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Title:
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Amend Ordinance S-48531 to Increase Federal HOME Award for Osborn Pointe Affordable Housing Development (Ordinance S-50807)
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Title
Amend Ordinance S-48531 to Increase Federal HOME Award for Osborn Pointe Affordable Housing Development (Ordinance S-50807)
Description
Request to authorize the City Manager, or his designee, to increase the award to Osborn Pointe, LP for federal HOME Investment Partnerships Program (HOME) funding by up to $1 million for a total loan amount of up to $2 million and to amend any and all agreements as necessary or appropriate to effectuate the increase in funding. Authorization is also requested for the City Controller to disburse funds for the life of the contract. There is no impact to the General Fund.
Report
Summary
On Dec. 6, 2023, 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.
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.
On April 20, 2022, City Council approved an award of $1 million in HOME funds to Native American Connections, through Osborn Pointe, LP for the development of Osborn Pointe, a 48-unit permanent affordable multifamily housing community. Native American Connections, Inc. is requesting an additional $1 million through this CFI, for a total award of $2 million in HOME funds, the maximum allowed through the CFI process. The increased loan funds will assist with the project’s financial gap related to cost increases for construction.
Procurement Information
Six proposals were received and 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 six projects were recommended for funding, as follows:
Garfield III (Pennrose)
Osborn Pointe (Native American Connections, Inc.)
Memorial Towers (National Church Residences)
Alex Apartments (Excelerate Housing Group)
Resilient Living @ Sunnyslope (Resilient Health, Inc.)
Kazan Apartments (BNB Development)
Osborn Pointe, located at 3406 N. 3rd St. (District 4), includes the new construction of a 48-unit permanent housing community. Native American Connections, Inc., a non-profit developer, through Osborn Pointe, LP, requested an additional $1 million for a total award of $2 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). In exchange for the additional funding, the owner has agreed to increase the public benefit by including an additional 11 City HOME units, bringing the total HOME units at the project to 22 City HOME units serving households at or below 40 percent AMI. Other proposed funding for this project includes permanent debt financing and Low Income Housing Tax Credit (LIHTC) equity.
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 2023 HOME funds and a forward allocation of 2024 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 CIP budget. Loan execution is anticipated for Fiscal Year 2024-25, 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.
Concurrence/Previous Council Action
On April 20, 2022, the original funding award of $1 million was approved by City Council through Ordinance S-48531 for Native American Connections, Inc.
Location
3406 N. 3rd St.
Council District: 4
Department
Responsible Department
This item is submitted by Deputy City Manager Gina Montes and the Housing Department.