3 Projects in Line for $5 Million in Federal Loans

By Brynn Grimley
Projects in Poulsbo, Silverdale and Port Orchard could get a jump-start if they are approved for a combined $5 million in loans from the federal Department of Housing and Urban Development.
Members of the executive board of the Kitsap Regional Coordinating Council heard presentations on those projects, along with a fourth planned for Bainbridge Island, on Wednesday.
The board recommended the three be considered by HUD officials for $5.7 million that is available to the county under the Section 108 loan guarantee program.
The Poulsbo request is from Westbury Inc., which wants $2 million to help build a plant to manufacture security and safety barriers systems primarily for airports; the Silverdale request comes from the county, which would use $1 million to help build a YMCA there; the city of Port Orchard asked for $2 million to support a downtown revitalization
project; and Martha and Mary asked for $1.5 million to help build a 12-suite rehabilitation facility on Bainbridge Island.
That adds up to $6.5 million, which is why the council had to whittle the list down.
This is only the second time in recent history that the county has used the loan guarantee program, according to Shelley Kneip, attorney for the Kitsap County Prosecuting Attorney’s Office. Previously, Section 108 loan money was used for renovations at the Admiral Theatre in Bremerton, she said.
The county is responsible for paying back the low-interest loans and has to pledge current and future Community Development Block Grant allocations to cover the loan amount as security.
To ensure the county is not on the hook for the loan payments, applicants had to prove they could pay back the total amount, or provide enough collateral to cover the cost.
The benefit of the Section 108 loan program is it does not affect an agency’s bonding authority, and provides flexibility to help a community jump-start development in areas that need it most, said Shannon Bauman, block grant program planner.
To be eligible, applicants must meet Community Development Block Grant rules and regulations, as well as at least one of three national objectives: the project must benefit low- and moderate-income people, help to eliminate “slum and blight,” or meet the urgent needs of the community.
The regional council board determined the Poulsbo project and the Silverdale project were the two most prepared to move forward and suggested they receive the full amounts requested.
County Commissioner Josh Brown expressed uncertainty about the city of Port Orchard’s plan to repay the loan. Other board members echoed those concerns, which Mayor Lary Coppola — also a KRCC member — said was agreeable.
The board stipulated the loans must be repaid in 10 years and that the projects must be ready to go no later than September 2010.
Because the Martha and Mary project was not ready for immediate implementation, the board committed to supporting the project later.
The three projects are now subject to a financial review by an independent financial consultant, which will make sure their payment plan is feasible. A 30-day comment period and a public hearing will also take place before a final loan application is sent to HUD.
A second public hearing will be held once the funds are received.

The Projects
The projects recommended to receive Section 108 loans from the federal Department of Housing and Urban Development include:
Westbury Inc.: The company plans to build in Poulsbo’s Twelve Trees Industrial Park, where it will manufacture security and safety barriers systems primarily for airports. It plans to employ 100 people, of which more than half will be from the low- to moderate-income bracket. Jobs would start at $16 an hour, plus benefits. The company requested $2 million, and will provide the remaining $500,000 it needs to get started.
Port Orchard Town Center Revitalization Project: The city of Port Orchard requested $2 million to help with the purchase of land needed for the construction of an underground parking garage and new library on Prospect Street. The cost of the parking garage, including land acquisition and design is $5.3 million. The cost of the overall downtown revitalization project is estimated at $36.6 million.
Kitsap County Silverdale Campus YMCA: The county requested $1 million for the proposed Silverdale YMCA. The county previously committed $5 million for the estimated $15 million project, which is projected to be between 50,000- and 70,000-square feet. The remaining $10 million will be funded by the YMCA of Pierce/Kitsap County. The new facility would create 74 full-time positions once open, of which 56 will be for low- to moderate-income individuals.

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