WTC Records Folder 0139 label, 2001

NYC 9/11 Public Portal Document NOU 30 2001 5:50 PM FR EDC/ECO&_=NGY ANALYS c18 8898 TO 759125151F877037 P.02

Now lfbrk City Miada.l G.carry C lkm MEMORANDUM

TO: Deputy Mayor Robert M.Harding

FROM: Michael G. Carey

SUBJECT: WTC Recovery / Federal Funds for Business Assistance

DATE: November 30,2001

This memorandum and attached materials updates you on our discussions with ESDC regarding Federal aid dollars for WTC attack relief.

The State is proceeding as if it will control the disbursement of all of Federal funds, either directly through ESDC or indirectly through the Lower Manhattan Redevelopment Corporation. We have asked them to seek a waiver from HUD to allow the City to be a sub recipient of CDBG funds, and have told them that we want to divide programmatic responsibilities. These requests have fallen on deaf ears. It seems that the only way to accomplish our goal of having the City control half of the Federal monies is to seek a political agreement with the State.

Federal funds for business assistance are being funneled through the CDBG program. A $700 million appropriation was approved at the end of last month, and funds should have been transferred to HUD by now. Release of the monies to the State is awaiting issuance of waivers, approval of a spending plan and a public notice and comment period. This will likely take about two months.

Attached for your review are copies of the $700 million HUD appropriation bill language, drafts of ESDC's proposed waiver and spending plan, and EDC comments. We have consulted with OMB's CDBG unit on our comments, and have told ESDC that the City reserves the option to express additional concerns.

On Wednesday, the House approved the Department of Defense and Supplemental Appropriation bill, which includes 51.825 billion in additional CDBG funds to be "used for economic revitalization activities in New York City." As is the case with the $700 million appropriation, these funds would flow through the State. The bill now goes to the Senate, where passage seems certain though the Democrats poised to offer up several amendments. The Senate is expected are

act on the appropriations bill before the holiday recess.

The situation with respect to the stimulus package is more fluid. We still do not know whether the final legislation will include tax-exempt bonding authority (supported by Federal OMB) and the Schumer-Clinton tax credits for lower Manhattan employers and residents.

•t 1C VAI2am Strvvt. Newlbrk NY 10095 212/312 3000 FA)f 212/3123913

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