At midnight on Friday, the 2013 Budget Sequestration cuts went into effect, making CMHA’s “neighborhood-transformation-by-demolition” strategy even more risky and speculative than before.

According to the OMB Report issued on September 12, 2012 pursuant to the Sequestration Transparency Act of 2012, the HUD Choice Neighborhoods “Transformation Initiative” is “sequestrable” (page 68). And according to a brief issued by the United Neighborhoods Centers of America (“A selection of programs that would be impacted by a March 1, 2013 sequester and their estimated cuts”), the HUD Choice Neighborhoods program that CMHA expects to finance the “transformation” of the Near East Side would be cut from $120M to $21.6M through sequestration, effective at midnight, tonight. Thus, a substantial source of money being counted upon for the neighborhood’s PACT redevelopment may not really be there.

Given the Compact’s history as a recipient of federal funding for community redevelopment, I continue to be concerned about the gamble that CMHA is taking that it can tear down irreplaceable historic building stock -- creating 27 acres of vacant land in the heart of the Near East Side -- and receive federal grant funding to then restore the neighborhood. As many know, the promised federal HUD Empowerment zone funding of $100M over ten years – for a competitive grant application we submitted and won – ended up at about $26M. While the 15 Round II Urban Empowerment Zones selected (including Columbus) out of 121 applications created good targeting of federal dollars, it also resulted in a situation where there was a small political constituency for the program on Capitol Hill, as the program impacted just 44 of the 435 Congressional districts (and a good number of those, as well as committee chairmanships, were in Republican-controlled legislative Districts that were not particularly fond of the Democratic-created Empowerment Zone initiative).

Those political realities created tremendous difficulties in the annual appropriations lobbying effort, as the program did not affect a broad slice of the American public (and thus, congressional districts). In contrast, HUD programs like CDBG, Section 8, and Healthy Homes (lead paint) affect almost every congressional district and have a much broader lobby for funding on Capitol Hill. Such other programs are listed in the Report “How Would HUD Programs Fare Under Sequestration), indicating their popularity for the HUD advocacy groups.

Further, the HUD funds are considered in the Transportation and Housing Committee – and transportation funding has very heavy and strong lobbying presence from the construction industry and state and local leaders, compared to low/mod income housing programs. [I would note that Chicago, led by my colleague Wallace Goode whom Charles may know, received a Round I Urban Empowerment Zone designation, which was an upfront commitment of $100M in Title XX SSBG funds through federal tax legislation which allowed multi-year commitment of federal dollars – a very different/better funding strategy than the annual appropriations of the Round II Urban Empowerment Zones and Choice Neighborhoods programs.]

The Choice Neighborhoods Initiative takes the political constituency weakness of the Round II Empowerment Zone program to an extreme. In any given year, only 4 - 5 Choice Neighborhood projects are likely to be funded. Further, these projects will serve much smaller geographies than Empowerment Zone geographies, and thus will impact just a handful of the nation’s 435 congressional districts.

For example, while the Columbus Empowerment Zone impacted three congressional districts, a Poindexter Village-linked Choice Neighborhoods program would impact just one congressional district – and this dynamic is repeated across the country. Also, the political dynamic of Republican-controlled House committee leadership over a Democratic White House-sponsored initiative is in place for the Choice Neighborhoods Initiative, just as it was for the Round II Urban EZ program.

My concern – based on eight years of real life experience lobbying on Capitol Hill with my EZ Director peers – is that beyond the White House there will be almost no political constituency for the Choice Neighborhoods Initiative in Washington -- which should cause critical concern about the program’s long-term viability in an era of scarce federal resources, and which should give us some pause here locally when the Poindexter Village redevelopment strategy is linked to CNI.

Last year, HUD awarded four Choice Neighborhood Implementation Grants, totaling $109M, to four communities (average grant of $27M). According to the United Neighborhoods Center of America’s analysis, with the sequestration, funding would be cut to $5.4M per community – which is less than the amount of money the City and CMHA have advanced to resurrect just the stalled Whitney Estates project. While $5.4M is real money, it is not enough money or leverage for the proposed transformation of Poindexter Village.

Further, to add to the gamble, Columbus has not been chosen to receive a Choice Neighborhoods Implementation Grant. In fact, we have not yet even applied for an Implementation Grant, though Columbus is one of 47 communities that have received the much smaller $300K Choice Neighborhood Planning Grants (10 such planning grants were issued in 2010, 13 planning grants were issued in 2011, and 17 planning grants were issued in 2012).

Of these 47 communities that received such Planning Grants, only 9 communities have received Choice Neighborhood Implementation Grants:

• In 2011, five communities were awarded implementation grants totaling $122M: Boston, Chicago, New Orleans, San Francisco and Seattle.

• In 2012, four communities were awarded Implementation Grants totaling $109M: Cincinnati, San Antonio, Seattle and Tampa, drawn from 42 applicants.

With Columbus as one of 39 planning grant recipients potentially applying for one of 4 implementation grants in a year, in strict statistical terms we have a 10% chance of being funded. A sampling of other cities that have received Planning Grants, but not yet implementation Grants, include: Baltimore, Atlanta, Buffalo, Camden, Cleveland, Durham, Kansas City, MO, Little Rock, Memphis, New York, Norfolk, Philadelphia, Sacramento, San Francisco (1 unfunded), Tulsa, Washington, DC (2 planning grants).

