New Jersey has submitted the Community Development Block Grant (CDBG) Disaster Recovery Action Plan to the U.S. Department of Housing and Urban Development (HUD) for review and approval. After the initial publication of the Action Plan, the public had an opportunity to comment on the Action Plan during a seven-day period that closed March 19. The Plan submitted to HUD includes the public comments that were submitted along with the State’s responses. After submission of the New Jersey Action Plan HUD has up to 45 days to approve the Action Plan. A copy of the Final CDBG Disaster Recovery Action Plan as submitted to HUD can be found here: http://www.nj.gov/dca/announcements/pdf/CDBG-DisasterRecoveryActionPlan.pdf
Leveraging Sandy CDBG Grants
A prominent mandate of the New Jersey, New York City, and New York State action plans is the leveraging of Sandy CDBG grants with other federal programs and private funds. In this vein, there are several programs which are available to leverage Sandy CDBG funds. Coupling the Sandy funds with the Federal New Markets Tax Credit Program was done Post Katrina and will generate approximately 25% of project costs through Federal Tax Credit equity generated on the remaining 75% of Sandy funds which flow through the New Markets Tax Credit Structure. Under the proposed New Jersey Action plan approximately $100,000,000 is slated to go the New Jersey Housing and Mortgage Finance Agency to be used as a grant similar to TCAP to leverage the Agency’s 9% low income housing tax credit allocation as well as make 4% low income housing tax credit transactions economically feasible. In a similar vein, investment funds are forming with the plan of using private capital to leverage Sandy CDBG funds for projects. These transactions should be attractive to funds because the leverage would be relataively low and the security and financial return on the investment very good. Applicants seeking Sandy CDBG funds should be prepared to demonstrate the leveraging of these funds with public programs and private investment.
New York City Publishes Sandy Action Plan
The City of New York published its Action Plan to allocate $1.77 billion in Hurricane Sandy authorized Community Development Block Grants to the City’s most urgent housing, business and infrastructure needs. Under the proposed Action Plan $720 million will be allocated to Housing with $350 million going to rehabilitating single-family houses, $250 million to multi-family houses and $120 million to public housing. $325 million is allocated to assist businesses. $100 million will be available in grants to businesses. Small and mid-sized businesses will be eligible for $100,000 grants and larger businesses in hard-hit areas will be eligible for $1 million grants. In addition $145 million will be disbursed through competitions rewarding innovative investment ideas for neighborhood growth and infrastructure improvements. Under the Action Plan $400 million is allocated to Infrastructure and City Services including public services, emergency demolition, debris removal, code enforcement, and reconstruction of public facilities. Finally the Action Plan references $327 for Resiliency Investments which program will be detailed in a future amendment to the Action Plan.
New York State Publishes Sandy Action Plan
The State of New York has published its action plan in connection with the first $1.7 billion in Federal CDBG-DR aid appropriated by the United States Congress, and allocated to New York State, for Sandy disaster relief. Using this first allocation, the State will focus principally on meeting the immediate needs for housing and business assistance in the communities affected by recent storms; assisting county and local governments to cover both their emergency expenses and the matching fund requirements that must be met to repair and mitigate key infrastructure projects; and, by leveraging private financing, assisting critical facilities that suffered damage to install energy-related mitigation (e.g., combined heat and power systems) to withstand future natural disasters. Continue reading “New York State Publishes Sandy Action Plan”
New Jersey Publishes Sandy CDBG Action Plan
New Jersey has published its action plan for the $1.8 billion CDBG grant allocated by HUD to assist the State’s Hurricane Sandy recovery efforts. The public comment period for the action plan will end at 5:00 pm on March 19. Additional allocations are expected to be made at subsequent dates to be determined by HUD. Funds must be spent within two years unless HUD provides an extension. Governor Christie has designated the New Jersey Department of Community Affairs as the entity responsible to HUD for administering the distribution of CDBG funds for New Jersey. The action plan provides for the distribution of the $1.8 billion of CDBG funds in the following areas: homeowner assistance; rental housing; economic revitalization; and support for state and local agencies. Within each category are a variety of programs to address specific recovery needs. As an example, with respect to rental housing, $100,000,000 is designated to facilitate the creation of quality, affordable housing units to help New Jersey recover from the loss of multi-family housing. CDBG funds will be provided as zero- and low-interest loans to qualified developers to leverage 9% and 4% low income housing tax credits, tax-exempt bonds and stand-alone financing to support development. Awards will be limited to $120,000 per unit. Similarly $75,000,000 will be awarded through NJEDA in amounts up to $10,000,000 to redevelopment agencies, municipalities, businesses and nonprofits, including CDFIs and CBDOs for community revitalization. These funds may be used for property acquisition, demolition, site preparation and infrastructure repair and installation as well as physical improvement and expansion of existing facilities.
