Item 3C: Resolution Concerning Loan Guarantee Assistance

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ECC UGENE ITY OUNCIL AIS GENDA TEM UMMARY Adoption of Resolution 4860 Authorizing Submission of an Application to United States Department of Housing and Urban Development for Loan Guarantee Assistance and Related Matters Meeting Date: March 13, 2006 Agenda Item Number: 3C Department: Planning and Development Staff Contact: Denny Braud www.eugene-or.gov Contact Telephone Number: 682-5536 ISSUE STATEMENT The proposed resolution will enable the City of Eugene to apply for a Section 108 Loan Guarantee and to be granted access to Brownfield Economic Development Initiative grant funds. BACKGROUND The City was recently awarded a $2 million Brownfield Economic Development Initiative grant (Brownfield Grant) through the U.S. Department of Housing and Urban Development (HUD) to assist redevelopment projects within the City's Downtown and Riverfront urban renewal districts. The City was one of only eleven communities nationwide to receive Brownfield Grant funding. The $2 million grant is the maximum award available under the Brownfield Grant program and must be used in conjunction with a HUD Section 108 Loan Guarantee. The Intergovernmental Relations Committee approved the Brownfield Grant application submission in May 2005. HUD’s Section 108 program allows cities to borrow up to five times their annual Community Development Block Grant (CDBG) allocation. Based on Eugene’s most recent annual CDBG allocation, the Section 108 borrowing capacity is $7,895,000. The Section 108 and Brownfield Grant programs must be used for projects that meet CDBG National Objectives, primarily low-income benefit and elimination of slums and blight. Brownfield Grant funds are typically used to enhance the security or improve the viability of projects financed with Section 108 proceeds. The proposal for the Brownfield Grant and Section 108 funds is the creation of a loan pool targeted for redevelopment projects that will have positive economic and community development benefits within the City’s Downtown and Riverfront urban renewal districts. Each project funded by the loan pool would require City Council review and approval of a formal resolution, followed by HUD approval. In addition to meeting a CDBG National Objective, projects would need to meet HUD’s Section 108 loan underwriting criteria. Although the City’s proposed Section 108 application will not include a request for funding a specific project, it will provide an overview of the City’s approach to selecting and funding projects. Projects considered may include economic development, affordable housing, and public facilities. Project L:\CMO\2006 Council Agendas\M060313\S0603133C.doc