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IURA reports HUD entitlement allocations, loan fund balance and grant delays; Southworks abatement raises costs
Summary
Committee heard an informational update on the IURA’s recommended 2025 HUD entitlement action plan, grant disbursement and loan receivables; staff reported delays in homeowner rehab spending, possible HUD spend-down letter, and that Southworks is encountering higher-than-expected abatement costs.
The IURA’s Economic Development Committee on April 8 reviewed the agency’s adopted recommended 2025 HUD entitlement action plan and received updates on grant disbursement, loan receivables and ongoing site projects.
Committee staff said the Neighborhood Investment Committee’s recommendations led to fuller funding for job-training programs in the Community Development Block Grant (CDBG) category, while less funding than initially proposed went to some housing projects. Staff estimated that roughly $13,000 will flow into the loan fund in the coming program year, bringing the fund to approximately $272,000–$275,000 available for lending when the program year begins Aug. 1.
Why it matters: the IURA manages federal HUD entitlement funds (CDBG, HOME) and must meet HUD’s spend-down rules. Staff flagged that the agency is likely to miss a HUD snapshot spend-down test (the agency should not have more than 50% of its most recent award unspent at the May snapshot) because several CDBG projects are moving slowly. Missing the test may lead HUD to require a workout plan and, if problems persist, could result in a loss of funding or parts of the award.
Grants and loan program status Staff reported that most loans are current. Two grants were highlighted as slower than expected: the Ithaca Neighborhood Housing Services (INHS) homeowner rehab program currently has about $240,000 waiting to be spent because contractors are difficult to find and a few homeowners exited the program; the Cecil Malone sidewalk project has $180,000 in funding and is under contract but likely will not spend by the May snapshot. Staff cautioned the committee that many small communities are behind on expenditure rates since the pandemic and HUD may negotiate a remedial plan before taking punitive actions.
Southworks site update In the staff report, members heard that the Southworks redevelopment project has encountered more lead paint and asbestos than initially expected, increasing cleanup costs. Staff said Southworks is working with New York State on abatement and infrastructure planning; the project team plans to start with Building 24 and has completed some abatement work elsewhere on the site.
Next steps and follow-up Staff asked committee members to review the HUD action plan application form template; one committee member noted the living-wage amount in the template ($15.37) is out of date and suggested updating it to reflect the most recent living-wage study (committee discussion referenced approximately $24.82). Staff will continue to push grantees to accelerate spending and will report back on any HUD correspondence regarding spend-down status.