Notice of Initial Allocation of Sandy Disaster Relief Grants
The Federal Register recently provided notice on the initial $5.4B of HUD CDBG Disaster Recovery Funds allocated to NYC, NY, NJ, MD, CT and RI. These grants were made by HUD based on unmet housing and economic revitalization needs, but not for infrastructure restoration needs because FEMA damage estimates have not been completed. The Notice specifies the eligible counties in each state, the most impacted counties in each state, and the minimum percentage of the grants which must be used in the most impacted counties. The Notice requires each grantee to provide to HUD an initial action plan for disaster recovery within 90 days, and this action plan must describe how the grant will be expended within 2 years. All action plans must be published for a 7 day public comment period. Highlights of the requirements of an action plan include leveraging of CDBG monies with other government funds; green building standards; sustainable rebuilding; economic revitalization which that restores or improves local or regional economies; and 50% of each grant must benefit low and moderate income persons. Standard CDBG procurement regulations apply, althought there is no limit on grant amount per job created. The action plans of the grantees should be available soon for review and comment.
Sandy CDBG Grant Recipients Must Comply With HUD Procurement Requirements
As New York, New Jersey and the City of New York begin to administer HUD CDBG monies for Super Storm Sandy recovery efforts, recipients of CDBG grants must comply with the HUD CDBG procurement requirements. When a grantee elects to hire a contractor, whether to administer a program, complete a task or do construction, those contractors must be procured competitively. Both grantees and sub recipients must follow federal procurement rules when purchasing services, supplies, materials, or equipment. Small purchase procedures allow recipients to acquire goods and services totaling no more than $100,000 without publishing a formal request for proposals or invitation for bids. The small purchases method can also be used to acquire eligible types of services, such as professional consulting, environmental review, or planning. However, if the services contract will exceed $100,000 in value, the grantee must issue a RFP under the competitive proposals requirements. The use of CDBG grants will also trigger compliance with the Davis-Bacon Act. In addition to federal regulations, most states and many local governments have laws and regulations regarding procurement.
New Jersey Receives $1.8 Billion of Sandy Recovery Monies
New Jersey has received $1.82 billion allocation of Federal Sandy aid from the U.S. Department for Housing and Urban Development. This initial allocation of Federal Sandy assistance will be distributed as Community Development Block Grants. The grants will be administered by the New Jersey Economic Development Authority in conjunction with the Department of Community Affairs. Governor Christie is required to provide a proposal to HUD for the use of the aid which will explain how New Jersey agencies will meet HUD’s guidelines for allocating federal funds. The $1.82 billion represents New Jersey’s first share of a total $16 billion in anticipated block grants that will be shared among storm-hit areas of New Jersey, New York City and New York State and Connecticut.
CDFI Fund Issues Interim Rules for Bond Guaranty Program
The CDFI Fund recently published Interim Rules in the implementation of the CDFI Bond Guarantee Program authorized under the Small Business Jobs Act of 2010. Under the CDFI Fund Bond Guaranty Program, the CDFI Fund may issue federally guaranteed bonds to eligible Community Development Financial Institutions (CDFIs). These CDFIs will use the bond proceeds to make loans for community development in economically underserved areas. The CDFI Fund plans to issue its first bond guarantee this year. Under the Bond Guaranty Program, the CDFI Fund is authorized to issue up to 10 bonds per year, each at a minimum of $100 million, with a total of up to $1 billion in bonds guaranteed per year. The goal of the CDFI Bond Guarantee Program is to provide low cost capitals to CDFIs which will be used to provide financing to economically underserved areas.
New York City Focuses Hurricane Sandy Funds on Resiliency Efforts
Mayor Bloomberg of New York City has announced that the City plans to spend its initial allocation from HUD of $1.77 billion from the Hurricane Sandy Recovery Act in Community Development Block Grants for housing recovery, business recovery, and infrastructure resiliency. The housing recovery initiatives include rehabilitation grants for housing and grants for resiliency efforts for public housing. The City of New York will provide grants to businesses for resiliency measures including grants for innovations in resiliency technology. The infrastructure grants will be for resiliency innovations for neighborhoods and utilities. The City of New York is working with HUD for an additional $600 million for Hurricane Sandy recovery efforts.