Mayor angry, Reid disappointed Las Vegas denied more federal aid for foreclosures

By Dave Toplikar

Published Thursday, Jan. 14, 2010 | 12:01 p.m.

Updated Thursday, Jan. 14, 2010 | 2:57 p.m.

Las Vegas Mayor Oscar Goodman was angry today about the news that Las Vegas would not be getting any more federal Neighborhood Stabilization Plan funding to help keep neighborhoods besieged by foreclosures from becoming blighted.

"It's a slap in our face, it defies logic," Goodman said this morning at his weekly press conference. "But the NSP2 grants exclude Las Vegas from receiving any of the monies."

Goodman said he just learned about the lack of funds a few minutes before the press conference, "and I'm still hot." He planned to continue looking into the matter.

Meanwhile, Senate Majority Leader Harry Reid, D-Nev., was also looking into it this afternoon.

Reid issued a statement through his office this afternoon that he was "extremely disappointed" to learn that Southern Nevada will be denied the funding, designed to assist areas in the country with the most need.

"Secretary (Shaun) Donovan was in Las Vegas last summer and saw first-hand how serious the situation is. With the highest foreclosure rate and today’s news that bankruptcies increased by nearly 60 percent last year, it’s clear Nevadans need help and it’s time for HUD to step up," Reid said in the statement.

“HUD has indicated that the applicants in southern Nevada did not meet eligibility requirements but the agency needs to explain why. And, given the severity of the foreclosure crisis in southern Nevada, HUD needs to work with the state to provide needed resources to confront it.

“I will be sending a letter to Secretary Donovan asking him to meet with me to discuss this issue further. I also want to hear an explanation from the agencies in southern Nevada that received $60 million dollars from the first round of Neighborhood Stabilization funds about why, according to press reports, tens of millions of dollars have been left on the table. It would be a travesty if that alleged inaction cost our state badly-needed federal funding.”

On the first round of grants about a year ago, the city receive about $20 million, to be used to take care of homes that were foreclosed, he said. The Las Vegas Valley as a whole received around $64 million.

Goodman said at that particular time, he thought federal Department of Housing and Urban Development was doing the grants backward.

Rather than help people who were in danger of foreclosure, the money was given to the city to help purchase the homes that were already in foreclosure so they wouldn't become blighted and allow the city to provide affordable housing, he said.

In July, Las Vegas joined in with Clark County, North Las Vegas and Henderson to ask the federal government for another $368.2 million.

"But we get the list today and there's an omission that people could not understand," he said. The $2 billion in Recovery Act grants were announced today by Donovan's office.

Goodman said Las Vegas not being on the list of grantees "defies any kind of logic" because the Las Vegas area is considered "the poster child for economic woe at this point in time."

Goodman said that for 38 consecutive months, Las Vegas has been leading the country in economic trouble, which included foreclosures and unemployment.

"It's unbelievable for the number of people being laid off that we haven't received money from HUD," he said.

HUD made these grants out of Washington, D.C., and there was no opportunity for local input for the grants, Goodman said.

"Only a moron who follows anything that's happening wouldn't know how much we needed this money in order to take care of the problems we have in the community," he said. "Hopefully we're going to be able to rectify it because it's unacceptable at this point in time. It's just inexcusable."

"It seems like every other city in the United States got money, except us. It's outrageous. It makes me sick."

The mayor said that no one in the country had had worse foreclosure experiences that Las Vegas.

Looking through the list of grants, he noted that the Michigan State Housing Authority was given $223 million and Los Angeles had received $100 million.

Some 6,500 homes are going to hit the market in the Las Vegas Valley "and we can't afford to buy any of them because we don't have this money," he said, slamming the grant list down on the podium.

"It's a joke! But the joke's on us. And it stinks. It really stinks. And if people don't like me saying it, that's tough," he said.

Goodman said he didn't know if the city could make an appeal to be included in this round of funding.

"I have a phone call in to HUD. Everybody's bewildered who has been associated with the process related to Las Vegas. Nobody can figure out what this story is because it is illogical, it makes no sense and it's just nuts."

He said Reno received $20.9 million but no other city in Nevada received any funding in the second round of funding.

"Habitat for Humanity is getting money all over the place and Las Vegas doesn't get a penny," he said. "...I'm going to try to do something about this."