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HomeMy WebLinkAboutAffordable Housing Board - Minutes - 07/06/1995AFFORDABLE HOUSING BOARD MEETING MINUTES July 6, 1995 The meeting of the Affordable Housing Board began at 4:10 p.m. in the Community Planning Conference Room, 281 North College Avenue, Fort Collins, Colorado. Board members present were Chairperson Mary Cosgrove, Tom Sibbald, Tony Kavanagh, Christa Sarrazin, Joanne Greer, Sue Nabors, Sue Wagner, and Bob Browning. Staff members present were Ken Waido and Dickson Robin. Gina Janett and Chuck Wanner from City Council were also present. Ms. Cosgrove questioned the minutes of June 1, 1995, on Page 5 where it states that the Division of Housing is providing $613,000 to the Kaufman and Broad projects. Mr. Waido and Mr. Sibbald agreed that that amount was a proposed amount which has not yet been provided. Ms. Cosgrove suggested that the minutes be clarified to reflect such. Moved by Ms. Greer, seconded by Ms. Wagner: To approve the minutes as corrected. Motion passed unanimously. The following comments were given concerning the Provincetowne SID: Mr. Wanner stated that the general idea of Provincetowne is to create a reproducible project that is practical and functional and which will develop tools to help implement other affordable housing projects. It is a substantial piece of property, and the City needs to get a fair amount of money out of it to satisfy bondholders. Mr. Sibbald suggested that maybe the best thing for the City to do would be to have a master plan for the property and sell it off in parcels as opposed to selling it off as one mass. This could enable parcels to develop into a variety of housing developments; such as, small lot, single family, mobile homes, or developments of this nature. Mr. Wanner suggested determining what the City could offer in a public1private partnership where the partner could work with the City to buy the property. He also mentioned that there has been some discussion on producing income by selling some of the wetlands in the area. Mr. Browning mentioned that a local developer had been contacted concerning the project with the idea that it was to be a mix of housing, some affordable and some that would help to turn a profit for the developer. However, the developer has become frustrated in his attempt to move forward on the project and not being able to do so. Mr. Wanner expressed concern about turning the project over to a developer and then being unable to obtain information that would assist production of future affordable housing projects. Mr. Sibbald pointed out that the first thing a private partner would have to do would be to develop a master plan, which could cost $75,000 to $100,000. Mr. Waido said there is an overall development plan currently approved on the property. However, from a planning perspective, it has some problems because it doesn't contain a mix of housing units and opportunities that the City would like to have take place. Mr. Sibbald added that if the City AHB Minutes • • July 6, 1995 Page 2 proposed the master plan, it could be a conflict of interest because of the fact that City Council is the final decision maker. Mr. Browning relayed questions the possible developer had on what the City would be willing to do to ensure a profit was made for him; such as, loan guarantees, lower interest rates, or some way to reduce costs. Mr. Waido said that there has been talk about how the City might help with the bonding in order to get a lower interest rate. Ms. Cosgrove questioned how far development had come in terms of a model. Mr. Wanner replied that the processes has not advanced significantly at this point. Mr. Sibbald pointed out that through the mini task forces that come about in 1992, 10 to 15 different kinds of cost development standards were set out, and if a developer wanted to come forward, the City might want to review some of those development standards to find cost saving implications in the development. Ms. Cosgrove said that a lot of those standards were included in a two -page memo through the Board to Council. Ms. Nabors questioned the possibility of relocating Pioneer Mobile Home Park to the Provincetowne property. Mr. Waido replied that he didn't believe the timing was such that anything could happen on the Provincetowne property that would create an option for Pioneer. Mr. Sibbald believes the most significant problem for a private partner will be capital and asked for opinions from the banking community. Ms. Wagner pointed out the need to build into the partnership a way that the City could be relieved of the partnership duties at some point in the future, and with that in mind, the partnership needed to be built with somebody who has plenty of collateral themselves and not somebody who was relying on the City. Mr. Sibbald stated that the only sources of money available to the City to help support a private partner would be HOME funds and CDBG funds. If these funds were pooled as security for a letter of credit, it would be an inadequate amount in the marketplace today for a sufficient loan amount. Discussion was held on the appraisal value of Provincetowne. Mr. Waido believes the value is around 2 to 2.2 million. Mr. Kavanagh sees the City's most favorable role as master planning the project themselves and selling off parcels because of the fact that few people will take on a 250 acre parcel