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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 05/18/2021 - ITEMS RELATING TO AFFORDABLE HOUSING FEE CREDIT RE Agenda Item 7 Item # 7 Page 1 AGENDA ITEM SUMMARY May 18, 2021 City Council STAFF Sue Beck-Ferkiss, Social Policy and Housing Programs Manager Ingrid Decker, Legal SUBJECT Items Relating to Affordable Housing Fee Credit Requests. EXECUTIVE SUMMARY A. First Reading of Ordinance No. 070 2021, Authorizing a Fee Credit and Appropriating Prior Year Reserves in the General Fund for the Housing Catalyst Oak 140 Affordable Housing Development. B. First Reading of Ordinance No. 071 2021, Authorizing a Fee Credit and Appropriating Prior Year Reserves in the General Fund for the Volunteers of America Cadence Affordable Housing Development. The purpose of this item is to seek Council consideration of requests from two qualifying development projects for fee credits totaling $350,000. At the discretion of Council, City Code authorizes a fee credit of $14,000 per qualifying unit of new affordable housing construction, provided that the proposed credits will not jeopardize the financial interests of the City. Fee credits s ubsidize the development of affordable housing units serving families that earn up to 30% of AMI (or $22,600 for a family of two). The Council Finance Committee heard this item at their April 16, 2021, meeting and recommend granting these requests. STAFF RECOMMENDATION Staff recommends adoption of both Ordinances on First Reading. BACKGROUND / DISCUSSION Current Fee Credit Requests The City has historically provided fee relief for affordable housing, recognizing the difficulty of developing housing that can be priced affordably to low-wage earning residents. The City has received requests for affordable housing fee credits from two affordable housing developments: 1. Housing Catalyst (HC) is developing the Oak 140 project at 140 Oak Street, to be locat ed at the site of the former Elks Lodge at Oak and Remington Streets in downtown Fort Collins. This project will deliver 79 affordable apartment homes and seven of them qualify for fee credits. The request is for a total credit of $98,000. See HC’s request (Attachment 1) and attached location map (Attachment 2). • All 79 new apartments will be affordable. • The development will have a mix of studio, one and two -bedroom apartments with the vast majority one bedroom. • Apartments will be priced to target households making between 30% and 80% AMI. • As stated, seven units qualify for fee credits because they are targeting 30% AMI households. Agenda Item 7 Item # 7 Page 2 • This project, in partnership with the Fort Collins Downtown Development Authority, aims to fill a need for downtown employees that find downtown housing costs a challenge to living near where they work. 2. Volunteers of America (VOA) is developing Cadence, a 55-unit age-restricted affordable housing development at 2555 Joseph Allen Drive, near the corner of Drake Road and Timberline Road. This project will have 55 apartment homes and 18 of them qualify for fee credits. Their request is for a total of $252,000. See VOA’s request (Attachment 3) and attached location map (Attachment 4). • All 55 new apartments will be affordable. • Apartments will be priced to target adults 55+ making between 20% and 80% AMI. • As stated above, 18 units qualify for fee credits because they target households at or below 30% AMI. Including 20% AMI targets is unusual and will serve extremely low-income households. • The location of this community is near a bike path, a bus route and a supermarket which are well suited to the special population (seniors) targeted by this project. A separate Ordinance for each of these requests has been included for Council consideration. Fee Credit and Fee Waiver History The City’s form of this relief has evolved over time. Fee credits replaced the City’s prior fee waiver program in 2020 and are currently the City’s only mechanism to specifically incentivize units serving households that earn 30% or less of AMI. Most mechanisms to incentivize affordable housing are available for units that serve up to 80% of AMI. Affordable units for households at or below 30% AMI are the hardest to develop. Rents need to be affordable to these extremely low-income households and cannot support the cost of development without substantial subsidy. For instance, a