Minutes 2009 0302 - Laserfiche WebLink

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MINUTES Page 10 City of San Leandro City Council and San Leandro Redevelopment Agency Joint Meeting-March 2, 2009 8.F. Matter of Committing $500,000 of Redevelopment Funds to Assist Davis Street Family Resource Center (DSFRC) in the Acquisition of the Property Located at 3081 Teagarden Street. Vice Mayor Stephens asked why CDBG monies would not be used, as was previously proposed. Mr. Sims indicated that sufficient unallocated CDBG funds are not currently available. The City has the capacity to borrow up to $2.8 million through a Housing and Urban Development (HUD) Section 108 loan, of which $2.5 million is already anticipated to be committed for the Senior Community Center project. Additionally, HUD requires that all resources must be specifically identified in order for an allocation to be made, but there are other funding sources for the property acquisition that have yet to be obtained. The complexity of these issues compelled staff to fmd a more flexible and straightforward funding mechanism, which it found in RDA fund cost savings from the Senior Community Center project. Vice Mayor Stephens stated that he favored a funding mechanism that would allow the City to commit the $500,000 to DSFRC, and to pay off that debt as quickly as possible. He expressed discomfort with the recommended option, viewing it as a long-term debt on the Redevelopment Agency. Mr. Hollister noted that the HUD Section 108 loan of $2.5 million that staff proposes for the Senior Center would cost nearly $250,000 over a 15-year period, and that the money would come out of the $500,000 in unallocated funding for various economic development and other projects. Housing and CDBG Manager Tom Liao added that Section 1081oan funds must be paid directly to the activity, and cannot be used to repay the RDA loan. Councilmember Starosciak asked whether the additional $185,000 CDBG allocation from the federal stimulus package could be used toward DSFRC. Mr. Liao stated that once HUD provides guidelines for use of these one-time funds, staff will report this information to the Council. Councilmember Starosciak inquired about the requirements for use of Redevelopment funds. Mr. Sims stated increasing property values and property tax generation are goals rather than requirements for use of RDA funds. He commented that in the case of the DSFRC, the goal may be to ameliorate economic blight, by providing resources such as health care and job training. Mayor Santos commented on the Finance Committee's consideration of this issue, noting that the commitment of funding for the 9~' Grade Academy gymnasium and the Senior Center presented challenges to the staff to identify available funding to contribute to DSFRC. Councilmember Souza noted that the County of Alameda has not yet committed support to this project. She stated her interest in delaying the decision until more information is known. Councilmember Souza. expressed concern that a precedent would be set for the other non-profit organizations receiving community assistance grants to make similar requests. She suggested that future grant funding to DSFRC could be reduced to help offset the $500,000 request, and that additional funding for community services should be considered from a citywide, agency-wide perspective.