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HomeMy WebLinkAboutAppropriating $200,000.00 Community Development Block Grant FundORDINANCE No. 6877 -81 Passed by the Common Council of the City of South Bend, Indiana January 12 �9 81 IRENE K. GAMMON Presented by me to the Mayor of the City of South Bend, Approved and signed by i/, Clerk of Common Council IRENE K. GAMMON Clerk BILL NO. ORDINANCE NO. 1 AN ORDINANCE APPROPRIATING $200,000.00 FROM THE COMMUNITY DEVELOPMENT BLOCK GR.LNT FUND FOR THE ESTABLISHMENT OF A LOid- INTEREST LOAN FUND FOR COMMERCIAL AND RESIDENTIAL REHABILITATION TO BE ADMINISTERED BY THE CITY OF SOUTH BEND THROUGH ITS DIVISION OF COMMUNITY DEVELOPMENT. STATEMENT OF PURPOSE AND INTENT: The government of the City of South Bend, in creative and affirmative partnership with its residents, private enterprise and the Federal Govern- ment, is committed to the goal of expanding economic opportunities. To further this goal, the Community Development Block Grant Program contains the specific objective of alleviating physical.and economic distress through the stimulation of private investment. The City believes that scarce federal funds should be used whenever possible to encourage private investment in property rehabilitation. Furthermore, existing, older buildings should be reutilized whenever economically possible. Therefore, the Division of Community Development intends to set up a low- interest loan fund for commercial and residential property rehabilitation. The fund will be used to make loans at reduced interest rates to private investors wishing to rehabilitate existing buildings in Community Development Neighborhood Strategy Areas or established Urban Renewal areas. NOW, THEREFORE, BE IT ORDAINED by the Common Council of the City of South Bend, Indiana, as follows: SECTION I. The sum of $200,000 is hereby appropriated for the program year starting July 7, 1980 (Program Year 1980). This appropriation is to be administered by the Division of Community Development, as set forth below: PROGRAM CD -80 -603 COMMUNITY DEVELOPMENT PROGRAM Purpose Amount Low - Interest Loan Fund for Commercial and Residential Rehabilitation $200,000 TOTAL: $200,000 SECTION II. This Ordinance shall be in full force and effect from and after its passage by the Common Council and approval by the Mayor. 1st READING PUBLIC HEAPING 2nd READING NOT APPROVED REFERRED PASSED I' /d -8- 9Z I- Ion -Fs'I la -Z- 1 Member of the Common Council �.. D C 3 1980 Gan! mon 010 CLEM(, SOUTH EERJD, PH). CITY of SOUTH BEND ROGER O. PARENT, Mayor COUNTY-CITY BUILDING • SOUTH BEND, INDIANA 46601 DIVISION OF COMMUNITY DEVELOPMENT MARZY T. BAUER Director STEVEN F. COMPTON Deputy Director M E M O R A N D U M TO: Members of the Common Council FROM: Marzy T. Bauer Community Development Director 1� SUBJECT: Ordinance to Appropriate $200,0,000 to establish a low- interest Loan Fund for Commercial and Residential Rehabilitation DATE: December 2, 1980 '• /m 2 Y 1440 County -City Building South Bend, Indlana46601 (219) 264.9335 Attached for your consideration is an Ordinance which would appropriate $200,000 from the 1980 Community Development Block Grant to establish a low - interest Loan Fund for Commercial and Residential Rehabilitation. The funds would be transferred from the 1980 Unspecified Local Option account which has a present balance of $318,175. As you are aware, the Community Development Program operates a number of programs designed to assist in the rehabilitation of residential structures. We have, generally, been unable to work with commercial buildings. While our emphasis remains on residential structures, we feel it is necessary at this time to develop an additional program to assist in the rehabilitation of commercial buildings. Since undertakings of this type require large capital outlays, we are proposing to allocate $200,000 initially in the loan fund. This may be used to support one large project or several smaller ones. Our expectation is that the Community Development funds will be only one part of a total financial package put together by a developer to accomplish a major re- habilitation effort. It should be clear that this is a loan fund, not a grant program, and all dollars loaned will be paid back. The loans will be secured against the property or other appropriate security interest. The interest rate will vary between 1 and 5 per cent. Page 2 Members of the Common Council December 2, 1980 Among the potential users of this program is the Oddfellows Building. Several developers have expressed an interest in rehabilitating the building if some additional funds can be made available to them to make the project economically feasible. The City administration is presently ne- gotiating with a not - for - profit corporation to assist us in lending funds to a developer for the rehabilitation of the Oddfellows Building. Other possible projects include 'rehabilitation of neighborhood commercial buildings, and rehabilitation of small (i.e. 4 -8 units) apartment buildings. If you have any further questions, please call me at 284 -9335. I request your favorable consideration of this Ordinance. MTB /gw (9 mmutee rpuYi ED the (aomman (Qounra of the tatty of Ovgt4 grlu Your Committee OF THE WHOLE to whom was referred A BILL APPROPRIATING $200,000 FROM THE COMMUNITY DEVELOPMENT BLOCK GRANT FUND FOR THE ESTABLISHMENT OF A LOT — INTEREST LOAN FUND FOR COMMERCIAL AND RESIDENTIAL REHABILITATION TO BE ADMINISTERED BY THE CITY OF SOUTH BEND THROUGH ITS DIVISION OF COMMUNITY DEVELOPMENT. Respectfully report that they have examined the matter and that in their opinion THIS BILL SHOULD BE RECOMMENDED TO THE COUNCIL FAVORABLE. JOHN VOORDE Chairman