Assignments

Several of the assignments listed below are found in the required textbook; page numbers can be found listed after each assignment.

Seidman, Karl F. Economic Development Finance. Sage, 2005. ISBN: 9780761927099.

Financial Analysis Worksheets

These worksheets are intended to extend and reinforce key financial analysis concepts and skills introduced in class. They summarize the purpose, interpretation, and formulas for key calculation and require several calculations and brief comments on their interpretation and related issues. Completion of the worksheets is required, but they will not be graded.

Class 5: Business Financial Statement Analysis Worksheet (PDF)
Class 8: City Plaza Real Estate Financial Analysis Worksheet (PDF)
Class 11: Orlando TIF Financial Analysis Worksheet (PDF)

Case Study Analyses

Five case study write-ups are listed on the syllabus. The background, financial data and assignment for each case is found in the corresponding chapter of the textbook, or separate case study material. Four of the case study write-ups include financial analysis and a brief (3 page) write-up that addresses the specific questions posed in the assignment. The written discussion should incorporate the results of the financial analysis required in the assignment, with the financial analysis or projections attached as an appendix. One case study involves analyzing a city’s development finance system and formulating recommendations to make it more effective. Four of the case studies can be found in the required textbook:

Class 6: Working Capital Loan Request Analysis (Crystal Clear Window Company) - Pages 103-110
Class 9: Employee Buyout Loan Request Analysis (Phoenix Forge) - Pages 123-132
Class 13: Federal Programs and Real Estate Finance (Inner City Supermarket) - Pages 334-340
Class 19: Development Finance System and CDFIs (Cleveland) (PDF)
Class 24: Raising Capital for a Development Finance Entity (Manufacturer’s Fund Recapitalization) - Pages 433-439

Term Project

The term project is only required for graduate students, and entails a team of graduate students working on a finance project for a client. This fall, four of the term projects are focused on financing issues related to economic development in Detroit. Only one team may work on a project. A brief (1-2 page) project work plan is due by Class 8. The final written project and other deliverables are due on Class 26.

Below are examples of student projects that were produced during the Fall 2016 iteration of the course.

“Leveraging Development Incentives in Detroit (PDF)” prepared for the Detroit Economic Growth Corporation

“Food Access Financing in Detroit (PDF - 3.7MB)” prepared for the Michigan Good Food Fund

This role play exercise will provide an opportunity to simulate the decision-making process for a community loan fund and apply the business finanace skills you have developed in the previous case studies. In the Phoenix Forge case, the Community Loan Fund (CLF) has before it a financing request from Phoenix Forge. The specif roles are indicated below.

The Loan Officer is responsible for presenting the loan request to the Community Loan Fund Board in a concise, clear manner that summarizes the request, why the loan is desirable for the CLF, key lending issues, and makes a recommendation. The President of the company will discuss Phoenix Forge’s business plan and why he/she believes the plan is sound and the company will succeed. The City Economic Development Director will discuss the benefits to the city, the city’s role in project financing, and why the city supports the project.

The CLF Chair is responsible for running the meeting, calling on individuals to speak, maintaining order and getting the CLF Board to reach a decision on what action to take on the loan request. THe balance of the CLF Board is composed of the following individuals:

A small business owner
The Chamber of Commerce Executive
2 bankers (including the loan officer from First National Bank, which is providing a line of credit to Phoenix Forge)
A community activist
A city councilor
A labor union representative

The role of the CLF Board is to ask questions regarding the proposed loan, the business plan, the financial projections and financing plan, and to make a decision on the loan request. Prior to class, each CLF Board member should consider the CLF mission, the issues raised in the case, specific concerns that their member would bring to the Board meeting, and be prepared with questions to ask.

After the role play we will discuss how the process worked and what it suggests about how the CLF might best structure its decision-making process. Please be prepared to discuss items that you thought should have been raised but were not, what issues were not addressed adequately, as wellas observations on how the process worked. Also consider what challenges were faced by the CLF Board in balancing community benefits and the project’s financial risks. How well did the baord balance these issues? How could CLF staff, the company, and local officials help make the CLF Board job easier? The role-play will last about 50 minutes with the balance of class time used to discuss and reflect upon it and the case. The presentations should be brief, with the Loan Officer taking 5-7 minutes; the Company President taking 3-5 minutes; the City Economic Development Director taking 3-5 minutes, and the Phoenix Forge Employee and Community Leader each hacing 1-2 minutes. The CLF Board will then have 30 minutes to ask questions, discuss the loan request, and make a decision.

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Financing Economic Development