WATERLOO -- The city has revised the terms of a 6-year-old federal grant in hopes of helping flood-damaged businesses near the former Rath Packing Co.

Waterloo City Council members voted unanimously Monday to amend a Section 108 loan and Brownfield Economic Development Initiative grant -- originally awarded by the U.S. Department of Housing and Urban Development in October 2002 -- to focus more on a loan pool available to businesses in the Rath Brownfield Area.

About $3.2 million of the $8.2 million in Section 108 funds are earmarked for loans to businesses in the older industrial area.

"That had been intended for job creation," said Community Planning and Development Director Noel Anderson. "But because of the area being declared a disaster, we can use it for job retention."

And that could mean helping businesses stay in the Rath area.

Blowers Creek waters backed up behind the Cedar River flood levee in June, heavily damaging homes, commercial and industrial buildings around Lafayette Park and the former meatpacking business. Many are still struggling to get back on their feet today.

The original program included an $8.75 million Section 108 loan and a $2 million BEDI grant, but the loan was later reduced to $8.2 million. The program is set up so that every $4 loaned and repaid from the Section 108 program generates roughly $1 in BEDI funding.

The city's use of the Section 108 funding was not changed with Monday's council action. Along with the $3.2 million loan pool, the city borrowed about $2 million to fix streets in the Rath area and about $3 million to help build river walls downtown. The street loan was repaid with local option tax funds while the river walls loan is being repaid with profits the city receives from the Black Hawk County Landfill.

Council members did change the BEDI grant, primarily by removing $425,000 earmarked for the demolition of the Rath administration building. A private developer is now renovating the structure, and the city has shifted a large portion of those dollars into a debt service reserve to help guarantee repayment of loans from the Section 108 loan pool.

Meanwhile, about $55,000 was shifted to the Lafayette Park renovation project, bringing the total BEDI grant for that work to $555,000.

Contact Tim Jamison

at (319) 291-1577 or

tim.jamison@wcfcourier.com.