HomeMy WebLinkAboutIowa Department of Economic Development-Grant Application-06.18.2007 gry„,,,,frj 6 - 1g-U7
I OWA
Michael Tramontina, Director
life I c h a ng{n t Iowa Department of Economic Development
Application for Financial Assistance
Section A — Applicant & Project Information
Business Development Division
Iowa Department of Economic Development
200 East Grand Avenue
Des Moines, Iowa 50309
www.iowalifechanging.com
Updated:April 19,2007
Instructions
1. All applicants shall complete Section A of the Application for Financial Assistance and attach only those section(s)for the
program(s)to which the applicant is applying.
Program Download and Complete
Community Economic Bettermeant Account(CEBA) Section B
Enterprise Zone Program(EZ) Section C
High Quality Job Creation Program(HQJC) Section D
Entrepreneurial Ventures Assistance Program(EVA) Section E
Value Added Agricultural Products &Processes
Financial Assistance Program(VAAPFAP) Section F
Economic Development Set-Aside Program (EDSA) Section G
2. Please visit the IDED Web site, http://www.iowalifechanginq.com/applications/bus dev/index.html or contact IDED at(515)
242-4819 to see if this version of the application is still current.
3. Before filling out this application form, please read all applicable sections of the 2005 Iowa Code and Iowa Administrative
Code(rules). http://www4.legis.state.ia.us/IAChtm1/261.htm
4. Only typed or computer-generated applications will be accepted and reviewed. Any material change to the format,
questions, or wording of questions presented in this application, will render the application invalid and it will not be
accepted.
5. Complete the applicable sections of the application fully; if questions are left unanswered or required attachments are not
submitted, an explanation must be included.
6. Use clear and concise language. Attachments should only be used when requested or as supporting documentation.
7. Any inaccurate information of a significant nature may disqualify the application from consideration.
8. Upon completion of the application, please submit the following to the Business Finance Team at IDED:
• The original, signed application form and all required attachments
• One copy of the application form and all required attachments from which additional copies can easily be made.
If electronic copies of the application and required attachments are available, please e-mail these documents to
businessfinance(a iowalifechanging.com in addition to submitting the original plus one copy.
Business Finance Team
Iowa Department of Economic Developmert
200 East Grand Avenue
Des Moines IA 50309
Application Due Dates
IDED Board Meeting Application Due Date
April 19, 2007 March 26, 2007
May 17, 2007 April 23, 2007
June 13, 2007 May 21, 2007
July 19, 2007 June 25, 2007
August 16, 2007 July 23, 2007
September 20, 2007 August 27, 2007
October 18, 2007 September 24, 2007
November 15,2007 October 22,2007
December 20, 2007 November 26, 2007
*EVA applications will be acted upon every other month starting in March.
Section A—Applicant&Project Information 2
Public Records Policies
Information Submitted to IDED. The Iowa Department of Economic Development(IDED) is subject to the Open Records law
(Iowa Code, Chapter 22). Treatment of information submitted to IDED in this application is governed by the provisions of the
Open Records law. All public records are available for public inspection. Some public records are considered confidential and
will not be disclosed to the public unless ordered by a court,the lawful custodian of the record,or by another person duly
authorized to release the information.
Confidential Records. IDED automatically treats the following records as confidential and they are withheld from public
disclosure:
• Tax Records
• Quarterly Iowa Employer's Contribution and Payroll Report prepared for the Iowa Workforce Development Department
• Payroll Registers
• Business Financial Statements and Projections
• Personal Financial Statements
Other information supplied to IDED as part of this application may be treated as confidential under Iowa Code section 22.7.
Following are the classifications of records which are recognized as confidential under Iowa law and which are most frequently
applicable to business information submitted to IDED:
• Trade secrets [Iowa Code§22.7(3)]
• Reports to governmental agencies which, j`released,would give advantage to competitors and serve no public purpose.
[Iowa Code§22.7(6)]
• Information on an industrial prospect with which the IDED is currently negotiating. [Iowa Code§22.7(8)]
• Communications not required by law, rule or regulation made to IDED by persons outside the government to the extent that
IDED could reasonably believe that those persons would be discouraged from making them to the Department if they were
made available for general public examination. [Iowa Code§22.7(18)]
Information supplied to IDED as part of this application that is material to the application and/or the state program to
which the applicant is applying including, but not limited to the number and type of jobs to be created, wages for those
jobs, employee benefit information,and project budget, are considered open records and will not be treated as
confidential.
