Committee approves reprogramming of CDBG funds, launches $30,000 legacy grant for Sacred Grounds

Los Angeles — The Civil Rights, Equity, Immigration, Aging and Disability Committee voted unanimously to reprogram Community Development Block Grant (CDBG) and CDBG‑CV funds to cover capital needs and program shortfalls and to initiate a legacy business grant to Sacred Grounds Coffee Shop.

Veronica McDonald, assistant general manager for the Community Investment for Families Department (CIFD), told the committee the reprogramming identifies roughly $8,900,000 in CDBG entitlement to close gaps on six projects and about $4,200,000 in CDBG‑CV funds to reallocate to three projects so the city can spend the remaining coronavirus‑era dollars before federal deadlines. "We have identified about $8,900,000 in CDBG entitlement, to fund 6 projects, that have identified gaps," McDonald said.

Rebecca Ronquillo, CIFD chief of planning and administration, emphasized timeliness: "Today is the day that HUD administers the timeliness test. And I am excited to say that, along with this reprogramming, previous to this, we have met the timeliness test," she said, explaining that reprogramming helps avoid federal recapture of funds.

The committee also approved a substitute motion read into the record by Chris Espinosa of the City Legislative Analyst's (CLA) office to initiate a legacy business grant of $30,000 for Sacred Grounds Coffee Shop and to instruct the Economic and Workforce Development Department (EWDD) to work with the business to complete application and contract documents. Espinosa read the substitute language into the record: "I therefore move that the Council instruct the Economic and Workforce Development Department to initiate a legacy business grant of $30,000 with Sacred Grounds Coffee Shop to assist with their business enterprise. I further move that the council instruct EWDD to immediately confer with the owners of the business to complete the necessary application and contract documents." The substitute motion passed 5–0.

Council members and staff discussed program income — revenue returned to the CDBG program from loans and other program investments — and its role in supporting public services and administration. Ronquillo explained program income helps calculate how much may be spent on public services (capped at 15 percent of the allocation) and on administration (capped at 20 percent), and that stronger program‑income generation allows the city to plan and scale services.

Councilmember Nury Martinez (referred to in the roll calls as Soto Martinez) and others asked for assurance that capital projects identified for reprogramming were ready to spend; CIFD and General Services Department (GSD) staff said permitting was not a barrier and described recent additional repairs at the El Nido Family Center roof that expanded scope and cost but are being addressed so work can move forward once funds are attested.

Councilmember Nithya Raman and others raised questions about using CDBG‑CV funds for microenterprise grants to help small businesses. CIFD staff said, in coordination with EWDD, security improvements and other business supports are eligible uses under current guidance and can be incorporated into program guidelines.

Councilmember Krekorian (recorded as Nazarian) offered an amendment directing CIFD to work with the Bureau of Street Lighting to assess and update the CDBG funds needed to fully fund the North Hollywood Area 3 street lighting project in program year 51; the committee adopted that amendment and approved the reprogramming as amended 5–0.

Votes at the committee for these items were recorded as: Councilmember Soto Martinez — yes; Councilmember Nazarian — yes; Councilmember Jurado — yes; Councilmember Rodriguez — yes; Councilmember Padilla — yes.

The committee’s action initiates the reallocation process; CIFD and EWDD will complete the project selection, application and contract steps and coordinate with departments such as GSD for project delivery. Staff repeatedly noted that reprogramming is intended to move funds to projects that are eligible and ready to spend to meet federal timeliness standards.

The public record included a brief public comment from a representative of Hoover Intergenerational Childcare asking that $1,000,000 remaining in a grant for classroom renovations not be reprogrammed and that funds be used to make the city‑owned building ADA compliant. That comment was received during the public comment period and addressed the broader reprogramming discussion but did not change the committee’s motions.

What’s next: The committee-approved reprogramming and amendments will be transmitted for further city processing and, where necessary, to full Council for final actions and contracting steps.