Nonprofits to make case for grant money at today’s City Council meeting

By Alicia Petska

Published: May 12, 2008

Lynchburg’s diminished community development grants will be the subject of a public hearing before members of City Council tonight.

A number of area nonprofits are expected to be there to make a final plea for a piece of this year’s federal Community Development Block Grant money.

The CDBG program supports a variety of community improvement efforts, including job training and neighborhood revitalization.

Requests typically outweigh available resources, but this year has been particularly strained by a decision to hold back one-third of Lynchburg’s allocation to guard against future loan defaults by downtown’s Bluffwalk Center.

Just over $1 million was available for local programs. The move to create a Bluffwalk contingency left close to $682,000 of that in play, with a total of 31 city and nonprofit projects vying for a portion.

A community advisory group has made recommendations on how the remaining money should be divvyed up, but the final decision rests with City Council. Public comment will be heard during a meeting at 7:30 tonight in City Hall, 900 Church St.

A public hearing is held each year as the city decides the fate of its CDBG money. It’s typical for community advocates to attend and make a case for their respective projects.

A total of 25 nonprofits applied for a piece of this year’s allocation to the tune of almost $1.5 million. They were recommended to get close to $357,000 or about 52 percent of the money available after the Bluffwalk contingency.

City projects, which include the cost of administering the grant program, were recommended for $325,000 or about 48 percent of the post-Bluffwalk cash.

Overall, six government projects — including programs run by the city housing authority and the beginning of the Fifth Street makeover — submitted applications for a total of $1.3 million.

Council agreed last month to set aside $325,772 in case Bluffwalk fails to make its next two payments on a federal loan backed by the city.

Last August, the high-end hotel and restaurant found itself unable to pay, requiring the city to step in and make a six-figure payment.

Bluffwalk partners have since agreed to repay that money at an unspecified point in the future. Council recently requested more information on how and when that will occur.

The next payment is due this August. If Bluffwalk succeeds in meeting the debt, the CDBG money can be redistributed to community projects.

The city has been criticized by some for its support of the project, which is seen as an important catalyst in downtown’s redevelopment.

City Councilman Mike Gillette, who won a second term as the Ward I representative last week, said he heard surprisingly little disapproval of the private-public partnership while on the campaign trail, though.

“I think people recognize it’s an investment in downtown, and are comfortable with the idea that it takes investment to make money,” he said. “I did not hear a lot of complaint about that.”

Gillette, who chairs the local CDBG advisory committee, said he did agree with those who feel a more detailed report on Bluffwalk’s financial state is needed. He also wanted to see a formal agreement put in place to “memorialize” the business’ intent to repay the city for the money spent so far.

He drew the line at calls for an audit, questioning the city’s legal ability to make such a demand.