Additional Information Available. Copies of Iowa's Open Record law and IDED's administrative rules relating to public
records are available from the Department upon request or at
http://www.iowalifechanging.com/downloads/chap169openrecords.doc.
Section A—Applicant&Project Information 3
Applicant Information
1. Name of Business: Healthcare Quality Association on Accreditation (HQAA)/JSA Development LLC
Address: 217 West 4th Street
City, State &Zip Code: Waterloo, Iowa 50701
Contact Person: Mary Nicholas Title: Executive Director
Phone: 319-274-4401 Fax: 877-226-5564 Email: mary.nicholas@hqaa.org
2. SIC or NAICS Code:
3. Federal ID Number:
Does the Business file a consolidated tax return under a different tax ID number? ® Yes ❑ No
If yes, please also provide that tax: ID number: 20-2218810(HQAA)
4. Is the contact person listed above authorized to obligate the Business? ®Yes ❑No
If no, please provide the name and title of a company officer authorized to obligate the Business:
5. If the application was prepared by someone other than the contact person listed above, please complete the following:
Name: Jeff Hassman
Address: 1221 Franklin Street
City, State, &ZIP Code: Cedar Falls, Iowa 50613
Phone: 319-610-7492 Fax: 319-235-7345 Email:jhassman@gmail.com
Sponsor Information
Please review the following table to determine who needs to sponsor this application. Depending on the programs being
applied for, more than one sponsor may be necessary.
Program Acceptable Sponsor
CEBA City or County or Community College in which the Project Site is Located
EZ Local Enterprise Zone Commission
HQJC City or County in which the Project Site is Located
EVA City or County in which the Project Site is Located; Local Development Entity;John Pappajohn Entrepreneurial
Center;a Srtiall Business Development Center; Business Accelerator;or similar entity
VAAPFAP City or County in which the Project Site is Located or Local Development Entity
EDSA City or County in which the Project Site is Located
1. Sponsor Organization: Greater Cedar Valley Alliance
Official Contact(e.g. Mayor, Chairperson,etc.): Steve Dust Title: President
Project Contact: Linda Laylin Title: Director of Business Services
Address: 10 West Fourth Street, Suite 310
City, State&ZIP Code: Waterloo, Iowa 50701
Phone: 800-369-0513 Fax: 319-232-1829 E-mail:dust@cedarvalleyalliance.com
2. If IDED needs to contact the sponsor organization with questions,should we contact the person listed above?
❑ Yes ® No, please contact the following person:
Name: Linda Laylin Title: Director of Business Services
Address: 10 West Fourth Street, Suite 310
City, State &ZIP Code: Waterloo, Iowa 50701
Phone: 800-369-0513 Fax: 319-232-1829 E-mail: laylin@cedarvalleyalliance.com
If necessary, please list information on additional sponsors in an attachment.
Section A—Applicant&Project Information 4
Certification &Release of Information
I hereby give permission to the Iowa Department of Economic Development(IDED)to research the Business' history, make
credit checks,contact the Business'financial institutions, insurance carriers, and perform other related activities necessary for
reasonable evaluation of this application. I also hereby authorize the Iowa Department of Revenue to provide to IDED state tax
information pertinent to the Business'state income tax, sales and use tax, and state tax credits claimed.
I understand that all information submitted to IDED related to this application is subject to Iowa's Open Record Law(Iowa Code,
Chapter 22).
I understand this application is subject to final approval by IDED and the Project may not be initiated until final approval is
secured. (High Quality Job Creation Program applications may be submitted up to 12 months following the completion of the
project.)
I understand that IDED reserves the right to negotiate the financial assistance. Furthermore, I am aware that financial
assistance is not available until an agreement is executed within a reasonable time period following approval.
I hereby certify that all representations,warranties,or statements made or furnished to IDED in connection with this application
are true and correct in all material respect. I understand that it is a criminal violation under Iowa law to engage in deception and
knowingly make, or cause to be made,directly or indirectly, a false statement in writing for the purpose of procuring economic
development assistance from a state agency or subdivision.
For the Business:
Signature Date
_Mary Nicholas
Name and Title(typed or printed)
For the Sponsor s :
/- � i co Z
Signature Date
/ , 1-Iis � Y),aynr
Name and Title(typed or printed)
Please use the following if more than one sponsor is required. (For example, use this if a signature from the local Enterprise
Zone Commission is required in addition to the signature from the Mayor of the sponsoring city.)
Signature Date
Name and Title(typed or printed)
IDED will not provide assistance in situations where it is determined that any representation, warranty, or statement made in
connection with this application is incorrect, false, misleading or erroneous in any material respect. If assistance has already
been provided prior to discovery of the incorrect, false, or misleading representation, IDED may initiate legal action to recover
incentives and assistance awarded to the Business.
