Schumer Urges Feds To Unlock $4 Million In Funding That Could Be Used TO Redevelop Bethlehem Steel Site; Complex Federal Rules Have Blocked Erie County From Using Already-Appropriated Funding For Over 10 Years, Wasting Taxpayer Dollars And Stifling Development

U.S. Senator Charles E. Schumer today urged the U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of Commerce's Economic Development Administration (EDA) to work together to unlock significant funding -- now frozen due to a tug-of-war between the agencies -- that would allow Erie County to jumpstart critical local economic development projects. Schumer explained that, since 2005, Erie County officials have been unable to fully utilize money they invested in the Regional Development Corporation (RDC) Revolving Loan Fund because of a bureaucratic dispute between HUD and the EDA. Schumer explained that both HUD and EDA have claimed their agencies' rules should apply to how the funds are spent, and because each agencies rules are different, Erie County has not been able to utilize the funds Because the $4 million in funds have been in dispute for over 10 years, Erie County has been unable to withdrawal their portion of the and use it for key projects like redeveloping Bethlehem Steel.

"A mindless bureaucratic tug-of-war between federal agencies is preventing Erie County from using these frozen federal funds to energize potential job-creating development projects like redeveloping the dormant Bethlehem Steel site. That is why I am strongly urging EDA and HUD to get over it and resolve their differences ASAP -- so we can to create jobs and revitalize Western New York," said Schumer. "The redevelopment of the former Bethlehem Steel Site -- which could bring good-paying local manufacturing jobs back to Buffalo -- has been stuck in the muck of federal bureaucracy for years now. This is unacceptable and is threatening local economic development."

Schumer explained that in 1979, Erie County established the RDC Revolving Loan Fund to make loans to businesses and support local economic development. This fund is a combination of federal and local money that would be loaned to businesses for various purposes. The businesses who benefited early on paid back their loans to the loan fund with interest, increasing the fund and its ability to make loans to other businesses. The fund originally included $7 million in EDA funds, and $4 million in funding from Erie County and the City of Buffalo that they originally received from HUD.

Over time HUD has changed its interpretation of its own rules and now claims that the Erie County and City of Buffalo contribution to the fund is actually HUD money and is therefore subject to HUD rules. The result of that interpretation is that the funds in the Revolving Loan Fund are now subject to the requirements of both HUD and EDA. These two different sets of requirements have greatly reduced the effectiveness of the fund and its ability to grant loans, and have rendered both the EDA funds and the local funds virtually useless.

Given the importance of this funding, and that this dispute not only prevents projects from moving forward but also results in tax payer dollars not being used for their intended purpose Senator Schumer is proposing a two-pronged effort to resolve the differences between the EDA, HUD and Erie County. First, Schumer is asking the EDA to allow Erie County to withdraw the $4 million in HUD funds plus interest from the loan fund. The money could then be repurposed to pay for development projects at the Bethlehem Steel site. Both HUD and EDA would need to agree to this solution. Second, Schumer urged the EDA and HUD to resolve the outstanding regulatory issues with the fund to ensure it can get back to its original purpose of helping fund local economic development projects. Schumer said local economic development efforts should not have to suffer over bureaucratic red tape that has existed for decades between these agencies.

By agreeing to allow Erie County to withdraw the money, Schumer said the projects at the Bethlehem Steel site can get underway. In addition, creating a streamlined regulatory process for the Revolving Loan Fund will ensure it will help local businesses to create jobs and help Erie County attract new businesses for future projects and years to come.

Schumer said Erie County has plans for infrastructure improvements to 1,000 acres of property at the former site of Bethlehem Steel, and the $4 million in funds plus the interest it has generated could be used for this purpose. This land requires upgrades such as improved utility lines and access roads, building demolition and environmental remediation. However, in order for that to happen, HUD and the EDA must work together to resolve the outstanding regulatory issues that has left these millions of dollars untouched, which is why Senator Schumer is urging the agencies to take action. Schumer said releasing these funds could unlock potential to attract a developer to the Bethlehem Steele site, and create good-paying local manufacturing jobs.

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