Brownfields Economic Development Initiative (BEDI)

PROGRAM DESCRIPTION:Approximately $25 million is available for Brownfields Economic Development Initiative (BEDI) grants under Section 108(q) of the Housing and Community Development Act of 1974, as amended. BEDI funds are used to enhance the security of the Section 108 guaranteed loan for the same project or to improve the viability of a project financed with a Section 108-guaranteed loan. A BEDI grant is required to be used in conjunction with a new Section 108 guaranteed loan commitment.

APPLICATION DUE DATE: Completed applications (one original and two copies) must be submitted no later than 12:00 midnight, Eastern time, on August 10, 1998 to the addresses shown below. See the General Section of this SuperNOFA for specific procedures governing the form of application submission (e.g., mailed applications, express mail, overnight delivery, or hand carried).

To HUD Headquarters. The completed application (an original and one copy) must be submitted to: Processing and Control Unit, Room 7255, Office of Community Planning and Development, Department of Housing and Urban Development, 451 Seventh Street, SW, Washington, D.C. 20410, Attention: BEDI Grant, by mail or hand delivery.

To the Appropriate CPD Field Office. An additional copy should be submitted to the Community Planning and Development Division of the appropriate HUD Field Office for the applicant's jurisdiction.

When submitting your application, please refer to BEDI, and include your name, mailing address (including zip code) and telephone number (include area code).

For Application Kits. For an application kit and any supplemental information, please call HUD's SuperNOFA Information line toll free at 1-800-HUD-8929. Persons with hearing or speech impairments may call the Center's TTY number at 1-800-HUD-2209 to obtain an application kit. The application kit will also be available on the Internet through the HUD web site at http://www.hud.gov. When requesting an application kit, please refer to BEDI. Please be sure to provide your name, address (including zip code), and telephone number (including area code).

For Further Information and Technical Assistance. Contact either Stan Gimont or Paul Webster, Financial Management Division, Office of Block Grant Assistance, Department of Housing and Urban Development, 451 Seventh Street, SW, Room 7178, Washington, DC 20410, telephone (202) 708-1871 (this is not a toll-free number). Persons with speech or hearing impairments may access this number via TTY by calling the toll-free Federal Information Relay Service at 1-800-877-8339.

See the General Section of this SuperNOFA for guidance on technical assistance. With respect to the Section 108 Loan Guarantee program, which is not a competitive program and thus not subject to those provisions of the HUD Reform Act pertaining to competitions, HUD staff will be available to provide advice and assistance to develop Section 108 loan applications.

(A)Authority. Section 108(q), Title I, Housing and Community Development Act of 1974, as amended, (42 U.S.C. 5301-5320) (the Act); 24 CFR part 570.

(B)Definitions. Unless otherwise defined herein, terms defined in 24 CFR part 570 and used in this program section of this SuperNOFA shall have the respective meanings given thereto in that part.

Brownfield means abandoned, idled, or under-used real property (including industrial and commercial facilities) where expansion or redevelopment is complicated by real or suspected contamination.

Brownfields Economic Development Initiative (BEDI) means the competitive award of up to $25 million, as appropriated in the FY 1998 HUD Appropriations Act, for economic development grant assistance under section 108(q) of the Act for the purpose of assisting public entities in the redevelopment of brownfields.

CDBG funds means those funds as defined at 24 CFR 570.3, including grant funds received pursuant to section 108(q) and this program section of this SuperNOFA.

Economic Development Initiative (EDI) means the provision of economic development grant assistance under section 108(q) of the Act, as authorized by Section 232 of the Multifamily Housing Property Disposition Reform Act of 1994 (Pub.L. 103-233, approved April 11, 1994).

Economic development project means an activity or activities (including mixed use projects with housing components) that are eligible under the Act and under 24 CFR 570.703, and that increase economic opportunity for persons of low- and moderate-income or that stimulate or retain businesses or jobs or that otherwise lead to economic revitalization in connection with brownfields.

Empowerment Zone or Enterprise Community means an urban area so designated by the Secretary of HUD pursuant to 24 CFR part 597, or a rural area so designated by the Secretary of Agriculture pursuant to 7 CFR part 25, subpart B.

EPA means the U.S. Environmental Protection Agency.

Showcase Community means an applicant chosen by the Federal Government's Brownfields National Partnership for inclusion in Federal Government's Brownfields Showcase Communities program.