especially in the Fort Collins' area. Mr. Sibbald agreed and suggested, as part of the master plan, the purchaser be required to provide some percentage for sale providers, such as Habitat for Humanity. The City could pick up the infrastructure costs, which CDBG could be used for. Also, the City could cover front-end costs and finance the street layout. Mr. Sibbald also mentioned that a proposed developer could borrow money from the HOME program. For example, the developer could make an application for 50 percent of anticipated front-end costs. If the developer is successful, the loan could be paid back at a low interest rate. If the developer is unsuccessful, it could be agreed that the City would split the costs. AHB Minutes • • July 6, 1995 Page 3 Ms. Cosgrove expressed her opinion for the need to have a model or set of goals developed so the end result that is to be obtained is known. She suggested that this could be put together by a committee, people from the Finance Department or Planning Department, or whoever needs to be involved. Mr. Sibbald feels that is exactly the kind of objective that the CDC should have in mind as opposed to a policy board. Ms. Cosgrove added that a timeline would be helpful and that the CDC is still doing research and has really not gotten off the ground yet. Mr. Wanner pointed out that a goal to focus on might get things moving faster. Mr. Sibbald replied that the goal is to have a recommendation to Council in October. Ms. Janett addressed two issues: the consultant on the CDC said the Provincetowne site could be the City's collateral investment in the CDC, and an appraisal was received on the position with the Housing Fund. These two things are assets. These things must be used to convince City Council collectively that Provincetowne is something that needs to be pursued, and cautious approaches need to be determined on how to present it to Council in a nonrisk-taking way. Ms. Janett also suggested that a memo from the Board, which itemized some general goals or approaches, would be helpful. Ms. Cosgrove asked: If the City were trying to use this parcel as their contribution to the CDC, wouldn't the debt have to be paid off with cash? Mr. Wanner replied that it would be a difference between the price to pay off the bonds and additional profits that could be obtained. Ms. Cosgrove then questioned whether or not the bond payoff would have to come from the City's budget. Mr. Wanner's reply was that he was not sure. However, discussion had occurred on selling the whole parcel and the City paying off the bonds. Mr. Sibbald felt this could ultimately cause the bondholders to take a loss. Ms. Janett feels that would be the purpose of selling it to a developer at some type of discount with stipulations attached. Mr. Wanner suggested that an incentive package be put together for the developer, and from the incentives offered, the developer will agree to release financial information to be used for future affordable housing projects that could be developed. Mr. Sibbald expressed the need for data that shows at least an analysis of how great the demand is for affordable housing in the area. Without that data it will be hard to convince anyone to go into a long-term project. Mr. Wanner pointed out part of the problem with getting such data is the desire to create a mix that is acceptable. Discussion was held on the various types of units possible for the project; such as, owned units, rental units, and entry-level family units for sale. Mr. Sibbald added that this specific site is going to be extremely difficult for multifamily use given the current LDGS inasmuch as the LDGS actually discourages multifamily use. Mr. Wanner pointed out that a large enough development could overcome some of the problems. Mr. Waido said that the City could rezone certain parts of the PUD and make,it straight zoning. Mr. Sibbald said it could be submitted as straight single family, which would be more cost effective and streamline the process. In addition straight single family zoning doesn't require anything more than a subdivision plat. Therefore, it would be a quick way to get some inexpensive lots at the project especially if mandatory zoning was used. Mr. Wanner asked the members of the financial community if they felt any of the items discussed at this meeting might, somewhere down the line, produce a result that more AHB Minutes • • July 6, 1995 Page 4 people might be interested in. Ms. Nabors felt it could be a suitable format. Ms. Wagner agreed but expressed the need to set up goals before setting anything out for consideration. Mr. Wanner also wanted to know what the time frame should be in terms of getting an RFP together. Mr. Waido replied that one option is a realtor under contract, who, at the City's option, could list the property and, therefore, bypass the need to go though the RFP. Mr. Sibbald said the RFP process is a stipulation City Council put on the BID liquidation process, and Council could also remove the RfP stipulation. Mr. Wanner pointed out that in the past there have been problems with selling off parcels because low or moderate income units are put in place, however, the goal of a mixed use was still not achieved. Mr. Sibbald replied the way to protect the community would be straight zoning. Ms. Cosgrove reiterated her desire to have a model set up and suggested that it could be set up to develop the project