Title
Loan Federal HOME Funds for Residences at Falcon Park Affordable Housing Development (Ordinance S-49820)
Description
Request to authorize the City Manager, or his designee, to enter into an Affordable Housing Loan Program agreement for up to $1,034,346 in federal U.S. Department of Housing and Urban Development (HUD) HOME Investment Partnerships Program (HOME) funds with Falcon Park, LLC, Palindrome Properties Group and Urban Housing Partners, or a City-approved nominee, for the Residences at Falcon Park affordable housing development project, and to take all actions and execute all documents to complete the loan. Further request to authorize 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. 21, 2022, 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 the City Council on Nov. 16, 2022. The Community Priorities are:
1. 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
2. Acquisition, rehabilitation and/or new construction of properties where the developer qualifies as a Community Housing Development Organization as defined by the HOME Program.
Residences at Falcon Park, located at 1220 N. 34th Ave., consists of the new construction of a 192-unit permanent housing community for low-income households at 30 percent, 50 percent and 60 percent Area Medium Income (AMI) with five HOME units serving Veterans. Palindrome Properties Group and Urban Housing Partners, for-profit developers, requested $1,034,346 to assist with the development of this project. Supportive services include, but are not limited to: financial literacy training, food services, physical and behavioral health referrals, job search assistance and reentry assistance. Other proposed funding for this project includes permanent debt financing, Low Income Housing Tax Credit (LIHTC) equity and deferred developer fee. Total development cost is estimated at $44,134,315.
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.
Procurement Information
Five proposals were 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 five projects were recommended for funding, as follows:
- Garfield III (Pennrose Holding, LLC/Garfield Veterans Housing III MM, LLC)
- Glendale Apartments (The Richman Group/Richman Glendale Apartments, LLC)
- Residences at Falcon Park (Palindrome Properties Group/Urban Housing Partners, VII)
- Acacia Heights III (Trinity Housing Development, LLC/Catholic Charities/Acacia Heights III, LLC)
- Phoenix Scholar House (The Affordable Rental Movement of Save the Family Foundation of Arizona/Brinshore Development)
Financial Impact
There is no impact to the General Fund. HOME is a federally funded program. Funding for this CFI is made available from Fiscal Year (FY) 2022 HOME funds and a forward allocation of FY 2023 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 Capital Improvement Program. Loan execution is anticipated for FY 2023-24, and the loan will be paid to the developer over an estimated four-year period based on HUD's project completion deadline.
Location
1220 N. 34th Ave.
Council District: 4
Department
Responsible Department
This item is submitted by Deputy City Manager Gina Montes and the Housing Department.