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Title:
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Loan Federal HOME Funds for Reserve at Thunderbird Phase II Affordable Housing Development (Ordinance S-48532)
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Title
Loan Federal HOME Funds for Reserve at Thunderbird Phase II Affordable Housing Development (Ordinance S-48532)
Description
Request to authorize 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 Program (HOME) funds with Glenmark Construction, Inc. and Antares Development & Investing (Mark Breen and Jessica Raymond), or a City-approved nominee, for the Reserve at Thunderbird Phase II affordable housing development project, and to take all actions and execute all documents to complete the loan. Further request to authorize 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. 22, 2021, 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. 17, 2021. 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 Program.
Reserve at Thunderbird Phase II, located at 13404 N. 30th Ave., consists of the new construction of a 134-unit permanent housing community with 56 market rate units. Glenmark Construction, Inc. and Antares Development & Investing (Mark Breen and Jessica Raymond), for-profit developers, 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 11 units serving households at or below 40 percent AMI. Supportive services include credit and financial counseling and job search/placement assistance. Other proposed funding for this project includes permanent debt financing, nine percent 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.
Procurement Information
Eight proposals were reviewed by an evaluation committee comprised of two City staff members and one community representative. 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. All eight projects were recommended for funding, as follows:
Garfield II (Garfield Veterans Housing II MM LLC/Pennrose LLC);
Reserve at Thunderbird Phase II (Glenmark Construction, Inc. and Antares Development & Investing, Mark Breen and Jessica Raymond);
Osborn Pointe (Native American Connections);
Acacia Heights III (Trinity Housing Development, LLC/Catholic Charities Community Services);
Pueblo Apartments (Chicanos Por La Causa, Inc.);
Trellis @ Cholla (Trellis);
Bret Tarver Terrace (Helping Hands Housing Services/UMOM Housing 9 LLC); and
Highbridge Apartments (Phoenix Holdings Group LLC/Gerald A. Haan).
Financial Impact
There is no impact to the General Fund. HOME is a federally funded program. Funding for this CFI is made available from 2021 HOME funds, and a forward allocation of 2022 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's Capital Improvement Program. Loan execution is anticipated for Fiscal Year 2022-23 and the loan will be paid to the developer over an estimated two-year period.
Location
13404 N. 30th Ave.
Council District: 1
Concurrence/Previous Council Action
This item was recommended for approval as a part of the Award of Federal HOME Funds for Affordable Housing Development Projects at the Economic Development and Equity Subcommittee meeting on March 23, 2022, by a vote of 3-0.
Department
Responsible Department
This item is submitted by Deputy City Manager Gina Montes and the Housing Department.