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HUD NEVER REQUIRED STATES TO MATCH FUNDS

After reading The News editorial "How to blow a shot at $100 million," I feel compelled to set the record straight. Buffalo's failure to be designated an empowerment zone is due to the fact that the Department of Housing and Urban Development simply saw fit to award the designation to other communities.

In the application process, HUD never stipulated any requirement that states match the federal commitment. Moreover, at the time the applications were due at HUD, there was no money set aside in the federal budget for the empowerment zone program.

I am chairman of Empire State Development Corp., which is responsible for providing matching funds for empowerment zones in the state. We never ruled out the possibility of matching the federal dollars. However, we needed to know the funding commitment from the federal government in order to know what to match. As the editorial noted, there is still no multiyear funding committed to the empowerment zones in the federal budget. In spite of these unknowns, we went ahead in good faith with the application process.

More importantly, HUD's selections themselves have proved that providing matching funds was not a requirement for designation. Five other states that applied for zones -- California, Texas, South Carolina, Missouri and Illinois -- provided not one cent in matching funds.

Charles A. Gargano New York City

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