Strategic Plan means a strategy developed and agreed to by the nominating local government(s) and State(s) and submitted in partial fulfillment of the application requirements for an Empowerment Zone or Enterprise Community designated pursuant to 24 CFR part 597.

(C)Purpose.

(1) Background. HUD has multiple programs which are intended to stimulate and promote economic and community development and can be effectively employed to address and remedy brownfield conditions. Primary among HUD's resources are the Community Development Block Grant (CDBG) program and the Section 108 loan guarantee program.

The CDBG program provides grant funds ($4.195 billion in FY 1998) to local governments (either directly or through States) to carry out community and economic development activities. The Section 108 loan guarantee program provides local governments with a source of financing for economic development, housing rehabilitation, and other eligible large scale physical development projects. HUD is authorized pursuant to Section 108 to guarantee notes issued by CDBG entitlement communities and non-entitlement units of general local government eligible to receive funds under the State CDBG program. Regulations governing the Section 108 program are found at 24 CFR part 570, subpart M. It must be noted that the Section 108 program is subject to the regulations of 24 CFR part 570 applicable to the CDBG program with the exception of changes embodied in 24 CFR part 570, subpart M.

For FY 1998, the Section 108 program is authorized at $1.261 billion in loan guarantee authority. The full faith and credit of the United States is pledged to the payment of all guarantees made under Section 108. Under this program, communities (and States, if applicable) pledge their future years' CDBG allocations as security for loans guaranteed by HUD. The Section 108 program, however, does not require CDBG funds to be escrowed for loan repayment (unless such an arrangement is specifically negotiated as loan security). This means that a community can continue to spend its existing allocation for other CDBG purposes, unless needed for loan repayment.

(2) EDI Program. The EDI program was enacted in 1994 and is intended to complement and enhance the Section 108 Loan Guarantee program. The purpose of EDI (and BEDI) grant funds is to further minimize the potential loss of future CDBG allocations:

(a) By strengthening the economic feasibility of the projects financed with Section 108 funds (and thereby increasing the probability that the project will generate enough cash to repay the guaranteed loan);

(b)By directly enhancing the security of the guaranteed loan; or

(c)Through a combination of these or other risk mitigation techniques.

(3) BEDI Program. For FY 1998, the Congress made a specific appropriation of approximately $25 million for the EDI program to assist in financing "brownfields" redevelopment. HUD intends the $25 million in Brownfields EDI (BEDI) funds available pursuant to this program section of this SuperNOFA to be used with a particular emphasis upon the redevelopment of brownfield sites consistent with the statutory purpose of the FY 1998 HUD Appropriations Act. Accordingly, BEDI funds shall be used as the stimulus for local governments and private sector parties to commence redevelopment or continue phased redevelopment efforts on brownfield sites where contamination is known or suspected and redevelopment plans exist. HUD desires to see BEDI and Section 108 funds used to finance projects and activities that will provide near-term results and demonstrable economic benefits, such as job creation and increases in the local tax base. HUD does not encourage applications whose scope is limited only to site acquisition and/or remediation (i.e., land banking).

(4) Redevelopment Focus. The redevelopment focus for BEDI-assisted projects is also prompted by the need to provide additional security for the Section 108 loan guarantee pursuant to 24 CFR 570.705(b)(3). While public entities are required by the Act to pledge their current and future CDBG funds as a source of security for the Section 108 loan guarantee, the public entity will usually be required to furnish additional collateral which, ideally, will be the assets financed with the Section 108 loan funds. Clearly, a redevelopment focus for the BEDI funds will help achieve this goal by enhancing the value and improving the viability of projects assisted with Section 108 financing.

(5) Integration of Other Government Brownfield Programs. HUD expects and encourages local governments which are designated through the Federal Government's Brownfields Showcase Community program or other brownfields programs (i.e., EPA's Assessment Pilot or Revolving Loan Fund programs) or a State-supported brownfields program or related economic development program to integrate efforts arising from those programs in developing projects for assistance under HUD's BEDI and Section 108 programs. Such applicants should elaborate upon these ties in their response to the rating factors, where appropriate (e.g. "Capacity of the Applicant," "Soundness of Approach," or "Leveraging Resources," - Rating Factors 1, 3, and 4 respectively.)

(6) Typical Project Structures. Provided that proposals are consistent with other CDBG requirements, including national objectives, HUD envisions that the following project structures could be typical:

(a) Land Writedowns. Local governments may use a combination of Section 108 and BEDI funds to acquire a brownfield site for purposes of reconveying the site to a private developer at a discount from its purchase price. This approach would provide the developer with an asset of enhanced value which could be used as collateral for other sources of funding. Such other sources of financing could be used to finance environmental remediation or other development costs. In theory, the level of BEDI assistance would approximate the difference between the original cost of the site and its remediation in comparison to the market value of the remediated property.

