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Home My WebLink AboutBill No. 54-26 CDBG Fund AllocationCDBG Fund Allocation: Western Avenue Transformation District Bill No. 54-26 A City of South Bend W Community Investment 0□ In LlerK-~ Qrnrc 1.\UG 2 5 2026 Bianca Tirado City Clerk, South Bend, IN s'~~~ City of South Bend 1,::_,_; Community Investment Western Avenue Transformation District (WATD) • Redevelopment of former dilapidated public housing developments on southwest edge of downtown South Bend ownea by the HASB • Will create 210 mixed-income housing units • Collaboration between the Housing Authority of South Bend, the City of South Bend, and the Community Foundation of St. Joseph County • Developer: The Michaels Organization & HASB • TMO National affordable housing developer with extensive experience w/partnerships with flousing authorities • TMO Awarded project through competitive RFP process through HASB • Funding includes Lilly Endowment award thro~g~ the Community Foundation of St. Joseph County~ READI 2.o-1 HUD Section 108 loan; and LI HTC credits; Private 1:.quity; Loca Partners {~\ City of South Bend 't .. / Community Investment Timeline To Date • Multi-year process A City of South Bend V Community Investment • Fall 2023 Monroe Circle Demolished • August 2024 -Neighborhood Visioning meetings • December 2024 -READi Blight Award • August 2025 -Community Feedback meeting • January 2026 -Former Rabbi Shulman apartment demolished • February 2026 -LIHTC credits awarded • 11May 2026 -City awarded $10M HUD Section 108 loan for infrastructure --(aR_plied ~ept._2025) • June 2026 -Common Council approved Pl LOT in support of project Phase ta • 156 total units • 48 Affordable Under 50% AMI • Household of 2 ppl, $35k • Household of 4 ppl, $44k • 62 Affordable Under 60% AMI • Household of 2 ppl $42k • Household of 4 ppl $52k • 46 Unrestricted Units • All of the 30% AMI and 50% AMI (75 total units) will receive Project Based Vouchers • TMO will work off waitlist provided by the Housing Authority • Former residents will have priority for the PBV units if they desire to return t~\ City of South Bend ~\.-,·;.!✓:-" Community Investment Phase tb • 54 total units • 11 Affordable 30% AMI • 16 Affordable 50% AM I • 12 Affordable 60% AMI • 15 Unrestricted Units Western Ave Transformation District • All new construction • Streetscape improvements increasing connection with DTSB • On site childcare/daycare center • New park space /~\ City of South Bend i <~~·; Community Investment Site Plan □ D □ r .. ......., tM □ □ r~;:"s~~~ ·"'"'"-'''""""-~ ,!fa,., 4--. ..-------a / •• ~~ H <£1~; N EBSCM..l:l/1 LBBA Western Avenue 1-·J " f t• ;. ~ f:_ ~ Western & Taylor '~'.f<. s~"~~ 'L~l: . ,,;,.r•, ,nat111)1 AV.MU& 1 1.1/H ichaels ----IJll!'III KIL .!. ffl1'fi~ lBBA l!.~CN11"L(;'t~ AP1111.1a..20 I;: Ii Community Development Block Grant ( CDBG) • HUD CDBG funds support community development activities to build stronger and more resilient communities • Eligible activities include but are not limited to: • Infrastructure • Economic development projects • Housing rehabilitation • Public services • Code enforcement • Homeowner assistance f~¼l City of South Bend i,:,·t,.-r Community Investment Community Development Block Grant (CDBG) • The City receives an annual allocation of approximately $2.3M annually in CDBG funding • Funds support City priorities including affordable housing, public facility improvements, and public services • Local nonprofits and organizations whose projects align with these priorities may apply for grants r"\ City of South Bend i<: _; Community Investment • Allows City to leverage annual CDBG allocation to access low-cost, flexible financing for economic development, housing, public facility, and infrastructure projects • Flexible repayment terms make it ideal to larer with other financing sources such as Low-Income Housing Tax Credits (LIHTC • City will leverage $10M of its annual CDBG funds to support infrastructure work for the Western Avenue