Norfolk housing authority wants to refund $1 million

NORFOLK

Nine years after receiving a federal HOPE VI grant to tear down two public housing complexes and build the neighborhood of Broad Creek, Norfolk officials say they can't spend all the money.

In a letter to federal officials, the city's housing authority this week offered to for go more than $1.3 million in federal funding so the city can end the project by June 30, 2010.

The refunded money is slightly less than 4 percent of the original $35 million grant the department of Housing and Urban Development awarded to Norfolk in 2000 to develop the community. The HOPE VI money helped pay to demolish the aging Bowling Green and Roberts Village communities, relocate residents and rebuild housing in the new mixed-income neighborhood.

Located off Ballentine Boulevard and Princess Anne Road, the community was the site for Homearama in 2005, an annual show of luxury homes hosted by Tidewater Builders Association.

"We've always been taught never to return any money," said John Kownack, chief housing reinvention officer for the city's housing authority. "But the grant really is over. The project is over."

HUD spokeswoman Donna White said returning unused money is not typical for HOPE VI recipients, but she added that it sometimes happens when authorities change their development plans.

The Norfolk Redevelopment and Housing Authority's board agreed last year to build 40 fewer public housing apartments than originally planned, saying Broad Creek could not accommodate additional rental units.

"We did that willingly and purposefully to try to ensure the neighborhood would be stable and sustainable," Sheppard Miller III, the board's chairman, said.

"Everything else was done. So we saved the taxpayers some money and we did what we said we were going to do. For me, it's a good thing to give money back."

Several years ago, the housing authority finished building the 354 apartments that qualified for federal funding. Although market-rate houses still are being built at Broad Creek, they don't qualify for HUD funding. The city won't tackle the final phase of the neighborhood - Village Center, along Princess Anne Road - until the housing market recovers.

In recent years, the authority has been using remaining grant money for its first-time homebuyers program. But spending the last of the funds could take years, officials said. Meanwhile, Norfolk has been penalized when applying for new HOPE VI funding because it hasn't wrapped up the first grant. "In a perfect world, we'd continue to try and use every drop of money," Kownack said. "But there comes a time when you have to close it out."

Moton Circle, a small public-housing complex next to Broad Creek, has lost out on $20 million in HOPE VI funding twice. The city this year declined to even apply for a third time because officials were told they had no chance of receiving it if Broad Creek's grant remained open.

NRHA executive director Shurl Montgomery said ending Broad Creek's grant by the end of June would clear the way to submit a funding application for Moton Circle next summer or fall.

The grant closure plan submitted to HUD this week for Broad Creek calls for $1 million in federal money to go toward creating an endowment to help former Bowling Green and Roberts Village residents with job training, transportation and child care needs.

The plan also gives the housing authority's homeownership programs another eight months to provide down-payment assistance to low- and moderate-income homebuyers anywhere in the city. Federal officials originally had offered to close the HOPE VI loan immediately, but NRHA persuaded them to leave it open until the middle of next year to aid nearly four-dozen buyers already in the pipeline, Kownack said.

"We're trying to use as much of the funds to assist as many homebuyers as we can," Kownack said. "There are 45 people waiting for homebuyer assistance that we didn't want to freeze out."

Montgomery said even though the authority didn't make use of all its federal grant, it was able to revitalize the area and spur private development. The value of the neighborhood, he said, was far greater than the $35 million in grant funding.

"The whole purpose of HOPE VI was to leverage other money," he said. "It's even more successful than people imagined."

Meghan Hoyer, (757) 446-2293, meghan.hoyer@pilotonline.com