HomeMy WebLinkAboutItem 09 Community Development Block Grant (CDBG) Acquistion of Distressed, Undervalued or Beneficial Properties
Meeting Date: !
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AGENDA ITEM SUMMARY
June 2, 2008
Public Hearing
DeV~lopmentNervices
KevIn Ko " '-
726-2?02 -<i\\
15 MInutes . \1'
SPRINGFIELD
CITY COUNCIL
ITEM TITLE:
COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) ACQUISITION OF
DISTRESSED, UNDERVALUED OR BENEFICIAL PROPERTIES
ACTION
REQUESTED:
1. Conduct a Public Hearing to receive testimony on earmarking up to $300,000 ,
of CDBG funds for the purpose of acquiring distressed, undervalued or
beneficial properties. '
2. Modify if appropriate and approve/not approve earmarking up to $300,000 for
this activity.' !
ISSUE
STATEMENT:
The Eugene-Springfield Consolidated Plan, One-Year Action Plan lists as an
approved activity the acquisition of distressed, undervalued or beneficial
properties. The purpose of this Public Hearing is to receive public testimony to
allow the City to expend up to $300,000 in CDBG funds for this activity. '
ATTACHMENTS:
1. Pages 81 and 101 of the 2008-2009 One Year Action Plan
DISCUSSION AND
FINANCIAL
IMPACT:
Since FY 2003-04 the City Council has approved a set-aside allocation of CDBG
funds for activities in the Downtown Revitalization' Area. Under HUD, CDBG
guidelines, the allowable set aside is roughly 24% of the annual entitlement,
approximately $150,000. In order to maximize the impact of the CDBG funding,
the City has elected to aggregate these expenditures over three consecutive plan-
years. We are currently in year three of the three year period. The expenditures in
years one and two have aligned the City to expend up to $300,000 in year three
and still be within the maximum allowable limit for this activity. FY 08/09 will
begin a new three year aggregate.
With the sale of the South 42nd Street property to the Relief Nursery earlier this
year and unallocated CDBG funds placed in reserves, funds are available to
expend this fiscal year.
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Council approval of earmarking up to $300,000 of CDBG funding for this activity
will allow the City to take advantage of opportunities to acquire property as they
anse.
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beneficial to the community. In the past, the City could not use CDBG and/or HOME funds to
,assist with the acquisition of such properties because that activity was not included in the current
Consolidated Plan. When an opportunity presented itsel( the City would, a) pass the opportunity
. to acquire the property on to area non-profit housing providers, b) allow the market to determine
the property's disposition, or c) in the case of distressed properties, let the property lapse into
foreclosure. With the rapid increase of land values in Springfield, the City may want to consider
acquiring such properties with HOME or CDBG funds, and make them available in the future for
purchase and! or development of an eligible properties that would benefit the Springfield
community. Examples of how this provision could be used:
. Purchase of residential properties prior to foreclosure to be made available for affordable
homeownership housing
. Purchase of vacant land for future use as affordable housing or neighborhood development
. . Purchase of distressed downtown properties for redevelopment
. Purchase of properties in Glenwood for redevelopment
Approval by the City Council will be required prior to acquiring any properties. Due to limited
~DBG and HOME funds, it is anticipated that this provision will be used very sparingly.
However, inclusion of this provision in the Five-year Consolidated Plan is necessary for the City
to consider acquisition of property with CDBG or HOl\l1E funds as an option.
Relocation Assistance - At a work session on April 21, 2008, the Springfield City Council
directed staff to investiga~e the viability of using CDBG and HOME funds to provide limited
relocation assistance to mobile home park residents facing forced eviction. Although there are
currently no plans for any mobile home park closures in Springfield, the growth and
redevelopment of much of the urban core of the city seems to make :MH park closures a certainty
in the future. The Council felt that it is in the community's best interest to begin discussing and
analyzing the options and resources available. Under most circumstances, relocation assistance by
the City Will be provided on a voluntary basis, and not as a required action under the Uniform
Relocation Act, CDBG or HOl\.1E statutes. At this time it is unclear how or in what capacity
CDBG and! or HOME funds will be used to assist with relocation, but general relocation
assistance as a possible activity -is being included 'in this Action Plan as an amendment to the
current Consolidated Plan.
