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City seeking federal funds for Eastside revitalization

Thursday, July 14, 2011 by Kimberly Reeves

Austin will submit its much anticipated, and somewhat delayed, application for federal revitalization funds today, a grant intended to boost business expansion along an industrial corridor on Austin’s near East Side.


The Community Development Commission, which heard an update on the application on Tuesday night, calls it the BEDI. That’s the acronym for the Brownfields Economic Development Initiative Grant and Section 108 Loan Program. The loans back the expansion of business facilities.


Austin’s application, which targets businesses along the railroad tracks in the Saltillo area, has been in the works for almost two years. After a false start last year, the Obama Administration finally set an actual deadline for submission. The city has had less than a month to review and revise its work.


“We have been scrambling for about three weeks to assemble it,” said Kevin Johns, director of the city’s economic development department. “We’ve gone back to the four original businesses in that application, and we have pretty good news on that front. Three of the four businesses still want to do it.”


In the initial draft application, the city requested up to $10 million in combined assistance and loan guarantees to assist four major East Side businesses. Those businesses were El Mundo newspaper; Saltillo Market, a project of developer Perry Lorenz and partners south of Plaza Saltillo; Waller Street Hotel, developed by the Seidman Family and partners at the corner of East 6th Street and Waller Street; and Corazon, an infill project by filmmaker Richard Kooris.


Johns said Kooris simply could not hold on. That was the largest of the four projects and had been expected to create about 100 of the projected 209 jobs. Under the draft proposal, Corazon would have produced 90 residential units for lease, as well as space for artists and technology.


The revised proposal will stretch the net farther and wider, with a longer time line, Johns told the commission. Johns said he was still optimistic about the city’s chances for securing federal money, which is targeted at eliminating slums and providing job opportunities for low- and moderate-income residents.


“Originally, we were going to create 290 jobs. Under our new scenario, our rough analysis looks like we’ll create about 245 jobs, with an additional 18 months,” Johns said. “It gives us more time to line up local businesses.”


The Community Development Commission’s main concern is job creation or, more specifically, creation of living wage jobs. Construction jobs on the site must be a living wage, according to the application, but jobs created by the businesses may or may not meet that standard.


“That’s why I voted against it,” Commissioner Gilberto Rivera told Johns. “It’s because the developer did not have to state, very clearly, that they would provide a living wage for permanent employees.”


Johns tried to assure the commissioners that the city was well aware of their concerns and would strive, wherever possible, to encourage higher wage jobs.


“All I can say is we’ll do our absolute best,” Johns told commissioners.


Most members of the Community Development Commission, however, sided with Rivera in the discussion.


“Since 50 percent of the jobs have to come from within the community, we want to know that those jobs will be living wage jobs so our families can get out of that poverty cycle,” said outgoing Commissioner Ruby Roa.


Commissioner Elridge Nelson, however, played devil’s advocate, noting that a doorman’s job at a hotel, for instance, might or might not be a living wage job. It depended on the demands of the market.


Commissioner Karen Langley said she recalled that the city was going to see whether “living wage” language could be built into the requirements for the loans. Johns said he did not remember that discussion but would go back and review the potential alternative with the city.


Johns said the application would go to the U.S. Department of Housing and Urban Development today. It would be a couple of months, he said, before the city would know if it had made it to the next phase.

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