Section A—Applicant&Project Information 5
Project Information
1. Provide a brief description and history of the Business. Include information about the Business' products or services
and its markets and/or customers.
HQAA is a VGM Group"spin off'that has been in temporary quarters at 217 W.4th Street for the last year. VGM invested
nearly a million dollars in getting it started (subordinated debt since it is a NFP in structure). It was very speculative until
recognized on November 14th, 2006 by Centers for Medicare Services or"CMS"(the old HCFA or Medicare)as a"deeming
authority".. Recognition as an accredited agency means it will survive and likely thrive as business builds under a new law. The
Medicare Modernization Act of 2003("MMA") requires that all home medical equipment providers("HME") become accredited
starting in 2007. In the past accreditation was voluntary, it now will be required when they are submitting claims for
reimbursement from Medicare.
HQAA will initially focus on the HME entities with an expected market share of 24% or 3,900 by year 3. Pharmacies also present
a great opportunity with about 70,000 entities across the US. This opportunity is not currently reflected in the HQAA business
plan but the potential exists to tap this market once traction is gained among the HME entities..
HQAA has two main competitive advantages fo'succeeding in this emerging market. First, it has a unique and proprietary
internet based system that allows customers to much more easily develop the system and documentation necessary to achieve
accreditation status. This technology also allows HQAA to be very price competitive with the older more established other
accreditation agencies which rely on traditional paper based processes. Second, HQAA draws heavily on the depth of HME
experience provided by the relationship with VGM.Although HQAA is an independently operated NFP, its core startup
personnel, including the Executive Director,came from VGM and have for years in the HME sector.This knowledge and
relationships within the sector provide HQAA with access to potential customers and the ability for VGM to refer HME entities to
HQAA for their accreditation.
HQAA has the right elements to become a very successful company and significant employer for downtown Waterloo.As CMS
begins to enforce accreditation requirements starting January 1st, 2007, HQAA begin a growth spurt that will last several years
as all HME's affiliate with one of the approved accreditation agencies.
Although HQAA has positive prospects, its success is by no means guaranteed. The company will need to act very quickly to
establish a position in the accreditation market. This will require significant capital to ensure that HQAA can hire,train and retain
qualified staff and that HQAA emerges from its startup status to a credible and professional organization with proper facilities
that will accommodate its potential growth.
HQAA could locate anywhere it could find qualified labor pool. In fact it would be much easier to startup and expand this
business in a major city with a larger pool of qualified medical employees available and a major airport. However, because of its
link to VGM(VGM principles still constitute a majority of the Board of Directors) it has an incentive to stay in town but it is
essential to ensure that it has no reason to consider out-of-state or even out-of-area alternatives.
2. Business Structure:
❑ Cooperative ❑ Corporation ❑ Limited Liability Company ® Not for Profit
❑ Partnership ❑ S-Corporation ❑ Sole Proprietorship
State of Incorporation: Iowa
3. Identify the Business'owners: Not for Profit. Governed by a Board of Directors
Does a woman, minority,or person with a disability own the Business? ❑ Yes ® No
If yes, is the business certified as a Targeted Small Business? ❑ Yes ❑ No
4. List the Business' Iowa Locations and the Current Number of Employees at each Location.
Section A—Applicant&Project Information 6
Current location is 217 West 4th Street in Waterloo, Iowa with a total of 6 employees.
5. What is the Business'worldwide employment? (Please include employees of parent company,subsidiaries,and other
affiliated entities in this figure.)
6 employees worldwide.
6. Briefly describe the proposed project for which assistance is being sought. (Include project timeline with dates,facility
size, infrastructure improvements, proposed products/services, any new markets,etc.)
HQAA has moved past the speculative stage and with CMS accreditation has the potential to grow aggressively. HQAA needs
quality personnel. The type of employees required are professional in nature with a strong preference for individuals with some
type of post-high school formal education degrees.
HQAA also immediately needs a permanent location that will accommodate its growth. This needs to be a very professional
location that is attractive to both employees and customers. Features of the space must include dedicated areas for:
-Technology(HQAA must maintain its competitive advantage in this area)
-Training area for employees
- Executive meeting area(must be modern and highly professional to impressive such big name clients as Target, CVS,
Walgreens,Wal-Mart and other potential high profile customers)
-Kitchenette and employee break area
HQAA has identified an excellent location in downtown Waterloo that will accommodate the needs of the business but the
facility will require significant improvements.