household of two cannot make over $22,600 annually to qualify. The table attached illustrates the 2021 AMI thresholds for the Fort Collins - Loveland MSA (Attachment 5). Fee waivers were previously calculated based on the sum of eligible fees, prorated by the percent of the development’s total units which are restricted to serve ≤30% AMI. Fees historically considered eligible for waiver include: • Development Review Fees • Building Permit Fee • Capital Expansion Fees (including those for Fire, Police, Streets, and Parks) Other fees collected by the City that were not considered eligible for waivers include fees which are collected on behalf of other agencies (such as Larimer County or Poudre School District) and fees for utilities. In 2020, Council changed this subsidy from a waiver to a credit and fixed the amounts of subsidy to $14,000 per unit for newly constructed units and $5,500 per unit for adaptive reuse units where the project gets the benefit of prior fees paid on the property. While this greatly simplified the administrative process in determining exact amounts of subsidy, these requests are still subject to Council discretion and based upon a finding that granting the request will not jeopardize the financial interests of the City. If granted by Council, the credits may be used by the developers for any fees owed the City. This process allows all City fees to be paid and removes the need to reimburse certain departments that are part of the administrative burden of the former fee waiver process. CITY FINANCIAL IMPACTS The two requests to be considered here are the first requests under the new process. Both requests are for qualifying new units of construction. Therefore, the flat fee to be applied to these requests is $14,000 per unit. The total of the two requests is $350,000: $98,000 for Housing Catalyst’s Oak 140 Affordable Housing Development, and $252,000 for Volunteers of America’s Cadence Affordable Senior Community Development. Agenda Item 7 Item # 7 Page 3 In the past, fee waiver reimbursements were primarily funded from General Fund Reserves and/or the Affordable Housing Capital Fund (AHCF), which is part of the Community Cap ital Improvement Project funding. Often the cost was split between these two sources. The balance of the AHCF is currently $810,359. Guidance from the Council Finance Committee supported splitting the cost of the current fee credit request between General Fund Reserves ($150,000) and the AHCF ($200,000). The $200,000 in funds from the AHCF was previously appropriated and is available for this purpose. Accordingly, Ordinance No. 070, 2021 would appropriate $98,000 of General Fund Reserves for fees for the Oak 140 project, and Ordinance No. 071, 2021 would appropriate $52,000 of General Fund Reserves for fees for the Cadence project. BOARD / COMMISSION RECOMMENDATION The Affordable Housing Board recommends providing fee credits to both projects. (Attachment 6) The Council Finance Committee recommends providing fee credits to both projects. (Attachment 7) PUBLIC OUTREACH The Affordable Housing Board and Council Finance Committee meetings were noticed and open to the public. No additional specific outreach was conducted on these requests. ATTACHMENTS 1. Oak 140 Fee Credit Request (PDF) 2. Location Map - 140 East Oak Street (PDF) 3. VoA Cadence Fee Waiver Request (PDF) 4. Location Map - 2555 Joseph Allen Drive (PDF) 5. Income Limits 2021 (PDF) 6. Affordable Housing Board Minutes (excerpt) (PDF) 7. Council Finance Committee Minutes (draft) (PDF) March 31, 2021 Sue Beck-Ferkiss, Social Sustainability Specialist Office of Social Sustainability City of Fort Collins 222 Laporte Avenue Fort Collins, CO 80521 Re: Fee Credit Request – Oak 140 Dear Mrs. Beck-Ferkiss, I am writing to request fee credits for Oak 140, a mixed-use development that will bring 79 affordable apartments and two ground-floor commercial spaces to the site of the former Elks Lodge at Oak and Remington Streets in downtown Fort Collins. The project is made possible through a partnership between Housing Catalyst and the Fort Collins Downtown Development Authority (DDA), two organizations that bring vast experience to the project and have a demonstrated commitment to making Fort Collins a stronger, safer, and better community. Name, address and contact information for developer Kristin Fritz Chief Real Estate Officer Housing Catalyst 1715 W