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Brownfield Econ Devel InitiativH&CD Housing and Community Development Department 1805 Central Avenue Dubuque, Iowa 52001-3656 (563) 589-4212 office (563) 5892,203 fax akramer@cityofdubuque.org March 25, 2003 Honorable Mayor and City Council City of Dubuque City Hall Dubuque Iowa 52001 RE:-Brownfield Economic Development Initiative Dear Mayor and Council; The Community Development Commission is responsible for identifying community development needs, particularly the needs of persons of Iow and moderate income; The Community Development Commission is responsible for advising the City Council in policy decisions regarding program development and implementation; The Community Development Commission advises the City Council on spending priorities for the City's Community Development Block Grant Program, to assist Iow and moderate-income people in lifting themselves out of poverty and to prevent poverty by addressing conditions of slum and blight; The Community Development Commission has identified industrial development as the key driver of economic advancement for Iow and moderate-income persons. An objective of the Consolidated Plan is to link existing human resources with skilled jobs, with the outcome of decreasing poverty throughout current Iow-income census tracts; The Consolidated Plan for Housing and Community Development, adopted by the City Council on May 1, 2000, establishes the objective to develop new jobs that have living wages. Specifically, the Plan calls for 50 percent of new jobs created to pay more than $9.00 per hour. It calls for 25 percent of new jobs created to be above $12.00. Smithfield Foods has signaled its interest in disposing of property on 16th Street formerly used for animal slaughter and meat-packing operations. The property was designated for industrial use in the Long-Range Plan of the City of Dubuque as originally adopted by the City Council, in particular because the property is accessible by rail. The land is currently zoned industrial. Service People Integrity Respoll$ibilJty Innovation T~mwork Smithfield Foods has confronted difficulties in disposing of the property because of the unexpectedly high costs of building demolition and land preparation associated with asbestos abatement and other environmental remediation requirements. The United States Housing and Urban Development Department (HUD) sponsors the Brownfield Economic Development Initiative (BEDI) as a competitive grant program to stimulate and promote economic and community development activities under Section 108(q) of the Housing and Community Development Act of 1974. BEDI is designed to assist cities with the redevelopment of abandoned, idled and underused industrial and commercial facilities with expansion and redevelopment capacities limited by real or perceived environmental contamination. BEDI grant funds are primarily targeted for use with a particular emphasis upon the redevelopment of brownfield sites consistent with the statutory purpose of the FY 1999 HUD Appropriations Act. Accordingly, BEDI funds are used for economic development projects to increase economic opportunities for Iow and moderate-income persons to stimulate or retain businesses or jobs or that would otherwise lead to economic revitalization. BEDI grants of up to $2 million per project are used as the stimulus for local governments and pdvate sector parties to commence redevelopment or continue phased redevelopment efforts on brownfield sites where either perceived or actual environmental conditions are known and redevelopment plans exist. HUD emphasizes the use of BEDI and Section 108 Loon Guarantee funds to finance projects and activities that will provide near-term results and demonstrable economic benefits, such as job creation and increases in the local tax base. BEDI funds must be used to enhance the security or to improve the viability of a project financed with a new Section 108 guaranteed loan commitment; Section 108 is the loan guarantee provision of the Community Development Block Grant (CDBG) program. Low-cost loans of up to five times a city's annual CDBG entitlement, with the CDBG allocations designated as collateral, are used to supplement BEDI grants to complete brownfield redevelopment projects. The BEDI funds minimize the potential loss of future CDBG allocations. Both Section 108 loan guarantee proceeds and BEDI grant funds are initially made available by HUD to public entities approved for assistance. Such public entities may re-loan the Section 108 loan proceeds and provide BEDI funds to a business or other entity to carry out an approved economic develop- ment project, or the public entity may carry out the eligible project itself; The City of Dubuque is thus eligible for a Section 108 loan of up to $7 million to support a BEDI project. Therefore, The Community Development Commission respectfully recommends that the City Council approach Smithfield Foods in a timely manner for the purpose of: 2 -- jointly redeveloping the former meatpacking facility and adjoining properties or jointly marketing the properties for redevelopment by another entity -- For one or more industrial uses supporting employment opportunities for Iow and moderate-income citizens consistent with the Consolidated Plan for Housing and Community Development -- using the federal Brownfield Economic Development Initiative and the Section 108 loan guarantee provision of the Community Development Block Grant (CDBG) program. Sincerely, Walt Pregler, Chairperson Community Development Advisory Commission Cc: Michael Van Milligen, City Manager 3