SA.24A
Division of Neighborhood Revitalization
Department of Housing and Community Development
Community Legacy Program (Statewide)
GO Bonds $6,000,000 Recommendation: Disapprove
PAYGO GF $7,000,000
Bill Text: Provide funds to assist neighborhoods with revitalization efforts. The funds shall be
administered in accordance with Article 83B, Sections 4-801 through 4-811.
Program Description: Created by Chapter 567, Acts of 2001, the Community Legacy Program provides
financing to assist neighborhoods that are at risk of physical, economic, or social deterioration with
revitalization activities. Eligible uses of the funds includes capital improvements such as street scape and
facade improvements, recreational amenities, improvement of community gathering places, and other
improvements. The program operates with a gubernatorially appointed board that recommends projects
for funding.
Year Program Began: Fiscal 2002
Comments: The fiscal 2003 CIP makes two significant change to the recommended funding for the
Community Legacy program from what was included in the fiscal 2002 CIP. First, although the total
funding level remains at $13.0 million for fiscal 2003, the allowance provides $6.0 million of GO bonds
supplemented by $7.0 million of PAYGO general funds. The CIP anticipated $13 million in GO bond
funding. Second, the fiscal 2003 CIP indicates the program will receive $10.0 million annually through
fiscal 2007 rather than the $13.0 million suggested in the fiscal 2002 CIP. Fiscal 2003 is the only year in
which GO bonds are allocated.
Established by Chapter 567, Acts of 2001, the Community Legacy program is designed to assist
neighborhood revitalization projects through the use of capital grant funds distributed by DHCD through
a competitive application procedure established by the agency and the Community Legacy Board. The
General Assembly added budget language to the fiscal 2002 appropriation for the Community Legacy
Program which restricted expenditure of the funds until DHCD submitted a report to the budget
committees detailing the proposed use of Community Legacy appropriations, including: (1) the role of
other, similar programs in revitalizing neighborhoods in DHCD and other entities and the way in which
Community Legacy will complement or replace these programs; (2) the rating and ranking criteria that the
Community Legacy Board will use in selecting the communities including details in preferential categories;
(3) a time-line for the receipt of applications and award of funds in fiscal 2002; and (4) how to sustain
programs funded under the Healthy Neighborhood Program.
For further information contact: Matthew D. Klein Phone: (410) 946-5530
1
SA.24A - Department of Housing and Community Development
As instructed, on September 21, 2001, DHCD submitted the requested report. Satisfied that the
requirements has been met, the budget committees advised DBM to release the $9.0 million of restricted
appropriations on November 7, 2001. The following is a summary of DHCD’s response to the provisions
of the budget language.
Ä Neighborhood Revitalization Programs: There are many State and federal programs targeted to
address neighborhood revitalization. Some of these include the Brownsfields Voluntary Cleanup and
Revitalization Incentive program, Neighborhood Conservation Program, Sidewalk Retrofit Program,
Transportation Enhancement Program, Smart Growth transportation Program, Live Near Your Work,
Neighborhood Business Development Program, Community Development Block Grant Program, and
many other grant and loan fund programs administered by the Department of Business and Economic
Development and the Maryland Department of Transportation. DHCD reports that many of these
programs are bound by statutory restrictions which limits their application. The Community Legacy
Program is intended to complement the various neighborhood revitalization programs by providing
a less restrictive source of funds. For instance, Community Legacy funds will be available for the
purchase or rehabilitation of older homes without regard to the income of a home buyer or
homeowner. Community Legacy funds can also be used for the acquisition or demolition of
deteriorated building or sites where a redevelopment project has not yet been identified. Moreover,
grant recipients will be able to apply Community Legacy funds as a source of bridge financing for
distinct elements of the project not covered by funds from other neighborhood revitalization programs.
Ä Rating and Ranking Criteria: DHCD has devised a comprehensive rating and ranking criteria and
project proposal review process for the Community Legacy program. The department first reviewed
each of the 91 applications the office received for fiscal 2002 funding to ensure that the proposals met
minimum requirements such as location of the proposed Community Legacy area within a designated
priority funding area, and indication of project support from local governments. Applicants seeking
project funding were required to submit a plan that describes the strategies to be employed to attract
new business, and lists the projects and contributing organizations that will help facilitate the success
of the plan. DHCD assigned review teams consisting of staff with experience in revitalization
programs from the agencies represented on the Community Legacy Board to review those projects
meeting the minimum requirements. Each individual project was evaluated by the review teams based
upon criteria such as ability of the sponsor to administer the project, success of similar projects within
the proposed project location, and demonstrated local government support. The review teams further
considered whether the Community Legacy plan for the project and the business development
strategies identified in the plan were consistent with the characteristics of the proposed Community
Legacy area.
Ä Healthy Neighborhoods: Baltimore City has submitted an application for $6.3 million of Community
Legacy grant funds for neighborhoods included in the city’s Healthy Neighborhood program. The
report indicates that the city’s application will be evaluated based upon the rating and ranking criteria
established by the Community Legacy Board, and that any ongoing State support to sustain the
Healthy neighborhood program will depend on additional State appropriations.
