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LOAN PROGRAM

The RDA assists property owners in the renovation, rehabilitation, and new construction of buildings within project area boundaries through its loan and tax increment reimbursement programs.

The RDA Loan Program provides critical gap financing for projects that advance the RDA’s goals and objectives outlined in its Strategic Plans. We work with project developers and lenders to bridge the funding gap between a project’s economics and market realities. In support of the RDA’s mission, we can assume a higher level of risk than traditional lenders to ensure that transformative projects get built. While our approach is flexible, we incentivize projects that achieve the RDA’s goals for affordable housing, placemaking, sustainability, high quality urban design, and economic development.

THRESHOLD REQUIREMENTS

Eligible Costs:
The RDA Loan Program provides financing for construction costs, or hard costs, to facilitate various development projects, including new construction, building rehabilitation, and energy efficiency upgrades.

Objective Requirement:
1. The project must be located in an RDA Project Area, and meet at least one Project Area Objective as provided through the most recent Project Area Strategic Plan; or
2. The project is located within Salt Lake City municipal boundaries and provides affordable or mixed-income housing.

Financing Structure Requirement:
The RDA Loan Program is intended to provide gap financing to supplement existing, secured
financing. Under specific circumstances, the Program may provide primary loans for projects that
demonstrate a high level of community benefit.

Design Requirement:
Projects approved for funding must support the RDA’s Design Guidelines.

LOAN TERMS AND PROVISIONS

Term & Amortization:
The standard loan term is 5 years with a 20 year amortization period. A 5-year option to extend the overall loan term to 10 years may be available, with an interest rate increase of 2% at the five-year extension. Terms outside of this standard will be considered on a case-by-case basis. Affordable housing projects may qualify for an extended amortization period.

Standard Interest Rate:
Interest rates are fixed at 300 basis points (3%) more than the 5-year United States Treasury rate at loan closing. A reduction to the standard interest rate is available if the project meets one or more Public Benefit criteria. For each criterion fulfilled, the project will receive a 50 basis points (one half of one percent) reduction from the standard interest rate, with a maximum reduction of 300 basis points.

Limits to Assistance:
Loan maximums are limited to the demonstrated gap in available financing to cover project costs. Loan amounts will be sized to cover the gap in financing to meet the lower of a debt coverage ratio (DCR) of 1.1 or a loan to value (LTV) of 95%. A DCR of 1.2 or LTV of 90% must be met for primary loans.

 

Download the complete policies and guidelines in PDF format:

RDA Loan Program: Policies & Guidelines

 

Initial loan application for download:

RDA Loan Application: Part A

Tax Increment Reimbursment

TAX INCREMENT REIMBURSEMENT

The RDA’s Tax Increment Reimbursement Program helps achieve the RDA’s project area goals by offering a tax increment reimbursement to developers for building eligible projects. The RDA will reimburse property owners or developers for construction costs associated with projects in RDA project areas that meet each project area’s strategic plan objectives. The amount of the tax increment reimbursement is determined by what the project generates, and the percentage of tax increment split between the RDA and developer.

THRESHOLD REQUIREMENTS

Eligible Costs:
The RDA Tax Increment Reimbursement Program provides financing for construction costs, or hard costs, to facilitate various development projects, including new construction, building rehabilitation, and energy efficiency upgrades.

Objective Requirement:
The project must be located in an RDA Project Area, and meet at least one Project Area Objective as provided through the most recent Project Area Strategic Plan.

Design Requirement:
Projects approved for reimbursement must support the RDA’s Design Guidelines. All designs will be reviewed by the RDA’s Design Review Committee.

TAX INCREMENT REIMBURSEMENT TERMS AND PROVISIONS

• Eligibility is limited to projects that are eligible if they are located in tax increment collection areas within RDA project areas.

• Applicants must complete a Tax Increment Reimbursement Application and provide information as required by the RDA to be eligible.

• Awarded applicants must enter into a Tax Increment Reimbursement Agreement with the RDA in order to receive funds.

• Projects built in the first 10 years of an RDA project area life will be eligible to receive a higher percentage of the total tax increment generated by the project. Projects built in the last 5 years of an RDA project area life are not eligible.

• Tax increment reimbursements are paid annually to developers the first year the completed project is on the Salt Lake County tax rolls.

For more information on the RDA’s TI Reimbursement Program, please contact Jill Wilkerson-Smith at 801-535-7243 or jill.wilkerson-smith@slcgov.com.

GRANARY DISTRICT ADAPTIVE REUSE PROGRAM

This program provides forgivable loans to encourage the reuse and revitalization of the Granary District’s unique stock of warehouse and industrial buildings. The loans are intended to ease the sometimes daunting cost of the necessary building code updates local developers face when renovating aging warehouses and distressed industrial buildings. By facilitating transformative development projects that increase the number of residents living, working, and visiting the Granary District, the RDA has been successfully revitalizing the area one project at a time.

Two businesses have recently completed adaptive reuse projects with the help of the Adaptive Reuse Program, including:

  • Atmosphere Studios, a locally owned company employing more than 30 people and specializing in the design and construction of branded environments, is now headquartered in a 66,000-square-foot renovated warehouse.
  • Fisher Brewing Company, a local beer brewer and retailer, transformed a pair of adjacent auto garages into its brewery and taproom.

The RDA’s strategy to combine the adaptive reuse of contributing structures with new infill development in a manner that supports commercial, residential, and light industrial uses in the Granary District has proven successful, and it invites more developers and businesses to take advantage of the Adaptive Reuse Program. Renewed and refunded by the RDA Board of Directors in Summer 2017, the Adaptive Reuse Program is ready to help support more adaptive reuse in the Granary neighborhood. For more information about eligibility, funding, match requirement, and terms, see this specification document.