Waiver of Requirements for the State of New York: CDBG Disaster Recovery Grants for Recovery of Lower Manhattan, 4911-4913 [2017-00710]

Agencies

• DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Federal Register Volume 82, Number 10 (Tuesday, January 17, 2017)]
[Notices]
[Pages 4911-4913]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-00710]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-5977-N-01]


Waiver of Requirements for the State of New York: CDBG Disaster 
Recovery Grants for Recovery of Lower Manhattan

AGENCY: Office of the Assistant Secretary for Community Planning and 
Development, HUD.

ACTION: Notice.

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SUMMARY: This notice advises the public of an additional waiver 
applicable to the Community Development Block Grant Disaster Recovery 
(CDBG-DR) grants provided to the State of New York for the purpose of 
assisting in the recovery from the September 11, 2001, terrorist 
attacks on New York City. As described in the ``Background'' section of 
this notice, HUD is authorized by statute and regulations to waive 
statutory and regulatory requirements and specify alternative 
requirements for this purpose upon the request of the grantee.

DATES: Effective Date: January 23, 2017.

FOR FURTHER INFORMATION CONTACT: Stanley Gimont, Director, Office of 
Block Grant Assistance, Department of Housing and Urban Development, 
451 7th Street SW., Room 7286, Washington, DC 20410, telephone number 
202-708-3587. Persons with hearing or speech impairments may access 
this number via TTY by calling the Federal Relay Service at 800-877-
8339. Facsimile inquiries may be sent to Mr. Gimont at 202-401-2044. 
(Except for the ``800'' number, these telephone numbers are not toll-
free.) Email inquiries may be sent to disaster_recovery@hud.gov.

Table of Contents

I. Background
II. Applicable Rules, Statutes, Waivers, and Alternative 
Requirements
III. Catalog of Federal Domestic Assistance
IV. Finding of No Significant Impact

