Item 3C: Resolution Concerning Loan Guarantee Assistance

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proposals would be selected for funding if they result in economic revitalization in connection with brownfields, are financially feasible, are within reasonable risk, are likely to be repaid, and clearly meet CDBG National Objectives. Project preference criteria, including project need and location, project effectiveness, and project impact, would also be used to review potential projects. The criteria would be designed to provide an objective evaluation of the applicant’s ability to produce an effective and timely outcome and of the project impact. There are two approaches to potential loan pool underwriting depending on the nature of the project. For projects where the City borrows money to lend to private developers, the City would maintain a six- step application process: 1) pre-application; 2) application; 3) administrative review; 4) Loan Advisory Committee review; 5) citizen participation; and 6) final review. Administrative review would include staff evaluation of evidence of site control, ability to repay, collateral, proposed costs, commitment of funds, need for public assistance, development team capacity/experience, and developer/owner commitment and character. Citizen participation would include a 30-day written public comment period and a public hearing before the CDBG Advisory Committee. Final review would include City Council review and resolution, followed by HUD approval. For public facility projects, the City would maintain a three step process: 1) administrative review; 2) citizen participation; and 3) final review. The process would be similar to when the City borrows money for a capital project. Following administrative review, the same citizen participation would be required as called for with private developer projects. Following a positive recommendation from the CDBG Advisory Committee, the application will follow the same final review as called for with private project applications. The council would review the project specific details and provide authorization for the borrowing. A major criterion in the Brownfield Grant award and the Section 108 application is project-readiness. Although no specific project funding request is being made at this time, there are several redevelopment opportunities that were highlighted in the City’s Brownfield Grant application, including the proposed Whole Foods redevelopment site, the Sears Building site being considered by the Oregon Research Institute, the industrial area proximate to the new federal courthouse, and the properties along West Broadway. In accordance with application requirements, the City’s CDBG Advisory Committee has held two public hearings, on February 1 and March 1, regarding the proposed Section 108 loan proposal. Opportunity for public comment was also made available during a 30-day written public comment period. On March 1, 2006, the CDBG Advisory Committee unanimously recommended submittal of the proposed $7,895,000 Section 108 application to HUD, with funding of future projects to be reviewed by the CDBG Advisory Committee and the City Council. It is important to note that the proposed submittal of this initial Section 108 application does not include a pledge of future CDBG funds at this time. The purpose of this application is to reserve the City’s ability to use the $2 million Brownfield Grant along with Section 108 funds for future redevelopment projects. Each project would need to go through a specific underwriting and approval process, as described above. L:\CMO\2006 Council Agendas\M060313\S0603133C.doc