Valley City – Barnes County Development Corporation
Expanded Flex PACE Program
January 1, 2014 (Amended February 17, 2015)
Contact: Jennifer Feist
Director of Development
Direct: (701) 840-7820
Email: [email protected]
The Valley City – Barnes County Development Corporation launched its Expanded Flex PACE Program making nearly $1
Million available to certain primary sector and service/retail businesses and multi-family housing.
Key Flex PACE Program elements are:
 Borrowers could receive interest reduction to as low as 1%.
 The interest reduction is funded, 25% local match (as a 4% loan) and 75% Bank of ND (grant).
 Maximum dollar amounts are $100,000 through the Bank of ND per project per biennium. Local maximum loan is
up to $33,000 (exact amount per Bank of ND Flex PACE schedule).
 Job creation resulting from the project is encouraged and preferred, but not required. Job creation numbers may
be requested for internal use.
 Interest at 4%. Principal deferment of local loan until Flex PACE loan proceeds are fully expended. At that time,
the local loan is required to be repaid within six months, which will allow the borrower time to pay off or
refinance the loan. Interest at 4% will accrue from the date it is due until the local loan is paid in full.
 10 year maximum term regardless of the loan amortization schedule.
 Flex PACE loans already in place are not affected by the expanded program.
Eligible projects include primary sector businesses that do not qualify under the Bank of ND’s PACE Program and service
and retail businesses that contribute in a meaningful way to Quality of Place and the Corporation’s mission and vision:
Vision: The Valley City - Barnes County Development Corp. strives to elevate the standard of living and enhance the quality
of life for all through business growth and career and educational opportunities to attract and retain talent.
Mission: The Valley City - Barnes County Development Corp. leads job creation and economic vitality through business
retention and expansion, entrepreneurial development and attracting new and expanding businesses.
Examples of Flex PACE interest savings are:
 $250,000 Loan 5% reduced to 1%, Local 4% loan-$13,640, Bank of ND Grant-$40,920, Flex PACE lasts 10 years
 $500,000 Loan 5% reduced to 1%, Local 4% loan-$27,280, Bank of ND Grant-$81,840, Flex PACE lasts 10 years
 $626,575 Loan 5% reduced to 1%, Local 4% loan- $33,333, Bank of ND Grant- $100,000 Flex PACE lasts 10 years
 $750,000 Loan 5% reduced to 1%, Local 4% loan-$33,300, Bank of ND Grant-$100,000, Flex PACE lasts 71 months
 $1.5 M Loan 5% reduced to 1%, Local 4% loan-$33,300, Bank of ND Grant-$100,000, Flex PACE lasts 30 months
 $2 M Loan 5% reduced to 1%, Local 4% loan-$33,300, Bank of ND Grant-$100,000, Flex PACE lasts 22 months
Actual amounts are contingent on loan amount and terms.
First Come/First Serve
Certain primary sector and service and retail businesses are eligible to receive Flex PACE funds on a first come/first serve
basis. To be placed on a first come/first serve list requires:
 The lender submits a letter of intent to the Development Corporation that the project meets the general banking
requirements; a firm commitment is not required.
 The lender must be comfortable with the strength of the borrower and that they have the means to complete the
business development project.
 Projects will stay on the first come/first serve list for 6 months from the date the Corporation receives a letter of
intent from the bank.
 This will provide businesses with ample time to develop their project, finalize financing and secure documentation
needed such as an appraisal, etc.
Application/Administration
A. The application for Flex PACE is the standard bank loan application. A separate application is not required. All
information submitted to the bank must be provided to the Development Corporation.
B. All standard bank underwriting requirements apply.
C. If the program is highly successful and demand is strong, a waiting list will be maintained and/or additional
funding considered and secured as needed.
D. Administration of the program will be handled by the Development Corporation.
E. It is not a requirement that Flex PACE be the deciding factor for a project's success or for the Development
Corporation to approve or prioritize projects for funding purposes.
F. The local program follows the Bank of ND PACE and Flex PACE Program Guidelines (www.banknd.nd.gov)
Why was Flex PACE expanded?
A. Create the best possible conditions upon which community growth can occur.
B. Improve the long term outlook through investments. A healthier base will attract future investors and improve
business succession.
C. Capitalize on the momentum created by economic development and local business activity.
D. Increase community capacity that will help companies recruit and retain talent.
E. Capture the benefits of economic development which takes work and investment.
F. Assist with increased costs that warrant an enhanced program.
G. Further fuel the economy.
County Participation
The Corporation serves Barnes County and is making funds available county wide. Historically, the Corporation has
secured grant funds through the Barnes County Commission funded through the Barnes County economic development
mill levy. These funds can be used to access Flex PACE.
Public Information
The program is not being funded by the City sales tax or Barnes County mill levy, which are dedicated to economic
development. The Corporation will provide regular updates to the Commissions including the number and type of
projects funded, local and total Flex PACE dollars, etc. Should the program be highly successful, future funding may be
pursued through the City and County.
Flex PACE for Affordable Housing
The Development Corporation participates in Flex PACE for Affordable Housing for multi-family housing development.
1) The Bank of North Dakota’s guidelines are:
a. $500,000 maximum buydown (grant); leverages $166,667 local match (as a 4% loan).
b. Requires one unit to be constructed for every $25,000 of Flex PACE Affordable Housing funds provided Example: $500,000/$25,000 = 20 units.
2) 10 year maximum term.
3) Local match is a 4% loan; interest accrues after Flex PACE is fully expanded until principal is paid in full. Principal
repaid within 6 months from the date Flex PACE funds are fully expended, not to exceed 10 years.
4) To meet the legislative intent, Flex PACE benefit must be passed on to tenants. The community’s definition of
"affordable housing" requires reduced rent by the amount of the Flex PACE interest savings from BND.
5) Benefits:
a. Investors-A development can be a viable project in terms of securing the debt coverage ratio acceptable
to lenders and assisting with being a bankable investment.
b. Renters-Rent potentially reduced by $200 to $300 per month depending on the number of units (Ex: 20
versus 42 plex); tenants would not be able to afford rent required for a private investment.
6) Investors may be able to leverage other programs such as a PILOT Program, Housing Finance Agency's Housing
Incentive Fund, Rural Development or others.
Information about the program is available on our website at www.hellovalley.com.
NOTE: The Valley City – Barnes County Development Corporation reserves the right to periodically review and/or make
program changes that may be needed at its discretion or as a result of Bank of North Dakota program/policy changes.