(206) 220-5356 (work)
(804) 363-7018 (cell)
November 30, 2012
HUD OKAYS TWO LOAN GUARANTEES TOTALING ALMOST $3 MILLION IN GRESHAM
One loan to develop Center for the Arts Plaza in downtown and second form loan pool to assist business or development projects in citywide
GRESHAM - The U.S. Department of Housing and Urban Development today announced that it has approved two Section 108 loan guarantees totaling $2,960,000 sought by the City of Gresham.
One loan guarantee - for $1,500,000 - will enable the City to continue development of the Center for the Arts Plaza in downtown. The second loan guarantee - $1,462,000 - will enable the city form a loan pool to help finance commercial, retail and affordable housing development as well as site improvements citywide, but with a particular focus on its Rockwood/West Gresham neighborhood and its downtown.
HUD is providing the loan guarantee under its Section 108 Loan Guarantee Assistance program which enables local governments to borrow money from private investors at reduced interest rates. In return, local governments pledge current and future Community Development Block Grant (CDBG) allocations to cover the loan amount as security for the loan. Over the years, Section 108 guarantees generally have generated $4 of private investment for every $1 in Section 108 guarantee.
"HUD's Loan Guarantee Program can be a powerful public investment 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 Gresham residents who need them most."
"Over the years HUD's Section 108 program has proven an effective tool for attracting private investment to projects of the sort that Gresham envisions," said Mary McBride, HUD's Northwest Regional Administrator. "We are pleased to be able to support Gresham economic, cultural and housing development efforts."
The $1.5 million HUD loan guarantee will further develop the Center for the Arts Plaza. Phase 1 of the project - construction of the plaza - was completed in the summer of 2009 under the direction of the Gresham Center for the Arts Foundation as part of the City's efforts to revitalize a blighted area which lacked recreational and cultural facilities and in which, the City says, 25 percent of the properties were physically-deteriorated and several were "vacant and boarded closed." The Section 108 loan guarantee will allow the City to move forward with phase 2 - a 40-foot diameter fountain. The City expects that the completed fountain will attract some 500 visitors per day.
The City will use the $1,462,000 HUD loan guarantee to establish a city-wide loan pool to help finance business and retail development, to rehabilitate a number of HUD-assisted housing complexes for the elderly and to improve sites for industrial development. Particular focus will be paid to projects - sponsored by either for- or not-for-profit organizations - the downtown and the city's Rockwood/West Gresham neighborhood.
HUD's Section 108 Loan Guarantee Assistance Program enables local governments to borrow money from private investors at reduced interest rates to promote economic development, stimulate job growth and improve housing or public facilities. Such public investment is often needed to inspire private contributions, to provide seed money, or to simply boost confidence that many private firms and individuals need to invest in distressed areas.
Section 108 loans are not risk-free, however; local governments borrowing funds secured by this loan guarantee program must pledge a portion their current and future Community Development Block Grant (CDBG) allocations to cover the loan amount as security for the loan. The loan must be re-paid within 20 years.
HUD's mission is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD is working to strengthen the housing market to bolster the economy and protect consumers; meet the need for quality affordable rental homes: utilize housing as a platform for improving quality of life; build inclusive and sustainable communities free from discrimination; and transform the way HUD does business. More information about HUD and its programs is available on the Internet at www.hud.gov and espanol.hud.gov. You can also follow HUD on Twitter at @HUDnews or on Facebook at www.facebook.com/HUD, or sign up for news alerts on HUD's News Listserv.