Downtown Redevelooment Area - With the designation of the Springfield Downtown
Redevelopment Area in 2004, the City of Springfield took a major step toward reversing the
decades of disinvestment and decay that has plagued the city's central business area. The City
'Council has committed CDBG funds for three consecutive. fiscal years to assist with capital
improvement and redevelopment projects in the downtown core. Projects will need to meet the
CDBG criteria for area "slum and blight" activities. FY07-08 is the third and final year of the
: original three-year set-aside. Upon the recommendation of the Community Development
Advisory Committee, the Springfield City Council approved an extension the downtown CDBG
set-aside through FY2008/09.
FY 2008/09 One-Year Action Plan
81
ATTACHMENT.1 - 1
Purchase of Distressed.. Undervalued or Beneficial Properties - With the rapid increase of
land values in Springfield, the City may want to consider acquiring such properties with HOME
or CDBG funds, and make them available in the future for purchase and/or development of an
eligible project that would benefit the Springfield community. Inclusion of this provision in the
five-year Consolidated Plan is necessary in order for the City to consider acquisition with CDBG
or HOME funds as an option. (See "Activities to be Undertaken" in the Springfield CDBG
Section for an expanded narrative.) ,
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Relocation Assistance - At a work session on April 21, 2008, the Springfield City Council
directed staff to investigate the viability of using CDBG and HOME funds to provide limited
relocation assistance to mobile home park residents facing forced eviction. Although there are
currently no plans for any mobile home park closure in Springfield, the growth and
redevelopment of much of the city urban core seems to make MH park closures a certainty in the
future. The Counci,l felt that it is in the community's best interest to begin discussing and
analyzing the options and resources available. Under most circumstances, relocation assistance
by the City will be provided on a voluntary basis and not as a required action under the Uniforril
Relocation Act, CDBG or HOME statutes. At this time it is unclear how or in what capacity
CDBG and/or HOME funds will be used to assist with relocation, but general relocation
assistance as a possible activity is being included in this Action Plan as an amendment to the
current Consolidated Plan.
Geo2raphicDistribution - A prQj ect must be located within the Springfield city limits in order
to be eligible for assistance through the City's housing programs. The City has developed a
Springfield Community Housing Plan to identify areas of need within the City and to develop
assistance programs that target these needs. Need is generally based upon income levels, public
safety issues, and physical deterioration. The rationale behind such targeted assistance is to
provide decent housing and a suitable living environment principally for low-and moderate-
income persons. Such assistance may take the form of any activity described in this Plan. These
~eas will be limited in size to generally not larger than a census block group. Though assistance
will not be limited to the targeted areas, it is anticipated that more comprehensive efforts will be
directed at the targeted areas.
With the designation of the Downtown Redevelopment Area, the Springfield City Council and
local business leaders have made redevelopment of the core downtown area a priority. Creating
a place where people work and live is vital to maintaining a thriving downtown. The City
invested HOl\1E funds in the development of the Royal Building apartments in the heart of
downtown. The project provides commercial space on the ground floor' and 33 affordable one
bedroom rental units on floors 2-S. The HOl\1E and CDBG funds invested in the proj ect
leveraged nearly S million dollars in other funding.
Minority Concentrations - Data from the 2000 Census shows that Springfield has three census
block groups that have moderate concentrations of minority/ethnic households. Census tract
21.01, block group 2 is located north of I-lOS, south of Hayden Bridge Road, east of Pioneer
Parkway and west of Sth Street. Census tract 32.02, block group 2 is located to the west of
Pioneer Parkway and east of Kelly Butte and is more commonly referred to as the Meadow Park
neighborhood. Census tract 33, block group 6 is located north of Centennial Road, south of 1-
105, east of Pioneer Parkway and'west of 10th Street. All three block groups have 15% or higher
minority households and 10% or higher Latino/Hispanic households. Please note that some of
FY 2008/09 One-Year Action Plan
ATTACHMENT,1 - 2
101