Eligible Activities: Economic Development

An activity may be assisted in whole or in part with CDBG funds if the activity is defined as eligible under Section 105(a) of Title I of the Housing and Community Development Act of 1974, as amended, {current law 42 USC 5305}. The Economic Development set-aside is to be used for the following activities:

  • provide grants to local governments in order for them to make loans to businesses for job creation or retention
  • provide grants to local governments for infrastructure improvements which will facilitate the location of a particular business. Examples include sewer, water, and street/road access on public property to the private industrial/business site boundaries.

The State also allows funding for program administration.

INELIGIBLE ACTIVITIES: Federal legislation has mandated that CDBG assistance will not be available to assist directly in the relocation of any industrial or commercial plant, facility or operation from one area to another if the relocation is likely to result in a significant loss of employment in the labor market area from which the relocation occurs.

Projects which consists of a loan and/or infrastructure improvements in which an elected official or a member of her/his immediate family has a financial interest as the project developer are ineligible.

Funds cannot be used to acquire, construct or rehabilitate a building or to create a general industrial park project with the hope of attracting future businesses/industries.

Also, projects involving "truck stops and related activities", gaming, "cut and sew" operations involving the manufacture of clothing/apparel and non-manufacturing operations such as hotels and motels, privately owned prisons, and nursing homes are not eligible.