"As part of the city's Special Economic Development Program, officials hope to use the Section 108 Loan Guarantee program offered through the U.S. Department of Housing and Urban Development to spur development of The Shops at the Alhambra project and The Alhambra Place Project," the Pasadena Star-News is reporting.
The funds must create new jobs that benefit low and moderate income persons, which the city says it will offer first to Alhambra residents.
The amendment outlining the request is below.
CITY OF ALHAMBRA
SUBJECT:PUBLIC HEARING (Notice No. N2M10-95) FOR THE FIRST AMENDMENT TO THE CITY OF ALHAMBRA’S 2010-2011 ANNUAL ACTION PLAN FOR THE CREATION OF A SPECIAL ECONOMIC DEVELOPMENT PROGRAM AND SUBMITTAL OF A SECTION 108 LOAN APPLICATION TO HUD
To request that the City Council approve the First Amendment to the 2010-2011 Annual Action Plan to create a Special Economic Development Program to create jobs for low and moderate income persons, authorize staff to submit a Section 108 loan application for $4,900,000 to HUD to implement the Special Economic Development Program and adopt a resolution authorizing the submission of a Section 108 loan guarantee application to HUD.
FIRST AMENDMENT TO THE 2010-2011 ANNUAL ACTION PLAN – CREATION OF A
SPECIAL ECONOMIC DEVELOPMENT PROGRAM
Staff is seeking to amend the 2010-2011 Annual Action Plan to create a Special Economic Development Program to assist businesses and developers create new jobs and/or expand and add employees to existing commercial establishments. The program may use a series of approaches to provide assistance including, but not limited to, land acquisition, demolition, site clearance and environmental remediation, new construction, interior or exterior improvements and the purchase of furnishings, fixtures and equipment.
The City intends to use up to $4,900,000 in HUD Section 108 loan funds to implement the Special Economic Development Program.
The program is eligible to use Section 108 loan funding as provided by 24 CFR 570.703(i)(1) and 570.203 for Special Economic Development Activities. The jobs created will meet the National Objective of activities benefiting low and moderate income persons – Job Creation 570.208(a)(4)(i). Per HUD Regulation 570.209(b)(1)(i) for the proposed projects to be eligible for assistance, at least 1 full-time equivalent (FTE) job must be created per $35,000 of CDBG assistance. A minimum of 140 FTEs will be created from the proposed projects. In addition, 51% of the jobs created will be available to local Alhambra residents.
AMENDMENT NO. 1 – SUBMITTAL OF A SECTION 108 LOAN APPLICATION
Staff is requesting approval to submit a Section 108 loan application for $4,900,000 to HUD to implement the Special Economic Development Program. Often times, cities would like to assist CDBG eligible activities, but the size and scope of the projects are beyond the annual CDBG entitlement. Instead of being required to accumulate enough CDBG funds over a series of years, the Housing and Community Development Act of 1974 created the Section 108 loan program. Cities may borrow up to five times their annual CDBG allocation and repay the loan over as long as 20 years, and at very competitive interest rates.
The City of Alhambra has twice previously used the Section 108 loan program when it developed Fremont Plaza and assisted a series of projects on Main Street. The Section 108 loan program is broadly used across the nation by many cities and most often when carrying out economic development projects, such as the two planned for the current Section 108 loan request.
The Shops at the Alhambra Expansion project which will be carried out by the Ratkovich Company will add a 152,000 square foot retail center with national retailers and restaurants to expand the existing Shops at the Alhambra on Fremont Avenue. The expansion project is estimated to create 258 FTE low/moderate jobs. The second project will be carried out by Lubert-Adler, the owner of parcels 5345-1-27, 5345-1-24, 5345-1-21, 5345-1-20, and 5345-1-32 which are located on Garfield between Main Street and Bay State Street. The project will include the construction of a new 36,000 square foot building for a national retail anchor tenant and additional shop or restaurant space of 9,000-10,000 square feet. The project is estimated to create 90 FTE low/moderate jobs.
The Section 108 loan would be repaid from annual program income the City currently receives from the tenant rents at Fremont Plaza. The City is eligible for loan guarantee assistance as detailed in 24 CFR 570.702. The loan will fund Special Economic Development Activities as provided by CFR 570.203.
On September 7, 2010, staff presented the proposed First Amendment to the Housing and Community Development Citizen Advisory Committee. The Committee is recommending approval of the First Amendment to the 2010-2011 Annual Action Plan.
The 30-day public review period began on September 8, 2010 and concluded on October 8, 2010. No comments were received.
It is recommended that the City Council:
- Open a public hearing and receive public comment;
- Close the public hearing and at the City Council’s discretion, approve the First Amendment to the City of Alhambra’s 2010-2011 Annual Action Plan to create a Special Economic Development Program to create jobs for low and moderate income persons, and authorization to submit a Section 108 loan application for $4,900,000 to HUD to implement the Special Economic Development Program; and
- Adopt Resolution No. R2M10-27 entitled A Resolution of the City Council of the City of Alhambra, California Authorizing the submission of a Section 108 Loan Guarantee Application to the United States Department of Housing and Urban Development