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January 24, 2013
HUD OKAYS $1 MILLION LOAN GUARANTEE FOR MT. VERNON FLOOD CONTROL PROJECT
Mayor Boudreau says it’s "final portion" of funding for flood wall
SEATTLE - The U.S. Department of Housing and Urban Development today okayed a $1 million HUD Section 108 loan guarantee to the City of Mount Vernon that will enable it to proceed with Phase II of its Downtown Flood Control Project that will include construction of a flood wall along the Skagit River to protect its levee system and the surrounding low- and moderate income area.
Phase I of the flood control project was completed in 2010 with the construction of a flood wall from Lion's Park to the Division Street Bridge. Phase II will involve construction of an additional 1,650-foot floodwall from the bridge south to Kincaid Street or the Moose Lodge. It also will include a pedestrian trail and a ¾ acre riverfront park. The flood wall is intended to provide protection against 100-year floods. In addition to the HUD Section 108 loan guarantee, funding for the $12.9 Phase II will come from the city's HUD Community Development Block Grant funding, the Governor's and State's capital budgets and other City and state funds.
HUD's Section 108 Loan Guarantee Assistance program enables local governments to borrow money from private investors at reduced interest rates. In return, local governments pledge current and future Community Development Block Grant (CDBG) allocations to cover the loan amount as security for the loan. Over the years, Section 108 guarantees generally have generated $4 billion of private investment for every $1 in Section 108 guarantee.
"HUD's Loan Guarantee Program can be a powerful public investment tool to drive economic development in underserved areas," said HUD Secretary Shaun Donovan. "The program will be a boost to the City's efforts to reduce the costs and consequences of recurrent flooding."
"For almost 35 years, our CDBG program has provided local governments with the resources and the flexibility they need to address urgent local priorities," said HUD Northwest Regional Administrator Mary McBride. "Because of the borrowing capacity it provides, our Section 108 program provides even more resources, even more flexibility. And, with its downtown and so much of its affordable housing supply at risk from recurrent floods, those are exactly the tools Mount Vernon needs to try to put the mighty Skagit at bay. We're very pleased that something in our toolbox can be helpful to Mount Vernon's to protect its town, its assets and its citizens."
"We are extremely pleased that HUD has approved our Section 108 loan guarantee of $1 million," said Mayor Jill Boudreau of Mt. Vernon, "This is the final portion of funding for this $12.9 million project and we hope to go to bid within the next couple months."
HUD's Section 108 Loan Guarantee Assistance Program enables local governments to borrow money from private investors at reduced interest rates to promote economic development, stimulate job growth and improve housing or public facilities. Such public investment is often needed to inspire private contributions, to provide seed money, or to simply boost confidence that many private firms and individuals need to invest in distressed areas. Section 108 loans are not risk-free, however; local governments borrowing funds secured by this loan guarantee program must pledge a portion their current and future Community Development Block Grant (CDBG) allocations to cover the loan amount as security for the loan. The loan must be re-paid within 20 years.
HUD's mission is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD is working to strengthen the housing market to bolster the economy and protect consumers; meet the need for quality affordable rental homes: utilize housing as a platform for improving quality of life; build inclusive and sustainable communities free from discrimination; and transform the way HUD does business. More information about HUD and its programs is available on the Internet at www.hud.gov and espanol.hud.gov. You can also follow HUD on Twitter at @HUDgov or on Facebook at www.facebook.com/HUD. or sign up for news alerts on HUD's News Listserv.