I. Background

    Provisions of four public laws (the Appropriation Acts) govern the 
Community Development Block Grant Disaster Recovery (CDBG-DR) grants 
covered by this Notice:
     The fifth proviso under the 2001 Emergency Supplemental 
Appropriations Act for Recovery from and Response to Terrorist Attacks 
on the United States (Pub. L. 107-38, approved September 18, 2001);
     Section 434 of title IV of the Departments of Veterans 
Affairs and Housing and Urban Development, and Independent Agencies 
Appropriations Act, 2002 (Pub. L. 107-73, approved November 26, 2001);
     Chapter 13 of division B of the Department of Defense and 
Emergency Supplemental Appropriations for Recovery from and Response to 
Terrorist Attacks on the United States Act, 2002 (Pub. L. 107-117, 
approved January 10, 2002); and
     Chapter 13 of title II of the 2002 Supplemental 
Appropriations Act for Further Recovery from and Response to Terrorist 
Attacks on the United States (Pub. L. 107-206, approved August 2, 
2002).
    These Appropriation Acts funded three CDBG-DR grants: A single 
grant of $700 million awarded to Empire State Development Corporation 
(ESDC); and two grants of $2.0 billion and $783 million, respectively, 
awarded to the Lower Manhattan Development Corporation (LMDC). ESDC is 
a political subdivision and public benefit corporation of the state of 
New York and LMDC is a subsidiary of ESDC.
    This Notice specifies waivers and alternative requirements and 
modifies previous requirements applicable to LMDC's grants under the 
Appropriation Acts, which are described in Federal Register Notices 
published by the Department on January 28, 2002 (67 FR 4164), February 
7, 2002 (67 FR 5845), March 18, 2002 (67 FR 12042), May 22, 2002 (67 FR 
36017), May 16, 2003 (68 FR 26640), April 12, 2004 (69 FR 19211), and 
August 22, 2011 (76 FR 52340) (referred to collectively in this Notice 
as the ``prior Notices.''). The requirements of the prior Notices 
continue to apply, except as modified by this Notice.\1\
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    \1\ Links to the prior notices, the text of the Appropriations 
Act, and additional guidance prepared by the Department for CDBG-DR 
grants are available on the HUD Exchange Web site: https://www.hudexchange.info/cdbg-dr/cdbg-drlaws-regulations-and-federal-register-notices/.
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    LMDC administers CDBG-DR funds allocated to the organization for 
emergency expenses and economic revitalization in response to the 
September 11, 2001, terrorist attacks in New York City. LMDC is charged 
with assisting New York City in recovering from the terrorist attacks 
on the World Trade Center (WTC), in part by working with the Port 
Authority of New York and New Jersey (Port Authority). There are two 
components to this effort. The first is a ``Memorial Program,'' carried 
out by LMDC, that includes the construction of a Memorial and Memorial 
Museum (completed), and the planning and construction of other 
Memorial-related improvements to complement further redevelopment in 
the immediate area. The second component is a ``Redevelopment 
Program,'' carried out by the Port Authority, which includes commercial 
and retail space, open space areas, and other improvements. LMDC works 
closely with the Port Authority to effectuate the Redevelopment 
Program. For additional information regarding the roles and 
responsibilities of LMDC and the Port Authority and the World Trade 
Center Memorial and Cultural Program General Project Plan (GPP), please 
refer to the LDMC Web site at: https://www.renewnyc.com/ThePlan/general_project_plan.asp.
    Consistent with its approved CDBG-DR action plan and amendments, 
LMDC used CDBG-DR funds to acquire and clear real property identified 
in the GPP as 130 Liberty Street and 140 Liberty Street. In order to 
enable LDMC to fully implement its Memorial Program and to enable the 
Port Authority to pursue its Redevelopment Program, LMDC proposes an 
exchange of real property interests with the Port Authority. The Port 
Authority will provide LMDC or its designee with a lease (up to 99 
years) and purchase option for Port Authority-owned property that will 
be used for memorial and cultural facilities that are part of LMDC's 
Memorial Program, most specifically a performing arts center. This 
ownership structure will parallel a prior plan governing the site of 
the Memorial Museum, which was also part of the larger exchange of 
memorial and cultural properties dedicated for the Memorial Program. In 
the first phase of this exchange, the Port Authority will obtain title 
to the portions of 130 and 140 Liberty Street parcels necessary to 
finalize the below-grade WTC Vehicle Security Center with a public 
park, known as Liberty Park, at and above street level, and the St. 
Nicholas National Shrine at the World Trade Center, all of which are 
part of the Redevelopment Program. These portions of 130 and 140 
Liberty Street have already been partially redeveloped by the Port 
Authority pursuant to an access agreement with LMDC. HUD must waive 
certain regulations applicable to the reuse of 130 and 140 Liberty 
Street to facilitate the current exchange

[[Page 4912]]

