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HomeMy WebLinkAboutCommunity Development Block Grant Commission - Minutes - 07/13/1995CDBG COMMISSION MEETING MINUTES July 13, 1995 The meeting of the CDBG Commission began at 6:30 p.m. in the Community Planning Conference Room, 281 North College Avenue, Fort Collins, Colorado. Commission members present at the meeting included Chairman Linda Coxen, Jim Elias, Dan MacArthur, Tim Ostic, Holly Sample, William Steffes, and Joe Zimlich. Staff members present included Ken Waido, Jackie Davis, Dickson Robin, Julie Smith, and Mary Hile. Concerning the HUD meeting, Ms. Coxen advised the Commission on the following issues concerning potential conflicts of interest: That she had informed HUD that to the Commission's knowledge, the Affordable Housing Board had no conflicts of interest, although the Commission was not fully aware of the Board's activities; that the Kaufman and Broad application was raised as illustrative of a conflict situation, but that Affordable Housing had taken no action on that application; that the question still remained for conflict for Commission or Board members who may compete for grant money. Ms. Coxen distributed a proposed letter from the City. She has declined to add her signature due to a lack of information available to her concerning the contents. The intent of the City is that: 1) HUD not declare a conflict; 2) Procedures continue per the status quo; and 3) the Affordable Housing Board not take part in HOME funding. Mr. Waido reported on the staff research concerning residency requirements. A public meeting was held June 21, attended by service industry and housing representatives. The Commission has received the minutes of that meeting. Staff does not perceive as viable residency requirements for human service programs, such as for homeless assistance or Crossroads. For housing programs, Mr. Waido recommended that: 1) Only projects within Fort Collins be eligible; 2) That housing agencies demonstrate a selection criteria for residents that emphasizes aid to qualified Fort Collins residents. Mr. Waido will present the Commission's decision at the proposed joint work session among City Council, CDBG Commission, and the Affordable Housing Board. The City is constructing a bicycle/skateboard park at Lemay and Vine Streets. Ms. Davis reported on a neighborhood request for CDBG funds to fence the northern boundary, adjacent to railroad tracks, and to install a pedestrian -operated stoplight on Lemay. The request has been made for a reprogramming of funds due to the $26,000 contingency after City Council's realignment of CDBG funding. Concerns were raised about the lateness of the request and the issue of inequity to other would-be applicants. Moved by Mr. Steffes, seconded by Mr. Zimlich: To not hear the request at this time but to encourage the applicant to apply for funding in the next fiscal year or when reprogramming is appropriate. Motion CDBG Commission Minutes July 13, 1995 Page 2 passed unanimously. Moved by Mr. MacArthur, seconded by Mr. Steffes: To approve the minutes of the June 8, 1995 meeting. Motion passed unanimously. Ms. Coxen read the memorandum to City Council urging adoption of the Fort Collins Consolidated Plan. Moved by Mr. Steffes, seconded by Mr. MacArthur: To adopt the memorandum as drafted. Motion passed unanimously. HOME Funding Ms. Coxen suggested a five-minute presentation, followed by a five-minute question - and -answer session for each applicant. Ms. Smith outlined the order of presentation, with the first applicants presenting first; the criteria met by each applicant to qualify for funding; and the discretion allowed the Commission in its proceedings. KAUFMAN & BROAD Mr. Kip Sheppard from Kaufman and Broad informed the Commission of the following: Kaufman and Broad is the largest home builder west of the Mississippi, the third or fourth largest in the nation, and has been building homes for 38 years. The 116-unit project, consisting of one- to three -bedroom units, is planned for the comer of Shields and Harmony. Mr. Kip Sheppard outlined the indoor and outdoor amenities that the project will feature. The project will be financed through tax-exempt private activity bonds, and Kaufman and Broad is working with CHAFA for inducement on the bonds. The tax credits approved have been reduced to four percent from the applied -for nine percent, so the application for funding from the Colorado Division of Housing will be at the $800,000 level. The funds would be granted to the Fort Collins Housing Authority, who would then lend the money to Kaufman and Broad. The amount of funding requested is $300,000. Mr. Kip Sheppard acknowledged questions concerning the project costs and noted that the project had passed the scrutiny of the Division of Housing and Ms. Smith and falls under the HUD 221(d)(3) cost cap. Mr. Pollock from the Division of Housing noted the following: That the Division is in a wait -and -see mode due to uncertainty over the tax credits application; that the Division feels that the projects costs can be improved on but is still supportive of the project; that if the City sees this housing as a priority, it would be supported by the State; that this request is notable in that it represents a loan to be paid to the City rather than an outright grant. CDBG Commission Mutes • July 13, 1995 Page 3 In response to a question raised concerning the State's contribution should the Commission recommend partial funding, Mr. Pollock stated: Due to the private activity bonds funding of the project, it is a different project than originally presented. Fort Collins projects have requested 30 percent of the State's entire funding budget, and that level of funding will not happen. While there is no set formula that the State reviews, it will give careful consideration to the projects to which the City gives strong commitment. 