SMALL BUSINESS IMPROVEMENT FUND SBIF Presenter: SomerCor 504, Inc. - - PowerPoint PPT Presentation

SMALL BUSINESS IMPROVEMENT FUND SBIF CITY OF CHICAGO

DEPARTMENT OF PLANNING & DEVELOPMENT ANDREW MOONEY , COMMISSIONER

Presenter: SomerCor 504, Inc.

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 $ Tax Districts Frozen EAV

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 SBIF Applicants Local Agencies (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

• wnership 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 3rd 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

DAT Donuts 8247 S. Cottage Grove Ave.

AFTER BEFORE

SBIF Eligible Costs

Betty’s Daycare Academy 5719 – 25 W. Chicago Ave.

AFTER BEFORE

SBIF Eligible Costs

DLV Printing Service 5825 W. Corcoran Pl.

AFTER BEFORE

SBIF Eligible Costs

Bridgeport Pasty 3142 S. Morgan Ave.

AFTER BEFORE

SBIF Eligible Costs

Louis’ Groceries 7604 S. Cottage Grove Ave.

AFTER BEFORE

SBIF Eligible Costs

Charter Steel Trading Co. 1600 S. Kostner Ave.

AFTER BEFORE

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:

1.

Exterior was recently updated and/or no exterior work needed;

2.

AND Interior work is “substantial” (i.e. building systems, 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

• f 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 SomerCor 504, Inc. Ph 312-360-3328 Email: jakestern@somercor.com Nora Curry

• Dept. of Planning & Development

Ph 312-744-1867 Email: nora.curry@cityofchicago.org Joe Lewis SomerCor 504, Inc. Ph 312-360-3329 Email: jlewis@somercor.com Silvia Sanchez SomerCor 504, Inc. Ph 312-360-3334 Email: ssanchez@somercor.com Latonya Jones SomerCor 504, Inc. Ph 312-360-3308 Email: jones@somercor.com

City of Chicago

Department of Planning & Development Andrew Mooney, Commissioner

THANK YOU Questions…