Transformation District Phase 1a and Phase 1b • City will pay back Section 108 Loan with CDBG allocation • Annual payment is estimated at 22% of current allotment • Per Federal Law, Interest Rate on Section 108 Loan are variable priced at the three-month (or 13-week) Treasury Action Bill rate plus 35 basis points (0.35) • As of 8/21, the 13-week Treasury Bill rate is 3.73%. With 35 basis points, it would be approximately 4.1% as of today {~\ City of South Bend r<~_./ Community Investment /.;::\_ t, !:": ..... """""{' .... ti,,,, ~ • City of South Bend Community Investment HUD U.S. OEPARTMEN't OF HOUSING AN.D URBAN OEVUOPMENT .s--~""1:Nro, / .111. ,'1'11,1 ~\ ~<,b 11110/ e1NOt'&'-' CDBG FUNDS .Annual CDBG entitlement grants to the City Flexible funds, LotDI impact. .. HUD U.S. DEPARTMENT OF HOUSING ANO URBAN DEVELOPMENT ~'\l,\EN'f O,:, q~ 11 A;0 i\ 11,.1'1'1' • .. ' ~0 I II I l v"'I> oq ~'Nn!N~'\, • September 2025: City applies for Section 108 loan • October 2025: Government shutdown • November 2025 -February 2026: HUD restructures loan award process and documents • March 2026: City staff meet with regional and federal HUD appointees • May 2026: City receives Commitment Letter • Present: City actively reviewing loan closing documents s~\ City of South Bend i,~·::-,.; Community Investment Western Avenue Transformation District • New 208-unit mixed-income neighborhood on the former Rabbi Shulman and Monroe Circle block and City-owned lots north of Western Ave • Section 108 loan supports infrastructure improvements at and around the project site: • Demolition of Rabbi Shulman • Design and Engineering • Construction • Previously expenditures are reimbursable /~\ City of South Bend ':-,._:~ __ ; Community Investment Western Avenue Transformation District • Infrastructure improvements: • Utilities • Stormwater • Interior parking lots • Sidewalks • Right-of-way improvements to Western Ave, Scott St, and Taylor St • New East/West road f~"§ City of S~uth Bend ">.: .~ Communzty Investment Site Plan DD ol••S•'l• I ' ~~w-~ ! ~ <~JUI.fl □ □ ~~~~])lit··f ~ ,. · 1111 rn • • N ffisc.Mel/ LBBA Western Avenue Western Avenue Transformation District Bid • May 12: Request to Advertise • June 23: Open bids • September 8: Award bid • September -November: First phase of infrastructure work • December 2026 -June 2028: Housing construction on Rabbi Shulman block • Spring 2027 -June 2028: Second phase of infrastructure work /~\ City of South Bend i_ -~;.; Community Investment • May 12: Request to Advertise • June 23: Open bids • September 8: Award bid • September -November: First phase of infrastructure work • December 2026 - June 2028: Housing construction on Rabbi Shulman block • Spring 2027 -June 2028: Second phase of infrastructure work §~\ City of South Bend ,·1-,/ Community Investment • HUD requires backup collateral in the unlikely event CDBG funds would be reduced and no longer cover annual repayment • Currently funds would need reduced by approximately 80% • This is unlikely and CDBG has been protected by bipartisan majorities as recently as 2025 • In the event CDBG funds cannot repay loan, River West TIF would be pledged to cover repayment • Annual repayment of the loan would be approximately 5-6% of the total Tax Revenue based on the most recent year • Approved by RDC on 8/13 • Funds are needed to ensure the Western Ave Transformation District proceeds as designed /~\ City of South Bend \_·::,.; Community Investment • Approval of Section 108 Loan will allow: • Reimbursement of already expended City costs (over $2M) • Construction of Phase I of Western Ave Transformation District -Min of 110 new affordable apartments • Affordable housing wait lists longer than ever • New daycare space • New park space for HASB residents including existing residents to west • Locks in investment: • $26.7M Private Investment (LIHTC, Private Equity) • $19.1M State Grants • $3.4M other Local Partners (~-1 City of S~uth Bend ">-;1/... Commumty Investment 1-·J ' t (I :r .. .. p .. ..