WASHINGTON - Housing and Urban Development Secretary Andrew Cuomo today awarded a $1.7 million Economic Development Loan guarantee to Laredo, Texas to help transform the historic Hamilton Hotel into a combination of retail stores and 165 units of affordable housing for low- and moderate-income income senior citizens.

"This project will help revitalize downtown Laredo and create needed housing for senior citizens," Cuomo said. "We are committed to building a better future for Laredo and its people."

HUD Deputy Secretary Saul Ramirez, the former Mayor of Laredo, announced the HUD loan guarantee this afternoon in a conference call with reporters and Mayor Betty Flores.

Covenant Communities, the developer of the project, will use federal low-income housing tax credits to hold down rents in the apartments for senior citizens. Residents with annual incomes of up to $16,000 will live in the building and will be charged rents ranging from $337 to $433 per month, depending on the size of their apartment.

The rehabilitation of the Hamilton Hotel is expected to create about 100 construction jobs. It will create about 40 permanent jobs in a restaurant, architectural firm, and two other small businesses expected to locate in the building.

The hotel was opened in 1923 and is listed on the National Register of Historic Places. Part of the building is 12 stories high, making it the tallest building in downtown Laredo. The hotel fell into disrepair over the years and most of the building was shut down. Only 40 residents were housed in the building in substandard apartments until they were relocated last week in preparation for the renovation, which will begin in January. The project is scheduled to be completed by April, 2000.

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 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.