Fuel & Iron business project receives nearly $300K in COVID relief funds

PUEBLO, Colo. (KRDO) -- Even though they didn't exist during the onset of the pandemic, an anticipated food hall and affordable housing complex in downtown Pueblo is slated to receive federal COVID-19 relief funds.

The Fuel & Iron Project, which is currently under-constructions and scheduled to open later this year, is converting the vacant Holmes Hardware building on the corner of B Street and Union Avenue in downtown Pueblo into 28 affordable housing units and a food hall consisting of 5 separate kitchens. 

Last month, the City of Pueblo signed off on a $294,121 grant for the project from the American Rescue Plan Act (ARPA) for new kitchen equipment. 

In March 2021, the United States Congress passed the $1.9 Trillion American Rescue Plan Act. Within the bill is a $350 billion fund called the Coronavirus State and Local Fiscal Recovery Funds. The fund is meant to deliver billions directly to local governments across the country to "support their response to and recovery from the COVID-19 public health emergency."

The criteria for the Coronavirus State and Local Fiscal Recovery Funds say funds can be utilized to "respond to the far-reaching public health and negative economic impacts of the pandemic, by supporting the health of communities, and helping households, small businesses, impacted industries, nonprofits, and the public sector recover from economic impacts."

The city of Pueblo received around $36 million from this fund. 

In the ordinance to approve the near $300K in ARPA grant funds for this project it says “Fuel & Iron is a small business disproportionately impacted by the COVID-19 public health emergency.” 

Construction began on the Fuel & Iron project in July of 2021, while the pandemic first began in the United States more than a year earlier.

"We didn’t write the ordinance, so I don’t feel comfortable commenting on the specific language," Nathan Stern with Fuel & Iron LLC told 13 Investigates after being asked about the grant language Wednesday. "With that said, employment in the hospitality sector and tourism to Downtown Pueblo were disproportionately impacted by COVID-19, and the Fuel & Iron Food Hall will address those impacts through the high number of jobs created at the food hall and the tourist traffic it will generate." 

Pueblo Mayor Nick Gradisar's Office tells 13 Investigates that Fuel & Iron has been disproportionately impacted by the pandemic while constructing the restaurants because of the backup of production and the rising cost of goods.

According to the American Rescue Plan Act, small businesses operating in low income neighborhoods were automatically disproportionately impacted by the pandemic and are eligible for assistance. The Mayor's Offices says Fuel & Iron meets that criteria.

The ordinance also says the project is “engaged in the development, repair, and operation of affordable housing and services or programs to increase long-term housing security.” 

On the second and third floors of the vacant building will be 28 affordable housing units all priced so the rent is economical. The housing units will be priced at 60% of the area's median income. From there, the rent prices are benchmarked to 30% of that 60%.

However, none of the ARPA grant funds is to be spent on affordable housing units.

“This will assist the city of Pueblo in recovering from COVID by increasing economic activity in this vital historic Union Avenue district,” Pueblo Mayor Nick Gradisar told 13 Investigates. “It’ll be a tourist attraction, and it will be 28 affordable housing units downtown, which is what we need to revitalize that downtown area. We need people working down there and living down there. This project will accomplish those kinds of things.” 

Gradisar points out that the American Rescue Plan permits municipalities to use these COVID relief funds to support startup businesses in qualified census tracts. 

Pueblo's Mayor tells 13 Investigates around $9 million of the remaining $36 million in ARPA funds haven't been allocated yet.

"We're still reviewing proposals," Gradisar said. "We have a meeting every week with the city's leadership team that reviews the proposals out there. We have meetings with other organizations to look at the requested funds."