Item 3H: Approval of Funding for CDBG and HOME Programs

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Administration - $420,000 in new funds will be used for project implementation, fair housing activities, the City’s Central Services allocation, the annual audit, and general program administration. This is the same amount as the last three annual allocations. Section 108 Loan Guarantee Program In July 2006, HUD approved the City’s Section 108 application for funding to create a $9,895,000 loan pool, together with Brownfield Economic Development Initiative (BEDI) grant funds, for redevelopment projects within the Downtown and Riverfront urban renewal districts. On February 26, 2007, the City Council approved an ordinance authorizing the use of the HUD Section 108 loan as a financing tool. The non-emergency ordinance established the City’s general ability to borrow for Section 108 projects with the stipulation that individual projects be approved by council resolution. The City received approval for its first individual Section 108 project for the acquisition of downtown property from the Portland field office in August of 2007. Due to unanticipated changes in the development financing and plan for the West Broadway redevelopment area, the individual project application was revised in March 2008. The revised application proposes to utilize a combination of federal and local funds to support the redevelopment of properties at the heart of downtown, along Broadway and Willamette Street. Specifically, the City seeks to acquire two properties (four tax lots) with $3.91 million in Federal Section 108 Loan Guarantee Program funds and $0.99 million in BEDI grant funds (the Properties). The City will work with Beam Development to remake the important intersection of Willamette and Broadway into a vital area with restaurants, a mix of national and local retailers, and office space. The scale of the buildings will entail new construction of a five-story building and historic rehabilitation of the existing five-story and two-story buildings known as the Centre Court and Washburne buildings, respectively. The national objective for this first individual Section 108 project is the elimination of slums and blight. The City anticipates participation in the Beam project with the use of Section 108/BEDI funds in two phases. In the first phase (Section 108 Loan #1), the City will acquire the properties. In the second phase (Section 108 Loan #2), the City anticipates providing a second layer of construction financing to Beam through a loan of Section 108/BEDI funds. HOME Investment Partnerships Program/American Dream Downpayment Initiatitve The Eugene-Springfield Consortium will receive $1,404,399 in Federal HOME Investment Partnerships Program (HOME) funding in fiscal year 2008/09. These funds will continue to be split 70/30 between the two jurisdictions; Eugene will receive $983,079 and Springfield will receive $421,320. HOME funds can be used for acquisition and development of housing affordable to low- and moderate-income households, rehabilitation, homebuyer programs, rental assistance, support of local Community Housing Development Organizations (CHDO) and HOME program administration. In addition to HOME Program funds, the Consortium will receive funding through the American Dream Downpayment Initiative (ADDI), which was signed into law on December 16, 2003. This program provides down payment, closing costs, and rehabilitation assistance for first-time homebuyers and will be administered as part of the HOME Program. In fiscal year 2008/09, the consortium will receive $10,989, split 70/30 between Eugene and Springfield. This amount is a reduction of $16,208 from last year’s allocation. Eugene will receive $7,692 and Springfield will receive $3,297. Staff proposes that HOME funds be divided among three program areas: 1) Housing Development Programs; 2) Homebuyer Assistance Program (HAP); and 3) CHDO Operating Support. This proposal F:\CMO\2008 Council Agendas\M080414\S0804143H.doc