Mayor Lori Lightfoot’s plan to revamp the Neighborhood Opportunity Fund designed to reverse decades of disinvestment in the South and West sides cleared a key city panel Tuesday.
Lightfoot’s proposal (O2020-103) would allow the city to reimburse 50 percent of a project’s construction expenses. The current rules cap that amount at 30 percent for grants of $250,000 or less, even though a project can be reimbursed for 50 percent of the cost of rehabilitating an existing building under the current rules.
The proposal would also give businesses that receive grants access to a pool of technical advisers to help them to bring together the capital and manage contractors.
The City Council’s Committee on Economic, Capital and Technology Development unanimously approved the changes, which head to final vote at the full City Council meeting set for Feb. 19.
Lightfoot has already moved to allow grants from the Neighborhood Opportunity Fund to be used to cover 100 percent of a project’s total cost — if both the owner and their employees are residents of the South or West sides. Otherwise, the grant is capped at 65 percent of total costs.
Ald. Walter Burnett (27) praised Planning and Development Comm. Maurice Cox and Lightfoot for the changes.
“I commend you for taking something that is good and making it better,” Burnett said. “It is like the Robin Hood thing without stealing.”
Mayor Rahm Emanuel created the Neighborhood Opportunity Fund in 2016 in an attempt to capitalize on the boom Downtown and in the West Loop by giving developers the green light to build taller and denser projects — for a price.
In addition, applicants can ask for as much as $25,000 before the project breaks ground to pay for appraisals, environmental surveys and architectural services. Under Emanuel, funding was limited to projects that were under construction.
Lightfoot has also changed the rules to allow more projects to qualify for grants up to $250,000 in order to reduce the need for bridge loans during construction. The new rules also permit the funds to be held in escrow for large projects, in an effort to help entrepreneurs qualify for other loans.
When Lightfoot took office, the Neighborhood Opportunity Fund had $57 million, but Emanuel awarded just $890,000 in grants, as the program was mired in red tape and confusing regulations.
In all, $202 million has been committed to the fund, with $53.8 million coming just from the approved but not yet started redevelopment of the River District/Tribune properties.
Lightfoot has also earmarked $30 million from the Neighborhood Opportunity Fund to be used by the Invest South/West initiative, which is designed to boost 10 neighborhoods that each have “at least one well-developed community plan with a commercial component” and “at least one active commercial area at a specific node or intersection,” according to the Department of Planning and Development.
Invest South/West will focus on Austin, Humboldt Park, North Lawndale, New City, Greater Englewood, Auburn Gresham, South Shore, South Chicago, Roseland/Pullman and the Quad Communities of Bronzeville, Oakland and Kenwood, according to the mayor’s office.
South and West side businesses and entrepreneurs can apply online for $10 million in grants through Feb. 29, as part of the first application period since Lightfoot took office. Officials can award grants of up to $250,000, while bigger projects have to win approval from the City Council.
Those who apply should get a decision by the end of March, with another application period set to open in July, according to the mayor’s office.