Loading...
HomeMy WebLinkAbout3. Draft - Forgivable Loan Updated February 24, 2021 Forgivable Loan Program City of Oshkosh and Greater Economic Development staff may recommend that the Greater Oshkosh Economic Development Corporation Revolving Loan Fund Committee consider offering a performance- based forgivable loan to a company for an investment that will have a significant economic impact to the City of Oshkosh economy,but for which other forms of assistance are not available and/or helpful for completing the investment. Eligibility The following requirements must be met in order to be eligible for the forgivable loan: • The company is considering the City of Oshkosh and one or more alternative communities outside the State of Wisconsin. • The company commits to creating a minimum of 20 jobs at a weekly wage rate that exceeds the average weekly wage as determined by the US. Bureau of Labor Statistics Quarterly Census of Employment and Wages for the Oshkosh-Neenah MSA when the application is submitted. • All other local assistance options have been presented and eliminated in consideration for the presentation to decision-makers. If other forms of assistance in the community can be viably utilized by the company to ensure a successful outcome for Oshkosh, this option shall not be offered to the company. • Funds to be committed shall not be at a rate that exceeds $1,000/job created, shall represent no more than 5 percent of the entire project, and not exceed$20,000 for the City of Oshkosh contribution. • The project must involve an investment of at least $2.5 million. Examples of eligible investments include acquisition of land or an existing building, construction of a new building, improvements to an existing building, infrastructure, machinery and equipment, or intellectual property. • Reasonable belief exists that should the forgivable loan not be offered, that the investment will not happen or would happen elsewhere. • The Greater Oshkosh Economic Development Corporation shall contribute a 1:1 forgivable loan match consisting of Greater Oshkosh EDC private funds to the City's Forgivable Loan Fund contribution. • The company shall disclose the need that is being met with this assistance.The company shall supply a letter from the highest ranking official from the company describing why the assistance is needed. The company must also submit the Wisconsin Economic Development Corporation (WEDC) application for financial assistance and WEDC's response as justification for the forgivable loan. Greatest consideration shall be granted for companies that would move an investment to Oshkosh versus another state AND viable evidence exists that the company would commit to further expansion in the City of Oshkosh in the future. The evidence can be based on previous conversations by City and Greater Oshkosh staff with the company in the process of visits through business retention and expansion (BR&E) efforts or a written commitment from the highest ranking official of the company. Funding The Oshkosh Common Council will allocate $6o,000 towards the City portion of the Forgivable Loan Fund. Once the funds are dispersed, no additional funds may be committed to companies without the approval of the Oshkosh Common Council. Forgivable loan support shall be limited to City of Oshkosh-based companies or companies that are planning to locate in the City of Oshkosh, as approved by the Greater Oshkosh EDC Revolving Loan Fund Committee. Forgivable Loan Agreement The Greater Oshkosh RLF Committee will establish an agreement between the company and Greater Oshkosh EDC with terms to repay the City's Forgivable Loan if the agreed upon job creation and investment are not fulfilled. Example of such terms include the following: • The agreed upon jobs must be created within one (1) year of the agreement execution date. • The agreed upon jobs must be retained for five (5) years in the City of Oshkosh after the agreement execution date. • The company shall be located in the City of Oshkosh for five (5) years after the agreement execution date. • Through the life of the five year agreement, the company must pay their real estate property taxes in a timely manner. Should the company not complete either the promised level of investment or the creation of jobs at expected wage level as agreed upon, the company shall be required to return the entire loan amount back to the City of Oshkosh Forgivable Loan Program proportionate to the investment and jobs created in the form of a`clawback.' Greater Oshkosh Revolving Loan Fund Committee The Greater Oshkosh Revolving Loan Fund Committee shall approve or deny the forgivable loan for the City of Oshkosh contribution and the Greater Oshkosh EDC contribution.When considering a forgivable loan, the City Manager of his/her designee will vote with the Greater Oshkosh RLF Committee on behalf of the City of Oshkosh funds. If the City votes against the forgivable loan, the City contribution shall not be awarded to the company.