HomeMy WebLinkAboutAgenda Statement 1982/01/26 Item 6COUNCIL AGENDA STATEMENT
Item h
Meeting Date 1/26/82
ITEM
SUBMI
.E: Resolution ~dy~ Transferring Block Grant Funds from Commercial
Rehabilitation to Third Avenue Street Improvements
gY; Community Development Director (4/5ths Vote: Yes No X )
The ommercial Rehabilitation Program is currently funded by a combination of Block
Gran s and redevelopment funds. The Block Grant funds are subject to various federal
regu ations which inhibit the implementation of the program. It is therefore pro-
pose to transfer some of the Block Grant funds from this program to the Third Avenue
Stre t Improvements Project, and to transfer an equal amount of Redevelopment Agency
fund from the Third Avenue project to the Commercial Rehabilitation Program. The
net mount of funds in each program would remain the same, but the Commercial Rehab-
ilit tion Program would be facilitated by the use of local rather than federal funds.
Ther fore, it is my
RECOI~PIENDATION: That the Council
Adop the resolution transferring Block Grant funds from Commercial Rehabilitation
to t e Third Avenue Street Improvements Project.
BOAR S/COMMISSIONS RECOMMENDATION: The Town Centre Local Development Corporation
conc rs in the transfer.
DISCUSSION:
The ity's Commercial Rehabilitation Program, an effort to enhance the appearance,
phys cal soundness, and economic viability of the central business district, is
admi istered through the Town Centre Development Corporation. The Corporation's
Boar of Directors acts to approve or disapprove all loan applications for these
low- nterest, extended-term Bank of America property improvement loans. The reduced
inte est rates are accomplished through interest subsidy payments to the Bank from
prop am funds. These program funds now consist of $87,000 from Block Grant and
$50, 00 from Redevelopment Agency funds.
When Block Grant funds are used to assist a loan, any contract paid with them is
subj ct to various federal labor regulations. Many potential clients are hesitant
to b involved in the rehabilitation program if it is so encumbered with regulations.
Loca funds, such as Redevelopment Agency funds, are not subject to the regulations.
The ommitment to the program of Redevelopment Agency funds was made so that some
loan could be made without federal regulations.
We n w have loan applications being processed which will need approximately $127,000
ins bsidy funds. One business, South Bay Auto Parts, which will need $56,000,
must use federal funds due to its location outside of the redevelopment area. How-
ever the other businesses interested in rehabilitating do not wish to use federal
fund .
Ther fore, we would like to exchange $31,000 of Block Grant funds for an equal amount
of A ency funds. This $31,000, combined with the $50,000 of Agency funds already
avai able in the program, will be sufficient to subsidize all of the pending loans
insi a the redevelopment area.
Continued
Form A-113 (Rev. 11/79)
Page 2, Item 6~
Meeting Date 1/26/82
An e sy way to accomplish this is to transfer the Block Grant funds for rehabilita-
tion to the Third Avenue project which now has both Block Grant and Agency funds
supp rting it. An equal amount of Agency funds could then be transferred from the
Thir Avenue project to the Commercial Rehabilitation Program. The Third Avenue
proj ct is subject to the federal labor regulations already and therefore the
tran fer of Block Grant funds to it will not have a negative impact.
The ransfer of Redevelopment Agency funds from Third Avenue to the Commercial
Reha ilitation Program was on the January 21st agenda of the Agency.
FINA I~CIAL IPAPACT:
Ther is no net financial impact. Below is a chart showing both the Block Grant
and he Redevelopment Agency fund transfers and the resulting budgets.
EXISTING FUNDING
Block Grant Agency Total
Thir Avenue Street Improvements $400,000 $600,000 $1,000,000
Comm rcial Rehabilitation 87,000 50,000 137,000
AFTER TRANSFER
Thir Avenue $431,000 $569,000 $1,000,000
Coma rcial Rehabilitation 56,000 81,000 137,000
Both transfers are within funds, and the Block Grant transfer is within HUD guide-
line for transfers.
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