sales schedule.
Sliding Scale Eligibility: Owner Occupied “Owner Occupied” - has ownership interest in both business and property • 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%).
NOT SBIF Eligible • Nat’l chains (food, bank branches, etc.) • Currency exchanges, pay day loan stores • Liquor stores, bars • Liquor licensing used to assess this amongst other considerations • Astrology, palm readers • Hotels and motels • Home based businesses • Trailer storage, junk yards • Similar uses
SBIF Eligible Costs • Roofing • Storefront improvements • Masonry repairs, tuck-pointing • Building Systems: HVAC, Electrical, Plumbing • Interior Renovations: Rough and finish carpentry • Permanent signage (structural aspects only) • Environmental remediation • Land purchase (business expansion or parking) • ADA compliance improvements
SBIF Eligible Costs BEFORE AFTER DAT Donuts 8247 S. Cottage Grove Ave.
SBIF Eligible Costs BEFORE AFTER Betty’s Daycare Academy 5719 – 25 W. Chicago Ave.
SBIF Eligible Costs BEFORE AFTER DLV Printing Service 5825 W. Corcoran Pl.
SBIF Eligible Costs BEFORE AFTER Bridgeport Pasty 3142 S. Morgan Ave.
SBIF Eligible Costs BEFORE AFTER Louis’ Groceries 7604 S. Cottage Grove Ave.
SBIF Eligible Costs BEFORE AFTER Charter Steel Trading Co. 1600 S. Kostner Ave.
SBIF Exterior Work Requirement • For commercial grantees receiving over $25,000 in SBIF funding, at least 10% of grant funding must be put towards an exterior improvement (i.e. roofing, masonry repairs, storefront improvements). • Possible waiver of this requirement if: Exterior was recently updated and/or no exterior work needed; 1. AND Interior work is “substantial” (i.e. building systems, 2. concrete, structural work)
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: http://ada.gov/taxincent.htm
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.
NOT SBIF Eligible Costs • New construction • Cosmetic Upgrades/Minor Repairs as standalone projects (e.g. painting, new carpet, interior office remodel) • Equipment related expenses (e.g. phones, kitchen appliances, cash registers) • Planters surrounding/affixed to building • Parking lot improvements, landscaping • Business-specific signage • Perimeter security fencing • Work on residential unit interiors • Impermanent items (e.g. furniture)
Compliance • Façade design requirements • Valid city business license • No city debt • Economic Disclosure Statement • Property taxes - current • Grant Recipient Affidavit (e.g. no relocation) • Proof of land ownership or min 3 yr. Lease • Other direct city financial assistance deducted from grant amount, excluding TIF Works • Start-ups – “follow through” required
Other SBIF Criteria • Contractor licensed by City and insured • M/WBE contractor list provided • Technical Assistance by SomerCor
Payment Project Completion Requires • Proof of payment: • Invoices • Cancelled checks • Waivers of lien • Site visit • Copy of building permit(s) 4-6 weeks for payment from City
SBIF TIMELINE • Application Deadline: At least 30 days after “open date.” • ALL WE NEED ARE THE FIRST 7 PAGES OF APPLICATION! • “Stage 1” - Within 20 DAYS: Furnish Additional Documents to Complete Application • “Stage 2” - Within 120 DAYS: Construction Planning & Cost Estimate Submittal **Application Review – Conditional Commitment Letter Issuance if Approved** (Note: Stage 1 and 2 must be completed before approval of grant funds can be fully considered.) • Within 300 DAYS: Complete Construction • 3 YEARS from date of Rebate: Eligible Again for SBIF
Contact Info Jake Stern Silvia Sanchez SomerCor 504, Inc. SomerCor 504, Inc. Ph 312-360-3328 Ph 312-360-3334 Email: jakestern@somercor.com Email: ssanchez@somercor.com Joe Lewis Latonya Jones SomerCor 504, Inc. SomerCor 504, Inc. Ph 312-360-3329 Ph 312-360-3308 Email: jlewis@somercor.com Email: jones@somercor.com Nora Curry Dept. of Planning & Development Ph 312-744-1867 Email: nora.curry@cityofchicago.org
THANK YOU Questions… City of Chicago Department of Planning & Development Andrew Mooney, Commissioner
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