Eddie Holmes

The Chattanooga Housing Authority will receive $6.35 million in federal stimulus package money to improve public housing.

“This is fantastic for our residents,” said John Coxwell, CHA’s chief financial officer. “The first cash received will be in late April.”

However, the money cannot be used to pay back CHA’s $4.5 million debt, which resulted in more than a third of its staff being laid off in May 2008, housing authority officials said.

“It’s treated as a grant,” said Mike Sabin, CHA’s development manager. “We have to make sure we’re in compliance.”

Housing authority officials already plan to use some of the money to get more housing units ready for occupancy. At least 134 additional public housing apartments will be available as a result of having the stimulus money to make the necessary repairs, Mr. Coxwell said.

In September 2008, about 200 of the housing authority’s 3,000-plus public housing units were not rented because they were in various stages of being repaired or cleaned, according to a Times Free Press story.

Housing authority board members approved a resolution to accept the stimulus money at their monthly board meeting Tuesday.

“We are very quick to approve this acceptance,” said Eddie Holmes, CHA’s board chairman.

The U.S. Department of Housing and Urban Development requires the authority to use the money to implement projects that can be shovel ready within 120 days, to rehabilitate vacant rental units, to assist in improvement projects already under way and to do projects included in the housing authority’s five-year plan.

Among those projects are major renovations to the Mary Walker Towers, new roofs at the Emma Wheeler Homes and a new elevator at Gateway Towers.

Bids already are going out for the projects this week, said Naveed Minhas, CHA’s vice president of development. More bids will go out in April, he said.

The goal is to have most of the money committed within 120 days, Mr. Minhas said.

Mr. Coxwell said, “as fast as we can get contracts available and work started, we can draw the cash as we incur the expense.”

Housing officials said they will encourage contractors to hire residents for some contracting jobs.

CHA board members also approved a contract that may lead to the sale of the Gurley Street Apartments. The contract is for the sale of the housing authority’s 24-unit apartment complex in North Chattanooga for $400,000. The potential buyer is Gurley Properties LLC.

The contract is contingent on HUD approval, CHA officials said.