The Redevelopment Assistance Capital Program (RACP) grant program is managed by the Commonwealth of Pennsylvania’s Office of the Budget (OB) for economic development projects throughout the state. RACP grant awards are issued by the Commonwealth and passed through a municipality or a public authority. In the City of Philadelphia, the Philadelphia Authority for Industrial Development (PAID) serves as the Applicant/Grantee and acts as an intermediary between the OB and the project that ultimately receives the funds.
Recent administrative changes have introduced a competitive selection component to the RACP award process. First, a project must be listed in an enacted Capital Budget Act. Once a project is “shovel-ready,” the project sponsor may submit a Business Plan application to OB presenting the scope of work, project costs, documentation of other financing sufficient to complete the project, anticipated construction schedule and other relevant project and organizational information. OB accepts project applications for a semi-annual funding round, and all applications are reviewed by a selective multi-agency Committee. Awards are made twice a year, in April and October.
The minimum project cost is $1 million. The program requires that the project owner match funding equal to or greater than the grant amount. The following are the selection criteria for a RACP award:
PAID staff are available to assist project sponsors in Philadelphia with questions on the application process. Projects can apply directly to the Commonwealth at this stage; however, PAID will assist with packaging and submitting an application, at the project’s option. If any Philadelphia project’s application is successful, PAID will work with the sponsor and the Commonwealth to obtain the final grant agreement, manage ongoing construction monitoring of the project, and assist with the payment request and disbursement process. PAID receives all grant disbursements and issues reimbursement checks to the project sponsor.
The RACP grant is operated on a reimbursement basis as expenses are incurred and paid by the project sponsor. Consequently, most RACP projects require bridge financing, which can be provided by a short-term loan, a line of credit, or sponsor funds. The Philadelphia Industrial Development Corporation (PIDC) offers a low interest bridge financing program for eligible RACP recipients.
Upon receipt of a grant award, the project sponsor will, in coordination with PAID, submit additional and updated project materials to assist the state in writing the grant agreement. Special conditions of the grant agreement must be met before funding can be released by OB. Draws are made on a reimbursement basis as project costs are incurred and paid.
All Philadelphia projects awarded RACP funding by the Commonwealth are charged an administrative fee by PAID equal to one percent of the grant amount. No portion of the fee may be paid from the proceeds of the grant. The first 25 percent of the fee is due upon execution of the Sub- Grant Agreement between PAID and project sponsor. The remaining portion is paid in installments as the project sponsor draws the funds over the life of the project.
Fees are subject to change. Please confirm all transaction fees with PIDC prior to application.