City Commissioners voted to rescind a Community Development Block Grant loan fund award during their Sept. 19 meeting.

In August 2022, commissioners approved $1.2 million in CDBG revolving loan funds to Dan Batemen to renovate the former Cambridge Court at 1109 6th Ave. N. into apartments.

The property is 1.26 acres, zoned multi-family high density, and contains a vacant, 5-story building that was
constructed in 1929.

City approves $1.2 million loan for apartment project [2022]

The building was an assisted living facility that closed in 2019 and has been vacant since.

The renovation includes installation of fire protection systems, updating windows, water and sewer service lines and updating electrical service, according to city staff.

Staff is recommended that commissioners rescind the funding since the project complexities affected the timeline and the project won’t meet the CDBG program requirements this year.

Essentially, the CDBG program requires that certain percentages of the annual allocation be spent within a certain amount of time, so since the Cambridge project is taking longer than anticipated, the city would be at risk of having too much CDBG funding for too long this year.

Tom Hazen, the city’s grand administrator, said that a CDBG grantee is considered timely if its line of credit is less than 1.5 times its annual allocation 60 days before the end of the program year.

Business Bites: PurpleGold açaí bowl and waffle bus coming; Tracy’s reopening; Cambridge Court closing, BeeHive expanding [2019]

The line of credit includes any CDBG award funds and any revolving loan funds from the program or program income, Hazen told commissioners.

If a grantee’s line of credit balance exceeds the 1.5 threshold, it’s considered newly untimely and given a year to achieve compliance. If it remains untimely the next year, the grantee in invited to an informal meeting with the U.S. Department of Housing and Urban Development’s office to demonstrate factors beyond its reasonable control that affected it’s timeliness, Hazen said.

City to hold public hearing on proposed CDBG funding

HUD recognized the challenges of COVID and issued temporary guidelines that if a grantee was timely in 2019, and then found to be untimely in 2022, the grantee would be given an additional one-year grace period and if it was found untimely again in 2023, it would be considered newly untimely.

If the city were to be found untimely again in 2024, it would likely lose a portion of its next CDBG allocation.

The city was timely in 2019, but was found to be untimely in 2022 and again in 2023, Hazen told commissioners.

CDBG funds awarded for Nat demolition, park upgrades

The city’s current allocation is $764,295, making the 1.5 threshold $1,146,442.50. The city’s current line of credit balance is $2,88,854.27, meaning the city needs to use at least $1,742,411.77 by May 2024 to meet the timeliness requirement, Hazen told commissioners.

The city awarded $2.438 million to 12 projects, including Bateman’s project to renovate Cambridge Court.

City accepting CDBG grant applications [2022]

Designs for the project haven’t yet been finalized and construction would likely not begin until at least March, Hazen told commissioners.

City staff have identified 11 other projects totaling $1.2 million that would reasonably have been spent by April 2024, if not before, leaving $504,197.15 that the city needs to use on an eligible project by May.

City staff Batemen intends to move forward with the project and encouraged him to apply for the funds again in the future when the project is further along.