An important agency in Rainier Valley is about to enter a new phase in which it will go from making business grants to acting more like an investment bank.

The city, county, and Sound Transit helped form the Rainier Valley Community Development Fund with a pledge of $50 million in funding spread from 2005 to 2013. The money provides cash assistance and loans to businesses struggling with light rail construction along Martin Luther King Jr. Way South, with $16 million budgeted for transit mitigation grants and loans, $2 million for job training for Southeast residents, and $32 million for long-term loans that will back new businesses and real estate development in Rainier Valley — the phase CDF is now entering.

Repayment of the low-interest loans (typically around 5 percent) must sustain the agency in 2013 and beyond, something the City Council is watching closely to ensure that the community investment program — which is the largest of its type in the nation — succeeds.

In a March 26 briefing to the council, CDF Director Jaime Garcia said that, to date, the agency has loaned or granted a total of $9.3 million in mitigation funds to 157 businesses. It has also trained 172 people in a pre-apprenticeship program that has placed 109 people in union or other jobs at hourly wages well over $16, plus benefits, Garcia said.

Though 12 businesses have closed as a result of light rail construction, another two dozen have opened, he said. With Sound Transit expecting to complete its MLK section late this year (and CDF’s mitigation and training programs to end in 2008 and 2009), the agency is now slowly shifting to making the larger business and real estate loans that will turn it into a sort of community investment bank.

So far, Garcia said, the CDF has approved three business loans totaling $191,000 and two real estate deals for a total of $3.1 million, with another 17 deals in the works. But Councilmember Sally Clark questioned Garcia on what happens in 2013, CDF’s first year with no public funding. In that year, Clark said, the agency’s projected budget shows $926,000 in operating costs, but a cash balance of only $367,000.

Garcia responded that, with the end of its training program, the agency will trim its staff and reduce its costs, assuring Clark that the CDF will make it. “In 2013, you can see that our earned income is close to $4 million,” he said, “which will provide the operating money and an ongoing source of $3.3 million to lend” each year.

—Cydney Gillis

Keeping up on the ‘hood
Pedestrian safety, human-level design, and community decisionmaking are facing down a city Department of Transportation bid to control a million-dollar building fund for Seattle street projects.

Neighborhood advocates want to keep advising city officials deciding what to do with the city’s Neighborhood Street Fund, a $1.5-million annual capital account. The federated City Neighborhood Council sent a letter to Mayor Greg Nickels and the City Council March 27 pointing out that projects paid through the street fund should be small-scale and enacted with the community’s approval.
Lots of small transportation projects have been undertaken with the input of local neighborhood councils, which convene and rate ideas for their areas; without that process, says Chris Leman, chair of the City Neighborhood Council, city officials’ priorities always come first.

“It frees that money up, and invariably it seems the money is allocated to friends of the adminstration or favorites within the bureaucracy,” he says. “That’s the fear, if you don’t have that grassroots process.”

—Adam Hyla