Funds would help create dedicated infrastructure bank in New York State

Creating a dedicated infrastructure bank to help coordinate infrastructure development and investment is among the initiatives outlined in New York State’s proposal for housing and business recovery programs to help residents devastated by Superstorm Sandy, Hurricane Irene and Tropical Storm Lee.

New York State submitted its proposed action plan this week. “This plan was put together with the input of homeowners and small businesses in affected communities, and it will serve as a blueprint to guide our housing and private sector recovery,” New York Governor Andrew Cuomo said Tuesday.

In January, Congress passed approximately $60 billion in supplemental appropriations to cover damage caused by storms affecting the United States, more than $30 billion of which is expected to be directed to New York State, notes the statement from the governor’s office. In early March, the U.S. Department of Housing and Urban Development (HUD) – designated as the agency coordinating the federal government’s response to Superstorm Sandy – issued rules governing the use of the first $1.7 billion allocated to New York.

The dedicated infrastructure bank will help co-ordinate infrastructure development and investment across the disaster region.

An initial capitalization of $20 million from the first allocation of federal funds will be combined with state funds and committed to financing eligible infrastructure projects that apply for assistance through the bank, the statement notes. The bank is expected to be funded with as much as $200 million through subsequent allocation rounds or such other amounts to be jointly determined with HUD.

The bank will adopt a centralized approach to infrastructure-related decision-making rather than a project-by-project, agency-specific process. Investment focus will be “projects that increase the resiliency of the area’s infrastructure to withstand future threats or provide redundancy of critical systems.”

The bank will work with both public and private investors to raise funds to finance infrastructure developments, offering the ability to combine several sources of funds to finance projects as effectively as possible.

Looking at the impact of Superstorm Sandy, Hurricane Andrew and Tropical Storm Lee on New York State, the plan hopes to address among other things:

• have HUD approve a series of housing programs to help families rebuild their homes better and smarter;
• recreate the NY Smart Home Repair and Reconstruction Grants at a cost of $233 million (to cover the difference between reimbursements received for repair and replacement costs and the amount of loss suffered by the homeowner);
• recreate NY Smart Home Resilience Grants at a cost of $259 million (projects supported by the grants will make homes in damaged property in the 100-year flood plain or outside of the floodplain that was substantially damaged significantly less vulnerable to future storm damage, and will save owners substantially through lower flood insurance premiums);
• use $415 million to help businesses replace or repair lost or damaged inventory and equipment, repair and mitigate damaged facilities and cover working capital needs; and
• provide $233 million in small business grants to help businesses – including farming and agricultural operations, and non-profits – that suffered physical damage or inventory loss. Grants of as much as $50,000 to cover eligible, uncompensated losses are proposed to enable an affected business to purchase or repair needed equipment, repair or rebuild facilities damaged or destroyed in the storm, and/or provide the working capital necessary to sustain and grow the business.