(b) Site Remediation Costs. Local governments may use BEDI funds in any of several ways to address site remediation costs. If the local government used Section 108 funds to acquire real property, BEDI funds could be used to address assessment and site remediation costs as part of demolition, clearance, or site preparation activities. If the local government used Section 108 funds to make a loan to a developer, BEDI funds could be granted to the developer for the purpose of addressing remediation costs as part of an economic development activity.

(c) Funding Reserves. The cash flow generated by an economic development project may be expected to be relatively "thin" in the early stages of the project, i.e. potentially insufficient cash flows to meet operating expenses and debt service obligations. The BEDI grant can make it possible for reserves to be established in a way that enhances the economic feasibility of the project.

(d) Over-Collateralizing the Section 108 Loan.

(i) The use of BEDI grant funds may be structured in appropriate cases so as to improve the likelihood that project-generated cash flow will be sufficient to cover debt service on the Section 108 loan and directly to enhance the guaranteed loan. One technique for accomplishing this approach is over-collateralization of the Section 108 loan.

(ii) An example is the creation of a loan pool made up of Section 108 and BEDI grant funds. The community would make loans to various businesses from the combined pool at an interest rate equal to or greater than the rate on the Section 108 loan. The total loan portfolio would be pledged to the repayment of the Section 108 loan.

(e) Direct Enhancement of the Security of the Section 108 Loan. The BEDI grant can be used to cover the cost of providing enhanced security. An example of how the BEDI grant can be used for this purpose is by using the grant funds to cover the cost of a standby letter of credit, issued in favor of HUD. This letter of credit will be available to fund amounts due on the Section 108 loan if other sources fail to materialize and will, thus, serve to protect the public entity's future CDBG funds.

(f) Provision of Financing to For-Profit Businesses at a Below Market Interest Rate.

(i) While the rates on loans guaranteed under Section 108 are only slightly above the rates on comparable U.S. Treasury obligations, they may nonetheless be higher than can be afforded by businesses in severely economically distressed neighborhoods. The BEDI grant can be used to make Section 108 financing affordable.

(ii) BEDI grant funds could serve to "buy down" the interest rate up front, or make full or partial interest payments, allowing the businesses to be financially viable in the early start-up period not otherwise possible with Section 108 alone. This strategy would be particularly useful where a community was undertaking a large commercial/retail project in a distressed neighborhood to act as a catalyst for other development in the area.

(g) Combination of Techniques. An applicant could employ a combination of these or other techniques in order to implement a strategy that carries out an economic development project.

(D)Amount Allocated. HUD has available a maximum of $25 million for the BEDI program, as appropriated in the FY 1998 HUD Appropriations Act for the purpose of assisting public entities in the redevelopment of brownfields.

(E)Eligibility to Apply for Grant Assistance.

Any public entity eligible to apply for Section 108 loan guarantee assistance in accordance with 24 CFR 570.702 may apply for BEDI grant assistance under section 108(q). Eligible applicants are CDBG entitlement units of general local government and non-entitlement units of general local government eligible to receive loan guarantees under 24 CFR part 570, subpart M. Note that effective January 25, 1995, non-entitlement public entities in the states of New York and Hawaii were authorized to apply to HUD for Section 108 loans (see 59 FR 47510, December 27, 1994). Thus non-entitlement public entities in all 50 states and Puerto Rico are eligible to participate in the Section 108 and BEDI programs.

(F)Related Section 108 Loan Guarantee Application.

(1) Each BEDI application must be accompanied by a request for new Section 108 loan guarantee assistance. Both the BEDI and Section 108 funds must be used in conjunction with the same economic development project. This request may take any of several forms as defined below.

