Item A: Downtown Development Financial Tools

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B. Brownfields Economic Development Initiative Grant (with HUD Section 108 Loan) BEDI / Section 108 Summary $2 million BEDI grant awarded to the City in 2006 $7.95 million Section 108 loan received initial approval from HUD Council approved ordinance authorizing Section 108 borrowing program in February Individual project approval process: Public hearing at City Council o Council approval (resolution) o HUD approval o Project must meet HUD national objective Benefit low/mod income through job creation o Eliminate conditions of slums and blight o Projects must be in Downtown or Riverfront urban renewal districts Section 108 funds must be repaid to HUD Primary collateral and debt service for Section 108 borrowing would be urban renewal. Secondary collateral must also include the City’s pledge of future CDBG funds City general fund may not be used as collateral The City was awarded a $2 million BEDI grant to assist redevelopment projects within the City's Downtown Urban Renewal and Riverfront Urban Renewal Districts. BEDI funds must be used in conjunction with a Section 108 guaranteed loan. The US Department of Housing and Urban Development (HUD) administers the BEDI as a key competitive grant program to stimulate and promote economic and community development. BEDI is designed to assist cities with the redevelopment of abandoned, idle, and underused industrial and commercial facilities where expansion and redevelopment is burdened by real or potential environmental contamination. BEDI grant funds are targeted for use in the redevelopment of brownfield sites in economic development projects to increase economic opportunities for low- and moderate-income persons as part of the creation or retention of jobs and to eliminate conditions of slums and blight. Section 108 is the loan guarantee provision of the federal Community Development Block Grant (CDBG) program. Section 108 allows cities to borrow up to five times their annual CDBG allocation; thereby, providing communities with a source of financing to support large-scale economic development, housing rehabilitation, and public facility projects. In March 2006, the City submitted a $7,895,000 Section 108 application that HUD later approved. Section 108 funds will be combined with BEDI funds to create a loan fund for redevelopment projects within the two urban renewal districts that will make positive economic and community development benefits. Council authorized the use of the Section 108 loan program in an ordinance in February. To draw down Section 108/BEDI funds, the specific project funding request is subject to a HUD public comment process, and a public hearing is required, followed by City Council and HUD approval. Projects that receive Section 108/BEDI funds must 1) meet a CDBG national objective of benefiting low or moderate income persons or eliminating conditions of slums or blight, 2) lead to economic revitalization in connection with brownfields, 3) be financially feasible, 4) be within reasonable risk, 5) be likely to be repaid, and 6) provide permanent, full-time employment for low and moderate income individuals. Example: No previous use in Eugene. Page 5 of 13