HQAA needs to decide very quickly about its location and ramp up operations to aggressively pursue business. This decision
should occur no later than the 2nd quarter of 2007 with the goal of being installed in its new facility by late in 2007.
7. Project Address(Street Address, City, and County):
112-116 E.4th Street,Waterloo, Iowa 50703
8. Type of Business Project:
® Startup ❑ Expansion of Iowa Company ❑ New Location in Iowa
❑ Relocation from another State
9. Please identify the management at the project location and his/her/their experience.
Mary Nicholas is the Executive Director of HQA4. Mary has been involved in quality initiatives for the healthcare industry for
over 15 years. Before starting HQAA, Mary was employed in the Homelink division of VGM where she was responsible for
quality improvement.
10. Has any part of the project started? ❑Yes ® No
If yes, please explain.
Section A—Applicant&Project Information 7
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12. Employee Benefits: Please identify all employee benefits provided by and paid for(in full or in part) by the Business.
Employee Benefits Total Annual Cost Portion of Total Plan Provisions
Provided by the (show on a per Annual Cost Paid (Include deductibles,coinsurance%,office visit
Business employee basis) by the Business* co-payments,annual out-of-pocket maximums,
face amounts,etc.
.< Employee Family Em.lo ee Famil
Deductible is$1000 for employee and
Medical/Health 4,764 14,604 3,811 11,683 $2000 for family.
Insurance Maximum out of pocket for employee
only is $2000 and for family is$4000.
Office visit co-pay is$25.
$50 deductible per person. Co-pay
Dental Insurance 285.60 987.60 229 790 depends on procedure and ranges
from 20 to 40%. No out-of-pocket
maximum.
Not included.
Vision Insurance N/A N/A N/A N/A
$40,000 policy, additional voluntary
Life Insurance 48 N/A 48 N/A term life insurance offered to
employee and family but not covered
by company.
Voluntary. Depends on age and salary.
Short Term Disability 318.60 N/A 0 N/A Estimate
(STD)
Depends on age and salary. Pays up to
Long Term Disability 166.20 N/A 166.20 N/A 60%of salary.
(LTD)
* If the business's plan is self-insured,please use the amount paid by the business for costs associated with employee and family coverage
during the past three years and then,determine the business'average annual contribution per employee for that three year period.
Does the Business offer a pension plan, 401(k) plan, and/or retirement-plan? ® Yes E No
If yes, please indicate the amount contributed on a per employee basis by the Business to the plan. For 401(k) plans, please
provide information on the company match and ndicate the average annual match per employee(show average as a
percentage of salary).
Company contributes up to 2% match for employee contribution.
Does the Business offer a profit-sharing plan? ❑ Yes ® No
If yes, please indicate total amount paid out each year for the past three years and then, determine the average annual bonus or
contribution per employee for that three year period.
Given that HQAA is a not-for-profit,there is no profit-sharing plan.
Does the Business offer child care services? ❑ Yes ® No
Child care services include child care services on-site at the facility in which the project will occur or off-site child care
subsidized by the business at the rate of 50% or more of the costs incurred by an employee.
Section A—Applicant&Project Information 10
13. Identify the Business'competitors. If any of these competitors have Iowa locations, please explain the nature of the
competition(e.g.competitive business segment, estimated market share, etc.) and explain what impact the proposed
project may have on the Iowa competitor.
HQAA has many competitors.There are at least 10 other entities which have been approved by CMS to evaluate and accredit
distributors of home medical equipment. Many of these entities have many years of experience and have plentiful access to
capital to enable them to compete very effectively. The advantage of HQAA is an innovative approach to accreditation which
leverages technology to handle the tremendous paperwork.
Accreditation is a recently imposed rule by CMS.At this time, the market is wide open for all companies and it is difficult to
assess market share in this rapidly developing market. HQAA has the goal of establishing itself as one of the 4 main
accreditation agency in the country which more than 25% market share within 5 years.
14. Will any of the current Iowa employees lose their jobs if this project does not proceed in Iowa?
® Yes ❑ No
If yes, please explain why and identify those jobs as"retained jobs"in the following question.
In case of relocation it will not be reasonable for HQAA to transfer the majority of the jobs in Waterloo to another city outside of
Iowa.At most,the Executive Director and perhaps one other person would relocate with the business and HQAA would then
hire locally the personnel required which would be easier in a larger city.
Section A—Applicant&Project Information 11
15. List the jobs that will be retained and/or created as the result of this project. (A retained job is an existing job that
would be eliminated or moved to another state if the project does not proceed in Iowa.) For retained jobs, include the current
hourly wage rate. For jobs to be created, including the starting hourly wage rate.