(a) A formal application for new Section 108 loan guarantee(s), including the documents listed at 24 CFR 570.704(b);

(b) A brief description (not to exceed three pages) of a new Section 108 loan guarantee application(s). Such 108 application(s) will be submitted within 60 days, with HUD reserving the right to extend such period for good cause on a case-by-case basis, of a notice of BEDI selection. BEDI awards will be conditioned on approval of actual Section 108 loan commitments. This description must be sufficient to support the basic eligibility of the proposed project or activities for Section 108 assistance. (See Section I(G) of this program section of this SuperNOFA.);

(c)If applicable, a copy of a Section 108 loan guarantee approval document with grant number and date of approval (which was approved after the date of this SuperNOFA, except in conjunction with a previous EDI award); or

(d)A request for a Section 108 loan guarantee amendment (analogous to Section I(F)(1)(a) or (b) of this BEDI section of the SuperNOFA) that proposes to increase the amount of a previously approved application. However, any amount of Section 108 loan guarantee authority approved before the date of this SuperNOFA is not eligible to be used in conjunction with a BEDI grant under this SuperNOFA.

(2) Further, a Section 108 loan guarantee amount that is required to be used in conjunction with a prior EDI grant award, whether or not the Section 108 loan guarantee has been approved as of the date of this SuperNOFA, is not eligible for a BEDI award under this SuperNOFA. For example, if a public entity has a previously approved Section 108 loan guarantee commitment of $12 million, even if none of the funds have been utilized, or if the public entity had previously been awarded an EDI grant of $1 million and had certified that it will submit a Section 108 loan application for $10 million in support of that EDI grant, the public entity's application under this program section of this SuperNOFA must propose to increase the amount of its total Section 108 loan guarantee commitments beyond those amounts (the $12 million or $10 million in this example) to which it has previously agreed.

(G)Eligible Activities and National Objectives.

BEDI grant funds may be used for activities listed at 24 CFR 570.703, provided such activities are carried out as part of an economic development project as defined in Section I(B) of this BEDI section of this SuperNOFA. Each activity assisted with Section 108 loan guarantee or BEDI funds must meet a national objective of the CDBG program as described in 24 CFR 570.208. In the aggregate, a grantee's use of CDBG funds, including any Section 108 loan guarantee proceeds and section 108(q) (EDI) funds provided pursuant to this program section of this SuperNOFA, must comply with the CDBG primary objectives requirements as described in section 101(c) of the Housing and Community Development Act of 1974, as amended, and 24 CFR 570.200(c)(3) or 570.484 in the case of State grantees. The foregoing eligible activities may also include:

(1)Payment of costs of private financial guaranty insurance policies, letters of credit, or other credit enhancements for the notes or other obligations guaranteed by HUD pursuant to Section 108, provided that the proceeds of such notes or obligations are used to finance an economic development project. Such enhancements shall be specified in the contract required by 24 CFR 570.705(b)(1), and shall be satisfactory in form and substance to HUD for security purposes; and

(2) The payment of interest due (and other costs such servicing, underwriting, or other costs as may be authorized by HUD) on the notes or other obligations guaranteed by HUD pursuant to the Section 108 loan guarantee program.

(H)Limitations on Use of BEDI and Section 108 Funds. Certain restrictions shall apply to the use of BEDI and Section 108 funds:

(1)BEDI grants shall not be used as a resource to immediately repay the principal of a loan guaranteed under Section 108. Repayment of principal is only permissible with BEDI grant funds as a matter of security if other sources projected for repayment of principal prove to be unavailable.

(2) BEDI grant funds shall not be used in any manner by grantees to provide public or private sector entities with funding to remediate conditions caused by their actions, where the public entity (or other known prospective beneficiary of the proposed BEDI grant) has been determined responsible for causation and remediation by order of a court or a Federal, State, or local regulatory agency, or is responsible for the remediation as part of a settlement approved by such a court or agency.

(3) Applicants may not propose projects on sites which are listed or proposed to be listed on EPA's National Priority List (NPL). Further, applicants are cautioned against proposing projects on sites where the nature and degree of environmental contamination is not well quantified or which are the subject of on-going litigation or environmental enforcement action.

(4) Applicants are cautioned against using Section 108 funds to finance activities which also include financing generated through the issuance of federally tax exempt obligations. Pursuant to Office of Management and Budget (OMB) Circular A-129 (Policies for Federal Credit Programs and Non-Tax Receivables), Section 108 guaranteed loan funds may not directly or indirectly support federally tax-exempt obligations.

(I)Limitations on Grant Amounts.

(1) HUD expects to approve BEDI grant amounts for approvable applications at a range of ratios of BEDI grant funds awarded to new Section 108 loan guarantee commitments but the minimum ratio will be $1 of Section 108 loan guarantee commitments for every $1 of BEDI grant funds. However, applicants that propose a leverage ratio of 1:1 will not receive any points under the Rating Subfactor 4(1): "Leverage of Section 108 Funds."

