Title
Authorization to Enter into Development Agreements for West Sunnyslope/Village Center Neighborhoods Affordable Housing Redevelopment (Ordinance S-50935)
Description
Request to authorize the City Manager, or his designee, to separately enter into a disposition and development agreement, and other agreements as necessary, (collectively, the "Agreements") with Habitat for Humanity Central Arizona and Viking Villas, LLC for the sale and development of properties located in the West Sunnyslope and Village Center neighborhoods for affordable residential development projects.
Report
Summary
The developers submitted their proposals in response to the Neighborhood Services Department (NSD) Request for Proposals (RFP) for the purchase and development of 11 City-owned lots located in the Sunnyslope/Village Center neighborhoods. These lots were acquired and assembled by the City through the Slum and Blight Program over the past 16 years to support the redevelopment strategies outlined in the Council-approved Target Area F Redevelopment Plan. The lots were separated into three packages to increase development opportunities and flexibility. The redevelopment of these lots into affordable infill housing aligns with the goals set forth in the Housing Phoenix Plan which addresses the critical need for this type of housing in Phoenix.
The proposed business terms include:
- The developer for Package #1 consisting of four residential lots shall purchase them for a total price of $265,000 and invest $200,000 into the Sunnyslope community through home repair services. The four single-family owner-occupied homes will feature a three-bedroom floor plan with a den that can be converted into a fourth bedroom, depending on household needs, with two and a half bedrooms.
- The developer for Package #3 consisting of one commercial and/or multifamily lot shall purchase it for a total price of $420,000, which is $60,000 higher than the appraised value. The 30-unit multifamily affordable tenant-occupied housing development will consist of a three-story building designed to accommodate various household sizes and needs. The unit breakdown will include six two-bedroom units, 12 one-bedroom units, and 12 studio units.
- Developers will enter into a Development Agreement within six months, and each project shall have development benchmarks for construction. Estimated construction completion is 25 months.
- The residential units each project creates will be made available to households with income levels not to exceed 80 percent area median income (AMI), as defined annually by the U.S. Department of Housing and Urban Development (HUD).
- Affordability requirements will be secured through a Declaration of Affirmative Land Use Restrictive Covenant.
The development of the lots will add affordable housing opportunities, generate jobs and economic activity, increase revenue at local businesses, increase tax revenue, and improved quality of life.
Procurement Information
In December 2023, an RFP was issued for the purchase and development of three property packages, totaling 11 residential and/or multifamily and one commercial and/or multifamily City-owned vacant lots located in the West Sunnyslope and Village Center neighborhoods. One proposal was received for the four residential lots offered in Package #1 and two proposals were received for the one commercial and/or multifamily lot offered in Package #3. Zero proposals were received for the seven residential/and or multifamily lots offered in Package #2. The submitted proposals were reviewed by an evaluation panel on April 12, 2024, and arrived at a consensus score for each evaluation criterion. The five-member evaluation panel, consisting of an external community stakeholder, an external partner/developer, and City staff from three City departments who engage in redevelopment activities, recommended a contract award for Package #1 to Habitat for Humanity to complete four units of affordable single-family detached housing and a contract award for Package #3 to Viking Villas, LLC to complete a 30-unit multifamily affordable housing development.
Contract Term
The contract term of the Agreements will be three-year contract terms, with two one-year options to extend, which may be exercised by the City Manager, or designee. The Agreements will include other terms and conditions deemed necessary by the City.
Financial Impact
The two projects are completely funded by each of the developers and neither is seeking any City financial assistance. No General Funds are required.
Concurrence/Previous Council Action
On June 16, 2020, Phoenix City Council approved nine policy initiatives listed in the Housing Phoenix Plan. These projects fall under Initiative #3.
Public Outreach
One community meeting was held in the Sunnyslope/Village Center neighborhood regarding the RFP and to solicit input on the development of these parcels on Nov. 30, 2023.
Location
Package #1 lots are located at 1121 W. Ironwood Dr., 8825 N. 1st St., 8817 N 2nd St., and 8844 N 2nd Way. Package #3 lot is located at 8930 N. 3rd St.
Council District: 3
Department
Responsible Department
This item is submitted by Deputy City Manager Gina Montes and the Housing and Neighborhood Services departments.