CUOMO VISITS MINNEAPOLIS EMPOWERMENT ZONE AND SAYS HUD BUDGET COULD BRING MINNEAPOLIS $44.6 MILLION

MINNEAPOLIS - Housing and Urban Development Secretary Andrew Cuomo - here to visit Minneapolis' new Empowerment Zone - said today that the proposed new HUD budget could bring Minneapolis an estimated $44.6 million in funding for major HUD programs, a $4.2 million increase over HUD funding this year.

Cuomo estimated that HUD major program funding for all communities in Minnesota in Fiscal Year 2000, including Minneapolis, could hit $153.3 million - up $16.6 million from the current year, if Congress approves the $28 billion HUD budget proposed by President Clinton without changes. For St. Paul, HUD aid is estimated at $28.1 million in Fiscal Year 2000 - an increase of $5.2 million over this year.

Cuomo toured the new Empowerment Zone - selected in January by HUD - and met with Mayor Sharon Sayles Belton and other local government, community and business leaders during a community roundtable gathering to discuss the future of the Zone.

Cuomo said proposed budget increases for HUD programs in the state, combined with the new Empowerment Zone for Minneapolis, will help transform lives and revitalize communities in Minnesota.

"I've come here today because I wanted to hear from the real experts on what's best for Minneapolis and Minnesota - the people living and working here," Cuomo said. "Our job at HUD isn't to tell communities what to do. Our job is to help communities reach the goals they set for themselves."

"We're pleased to have Secretary Cuomo visit Minneapolis today and work with us in planning for the future success of our new Empowerment Zone," Mayor Sayles Belton said "Our community - and our citizens - are dedicated to improving our city. With this dedication, and a firm commitment from Congress to fully fund the Zone over the next decade, we expect to see tremendous neighborhood revitalization, and business and job growth in Minneapolis."

In addition to increased program funding, HUD's proposed budget calls for an increase in the amount of mortgage loans that the Federal Housing Administration can insure each year. The budget raises the annual FHA loan volume cap nationwide to $120 billion, a $10 billion increase over the current limit.

The increase would allow FHA to insure an extra 550,000 mortgages nationally over the next five years - amounting to an estimated 14,170 additional mortgages in the Minneapolis-St. Paul area during the period. FHA mortgage insurance enables many families to qualify for mortgages that they could not otherwise obtain.

"This budget will open doors of opportunity for more people in Minnesota and across the nation," Cuomo said. "It increases funding for virtually all HUD programs and will enable HUD to help lead communities into the new century."

HUD combined historical data with data on the new budget from its major assistance programs to forecast the approximate amount of aid that individual communities would receive under its major programs if the President's budget is approved by Congress without change.

Aid from other HUD programs could boost assistance to individual communities even higher. The exact amount of HUD funds going to an individual community under the President's budget cannot be determined, since some funding is awarded on a competitive basis.

Cuomo visited Minneapolis because a portion of the city was one of 20 economically distressed communities selected by HUD as new Empowerment Zones last month. The new Zones are eligible to share $3.8 billion in proposed federal grants and tax-exempt bonding authority to finance sweeping revitalization and job creation programs over the next 10 years.

If Congress approves full funding for the Empowerment Zones, the federal investment is expected to help create and retain about 90,000 jobs and stimulate $20.3 billion in private and public investment in the next 10 years in all the Zones. This would have a dramatic effect in the areas, which have high unemployment, weak economies, shortages of affordable housing and other problems.

Minneapolis is one of 15 new Urban Empowerment Zones that is each receiving a $3 million grant this year. The Clinton Administration has already won Congressional approval of $130 million in tax-exempt bonding authority for each Urban Zone over the next 10 years, and is seeking Congressional approval for $100 million in grants over the same period for each of the Zones.

As a result of the new Empowerment Zone status and public and private commitments to the city, Minneapolis is expected to create or retain more than 7,000 jobs. The Minneapolis Zone encompasses 6.7 square miles with 49,000 residents.

At the roundtable meeting today, Cuomo and local leaders discussed plans to redevelop distressed areas to create jobs and business opportunities for Minneapolis' residents.

Previously a federally designated Enterprise Community, Minneapolis has leveraged $3 million of federal grant dollars into $50 million in related investments. This investment created 1,200 jobs in Minneapolis.

