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CUOMO ANNOUNCES $21.8 MILLION IN
ECONOMIC DEVELOPMENT LOANS, CREATING HUNDREDS OF JOBS IN EIGHT CITIES
WASHINGTON -- HUD Secretary Andrew Cuomo announced $21.8 million in economic development loan funds for eight cities, resulting in at least $60 million in private sector investment and hundreds of jobs for low- to moderate-income residents.
The eight cities and their loan amounts include Mobile, AL ($1.45 & $1.47 million); Merced, CA ($2.6 million); Santee, CA ($2 million); Union City, CA ($3.9 million); East Hartford, CT ($3 million); Haverhill, MA ($4 million); Muskegon, MI ($1.5 million); Raymond, WA ($1.9 million).
"Our Section 108 Economic Development Loan Fund is a powerful engine for economic development and job creation, and we're giving these communities the key to that engine," said HUD Secretary Andrew Cuomo. "Each of these cities has developed a local plan -- rehabilitating industrial parks, starting loan funds, expanding businesses and clearing way for new development -- that will make them stronger, healthier, and -- especially -- better places to live and work."
HUD's Economic Development Loan Fund, also known as Section 108, provides communities with a source of financing for economic development, housing rehabilitation, public facilities, and large scale physical development projects. Without the loan guarantees provided under this program, traditional commercial lenders would not otherwise make the loans available to communities. HUD's loans often attract other sources of funding from local/state government, non- profits, and the privates sector to complete financing for major job creation activities.
Between 1993 and 1996, HUD loaned more than $2.6 million across the country, helping to leverage an additional $4.7 billion in private sector funding alone. A sample of 40 loan guarantee projects leveraged an average of $2.4 dollars for every federal dollar in grants or loan guarantees. HUD also awarded communities $369 million in grants from the new Economic Development Initiative for job creation activities.
The cities selected, and the projects they will undertake, include:
Mobile, Alabama, will receive $1,470,000 for construction of the Thomas James Economic Development Center, housing a retail variety goods store and training facility. Located on public housing property, the primary purpose of the facility is to move people from welfare to work by providing residents with basic education and job skills training. The project will be supported by more than $1 million in private funds, and an investment by the Mobile Housing Board.
Mobile, Alabama, also will receive $1,450,000 to rehabilitate a 20,000 square foot community recreation facility in Harmon Park. The area, which is more than two-thirds low- and moderate-income, will benefit from a renewed structure with gymnasium, kitchen facilities, office space, and activity rooms. The City of Mobile also will contribute CDBG funds to this project.
Merced, California, will receive $2.6 million for installation and modernization of public improvements and utilities in the city-owned Airport Industrial Park. In addition to the HUD funds, the city will use $20 million in private investment to make infrastructure improvements to 130 acres of the park. The area has a poverty rate in excess of 20 percent, and a majority of the new jobs will be for low and moderate income residents.
Santee, California, will receive $2 million for construction of a neighborhood park on a 5.69 acre site in the Hillside Overlay District. Shadow Hill Park will include tot lots, a basketball court, tennis courts, picnic areas, and a parking area. The park will provide critical recreational facilities in an area of mostly low- and moderate-income families. The city also will use Community Development Block Grant (CDBG) funds for the project.
Union City, California, will receive $3.9 million for acquisition and demolition of blighted properties, and construction of a 15,000 square foot senior center in the city's Decoto neighborhood. Eden Housing Inc., a local nonprofit developer, also will construct 45 units of affordable senior housing on the site.
East Hartford, Connecticut, will receive $3 million for construction and development of a 150,000 square foot facility for the Science Center of Connecticut, a nonprofit educational institution, located in the city's riverfront redevelopment area. The project will provide financial commitments totaling more that $20 million. The new Science Center will spur creation of 60 permanent jobs and will target its math, science, technology programs to those segments of population most under-represented in these fields.
Haverhill, Massachusetts, will receive $4 million for creation of an Economic Development Loan Fund to provide financial assistance to businesses in this aging industrial community. The funds will be loaned to existing and start-up businesses, and rehabilitation of blighted properties.
Muskegon, Michigan, will receive $1.5 million for construction of Shoreline Drive East, a roadway needed to stimulate further development in the inner city. The project, located in the city's Enterprise Community Zone, will be supported by almost $7.5 million in other public funds, but is expected by the city to stimulate tens of millions in new annual payrolls, and, over time, more than one hundred million in capital investment.
Raymond, Washington, will receive $1,960,000 to help finance inventory and equipment for a new supermarket in the Waterfront area. The total project cost of $5.398 million includes $3.4 million in private investment. This economic development project will create 40 full-time jobs in the first year, and a total of 55 jobs within two years.
Through the Section 108 Loan Guarantee program, HUD provides a guarantee of payment to private investors who purchase debt obligations issued by local governments. The guarantee represents the full faith and credit of the United States government, enabling local governments to borrow funds at rates comparable to federal borrowings through the U.S. Treasury. To date, there has not been a default on any loan guarantee by the Economic Development Loan Fund.
Eligible applicants for the Economic Development Loan Fund (Section 108) include CDBG entitlement metropolitan cities and urban counties as well as non-entitlement communities.
Content Archived: April 9, 2010
Content Archived: April 9, 2010