R2002-108 ENDORSING THE SUBMISSION OF AN APPLICATION

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� , . + r. Neighborhood Services Department Memorandum #02-23 June 10, 2002 TO: Honorable o Howley and City Council FROM: Steve Garma , ty Manager A. J. Kriege sistant City Manager Linda J. Love, eighborhood Servic s rector - 5UBJECT: Section 108 Loan Application RECOMMENDATION: City staff recommends approval of a resolution authorizing the submittal of a Section 108 Loan Application to the U. S. Department of Housing and Urban Development (HUD) for $8,430,000. The proceeds will be used for eligible activities in the Near North Redevelopment Project, including infrastructure and other public/capital improvements. The loan will be repaid by using a portion of the City of Decatur's annual CDBG entitlement allocation. BACKGROUND: Section 108 is a loan fund offered by HUD to entitlement communities to advance economic development projects that meet national objectives. 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 was awarded an approximately $8.5 million Section 108 Loan, which allocated approximately $6,000,000 to the Near North project and the balance to redevelopment activities downtown; of which just under $1.5 million was used for the One Main Place project. City Council approved that loan in early 1998. City staff is exploring with HiJD the feasibility of using (and reallocating) the remaining 1995 108 funds to finance the infrastructure improvements necessary to support new residential development in the Near North. Based on preliminary indications from HUD it may be possible for the City to use some of the 1995 funds for Phase I infrastructure. However, since the boundaries of the Near North Redevelopment Area have been revised to include Longview Place, a new Section 108 Loan Application will be required for funding infrastructure and other improvements beyond Phase 1. POTENTIAL OBJECTION: City staff is not aware of any objection to this 108 loan application. The City is currently within a 30-day public comment period. As of the time of this memorandum's writing, City staff has not received any opposition. INPUT FROM OTHER SOURCES: Attached is a copy of the application. City staff has been working closely with representatives from HUD in both Chicago and Washington D.C.