as a package or with the option to sell parcels. Mr. Wanner added that it would be important for the RFP to be presented to the right developers, noting that small developers might have the expertise and creativity needed and large developers may not be interested. Mr. Sibbald said large developers may also be less likely to openly share financial information on the project, whereas such a problem would be less likely to exist with small developers. Mr. Kavanagh questioned the ability to recuperate profit from an individual owner. However, such owners could be provided a stepping -stone with the ability to purchase a parcel. In such case they will be buying into the community, and the capital could be reinvested. Mr. Wanner adds that there will still bye a need for lower and moderate housing in the community over time. Ms. Sarrazin suggested looking back to the rental proposal with Kaufman & Brody to critique what was liked and disliked about the proposal in an effort to obtain some goals. Ms. Cosgrove stated that the Board has their own RFP materials that could be considered. Ms. Cosgrove would like to see parallel progress on the CDC and development of goals for the Provincetowne project. Ms. Janett suggested the Board put together a package to present to the City Council with general ideas for production goals and the possibility of overall development with a contractor or selling parcels with stipulations in an effort to demonstrate the Board's involvement at this point. Mr. Wanner added that it is important to try to eliminate any preconceptions of what could happen. Ms. Wagner addressed the importance of determining where the City is going to focus its involvement so as not to end up competing with the free enterprise. Mr. Sibbald said that would be another reason to break the property into parcels. There are developers who might want to take on smaller amounts that would under no circumstance take on the entire project. Mr. Sibbald would like a layout of the rules contained in the bond documents as to the City's discharged from the property and what the stipulations within the contract are with AHB Minutes • • July 6, 1995 Page 5 bonding. He would also like to know where the title process stands. Ms. Nabors also would like to know the basis of the appraisal. Mr. Wanner would like to know what information is available on projects such as this that have been developed in the past. Mr. Sibbald said there is plenty of information about different models but very little information is available on a project of this magnitude. Ms. Wagner asked how much wetland is on the property. Mr. Waido said there was about 100 acres of wetland. Mr. Sibbald feels the wetlands permit could pose a problem for a developer. Ms. Janett believes the City's intent is to purchase the wetlands through the Natural Resources Department. Mr. Waido suggested that some may say that since there is a natural area, it must have very low density. Mr. Wanner pointed out that that problem may be overcome if both areas are developed at the same time by a third party that has a conservation interest in mind to begin with. Further discussion was held on what needed to be put together for the City Council as a presentation. Mr. Wanner believes the most important aspect would be to express the determination to go forward with the project, pointing out that all the fine points have not yet been worked out, however, the project is worth pursuing. Ms. Janett agreed and said this would be the opportunity to get people excited and show the project is possible. Ms. Cosgrove suggested that anyone on the Board who would be unable to attend the City Council meeting could fax a letter to herself, Ms. Janett, or Mr. Wanner, and those letters could be taken to the Council meeting. Mr. Sibbald added that he is unable to fully endorse the project at this time because of some concerns he has. The main concern would be how the lending decision makers are going to fund the proposal, because it is a risk, and his other concern is the real estate risk involved. No further discussion was held regarding the Provincetowne SID. Ms. Cosgrove addresses the issue of the Consolidated Plan saying that some comments had already been provided to Mr. Robin before the Board meeting began and asked for any further comments. Ms. Janett addressed an issue in the paper regarding affordable housing efforts not considering students. Mr. Sibbald stated that there are two sentences on page 8 of the Consolidated Plan that address this issue and pointed out that students impact the ability of families to adequately house themselves inasmuch as students have a greater ability to pay housing costs, whatever they may be, whereas some of the low and moderate income families cannot. He sees this aspect as lacking in the Consolidated Plan but is unsure of how much importance to place on it. Ms. Cosgrove feels students are part of the whole affordable housing issue and need a place to live like everyone else does. Mr. Sibbald stated that it would be his recommendation to City Council that the Board adopt the Consolidated Plan and move forward, but within six months — or before the end of the year — the Board should come up with a report that clarifies issues and gives some clear policy implementation guidelines to Council with a menu of items that could be enacted at the end of the six month period for various issues needing