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RACP Program Guidelines

A printable copy of these Program Guidelines is available by clicking here.
 
A. PROJECT ELIGIBILITY

1. LEGISLATIVE AUTHORIZATION
All grants awarded through the Redevelopment Assistance Capital Program (RACP) MUST be for projects included in one (1) or more of the PA Capital Budget Project Itemization Acts.  Only itemizations/projects from these Acts that have remaining “Project Allocation” amounts and that have not been statutorily “sunset” according to Act 77, are eligible.  Potential projects are typically added to Capital Budget Project Itemization Bills by members of the House of Representatives, Senate and Administration. A complete listing of authorizations can be found via the Itemized Projects Eligible for Funding 1986-Present  link found in the Project Listings & Awards section of this website.
2. DEFINITION
Redevelopment Assistance Capital Program projects are primarily economic development projects, authorized in the Redevelopment Assistance section of a Capital Budget Itemization Act, have a regional or multi-jurisdictional impact, and generate substantial increases or maintain current levels of employment, tax revenues or other measures of economic activity.  Included are projects with cultural, historic, recreational or civic significance.
Redevelopment Assistance Capital Program projects are state-funded projects that cannot obtain primary funding under other state programs.  Projects that can normally obtain funding from PENNDOT, PENNVEST, the Department of Community and Economic Development, or other state agencies are generally restricted from participating in the Redevelopment Assistance Capital Program.  Please see Section A.6 for more detail on ineligible projects.
***If a RACP project does include and require improvements to housing, roads, bridges, tunnels, infrastructure, and/or drinking water/waste disposal/wastewater/stormwater systems, these improvements must not be the primary focus of the project; and as per Act 77 of 2013, they must be associated with a project that is part of an economic development project; and in the case of housing, must be part of a community revitalization plan and in accordance with RACP requirements.  These additional requirements for housing projects are not required if the funding is from a designated special allocation for housing.
3. FEDERAL TAX-EXEMPT BOND ELIGIBILITY
Redevelopment Assistance Capital Program grants must be eligible for tax-exempt bond funding under existing federal law requirements.  The Applicant must demonstrate and document that the project qualifies for financing with federally tax-exempt bonds.  Applicants will be required to comply with procedures to maintain the tax-exempt status of bonds issued to finance the project.
4. PROJECT COST REQUIREMENTS
A RACP project must have a total cost of at least $1,000,000.
5. MATCHING FUNDS - NON-STATE PARTICIPATION
a. General Requirements
A RACP project must have matching funds that comply with the following:
  • At least 50% of the project cost must be match (non-state) participation.
  • At least 50% of the non-state participation must be secured funding at the time of application.
  • Sources of matching funds must be documented at the time of application with identifiable and firm commitments from all sources.
  • Sources of match funds can be local, private, land or building appraised value, and/or federal funds.
  • The only non-cash, non-state match permitted are land or fixed assets, which have a substantial useful life and are directly related to the project.
  • Funds from other state sources, including legislative sources may not be used as match.
  • If financing/loans are used in match funding they typically must consist of permanent financing (i.e., a minimum term of 20 years).  This policy does not apply to bridge or interim financing used in the project.
  • Funds (grants and/or loans) from other state sources, including legislative sources, may not be used as match. However, care must be taken not to mistake certain non-state funds as state funds just because they are distributed through a state agency. The disqualifying part is if the source of the funds is from the state. Some non-state (usually federal) funds are passed through a state agency. This pass-through does not make them ineligible to be used as MATCH in a RACP project. For example, Community Development Block Grants (CDBGs) administered by the DCED is a federal source pass-thru so it is acceptable for use in a RACP project.
  • An exception to the prohibition of other state funds being used as match in a RACP project is certain gaming/casino source funds.  As of July 1, 2011, the use of the Gaming Local Share Assessment (LSA) can be used as matching funds for RACP in the following counties:
                                                      
 Allegheny          Pike
 Carbon  Monroe  Washington
 Lackawanna  Northampton  Wayne
 
 
 
 
b.  Reimbursable Cost Categories
The following costs are typically eligible for reimbursement and/or can be matching cost for RACP funds.
  • Construction - the primary use and intent of RACP funds should be the reimbursement of construction costs.
  • Interest during construction - interest costs paid as a result of the use of interim or bridge financing for the project during construction can be reimbursed from RACP funds.
  • Permits - costs for acquiring permits needed for construction of the project can be reimbursed from RACP funds.
  • Land - if land is purchased for the project, a certified appraisal must be provided.  Redevelopment Assistance Capital Program funds may be used to reimburse the costs for the land acquisition.  The appraised value may include permanent improvements exclusive of the RACP project.  The appraisal should be “as is” value.
  • Other – other costs that can be reimbursed with RACP funds can include work related to the abatement of hazardous materials, acquisition costs.
c.  Non-Reimbursable Cost Categories
The following costs are eligible match costs only and not allocated for reimbursement with Redevelopment Assistance Capital Program funds.  These costs must be paid from non-state matching funds and may include federal funds.  All costs below must be directly related to the RACP project.
  • Future physical maintenance & operation - a portion of any funds reserved for future physical maintenance and operation of facilities may be included as a part of the 50% match (non-state) participation, provided such funds do not exceed 15% of the total project cost.  These reserved funds must have legally binding documentation explaining the intent, design, and operation of the dedicated fund.  Salaries cannot be paid from reserve funds.
  • Administrative costs - any fees for the administration of the project, whether by the Applicant’s staff or by contract.
  • Legal fees - any fees for the services of lawyers or solicitors.
  • Financing/Accounting costs - any fees for financing and accounting services.
  • Architectural/Engineering fees - any fees for application preparation, project administration, or other professional services incurred for the planning, design, and construction of the project.
6.  INELIGIBLE PROJECTS

Projects located in a City Revitalization and Improvement Zone (CRIZ) and eligible for CRIZ benefits are not eligible RACP projects.  However, approved RACP grants that existed prior to zone approval shall not be restricted.

Projects that are generally funded through other state programs are not eligible for Redevelopment Assistance Capital Program funds.  Examples of those funding sources and projects are as follows:

Projects funded by PENNDOT or federal government:

 

Highways, vehicular bridges, tunnels  

 

Projects funded by PENNVEST:

Drinking water, wastewater, stormwater and waste disposal facilities

Exception to the above; stormwater, water or sewer infrastructure or tunnels, bridges or roads when associated with a project that is part of an economic development project.  As an example, RACP funding could be utilized to prepare and install water and sewer lines within and/or leading to an industrial/business park development.  Costs associated with repairs or replacement of existing public or private water or sewer systems are not eligible expenditure of RACP funds.

Other state funded projects:

Housing Units are fundable only when specialized funding specifically for that purpose is approved and remains unused.  Acts 87 of 2005 & 82 of 2010 each allowed $25 million (for a total of $50 million) for the construction of housing units.  Outside of the special allocation housing funding, housing projects are only eligible if they support and generate economic activity and are part of a community revitalization plan.

***If a RACP project does include and require improvements to housing, roads, bridges, tunnels, infrastructure, and/or drinking water/ waste disposal/wastewater/stormwater systems, these improvements must not be the primary focus of the project. Per Act 77 of 2013, they must be associated with a project that is part of an economic development project, and in the case of housing, must be part of a community revitalization plan and in accordance with RACP program requirements.  These additional requirements for housing projects are not required if the funding is from a designated special allocation for housing.

B. CANDIDATE ELIGIBILITY AND RESPONSIBILITY