The Community Development Block Grant, Demolition Program (CDBG Demolition) is administered by the North Carolina Department of Commerce; it is designed to fund the demolition of vacant and dilapidated industrial buildings and properties.
CDBG Demolition Program is designed to assist local governments in demolition projects that result in viable industrial or commercial sites. The demolition activity is expected to create a site at which it can reasonably be expected that new jobs will be created and private sector capital will be invested.
Although specific job creation is not required, the following conditions apply:
When the demolition project involves a company’s plan to construct a new building on a to-be-razed site, the CDBG Demolition Program will require an estimate of the number of employees it anticipates hiring.
When the project involves demolition of a building only for future economic development—and when a business has not yet been identified to construct a new building and hire employees—the CDBG Demolition Program requires that the building targeted for demolition be located in a low and moderate income (LMI) census tract.
The local government must provide at least one dollar for every three dollars provided by CDBG Demolition.
The Economic Development Partnership of North Carolina does not award or administer this incentive. All economic development incentives are awarded and administered by the North Carolina Department of Commerce.
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Eligible Use for CDBG Demolition Program
CDBG Demolition projects must involve demolition activities that aid in the prevention or elimination of slums or blight and lead to the creation of industrial sites. The demolition activity will be considered to address prevention of slums or blight in an area if: (1) The area, delineated by the unit of government, meets a definition of slum, blighted, deteriorated or deteriorating area under NC General Statute 160A-500 or (2) At least 25% of properties throughout the delineated area experience one or more of the following conditions: physical deterioration of buildings or improvements, abandonment of properties, chronic high vacancy rate in industrial buildings, abnormally low property values relative to other areas in the community, public improvements in the area are in a general state of deterioration, and known environmental contamination.
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Basic Requirements for Eligibility for CDBG Demolition Program
All counties in North Carolina, except for Wake, Mecklenburg and Cumberland, and all municipalities except for 24 entitlement communities, are eligible to apply for CDBG Demolition Program funding.
Entitlement communities that receive CDBG Demolition Program funds directly from HUD are Asheville, Burlington, Cary, Chapel Hill, Charlotte, Concord, Durham, Fayetteville, Gastonia, Goldsboro, Greensboro, Greenville, Hickory, High Point, Jacksonville, Kannapolis, Lenoir, Monroe, Morganton, New Bern, Raleigh, Rocky Mount, Salisbury, Wilmington and Winston-Salem. The town of Holly Springs in Wake County and the town of Linden in Cumberland County opted to participate in the statewide CDBG Demolition Program rather than that grant’s entitlement community program. For this reason, they receive funding through the statewide CDBG Demolition Program.
For CDBG Demolition projects, the local government must have control of the building proposed for demolition. The post-demolition use of the property cannot be used for parking, recreation, residential housing (single or multi-unit) or retail.
CDBG Demolition funding will NOT be made available to projects under the following circumstances:
Projects that assist companies transferring jobs within the state or from another state, unless the company is expanding into the new area by adding a branch, affiliate or subsidiary while maintaining employment levels an existing facility. Jobs that are transferred from other facilities may not be counted toward the job-creation commitment; Projects assisting not-for-profit companies or organizations; Projects assisting companies that are in bankruptcy; or Projects assisting sports teams, including motorsports.
In addition, any one of the following situations would render a company ineligible for CDBG Demolition funding, if it occurred prior to the grant award:
- Execution of construction contracts;
- Placement of equipment purchase orders for the project site;
- Execution of a binding option for the purchase of an existing facility with a deposit that is so large that the option constitutes a sales contract;
- Execution of sales contracts without a condition contingency for CDBG Demolition funding; or
- Public announcement of a project that includes no expression of the need for CDBG Demolition participation, unless previously approved by CDBG Demolition staff.
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