resolved. Mr. Sibbald also suggested that Mr. Robin put a disclaimer on the plan which reads: The information contained herein should not be relied upon as a decision making document. AHB Minutes • July 6, 1995 Page 6 By doing this, the plan would not be used as a market demand analysis. Disagreement to this was heard stating that the plan was simply a tool to get in the door with HUD. Mr. Robin asked Mr. Sibbald if the follow-up report he requested should be done as part of the comprehensive plan. Mr. Sibbald said no. He believes affordable housing on a production basis needs to be separated from the plan itself. Ms. Cosgrove said she liked the concept of a next step that would not have to be sent to HUD. Mr. Browning objected to page 47 of the plan where Pioneer Mobile Home Park is referenced. He believes that assistance from these funds will not be given to Pioneer and feels this reference should be removed. Mr. Sibbald pointed out that the recipient of the $235,000 would not be the Housing Authority. The recipient could be anybody who applies. Ms. Cosgrove agreed that reference should be changed. Mr. Sibbald suggested changing the statement to "The funds may be used," rather than, "would be used.' Mr. Robin said he had received numerous comments from the public and nearly all of it was positive. Ms. Cosgrove suggested a change on page 9, in reference to the 6,000, to "will be needed," instead of "required." In addition she suggested quoting the source. Ms. Cosgrove also suggested a change on page 33. She would like something to be added that mentions multifamily. She points out that that objective is being lead into, however, when reading the introduction, a different impression is created. Moved by Mr. Sibbald, seconded by Ms. Nabors: To recommend to City Council adoption of the Consolidated Plan and forward it to HUD with the condition that City Council direct staff to prepare a scoping report entitled, "Cracking the Housing Crisis," to be finalized by the end of the calendar year. Discussion was held to amend the motion to include the changes that were mentioned. Mr. Sibbald and Ms. Nabors accepted this. Motion approved unanimously. Ms. Cosgrove and Mr. Waido addressed the status of the conflict of interest of the Board and the CDBG in relationship to Federal programs. The following information was conveyed: A meeting with HUD representatives was held regarding the possible conflict of interest. At this meeting Ms. Cosgrove outlined the roles of the two boards for HUD. Certain consensuses were reached; such as, the members of this Board will not have a conflict of interest in relationship to Federal programs provided the Board maintains its role as a policy board. This means that if a Board member's role were to expand to evaluating proposals, he or she would have a conflict of interest and either could not apply for Federal programs or would have to go through a waiver process to clear themselves of the conflict of interest. The CDBG commission, however, falls into the conflict of interest category because they do actually make recommendations, evaluate applications, and so forth regarding funding. Therefore, they would need to go through an exception process. AHB Minutes July 6, 1995 Page 7 A letter was drawn up to confirm these consensuses, which were believed to have been reached. It is unknown how long it will take for HUD to respond. HUD has requested a disclosure be made anytime a Board member applies for a project, and the conflict of interest issue will be decided on a case -by -case basis in those instances. Moved by Mr. Sibbald, seconded by Ms. Greer. To nominate Mary Cosgrove to a one- year term as Chair and Bob Browning as Vice Chair. Mr. Browning declined to take the position of Vice Chair. Moved by Ms. Nabors, seconded by Ms. Wagner: To amend motion to nominate Ms. Cosgrove to a one-year term as Chair. Motion passed unanimously. Discussion was held on the importance of a Vice Chair. It was determined a Vice Chair was needed in the event the Chair was absent. Moved by Mr. Sibbald, seconded by Ms. Greer: To nominate Ms. Nabors to a one- year term as Vice Chair. Motion passed unanimously. As a final agenda item, Ms. Cosgrove asked for input in terms of future agenda items. Ms. Nabors requested an update on Pioneer Mobile Home Park as well as CDC updates. Mr. Waido explained he would not be attending the next Board meeting, and as a result, Mr. Robin would be in charge of preparing agenda material. He also stated that Council is in the process of putting together their'95-'97 policy agenda, and the Board would be receiving the most recent draft version of that for review at the next Board meeting. Mr. Sibbald expressed an interest in hearing a summary about the consortium. Ms. Cosgrove suggested that perhaps someone who authored the report could come in and give verbal comments. Mr. Sibbald replied that he would like to know what the City plans to do with the information, perhaps in the form of a staff analysis. Ms. Cosgrove suggested using the new staff person in charge of neighborhood organization to go from neighborhood to neighborhood to get a dialogue about affordable housing as a proactive approach to neighborhoods in an effort to encourage neighborhoods to be more open-minded about affordable housing. Mr. Browning moved adjournment, seconded by Ms. Sarrazin. Upon a unanimous vote, the meeting adjourned at 6:20 p.m.