Mountain Ave Fort Collins, CO 80521 C: 415-531-5617 kfritz@housingcatalyst.com Name and address/location of development, and location map Oak 140 Northwest corner of Remington St. and Oak St. in downtown Fort Collins OAK ST REMINGTON ST OAK 140 ATTACHMENT 1 Total number of units with breakdown of AMI targets for all units 100% of the 79 studio, one-bedroom, and two-bedroom apartments will be affordable for those earning between 30% and 80% of the Area Median Income (AMI), with an average resident income of 60% of the AMI. Below is the detailed AMI breakdown and unit mix: 30% AMI Units - 7 40% AMI Units - 6 50% AMI Units - 29 70% AMI Units - 29 80% AMI Units – 8 Studio - 4 One-bedroom – 58 Two-bedroom apartments - 17 Note: Oak 140 does not include any apartments at 60% AMI due to the predominance of 60% AMI units in the City’s existing portfolio of LIHTC units. Description of development and why it qualifies for affordable housing fee credits Oak 140 is well-aligned with both the City of Fort Collins’ belief that one of the keys to a healthy community is the ability to house its residents in good quality, affordable housing and the City Council’s priority to improve access to a broad range of quality housing that is safe, accessible, and affordable. With 79 affordable units, this project will make a significant impact in helping the City achieve its goal of having 10% of the City’s housing stock be affordable by 2040. Oak 140 creates living options for downtown employees that currently find it financially challenging to live and work in Fort Collins because of rising housing costs. The DDA’s contribution of the land at the former Elks building site provides a rare opportunity to make building affordable housing in a highly desirable downtown location financially feasible. Housing Catalyst and the DDA are proud to have developed an architectural design that respects the rich history and essence of Downtown Fort Collins, while also reflecting the evolving needs and character of the community. Since identifying the significant need and desire for affordable housing for people working in and around downtown, the DDA and Housing Catalyst have worked to create a development that honors the vision to address this unique community demand. Project amenities include an on-site leasing office, community room with a community kitchen, exercise room, bike storage, parking, and an elevated terrace with gardens and seating areas. Oak 140 is ideally located for public transit use and easy access to job centers across the City. The site is within a quarter-mile of multiple bus stops with daily service to most areas of Fort Collins and adjacent cities, along a bike route and adjacent to a bike sharing program, and provides next-door access to hospitality and retail jobs. The site is also in a highly walkable location with convenient access to the many incredible amenities that are at the heart of Old Town Fort Collins. Proposed construction timeline Construction will begin in June 2021 and be completed in March 2023. Thank you for your consideration and please let us know if you need any additional information. Sincerely, Julie J. Brewen CEO ST JOSEPH'SSCHOOL LIBRARY PARK OAK STPLAZA PARK CIVICCENTERPARK W Mountain Ave Remington StN Mason StS Mason StN CollegeAveJeff e r s o n St E Mountain Ave Lincoln AveN Howes StS Howes StS CollegeAveWal n u t S tLinden StMathewsStChestnut StPeterson StW Olive StCanyon AveW Oak St E Olive St E Oak St WXYZÕ I³ Copyright nearmap 2015 140 E Oak St & 149 Remington StFort Collins, CO 80524 CITY OF FORT COLLINS GEOGRAPHIC INFORMATION SYSTEM MAP PRODUCTS These map products and all underlying data are developed for use by the City of Fort Collins for its internal purposes only, and were not designed or intended for general use by members of the public. The City makes no representation or warranty as to its accuracy, timeliness, or completeness, and in particular, its accuracy in labeling or displaying dimensions, contours, property boundaries, or placement of location of any map features thereon. THE CITY OF FORT COLLINS MAKES NO WARRANTY OF MERCHANTABILITY OR WARRANTY FOR FITNESS OF USE FOR PARTICULAR PURPOSE, EXPRESSED OR IMPLIED, WITH RESPECT TO THESE MAP PRODUCTS OR THE UNDERLYING DATA. Any users of these map products, map applications, or data, accepts them AS IS, WITH ALL FAULTS, and assumes all responsibility of the use