The Community Development Block Grant, Economic Development Program (CDBG ED) is administered by the North Carolina Department of Commerce; it provides grants to local governments for public infrastructure development. Funds are administered based on an annual federal allocation to North Carolina from the U.S. Department of Housing and Urban Development (HUD) and are made available to most local governments for economic development projects. Companies cannot apply directly for this funding, but instead work collaboratively with a local government applicant.
Under the authority of Title I of the U.S. Housing and Community Development Act of 1974 (as amended), the CDBG ED Program in North Carolina is designed to benefit low- and moderate-income persons through job creation. Funding eligibility is contingent upon the creation of permanent, full-time jobs meeting the following qualifying condition: at least 60% must be made available to persons whose household income over the previous 12 months was less than 80% of the median income for the area. For purposes of the CDBG ED Program, income eligibility is determined from data published annually for HUD’s Section 8 housing program.
The N.C. Department of Commerce annually ranks the state’s 100 counties based on economic well-being and assigns each a tier designation. The 40 most distressed counties are designated as Tier 1, the next 40 as Tier 2 and the 20 least distressed as Tier 3. This tier system is incorporated into CDBG ED to encourage economic activity in the less prosperous areas of the state.
For more information on county tier designations, visit our County Development Tier Designations page.
CDBG ED awards are limited to $1 million per project to local governments located in Tier 1 and 2 counties and $750,000 to local governments located in Tier 3 counties. Awards for priority projects (primarily manufacturing) range from $10,000 to $15,000 per job. Awards for projects other than manufacturing range from $4,000 to $10,000 per job. The local government must provide at least one dollar for every three dollars provided by CDBG ED. The state’s 25 most economically distressed counties are not required to provide a local match.
CDBG ED provides funding for the construction of public infrastructure to a site, in order to enable a company to locate or expand. Eligible uses include:
- Upgrade or repair of public drinking water or wastewater treatment plants
- Upgrade, extension or repair of public water or sewer lines
- Extension of publicly owned natural gas lines (with an executed pipeline construction, operating and resale agreement)
- Installation or extension of public broadband infrastructure
- Construction of publicly owned access roads not owned or funded by the North Carolina Department of Transportation
- Construction of public rail spur improvements
Basic Requirements for Eligibility
All counties in North Carolina, except for Wake, Mecklenburg and Cumberland, and all municipalities, except for 24 entitlement communities, are eligible to apply for CDBG ED funding.
Entitlement communities that receive CDBG ED Program funds directly from HUD are Asheville, Burlington, Cary, Chapel Hill, Charlotte, Concord, Durham, Fayetteville, Gastonia, Goldsboro, Greensboro, Greenville, Hickory, High Point, Jacksonville, Kannapolis, Lenoir, Morganton, New Bern, Raleigh, Rocky Mount, Salisbury, Wilmington and Winston-Salem. The town of Holly Springs in Wake County and the town of Linden in Cumberland County opted to participate in the statewide CDBG ED Program rather than that grant’s entitlement community program. For this reason, they receive funding through the statewide CDBG ED Program.
CDBG ED funding will NOT be made available to projects that:
- Assist companies that transfer jobs within the state or from another state, unless the company is expanding into the new area by adding a branch, affiliate or subsidiary while maintaining employment levels an existing facility. Jobs that are transferred from other facilities may not be counted toward the job-creation commitment;
- Assist not-for-profit companies or organizations;
- Propose to assist companies that are in bankruptcy, or
- Assist sports teams, including motorsports.
In addition, any one of the following situations would render a company ineligible for CDBG ED funding, if it occurred prior to the grant award:
- Execution of construction contracts;
- Placement of equipment purchase orders for the project site;
- Execution of a binding option for the purchase of an existing facility with a deposit that is so large that the option constitutes a sales contract;
- Execution of sales contracts without a condition contingency for CDBG ED funding, or the
- Public announcement of a project that includes no expression of the need for CDBG ED participation, unless previously approved by CDBG ED staff.
For more information about the Community Development Block Grant Economic Development Program, contact the Economic Development Partnership of North Carolina at (919) 447-7744 or firstname.lastname@example.org.
The Economic Development Partnership of North Carolina does not award or administer this incentive. All economic development incentives are awarded and administered by the North Carolina Department of Commerce.