With similar projects in the works, Chattanooga officials will repurpose $1.45 million in federal pandemic relief funds initially set aside during former Mayor Andy Berke's administration to convert a hotel into an emergency shelter.
On Tuesday, the Chattanooga City Council authorized staff to reallocate that money, which the city received through a stimulus package the federal government approved at the beginning of the pandemic.
"The original intent of it was to acquire a hotel or a motel and to convert that hotel or motel into a noncongregate shelter to prevent the spread of COVID-19," Jermaine Freeman, Mayor Tim Kelly's senior adviser for economic opportunity, told council members during a meeting April 18.
The initial resolution the council passed in November 2020 was specifically tailored for that purpose, which is why it required a revision by the board. Freeman said the city's housing division is now looking at using those funds for other affordable housing initiatives that also align with limiting the spread of COVID-19.
Allowable uses closely mirror those eligible under the federal community development block grant program, which include housing and programs such as rent or utility assistance.
Chief Housing Officer Nicole Heyman said in a phone interview Tuesday the city will be notifying local organizations about the funding opportunity.
With the Kelly administration moving forward with plans to convert the former Airport Inn on Lee Highway into about 70 units of permanent supportive housing, Heyman said it became obvious the city was sitting on money that wasn't going to be used as originally envisioned under Berke. The city has also had strong interest in its community development block grant funding this year, with requests exceeding the amount of available money.
"We realized that we had an opportunity to do a lot more for affordable housing if we reallocated the funding," Heyman said.
Staff in Berke's administration presented a plan to the council in October 2020 that involved using more than $1 million in pandemic stimulus dollars to establish a low-barrier homeless shelter, an effort the Kelly administration has carried forward through a different federal funding source.
Last July, the council approved a $30 million spending plan from Kelly's office using money the city had received through the American Rescue Plan Act — another federal stimulus package Congress passed during the Biden administration. Kelly's spending plan included about $2.8 million the city will use to develop a low-barrier shelter.
Council members will also decide May 9 whether to distribute almost $3.2 million in annual funding the city receives from the U.S. Department of Housing and Urban Development.
That money comes from two sources: community development block grants, which can be used with some flexibility on different projects, and the Home Investment Partnership, which are restricted to the preservation and production of affordable housing.
Chattanooga's Home dollars will be available through an ongoing application process over the course of the year. The city has accepted almost $1.4 million through that program, although nearly $140,000 will be used for grant administration.
Chattanooga has also received $1.8 million in community development block grant funding, which could support several local projects including:
— $300,000 for Chattanooga Community Housing Development to provide roof repair and replacements for about 28 low- to middle-income homeowners.
— $400,000 for Chattanooga Neighborhood Enterprise to help 12 homeowners with major home improvements.
— $84,800 for Consumer Credit Counseling Service to fund a case manager who would provide services to homeless families with children.
— $150,000 to Good Neighbors for the renovation of Whiteside's Faith Manor at 735 E. 10th St.
Contact David Floyd at dfloyd@timesfreepress.com or 423-757-6249.