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Renovation hinges on federal loan

Renovation hinges on federal loan

City: $884K plan would turn former Boys and Girls Club site into recreation centerRenovation hinges on federal loan

March 17th, 2019 by Karl Richter in Texarkana News

In this file photo, the Boys and Girls Club building is shown in Texarkana, Ark.

Photo by Greg Bischof /Texarkana Gazette.

The Texarkana, Ark., Board of Directors on Monday will take up a new plan to revive the city's abandoned former Boys and Girls Club building.

At its regular meeting, the board will consider approving an application to a federal loan program for more than $884,000 needed to repair the Legion Drive building, which would become a city-owned recreation and community center.

If passed, a resolution sponsored by Ward 6 Director Terri Peavy would give Assistant Public Works Director Tracie Lee the green light to an apply for a Department of Housing and Urban Development Section 108 loan.

Section 108 is a financing mechanism that leverages a city's HUD Community Development Block Grants, one of the most relied-upon forms of federal funding for city and state improvement projects.

Under Section 108, a city or state my borrow up to five times its most recent annual CDBG allocation and repay the loan with future CDBG funds.

The Arkansas side's application would request a 20-year loan term, which would result in debt service payments of about $30,000 to $50,000 per year, according to a briefing document prepared by city staff.

The idea grew from an initiative begun last year with the goal of helping Arkansas-side residents be healthy, Peavy said Friday.

Creating a multi-purpose, all-age recreational facility would complement recent city efforts to improve parks, trails and the farmers' market for the sake of residents' health, she said.

If the plan is successful, the city's CDBG funding would not be disrupted, City Manager Kenny Haskin emphasized in a statement Friday.

"As public facilities are an existing line item in the CDBG budget, this will not reduce any other services provided by the CDBG program," he stated.

The city's Fiscal Year 2017 CDBG award was $234,427, so its available Section 108 borrowing capacity is $1,172,135, according to an email from HUD published by the city Thursday as part of meeting agenda materials.

Lee's loan proposal lists start-up expenses of more than $884,000, including more than $835,000 for architecture and remodeling. Other expenses include legal fees, insurance, security, marketing, equipment and supplies.

Haskin stressed that the application would be just the beginning of a process that ultimately may not be successful.

"If the board decides to move forward with our request, the application will then have to be approved by the federal government, and their stress test is not an easy one to pass. This is just the first step," he stated.

The building has been vacant since 2008 and needs extensive electrical and plumbing work, roof repair and a new gymnasium floor. If means to renovate it are not found, demolishing it may be the best remaining option, Haskin said.

The building played a role in recent intra-board conflict that resulted in the 2017 censure of Ward 2 Director Laney Harris. The remainder of the board and then-Mayor Ruth Penney-Bell censured Harris in part for leading a walk-through of the building without informing the board beforehand.

Harris in 2018 sued the board and Penney-Bell, asking a federal court to declare the censure "null and void." The suit has not yet been resolved.

In May 2017, shortly after the disputed walk-through, Harris organized a rally at a local church meant to kickstart an awareness and fundraising campaign regarding the building. Despite initial enthusiasm, the effort led nowhere.

In other business Monday, the board will consider spending more than $119,000 on video and audio equipment for the Police Department.

The department seeks to purchase 10 in-car and body-worn camera bundles and three interview room video/audio recording systems.

Funding for the purchase would come from a variety of sources, including federal grants, seized cash and assets, and income from housing U.S. Marshal Service prisoners.

The board will also vote on approving the purchase of a pickup for the Public Works Department Streets Division. The city plans to pay McLarty Ford more than $34,000 for a three-quarter-ton crew cab truck. The cost is included in the current city budget.

The agenda includes a citizen communication time during which members of the public may address the board on any topic for up to five minutes each.

The meeting is scheduled for 6 p.m. in City Hall, 216 Walnut St.

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