Ithaca committee pencils preliminary 2025 housing and economic-development funding, flags compliance and feasibility concerns

The Independent Renewal Agencies’ funding committee reviewed and provisionally allocated federal HOME and CDBG funds for the city’s draft 2025 action plan, endorsing full or partial funding for several housing, public‑service and workforce programs while identifying compliance and feasibility risks for complex development proposals.

Committee members penciled in full funding for several public‑service requests and placed tentative allocations on longer projects: staff recorded $95,340 recommended for the Learning Web housing scholarship program and $96,000 for Catholic Charities’ security‑deposit assistance, and the committee put the Neighborhood Housing minor‑repair program at $45,000 (CDBG). The committee also recommended substantial support for workforce and economic‑development programs, and set placeholder amounts for multiple housing projects while asking staff and applicants for additional documentation.

Why it matters: the committee’s recommendations form the draft action plan that the city will submit to HUD and that guides local grants and development in 2025. Several large or complex proposals raised legal, financial or technical questions that could delay HUD release of funds or require additional local underwriting before federal dollars are committed.

Most important decisions and placeholders - Learning Web: recommended full funding at $95,340 (HOME category in committee discussion). - Catholic Charities, security‑deposit assistance: recommended full funding at $96,000 (HOME). - Neighborhood Housing minor‑repair program: recommended full funding at $45,000 (CDBG). - Habitat for Humanity (610 West Court St.): requested $95,000; the committee discussed splitting funding between HOME and CDBG and recorded multiple placeholder figures while asking applicants for clarification on mortgage/second‑mortgage terms and flood‑insurance assumptions. - Ithaca Neighborhood Housing project (209 West State St., senior apartments): requested $199,900; committee members expressed concerns about several units priced above fair‑market rents and penciled a $100,000 placeholder (committee discussion favored placing $100,000 in CDBG as an administrative placeholder while reserving final decisions for budget reconciliation). - Black Hands Universal, 612–614 West State St.: the committee decided not to fund the project at this time because the application lacked detailed cost estimates, a confirmed purchase price or a complete financing plan; members recommended the group pursue additional predevelopment funding or partners and return with architectural plans and revenue schedules. - Economic‑development workforce programs (examples discussed): Finger Lakes ReUse, GIAC (Greater Ithaca Activities Center), and local job‑training programs were recommended at or near the levels the economic‑development committee proposed; staff flagged documentation and compliance questions for some line items (for example, stipend accounting and gift‑card documentation for reuse programs).

Substantive concerns the committee asked staff/applicants to address - Rents and AMI targeting: members pressed the Ithaca Neighborhood Housing applicant to explain why a small share of units would be priced above 80% of area median income (AMI), and requested documentation of the market analysis used to set those rents and whether voucher holders (Housing Choice vouchers) would be accommodated. - Flood risk and insurance: for projects sited in or near the updated flood plain, members asked for clear environmental‑review materials, flood‑mitigation cost estimates and how flood‑insurance costs would affect long‑term affordability. - Prevailing‑wage (Davis‑Bacon) and volunteer labor: for projects that include construction or trades work, staff reminded the committee that Davis‑Bacon rules and HUD guidance constrain use of paid‑and‑unpaid labor and may limit use of skilled volunteers on federally funded construction projects; applicants were asked to show how prevailing wages and documentation of payroll would be handled. - Loan and mortgage assumptions: Habitat for Humanity and other for‑sale components included illustrative mortgage calculations and a possible forgivable second mortgage; members asked for clarity on expected interest rates, the potential use of forgivable seconds, and the extent to which high market interest rates could affect buyer affordability. - Acquisition vs. long‑term leasing: at least one development proposer described acquisition structured as a down payment with subsequent installments; staff cautioned that HUD rules require beneficiaries to be demonstrated within a reasonable period and that long‑term acquisition arrangements require additional compliance safeguards.

Process notes and next steps Committee members repeatedly emphasized that the figures discussed were provisional. Staff explained the action plan must be finalized once the city’s official HOME and CDBG grant awards are confirmed by HUD; if the final grant amounts differ from the committee’s expectation the committee instructed staff to (a) scale project awards proportionally across recommended projects or (b) use the specific contingency rules the committee discussed (for HOME: reduce the Habitat allocation first, then scale remaining HOME projects equally; for CDBG/public services: preserve a small set of public‑service awards, scale the remainder proportionally, and keep the Neighborhood Housing minor‑repair program whole if possible).

The committee also declined to advance the Black Hands Universal acquisition request without additional plans, cost updates and evidence of other committed funding partners.

Ending Staff will prepare a draft action plan incorporating the committee’s provisional allocations and the requested clarifications, circulate it for committee review, and return to the committee if HUD’s final award differs from the estimate. Several members emphasized applicants should provide additional documentation (market studies, flood mitigation plans, Davis‑Bacon payroll arrangements and written owner agreements) before the city commits federal funds.