Job Title Skills,Education,or Experience Number of Retained(R)or Starting or Current Wage
Required Jobs Created(C) Rate
Year 1 of the Project
Executive Director Masters Degree,extensive 1 R $95,000
experience in quality and
healthcare
Director of Quality and 4-year degree,extensive 1 R $92,000
Compliance experience in quality and
healthcare
Accreditation Manager Degree preferred in healthcare 1 R $37,000
related field,extensive healthcare
experience-preferably in HME
business
Accreditation Coach Degree preferred,experience in 2 R $25,000
healthcare related business
Administrative Support Degree preferred,prior experience 1 R $25,000
as administrative assistant
Accreditation Coach Degree preferred,experience in 4 C $28,000
healthcare related business
Accountants Accounting degree,CPA preferred, 1 C $40,000
previous financial experience
Director of Business 4-year degree,extensive 1 C $55,000
Development experience and network in HME
industry,minimum of 10 years
work experience
Training and Education 4-year degree,experience in 1 C $45,000
Manager quality and/or accreditation
Director of IT 4-year degree,extensive IT 1 C $70,000
experience especially in the
development of web applications
IT Support Manager 4-year degree,2-3 prior experience 1 C $40,000
in IT
Administrative Support Degree preferred.prior experience 1 C $25,000
as administrative assistant
HR Manager Degree preferred with extensive 1 C $40,000
experience as HR manager
Year 1 Subtotal 17
Year 2 of the Project
Accreditation Manager Degree preferred in healthcare 1 C $42,000
related field,extensive healthcare
experience-preferably in HME
business
Accreditation Coach Degree preferred,experience in 5 C $29,400
healthcare related business
Accountants Accounting degree,CPA preferred, 2 C $42,000
previous financial experience
Director of Business 4-year degree,extensive 2 C $57,750
Development experience and network in HME
industry,minimum of 10 years
work experience
Training and Education 4-year degree,experience in 1 C $47,250
Section A—Applicant&Project Information 12
Manager quality and/or accreditation
IT Support Manager 4-year degree,2-3 prior experience 2 C $42,000
in IT
Administrative Support Degree preferred,prior experience 1 C $26,250
as administrative assistant
HR Manager Degree preferred with some 1 C $42,000
experience in HR
Year 2 Subtotal 15
Year 3 of the Project
Accreditation Manager Degree preferred in healthcare 1 C $44,100
related field,extensive healthcare
experience-preferably in HME
business
Accreditation Coach Degree preferred,experience in 6 C $30,870
healthcare related business
Accountants Accounting degree,CPA preferred, 2 C $44,100
previous financial experience
Director of Business 4-year degree,extensive 1 C $60,380
Development experience and network in HME
industry,minimum of 10 years
work experience
Training and Education 4-year degree,experience in 2 C $49,613
Manager quality and/or accreditation
IT Support Manager 4-year degree,2-3 prior experience 2 C $44,100
in IT
Year 3 Subtotal 14
Total Number of Retained Jobs: 6
Total Number of Created Jobs: 40
Section A—Applicant&Project Information 13
16. Discuss each of the following items with respect to the proposed project:
a) the current employment conditions in the community, include any business closures, unemployment rates,etc.
and if applicable, the community's need for assistance in attracting the Business.
The current employment conditions are not favorable for HQAA. There is a lack of available quality personnel in the
community with significant healthcare experience. HQAA will be forced to hire people and invest heavily to train them
in the specifics of this industry.
b) impact of the proposed project on the community and the state, include projections that reflect the impact on local
and state tax revenue and any additional costs the community will incur as the result of the proposed project;
No other business like HQAA is located in Iowa and it is unlikely that any other business will consider locating here.
There are only a handful of entities that CMS has given authorization to perform the accreditation. HQAA plans to
create employment for high paying quality jobs that will contribute significantly to local and state tax revenue. In direct
payroll taxes alone, HQAA will pay nearly$500,000 over the next three years. This obviously exclude the multitude of
indirect benefits generated as a result of these employees economic activity in the community(purchasing a house,
increase in retail sales,etc.).
c) impact the proposed project will have on current employees, including the potential for increased skills and wages;
and
As mentioned previously, HQAA is required to invest heavily in training new employees due to the lack of available
employees with the appropriate skill set. This activity is helping to create an economic cluster in the Cedar Valley area
focused on the healthcare sector.The wages that HQAA will pay are significantly higher than the average wage for the
area.
d) impact the investment will have on the ability of the business to expand, upgrade, or modernize its capabilities.