260 units are being proposed in Fort Collins; the State feels that number can be absorbed in the market; and project developers will have to stretch for all the proposed projects to be completed. In response to a question concerning the possibility of negotiating project costs, Mr. Pollock stated: A favorable environment exists for developers, i.e., lower interest rates and higher return on tax credit investments. More costs can be paid out over time, from cash flow, which would give further incentive to the developer to have the project succeed. In response to a question concerning the Kaufman and Broad costs in comparison to the Rosetree project, Mr. Kip Sheppard stated: He could not comment on Rosetree costs, as he had not seen verifiable numbers concerning that project, not knowing the amenities and specifications. Kaufman & Brode is committing to 50 years of affordability, thereby driving up quality and costs. The project costs are in line with the local standard. CARE Housing Kurt Holven noted the following: In the existing 40-unit project, 21 resident families had previously been doubling up with friends or families to meeting housing needs. The average tenant income is $16,500, or 40 percent of median income. 81 children presently live at the project. Sister Mary Alice Murphy stated that the proposed project on Swallow was designed not to look like the other CARE housing but to blend more in character with the existing neighborhood. Input on housing configuration was received from Greenbriar tenants. The Swallow project is planned for 48 units. Terry Wahl noted the changes that were made from the existing Greenbriar units to the proposed Swallow units. The three -bedroom units will have 1-1/2 baths, and the square footage has increased from 888 to 938 square feet. Project cost is $3.7 million, with the target population being those families in the 30-to-50 percent of median income bracket. Rents must be kept low, hence the need for additional grant moneys. Mr. Wahl outlined the project amenities and noted that of the six -acre parcel, CARE hopes to share three acres with a Housing Authority project. In response to questions by the Commission, Mr. Wahl stated that handicapped - accessible units will be those on the ground floor, comprising 24 out of the total 48. Hopefully, in the event that not all the applied -for funding is realized, the return on CDBG Commission Minutes July 13, 1995 Page 4 investment tax credits will help to defray the project costs. An increase in the mortgage from 15 to 30 years would also reduce costs. The project will also apply for funding from private organizations. Part of the project costs are targeted to the social services provided to the tenants, $100,000 in cash reserves, and administration and acquisition costs. The developers fee will probably be paid back over 15 to 20 years. Grant moneys will be used to make a low -interest loan to the project that will be paid back as the project cash flow permits. The project is committed to 50 years of affordability. Sister Mary Alice noted that the main concerns of the neighbors was increased traffic around the high school; the P&Z hearing would be this month; and that the project would go through a PUD process. Housing Authority - 221 Third Street Shelley Stephens outlined the proposal to place a duplex consisting of two three - bedroom units on the proposed location. The project would be funded through a combination of a CDBG grant, 8.1 percent loans from area lenders, and the proposed $50,000 HOME grant. In response to questions by the Commission, Ms. Stephens stated: The units have been approved for the neighborhood. Although the neighborhood houses are largely single-family, some have a duplex configuration, and many are quite substandard. CDBG provided funds for land acquisition; the HOME funds would be used for rehabilitation. Housing Authority - Hillcrest Shelley Stephens addressed the plan of the Housing Authority to move the structure at 618 North College to the proposed location, where it will serve as the foundation and garden level for an added second story. The garden -level apartments will be handicapped -accessible. The project will encompass 24 units. The project is an already -approved PUD. The Housing Authority has ensured that the structure will survive the move. Staff Comments Ms. Smith outlined the available funding: $350,000 in general funds; $75,000, CHDO projects; and $25,000 in CHDO operations. In addition, the 1996 funds of $318,500 were available. CDBG Commission minutes • July 13, 1995 Page 5 HOME Funding Recommendations CDBG Commission Kaufman and Broad Moved by Mr. Steffes, seconded by Mr. MacArthur. To recommend funding of $300,000. Motion passed unanimously. Pros of application Cons of application Well leveraged. Does not attend to the desired numbers of Makes many units available. below 50 percent AMI. Brings new player to the Fort Collins housing High costs. needs. Addresses housing needs. Requests loan rather than grant. Concerns expressed by Commission members: To put a rein on project costs. CARE Housing Moved by Mr. MacArthur, seconded by