thereof, and further covenants and agrees to hold the City harmless from and against all damage, loss, or liability arising from any use of this map product, in consideration of the City's having made this information available. Independent verification of all data contained herein should be obtained by any users of these products, or underlying data. The City disclaims, and shall not be held liable for any and all damage, loss, or liability, whether direct, indirect, or consequential, which arises or may arise from these map products or the use thereof by any person or entity. Printed: May 06, 2021 Site 0 250 500125Feet © ATTACHMENT 2 March 24, 2021 Sue Beck-Ferkiss via email only Social Policy and Housing Program Manager Social Sustainability Department City of Fort Collins 222 Laporte Ave. Fort Collins, CO 80521 RE: Fee Waiver Request Cadence – Fort Collins, CO Dear Sue: Pursuant to the City’s process for reviewing fee waivers, please find enclosed the subject request and necessary information. 1.Name, address and contact information for developer Volunteers of America Ft. Collins VOA Senior Housing LLC 1660 Duke Street Alexandria, VA 22314 (303) 726-1055 or (703) 341-5045 2.Name and address/location of development, and location map 2555 Joseph Allen Drive Fort Collins, CO 80525 3.Total number of units with breakdown of AMI targets for all units # of Units Area Median Income % 4 20% 7.3% 14 30% 25.5% 5 40% 9.1% 4 50% 7.3% 10 60% 18.2% ATTACHMENT 3 12 70% 21.8% 6 80% 10.9% 55 51.3% average 100% 4.Description of development and why it qualifies for affordable housing fee credits Cadence is a new development of 100% affordable housing u nits for older adults, age 55+ in the City of Fort Collins. Eighteen (18) units or 33% of the project provides very low income units at the 20 & 30% Area Median Income levels which qualify for the fee waiver program. These units help the City of Fort Collins fulfill their goals of providing additional new affordable housing units at these very low AMI levels. 5.Proposed construction timeline Cadence recently closed on its financing and broke ground in March, 2021. Construction is anticipated to be completed in May, 2022. Based on our understanding of the City of Fort Collins current affordable housing fee waiver program, Cadence is eligible for a $14,000/very low income unit credit towards the project’s City fees. This would equate to 18 x $14,000/unit = $252,000. Please let us know if you have any additional questions. Sincerely, Doug Snyder Vice President, Regional Real Estate Development E Drake Rd S Timberline RdWindrow DrParklakeDrSpring Farm Dr Trail Dr Creekwood Dr Abilene Ct Trailwoo d D r Pacific Crest Dr Arapaho Pass Dr Krisron Rd Yucca C tJoseph Allen DrEastwood Ct Appalachian DrE as t wo o d D rSagebrush DrAdobe DrShado wCt L ak es hore Dr TanglewoodDr ParklakeCtCopyright nearmap 2015 2555 Joseph Allen DrFort Collins, CO 80525 CITY OF FORT COLLINS GEOGRAPHIC INFORMATION SYSTEM MAP PRODUCTS These map products and all underlying data are developed for use by the City of Fort Collins for its internal purposes only, and were not designed or intended for general use by members of the public. The City makes no representation or warranty as to its accuracy, timeliness, or completeness, and in particular, its accuracy in labeling or displaying dimensions, contours, property boundaries, or placement of location of any map features thereon. THE CITY OF FORT COLLINS MAKES NO WARRANTY OF MERCHANTABILITY OR WARRANTY FOR FITNESS OF USE FOR PARTICULAR PURPOSE, EXPRESSED OR IMPLIED, WITH RESPECT TO THESE MAP PRODUCTS OR THE UNDERLYING DATA. Any users of these map products, map applications, or data, accepts them AS IS, WITH ALL FAULTS, and assumes all responsibility of the use thereof, and further covenants and agrees to hold the City harmless from and against all damage, loss, or liability arising from any use of this map product, in consideration of the City's having made this information available. Independent verification of all data contained herein should be obtained by any users of these products, or underlying data. The City disclaims, and shall not be held liable for any and all damage, loss, or liability, whether direct, indirect, or consequential, which arises or may arise from these map products or the use thereof by any person or entity. Printed: May 06, 2021 Site 0 250 500125Feet © ATTACHMENT 4 2021 Income