The incentives requested are fundamentally aimed at providing HQAA with a top quality location in downtown
Waterloo.Without assistance,the expansion of HQAA will be severely limited and HQAA will actively consider it's
alternatives outside of the area and the State of Iowa.
17. Is the Business actively considering locations outside of Iowa? ® Yes E No
If yes,where and what assistance is being offered?
18. There are three general justifiable reasons for assistance. Check the box next to the reason why assistance is needed
to complete this project
® Financing Gap - The Business can only raise a portion of the debt and equity necessary to complete the
project. A gap between sources and uses exists and state and/or federal funds are needed to fill the gap.
® Rate of Return Gap — The Business can raise sufficient debt and equity to complete the project, but the
returns are inadequate to motivate an "economic person" to proceed with the project. Project risks outweigh the
rewards.
Locational Disadvantage(Incentive)—The Business is deciding between a site in Iowa (site A) and a site in
another state (site B) for its project. The Business argues that the project will cost less at site B and will require a
subsidy to equalize costs in order to locate at site A. The objective here is to quantify the cost differential between site
A and site B.
What measures were analyzed to determine the amount and form of assistance needed?
HQAA needs assistance to be able to expand and move into a quality downtown building and will partner will JSA
Development to achieve that goal. Unfortunately, despite the heavy investment required to renovate and remodel the
building,the lift in property value is nominal. After the investment of$1.5 M, the value of the building will increase from
$164,000 to about $452,000. This does not make economic sense and no "economic person" would reasonably
embark on such a project. We have a unique opportunity for a win for all parties. HQAA can receive financial
Section A—Applicant&Project Information 14
assistance to expand and remain witinin the State of Iowa, downtown Waterloo will receive a top quality downtown
building and the region and state benefit from the creation of stable high quality jobs that contribute to the tax base.
19. What amount of state assistance is requested based on the above-identified need? $
What type/form of assistance is preferred(e.g. loans,forgivable loans,tax incentives, etc.)?
20. Please indicate what program(s)the Business is applying to and download and submit those applicable sections:
® CEBA (Complete Section B)
® EZ (Complete Section C)
® HQJC (Complete Section D)
[ EVA (Complete Section E)
❑ VAAPFAP (Complete Section F)
❑ EDSA (Complete Section G)
The Department reserves the right to review this application and determine, based on the proposed project and available
program funds, which financial assistance program(s)is best suited for the Business'project. The actual program(s)utilized
may vary from the programs indicated above.
Section A—Applicant&Project Information 15
21. Return on Investment Information—Business Taxes
IDED is required to calculate the return on state and local government investments in this project. Data from other parts of the
application will be combined with the estimates requested below to calculate the required return on investment information.
Instructions for Question 21
- IDED is asking for a best estimate on the increase in taxes associated with this project.
- Estimates should only include the expected increase in tax liability resulting from this project.
- At minimum, IDED needs estimates for the first three years of the project.
- Show data as if no tax abatements or tax credits awarded for this project were taken.
- For partnership forms of ownership(e.g. limited partnerships, s-corporations, LLC,etc.), please estimate the
partners' increase in Iowa tax liability due to this project.
- Sales and use taxes refer to the taxes paid on materials,etc.that the Business purchases, not taxes you
collect from sales to your customers.
- Applicants will not be held to these numbers with respect to any award from or contract with IDED.
- This page of the application will automatically be treated as confidential.
Increase in Tax Collections Associated with this Project
State Business Taxes Year 1 Year 2 Year 3 Year 4 Year 5
State Corporate Income Tax* HQAA is a Not-for-Profit and therefore does not pay income tax
State Business Sales and Use Tax $120,000 $9,000 $12,000 $12,000 $12,000
*Insurance Companies: Provide State Insurance Premium Tax
Local Business Taxes Year 1 Year 2 Year 3 Year 4 Year 5
Local Real Estate Property Tax $16,000 $16,000 $16,000 $16,000 $16,000
Local Option Sales Tax $20,000 $1,500 $2,000 $2,000 $2,000
Section A—Applicant&Project Information 16
Attachments
Please attach the following documents:
Al Business Plan
At a minimum, include:
• marketing study,
No marketing study was performed but there was and is an excellent understanding of the market and the
potential.Accreditation has never before been mandatory and HQAA is among the select few that CMS has
approved.
