Fiscal Note
The proposed resolution authorizes a sole source contract with Madison Development Corp. to provide loan administration services to small businesses located within the boundaries of any TIDs (and if applicable, the Half-Mile Rule boundary of TIDs) that have included in their current or future project plans a Small Cap TIF program for small business assistance. No additional City appropriation is required.
MDC will market the program to eligible small business borrowers, conduct credit review and underwriting, secure approval by its loan committee and submit a Loan Summary Report to the City that will be included in an authorizing resolution introduced to the Common Council referred to the Finance Committee and reported to Common Council for final consideration and approval.
MDC will charge loan service fees, paid with TIF proceeds, calculated as 15% of each Small Cap TIF loan authorized. Total MDC service fees for all Small Cap TIF services under this contract shall not exceed $300,000.
Title
Authorizing the Mayor and City Clerk to execute a sole service contract with Madison Development Corp. to administer a Small Cap TIF loan program to provide financial assistance to small businesses located within eligible Tax Increment Districts. (Citywide)
Body
WHEREAS on July 11, 2023 the City of Madison adopted RES 23-00470 authorizing the Mayor and City Clerk to execute a sole source service contract with Madison Development Corp. (“MDC”) to administer a Small Cap TIF loan program (the “Program”) to provide financial assistance to small businesses located within TID 51 (South Madison) and its Half Mile Rule boundary and to small businesses located within the TID boundaries of all TIDs created hereafter, including Half Mile Rule boundaries, that include a Small Cap TIF program for small business in their respective project plans; and,
WHEREAS, MDC is also currently contracted with the City to administer a Business Loan Program (“BLP”) utilizing Community Development Block Grant (CDBG) funds; and,
WHEREAS, the loan underwriting and administration services provided through the existing MDC service contract for administration of the CDBG funds used in the BLP and the Program are consistent with the services required for administration of the Program going forward; and,
WHEREAS, this relationship meets the requirements of MGO 4.27(4)(a)(7) for an exception to the RFP process stating: “[a] particular consultant has provided services to the City on a similar or continuing project in the recent past, and it would be economical to the City on the basis of time and money to retain the same consultant”; and,
WHEREAS, the City of Madison adopted RES-25-00127 amending the 2025 Economic Development Division Capital Budget for TID #44 by $500,000 to fund small business development programs, amending the 2025 Economic Development Division Capital Budget for TID #46 by $750,000 to fund small business development programs, amending the 2025 Economic Development Division Capital Budget for TID #51 by $850,000 to fund small business development programs, thereby setting aside TIF funds to be used for the Program; and,
WHEREAS, the City wishes to continue the Program to assist small business development located within eligible TID designated areas and its Half-Mile Rule boundary, and to small businesses located within the TID boundaries of all TIDs created hereafter, including Half-Mile Rule boundaries, that include the Program for small business in their respective project plans; and,
WHEREAS, at loan closing, the City shall disburse an amount equal to fifteen percent (15%) of the principal amount of each Loan to MDC from Program funds for servicing and closing fees and the aggregate of all loan fees disbursed from Program funds shall not exceed $300,000; and,
WHEREAS, the term of the contract shall run until December 31, 2029.
WHEREAS, the Program objectives include retaining and creating jobs within the TID Boundaries and its half-mile radius, renovating and expanding existing property, said objectives are a public purpose consistent with job creation objectives in the Comprehensive Plan and City of Madison TIF Policy; and,
WHEREAS, in addition to any other powers conferred by law, the City may exercise any power necessary and convenient to carry out the purpose of the TIF law, including the power to cause project plans to be prepared, to approve such plans, and to implement the provisions that effectuate the purpose of such plans.
NOW, THEREFORE, BE IT RESOLVED that the City hereby finds and determines that the Program, as described herein, is consistent with the public purposes, plans and objectives set forth in the TID Project Plans and demonstrates the potential to attract, retain and expand small businesses and create employment in these areas thereby making more likely an accomplishment of the public purpose objectives set forth in the Project Plans, the TIF Law and City TIF Policy.
BE IT FINALLY RESOLVED that the City hereby authorizes the Mayor and City Clerk to execute a sole source service contract with MDC, on substantially the same terms as described herein and in a form approved by the City Attorney.