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NORTHWEST ASSOCIATED CONSULTANTS INC. <br />MEMORANDUM <br />TO: Little Canada City Staff <br />FROM: Alan Brixius <br />DATE: 10 January 1983 <br />RE: <br />FILE NO: <br />Little Canada 1983 Community Development Block Grant <br />Application <br />758.09 (83.01) <br />In the preparation of Little Canada's 1983 Community Development Block Grant <br />Application, we contacted Linda Henning of N.U.D. Community Planning and <br />Development in an effort to identify the short - comings of Little Canada's <br />1982 application. Our discussion revealed that generally the application was <br />well prepared, however, the following factors greatly influenced Little <br />Canada's review score: <br />1. NEED FACTORS: This portion of the project scoring is beyond the control <br />of the City. The project need for Little Canada is evaluated against <br />the need of other applicant communities. <br />2. PROGRAM FACTORS: This portion of the project scoring is greatly in- <br />fluenced by the content of the application. Ms. Henning noted the follow- <br />ing areas that affected Little Canada's score in this portion of the <br />application. <br />A. The application provided no evidence of an appraisal to support <br />project costs. Without an appraisal there was no certification <br />of the accuracy of the project cost estimate. <br />B. The second item noted by Ms. Henning was the City's need for the <br />grant due to the ineffectiveness of tax increment financing for <br />this project. HUD's Section 202 and CDBG people work closely <br />together in the evaluation of CDBG applications for housing. The <br />Section 202 grant required a commitment from the City to acquire <br />the land for the elderly housing project. The CDBG review revealed <br />that the dates between the Section 202 grant acceptance and the <br />information regarding the tax exemption status of nonprofit groups <br />were close together. Through this information HUD inferred that <br />Little Canada may have known of ineffectiveness of tax increment <br />financing for this project prior to making the commitment to the <br />land acquisition to secure the 202 grant. Knowledge of the in- <br />effectiveness of tax increment financing was viewed by HUD as the <br />4820 minnetonka boulevard, suite 420 minneapolis, mn 55416 612/925 -9420 <br />11 <br />