Title
Choice Neighborhoods Implementation Grant (Ordinance S-43959)
Description
This report requests authorization for the City Manager, or his designee, to apply for the U.S. Department of Housing and Urban Development's (HUD) Choice Neighborhoods Implementation Grant Program for up to $30 million or the maximum award, for the Edison-Eastlake Community (EEC), and to implement the grant with the Housing Department and Gorman and Company serving as co-development partners. Authorization is also requested for the City Treasurer to accept and the City Controller to disburse all funds for the life of the grant.
Report
Summary
The HUD Choice Neighborhoods (CN) Program is designed to support locally-driven solutions for transforming distressed neighborhoods, using place-based strategies to address the interconnected challenges of poor quality housing, access to quality educational programs, poor health, high crime, and lack of capital. Since being awarded a $1.5 million CN Planning and Action Grant in June 2016 to create a comprehensive Neighborhood Transformation Plan for the EEC, the Housing Department has conducted comprehensive community engagement in this effort, including working with public housing and community residents, non-profit and private sector partners, and local stakeholders.
The EEC is the CN target area, bounded by the I-10 Freeway on the north and east, 16th Street on the west, and the Union Pacific Railroad on the south. The neighborhood includes the A.L. Krohn, Frank Luke Homes, and Sidney P. Osborn public housing communities, St. Luke's Medical Center, light rail, Edison Park, Edison Elementary School and various businesses. The public housing within the EEC is aged, obsolete and beyond its useful life. Upon redevelopment of the public housing communities, the Housing Department will utilize the HUD Rental Assistance Demonstration (RAD) Program to convert public housing units from a public housing operating subsidy to a long-term, sustainable, project-based Section 8 contract.
The City is seeking to apply for a HUD CN Implementation Grant through a Notice of Funding Availability (NOFA) that was released on Aug. 24, 2017. Through the NOFA, HUD is making up to $30 million available per applicant in Implementation Grant funds to support communities, like Phoenix's EEC, that have undergone a local, community-driven planning process and are ready to implement the resulting plan to redevelop public housing sites into new, energy-efficient mixed-income housing, revitalize and improve conditions in the surrounding neighborhood, and provide supportive services to individuals, families and youth in the area. Applications for the CN Implementation Grant are due by Nov. 22, 2017. The estimated grant term is six years, from July 2018 through July 2024.
Gorman and Company (Gorman), a Wisconsin-based affordable and mixed-income housing developer, was previously procured to provide co-development services for the Choice Neighborhoods Program. Gorman and their team of national and local consultants have extensive experience successfully securing various national and local financing, including CN grants, and utilizing RAD to develop and redevelop affordable and mixed-income housing communities in Arizona and nationwide. This partnership will leverage the City's resources and expedite the completion of the work through the CN Implementation Grant.
The Housing Department, working with its co-development partner, Gorman, seeks authorization to proceed with all actions necessary or appropriate to apply for, accept, disburse, and implement the CN Implementation Grant including the following:
1) Pursue rezoning of existing public housing sites and affected offsite property to the City of Phoenix Walkable Urban Code.
2) Appropriate, expend and disburse up to $15 million in Housing Department Public Housing and/or Affordable Housing Funds to provide for application expenses, predevelopment, gap funding, and/or other activities to serve as required leverage for the CN Implementation Grant.
3) Appropriate, expend and disburse up to $1.5 million in federal Community Development Block Grant (CDBG) funds to provide for neighborhood and/or housing improvements, or other activities to serve as required leverage for the CN Implementation Grant.
4) Appropriate, expend and disburse up to $5.4 million in federal HOME Investment Partnerships Program funds to provide for predevelopment, gap funding for housing redevelopment, and/or other activities to serve as required leverage for the CN Implementation Grant.
5) Acquire land in strategic locations to further the goals of the CN Planning, Action and Implementation Grant Programs.
6) Allocate up to 200 Section 8 Project-Based Vouchers, and/or RAD-converted units, amend HUD Annual Plans, and enter into or execute associated contracts, documents, and agreements, as necessary to facilitate activities for the application and implementation of the CN Implementation Grant.
7) Enter into or execute all contracts, documents, and agreements necessary to apply for and implement the CN Implementation Grant, including development and other agreements with Gorman.
8) Apply for, use, expend, and/or disburse the proceeds of any grants, match funds, in-kind and cash donations, leverage funds, loans, and other financing and funding sources to facilitate activities for the application and implementation of the CN Implementation Grant.
9) Partner with public and private agencies, non-profit and for-profit organizations, and individuals to leverage the financial, human capital, and in-kind resources needed to support the application and implementation of the CN Implementation Grant.
10) Take other action necessary or appropriate to apply for, accept, disburse, and implement all funding and activities associated with the CN Implementation Grant.
Financial Impact
There is no impact to the General Fund. The City's required leverage funds of up to $21.9 million are available in the Housing Department's Affordable Housing, Public Housing, and other Federal Programs. CN Implementation Grant funds and leverage funds will be incorporated in future Housing Department Capital Improvement Program and operating budgets.
Concurrence/Previous Council Action
This item was heard at the Sustainability, Housing, Efficiency and Neighborhoods Subcommittee on Sept. 19, 2017, and approval was recommended by a vote of 4-0.
Location
Edison-Eastlake CN Community is bounded by the I-10 Freeway on the north and east, 16th Street on the west, and the Union Pacific Railroad on the south. The public housing properties within the Edison-Eastlake CN Community are:
1) A.L. Krohn Homes, 1940 1/2 E. Villa Street, 202 units
2) Frank Luke Homes, 500 N. 20th Street, 230 units
3) Sidney P. Osborn, 1720 E. Adams Street, 145 units
Council District: 8
Department
Responsible Department
This item is submitted by Deputy City Manager Deanna Jonovich and the Housing Department.