HUD No. 09-175
September 21, 2009
HUD APPROVES $70 MILLION LOAN GUARANTEE TO BOSTON
City to fund revolving loan program to kick-start stalled developments and create 2,000 jobs
BOSTON - The U.S. Department of Housing and Urban Development today announced that it is approving a $69.7 million loan guarantee to the City of Boston to create a revolving loan pool designed to kick-start stalled
development projects and to stimulate hiring of nearly 2,000 full-time workers. The City of Boston will create the Boston Invests in Growth Loan Fund, a program intended to boost commercial real estate development throughout
the City by offering gap financing for projects in the $10 million to $15 million range.
"HUD's Loan Guarantee Program can be a powerful tool to drive economic development in underserved areas," said HUD Secretary Shaun Donovan. "The program will be a boost to the City's revitalization efforts and provide jobs for Boston residents who need them most."
HUD's Section 108 Loan Guarantee Assistance Program enables local governments to borrow money at reduced interest rates to promote economic development, stimulate job growth and improve public facilities. Such public investment is often needed to inspire private contributions; to provide seed money; or to simply boost the
confidence private firms and individuals may require to invest in distressed areas.
The Boston Invests in Growth Loan Fund will provide financing for projects that have been unable to start construction due to the downturn in the economy and the credit environment. The City has established
conservative underwriting criteria for the loan pool and has reserved up to 10 percent of the loan pool for smaller neighborhood-based projects with an average loan size of $500,000.
The City identified three projects they would like to fund under the loan pool that are ready to begin:
- Sawyer Enterprises, W Hotel ($10 million), construction at the new W Hotel. This loan will create
300 new jobs;
- Finard Properties, Shops at Riverwood ($5 million), construction of retail space including a bank, supermarket, shoe store, and a national clothing retailer. This loan will create 300 new jobs; and
- Pappas Enterprises, Gloria Foods ($700,000), to facilitate the opening of a new neighborhood
market in South Boston. This loan will create 30 new jobs.
The City's application to HUD indicates that the project will create in nearly 2,000 new full-time permanent jobs,
at least 51 percent to be made available to low- and moderate-income persons.
HUD is the nation's housing agency committed to sustaining homeownership; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development and enforces the nation's fair housing laws. More information about HUD and its programs is available on the Internet and espanol.hud.gov.