Saturday, July 17, 2004

U.S. says city owes it $3.95M


Renovation grants provision cited

By Kevin Aldridge
Enquirer staff writer

The U.S. Department of Housing and Urban Development has asked Cincinnati to repay $3.95 million in grants used to renovate Huntington Meadows in Bond Hill.

Mayor Charlie Luken is appealing to congressmen to step in.

Federal officials said the city violated an agreement that required it to maintain Huntington Meadows as low-income housing for at least five years after renovations.

Huntington Meadows went bankrupt in 2002, four years after renovations. More than 200 families were evicted.

In February, Cincinnati City Council agreed to spend more than $13 million to help two Bond Hill churches redevelop the site into market-rate housing.

HUD officials called the city's efforts to keep Huntington Meadows open "inadequate" and demanded repayment.

Lana Vacha, HUD director of community planning and development, told the city in a July 9 letter there were three remedies:

•  Repay the $3.95 million.

•  Agree to an annual grant reduction of more than $1 million over three years.

The city receives about $8 million a year from HUD to benefit low-income residents.

•  Substitute the 264 units lost at Huntington Meadows with 264 low-income units elsewhere that don't receive federal funds.

Luken said HUD's decision could have serious implications for the city's general fund budget, which is facing a deficit of $10 million next year.

He sent letters Thursday to Reps. Steve Chabot and Rob Portman and Sens. Mike DeWine and George Voinovich asking them to help overturn HUD's decision.

"The city repeatedly demonstrated its best efforts to keep the project viable in the absence of implementing regulation and/or guidance," Luken wrote. "While I appreciate HUD's responsibility to ensure that federal funds are expended in a manner consistent with program rules and regulations, the foreclosure on the Huntington Meadows property was beyond the city's control."

E-mail kaldridge@enquirer.com




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