For example, an applicant requesting a BEDI grant of $1 million will be required to leverage a minimum of at least $1 million in new Section 108 loan guarantee commitments. This will be a special condition of the BEDI grant award. Of course, even though there is a minimum ratio of 1:1, applications with higher ratios will receive more points under Rating Factor 4, "Leveraging Resources/Financial Need" and, all other things being equal, will be more competitive. Applicants are encouraged to propose projects with a greater leverage ratio of new Section 108 to BEDI grant funds (assuming such projects are financially viable). For example $1 million of BEDI could leverage $12 million of new Section 108 loan commitments. HUD intends that the BEDI funds will be used for projects which leverage the greatest possible amount of Section 108 loan guarantee commitments.

(2) HUD expects that the average grant size will be approximately $1 million.

(3) In the event the applicant is awarded a BEDI grant that has been reduced below the original request (e.g. the application contained some activities that were ineligible or there were insufficient funds to fund the last competitive application at the full amount requested), the applicant will be required to modify its project plans and application to conform to the terms of HUD approval before execution of a grant agreement. HUD reserves the right to reduce or de-obligate the BEDI award if approvable Section 108 loan guarantee applications are not submitted by the grantee in the required amounts on a timely basis. Any requested modifications must be within the scope of the original BEDI application.

(4) In the case of requested amendments to a previously approved Section 108 loan guarantee commitment (as further discussed in section I(F)(1)(d) above), the BEDI assistance approved will be based on the increased amount of Section 108 loan guarantee assistance.

(J)Timing of Grant Awards.

(1) To the extent a full Section 108 application is submitted with the BEDI grant application, the Section 108 application will be evaluated concurrently with the request for BEDI grant funds. Note that BEDI grant assistance cannot be used to support a Section 108 loan guarantee approved prior to the date of the publication of this SuperNOFA. However, the BEDI grant may be awarded prior to HUD approval of the Section 108 commitment if HUD determines that such award will further the purposes of the Act.

(2) HUD notification to the grantee of the amount and conditions (if any) of BEDI funds awarded based upon review of the BEDI application shall constitute an obligation of grant funds, subject to compliance with the conditions of award and execution of a grant agreement. BEDI funds shall not be disbursed to the public entity before the issuance of the related Section 108 guaranteed obligations.

In addition to the program requirements listed in the General Section of this SuperNOFA, applicants are subject to the following requirements.

(A)CDBG Program Regulations. The requirements of 24 CFR part 570, including subpart K (Other Program Requirements).

(B)Environmental Review.

After the completion of this competition and after HUD's award of BEDI grant funds, pursuant to 24 CFR 570.604, each project or activity assisted under this program is subject to the provisions of 24 CFR part 58, including limitations on the EDI grant and Section 108 public entity's commitment of HUD and non-HUD funds prior to the completion of environmental review, notification and release of funds. No such assistance will be released by HUD until a request for release of funds is submitted and the requirements of 24 CFR part 58 have been met. All public entities, including nonentitlement public entities, shall submit the request for release of funds and related certification, pursuant to 24 CFR part 58, to the appropriate HUD field office for each project to be assisted.

(C) Environmental Justice.

(1) Executive Order 12898 (Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations directs Federal agencies to develop strategies to address environmental justice. Environmental justice seeks to rectify the disproportionately high burden of environmental pollution that is often borne by low-income, minority, and other disadvantaged communities, and to ensure community involvement in policies and programs addressing this issue.

(2) Brownfields are often located in distressed neighborhoods, contribute to neighborhood blight, and lower the quality of social, economic, and environmental health of communities. The BEDI program is intended to promote the clean up and redevelopment of brownfield sites and, to this end, HUD expects that projects presented for BEDI funding will integrate environmental justice concerns and provide demonstrable benefits for affected communities and their residents.

(D) Compliance with Applicable Laws. Applicants are advised that an award of BEDI funding does not in any way relieve the applicant or third parties users of BEDI funds from compliance with all applicable Federal, State and local laws, particularly those addressing the environment. Applicants are further advised that HUD may require evidence that any project involving remediation has been or will be carried out in accordance with State law, including voluntary clean up programs.

(A)Rating and Ranking.
(1) Each rating factor and the maximum number of points is provided below. The maximum number of points to be awarded is 102. This includes two EZ/EC bonus points as described in the General Section of the SuperNOFA, or two bonus points for having received a federal designation as a Brownfields Showcase Community.

