Alternative Real Estate Financing Alert: Redevelopment Assistance Capital Program (RACP) Reform Announced
On June 6 the Governor's Budget Office announced changes to the Redevelopment Assistance Capital Program (RACP), a debt-financed state grant program that provides funding for capital projects, including real estate development projects and the acquisition and construction of regional economic, cultural, civic and historical improvement projects. Our State Government Relations Group has assisted clients in obtaining hundreds of millions of dollars in RACP funding for development projects across the state.
As a result of the changes, the RACP will now be known as the Pennsylvania Economic Growth Initiative (PEGI). The Budget Office is hosting an information session regarding the PEGI program on Friday, June 15 in Harrisburg. John Paul Jones and Debra Stark from our State Government Relations Group will be in attendance. Please feel free to direct any questions you may have regarding the program to John Paul (john.jones@bipc.com) or Debby (debra.stark@bipc.com), and they will attempt to obtain answers to those questions at the information session.
Funding under the PEGI will be limited to about $125 million per year, and the deadline for submission of business plans for PEGI funding for this year is June 29, 2012. As with RACP, those seeking funds must have an already existing legislative authorization that contains sufficient funds for the request. Members of our State Government Relations Group regularly work with clients either to identify existing authorizations or to have authorizations passed by the General Assembly.
Projects will be scored by the Governor's Office and those with the following characteristics will score highest:
- Large, regional economic development projects
- Projects promising the greatest financial benefit to Pennsylvania's economy
- Projects that will have the greatest impact in job creation and retention
- Projects that maximize generation of new tax revenue
- Projects that demonstrate long-term sustainability
- Projects that leverage maximum private investment.
While the scoring system that Governor Corbett has implemented will play a dominant role in determining recipients for PEGI funding, it is strongly recommended that applicants secure the support of state and local elected and private-sector officials in order to ensure that their application is competitive.
Please feel free to contact John Paul, Debby or any other member of our Real Estate Group with questions regarding the PEGI program or the application process.