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Residents, commission member oppose federal grant for Plaza Saltillo area

Monday, December 20, 2010 by Michael Kanin

The Austin City Council will hold a Jan.13 public hearing on an $8 million federal grant that would provide loans for local businesses in the Saltillo Plaza neighborhood.


Mayor Pro Tem Mike Martinez pulled the item that set the date for that hearing from the Council’s consent agenda for discussion on Thursday. He and his colleagues proceeded to question Economic Growth and Redevelopment Services Director Kevin Johns. They focused on any fiscal implications for the city, the department’s outreach efforts, and whether a delay requested by skeptical neighbors would damage the grant application.


The grant is part of a Housing and Urban Development program called the Brownfields Economic Development Initiative. According to the organization’s web site, the money is intended to “assist cities with the redevelopment of abandoned, idled and underused industrial and commercial facilities where expansion and redevelopment is burdened by real or potential (emphasis theirs) environmental contamination.”


The city plans to use those funds to help four businesses, each of which would, in turn, provide jobs for area residents. Neighbors, however, were skeptical.


“There are numerous questions that need to be answered,” said Community Development Commission member Gilbert Rivera. “Today we just heard that 209 jobs would be obtained from this project. At the last (commission) meeting, we were told it was going to be 300 jobs.”


Rivera said that the commission would like a delay so that it would have enough time to put together a response. “There is a public hearing on January 11, at our regular (Commission) meeting and then the public hearing (is) scheduled for the 13th. The key here…is to see if the (Commission) could have enough time to put together comments and recommendations for that public hearing that is on the 13th.”


After a brief discussion about moving the hearing to a later date, it remained set for Jan. 13.


Martinez asked Johns about the sort of outreach his department had done. Johns explained a process by which his office had contacted a host of area businesses, but that only four had responded with appropriate applications.


The Mayor Pro Tem was also concerned about any city liability associated with the grants. Johns explained that there was a difference between these proposed funds and similar ones the city had received in the past. “The city’s…loan programs have made loans where the city then became liable for those loans, so it’s a drain on the (Community Block Development Grant) funds,” he said. “This is different in the sense that…when we compete nationally for these dollars, we have to show that the business owners that are drawing down the money have committed to create a certain number of jobs, but also to provide 100 percent collateral to back up the loans.”


Martinez then turned to the question of how the city would be able to prove whether the funds were doing what they were supposed to do. “When we talk about creation of jobs, specifically for those individuals in and around that community because of the high poverty rates and the high unemployment rates, how do we ensure that those are the folks that are actually going to be employed in these construction of these projects and the post-construction businesses?” he asked.


Johns explained that his department and the Neighborhood Housing and Community Development department would be watching. “The (federal) requirements are very specific: Fifty-one percent of all the jobs have to be for low and moderate income people who are in that area,” he said. “Those jobs, we will monitor.”


After the hearing, Rivera reiterated his concerns to In Fact Daily. “It really is not an initiative that is going to help the neighborhood,” he said. “They are using our poverty statistics to benefit…developers that have money on their own that…could (build) on their own without using our poverty to get wealthier.”


Johns defended the program. “This is a program that has a history of creating employment in hardcore, unemployed areas,” he said. “This is an area along the railroad tracks that has a 30 percent poverty rate. By helping the businesses that are already there to expand and create businesses, you create a more stable environment.”


Any potential funds for the program would come pending both the public hearing and final City Council approval.

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