County doesn't get NSP grant

February 12, 2010
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Call it a consolation prize. Kent County commissioners received and then appropriated $1.07 million last week to the county’s Community Development Department.

The revenue will come from the Neighborhood Stabilization Program, which targets housing development in urban centers and is administered by the U.S. Department of Housing and Urban Development. The money represents the income CDD generated from earlier NSP funds, and the amount is based on a resale of 16 single-family homes renovated in the county through those dollars.

“Additional program income will be realized as funds are reallocated to developers to produce additional units,” said Liz Kayser-Burns, a financial supervisor.

Still, CDD was hoping for more funding — about 20 times more.

Last July, the department applied to HUD for a $20 million NSP grant that would be used to rehabilitate foreclosed and abandoned homes in four sectors of the county. The dollars were apportioned under the American Recovery and Reinvestment Act approved by Congress a year ago.

But CDD Director Linda Likely recently told the Business Journal that HUD didn’t approve the county’s grant, and all the state’s allotment of NSP funds went to the Michigan State Housing Development Authority for its New Michigan Neighborhood Plan.

MSHDA requested $290 million from HUD in November, and HUD gave MSHDA $223 million last month. The money was part of a $2 billion pot that HUD made available to tackle foreclosures throughout the nation.

Under the original request, MSHDA planned to acquire and redevelop 6,000 foreclosed, abandoned and vacant properties in the state. An estimated 2,500 buildings would have been demolished and 1,500 homes would have been built or rehabilitated, as well. But those numbers could change because the funding MSHDA was awarded was $67 million less than it requested.

“Our proposal shows we are working together to overcome division, because we understand that all Michigan communities have a shared stake in developing the assets of our urban centers,” said Keith Molin, MSHDA executive director, in a statement.

Grand Rapids and the Michigan Land Bank Fast Track Authority could receive up to $20 million of MSHDA’s HUD funds. The authority will provide land bank services here until the county establishes its own, which county Treasurer Kenneth Parrish is in the process of doing.

Likely said she didn’t know why HUD didn’t OK the county’s grant application since the county was approved on its previous application. She has asked the federal agency to tell her  the reason. She wants that information so CDD doesn’t repeat whatever mistake it made when the next NSP application has to be filed. HUD had 30 days to respond to her inquiry.

The county had planned to spend $18 million to buy, rehab and either sell, lease or rent foreclosed homes to income-qualifying individuals and families. The remaining $2 million would have been used to administer the grant. Six new jobs were to have been created had the department received the funding.

CDD did get a NSP grant of $3.9 million last year from HUD, money that came from the Housing and Economic Recovery Act of 2008. The department chose to focus those dollars on residential areas in Grandville, Kentwood, Wyoming, Plainfield Township and Gaines Township, as all five have a high number of houses financed through sub-prime mortgages.

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