Detroit Housing Commission

Replacement Housing Factor Program

Brownfields Economic Development Initiative (BEDI)

Summary:
The Brownfields Economic Development Initiative (BEDI) is a key competitive grant program that HUD administers to stimulate and promote economic and community development. BEDI is designed to assist cities with the redevelopment of abandoned, idled and underused industrial and commercial facilities where expansion and redevelopment is burdened by real or potential environmental contamination.

BEDI grant funds are primarily targeted for use with a particular emphasis upon the redevelopment of brownfields sites in economic development projects and the increase of economic opportunities for low-and moderate-income persons as part of the creation or retention of businesses, jobs and increases in the local tax base.

BEDI funds are used as the stimulus for local governments and private sector parties to commence redevelopment or continue phased redevelopment efforts on brownfields sites where either potential or actual environmental conditions are known and redevelopment plans exist. HUD emphasizes the use of BEDI and Section 108 Loan Guarantee funds to finance projects and activities that will provide near-term results and demonstrable economic benefits. HUD does not encourage applications whose scope is limited only to site acquisition and/or remediation (i.e., land banking), where there is no immediately planned redevelopment. BEDI funds are used to enhance the security or to improve the viability of a project financed with a new Section 108 guaranteed loan commitment.

BEDI Purpose:
The purpose of the BEDI program is to spur the return of brownfields to productive economic use through financial assistance to public entities in the redevelopment of brownfields, and enhance the security or improve the viability of a project financed with Section 108-guaranteed loan authority. Therefore BEDI grants must be used in conjunction with a new Section 108-guaranteed loan commitment.

Section 108 is the loan guarantee provision of the Community Development Block Grant (CDBG) program. The BEDI funds minimize the potential loss of future CDBG allocations. Both Section 108 loan proceeds and BEDI grant funds are initially made available by HUD to public entities approved for assistance. Such public entities may re-loan the Section 108 loan proceeds and provide BEDI funds to a business or other entity to carry out an approved economic development project, or the public entity may carry out the eligible project itself.

BEDI projects must increase economic opportunity for persons of low-and moderate-income or stimulate and retain businesses and jobs that lead to economic revitalization. BEDI funds have been made available on a competitive basis. In FY 2004, instructions for submitting applications will be included in HUD's SuperNOFA, which is published in the Federal Register. There is a cap of $2 million per BEDI award. Section 108 funds are available to eligible applicants throughout the year on a noncompetitive basis.

Eligible Applicants:
CDBG entitlement communities and non-entitlement communities are eligible to receive loan guarantees.* A request for a new Section 108 loan guarantee authority must accompany each BEDI application. BEDI and Section 108 funds must be used in conjunction with the same economic development project.

*Non-entitlement communities, including those in Hawaii, may also apply for and receive grants under the BEDI program. If a non-entitlement community receives a BEDI grant and applies for Section 108 loan guarantee assistance, the applicable state entity (or HUD, in the case of Hawaii) is required to pledge Community Development Block Grant (CDBG) funds as partial security for the loan guarantee.

Content updated February 1, 2005