Section 108 - 2006 Economic Development Projects - Oregon

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Brownfields Redevelopment Loan Fund
Eugene, OR
Section 108 Guaranteed Loan- $7,895,000

The City of Eugene’s Community Development Division will create a business loan fund that will assist existing businesses and help attract new businesses to distressed areas in the City. The loan fund will focus primarily on the City’s Downtown and Riverfront urban renewal districts. The fund will provide loans to subrecipients for acquisition, relocation assistance, clearance and demolition, site preparation, and construction of public facilities. It will also be available to non-profit service providers and public housing entities, via subrecipient agreements.

In conjunction with the Section 108 Guaranteed Loan funds, the City will use a $2,000,000 Brownfield Economic Development Initiative (BEDI) grant to pay for part of the interest on the Section 108 Guaranteed Loan, for site preparation, and for the creation of a debt service reserve. The total cost of the project is $9,895,000.

The Community Development Block Grant (CDBG) national objective for the City’s use of the guaranteed loan proceeds is to benefit low-moderate income persons through job creation and through the provision of affordable housing. Also, the national objective is to eliminate/prevent blight or slums. The loan fund will create an estimated 200 new full-time jobs as the City will require each Business Loan borrower to provide one full-time job for every $35,000 in Loan Fund proceeds used.

The City will repay the Section 108 Guaranteed Loan over a twenty-year period using repayments from its business borrowers and subrecipients. To secure repayment of the guaranteed loan funds, the City pledges its interest in third party loans secured by first lien deeds of trust on real property, personal guarantees, equipment, accounts receivable, and/or inventory. The City also pledges its CDBG funds.