Federal Economic Development Administration Releases $1.5 Billion CARES Act Funding Opportunity

Established under the Public Works and Economic Development Act (PWEDA) of 1965, the U.S. Department of Commerce Economic Development Administration has helped communities generate jobs, retain existing jobs, and stimulate industrial and commercial growth for more than 45 years. The EDA is the only federal government agency solely focused on economic development and the administration has played a critical role in fostering regional economic development efforts in communities across the nation.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act, signed into law on March 27, 2020, provides the Economic Development Administration (EDA) with $1.5 billion for economic development assistance programs that help communities prevent, prepare for, and respond to the impacts of coronavirus. EDA has determined that all communities throughout the United States are eligible for CARES Act funding, based upon the criteria that economic injury from the COVID 19 pandemic constitutes a “Special Need” under the EAA program. Eligibility can also be established on this basis without needing to prove other economic distress criteria so long as the community can explain how their EDA-funded project would respond to demonstrated economic injury because of coronavirus.

Recently, the EDA released an addendum to its Notice of Funding Opportunity (NOFO) with updated guidelines for the Economic Adjustment Assistance (EAA) Program. Most notably within the NOFO is an approximate tenfold increase in the funding ceiling for EAA awards, taking the ceiling up to a maximum of $30 million for projects. The funding floor remains the same at $100,000. Generally, the amount of an EDA award may not exceed 50 percent of the total project cost. Projects may receive up to an additional 30 percent of the total project cost, based on the relative needs of the region (e.g., if the 24-month unemployment rate is at least 225% of the national average, if per capita income is not more than 50% of the national average, etc.)

Additionally, the $1.5 billion in CARES Act funding will:

• Be administered through an open funding cycle;
• Will still require applicant communities to have an updated Community Economic Development Strategy (CEDS) or other EDA-approved regional strategy in place, and;
• Will provide funding to projects that advance priority initiatives within the CEDS strategy, while also addressing the coronavirus “Special Need” definition.

EDA’s EAA program is broad and can assist eligible communities and regions in a number of ways that are focused on planning, technical assistance, loan program, public works and innovation areas:

• Planning and Technical Assistance to provide economic recovery grants to EDA Economic Development Districts, Tribal Grantees and University Centers.
• Strategy Grants to support the development, updating, or refinement of a CEDS. CEDS are designed to create a roadmap for alleviating long-term economic deterioration or a sudden and severe economic dislocation, as described in EDA’s regulations.
• Implementation Grants support the execution of activities identified in a CEDS, such as infrastructure improvements or creating an industrial park. Site acquisition, site preparation, construction, rehabilitation and equipping of facilities are examples of eligible uses.
• Under the CARES Act parameters, development of CARES Act recovery and resilience strategies, including industry supply chain, cluster analyses, econometric analyses, diversification efforts, and travel and tourism-related marketing campaigns.
• Revolving Loan Fund Capitalization and Recapitalization to support businesses in particularly economically distressed areas that have been affected by the coronavirus pandemic.
• Construction of infrastructure, public works projects and other economic development projects. Public Worksprogram funding can be used to help distressed communities build, design, or engineer critical infrastructure and facilities that will help implement regional development strategies and provide a foundation for advancing economic development priorities of a community or region. Examples of EDA Public Works investments include water and sewer system improvements, industrial parks, high-tech shipping and logistics facilities (a targeted industry cluster), workforce training facilities, business incubators, Brownfield redevelopment, science and research parks, and telecommunications infrastructure.
• Innovation Grants focused on technology innovation activities that help communities prevent, prepare, and respond to the coronavirus pandemic.

EDA provides strategic investments on a competitive merit basis to support economic development, foster job creation, and attract private investment in economically distressed areas of the United States. There are several criteria the EDA uses in determining which projects receive EAA grants, including:

• The ability of a project to realistically achieve the desired results and leverage financial resources outside of EDA assistance;
• The ability of a project to start quickly and create jobs in a timely manner, and;
• The extent to which the project enables the community or region to become more diversified and economically prosperous.

The EDA considers a wide variety of applicants as eligible to apply for funding, including:

• State, county, city and township government;
• Public/state or private institutions of higher learning;
• 501(c)(3) nonprofits;
• Special district governments, like a Transportation Improvement District (TID);
• Indian Tribes, and;
• Consortiums of eligible partners.
  
  

Under the current EDA NOFO, EDA is soliciting applications in order to provide investments that support construction, non-construction, planning, technical assistance, and revolving loan fund projects under EDA’s Public Works program and EAA program (which includes assistance to impacted coal communities and nuclear communities).

Assistance to Coal Communities (ACC) – EDA designates a portion of its EAA funding to support communities and regions that have been negatively impacted by changes in the coal economy, including the complete supply chain of coal-reliant industries, through both strategy planning and implementation projects. ACC projects must address one or more of EDAs funding principles, including collaborative partnerships; economic and workforce development integration; high quality jobs and worker advancement; and multi-jurisdictional project impact.

EDA gives ideas on how ACC funding can be invested, including:

• Supporting the creation of new businesses and jobs in existing or emerging industry sectors;
• Implementing local and regional job creation and growth, and economic diversification strategies;
• Developing business incubator programs;
• Enhancing access to and use of broadband services that support job creation and business investment, and;
• Generation of economic development diversification strategies in accordance with CEDS criteria.

Nuclear Closure Communities (NCCs) – EDA can also provide assistance to nuclear closure communities under the EAA program, as the EDA recognizes the closure of nuclear power plants have significant impact on the economic foundations of surrounding communities through sudden job losses and significant reductions in local and regional tax bases. Communities and regions must show then have been impacted, or will be impacted, by nuclear power plant closure.

NCC funds may used for any eligible EAA activity, including but not limited to:

• Early-stage strategic planning activities;
• Public works (construction) investments, and;
• Economic diversification initiatives.

When making application to the EDA, communities must keep in mind that they still must clearly demonstrate how the EDA investment will complement, leverage, or otherwise align with other public and private investments to implement the project.

The Economic Development Administration is broken down into six regions across the United States.

For a complete list of contact information for each of the EDA’s Regional Offices and corresponding Economic Development Representatives, visit www.eda.gov/contact. 

For more information on how EDA funding may support strategic investments in your community or region, contact Dave Robinson with The Montrose Group at [email protected].