(2) Once scores are assigned, all applications will be ranked in order of points assigned, with the applications receiving more points ranking above those receiving fewer points. Applications will be funded in rank order.

(3) If HUD determines that an application rated, ranked and fundable could be funded at a lesser BEDI grant amount than requested consistent with feasibility of the funded project or activities and the purposes of the Act, HUD reserves the right to reduce the amount of the BEDI award and/or increase the Section 108 loan guarantee commitment, if necessary, in accordance with such determination. An application in excess of $1 million may be reduced below the amount requested by the applicant if HUD determines that such a reduction is appropriate.

(4) HUD may decide not to award the full amount of BEDI grant funds available under this program section of this SuperNOFA and may make any remaining amounts available under a future SuperNOFA.

(B) Narrative Statement. Each applicant shall provide a narrative statement describing the activities that will be carried out with the BEDI grant funds and explaining the nature and extent of the Brownfield's problems(s) affecting the project. The narrative statement shall not exceed three (3) 8.5" by 11" pages for the description of the activities to be carried out with the BEDI grant funds. The description of activities should include a statement of how the proposed uses of BEDI funds will meet the national objectives for the CDBG program under 24 CFR 570.208 and qualify as eligible activities under 24 CFR 570.703. Citations to the specific regulatory subsections supporting eligibility are recommended, but a narrative description will be accepted. See Section I(G) of this program section of this SuperNOFA. The applicant shall also provide a narrative response to the rating factors below. Each of the listed rating factors (or, where applicable, each subfactor) below also has a separate page limitation specified. Narrative statements must be printed in 12 point type/font, and have sequentially numbered pages.

(C) Factors for Award Used to Evaluate and Rate Applications. All applications will be considered for selection based on the following factors that demonstrate the quality of the proposed project or activities, and the applicant's creativity, capacity and commitment to obtain maximum benefit from the BEDI funds, in accordance with the purposes of the Act.

Rating Factor 1: Capacity of the Applicant and Relevant Organizational Experience (15 Points)

[Your response to this factor is limited to three (3) pages.]

This factor addresses the extent to which the applicant has the organizational resources necessary to successfully implement the proposed activities in a timely manner. The rating of the "applicant" or the "applicant's organization and staff" for technical merit or threshold compliance, unless otherwise specified, will include any faculty, subcontractors, consultants, subrecipients, and members of consortia which are firmly committed (i.e. has a written agreement or a signed letter of understanding with the applicant agreeing in principle to its participation and role in the project). In rating this factor, HUD will consider the following:

(1) With regard to the BEDI/Section 108 project proposed by the applicant, the applicant should demonstrate that it has the capacity to implement the specific steps required to successfully carry out the proposed BEDI/Section 108 project. This includes factors such as the applicant's:

(a) Performance in the administration of its CDBG, HOME or other programs;

(b) Previous experience, if any, in administering a Section 108 loan guarantee;

(c) Performance and capacity in carrying out economic development projects;

(d) Performance and capacity to carry out Brownfields redevelopment projects;

(e) Ability to conduct prudent underwriting;

(f) Capacity to manage and service loans made with the guaranteed loan funds or previous EDI grant funds;

(g) Capacity to carry out its projects and programs in a timely manner; and,

(h) If applicable, the applicant's capacity to manage projects under this program section of this SuperNOFA along with any federal funds awarded as a result of a federal urban Empowerment Zone/Enterprise Community designation. (2) If an applicant has previously received an EDI grant award(s), the applicant must describe the status of the implementation of that EDI-assisted project(s), any delays that have been encountered and the actions the applicant is taking to overcome any such delays in order to carry out the project in a timely manner. For such previously funded EDI grant projects, HUD will consider the extent to which the awarded EDI grant funds and the associated Section 108-guaranteed loan funds have been utilized.

(3) The capacity of subrecipients, nonprofit organizations and other entities that have a role in implementing the proposed program will be included in this review. HUD may also rely on information from performance reports, financial status information, monitoring reports, audit reports and other information available to HUD in making its determination under this factor.

Rating Factor 2: Distress/Extent of the Problem (15 Points)

[Your response to this factor is limited to three (3) pages.]

This factor addresses the extent to which there is need for funding the proposed activities based on levels of distress, and an indication of the urgency of meeting the need/distress in the target area.

(1) In applying this factor, HUD will consider current levels of distress in the immediate community to be served by the project and the jurisdiction applying for assistance. Applicants who are able to indicate a level of distress in the immediate project area that is greater than the level of distress in the applicant's jurisdiction as a whole will receive a higher score under this factor than those who do not. HUD requires that applicants use sound and reliable data that is verifiable to support the level of distress claimed in the application. The applicant shall provide a source for the information it uses.

