Chicago’s Neighborhood Opportunity Fund (NOF) promotes equitable neighborhood development in Chicago’s West, Southwest and South Side commercial corridors. Proceeds received from bonus payments on downtown developments are used to provide grants to support commercial investment and neighborhood needs in underserved areas.
NOF provides an exciting opportunity for developers to obtain grants to assist with funding new construction or rehabilitation projects. Approved applicants may receive funds to assist with site preparation, design, employee training programs and other qualified expenses. NOF grants may not be used to reimburse costs associated with residential units, minor repairs, operating expenses or repairs required to meet code requirements. For approved costs, however, NOF grants can provide a substantial benefit to developers as they do not have to be repaid.
NOF offers grants for both small and large scale projects. Small projects must be located in an eligible commercial corridor and may receive assistance up to $250,000. Large projects must be located within a qualified investment area and are eligible to receive grants ranging from $250,000 to $2.5 million. Large project grants, however, are subject to city council approval.
Under NOF, eligible small new construction projects may receive grants up to 50% of the total project cost and large new construction projects up to 30% of the project cost. Qualified rehabilitation projects may receive grants up to 50% of the total project cost for both small and large projects.
Developers may also be eligible for additional bonus funding if they meet local residency or local hiring requirements. The local residency bonus provides funding for an awardee who maintains his or her primary residence in a NOF eligible area. Further, if the awardee hires at least two new full-time employees they may be eligible to receive a local hiring bonus as a reimbursement for wage expenses or training costs. The local hiring bonus is paid after the project is completed. For large grants bonuses are capped at $250,000.
Application and approved projects
NOF applications are accepted during two application rounds. Applications are prioritized based upon four key factors: (1) catalytic impact; (2) project readiness; (3) financial feasibility; and (4) construction implementation. The applications are then submitted to an advisory committee comprised of community leaders for final selection.
In 2021, approximately $10 million dollars in grants have been awarded to 27 Chicago businesses. More than 75% of the finalists are Black, Indigenous or people of color-owned businesses. Grants have been awarded for the renovation and expansion of restaurant and community event space, the development of a neighborhood grocery store, the creation of a cross-cultural business incubator and to open a youth-focused bookstore.
Interested applicants should first confirm that their project meets the program’s eligibility and location requirements. Upon confirmation, applicants should then review the NOF grant criteria and program rules before applying through the NOF program administrator.
Interested in applying for NOF or have additional questions? Contact a Chuhak & Tecson Real Estate attorney for the answers.
Client Alert authored by Kevin M. Coyne(312 855 5441), Principal and leader of Chuhak & Tecson’s Real Estate practice.
A special thanks to firm law clerk Martin Crowley for his contribution to this client alert.
This Chuhak & Tecson, P.C. communication is intended only to provide information regarding developments in the law and information of general interest. It is not intended to constitute advice regarding legal problems and should not be relied upon as such.