Title
Authorization to Enter into Sale and Redevelopment Agreement with Trellis (Ordinance S-44855)
Description
Request to authorize the City Manager, or his designee, to enter into a Sale and Redevelopment Agreement, and other agreements as necessary, (collectively, the Agreements) with Trellis, or its City approved designee (Developer), for the sale and redevelopment of up to 10 vacant, City-owned lots in the Garfield Neighborhood Initiative Area (NIA) as affordable, single-family, owner-occupied residences. Further request authorization for the City Treasurer to accept all funds related to this item. The Developer shall purchase up to 10 lots in Package 2 for $5,000 per lot for a one-time total of up to $50,000; funds from the purchase will be distributed to the appropriate City accounts.
Report
Summary
On April 19, 2017, the Phoenix City Council authorized the Neighborhood Services Department (NSD) to issue a Request for Proposals (RFP) for the sale and redevelopment of 13 vacant, City-owned lots in the Garfield NIA located within the general boundaries of the Interstate 10 Freeway and Van Buren Street, and 7th and 16th Streets. These lots were separated into two property packages to allow for increased development opportunity and flexibility: Package 1, with three larger assembled lots, and Package 2, with 10 scattered individual lots. This request is for Package 2.
Package 2 is approximately 1.44 acres in total area, and consists of properties acquired and assembled by the City through the Slum and Blight Program over the past 21 years to support the redevelopment strategies outlined in the Council-approved Garfield Redevelopment and Garfield Neighborhood Plans. The Developer's proposal is to redevelop the lots with affordable, single-family, owner-occupied residential homes with covered spaces for off-street parking. The residences will offer approximately 855 - 1,225 square feet of living space, and meet the Silver rating of the National Green Building Standards, EnergyStar performance specifications, and the Environmental Protection Agency Indoor AirQuality+V3 certification. Additionally, the homes will utilize a fully accessible design standard with flexible and adaptable floor plans, and be built with the philosophy of being lifetime homes where families can grow and homeowners will be comfortable aging-in-place. The homes will be built in the American Craftsman Bungalow-style, with designs previously approved by the Historic Preservation Commission. The Developer will seek Certificates of Appropriateness, as required, to mirror the character of the Garfield neighborhood.
The Developer's proposal was reviewed for project feasibility and recommended to progress to the negotiation of business terms. The project will bring an estimated value of investment up to $2.58 million to the Garfield neighborhood and create up to 60 construction jobs. The proposed key business terms include:
- The Developer will enter into a Sale and Redevelopment Agreement, which will include development benchmarks for construction, within six months from the Phoenix City Council's authorization date.
- The Developer shall purchase the lots in Package 2 for $5,000 per lot.
- The Developer shall provide the public benefit of selling seven homes in Package 2 to income eligible homebuyers at or below 120 percent of the area median income (AMI), and or three homes to income eligible homebuyers at or below 80 percent AMI. The Developer shall also provide down payment assistance as applicable, due to the proposed purchase price being below the appraised value.
- The Agreements may include other terms and conditions deemed necessary by the City, including community outreach, mutually agreed construction timelines, and development deed restrictions, as required.
- Prior to development, staff shall utilize one or more tools to ensure compliance with the development as presented, and prevent the developer from transferring lots without the City's consent.
Procurement Information
In June 2017, NSD issued a RFP for the Sale and Development of 13 vacant, City-owned lots in the Garfield NIA (RFP-NSD-GAR13). NSD received one responsive proposal for each of the two RFP property packages. Staff verified the proposal received for Package 2, submitted by Trellis, which met the requirements and minimum qualifications of the RFP. The Phoenix City Council authorized the Neighborhood Services Department to enter into a Sale and Redevelopment Agreement with Diana James Community Partners LC to redevelop the three lots in Package 1 into single-family, owner-occupied homes during the May 16, 2018 Formal Meeting.
Financial Impact
This contract will have no impact to the General Fund. The sale of the Package 2 lots will generate a one-time sales proceed of up to $50,000 to the City of Phoenix, which will be distributed to the appropriate accounts.
The sale of these lots will put up to 1.44 acres of land back into private ownership, which will generate new property tax revenues. The project will bring an estimated investment value up to $2.58 million to the Garfield Neighborhood and create up to 60 construction jobs.
Concurrence/Previous Council Action
This item was recommended for approval by the Sustainability, Housing, Efficiency and Neighborhoods Subcommittee on June 19, 2018 by a vote of 3-0.
Public Outreach
Public meetings were held Dec. 14, 2016 and Feb.13, 2017 in the Garfield Neighborhood prior to the RFP release, and on June 26, 2018 regarding the Developer's proposal for Package 2.
Location
The Garfield Lots in Package 2 are located within the general boundaries of the Interstate 10 and Van Buren Street, between 7th and 16th Streets, with the following street addresses and distinct Assessor Parcel Numbers (APN):
- 378 N. 15th St.; APN 116-18-012.
- 1210 E. Garfield St.; APN 116-24-076.
- 904 E. Pierce St.; APN 116-32-119.
- 1018 E. Pierce St.; APN 116-27-052.
- 1020 E. Pierce St.; APN 116-27-051.
- 1024 E. Pierce St.; APN 116-27-050.
- 1110 E. Pierce St.; APN 116-27-097.
- 1416 E. Pierce St.; APN 116-19-051.
- 1125 E. Taylor St.; APN 116-26-057.
- 1129 E. Taylor St.; APN 116-26-056.
Council District: 8
Department
Responsible Department
This item is submitted by Deputy City Manager Mario Paniagua and the Neighborhood Services Department.