(2)In previous EDI competitions, the poverty rate was often considered the best indicator of distress; however, the applicant may demonstrate the level of distress with other factors such as income levels and unemployment rates.

(3) HUD will consider a project to have maximum distress if the project(s) is located within the boundaries of a federally-designated Empowerment Zone or Enterprise Community (Applicants will be responsible for demonstrating that the project site is within the boundaries of the applicant's EZ/EC area).

(4)To the extent that the applicant's Consolidated Plan and its Analysis of Impediments to Fair Housing choice (AI) identifies the level of distress in the community and the neighborhood in which the project is being carried out, the applicant should include references to such documents in preparing its response to this factor.

Rating Factor 3: Soundness of Approach (25 Points)

[Your response to this factor is limited to three (3) pages.]

This factor addresses the quality and cost-effectiveness of the applicant's proposed plan. There must be a clear relationship between the proposed activities, community needs and purposes of the program funding for an applicant to receive points for this factor. In rating this factor, HUD will consider the following:

(1) HUD will consider the quality of the applicant's plan/proposal for the use of BEDI funds and Section 108 loan funds, including the extent to which the applicant's proposed plan for the effective use of BEDI grant/Section 108 loan guarantee will address the needs described in Rating Factor 2 above regarding the distress and extent of the problem in the applicant's immediate community and/or its jurisdiction.

(2) HUD will consider the extent to which the plan is logically, feasibly, and substantially likely to achieve its stated purpose. HUD's desire is to fund projects and activities which will quickly produce demonstrable results and advance the public interest including the number of jobs to be created by the project. An applicant should demonstrate that it has a clear understanding of the steps required to implement its project, the actions that it and others responsible for implementing the project must complete and shall include a reasonable time schedule for carrying out the project.

(3) The applicant's response to this factor should take into account certain site selection, planning, and environmental issues. Further, applicants are cautioned against proposing projects on sites where the nature and degree of environmental contamination is not well quantified or which are the subject of on-going litigation or environmental enforcement. To reiterate, HUD's desire is to fund projects and activities which will quickly produce demonstrable results and advance the public interest. Sites with unknown or exceptionally expensive contamination problems may be beyond the scope of the BEDI program's financial resources and sites subject to pending and current litigation may not be available for remediation and development in a timeframe consistent with HUD's desire for rapid progress in the use of BEDI and Section 108 funds.

(4) The BEDI program is intended to promote the clean up and redevelopment of brownfield sites and, to this end, HUD expects that projects presented for BEDI funding will integrate environmental justice concerns and provide demonstrable benefits for affected communities and their residents.

(5)HUD will evaluate the extent to which the applicant's project incorporates one or more elements that facilitate a successful transition of welfare recipients from welfare to work. Such an element could include, for example, linking the proposed project or loan fund to social and/or other services needed to enable welfare recipients to successfully secure and carry out full-time jobs in the private sector; provision of job training to welfare recipients who might be hired by businesses financed through the proposal; and/or incentives for businesses financed with BEDI/section 108 funds to hire and train welfare recipients.

(6) Up to two (2) additional points will be awarded to any application submitted by the City of Dallas, Texas, to the extent this subfactor is addressed. Due to an order of the U.S. District Court for the Northern District of Texas, Dallas Division, with respect to any application submitted by the City of Dallas, Texas, HUD's consideration of the applicant's response to this factor, "Soundness of Approach" will include the extent to which the applicant's plan for the use of BEDI funds and Section 108 loans will be used to eradicate the vestiges of racial segregation in the Dallas Housing Authority's programs consistent with the Court's order.

Rating Factor 4: Leveraging Resources/Financial Need (35 Points)

[Page limits for the response to this factor are listed separately for each subfactor under this factor.]

In evaluating this factor, HUD will consider the extent to which the applicant's response demonstrates the financial need and feasibility of the project and the leverage ratio of Section 108 loan proceeds to BEDI grant funds. This factor has three subfactors, each with its own maximum point total:

(1) Leverage of Section 108 funds (20 points). [Your response to this subfactor is limited to one (1) page.] The minimum ratio of Section 108 funds to BEDI funds in any project may not be less than 1:1. The extent to which the proposed project leverages an amount of Section 108 funds beyond the 1:1 ratio will be considered a positive factor. Applicants that have a ratio of 1:1 will not receive any points under this subfactor. Applicants that use their BEDI grant to leverage more Section 108 commitments will receive more points under this subfactor.

