The Community Development Block grant the city is applying for to benefit 21st Century Systems is different than the county's revolving loan fund.
The McCook City Council unanimously approved Monday night at its regular meeting the application for a $505,000 CDBG grant, the Memorandum of Understanding and a resolution that allows the mayor to sign all grant related documents.
The city is requesting the CDBG Economic Development funds on behalf of the software application company 21st Century Systems Inc.
The company will occupy the entire fourth floor of the Keystone building. The building is now being renovated by the McCook Economic Development Corp. into a business center.
Of the amount requested for 21st Century Systems Inc., $300,000 will be used to build a data center in the basement of the Keystone.
Additionally, $200,000 will go toward the purchase of the equipment and furnishings for the data center and $5,000 to administer the grant.
21st Century Systems Inc. and lenders will provide $700,000 in matching funds. The total cost of the project is $1.2 million.
21st Century Systems will pay back $250,000 of the loan. The other $250,000 will be forgiven if 21 new jobs are created within three years, while retaining the seven positions currently in McCook.
In response to a question by Mayor Dennis Berry, Rex Nelson, director of the MEDC, said this is different than the county's revolving loan fund as money paid back by 21st Century Systems Inc. will go to the state and federal government and not to a revolving loan fund.
The county's revolving loan fund was started with a CDBG grant to two local dairies. The funds were paid back by the dairies to the county's revolving loan fund, and these funds are used for other businesses requesting loans.
"So if this whirly bird doesn't fly, the city is not on the hook," Mayor Dennis Berry emphasized.
Councilman Aaron Kircher added that the grant is similar to what the city did for Valmont, with half the loan forgiven with new jobs created.
Councilman Lonnie Anderson added that no city money is used, but that the city will be compensated with $5,000 for administrative fees.
The CDBG grant is not a new concept for this project but has been in the works for at least three years now, Nelson said. 21st Century Systems is investing more into the community than before and the grant is "a piece of the puzzle."
"All the pieces have come together," Nelson said.
In response to a question by Councilman Anderson, Nelson said the renovation of the Keystone should be "substantially completed" by June, with plans to occupy the building by August.