Economic Development Administration (EDA) Recovery Assistance Through the CARES Act

Ice Miller's Economic Development Intern Sean McCorkle contributed to this article.

Background

The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law on March 27, 2020. This $2 trillion package aims at providing relief to various groups including individual workers, small businesses, corporations, public health entities, and State & Local governments. Administered under the authority of the bureau’s Economic Adjustment Assistance (EAA) program, the Act also provides the Economic Development Administration (EDA) with $1.5 billion for economic development assistance programs to help communities prevent, prepare for, and respond to the COVID-19 pandemic.

On May 7, 2020, Secretary Wilbur Ross made EDA’s CARES Act Recovery Assistance funding available with the announcement that EDA had published an Addendum to its FY 2020 Public Works and Economic Adjustment Assistance Notice of Funding Opportunity. EDA intends to deploy its CARES Act funding as quickly, effectively, and efficiently as possible, and in a manner that meets community’s needs.

The EDA also released Frequently Asked Questions (FAQs) regarding the implementation of funds and eligibility requirements under the CARES Act.

Overview

EAA investments provide resources that help communities experiencing or anticipating economic dislocations to plan and implement specific solutions to leverage their existing regional economic advantages to support economic development and job creation. Like Public Works investments, EAA investments are designed to help communities catalyze public-private partnerships to foster collaboration, attract investment, create jobs, and foster economic resiliency and prosperity.

• For example, EDA might provide funding to a university or community college to create and launch an economic diversification strategy to promote and enhance the growth of emerging industries in a region facing job losses due to declines in regionally important industries.
• As another example, EDA might provide funding to a city to support the construction of a publicly owned multi-tenant business and industrial facility to house early-stage businesses.
• For more examples of EDA funding, see the Sample Projects list below.  

Total Funds: $1,500,000,000
Award Ceiling: $30,000,000
Award Floor: $100,000

Successful applications will enable affected communities to respond to the impacts of the coronavirus pandemic by supporting affected businesses and communities, including by providing technical assistance to retain existing and hire new employees; by providing a range of skills-training and workforce development projects to help employees compete for high-quality jobs; and by developing and implementing strategies to diversify regional economies to create jobs in new or existing industries. EAA investments are designed to help communities catalyze public-private partnerships to foster collaboration, attract investment, create jobs, and foster economic resiliency and prosperity.
 
Eligibility

Eligible applicants for EDA financial assistance under the Public Works and EAA programs include:
 

• District organizations;
• Indian Tribes or a consortium of Indian Tribes;
• State, county, city, or other political subdivision of a state, including a special purpose unit of a state or local government engaged in economic or infrastructure development activities, or a consortium of political subdivisions;
• Institutions of higher education or a consortium of institutions of higher education; and
• Public or private non-profit organizations or association acting in cooperation with officials of a political subdivision of a state.

EDA is not authorized to provide grants or cooperative agreements to individuals or to for-profit entities, and such requests will not be considered for funding.

The EDA will accept applications for grants to support a wide variety of construction and non-construction assistance including:
 

• Planning and technical assistance;
• Capitalization and recapitalization of Revolving Loan Funds (RLFs), which provide access to capital for businesses;
• Construction of infrastructure and other economic development projects; and
• Innovation grants.

To be eligible for funding under EDA’s CARES Act Recovery Assistance, applicants must explain clearly in their application how the proposed project would “prevent, prepare for, and respond to coronavirus” or respond to “economic injury as a result of coronavirus.”

A proposed project may meet the regional eligibility criteria in one of the following three ways:
 

1. The proposed project will be located in a region that meets EDA’s economic distress criteria
2. The proposed project is located in an Economic Development District (EDD) that is located in a region that does not meet EDA’s economic distress criteria, and EDA determines the proposed project will be of substantial direct benefit to a geographic area within the EDD that meets EDA’s economic distress criteria
3. The proposed project will be located in a geographic area of poverty or high unemployment that meets EDA’s economic distress criteria, but which is located in a region that overall does not meet EDA’s distress criteria

Criteria

The EDA states it will consider the following among its criteria for awarding EAA assistance grants.
 

• The ability of the proposed project to realistically achieve the desired results and catalyze additional resources.
• The ability of a project to start quickly and create jobs faster.
• The extent to which the project will enable the community/region to become more diversified and more economically prosperous.
• The relative economic distress of the region.
• The applicant’s performance under previous Federal financial assistance awards, including whether the grantee submitted required performance reports and data.
• The comparative feasibility of the applicant to achieve the outcomes identified in the application.