Mr. Steffes: To recommend full funding. After discussion, with consent of the second, Mr. MacArthur amended the motion to reflect the condition that full development approval is obtained within six months. Motion failed, 3-4. Moved by Mr. Steffes, seconded by Mr. Ostic: To award $75,000 of CHoDO project funds and $25,000 of CHoDO operations funds, all from 1994 funds. Motion passed unanimously. Pros of application CARE has successful track record. Addresses community need. Concerns expressed by Commission members: Cons of application Traffic concerns are valid. Project has not cleared P&Z. Poor leveraging; project is heavily funded through grant moneys. If a project fails to proceed, it may leave too narrow of a window to reallocate those funds within the required time period. The Commission may attach time limits to funding in order to ensure that the funds may be reprogrammed in a timely manner. Better leveraging can be seen rather than heavy reliance on government funding. CDBG Commission Minutes July 13, 1995 Page 6 Fort Collins Housing Authority - 221 Third Street Moved by Mr. Steffes, seconded by Mr. MacArthur. To recommend funding of $50,000. Motion failed, 0-2, with four abstentions. Further discussion was held concerning the procedures and goals of HOME funding; the time and funding parameters of the proposed project; and the direction of the Commission regarding HOME funding. Moved by Mr. Steffes, seconded by Mr. MacArthur: To recommend funding of $50,000. Motion passed, 4-2, with one abstention. Pros of application Addresses housing need of different population in the community. Quick availability. Good track record. Concerns expressed by Commission members: Cons of application High per -unit cost. High percentage public funding. The Commission is sorting through the disparate approaches taken with CDBG funds, where competition is strong for the available moneys, and HOME funds, which is decided on a first -come -first -served basis. Commission members are unsure of the applicability of CDBG criteria and priorities to the HOME funds. Presently, HOME funding criteria appears somewhat passive: 1) Is the project needed; 2) Are HOME funds necessary for the project; 3) Are HOME funds available. Fort Collins Housing Authority - Hillcrest Moved by Mr. MacArthur, seconded by Ms. Sample: To recommend full funding. Motion failed, 3-4. Moved by Mr. Ostic, seconded by Mr. Steffes: To recommend funding of $25,000. Motion passed unanimously. Pros of application Building will be moved; higher loan amount will mean higher rents. Cons of application Low leveraging; high percentage of costs coming from grants. Moved by Mr. Steffes, seconded by Mr. Ostic: On all projects, funding will be available for reprogramming if Planning and Zoning Is not completed within six months. Motion passed unanimously. Commission members recommended that staff encourage the Colorado Division of Housing to support these projects for the maximum funding possible. CDBG Commission Minutes • July 13, 1995 Page 7 The Commission discussed the issue of reformulating its HOME policies and strategies. The HOME projects seen by the Commission are generally further in the development process than CDBG projects; therefore, funding is more immediate. The present procedure was developed on a first -come -first -serve basis to address applications in a timely manner. A quorum being present, Mr. Waido advised the Commission on the staff research regarding residency requirements, as set forth on Page 1 of these minutes. Moved by Mr. Steffes, seconded by Mr. MacArthur: That residency requirements not be set for housing projects; that applicants give Fort Collins residents highest priority. Motion passed unanimously. Election of officers was discussed. Ms. Coxen declined to continue chairing the Commission. She expressed her pleasure with her past service and gratitude to the Commission for its approach to the issues it has faced. Commission members complimented Ms. Coxen on her past service. Moved by Mr. Ostic, seconded by Mr. Zimlich: To nominate Dan MacArthur as chairman. No other nominations were advanced. Motion passed unanimously. Following discussion, Mr. Steffes indicated his willingness to serve as vice chairman. Mr. Elias recognized the statement as a motion to self -nominate, and seconded the motion. No other nominations were advanced. Motion passed unanimously. Mr. Waido informed the Board on the Pioneer situation. Although it is unlikely that an alternative site can be developed timely, housing options are being pursued through the Housing Authority, along with potential sites in Greeley, Berthoud, and the Downtown Air Park. It is anticipated that all Pioneer residents will receive six- month closure notices by September 1. Mr. Waido and Ms. Davis will not be present for the scheduled August meeting. No agenda items of major import are anticipated. Moved by Mr. MacArthur, seconded by Mr. Steffes: To cancel the August 1995 meeting. Motion passed unanimously. Ms. Coxen noted for the minutes that Tom Sibbald attended the meeting but did not address the Commission or attempt to influence any Commission decision. Further discussion was held concerning the HUD opinions on conflicts of interest. Mr. Waido advised Commission members on the issues as set forth on Page 1 of these minutes. He noted that HUD rules concerning conflicts of interest applied to the Commission members. Mr. Steffes moved adjournment, seconded by Mr. Zimlich. Upon a unanimous vote, the meeting adjourned at 8:50 p.m.