WTC Records Folder 0139 label, 2001

NYC 9/11 Public Portal Document NOV 33 2001 5:59 PM FR EDC/ECO&ENGY ANALYS 5l8 8898 TO 7593251516877037 P. 16

November 19, 2001 The Honorable Mel Martinez Secretary Department of Housing and Urban Development 4517-" Street, S.W . Washington. DC 20410

Dear Secretary Martinez: I want to thank you for your ongoing assistance and express my appreciation to Assistant Secretary Bernardi for meeting with my staff on Monday to ensure the swift and efficient transfer of the funds from the Emergency Response Fund created by Pub. L. 107-38, that have been directed to New York State. As discussed at that meeting, New York is asking HUD to establish a letter of credit with Empire State Development Corporation (ESDC), a public benefit corporation of the State, to accomplish the transfer of the federal funds to the State.

It is my understanding that upon your Agency's review of the State's proposed spending plan, HUD will confirm with my staff that our intended use of the fwzds will satisfy the "urgent need national objective" requirements associated with the fends. Moreover, upon submission by the State of a formal application for these funds, HIID will conduct an expedited review process that will ensure a prompt conveyance of the funds to the State through a grant agreement.

So that New York may maximize the use of those funds, and in concurrence with the intent underlying the allocation of these funds. I would respectfully ask that you waive the following statutory or regulatory requirements of the Community Development Block Grant (CDBG) program:

• the requirement that allows distribution of the funds received under CDBG to units of general local govetntlnent only, and which prohibits the State from distributing these funds directly to for-profit and not-for-profit businesses.

• the requirement that fifty-one (51) percent or more of the funds be used for activities that principally benefit low and moderate-income persons. This request is justified by the composition of the disaster area — the financial district of Lower Manhattan is largely commercial real estate occupied by large corporate or retail tenants. Indeed, due to the nature and type of businesses located within the disaster zone, there is no practical alternative course of action by which the State may otherwise target funds to activities that principally benefit low and moderate-income persons. It is worth noting, however, that the indirect benefit to such persons would be manifest and significant, as the jobs of many thousands of private sector employees in New York

NYC-WTC 000136561