A streak of major grant and loan awards from the State of Pennsylvania to various Cumberland County institutions begs the question — what exactly has to be done to access this pool of funding?
The answer depends highly on what program is being accessed, with PA having dozens, if not hundreds, of publicly-backed programs intended to spur development and job growth.
“There are a lot of opportunities for businesses and organizations to apply on their own, but it becomes very daunting at a certain point, that’s just the nature of the beast,” said Mary Kuna, Economic and Real Estate Development Manager for the Cumberland Area Economic Development Corporation.
For most programs that require a local public sponsor, CAEDC is the source in Cumberland County. The nonprofit corporation is legally owned by the county government, and receives funding from the county’s hotel tax. CAEDC is also the administrator for the county’s Industrial Development Authority, which is the designated conduit for a number of state programs.
This allows CAEDC to take on projects like the recently successful move to get $1.5 million in grant funding through the state’s Redevelopment Assistance Capital Program (RACP) to help with the rebuilding project at the Carlisle YMCA.
“We put in the application at the start of 2017, so the award came roughly a year later,” Kuna said.
It wasn’t just a year of waiting, but an extensive process.
“When you’re talking about a project that can get over a million in funding, it’s pretty hefty,” Kuna said. “They’re heavily vetted and have to go through a lot of political willpower.”
Trust the process
RACP funds are administered directly from the Governor’s Office of the Budget — unlike most development incentives in Pennsylvania, which originate with the Department of Community and Economic Development.
Starting last year, however, the DCED does preliminary review on RACP applications.
“You have to pitch your project very succinctly,” Kuna said, noting that three points in particular are critical — the financial feasibility of the project, its ability to get off the ground within a year, and the level of community support.
Depending how intensive the process is, submission can continue for months, if not years. For the YMCA application, CAEDC staff ended up with a 22-part business plan.
“That’s everything that goes from market feasibility studies, to where you’re providing documents about financing, to everything in between,” Kuna said. “It’s a huge undertaking and it’s very well thought out, because the state wants to make sure it happens.”
Last year, Gov. Tom Wolf announced additional oversight of organizations and businesses that benefit from DCED incentives in order to ensure that the capital and jobs being created stayed around in the state.
This requires companies to repay tax credits and grants if they fail to meet their project goals. It also requires a 10-percent payback penalty for employers who create jobs with DCED funds and then move those jobs out of state.
Roughly a year ago, for instance, Unilife pharmaceuticals abandoned its York County facility, only eight years after it had used $6.5 million in state incentives to build it.
None of those high-profile failures have been in Cumberland County, however.
“We’ve never had a loan situation where the state has come back after job creation and said it wasn’t enough,” Kuna said. “They’re pretty accommodating when it comes to job creation timelines, but they do monitor it closely.”
In the last two years, Cumberland County applicants have received $17.5 million in funding from the DCED, according to the state’s database.
In any given time span, a few chunks of that total will be large redevelopment projects — such as the Multimodal Transportation grant that will support road improvements near a new mixed-use development in East Pennsboro Township.
Although not included in that total, other major state-backed projects are likely coming down the pipes, with CAEDC and its affiliated Real Estate Collaborative preparing the abandoned Domestic Castings site in Shippensburg, and the Tyco Electronics site in Carlisle.
Others are grants to municipal or county agencies which then use these funds to help individual residents or businesses — such as the HOME grant program, which assists first-time, lower-income home buyers. Carlisle Borough’s program received over a half-million dollars from the DCED last year.
But the majority of items on DCED’s list are small tax-credit expenditures, typically under the Keystone Improvement Zone or Educational Improvement programs. The former gives tax credits for job expansion or retention; the latter for businesses who contribute funds to educational or workforce development programs.
Most of these credits are valued under $100,000, and businesses are able to apply by themselves.
“Some programs, you have to go through a designated public authority, which is often CAEDC,” Kuna said. “But for smaller tax credits, there a number of accounting firms that do a really good job with applying for those on behalf of their business clients.”