'Costs Covered': Watertown Local Development Corp. is fronting $132,000 pending ESD funding

Watertown Local Development Corp. will forward Neighbors of Watertown Inc. up to $132,000 to cover construction at the Franklin Building until one source of state funding comes through.

In April, Neighbors had billed almost $1.1 million from the promised $1.55 million from the Restore NY Communities Initiative program.

"Other sources have filled the construction gaps," Corporation CEO Donald W. Rutherford said during a special meeting Thursday afternoon.

But now, the construction has exhausted the other sources, so to pay October's construction bill, the corporation must step in. Neighbors asked for $397,000 to cover November's construction cost, but James P. Fayle, regional director of the state Empire State Development Corp., said the expected money should be wired in the next 10 business days. That would cover the November bill.

"It's waiting for one final signature, then it should be funded within 10 business days," said Mr. Fayle, who is also a board member.

"That makes me feel a lot better," Mr. Rutherford said. "It's been since April, and they were saying 60 to 90 days."

Mr. Fayle said, "I will apologize for ESD. We had some internal communications problems and delayed it two to three months."

The board decided to front the $132,000 required for October's construction and an insurance premium.

Construction must conclude by the end of December to use $3.8 million in tax credits from the state Homes and Community Renewal and the National Park Service.

Stimulus funding that filled a $700,000 funding gap caused by lower tax credit revenue expires at the end of January.

Mr. Rutherford asked if the corporation, also known as the Watertown Trust, could bridge the remaining Restore money in a loan to obtain the stimulus funding. The stimulus funding requires all other primary sources be put in before it is applied. Restore money should take two or three months to come through, which would be past the January deadline for the stimulus money.

"It seems like that is what could be done," said Reginald J. Schweitzer, deputy director of Neighbors.

In the $7.8 million project, Neighbors plans to turn the three-story building at 50 Public Square into a mixed-use space with 16 residential units on upper floors and seven to 12 commercial units at street level.