2006 Section 108 Project Summaries - Washington

Brownfields Redevelopment Loan Fund
Seattle, WA
Section 108 Guaranteed Loan- $10,000,000

The City of Seattle will establish a brownfields redevelopment loan fund to assist business development on designated brownfields sites in the City's Central Area, International District, Southeast Seattle in census tracts that have a poverty rate of at least 20 percent. The Section 108 Guaranteed Loan funds will be used to provide loans to public or private nonprofit and for-profit businesses to carry out a variety of activities, which include acquisition of real property for economic development purposes, clearance and demolition, site preparation for economic development, and/or housing rehabilitation as part of a neighborhood economic development project.

In conjunction with the Section 108 Guaranteed Loan funds, the City will also use a $2,000,000 Brownfields Economic Development Initiative (BEDI) grant award from HUD in the fiscal year 2004 to provide interest rate subsidies to some businesses, and to fund a loan loss reserve for its brownfields redevelopment fund. Some business may need a funding combination of a grant and loan to carry out approved activities.

The Community Development Block Grant (CDBG) national objective for the City's use of the guaranteed loan proceeds and BEDI grant funds is to benefit persons of low-moderate incomes and to aid in the elimination of blight in distressed areas.

The City will repay its Section 108 Guaranteed Loan from the business debt service payments it receives from each individual loan. The terms of the loans will vary from 10 - 20 years depending upon the type of financing provided: real estate, equipment purchases, working capital, acquisition, or site preparation. To secure repayment of its guaranteed loan, the City will pledge its interest in the redevelopment fund's business loans secured by liens on real estate, machinery and equipment, and in some cases personal guaranties. The City also pledges its CDBG funds as security for repaying its Section 108 Guaranteed Loan.