Projects receiving federal support must comply with several requirements before construction can start. Warehouses4Good staff and teaming partners conduct the investigations, provide architectural, engineering, and financial services, and prepare the reports needed to meet those requirements. Several of these services are summarized below.
Need and Eligibility
The applicant must demonstrate both local need for the facility and that it meets the eligibility requirements of the relevant program. Reports prepared for these reviews include:
- Evidence of community need and support, such as public meeting minutes, local government participation, support letters from prospective warehouse users.
- Site location and service area, demographic characteristics in that area.
- Facility definition, intended uses
- Public use characteristics, such as broad-based impact (benefit more than a small part of community), percentage of population served that resides in the eligible rural area, etc.
- How the facility will be operated and assured sources of income for operation, maintenance, debt repayment, etc.
- Developer’s legal authority to construct, own, operate, maintain, manage, borrow funds, and pledge collateral. Also, corporate formation and governance documents, list of directors, certificate of good standing, and compliance statements for various federal regulations (e.g., non-discrimination, no debarment, tax compliance).
Financial Requirements
Agencies require a comprehensive description of past, current, and projected financial performance, including reports such as:
- Financial Condition Report – A compilation of accounting and audit reports, including existing loans, security agreements, guarantees, lease obligations, etc.
- Financial Feasibility Report – Describing the status of the ownership, total cost, sources of capital and operating funds for the warehouse. This includes a pro forma Operating Budget and Cash Flow Statement for the initial years of operation.
- Facility Lease Agreements, Management Agreements – If applicable, these are typically submitted as a draft agreement for review by the agency’s Office of General Counsel.
- Debt Service Reserve Requirements – An amount held in reserve equal to one years’ total loan payments.
- Capital Assets Reserve Requirement – An additional amount in reserve sufficient to maintain long-lived assets, calculated based on the facility’s condition and economic life.
- Alternative Financing Sources – A statement regarding efforts to finance the project/facility through other sources, terms offered, etc.
- Eligible Costs – Applicant must demonstrate that federal funds are applied only to eligible costs as specified under the relevant program.
Environmental Mitigation
To the extent practicable, facilities must avoid or minimize:
- Adverse impacts to the environment, protected species, historical and cultural resources, etc.
- Loss of wetlands or important farmland
- Unwarranted alterations to or encroachment on 500-year floodplains
- Disproportionate, adverse impacts to minority or low-income populations
Depending on the site’s location, characteristics, and use history, the federal agency issues one of three determinations that either allows or denies funding support:
- Categorical Exclusion (CE) – Applicable if the facility doesn’t create significant individual or cumulative effects on the human environment, usually removing the requirement to conduct an environmental assessment (EA) or environmental impact statement (EIS) and allowing funding to proceed.
- Finding of No Significant Impact (FONSI) – When a CE is not applicable, and an environmental assessment determines that potential impacts are below specified thresholds, the agency issues a FONSI allowing the funding to proceed.
- Record of Decision (ROD) – If the EA shows that impacts exceed the thresholds, a more detailed environmental impact study is conducted, the results of which support the agency’s decision to either allowing or denying agency funding.
Warehouses4Good team member Brown and Caldwell, an employee-owned environmental engineering firm, conducts the required environmental assessments per the:
- American Society for the Testing of Materials (ASTM) E 1527-13 Standard Practice for Environmental Site Assessments
- “All Appropriate Inquiry” rule as defined in CERCLA, 42 U.S.C. §9601(35)(b) and clarified by 40 CFR 312
Receiving a favorable environmental determination does not guarantee funding approval, as several other criteria (summarized below) must be addressed.
Historic Preservation
Complying with the National Historic Preservation Act (NHPA), Warehouses4AGood will seek a statement from relevant State Historical Preservation Officer (SHPO) identifying whether the site contains or is near any historical sites or archaeological properties. If warehouse construction has the potential to impact historic properties, then a Section 106 review is required.
Displacement
Whenever construction displaces people or their personal property, projects must comply with the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970 (URA) (49 CFR Part 24).
Professional Service Providers
A federal funding agency must review and approve the applicant’s contracts with legal, architectural/engineering, bond counsel, and accounting service providers.
Architect/Engineer Reports
The project’s Architect/engineer must produce a Preliminary Architectural Report (PAR) per the requirements of 7 CFR 1942.18(c) and any additional state requirements.
Appraisal Requirements
For projects secured by real estate, an independent appraisal must be conducted to demonstrate that the value is equal to or exceeds the loan amount (7 CFR 1942.17(g) (2)(iii)(B) or 7 CFR 3575.48).