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Committee delays decision to use surplus funds for three Homestead Corridor parcels
Summary
Committee postponed a resolution authorizing use of city surplus funds to purchase 255 Garden Street and 51 and 101 Homestead Avenue after members sought clarity on reimbursement timing and surplus accounting for Board of Education funding.
The Planning, Economic Development and Housing Committee on Monday postponed action on a resolution that would let the mayor use surplus city funds to acquire three parcels — 255 Garden Street and 51 and 101 Homestead Avenue — pending further information about the timing and treatment of a $1.6 million state grant.
Wayne Diaz, development services staff, said the state awarded $1.6 million through the Department of Community Development (DECD) for acquisition of the parcels to support a Homestead Corridor redevelopment plan. Diaz told the committee the city had entered a nonbinding letter of intent in November 2024 and submitted an application for the DECD grant in December 2024. “We will be drafting a resolution to officially ask the city council to receive the grant funding from DECD,” Diaz said, and the plan was to use surplus funds up front and reimburse the city with the DECD award after closing.
Council members expressed concern that using surplus would reduce funds available for the Board of Education. Councilman Josh Mickham asked whether the city could wait to buy the parcels until surplus levels were confirmed. Attorney Richard Fasalo told the committee he could not answer whether reimbursed grant proceeds would count as available surplus for school funding purposes and advised follow-up with budget staff.
Committee members discussed making the authorization contingent on receipt of the DECD grant or using DECD funds directly when they become available. Chair John Gale and members agreed to postpone so staff could provide more detailed timing and accounting information to the committee. A motion to postpone carried.
Diaz said sellers had expressed eagerness to move the sale, but staff and council members said a short delay would likely not jeopardize the transaction. Council members asked staff to work with management and budget to confirm how reimbursed funds would be treated for surplus calculations and to prepare amended resolution language if appropriate.