These and the other 20 cities provide strong competition for the nationwide Choice Neighborhoods Implementation Grant application process, assuming one moves forward in 2013 (with or without sequestration in effect). And it should be noted that Ohio already has one Implementation Grant in Cincinnati, so if there are national political considerations (rather than application merit) involved in selection, there may be a dynamic that supports spreading the wealth around the country and outside of Ohio.

I would also note that the funding trajectory for Choice Neighborhood Grants is heading in the wrong direction, from $122M in 2011, to $109M in 2012, and as of midnight Friday, just $21.6M. With 400 units of potential housing at Poindexter Village relying on the Choice Neighborhoods Initiative funding … a loss of federal funding would be devastating to the neighborhood – which would now be vacant and with demolished housing.

Obviously, we all hope the sequestration will not last long, but it does underscore the dangers of relying on uncertain federal appropriations – particularly from a competitive program for which Columbus has not yet applied. I have no doubt Columbus would put forth a competitive application with strong partners, but we must be clear that eligibility to apply is not the same as money in the bank, and any redevelopment strategy that relies heavily on such federal funding is risky.

It continues to make sense to me that we take a far more measured approach to demolition of our historic properties. Mass demolition without a plan or financing for rebuilding is a risky gamble, when more measured alternatives exist and have yet to be explored. We should also remember that while CMHA has applied for funding for the Senior Facility proposed for the site of soon-to-be-demolished Poindexter Village buildings, CMHA has not yet been funded. Yet an application for demolition permits has been filed, and demolition will presumably begin, prior to and irrespective of committed funding for the Senior Housing facility (Poindexter Place), which I understand was among the top three local funding priorities (please correct me if that information is incorrect) resulting in a loss of five points in the OHFA scoring criteria, and which will be subject to OHFA’s consideration of public comment through May 3, 2013 which appear to be worth up to 10 points in the scoring criteria. We have not yet organized to submit public comment to OHFA, and would like to be able to work with CMHA so we can submit positive and supportive comments.

Again, many of us would like to support CMHA’s proposal to build Senior Housing in the Poindexter Village area – specifically on one of the several directly adjacent vacant lots (site of the recently-demolished Poindexter Towers, site of the vacant Carl Brown IGA, site of the recently-demolished Champion Middle School, and/or vacant lots owned by Union Grove Baptist Church) -- but we have considerable angst not just about the proposed location which requires demolition, but also about the viability of the overall PACT redevelopment project’s federal funding stream itself.

We are all fully-cognizant that CMHA owns the property and can do what it wants with that property, but I continue to believe that this community deserves a discussion with private investors who are interested in revitalizing Poindexter Village to create a mixed income community, and a discussion about the appropriate number and location of units to be restored and built.

It would seem to be a concern to the Board and Senior staff that CMHA’s first project -- of a proposed ten year commitment -- would come by running over the neighborhood which you state the intention of serving. We were all present when the Near East Area Commission overwhelmingly rejected sending a letter of support for the Senior Housing project. With that as precedent and agency approach, it could be a very long and rocky ten years. With dialogue and compromise evidencing a good-faith partnership on the front end, rather than a power play, the ten years of your agency commitment could work much more smoothly.

To be clear, we do not view the MOA provision for the study of up to 10 buildings for potential cost effective reuse by CMHA to be a meaningful provision designed to ensure any consideration of preservation. CMHA has already stated publicly that it did not think it can operate the buildings profitably, and 24 CFR 970.15(b)(2) sets a clear standard by which CMHA can justify that result as the 57.14% of total development cost threshold would certainly be exceeded in a redevelopment. Thus, the 10 building study provision could be perceived as a cynical provision, because even before the Expert Group work begins, CMHA has a federal standard that provides the “justification” for a CMHA decision to ultimately demolish. What would be good-faith, would be to seriously consider a sale.

I would ask you to re-evaluate and consider talking through some of these issues. What happens if neither the Senior Housing nor the Choice Neighborhoods projects come through? If that happens, do you want to be the ones who take the blame for demolishing significant markers of Black history in Columbus?, for being responsible for the loss of 8% of the area’s population and housing stock? Doesn’t it make sense to consider alternatives which help us all hedge the risks as a community?

As the person who has done more community development work in the neighborhoods than anyone else over the last 15 years, I know how important neighborhood support is to long-term success. I have seen projects work, and fail … and I think we should all take the perspective that doing a strategic initiative next year, instead of this year, when the prospects are more clear, might be a better long-term approach. When you look at that area, St. Paul’s AME is up for a March 29th Sheriff’s Sale for $5M judgment against the loans for the wellness center … the Gideon/Gateway Building at 750 E. Long has been propped up solely with City of Columbus police/fire leases with the ownership having defaulted and changed … as you well-know CMHA has pumped an additional $3.5M into the existing $3.4M city grant to move the Whitney project forward … the Lincoln Theater is a heavily subsidized public sector redevelopment … All these things are happening with public money.

The goal of public sector involvement in community redevelopment is to facilitate the flow of private investment capital. I understand Bob Weiler has approached CMHA about Poindexter, as has Tom Fortin. These are all local developers we can work with to achieve community/neighborhood transformational goals – so why can’t we have a serious executive level discussion that includes preservation as a strategy in partnership with the private sector – particularly when the neighborhood is split so strongly by the prospect of mass demolition? Aren’t your goals to support the neighborhood and its residents? – and wouldn’t flexibility necessarily be a part of achieving those goals – particularly when the federal funding landscape looks so challenging?