• feasibility study,
The business is already operating
• projected profit and loss statements for three years into the future,
2007 2008 2009
Revenues 2,209,500 4,734,000 7,512,000
Expenses
Personnel 1,145,000 2,152,750 3,251,720
Employee benefits 119,600 254,800 405,600
Travel&Entertainment 240,000 488,000 720,000
Consulting expense 480,000 976,000 1,440,000
Other expenses 593,244 923,478 1,282,873
Net Revenue over expenses -368,344 -61,028 411,807
• project budget,
Remodeling cost for the building are as follows:
Exterior: $133,333
Interior-General $722,000
Mechanical $366,667
Electrical $150,000
Architect/Engineering Fees: $150,000
TOTAL COST ESTIMATE: $1,522,000
• production operations,
The accreditation process is described in the attached documents.
Section A—Applicant&Project Information 17
• management structure,
Mary Nicholas
Executive Director
Curtis McLees Rhonda Pierce Steve DeGenaro Open
Quality& Compliance Accrediation Support Surveys Marketing & Sales
• personnel needs,
Number of employees
50
45
40
35
30
25
20
15
10
5
0 - 11-71111
2007 2008 2009
• descriptions of product or process,
The accreditation process is described in the attached documents.
• status of product/process development, and
HQAA has its basic"product"development but will need to continue investing in personnel and technology in order
to stay competitive.
• patent status(if applicable).
Not applicable.
(Any information outlined above not included in the business plan should be submitted as supplemental information via
a separate attachment.)
A2 Copies of the Business' Quarterly Iowa Employer's Contribution and Payroll Report Summary Page(Page 1)for the
past year and a copy of the most recent payroll report for one pay period.
HQAA receives its payroll services from the VGM Group and therefore the employees are not broken out on a separate
report. The figures are the following:
Section A-Applicant&Project Information 18
Past Year
Gross wages: (Pending from Jane)
Withholding:
Most recent payroll
Gross wages:
Withholding:
A3 Affidavit that states the Business has rot, within the last five years,violated state or federal statutes, rules, and
regulations, including environmental and worker safety regulations,or, if such violations have occurred,that there were
mitigating circumstances or such violations did not seriously affect public health or safety or the environment.
A4 Financial Information (Existing Businesses Only)
• Profit and loss statements and balance sheets for past three year-ends;
• Current YTD profit and loss statement and balance sheet;
2007 YTD
Revenues 439,394
Expenses
Personnel 110,427
Employee benefits 6,896
Travel&Entertainment 41,157
Consulting expense 69,600
Other expenses 142,175
Net Revenue over expenses 69,137
The net revenues to date are positive but the projections for the year are negative. In order to qualify for the financial
assistance, HQAA will need to raise )oth wages and benefits for employees which will put a significant downward
pressure on the results of the company. The higher wages and benefits are reflected in the three-year projected P&L.
• Schedule of aged accounts receivable;
Unavailable at this time.
• Schedule of aged accounts payable; and
Unavailable at this time.
• Schedule of other debts.
HQAA currently owes more than $1 M to VGM in the form of a subordinated note.
Application Checklist
Section A—Applicant&Project Information 19
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Section B — CEBA
Life. j changing®
Which program component is the Business applying for?
❑ Small Business Gap Financing
❑ New Business Opportunity
❑ New Product Development
El Modernization Component
2. Funding Information:
Total Amount Requested: $
Loan Amount: $
Forgivable Loan Amount: $
See Chapter 53, Section 261 in the CEBA Administrative Rules for maximum funding amounts. The CEBA program is
not designed to provide 100% funding for any project and limits assistance based on the type of project submitted.
3. Security:
[ 1 Corporate Guaranty ❑ Surety Bonds
l UCC Financing Statement ❑ Mortgage on Real Estate
❑ Irrevocable Letter of Credit ❑ Escrow Account
❑ Personal Guarantee ❑ Other:
All awards secured by Personal Guarantees will require a current financial statement from each of the personal
guarantors, which must be attached to the application.
4. Does the business certify that at least: 10% of the positions to be created will be made available to qualified Promise
Job Participants? n Yes ❑ No
5. Are underground tanks(whether or not in current use)for the storage of petroleum products, agricultural or other
chemicals, waste oil or other liquid waste or any other inflammable,corrosive, reactive or explosive liquid or gas
located on the project site?
❑ Yes ® No If yes, please explain:
Will the Business be storing above-ground,on or about the project site, in tanks or otherwise, any liquid or gas (as
described above)or any inflammable, corrosive, reactive or explosive solid, for any length of time or any purpose?
❑ Yes ® No If yes, please specify:
Will the Business be treating,transporting or disposing of any liquid,gas,or solid (described above)either on or about
the project site or at a landfill or other treatment facility or upon any public street or highway, or on any waterway or
body of water,or in any aircraft?
