CUOMO ANNOUNCES OVER $40 MILLION IN HUD ASSISTANCE TO PHILADELPHIA TO CREATE SHIPBUILDING FACILITY

WASHINGTON - Housing and Urban Development Secretary Andrew Cuomo today announced more than $40 million in HUD loan guarantees to Philadelphia to help the city establish a shipbuilding facility at the former Philadelphia Naval Shipyard that will provide more than 950 permanent jobs and approximately 600 construction jobs.

"This is an outstanding example of one of the Clinton Administration's successful job-creation initiatives,” Cuomo said. “Once again, President Clinton's emphasis on creating good jobs for American workers is paying off, helping families build better lives and helping Philadelphia build a stronger economy. Working in a partnership with other federal agencies, Philadelphia and Pennsylvania, we are transforming one of the oldest shipbuilding facilities in the nation into a major employer for the 21st Century.”

Cuomo said Philadelphia will use the $40.875 million from HUD's Economic Development Loan Guarantee Fund to help Kvaerner Philadelphia Shipyard, Inc. finance the construction of a new shipbuilding facility at the Philadelphia Naval Business Center, formerly the Philadelphia Naval Shipyard. The firm is a subsidiary of Kvaerner ASA, a Norwegian shipbuilding firm.

Kvaerner will spend a total of about $242 million over two years on new construction, renovations of existing facilities, infrastructure improvements, and professional services to create a world-class shipyard. Initially, the shipyard will construct up to nine tanker and container ships for both domestic and international shipping markets. Adaptive reuse of the Philadelphia Naval Base Complex will also promote the economic revitalization of an area hurt by the closing of the Navy Yard in 1995.

In addition to the HUD loan guarantees, financing will made possible through an $182 million capital budget grant from the Commonwealth of Pennsylvania and a $20 million loan from the Pennsylvania Industrial Development Authority. Another $187 million will be made available for workforce training, funded through grants and loans, including $50 million from the U.S. Department of Defense and an anticipated $50 million from the U.S. Department of Labor.

HUD has awarded Philadelphia a total of $216 million in loan guarantees since 1993, Cuomo said. The funds have been used to finance economic development loan programs, housing rehabilitation and homeownership programs, and to provide funding for several Center City hotel projects.

The Clinton Administration has proposed a new $400 million Community Empowerment Fund to assist communities like Philadelphia with their job creation efforts. Cuomo said the Administration expects this proposal to leverage an estimated $2 billion in private sector loans to businesses and to create and retain an estimated 280,000 jobs for economically distressed communities around the nation.

Cuomo joined Mayor Ed Rendell and members of the Pennsylvania Congressional Delegation in a satellite news conference today to announce the loan guarantees.

“Mayor Rendell has been a tireless and effective advocate for Philadelphia, and I'm pleased the Clinton Administration has been able to play an important role in working with him for the benefit of the city,” Cuomo said.

Mayor Rendell said: “We are bringing back to life the nation's oldest shipyard and bring new economic revitalization to an area that has been hurt by the closing of the Navy Yard in 1995. Over 1,000 jobs will be created providing economic stability to individuals and families living in Philadelphia. The rippling effect will yield several thousand additional jobs as Kvaerner deals with vendors, contractors, and other service providers. We are grateful to HUD for its continued commitment to economic development in the City of Philadelphia.”

Senator Arlen Specter said: “I am pleased to join with Secretary Cuomo, Mayor Rendell and Congressional colleagues in announcing the availability of $40 million in loan guarantees for the historic deal which will bring life back to one of Philadelphia's crown jewels. Together with the Labor Department job-retraining funds that we provided for the deal in the Appropriations Subcommittee that I chair, these guarantees should go a long way to making the Philadelphia Naval Shipyard once again ‘open for business'.”

Senator Rick Santorum said: “This grant is a tremendous boost to our efforts to spur job creation for those with low and moderate incomes, as well as to the overall economic revitalization efforts of the Philadelphia community. I applaud the effort by all of the parties involved that made this effort into a reality. I look forward to working with the Department of Housing and Urban Development on this project that will no doubt create hundreds of new jobs.”

“This assistance will dramatically help the rebirth of the Philadelphia Shipyard, “ Congressman Robert Borski said. “Philadelphia has a high-skilled workforce and state-of-the art facilities at the Shipyard. I am pleased that the Clinton Administration recognizes the great potential that Philadelphia has to offer to revitalize America's shipbuilding industry.”

“I have always believed Philadelphia to be a world class city,” said Congressman Chaka Fattah. “It is important to the future of Philadelphia that our workforce be integrated into the global economy. This new $40 million investment by HUD, adds to the local, state, and federal partnership that makes Philadelphians part of the growing international workforce.”

HUD's Economic Development Loan Guarantee Fund provides communities with a source of financing for job creation, housing rehabilitation, and construction of public facilities and large-scale development projects. The majority of jobs created by each project are available to people with low and moderate incomes.

The Economic Development Loan Guarantees, also known as the Section 108 program, save communities money by reducing the interest rate they are charged on loans from commercial lenders. The guarantees also make loans more readily available and often attract other sources of funding from local and state governments, non-profits and the private sector to complete financing for major job creation activities.