between LMDC and the Port Authority and future development of the rest 
of the 130 Liberty Street site. The current transfer of property to the 
Port Authority explicitly excludes that portion of 130 Liberty Street 
that is labeled as ``Tower 5'' on Attachment 1 to the GPP as LMDC will 
retain the Tower 5 site for future transfer and redevelopment.
    The proposed property exchange is a step toward finalizing a new 
site for St. Nicholas Greek Orthodox Church (St. Nicholas), which was 
destroyed by the collapse of the South Tower of the World Trade Center 
on September 11, 2001. St. Nicholas had been located at 155 Cedar 
Street, which is adjacent to the 130 and 140 Liberty Street parcels, 
but the WTC Memorial and Redevelopment Plan provides for reconstruction 
of St. Nicholas (as the St. Nicholas National Shrine at the World Trade 
Center) on a portion of 130 Liberty Street. To carry out this plan, the 
Port Authority entered into an agreement with St. Nicholas that will 
permit the Port Authority to acquire 155 Cedar Street from St. Nicholas 
in exchange for a long-term lease and purchase agreement on a portion 
of 130 Liberty Street.
    As discussed below, reliable valuations of these properties are 
difficult to obtain but some components of the overall transaction can 
be evaluated in a more traditional manner. One such component involves 
the property interest that St. Nicholas will receive from the Port 
Authority in exchange for 155 Cedar Street. LMDC has carried out an 
analysis and determined that the properties are comparable, in part due 
to a permanent restrictive declaration limiting development of the 
property that will be transferred to St. Nicholas.
    As part of the larger planned exchange between the Port Authority 
and LMDC, LMDC is transferring to the Port Authority the portions of 
130 and 140 Liberty Street parcels necessary to finalize the WTC 
Vehicle Security Center, Liberty Park, and the St. Nicholas National 
Shrine at the World Trade Center. This transfer will not be considered 
to be CDBG-assisted and, therefore, will not be subject to CDBG 
requirements. As a result, the Port Authority's conveyance of a portion 
of 130 Liberty Street to St. Nicholas for the St. Nicholas National 
Shrine at the World Trade Center will not be assisted with CDBG-DR 
funds. Additionally, the Port Authority's proposed use of 155 Cedar 
Street and the portion of 130 and 140 Liberty Street that it receives 
from LMDC (minus the St. Nicholas transfer site) will not be subject to 
CDBG requirements.
    HUD notes that LMDC never intended to retain long-term ownership of 
130 and 140 Liberty Street. The properties were purchased with CDBG-DR 
funds to address conditions that developed as a result of the collapse 
of the Towers and to obtain open space adjacent to the World Trade 
Center site. Neither LMDC nor its parent organization, ESDC, holds real 
property for the long-term and it is LMDC's intention to transfer 
ownership of its holdings on the World Trade Center site in the future 
for eligible uses in support of long-term recovery.

II. Applicable Rules, Statutes, Waivers, and Alternative Requirements

    The Appropriation Acts authorize the Secretary to waive, or specify 
alternative requirements for, any provision of any statute or 
regulation that the Secretary administers in connection with the 
obligation by the Secretary or use by the recipient of these grant 
funds, except for requirements related to fair housing, 
nondiscrimination, labor standards, and the environment, upon a finding 
that such waiver is required to facilitate the use of such funds, and 
would not be inconsistent with the overall purpose of the statute or 
regulation. Regulatory waiver authority is also provided by 24 CFR 
5.110, 91.600, and 570.5.
    The following waiver and alternative requirement (together with 
previously granted waivers and alternative requirements) is necessary 
to facilitate the use of these funds, and is not inconsistent with the 
overall purposes of the regulation or title I of the Housing and 
Community Development Act of 1974, as amended (42 U.S.C. 5301 et seq.). 
Under the requirements of the Appropriations Acts, waivers and 
alternative requirements must be published in the Federal Register no 
later than 5 days before the effective date of such waiver.

1. Waiver To Allow the Lower Manhattan Development Corporation (LMDC) 
To Transfer Property Acquired and Cleared With CDBG-DR Funds in 
Exchange for Other Property Interests

