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Title:
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Loan Federal HOME Funds for Reserve at Thunderbird Phase 1 Affordable Housing Development (Ordinance S-47454)
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Title
Loan Federal HOME Funds for Reserve at Thunderbird Phase 1 Affordable Housing Development (Ordinance S-47454)
Description
Request authorization for the City Manager, or his designee, to enter into an Affordable Housing Loan Program agreement for up to $1 million in federal U.S. Department of Housing and Urban Development HOME Investment Partnerships Act Program funds with Reserve at Thunderbird LP, or a City-approved nominee, for the Reserve at Thunderbird Phase 1 affordable housing development project, and to take all actions and execute all documents to complete the loan. Authorization is also requested for the City Controller to disburse the funds for the life of the contract. There is no impact to the General Fund.
Report
Summary
On Nov. 16, 2020, the Housing Department issued a Call for Interest (CFI) seeking proposals for the acquisition, new construction, and/or rehabilitation of affordable rental housing based on the Affordable Housing Community Priorities approved by City Council on Nov. 4, 2020. The Community Priorities are:
Acquisition, rehabilitation and/or new construction of properties that focus on homeless or special needs populations, and that provide appropriate services to assist and sustain these populations; and
Acquisition, rehabilitation, and/or new construction of properties where the developer qualifies as a Community Housing Development Organization (CHDO) as defined by the HOME Investment Partnerships Act Program (HOME) Program.
Procurement Information
Six proposals were received and reviewed by an evaluation committee comprised of two City staff members and two community representatives. The proposals were evaluated on a 1,000-point scale based on the following criteria: Developer Experience; Project Merits/Approach; Financial Feasibility; and Project Impact. The evaluation panel scored the proposals as follows:
Pueblo Apartments (Chicanos Por La Causa, Inc.): 923 points.
Acacia Heights II (Trinity Housing Development, LLC): 914 points.
Reserve at Thunderbird - Phase 1 (Glenmark Construction, Inc. and Antares Development & Investing [Mark Breen and Jessica Raymond]): 911 points.
Rehoboth Place II (Gorman and Company, LLC and Rehoboth Community Development Corporation): 820 points.
Commons at 9 South (UMOM/Helping Hands Housing Services): 766 points.
Mustang Villas (YES Housing of Arizona, Inc.): 708 points.
Based on funding availability, all six projects were recommended for funding.
Reserve at Thunderbird Phase 1, located at 3045 W. Thunderbird Road, includes the new construction of a 108-unit permanent housing community. Glenmark Construction, Inc. and Antares Development & Investing, for-profit developers (Mark Breen and Jessica Raymond), through Reserve at Thunderbird LP, requested $1 million to assist with the development of this project. All units will serve households with incomes at or below 60 percent of the Area Median Income (AMI) with at least 11 units serving households at or below 40 percent AMI. Supportive services will be provided by Greater Phoenix Urban League and other non-profit partners, and will include credit and financial counseling, kids meal programs, and job search/placement assistance. Other proposed funding for this project includes permanent debt financing, Low Income Housing Tax Credit (LIHTC) equity, solar credits, additional gap funding, and a deferred developer fee.
Project awards are contingent on full underwriting, environmental release of funds, commitments of other financing, and availability of federal funds. The overall loan structure will be consistent with the Housing Department's Underwriting Guidelines for affordable rental housing projects.
Financial Impact
There is no impact to the General Fund. HOME is a federally-funded program. Funding for this CFI is made available from 2020 HOME funds, and a forward allocation of 2021 HOME funds. Funding commitments for projects with LIHTC equity are reliant upon receiving a LIHTC award from the Arizona Department of Housing. Funding is budgeted in the Housing Department Capital Improvement Program. Loan execution is anticipated for FY 2021-22 and the loan will be paid to the developer over a two-year period.
Public Outreach
All applicants were required to hold at least one community meeting with the surrounding neighborhood to inform them of their proposed housing development. Per the evaluation criteria, applicants that held more than one community meeting were given additional points.
Location
3045 W. Thunderbird Road
Council District: 1
Concurrence/Previous Council Action
This item was recommended for approval at the Land Use and Livability Subcommittee meeting on March 17, 2021, by a vote of 4-0.
Department
Responsible Department
This item is submitted by Deputy City Manager Inger Erickson and the Housing Department.