Does Worcester Still Need CDCs?

Wednesday, September 19, 2012

Adam Joseph Drici, GoLocalWorcester Contributor

City Manager Michael O'Brien told the Council that major changes to Worcester's federal entitlement programs may be in order and all options are on the table after a federal report revealed a lack of oversight in the use of millions in grant funds.

In a letter to the City Council that accompanied the federal Housing and Urban Development report of non-compliance and misuse of Community Development Block Grants by several of the city's community development corporations (CDCs), O'Brien said officials have a lot of work to do.

"The work ahead is extensive and significant and will require partnership at all levels and with our contracted agencies," he wrote.

"If we are to continue these programs, we must re-set how we spend these Federal dollars to eliminate silos, including the potential merging of applicants undertaking similar activities, and instead leverage the very best of this community. We must also use data and public input to ensure that we are funding current priorities and not simply repeating historic funding traditions."

Funding Freeze

District 4 Councilor Sarai Rivera expressed concerns over how the HUD report, which called for the freezing of funds being put to non-compliant use, would affect other, non-housing organizations that depend on a portion of those funds to stay in operation.

Rivera's district is home to the South Worcester Neighborhood Center, a facility that relies on federal dollars to keep its doors open.

Chief Development Officer Timothy McGourthy clarified that only those entities making non-compliant or non-eligible use of federal grant money would be subject to the funding freeze.

Housing Development Alternatives

Several local private developers spoke during Tuesday's City Council meeting to express their support for the City Manager's recommendations.

"There are a lot of people who are willing to invest money in the City of Worcester," said Bill Randell, noting that as a developer, he has added 40 to 50 housing units in the city's Main South area.

Councilor Anthony Economou said such alternatives for housing development warrant a closer look.

"I think part of the discussion also should take place as to whether the CDCs are really the right vehicle for housing," he said.

Economou noted that many residents who buy homes developed by CDCs are later unable to fully realize their earned equity when they sell because they are required to pay back into the development corporations they purchased their homes through.

"Private development might be the best route to go."

Randell and Chandler Street Business Association President Paul Collyer would like to see the city take a more market-driven approach to housing development.

State and federal mandates require that 10 percent of a city's housing units be designated as affordable. Currently, such units account for 13 percent of Worcester's housing stock.

"My opinion is that the city probably still needs one CDC or two CDCs," said Collyer.

"But it doesn't need six or seven of them."

Which Way Forward?

Councilor Frederick Rushton said the issues of non-compliance among the CDCs stemmed from shortcomings in management and operations.

"Let's look at the managment side of this, let's put it on the table, let's ask the questions, and let's turn the page," he said.

Councilor Joseph O'Brien was focused on moving forward as well, and he joined Rushton in calling for a public hearing on the HUD report and City Manager's recommendations.

Looking forward was also on Councilor Konnie Lukes' mind when asked about the topic earlier in the day.

"The real question is going to be what do you want the city to look like in the next 10 years," she said.

"We can't be a healthy city if we are a needy city."