Projects slated to begin in Minneapolis' new Empowerment Zone include:

• Redevelopment of an abandoned Sears retail outlet and warehouse in South Minneapolis.

• Redevelopment of Minneapolis' Near North neighborhood - formerly the largest public housing complex in Minnesota - into a mixed-income community offering housing, a park, and new greenspace.

• Environmental clean-up, redevelopment and formation of commercial enterprises in the Southeast Minneapolis Industrial area.

Currently there are several innovative projects underway in the Minneapolis' Empowerment Zone, such as the Green Institute Materials ReUse Center that sells donated materials from manufacturing excess, contractor overruns, and demolitions. The Youth Skills Trade Initiative works with high school students to emphasize the importance of high academic achievement and help place students into apprenticeships and internships.

HIGHLIGHTS OF INCREASED AID TO COMMUNITIES UNDER HUD'S PROPOSED BUDGET FOR FISCAL YEAR 2000

Communities across the nation will get more funds from the Department of Housing and Urban Development if a $2.5 billion increase proposed for HUD's budget by President Clinton wins Congressional approval.

The $28 billion HUD budget for the 2000 fiscal year funds initiatives to revitalize economically distressed communities with new jobs and business growth, to help welfare recipients and others get jobs and become self-supporting, and to increase the supply of affordable housing with 100,000 new rental assistance vouchers and other actions.

Here are figures showing how funding for major HUD programs would go up nationally in 2000 under President Clinton's proposed budget:

• $4.775 billion for Community Development Block Grants, a $25 million increase. The grants help state and local governments carry out a wide range of programs to revitalize neighborhoods by renovating housing and providing public facilities. Because of fewer set-asides in the program, the increase will effectively bring communities an additional $130 million.

• $3 billion in Public Housing Operating Subsidies, a $185 million increase. The subsidies help housing authorities operate and maintain apartments for low-income people.

• $1.61 billion for the HOME program, a $10 million increase. The grants would expand the national supply of affordable housing by about 84,400 units. HOME provides funds to state and local governments for activities such as building and rehabilitating affordable housing, assisting first-time homebuyers, providing supportive services, and offering short-term rental assistance.

• $1.12 billion for the Continuum of Care Homeless Assistance program, a $150 million increase. The grants help homeless people get housing, jobs and needed treatment to become self-sufficient. The funding includes 18,000 new rental assistance vouchers HUD is seeking.

• $240 million for the Housing Opportunities for Persons With AIDS program, a $15 million increase. The program provides rental assistance and supportive services for low-income people with HIV/AIDS and their families.

• $580 million in new funding to create 100,000 new rental assistance vouchers to enable low-income individuals and families to afford apartments.

• $50 million in new Regional Connections grants to help communities develop smarter growth strategies across jurisdictional lines. Also included in the Regional Connections listing in the charts of HUD assistance is: 1) $50 million in new grants for the Abandoned Buildings Initiative for the demolition of blighted and abandoned buildings as part of a comprehensive plant to redevelop properties for commercial or residential use. 2) $50 million a year for the Brownfields Initiative, an increase of $25 million a year, to accelerate efforts to clean up moderately contaminated business and industrial sites so they can be used again

In addition to these grant programs, HUD's proposed budget calls for an increase in the amount of mortgage loans that the Federal Housing Administration can insure each year. The budget raises the annual loan volume cap to $120 billion, a $10 billion increase over the current limit. The increase would allow FHA to insure an extra 550,000 mortgages over the next five years.

Based on past FHA loan volume, HUD has calculated approximately how many of the new insured mortgages would go to individual communities. FHA mortgage insurance enables many families to qualify for mortgages they could not otherwise obtain.

Cuomo said the new HUD budget is about opening doors: to new markets, to affordable housing, to One America, to a better quality of life, and to life-long security. He said the budget "addresses five of the major challenges our nation's communities will face in the 21st century" by:

• Ensuring communities are economically competitive by creating jobs, helping businesses grow and prosper, and helping people move from welfare to work.

• Making housing affordable by increasing HUD's commitment to its core mission of providing "a decent, safe, and sanitary home and suitable living environment for every American."

• Moving closer to One America by expanding programs to fight housing discrimination.

• Finding regional solutions and creating sustainable communities at a time when cities, suburbs, small towns and rural areas are more interdependent than ever.

• Responding to the "aging of America" with a commitment not just to saving Social Security but to providing housing security for older Americans.