How to Apply and Grant Standards

Qualifying applicants can apply directly to the EDA by following this link: Recovery Assistance. Applicants are advised they must complete the registration process prior to submitting an application through Grants.gov
 

• Applications are accepted on a rolling basis
• Each project must be consistent with the region’s current Comprehensive Economic Development Strategy (CEDS)
• Applicant must propose a project that meets the EDA’s distress criteria
• Prospective applicants are strongly encouraged to contact their applicable EDA Regional Office representatives to discuss their needs and project plans at https://www.eda.gov/contact/.

As part of CARES Act Recovery Assistance, EDA will also fund projects that qualify for EAA funding but are similar to the kinds of projects funded under other EDA programs, such as Public Works, Research and National Technical Assistance, Planning, Local Technical Assistance, University Centers, and Build to Scale. In addition to projects with a regional focus, EDA anticipates making awards for projects of national scope as part of this funding opportunity.

Economic Distress Criteria: In order to be eligible for funding, an applicant must propose a project that meets EDA’s distress criteria. EDA has determined that economic injury from the coronavirus pandemic constitutes a “Special Need,” and eligibility may be established on that basis without reference to the other economic distress criteria. The extent to which a proposed project responds to needs caused by the coronavirus pandemic is one factor that EDA will consider when evaluating applications for funding.

Cost Sharing/Matching
 
Cost sharing is an essential element of any EDA project, and the availability and committed nature of matching funds is a competitiveness factor in evaluating applications against each other.
 
Section C.2. of the FY20 PWEAA NOFO (starting on pg. 11) sets out the cost sharing requirements for EDA projects. For CARES Act Recovery Assistance, EDA generally 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’s Grants Officers 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
• Whether the region meets other thresholds for elevated need based on the relative economic distress of the region.

Sample Projects

Examples of projects that may be funded through CARES Act Recovery Assistance include economic recovery planning and preparing technical strategies to address economic dislocations caused by the coronavirus pandemic, preparing or updating resiliency plans to respond to future pandemics, implementing entrepreneurial support programs to diversify economies, and constructing public works and facilities that will support economic recovery, including the deployment of broadband for purposes including supporting telehealth and remote learning for job skills.
 

• In September 2015, EDA awarded $1 million in POWER economic adjustment assistance funds to the Kentucky Cabinet for Finance and Administration to develop a training program to support the creation of an e-commerce ecosystem centered on tourism, agriculture, healthcare, and broadband. The project will leverage KentuckyWired/I-Way, a $300 million statewide, open-access fiber optic network currently underway in eastern Kentucky, by investing in local internet access centers and providing e-commerce training. The training will prepare communities for fiber readiness, and offer support services, including marketing, product development, production efficiency and process improvement, to prepare local companies and entrepreneurs to take advantage of the new IT infrastructure.
• $1,950,000, matched by $1,950,000 in local investment, to the Johnstown Redevelopment Authority, Johnstown/Cambria County, Pennsylvania, to fund the construction of a 2-story building to serve as a multi-use business center that will bolster economic development in Cambria County. The project will assist in the redevelopment of the region’s economy that was affected from the downturn in the coal industry by promoting entrepreneurialism, providing office space for local businesses, and supporting a labor force reintegration job training program for individuals effected by the opioid crisis. Once completed, the project will help diversify the region’s economy, attract private investment, and create jobs. 
• In February 2017, EDA awarded $100,000 in Economic Adjustment Assistance funds to the Downriver Community Conference to fund an Economic Recovery and Development Strategy for the Downriver area of the greater Detroit region, including, and with emphasis on, the communities of Trenton, Ecorse, Wyandotte and River Rouge. The strategy will include the identification and assessment of the economic impacts of the decline in the area’s long-term industrial sector. The project will engage regional stakeholders and the general public in the strategy development process as well as assess the relationship of the project area to the larger geographic region.
• In 2015, EDA awarded $600,000 to support the Coalfield Development Corporation’s Regional Economic Diversification Project. The primary objectives of this project include increased agricultural production called the Refresh Appalachia: Agricultural Entrepreneurship Development Program. Refresh Appalachia will include the launch of a business incubator and extensive agriculture training and workshops to address the need for a skilled agriculture workforce.
• In July 2014, EDA awarded $1.6 million to the city of Madison, Indiana, to upgrade critical railroad infrastructure to support increased commerce. By upgrading to 115-pound track, Madison’s Meese Orbitron Dunne, a plastics design and manufacturing company, will be able to expand its product line. Meese is dependent upon the rail system for distribution of its products and materials and has already invested $6 million toward the expansion. According to the grantee, this expansion will create 15 new jobs and save an existing 110 jobs. The increased capacity of the railroad will also assist with future economic development for the region.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.