HomeMy WebLinkAbout972071.tiffCOLORADO
August 11, 1997
The Honorable George Baxter, Chairperson
Weld County Commissioners
P.O. Box 758
Greeley, CO 80632
Dear Commissioner Baxter:
Office of Business Development
1625 Broadway, Suite 1710
Denver, Colorado 80202
(303) 892-3840
(303) 892-3848 fax
1-800-659-2656 TDD
Roy R. Romer
Governor
On May 13, 1997, the Colorado Office of Business Development (OBD) received a pre -application
from Weld County requesting to use Community Development Block Grant funds in support of
Applied Films Corporation ("Applied Films"). The pre -application requested that the state provide
an infrastructure grant that would be used to construct access lanes to the Applied Films' site in Weld
County.
Prior to receiving the pre -application, a meeting was held with William ("Bill") Argo and Roger Smith
(on April 1, 1997), in which OBD staff expressed concerns pertaining to the eligibility of the CDBG
application based on Applied Film's stated time frames. Specifically, OBD staff indicated concerns
with Applied Film's proceeding with the construction of its private facility prior to receiving approval
from the state on Weld County's infrastructure grant request. Following the meeting, OBD staff
continued to express these same concerns to the Greeley/Weld Economic Development Action
Partnership, Inc. staff and recommended that an application be submitted for state review prior to
Applied Films proceeding with the construction of its private facility.
On May 9, 1997, OBD staff learned that construction had started on the proposed Applied Films
building. Additionally, a clarification was provided indicating that a local developer (Neenan
Construction Co.) was proceeding with the construction of the private facility and that Applied Films
had not yet executed its lease/purchase option agreement pertaining to the building as of that date.
On May 16, 1997, OBD staff discussed the status of this project with the Governor's Financial
Review Committee. During the meeting it was determined that Weld County's application would be
declined without further review for the following reasons: 1) a review of the project's status and
discussions with Applied Film's clearly reflected that this project was moving forward with or without
the state's approval of the requested funds; and 2) Weld County's ability to fund a portion or all of
this project was questioned based on the relatively healthy nature of its economy.
&a-14 -117;2+c uy
OV) ilq7
Cc, F
972071
The Honorable George Baxter
August 11, 1997
Page 2 of 3 pages
Upon OBD staffs notification of this determination, Mr. Argo requested that he and Mr. Smith be
allowed to make a presentation to the FRC in the hopes that the FRC would reconsider their decision.
This presentation was made on July 30, 1997.
Although the FRC was supportive of providing funding to Applied Films, the Committee ultimately
determined that this project was not eligible under the program guidelines (since it was clear that this
project was moving forward with or without the requested funds) after further discussions with the
funding source (the United States Department of Housing and Urban Development). We believe that
we have clarified to Mr. Argo and Mr. Smith the inherent differences between this project and other
previous projects that were assisted by the state and packaged by the Greeley/Weld Economic
Development Action Partnership, Inc. These differences include instances where private facility
construction had not yet started prior to FRC approval; the state's assistance was in support of an
expansion at the time that it was provided; no direct evidence of a material nature was present which
indicated that the CDBG-defined projects would proceed without state assistance; relative economic
status of the communities assisted, etc.
The FRC believes very strongly that Applied Films Corporation is representative of the type
of company that Colorado is targeting for economic development. While the FRC was unable
to provide funding to this project, it would like to recommend that the Weld/Larimer
Revolving Loan Fund (RLF) consider utilizing its revolved/unrestricted funds to assist this
company due to the unique situation described by Mr. Argo and Mr. Smith during the FRC
meeting.
As you may know, the Office of Business Development provides Community Development
Block Grant funds to the RLF to provide assistance to businesses within your area. Weld
County has served as the "lead county" for contract purposes. Although these funds are
usually targeted for loans to businesses based on OBD's RLF structure, the Office of Business
Development would be willing to approve a one time business grant structure by the RLF as
follows:
1) The RLF currently has revolved/unrestricted funds (meaning without federal requirements)
available for its use. The RLF could utilize its unrestricted funds to provide the infrastructure
assistance needed by Applied Films on a grant basis. During the FRC meeting, Mr. Smith
indicated that he believed that the requested infrastructure improvements could be completed
for approximately $90,000.
2) The RLF is currently in the process of preparing a new CDBG application to be submitted to
OBD for the purpose of increasing the RLF's capitalization structure. The FRC would be
willing to provide $90,000 in replacement CDBG funds to be used by the RLF to provide
assistance to other businesses as authorized by the state's typical contract structure.
The Honorable George Baxter
August 11, 1997
Page 3 of 3 pages
However, the RLF would need to submit a copy of its commitment letter, (pertaining to the
infrastructure grant) issued to Applied Films, with its RLF application for additional funds.
We hope that this alternative structuring option will assist Weld County in providing the
infrastructure needed by Applied Films Corporation. If you have any questions or would like to
discuss this structuring option further, please do not hesitate to contact me or Mice Kotrlik at (303)
892-3840.
aime G. Gomez, Director
Finance and Business DevelopmPrograms
cc: Don Warden, Finance Director, Weld County
RLF Board, Chairperson
William ("Bill') J. Argo and Jodi Hartmann (individual copies), Greeley/Weld Economic
Development Action Partnership, Inc., 822 Seventh Street, Suite 550, Greeley, CO 80631
Roger Smith, Treasurer, Applied Films Corporation, 6797 Winchester Circle, Boulder, CO
80301 USA
OBD File
Filed under H:\Finance\Sign\appfilms.let
Hello