The U.S. Economic Development Administration (EDA) has announced funding opportunities for the $1.5 billion supplemental appropriation EDA received from the Coronavirus Aid, Relief, and Economic Security (CARES) Act passed by Congress at the end of March. On May 7, 2020, EDA announced an Addendum to its FY 2020 Public Works and Economic Adjustment Assistance Notice of Funding Opportunity, adding CARES Act Recovery Assistance in order to quickly deploy CARES Act funding to eligible entities.
Administered under the authority of EDA’s Economic Adjustment Assistance (EAA) program, the funding is targeted for economic development assistance to help communities prevent, prepare for and respond to the COVID-19 pandemic. These supplemental funds must be awarded by Sept. 30, 2022.
Applications for EDA financial assistance under the Addendum and EAA programs can be submitted by:
- States, counties, cities or other political subdivisions of a state, including special-purpose units of state or local government engaged in economic or infrastructure development activities
- Federally recognized Indian tribes
- Institutions of higher education
- Public or private not-for-profit organizations acting in cooperation with officials of a political subdivision of a state
- EDA-designated district organizations
EDA has determined that economic injury from the pandemic qualifies as a special need under the EAA program. Therefore, all applicant entities are eligible to apply without need to reference other economic distress criteria. However, applicants need to explain how the proposed project will “prevent, prepare for and respond to coronavirus” or respond to “economic injury as a result of coronavirus.”
Businesses cannot submit applications, however, they may be eligible for various types of assistance from EDA recipients, including loans from an EDA-funded revolving loan fund (RLF) and technical assistance from university centers and other recipients.
Eligible grant expenses
EDA will accept applications for grants to support a wide variety of construction and non-construction projects, including:
- Preparation of economic recovery plans, resiliency plans, market and environmental studies and technical strategies to address economic dislocations caused by the coronavirus pandemic, as well as plans to respond to future pandemics
- Implementation of innovation and entrepreneurial support programs to diversify economies
- Construction of public works and facilities to support economic recovery, including the deployment of broadband to bolster telehealth and remote learning
- Capitalization or re-capitalization of RLFs to provide small businesses access to capital
- Award amount: EDA grant requests can range from $100,000 to $30 million and applications are accepted on a rolling basis.
- EDA award categories: EDA will award CARES Act assistance through three separate, parallel processes: competitive awards through EDA’s regional offices, noncompetitive awards to existing EDA grant recipients, and competitive awards for national-scale projects through EDA headquarters.
- Match: Cost-sharing, in general, is a requirement of EDA-supported projects, and the availability of matching funds as leverage is a factor in increasing the competitiveness of an application. For CARES Act Recovery Assistance, EDA expects to fund at least 80%, and up to 100%, of eligible project costs. In determining whether to fund a project’s federal share above 80%, EDA will consider on a case-by-case basis whether the circumstances of the proposed project warrant a federal share in excess of 80%, including: whether the applicant has exhausted its effective taxing or borrowing capacity; the extent of the impact of the coronavirus pandemic on the region; and whether the region meets other thresholds for elevated need based on the relative economic distress of the region.
- Period of performance: The period of performance depends on the type of project, scope and EDA program under which the grant is awarded. Economic strategy investments are likely to allow for one to three years, while all construction projects are expected to be completed within five years from the date of award. The EDA-established project timeline will range from one to five years, depending on the project’s needs related to complexity and urgency.
EDA funding priorities
EDA will evaluate all applications and consider the extent to which the proposed project aligns with EDA’s investment priorities, creates and/or retains high-quality jobs, leverages public and private resources, and demonstrates the applicant’s ability to quickly and effectively use the funds.
Funding requests for project support must align with EDA priorities that focus on investing in projects to contribute the strongest positive impact on sustainable regional economic growth and diversification. Projects must meet at least one of the following investment priorities:
- Recovery and resilience: Projects that assist with economic resilience
- Critical infrastructure: Projects that establish the fundamental building blocks of a prosperous and innovation-centric economy, including physical and other economic infrastructure
- Workforce development and manufacturing: Projects that support the planning and implementation of infrastructure for skills-training centers and related facilities that address the hiring needs of the business community
- Exports and foreign direct investment (FDI): Primarily infrastructure projects that enhance community assets (e.g., port facilities) to support growth in U.S. exports and increased FDI – and ultimately, the return of jobs to the U.S.
- Opportunity zones: Planning and implementation projects aimed at attracting private investment – including from opportunity funds – to grow businesses and create jobs in Census tracts that have been designated as opportunity zones. This includes targeted projects located within an opportunity zone; projects that, while not located within an opportunity zone, have a clear intent of benefitting nearby opportunity zone(s); and regional projects that encompass an area containing at least one opportunity zone with a clear intent of benefitting that opportunity zone.
For more information on this topic, or to learn how Baker Tilly public sector specialists can assist with EDA grant applications and economic development strategy development, contact our team.