UPDATE: FEMA suspends hazard mitigation funds for Indiana

Indiana plans to take legal action against the city of Kokomo after unresolved compliance issues with its baseball stadium project spurred federal officials to freeze more than $6 million in hazard mitigation grants for the entire state, a Department of Homeland Security spokesman said Friday.

The state plans to take legal action soon against Kokomo in Marion County's courts in response to a lawsuit the city recently filed against the state agency, DHS spokesman John Erickson said, adding, "we're interested in getting this handled quickly."

The Federal Emergency Management Agency determined last year that the baseball stadium project along Wildcat Creek was was not in compliance with its rules, in part because fill dirt had been added to the flood-prone site.

FEMA announced Thursday it had suspended about $5.5 million in funding for flood-mitigation projects, tornado safe rooms and other safety projects in Indiana due to the unresolved compliance issues. By Friday afternoon, the suspended funding had grown to more than $6 million, Erickson said, and the state could face the loss of millions of more dollars in additional grant funding the longer the matter is unresolved.

"Now that this has blossomed into something that affects the entire state, we are going to seek remedies in court," he said. "… We have to take action on this. We were in the process anyway, but the stakes have become higher."

The $50 million funded hazard mitigation projects being handled by the state's homeland security department aren't affected because that money has already been committed.

FEMA said up to eight parcels of land within the stadium project must be returned to open space in accordance with grant regulations because that land for the project was purchased using FEMA grants.

A lawsuit Kokomo filed Jan. 26 against the Homeland Security department asks a Marion County environmental judge to resolve the stadium compliance questions. Kokomo's director of operations, Randy McKay, said Friday in a statement that city officials sued because they "firmly dispute FEMA's assertions that the eight parcels in question are not in compliance."

"We are evaluating FEMA's current position and are open to discussing what change, if any, is needed to the project in order to bring finality to it," McKay said, calling FEMA's action "political and bureaucratic interference."

He said the city is committed to finishing the Kokomo Municipal Stadium. Kokomo stopped construction work in October on the eight parcels identified by FEMA, city development specialist David Tharp said.

Erickson said Kokomo's project had added a baseball dugout to one of the eight parcels, a path that appears to be concrete had either been added or is planned at another portion and a "significant amount of fill dirt" has been added in some of the parcels.

"They've gone from a lower elevation to a significantly higher elevation, which is going to change flood patterns," he said.

The state Homeland Security agency sent Kokomo officials a letter on Nov. 24 giving the city 60 days to correct the situation. FEMA's Thursday letter noted that the violations still exist.