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Council questions use of returned revitalization loan dollars to match HUD funds near 36th & Peoria
Summary
City staff proposed using roughly $1.5 million in returned redevelopment loan proceeds to match $1.1 million in HUD funds for retail revitalization adjacent to a Choice Neighborhoods project near 36th Street North and Peoria.
City economic-development staff told the council Nov. 5 they plan to use roughly $1.5 million in returned loan proceeds from a redevelopment/beautification fund to match about $1.1 million in HUD funds associated with a Choice Neighborhoods project that covers portions of 36th Street N. and Peoria.
Councilors pressed staff on whether redirecting returned loan proceeds to this specific corridor matched the original voter intent for the "beautification and reinvestment" funds created under earlier sales-tax packages. "Why wouldn't we use it for what we told voters that it was going to be used for?" a councilor asked.
Staff said the returned funds are now unrestricted program income and that the retail-revitalization program is an eligible use under the economic-incentive policy; staff said the HUD award and match would be geographically focused adjacent to the Choice Neighborhoods housing work and would be administered as revolving loans for small business/entrepreneur support. Staff described the proposed work as a combination of business loans for franchise or start-up retail near that redevelopment project and programmatic support to recruit local operators.
Councilors asked for written clarifications that the HUD funds and required city match would be restricted to the targeted corridor for the HUD performance period, and for an explanation of how any returned program income from these loans would be handled after HUD's performance period ends. Staff agreed to return with specific contract language and a timeline.
What’s next: Staff offered to revise the budget backup and contract language to include a policy statement that, while HUD match funds are restricted to the Choice Neighborhoods area for HUD’s performance period, program income collected would be tracked and subject to council policy directives when it is redeployed.
Why it matters: Councilors flagged the political and legal sensitivity of moving long-committed redevelopment funds into new geographic priorities without explicit policy direction, and asked for a clear paper trail showing that current uses meet both HUD requirements and voter expectations.
Attribution: Economic development staff and councilors discussed the proposal in the Nov. 5 UED meeting. No formal appropriation vote was taken during the presentation.
