10.23.02

City of Yakima secures needed changes to federal grant for downtown redevelopment

HUD decision key step in efforts to use $5 million federal grant & loan package

SEATTLE, WA - U.S. Senator Maria Cantwell (D-WA) today announced that the U.S. Department of Housing and Urban Development (HUD) has agreed to amend a $1 million grant to the City of Yakima so it can be used on multiple projects.

"This decision provides an important boost for the redevelopment of downtown Yakima," Cantwell said. "New businesses downtown will create new jobs for Yakima."

In November 1998, the City of Yakima was awarded a $1 million Economic Development Initiative (EDI) grant and a $4 million Section 108 loan to rehabilitate and restore the Great Western building (downtown Mall) into an upscale historic hotel.

The City of Yakima asked HUD to amend its EDI grant to attract new retail businesses to the mall. The City's request came after plans to turn the mall into a hotel fell though and additional retail department stores in the downtown mall closed, and it became clear that limiting the grant's scope to a single project would limit its effectiveness. The amendment requested permission from HUD to use the grant on multiple projects.

Cantwell worked closely with the City to support its efforts to amend the EDI grant. Cantwell's office notified the City this week that the amendment was approved by HUD.

Cantwell is also working with the City on its request that HUD amend the $4 million loan which will work in conjunction with the grant, allowing both the grant and loan to finance multiple, smaller projects. A number of businesses are interested in participating in the grant/loan program.

Once HUD approves the loan amendment, it will authorize the City to approve low-interest loans for redevelopment. The City will be the actual borrower of HUD funds, securing them through the City's annual CDBG entitlement funding. The City will locally underwrite the loans and require additional security from local borrowers.