Steve Brandt, Star Tribune

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September 24, 2002


The new spending priorities of housing affordability and loans reflect changes in the Minneapolis neighborhood.

Powderhorn Park is leading Minneapolis neighborhoods into the second phase of the city's Neighborhood Revitalization Program (NRP).

The program's governing board approved Powderhorn's plan Monday for spending $3.6 million, making the neighborhood of century-old homes in the shadow of the former Sears tower on Lake Street the first area to wm that authority.

The new spending priorities reflect changes in neighborhood conditions and other factors since the original plan was adopted nearly a decade ago.

"The world of Minneapolis is a lot different from what it was in 1994 when we put together our first plan," said David Rubedor, executive director of the Powderhorn Park Neighborhood Association.

Then, the biggest concerns were crime and housing conditions. But crime has diminished, Rubedor said, and housing activists are more concerned by rising prices than shoddy maintenance.

The plan devotes 40 percent of its money to housing affordability but less than half that to improving housing. And the new plan marks a shift toward loans, rather than giving away money for housing and business improvements. In most cases, loan repayments will be deferred until an owner sells a house.

The repaid loans will keep money revolving through the community even if NRP funding evaporates in future years.


Giving neighbors a say

Neighborhood Revitalization is a $400 million program that allows neighborhoods to decide how the money will be spent in their areas.

Although some neighborhoods are just entering the program's first phase, Powderhorn has spent most of its original $5 million allocation.

As recently as last year, the program's future seemed in doubt. State tax changes had undercut its main funding source, but the Minneapolis City Council stepped in to extend the program to 2015, six rears longer than planned.

The program now is slated to allocate about $130 million to eighborhoods.

The board also has reserved $l6 million for a citywide competition to build or preserve low-cost housing and $4 million or improving major retail streets. Whittier neighborhood's plan is expected later his fall, with Stevens Square following next year.


Grants breakdown

In Powderhorn, the largest share of first-phase spending was for grants. More than 300 homeowners were able to make exterior repairs to their property with the money. Money was also lent to rental property owners. The program also made 100 grants of up to $3,500 each, to help people buy homes, to finance a competition among architects to develop house designs for narrow lots, to creating artist housing and to rehab boarded houses.

Loans also were extended to commercial or nonprofit ventures along Lake Street, some of which were located outside the neighborhood's boumdaries.

For example, Powderhorn put $350,000 into the $21 million Midtown YWCA, and $214,000 into the $2.2 million creation of Mercado Central, an incubator for fledgling Hispanic businesses.

But some loans went sour or remain outstanding. The neighborhood still has $200,000 in the former Sears property that awaits redevelopment.

But that investment keeps Powderhorn at the table for redevelopment discussions, the neighborhood association's Rubedor said.

For business loans made under its second-phase plan, the neighborhood plans to set a lower dollar limit to avoid committing too much money to a single project and a subcommittee will be named to give closer scrutiny to the finances of loan applicants.

Although first-phase Neighborhood Revitalization efforts were often criticized for reflecting the needs and interests of white homeowners, Powderhorn's new plan responds to the recent influx of Hispanic residents, who comprised 25 percent of Powderhorn residents in the 2000 census.

The newcomers expressed a need for houses to accommodate larger families and for business startup assistance, so the plan includes low-interest loans to business owners and money to build houses with more bedrooms.



Steve Brandt can be contacted at sbrandt@startribune.com or 612-673-4438.

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