    Because the 130 and 140 Liberty Street parcels were acquired and 
cleared using CDBG-DR funds, LMDC's use of these parcels is subject to 
the CDBG ``change of use of real property'' provision at 24 CFR 
570.489(j), which prohibits grantees from changing the use or planned 
use of a property acquired with CDBG-DR funds unless the new use of the 
property qualifies as meeting a national objective, or the grantee 
reimburses its program in the amount of the current fair market value 
of the property. This regulatory provision does not accommodate unique 
aspects present in LMDC's charge to undertake the Memorial Program and 
cooperate with the Port Authority in its implementation of the 
Redevelopment Program, and the realities associated with redevelopment 
of a nationally significant site in the heart of Lower Manhattan. For 
these reasons, the Department has determined that good cause exists to 
grant a waiver of 24 CFR 570.489(j) and establish an alternative 
requirement to facilitate the use of LMDC's CDBG-DR funds, allow the 
proposed property exchanges, and promote completion of the Memorial and 
Redevelopment Programs.
    As an alternative requirement, HUD will permit LMDC to compensate 
its CDBG-DR program for funds expended on acquisition and clearance of 
130 and 140 Liberty Street through acquisition (via long-term lease and 
purchase) of properties on the World Trade Center site from the Port 
Authority that are sufficient as sites for various memorial and 
cultural facilities, including the September 11 Memorial and Museum and 
the yet to be built performing arts center, as described in the GPP and 
LMDC's applicable Action Plan, as amended. The Department's decision is 
based on its finding that the properties involved in this transfer 
present unique valuation difficulties. The portions of 130 and 140 
Liberty Street that LMDC will transfer will not be redeveloped for 
commercial uses but will serve public and non-profit purposes. Given 
that these parcels are located in Lower Manhattan, their value as 
commercial properties would be substantial but use for public and non-
profit purposes alters their valuation. As a result, common appraisal 
approaches are not applicable to establishing current fair market 
valuations. Concurrently, the World Trade Center site is unique and 
venerated by the city and state of New York as well as the nation as a 
result of the tragedy that transpired on September 11, 2001. This 
status makes it exceptionally difficult, if not impossible, to 
establish reliable valuations of the real property interests on the 
World Trade Center site that are to be conveyed to LMDC. The 
difficulties in establishing current fair market valuations of the 
various parts of this transaction and the strong desire of all parties 
(including HUD) to facilitate redevelopment progress on and adjacent to 
the World Trade Center site more than fifteen years after the events of 
September 11, 2001, create a situation in which the waiver and 
alternative

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requirement represent the most practical and feasible path forward.
    HUD finds that good cause exists to waive 24 CFR 570.489(j) and 
impose an alternative requirement to the extent necessary to allow LMDC 
to transfer the portions of 130 and 140 Liberty Street necessary to 
finalize the WTC Vehicle Security Center, Liberty Park, and the St. 
Nicholas National Shrine at the World Trade Center to the Port 
Authority without reimbursing the CDBG-DR program for the fair market 
value of the properties. HUD is therefore waiving section 570.489(j) 
for this purpose and establishing an alternative requirement to permit 
LMDC to acquire from the Port Authority property on the World Trade 
Center site, via long-term lease and purchase, sufficient to carry out 
the memorial and cultural facilities on the World Trade Center site 
that are contemplated in the GPP and LMDC's applicable Action Plan, as 
amended. Additionally, the property to be acquired by LMDC on the World 
Trade Center site will be subject to CDBG-DR programmatic requirements 
upon transfer to LMDC. HUD recognizes the phased nature of the 
transactions contemplated by various parties pursuant to this 
alternative requirement. However, as part of this alternative 
requirement, if LMDC does not acquire property that is sufficient to 
carry out the memorial and cultural facilities on the World Trade 
Center site as contemplated in the GPP and LMDC's applicable Action 
Plan, as amended, before LMDC closes out its grants, HUD may pursue 
appropriate remedial actions.
    This waiver and alternative requirement are consistent with the 
provisions of the Appropriation Acts and are necessary to facilitate 
LMDC's use of CDBG-DR funds for its Memorial Program.

III. Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance numbers for the disaster 
recovery grants under this Notice is 14.218 and 14.228.

VI. Finding of No Significant Impact

    A Finding of No Significant Impact (FONSI) with respect to the 
environment has been made in accordance with HUD regulations at 24 CFR 
part 50, which implement section 102(2)(C) of the National 
Environmental Policy Act of 1969 (42 U.S.C. 4332(2)(C)). The FONSI is 
available for public inspection between 8 a.m. and 5 p.m. weekdays in 
the Regulations Division, Office of General Counsel, Department of 
Housing and Urban Development, 451 7th Street, SW., Room 10276, 
Washington, DC 20410-0500. Due to security measures at the HUD 
Headquarters building, an advance appointment to review the docket file 
must be scheduled by calling the Regulations Division at 202-708-3055 
(this is not a toll-free number). Hearing or speech-impaired 
individuals may access this number through TTY by calling the toll-free 
Federal Relay Service at 800-877-8339.

    Dated: January 9, 2017.
Nani Coloretti,
Deputy Secretary.
[FR Doc. 2017-00710 Filed 1-13-17; 8:45 am]
 BILLING CODE 4210-67-P