Proposed Expenditures of Community Development Block Grant Funding
Received under the American Recovery and Reinvestment Act of 2009 -
Substantial Amendment of Vermont’s 2008 Action Plan for Housing & Community Development

The State of Vermont is eligible to receive $1,981,527 under the American Recovery and Reinvestment Act of 2009 (ARRA) to carry out, on an expedited basis, eligible activities under the Community Development Block Grant (CDBG) program. On May 5, 2009, the U.S. Department of Housing & Urban Development (HUD) published a June 29, 2009, deadline for states to submit an application and plan for spending this money in compliance with the following guidance:

Funding available under the Recovery Act has clear purposes – to stimulate the economy through measures that modernize the Nation’s infrastructure, improve energy efficiency, and expand educational opportunities and access to health care. HUD further clarifies that CDBG-ARRA grantees carefully evaluate proposed projects for consistency with the overarching goals of the Recovery Act, especially the above-cited purposes. To this extent, HUD strongly urges grantees to use CDBG-ARRA funds for hard development costs associated with infrastructure activities that provide basic services to residents or activities that promote energy efficiency and conservation through rehabilitation or retrofitting of existing buildings.

While grantees have the full range of CDBG eligible activities at their disposal for CDBG-ARRA, Congress clearly intends that CDBG-ARRA funds should primarily be invested in economic development, housing, infrastructure and other public facilities activities that will quickly spur further economic investment, increased energy efficiency, and job creation or retention. HUD has provided guidance to grantees in selecting activities for CDBG-ARRA funding, and advises grantees not to fund eligible activities under the Housing and Community Development Act that are unlikely to substantively address the intent of the Recovery Act.  Therefore the State’s plan will comply with Section 1602 of the Act, which requires grantees to fund activities that maximize job creation and economic benefit and can award contracts based on bids within 120 days. The Act also requires that proposed CDBG-ARRA funded activities be clearly identified by name, description, funding amount, eligibility category, national objective, and other leveraged funds within the proposed plan.

The plan for spending the CDBG-ARRA funding is a “substantial amendment” to the State’s 2008 CDBG Action Plan. To meet the tight turnaround time, HUD is shortening the minimum time for citizen comments from 30 to 7 calendar days. Substantial amendment materials must be posted online as the materials are developed, published, and submitted to HUD.

The State proposes to undertake the following activities to stimulate the economy through, job creation and retention and the creation and retention of affordable housing, with the following projects:

1. For-profit Business Loan to Vermont Meats- to rehabilitate, retrofit and install modern processing equipment in an existing un-used facility located on Back Westminster Rd in the Town of Westminster, to be utilized as a USDA Inspected meat and poultry slaughter and processing facility.  15 new jobs will be created of which 12 will be available to low and moderate income persons.  $648,000 of CDBG-ARRA funding will be used for rehabilitation of the facility and for the purchase of modern energy efficient processing equipment.  An additional $723,000 of private, bank and public financing will support this $1,371,000 job creation project.  The benefit and economic impact to the area farmers and agricultural community will be significant.  The Agency of Agriculture has cited the lack of USDA Inspected Meat Processing Facilities in Vermont as barrier to the continued growth of the local foods movement and increased economic opportunities for Vermont farmers.   An estimated 8 temporary construction jobs will created in addition to the 15 new jobs created directly at the facility.

2. Deferred Loan to ReCycle North, an area Non-Profit Organization, to purchase and renovate a historic granite shed in the City of Barre.  The project located at 28-34 Granite St. in downtown Barre, will include rehabilitation of the granite shed, asbestos contamination cleanup, construction of classrooms and training spaces, and developing an efficient marketplace for the reuse and distribution of  goods to people in need. Electrical and lighting efficiencies will be addressed, the heating system will be replaced, and historic windows will be rehabilitated or replaced to make more efficient. This project is modeled after RyCycle North’s successful project in Burlington. 10 new jobs will be created of which six (6) will be filled by low-to-moderate income persons.  $294,820 of CDBG-ARRA funding will be used for the acquisition of the property and combined with $745,269 in other state, federal and local sources to rehabilitate the property.  The project will provide job skill training to low income youth who have dropped out of school, protect the environment by reusing hundreds of tons of materials that would otherwise end up in the landfill, and relieve poverty by providing low-cost and free goods to low-income people in central Vermont.  The benefit and economic impact to the region will be significant.  An estimated 18 temporary construction jobs will be created in addition to the 10 new jobs created directly at the facility.

3. For-profit Business Loan to Commonwealth Yogurt to purchase specialized equipment for a new Class II Dairy Processing facility in the Town of Brattleboro. $600,000 of CDBG-ARRA funding will be used for the partial fit up of a newly constructed modern energy efficient cultured dairy processing facility.  An additional $17,600,000 in commercial debt, VEDA financing, new market tax credits, and investor equity will provide the funding to construct and equip the yogurt production facility, and establish the business.
   
   The equipment will allow Commonwealth Yogurt to process whole milk from any source (instead of skim) and sell the cream by-product to cheese and ice cream makers, maximize profit margins, and better control its raw material. This approach has been cited by the Agency of Agriculture and the Vermont Dairy Task Force as a major goal since it will create a better 'balanced' Vermont dairy product industry with a skim milk user and cream supplier in Southern Vermont, create jobs in Windham county, an area of Vermont which has seen job decline in recent history and locate closer to large consumer markets to reach an appropriate economy of scale.  Using conventional, rBST free, and organic milk the facility will produce cultured products, primarily yogurt for private label retail and wholesale customers as well as co-pack production for major national brands. 25 new jobs will be created directly at the facility of which 14 will be available low to moderate income persons. The benefit and economic impact to the region and agricultural industry will be significant and an estimated 80 temporary construction jobs will created in addition to the 25 new jobs created directly at the facility.

4. Deferred Loan to Champlain Housing Trust (CHT) and Housing Vermont (HVT) to construct a 16 unit affordable housing complex on a vacant lot (former burned-out meat-packing plant, since demolished) in the Village of Swanton. $300,000 of CDBG-ARRA funding will be used for the construction, in conjunction with $3,406,112 in other local, state, federal and private resources, to build 16 new perpetually affordable rental units in one building called Blake Commons on a 1.76 acre parcel at 8 Blake Street, a dead end street less than a mile from downtown Swanton. The property is adjacent to Town recreational fields and the soon-to-be-developed Swanton Rail Trail and within walking distance to the Mary Babcock Elementary School, the town library, post office and health clinic. Two of the sixteen units will be fully accessible.  The construction of 16 new housing rental units will benefit approximately 24 low to moderate incomes residents and benefit the local economy by providing an estimated 65 temporary construction jobs.

The State also proposes to use 7% of the allowable 10% of the CDBG-ARRA funding allocation for State Administration of the program. 
Comments on this proposed plan for CDBG-ARRA funding are due by close of business on June 25th, 2009.  Comments should be emailed to: josh.hanford@state.vt.us
For more information contact:
Josh Hanford, Director, Vermont Community Development Program
802 828-5201
josh.hanford@state.vt.us

June 2009