The City of Cleveland Heights is an integrated, inner ring suburb of Cleveland with a population of about 55,000. By 1995, approximately 35 percent of the population was non-white, with a significant number falling below the official poverty income line. As a city of more than 50,000, Cleveland Heights was an "Entitlement City" under the 1974 federal Community Development Block Grant (CDBG) program. Fiscal year 1995 was known, in CDBG parlance, as "Year 21." Cleveland Heights, under the CDBG formula, was receiving more than $1.5 million annually in federal funds from this program. Under federal guidelines, 70 percent of the funds had to directly benefit low- and moderate-income individuals. Because the Civic was located in one of the poorest census tracts in the city, and its condition would have a significant impact on an already economically troubled area of the city, the Civic Foundation saw that it could potentially benefit from these federal dollars.

In August 1994, The Civic Foundation applied to the City of Cleveland Heights for $500,000 of CDBG funds for the Year 21 program. After a rigorous process of arguing the case for the Civic's proposal, the Foundation was awarded $250,000 by the City for the 1995 program. Because in 1994 the ownership of the Civic had not yet been assumed by the nonprofit Civic Foundation, the City made the award of the funds contingent upon the ownership change. As detailed earlier, the ownership change occurred in January 1995. On November 7, 1994, City Council formally awarded the Civic its first capital rehabilitation grant.

The next step was for the staff of the Civic to begin the process of working with the architects, vanDijk, Pace, Westlake & Partners, to put together a priority list of projects and begin the drawing up of bid documents. Because this was a federally funded project, the bid procedures were very cumbersome and time-consuming. By spring of 1996, vanDijk had drafted a $1 million, three-phase construction priority list. The first phase would utilize the $250,000 that had been allocated by the City in November 1994. That phase would include roof repairs as well as gutter and downspout replacement. Since the Civic was listed on the National Register of Historical Places, the construction had to conform to historical guidelines as enforced by the Ohio Historical Society. This meant that the gutters and downspouts had to be copper, as they originally were, even though copper was then about three times as expensive as aluminum.
While the process of drawing up the bid specifications for the first $250,000 grant was going on, the staff began the process of applying for another $250,000 grant from the next CDBG funding cycle. The Year 22 total funding requests were much greater than the previous year, making competition much stiffer. As a result, the Civic was only awarded $144,000. However, the total CDBG funds now totaled almost $400,000. Unexpectedly, spending the money became the problem, because the City was unwilling to authorize the funds until the Civic cleared up its financial problems with National City Bank. As noted above, that finally occurred in the fall of 1997.