❑ Yes ® No
If yes, please specify the substance and what the Business will be doing with it.
Section B—CEBA 12/21/2006 1
6. Does the Business generate solid or hazardous waste? ❑ Yes ® No
If yes, please describe and provide a copy of the Business'solid and hazardous waste reduction plans.
7. Does the project include the initial construction of any building or facility? ❑ Yes ® No
If yes, does the local jurisdiction have a local building code in place which it enforces through a system of plan reviews
and inspections? ❑ Yes ❑ No
Attachments
Please attach the following documents:
B3 Community resolution authorizing the submission of the application
Section B—CEBA 12/21/2006 2
I 0 VVA
Section C — Enterprise Zone
tife I changing. Program
1. In which Enterprise Zone will this project occur(include the zone's name, number, size in acres, and date certified)?
2. Please list any additional requirements adopted by the local Enterprise Zone Commission and how the Business will
meet each requirement.
Attachments
Please attach the following documents:
C1 Legal description of the business site on which the project will occur
C2 Detailed map (no larger than 8"x14") showing the business site in relation to the boundaries of the certified Enterprise
Zone
The local Enterprise Zone Commission should submit the following:
C4 Proof that the local Enterprise Zone Commission meeting, during which this application was approved, was open to the
public(i.e. public notice which was published and/or posted)
C5 Meeting minutes from the local Enterprise Zone Commission meeting,during which this application was approved
C6 Resolution by the local Enterprise Zone Commission approving this application
Section C—EZ 2/4/2005 1
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Black Hawk County Parcel Map
Parcel ID. 3913-25-1 O2-011
'Deed Folder. JSA DEVELOPMENT LLC
Parcel Address: 112.116E 4TH ST,WATERLOO,IA 50703
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Section C—EZ 2/4/2005 2
Healthcare Quality Association of Accreditation/ JSA Development LLC
The eligibility requirements of the Enterprise Zone for Business Projects:
❑ The business must make a minimum capital investment of$500,000.
The project will involve $1.5 million in building remodeling, as well as
approximately $486,000 additional funds in computer hardware, software, and
office furnishing. The breakdown of building remodeling costs is approximately:
Exterior- $133,333
Interior—general - $722,000
Mechanical - $366,667
Electrical - $150,000
❑ The business must create at least 10 full-time jobs and maintain them for at
least 10 years.
The business currently has 6 employees and plans the following creation of jobs:
Year 1: 11 new jobs created(17 total jobs after Year 1)
Year 2: 15 new jobs created
Year 3: 14 new jobs created
Thus,the business would create 40 new jobs and retain the existing 6 jobs.
❑ The business provides all full-time employees with the option of choosing a
standard medical and dental insurance plan of which the business pays 80%
of the premiums or a monetarily equivalent benefit.
Yes. (Page 10)
❑ The business must pay an average wage that meets or exceeds 90% of the
average county or regional wage,whichever is lower.
Yes. (Page 12)
❑ The business cannot be a retail establishment or a business whose entrance is
limited by cover charge or membership.
The business is neither.
❑ The business cannot close or reduce its operation in one area of the state and
relocate substantially the same operation in the Enterprise Zone.
This is a startup business as described primarily on Page 6, and created due to the
Medicare Modernization Act of 2003.
❑ The local Enterprise Zone Commission and the Iowa Department of
Economic Development must approve the business' proposed project prior to
project initiation.
This is the point we are currently at.
Application notes/updates:
The proposed project will involve a Development Agreement with e City of
Waterloo regarding tax rebates and parking. It may also involve the use of
Historic Tax Credits, the Enterprise Zone Tax Credits (10% for building,
equipment, etc. and additional 6.5% credit for research and development)
and benefits (state sales, service and use taxes refund, job training funds)
and potentially other State incentives such as CEBA, HQJC, etc. The
Enterprise Zone benefits will make the project more feasible for the
EZAgenda.May2907/25-May-07
developer. Mr. Walsh has been working with new businesses in other parts
of Downtown Waterloo for similar renovations: Jamesons, Bank Iowa, etc.
The sites is zoned "C-3" Central Business District which allows for such
professional office development. The renovation of this building for
professional office use would appear to be compatible to the plans for
Downtown Waterloo, and would be compatible to other professional office
buildings in this area —thus appearing to meet the requirements of the local
Enterprise Zone Comm Ission. The renovation of this project may also involve
the redevelopment of Newton's Square (small grass area between Newton's
Jewelry and Sub City II) for parking.
EZAgenda.May2907/25-May-07