A Coalition of
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NRP
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Miller faults mayor, Council for NRP program demise
by Virginia Rybin
Last Updated: 11/16/2007 3:45:36 PM
The Harrison Neighborhood Park and Community Center, at Irving and Glenwood Avenues, opened in 2001. The Harrison Neighborhood Association used $300,000 of its NRP funds for the project. The Lao Assistance Center, the Minneapolis Board of Education and the city's Park Board were partners in financing the construction. The building houses the association's office, the Lao Assistance Center, the park office, and a Minneapolis public school for special education students.
A major program that allows Minneapolis residents to set priorities for improving their neighborhoods is short of money and mired in controversy as it nears the end of its funding cycle in 2009.
The future of the Neighborhood Revitalization Program is in doubt, and the money available for Phase II of the program may be only 70 percent of what neighborhood groups expected.
The causes of the crisis are many. A change in Minnesota's property tax laws, which led to depletion of a portion of the fund that finances NRP, is a major factor.
The controversy epitomizes the struggle of big, older cities to set priorities when there's not enough money for hundreds of worthy projects. Another issue is control - specifically, whether neighborhood groups will continue to determine how some of the city money for housing and other needs is spent.
Poorer communities get more money from the NRP fund, so these neighborhoods, which have large minority populations, will be most affected by the reductions in NRP grants.
Phase I was always the largest part of the 20-year program. The 71 community organizations that get NRP money received a total of $210 million in this 11-year phase - 100 percent of their allocations. If they get 70 percent of their allocations, the Phase II grants for the final nine years will total $29.2 million. At that level, these grants to neighborhood organizations would range from $17,500 to $1.7 million.
The Debate
"It's about power," said Tracy Kill, vice-president of the Harrison Neighborhood Association Board. "The neighborhoods have taken these nuggets of cash and turned them into something special, important and meaningful. I don't think the city recognizes that."
Jerry Moore, executive director of the Jordan Area Community Council, sees the reduction of NRP funds as an emphasis on bricks and mortar. "If the priority is buildings over people," he said, "it's a sad day."
Community activists are upset about the city's use of the source of funding for NRP to pay a loan for other needs, such as city-controlled community projects. Most of those are not related to larger development projects, although the city's plan calls for spending $2.7 million to prepare land for industrial uses. The largest project is a $4.7-million job training and placement initiative. Other items in the city's plans include small business loans, housing programs and prevention of mortgage foreclosures.
Mayor R. T. Rybak said a new, more reliable source of funding for NRP should be found. The money now comes from the Common Project, a fund that includes the proceeds of a variety of types of redevelopment districts. Most of the NRP funding has come from tax increment financing (TIF) districts in the Common Project. After TIF districts are formed, the growth in property tax revenue from those areas is reserved for specific projects, such as economic development and housing.
Rybak said the city needs a strategy to achieve better communication with NRP groups and to give residents a greater voice in city-administered programs in their neighborhoods.
City Council Member Paul Ostrow said he does not support continued use of dedicated property tax money for NRP in view of the many urgent needs in Minneapolis. The city would need approval from the Minnesota Legislature to continue the tax increment districts supporting NRP and other programs beyond 2009.
"The main point is strengthening community participation and neighborhood planning," said Ostrow, who is chairman of the council's Ways and Means Committee. He said the neighborhood organizations should continue with support from their own staffs and City Hall personnel, but that doesn't necessarily mean that money for programs has to go to them.
City Council Vice-President Robert Lilligren said it is unlikely that the city will ask the Legislature to renew the authorization for the TIF districts. He said Minneapolis should continue to work with the same kinds of neighborhood groups, and they should have control over some of the community development funds.
Council Member Don Samuels said he wants NRP to continue, and the city should consider seeking renewal of the TIF districts if other money can't be found.
The council is looking into the possibility of guaranteeing that community organizations will get 70 percent of their original allocations during Phase II. Council members asked the city Finance Department to find sources of money that would make 70 percent funding feasible. A report is due in late December.
Accomplishments and Apprehension
The neighborhood organizations funded by NRP are pleased with what they have done but disappointed that they will have to reduce projects planned between now and 2009, when the tax increment districts supporting the program end.
Tracy Kill of the Harrison neighborhood said 70 percent funding will mean fewer housing rehabilitation loans and low-interest loans for first-time homebuyers.
"If the city valued us and this program (NRP), they would fund it," Kill said. The association will receive about $592,000 for Phase II if the council approves funding at 70 percent, a reduction of $254,000 from its full grant.
In Phase I, the Harrison association's projects included a new community center and a major housing project, both done with help from other organizations.
Such cooperation is a major facet of NRP. Often, the grants provide leverage to get corporate and foundation money for projects.
Sherrie Pugh Sullivan, executive director of the North Side Residents Redevelopment Council, said the reduced funding "will affect the community's ability to respond to the housing crisis."
"North Minneapolis has had the most dots" on a map of foreclosures in the city, she said. "Now the dots are invisible. They are more like blobs."
The association, which serves the Willard Hay and Near North neighborhoods, made great strides in increasing home ownership during Phase I of NRP, Pugh Sullivan said. It also uses its grants and leveraged money to improve rental housing. Because it is located in one of the city's poorest neighborhoods, the association gets more money than other groups and will lose more - about $550,000 - through the reduced funding. The 70 percent grant the council may guarantee for Phase II is nearly $1.3 million.
"We have been able to adjust," said Jerry Moore of the Jordan neighborhood group. "Here we'll have another opportunity to look at how creative we can be." He said cuts in housing loans and crime prevention programs will be necessary.
Money Problems
Tax increment financing districts like the ones that have provided most of he support for NRP since 1989 are not a very reliable source of revenue. Many variables make it difficult to predict the amount of additional property taxes that will be collected over several years.
The tax increment districts that have helped pay for NRP include downtown Minneapolis and nearby neighborhoods. These districts are meant to be temporary; TIF funding for NRP expires in 2009.
City officials note that the NRP board approved the withdrawals to pay the loan. Miller works for the board, which is independent of the city. When the board voted on the withdrawals, Miller said, its members understood that the neighborhood groups would get 100 percent of their grants.
If the city had not obtained the loan, Mayor Rybak said, much of its important work in neighborhoods, such as job training, housing programs and loans to small businesses, would have gone undone.
Miller said the money being taken from the Common Project to pay the borrowing for city-run community programs has directly reduced funds available to neighborhoods for their priorities. He said the NRP projects could get 100 percent of their expected funding if the city would stop taking out money to pay the loan, but "this mayor and council have refused to look at it. They need to be accountable."
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