Somerville presents annual HUD entitlement plan; proposes Section 108 loan for Clarendon Hill phase 2

City staff presented Somerville's annual HUD entitlement plan to the Committee on Housing and Community Development on June 30 and described a proposed Section 108 financing request tied to the Clarendon Hill project.

Alan Inacio, Director of Community Finance and Community Development in the Office of Strategic Planning and Community Development (OSPCD), said the city's allocations were largely level-funded this year: Community Development Block Grant (CDBG) $2,477,825; HOME Investment Partnerships Program (HOME) $517,544; and Emergency Solutions Grant (ESG) $218,817. "We were fortunate and relieved that this year, all 3 of our programs were relatively level funded," Inacio said.

Planned borrowing for Clarendon Hill: Inacio told the committee the plan proposes using a Section 108 loan to provide approximately $10,000,000 in financing for phase 2 of the Clarendon Hill project. He said the borrowing will reduce pressure on the city's general fund but estimated it will cost the city roughly $500,000 in annual entitlement payments to cover the loan repayment obligations tied to those entitlements.

Why it matters: CDBG funds a wide range of community activities, HOME supports housing development, and ESG funds homelessness-prevention and emergency services. Using Section 108 borrowing can extend available capital for a large housing project but converts future entitlement revenue to debt service for the loan.

Committee response: A committee member said they were prepared to approve the plan and send it to the full City Council. The presentation and public-hearing materials were attached to the agenda item.

Ending: Staff closed the presentation after questions; committee members indicated support for forwarding the plan to the full council for formal approval.