Amount
Allocated:
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$32
million in 2007, maximum cap of $2 million per award |
Application
Due Date:
December 28, 2007
Eligible
Applicants:
CDBG
entitlement communities and non-entitlement communities eligible
to receive loan guarantees*
Section
108 Application:
A
request for new Section 108 loan guarantee authority must accompany
each BEDI application. BEDI and Section 108 funds must be used in
conjunction with the same economic development project.
Eligible
Activities and CDBG National Objectives:
Each
activity assisted with Section 108 loan guarantees and BEDI funds
must meet one of the CDBG Program's three National Objectives:
|
Benefit
low and moderate income persons.
|
Prevent
or eliminate slums or blight.
|
Address
imminent threats and urgent community needs.
| | |
Uses
of BEDI Grant Funds:
|
Land
Writedowns
|
Site
remediation Costs
|
Funding
reserves
|
Over-Collateralizing
the Section 108 Loan
|
Direct
Enhancement of the Security of the Section 108 Loan
|
Provisions
of Financing to For-Profit Businesses at a Below market Interest
Rate
| | | | | |
Limitations
on Grant Amounts:
|
Minimum
BEDI to Section 108 ratio is 1:1 |
|
Maximum grant amount is $2 million |
Rating
Factors:
|
Capacity
of Applicant and Relevant Organizational Experience
|
Distress/Extent
of the Problem
|
Soundness
of Approach
|
Leveraging
Resources/Financial Need
|
Achieving
Results and Program Evaluation
| | | | |
Empowerment
Zones, Enterprise Communities and Showcase Communities:
Projects
located in High-performing EZs and ECs or Brownfields Showcase Communities
will receive two (2) bonus points.
*Non-entitlement
communities, including those in Hawaii, may apply for and receive
grants under the BEDI programs. In order to be considered for funding,
however, a non-entitlement community must secure from the applicable
state entity (or HUD, in the case of Hawaii), a pledge of Community
Development Block Grant (CDBG) funds as partial security for the
loan guarantee.
Program
Description
Brownfields Economic Development Initiative (BEDI) grants enhance
the security or improve the viability of a project financed with
new Section 108 guaranteed loan authority. Section 108 is the loan
guarantee provision of the Community Development Block Grant (CDBG)
program. Section 108 provides communities with a source of financing
for economic development, housing rehabilitation, public facilities
and large scale physical development projects. BEDI funds may be
used for any eligible activities under the Section 108 Loan Guarantee
program.
The purpose of BEDI funds is to minimize the potential loss of future
CDBG allocations used to secure Section 108 loan guarantees:
- By
strengthening the economic feasibility of the projects financed
with Section 108 funds (increasing the probability that the project
will generate enough cash to repay the guaranteed loan);
- By
directly enhancing the security of the guaranteed loan; or
- Through
combination of these or other risk mitigation techniques.
HUD intends BEDI and Section 108 funds to finance projects and activities
that will provide near-term results and measurable economic benefits,
such as job creation and increases in the local tax base. BEDI funds
can support a wide variety of activities. For example, a local government
may use BEDI fund to address site remediation costs, or a local
government may use a combination of Section 108 and BEDI funds to
acquire a brownfield property and convey the site to a private sector
party at a discounted price from its purchase price. The redevelopment
focus for BEDI-assisted projects is prompted by the need to provide
additional security for the Section 108 loan guarantee beyond the
pledge of CDBG funds.
There are certain limitations on the use of BEDI grants and Section
108 funds. BEDI funds may not immediately repay the principle of
a loan guaranteed under Section 108. BEDI funds shall not be used
to provide public or private sector entities with funding to remediate
contamination caused by their actions. Applicants may not propose
sites listed or proposed for listing on EPA's National Priority
List (NPL); sites subject to unilateral administrative orders, court
orders, administrative on consent, or judicial consent decrees issued
or entered under CERCLA, and facilities that are subject to the
jurisdiction, custody or control of the federal government. Further,
applicants are cautioned against proposing projects on sites where
the nature and degree of environmental contamination is not well-quantified
or are the subject of on-going litigation or environmental enforcement
action.
HUD encourages local communities to integrate projects proposed
for assistance under HUD's BEDI and Section 108 program with other
federal, state and local brownfields redevelopment efforts.
For a BEDI application kit and/or guidebook to all HUD programs,
please contact the SuperNOFA Information Center at 1-800-HUD-8929.
Persons with hearing or speech impairments may call the Center's
TTY number at 1-800-HUD-2209. Questions regarding the BEDI program
may be directed to David
Kaminsky in HUD's Office of Economic Development at (202) 402-4612.
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