Ä Application and Awards Time-Line: The report includes a time line which sets forth the grant
application and review period and eventual grant awards announcement scheduled for October.
2
SA.24A - Department of Housing and Community Development
Fund Data
Fund History
FY 2001 Actual FY 2002 Estimated FY 2003 Estimated
Beginning Balance $0 $0 $0
REVENUE
General Funds 0 9,000 7,000
GO Bonds 0 0 6,000
Loan Repayments & Interest 0 0 0
TOTAL REVENUE 0 9,000 13,000
TOTAL AVAILABLE 0 9,000 13,000
ENCUMBRANCES
Loans 0 9,000* 13,000
Operating Expenses 0 0 0
TOTAL ENCUMBRANCES 0 9,000 13,000
Ending Balance $0 $0 $0
*Grants and loans made as of 12/31/01 = $9.0 million
($ in Millions)
2001 2002 2003 2004 2005 2006 2007
Description Approp. Approp. Request Estimate Estimate Estimate Estimate
GO Bond $0.000 $0.000 $6.000 $0.000 $0.000 $0.000 $0.000
PAYGO GF 0.000 9.000 7.000 10.000 10.000 10.000 10.000
Total $0.000 $9.000 $13.000 $10.000 $10.000 $10.000 $10.000
Issues
3
SA.24A - Department of Housing and Community Development
1. Community Legacy Program Should Be Eliminated
Chapter 759, Acts of 1997 established the Neighborhood Conservation and Smart Growth initiative
otherwise known as Smart Growth. Under Smart Growth policy, State funding for projects located in
“priority funding areas” receive priority funding over projects not located in “priority funding areas.”
Priority funding areas – municipalities, existing communities, industrial areas, and local designated planned
growth areas – are locations where the State and local governments want to target their efforts to
encourage and support development and new growth. Numerous State programs, including Community
Legacy, exist to advance Smart Growth policy. Exhibit 1 shows the total State capital appropriations
made for fiscal 2001 and 2002 and the proposed capital appropriations for fiscal 2003 that support
neighborhood and community revitalization and land preservation efforts in the State.
Exhibit 1
State Capital Funding for Community and Neighborhood Development and Revitalization
Fiscal 2001 through 2003
( $ in Thousands)
Fiscal 2001 Fiscal 2002 Fiscal 2003
$238,860 $286,014 $278,729
Source: Department of Budget and Management
As evidenced by the figures provided in Exhibit 1, a considerable amount of State resources are
provided to advance Smart Growth policy, and Community Legacy is just one piece of the overall policy
objective. When the Community Legacy program was initiated by the Governor and established by the
General Assembly during the 2001 session, the State was enjoying almost a $1 billion general fund surplus.
The fiscal picture has changed dramatically in just one year, and the State is now facing a structural general
fund deficit estimated at approximately $1 billion. Consequently, the State can no longer afford to fund
the Community Legacy Program, and a new program initiated less than a year ago should be eliminated.
Accordingly, DLS recommends that the budget committees delete both the $7.0 million of general
PAYGO funds and the $6.0 million of G.O. bonds provided in the fiscal 2003 allowance to support
the Community Legacy Program. The elimination of the Community Legacy program can be
effectuated through an amendment to the Budget Reconciliation Act of 2002.
4
SA.24A - Department of Housing and Community Development
Recommended Actions
Amount
Reduction
1. Delete general funds for the Community Legacy Program $7,000,000 GF
(CLP). CLP is a new Governor initiative created by Chapter
567, Acts of 2001 when general funds to support the
program were thought to be available. The program
duplicates other neighborhood revitalization programs funded
by the State and should be discontinued.
2. Delete general obligation bond funding for the Community 6,000,000 GO
Legacy Program (CLP). CLP is a new Governor initiative
created by Chapter 567, Acts of 2001 when general funds to
support the program were thought to be available. The
program duplicates other neighborhood revitalization
programs funded by the State and should be discontinued.
Total General Fund Reductions $7,000,000
Total General Obligation Bond Fund Reductions $6,000,000
Fiscal 2002 Project Status
Project Grants (Location)* Amount
Allegany County $ 1,155,000
Anne Arundel County 980,000
Baltimore City 1,883,600
Baltimore County 350,000
Calvert County 250,000
Caroline County 50,000
Carroll County 262,800
Cecil County 150,000
Charles County 0
Dorchester County 53,100
Frederick County 0
Garrett County 0
Harford County 150,000
Howard County 125,000
Montgomery County 1,165,000
Prince George’s County 1,270,500
Queen Anne’s County 0
Somerset County 0
5
SA.24A - Department of Housing and Community Development
Project Grants (Location)* Amount
St. Mary’s County 104,000
Talbot County 100,000
Washington County 636,000
Wicomico County 150,000
Worcester County 165,000
Total $9,000,000
*All grant awards were announced December 11, 2001. A total of $2,856,000 has been encumbered, and the department
expects to encumber the remaining $6,144,000 by March 1, 2002, once grant agreements have been executed with each grant
recipient.
6