(2) Financial feasibility (10 points). [Your response to this subfactor is limited to three (5) pages.] HUD will consider the extent to which the applicant demonstrates that the project is financially feasible. This may include factors such as:

(a) Project costs and financial requirements. Applicants should provide a funding sources and uses statement (not included in 5 page narrative limit) as well as justifications for project costs.

(b) The amount of any debt service or operating reserve accounts to be established in connection with the economic development project.

(c) The reasonableness of the costs of any credit enhancement paid with BEDI grant funds.

(d) The amount of program income (if any) to be received each year during the repayment period for the guaranteed loan.

(e) Interest rates on those loans to third parties (other than subrecipients) (either as an absolute rate or as a plus/minus spread to the Section 108 rate).

(f) Underwriting criteria that will be used in determining project feasibility.

(3) Leverage of other financial resources (5 points). [Your response to this subfactor is limited to one (1) page plus supporting documentation evidencing third party commitment (written and signed) of funds.] HUD will evaluate the extent to which the applicant leverages other funds (public or private) with BEDI grant funds and section 108 guaranteed loan funds and the extent to which such other funds are firmly pledged to the project. This could include the use of CDBG funds, other Federal or state grants or loans, a grantee's general funds, project equity or commercial financing provided by private sources or funds from non-profits or other sources. Funds will be considered pledged to the project if there is evidence of the third party's written commitment to make the funds available for the BEDI/108 project, subject to approval of the BEDI and Section 108 assistance and completion of any environmental clearance required under 24 CFR part 58 for the project. Note that with respect to CDBG funds, the applicant's statutorily required pledge of its CDBG funds will be considered sufficient commitment.

Rating Factor 5: Comprehensiveness and Coordination (10 Points)

[Your response to this factor is limited to two (2) pages.]

This factor addresses the extent to which the applicant coordinated its activities with other known organizations, participates or promotes participation in the applicant's or a State's Consolidated Planning process, and is working towards addressing a need in a comprehensive manner through linkages with other activities in the community.

In evaluating this factor, HUD will consider the extent to which the applicant demonstrates it has:

(1) Coordinated its proposed activities with those of other groups or organizations prior to submission in order to best complement, support and coordinate all known activities and if funded, the specific steps it will take to share information on solutions and outcomes with others. Any written agreements, memoranda of understanding in place, or that will be in place after award should be described.

(2) Developed linkages, or the specific steps it will take to develop linkages with other activities, programs or projects through meetings, information networks, planning processes or other mechanisms to coordinate its activities so solutions are holistic and comprehensive, including linkages with other HUD-funded projects/activities outside the scope of those covered by the Consolidated Plan.

(3) Coordinated its efforts with other Federal, State or locally supported activities, including EPA's various Brownfields initiatives, and those proposed or on-going in the community.

(A) Public entities seeking BEDI assistance must make a specific request for that assistance, in accordance with the requirements of this program section of this SuperNOFA.

(B) The application should include an original and one copy of the items listed below submitted to HUD Headquarters (see the section "Addresses For Submitting Applications in this program section of this SuperNOFA), with one additional copy submitted directly to the Community Planning and Development Division of the cognizant HUD Field Office for the applicant's jurisdiction.

(C) A BEDI application shall consist of the following items:

(1) Transmittal letter from applicant;

(2) Table of contents;

(3) Application check list (supplied in application kit);

(4) A request for loan guarantee assistance under Section 108, as further described in Section I(F) of this program section of this SuperNOFA. Application guidelines for the Section 108 program are found at 24 CFR 570.704;

(5) As described in Section III(B) of this program section of this SuperNOFA, a narrative statement (3 page limit) describing the activities that will be carried out with the BEDI grant funds;

(6) Responses to each of the rating factors (within the page limits provided for each factor or subfactor as applicable);

(7) Completion of a funding sources and uses statement and a BEDI and Section 108 eligibility statement (see the application kit);

(8)Written agreements or signed letters of understanding in support of Rating Factor 1: "Capacity of the Applicant and Relevant Organizational Experience;"

(9)Signed third party commitment letters pledging funds in support of subfactor 4(2): "Leverage of other financial resources;"

(10)Required certifications; and

(11)Acknowledgement of Application Receipt form.

The General Section of the SuperNOFA provides the procedures for corrections to deficient applications.

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