Title
HUD Rental Assistance Demonstration Redevelopment of A.L. Krohn East Public Housing Community (Ordinance S-43578)
Description
Request authorization for the City Manager, or his designee, to implement the redevelopment of the A.L. Krohn East Public Housing community through the U.S. Department of Housing and Urban Development's (HUD) Rental Assistance Demonstration (RAD) Program, with the Housing Department serving as co-developer. Authorization is also requested for the City Controller to disburse Public Housing and/or Affordable Housing Funds for the project.
Report
Summary
A.L. Krohn East, located at 14th and Monroe streets and built in 1962, consists of seven buildings containing 38 units with two to five bedrooms. The property, which sits on approximately 1.92 acres, is an aged community containing obsolete systems, poor design and amenities. In February 2017, HUD awarded a RAD Program commitment for A.L. Krohn East, allowing the Housing Department to convert the property's 38 Public Housing units from a Public Housing operating subsidy to a long-term, renewable, project-based Section 8 contract. The RAD Program helps revitalize aging public housing properties and address the backlog of deferred maintenance and capital improvements, as well as provide future financial sustainability and continued affordability. It is anticipated that the new development will contain 38 RAD units, as well as other affordable and market rate units.
The Housing Department is procuring a co-development partner to redevelop the A.L. Krohn East site to a new, mixed-income multi-family rental housing community with increased density and resident amenities such as a community center (the Project). A separate request will seek City Council approval for contract award of the selected co-developer.
The Housing Department, working with its co-development partner once selected, seeks authorization to proceed with all actions necessary or appropriate to redevelop the A.L. Krohn East site including the following:
1. Demolish existing structures and relocate resident households per RAD requirements.
2. Pursue rezoning of the site to the City of Phoenix Walkable Urban Code.
3. Form a new city-controlled non-profit corporation with the Housing Director to serve as sole incorporator, with names and governance documents as approved by the City Manager or his designee.
4. Jointly with the co-developer, form a new corporate entity or entities, of which the corporation will be a member and co-developer for the Project, to serve as the ownership entity(ies) for the site.
5. Procure and/or engage in funding transactions to finance the redevelopment, including submitting applications and accepting awards of Low Income Housing Tax Credits (LIHTC), seeking a LIHTC equity investor, and obtaining other grants and/or loans for the Project.
6. Provide financial guarantees to investors or lenders to assure construction completion and loan repayment if necessary to obtain financing, provided that any guaranty may only be paid from any developer fees to be paid to the new corporation.
7. Appropriate and expend up to $3 million in Housing Department Public Housing and/or Affordable Housing Funds to provide and/or loan predevelopment and/or gap funding.
8. Allocate Section 8 Project-Based Vouchers and/or Public Housing units, amend HUD Annual Plan(s), and enter into associated contracts or agreements, as necessary to facilitate financing, redevelopment, and operations.
9. Convey or grant fee title or a lesser interest in all or any portion of the site to the Corporation(s), LLC(s), public utilities, and other third parties as necessary to facilitate redevelopment.
10. Procure, execute, and submit or deliver all contracts, documents and instruments necessary for the redevelopment and operation of the property.
11. Use and expend the proceeds of any grants, loans and other financing and funding sources to carry out the redevelopment.
12. Take other action necessary or appropriate to develop, implement, and operate all phases of the A.L. Krohn East RAD Program redevelopment.
Financial Impact
Funding is available in the Public Housing and/or Affordable Housing Funds.
Location
A.L. Krohn East Public Housing community, 14th and Monroe streets.
Concurrence/Previous Action
This item was considered at the Sustainability, Housing, Efficiency and Neighborhoods Subcommittee on May 16, 2017, and approval recommended by a vote of 4-0.
Department
Responsible Department
This item is submitted by Deputy City Manager Deanna Jonovich and the Housing Department.