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Title:
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Loan Federal HOME Funds for Acacia Heights II Affordable Housing Development (Ordinance S-46489)
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Title
Loan Federal HOME Funds for Acacia Heights II Affordable Housing Development (Ordinance S-46489)
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 (HUD) HOME Investment Partnerships Program (HOME) funds with Acacia Heights II, LLC, or a City-approved nominee, for the Acacia Heights II 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. 15, 2019, 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. 6, 2019. 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.
Procurement Information
Seven 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 500-point scale, and were scored based on the following evaluation criteria: Developer Experience; Project Merits/Approach; Financial Feasibility; and Project Impact. The evaluation panel scored the proposals as follows:
Acacia Heights II (Trinity Housing Development and Catholic Charities/Housing For Hope, Inc.): 478 points.
Mesquite Terrace (Trinity Housing Development and Catholic Charities/Housing For Hope, Inc.): 460 points.
Trellis at Mission (Trellis): 440 points.
The Bell at 25th Apartments (Chicanos Por La Causa, Inc.): 424 points.
Rehoboth Place Phase II (Turnstone Development, Rehoboth Community Development Corporation (CDC), and Newtown CDC): 397 points.
Newsome Village (UMOM/Helping Hands Housing Services): 388 points.
Desert Cove Place Apartments (Haan Development): 329 points.
Based on funding availability, all seven projects were recommended for funding.
Acacia Heights II, located at 4737 N. 7th Ave. (proposed), includes the new construction of a 66-unit permanent housing community. Trinity Housing Development, a for-profit developer, and Catholic Charities/Housing for Hope, a non-profit CHDO, through Acacia Heights II, LLC, 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 were not indicated in this application. Other proposed funding for this project includes permanent debt financing, Low Income Housing Tax Credit (LIHTC) equity, 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 2019 and 2020 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 2020-21 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
4737 N. 7th Ave. (proposed)
Council District: 4
Department
Responsible Department
This item is submitted by Deputy City Manager Mario Paniagua and the Housing Department.