LEDA Overview

Under the Local Economic Development Act (LEDA) (5-10-1 to 5-10-13 NMSA 1978) the New Mexico Economic Development Department (NMEDD) is granted authority to administer grants to Local Governments (Municipality and/or County); to assist expanding or relocating businesses that are Qualified Entities that will stimulate economic development and produce public benefits pursuant to LEDA.  All grants are funded on a strictly reimbursement basis. 

NMEDD targets economic development projects that comply with all legal facets of LEDA. Additional consideration is given to project that demonstrate:

• Significant Community Impact and Support;
• Rural and Underserved Areas of New Mexico;
• Increased Wages and Job Creation;
• Significant New Capital Investment; and
• Environmentally Sustainable Outcomes.

Implementation:

The Department has designed and implemented a systematic, transparent approach to prioritizing projects that meet the over-arching goals of NMEDD for financial evaluation and structuring.  These goals provide guidance for funding on project impact qualifications, application review criteria, and concentration factors. 

Qualifying Entity:

Means a corporation, Limited Liability Company, partnership, joint venture, syndicate, association or other person that is one or a combination of two or more of the following:

• An industry for the manufacturing, processing or assembling of agricultural or manufactured products; 
• A commercial enterprise for storing, warehousing, distributing or selling products of agriculture, mining or having been manufactured; or.
• An “Economic Base Employer”, which is defined as an employer who is deemed eligible for in-plant training assistance by the Economic Development Department’s Job Training incentive Program (Section 21-19-7 NMSA 1978).

Non-Qualifying Entities:

• Any enterprise for the sale of goods or commodities at retail or for distribution to the public of electricity, gas, water or telephone or other services commonly classified as public utilities; 
• A business in which all or part of the activities of the business involves the supplying of services to the general public or to governmental agencies or to a specific industry or customer, but not including businesses primarily engaged in the sale of goods or commodities at retail.

Program Application Requirements:

Access to the on-line application portal is extended to a Qualified Entity after an initial review of program eligibility and includes:

• Demonstration of Financial Soundness and Readiness to Proceed;
• A signed Release/Authorization Form, including certification that the Qualified Entity is current with all New Mexico and Federal obligations;
• Project Scope of Work, including use of requested funds;
• 3 years Financial Statements and/or Pro Forma, along with appropriate documentation (purchase agreements of land, loan approval, term sheets, infrastructure order, etc.);
• Funding Sources and uses;
• Job creation and salary/benefit information;
• Project Capital Investment; and
• Completed Economic Impact data sheet. 

Department’s Role:

• Determine eligibility prior to invitation to apply;
• Determine appropriate LEDA project amount;
• Conduct due diligence, including commercial credit check;
• Review the application and approve when complete;
• Determine project feasibility, including financial analysis; and
• Develop Project Terms Sheet  which identifies: Security Interest that is equal to the approved amount (i.e., letter of credit, mortgage, UCC filing, etc.); Performance and “claw back” provisions; Expected Project Leverage (Private investment versus public funds requested); job creation timeline; and Project Starting Head Count.

Community’s Role:

• Will provide a letter requesting the funds and indicating support for the project and that the project complies with community local LEDA Ordinance;
• Act as the Fiscal agent for receipt of initial funds and subsequent disbursements/reimbursement of funds based on Department’s approval;
• Track any outstanding LEDA balance remaining; and
• Provide to NMEDD job reports and ES903 obtained from the Qualifying Entity.

Program Funding Uses:  

• The purchase, lease, grant, construction, reconstruction, improvement or other acquisition or conveyance of land, buildings or other infrastructure;
• Public works improvements essential to the location or expansion of a qualifying entity, and
• Loan guarantees securing the cost of land, buildings or infrastructure in an amount not to exceed the revenue that may be derived from the municipal infrastructure gross receipts tax or the county infrastructure gross receipts tax;

LEDA projects are effectuated by a Project Ordinance passed by the local community and may include: a signed Project Participation Agreement (PPA) outlining the agreed upon scope of work between the Fiscal Agent and the Qualifying Entity; a signed Intergovernmental Agreement (IGA) between the Fiscal Agent and the State; and a Final Security Document. All funding decisions are made by the Secretary and Governor based on staff recommendations and are final.

LEDA Project Life Cycle

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Timeline is determined by the company decision process, the local government public meeting requirements and complexity of negotiations.  Projects have been announced within 3 months of being placed in the Pipeline and have extended out 18-24 months.

 

Please direct all inquiries for this Program to Juan Torres, Director of Finance Development Programs, [email protected] or 505.827.0238.