R2003-116 AUTHORIZING FUNDING AGREEMENT

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Economic & Urban Development I)eparhnent Memorandum # 03-69 July 28, 2003 TO: Honorable Mayor Osborne and City Council FROM: Steve Garm , 'ty Manager A. J. Krieger, sistant City Manage Linda J. Love, Neighborhood Pro ams anager � �- c- � �. ✓ SUBJECT: Section 108 Loan Program RECOMMENDATION: City staff recommends approval of a resolution authorizing the execution of the funding approvaUagreement with the U. S. Department of Housing and Urban Development (HUD) for $2.5 million in Section 108 loan assistance for the Near North Redevelopment Project. Execution of a funding agreement is necessary to draw down approved Section 108 funds. With � this additional $2.5 million allocation, the City now has access to a total of $5.5 million in Section 108 funds for the Near North Redevelopment Project. This process was necessary in ' order to use Section 108 funds previously allocated to downtown. BACKGROUND: Section 108 is a loan fund offered by H[TD to entitlement communities to advance economic development projects that meet national objectives specified by H[JD. Eligible expenditures include construction of infrastructure and other public improvements, all CDBG eligible economic development activities, property acquisition and clearance/demolition, among others. In 1995 the City of Decatur received approval for approximately$8.5 million in Section 1081oan assistance, allocating $6 million to the Longview Place area redevelopment project. The balance of$2.5 million was designated for downtown revitalization activities, of which just under $1.5 million was used for the One Main Place project. City Council approved that loan in early 1998. Since that time, Decatur Housing Authority was awarded the $34.8 million HOPE VI grant. The original Longview Place area redevelopment project was redefined to include the Decatur Housing Authority's Longview housing project located west of the raikoad and the project was renamed the Near North Redevelopment Project. During the summer of 2002, City staff explored the feasibility of using (and reallocating) the remaining 1995 Section 108 funds to finance the infrastructure improvements necessary to support the new residential development in the Near North. A determination was made by HCTD that the City could use the existing allocation of$6 million for the Near North; a new application was required to access other Section 1081oan assistance available to the City.