BY COUNCILOR GILBERT:
WHEREAS, the Duluth City Council has established that the rehabilitation of residential property is a high priority for community development activities; and
WHEREAS, the United States Federal Government has implemented cuts in the Community development block grant (CDBG) program, and has proposed new substantial cuts in CDBG funds and the community development financial institution (CDFI) program; and
WHEREAS, Neighborhood Housing Services of Duluth (NHS)is the only housing CDFI in the Northland region; and
WHEREAS, NHS of Duluth is preparing a $300,000 application for CDFI funds to capitalize the Duluth exterior preservation loan fund in the amount of $1,300,000 for the purpose of rehabilitation of city infrastructure, namely older homes in Duluth, including but not limited to 3,000 structures identified by the city of Duluth as historic; and
WHEREAS, the CDFI application is due on February 24, 2005; and
WHEREAS, the CDFI application requires a nonfederal match; and
WHEREAS, the national trust of historic preservation has reserved $300,000 of additional federal funds for the Duluth exterior preservation loan fund; and
WHEREAS, NHS is in the process of raising another $300,000 from private sources; and
WHEREAS, Neighborhood Housing Services of America has committed an additional $1,300,000 to purchase loans from this pool; and
WHEREAS, this will probably be the last opportunity for Duluth to benefit from CDFI resources; and
WHEREAS, the establishment of this fund could help mitigate some impacts of the decline of CDBG funds.
NOW, THEREFORE, BE IT RESOLVED, that the proper city officials are authorized to transfer $300,000 from Fund 256 (the community investment trust fund) to the Duluth exterior preservation loan fund, and the proper city officials are authorized to implement and execute an agreement, containing substantially the terms of that agreement on file with the clerk as Public Document No. _________, between the city and Neighborhood Housing Services, Inc., for establishment and operation of the Duluth exterior preservation loan fund.
BE IT FURTHER RESOLVED, that the transfer of funds authorized by this resolution is conditional upon the certification of the city director of finance and records, before December 31, 2005, that the said CDFI application has been approved in the amount of $300,000 by the United States of America.
STATEMENT OF PURPOSE: This resolution authorizes the use of $300,000 of the revenue received from the Fond du Luth Casino compact to be used for funding a one-time investment in the Duluth exterior preservation loan fund. Approval of this resolution requires a 7/9ths vote of the city council.
This one-time investment of $300,000 from the community investment fund will leverage $1,000,000 from other private and federal sources which yields a 4.3 to 1 leverage on the investment. This will also create a new partnership between historic preservation and rehabilitation of residential structures in Duluth’s neighborhoods.