Limits Income Limits (effective date: 6/01/2021) 2021 Median Income: $95,900 (Fort Collins/Loveland Metropolitan Statistical Area) City of Fort Collins Household Members Income 1 2 3 4 5 6 7 8 100% AMI $67,200 $76,800 $86,400 $95,900 $103,600 $111,300 $119,000 $126,600 80% of AMI* $53,700 $61,400 $69,050 $76,700 $82,850 $89,000 $95,150 $101,250 60% of AMI $40,320 $46,080 $51,840 $57,540 $62,160 $66,780 $71,400 $75,960 50% of AMI* $33,600 $38,400 $43,200 $47,950 $51,800 $55,650 $59,500 $63,300 30% of AMI* $20,150 $23,000 $25,900 $28,750 $31,050 $33,350 $35,650 $37,950 AMI = Area Median Income 51-80%: Low Income Limit (HOME High Income Limit) 31-50%: Very Low Income Limit (HOME Low Income Limit) 0-30%: Extremely Low Income Limit *80%, 60%, 50% & 30% are the HOME income limits published by HUD. These are the income limits required for projects funded with CDBG & HOME. Updated: 5/3/2021 ATTACHMENT 5 AFFORDABLE HOUSING BOARD REGULAR MEETING March 4, 2021, 4:00-6:00pm Remote/Online via Zoom due to COVID-19 3 /4 /2021 – MINUTES Page 1 1.CALL TO ORDER: 4:02 2.ROLL CALL •Board Members Present: Kristin Fritz, Jen Bray, John Singleton, Tatiana Zentner, Diane Cohn, Daphne Bear •Board Members Absent: Bob Pawlikowski •Staff Members Present: Sue Beck-Ferkiss, Brittany Depew •Community Members: John [no last name listed] 3.AGENDA REVIEW 4.CITIZEN PARTICIPATION •John – Shared some concerns about Kechter townhomes and impacts on traffic and thoughts on the Housing Strategic Plan. 5.APPROVAL OF MINUTES Diane moved to approve February minutes. John seconded. Approved 6-0. 6.NEW BUSINESS XXX A.Update on Affordable Housing Fee Credits – Sue Beck-Ferkiss Fee waiver program recently transitioned to fee credit program. Came up with set amount of subsidy per unit. New program provides fee credits developer can put in account to pay fees of their choice. $14k per unit, $5,500 for adaptive reuse (e.g. Mason Place – took existing building, which had already paid impact fees, and received credits for that). Two projects will qualify: Spark (Oak 140) downtown (79 units) and Cadence (55 units). Will go to Council Finance Committee in April. Discussion: •Is this subject to independent funding? o Eventually, would like pool of money, but currently a big leap from former process. Intermediate step was to ask for set amount, which was approved by Council. •Each request must be considered and approved by Council. •In the past, fee waivers were backfilled through general fund reserves or Affordable Housing Capital Fund dollars. ATTACHMENT 6 AFFORDABLE HOUSING BOARD REGULAR MEETING 3 /4 /20 2 1 – MINUTES Page 2 o Would continue to recommend fund with GF reserves or Affordable Housing Capital Fund. • Only units in the developments that target 30% area median income households or below would qualify for this fee credit. Daphne made a motion to make recommendation supporting anticipated upcoming fee credit requests for Housing Catalyst’s Spark project and VOA’s Cadence project. John seconded. 5-0-1 (Kristin abstained) Finance Administration 215 N. Mason 2nd Floor PO Box 580 Fort Collins, CO 80522 970.221.6788 970.221.6782 - fax fcgov.com Finance Committee Meeting Minutes April 19, 2021 10 am - noon Zoom Meeting Council Attendees: Mayor Wade Troxell, Ken Summers, Ross Cunniff, Susan Gutowsky Staff: Darin Atteberry, Kelly DiMartino, Kyle Stannert, Travis Storin, Carrie Daggett, John Duval, Tyler Marr, Lance Smith, Caryn Champine, JC Ward, Noelle Currell, Ryan Mounce, Tim Dailey, Meaghan Overton, Jackie Kozak-Thiel, Victoria Shaw, Sue Beck-Ferkiss, Leo Escalante, Blaine Dunn, Dave Lenz, Jo Cech, Zack Mozer, Jordan Granath, Carolyn Koontz Others: Joe Rowan Joshua Stallings Patricia Miller - Thistle ____________________________________________________________________________________ Meeting called to order at 10:04 am Mayor Troxell; I would like to note for the record that I have conferred with the City Manager and the City Attorney and have determined that the Committee should conduct this meeting remotely because meeting in person would not be prudent for some or all persons due to a current public health agency recommendation. Approval of Minutes from the March 15, 2021 Council Finance Committee Meeting. Ross Cunniff moved for approval of the minutes as presented. Ken Summers seconded the motion. Minutes were approved unanimously via roll call by Ken Summers, Ross Cunniff and Mayor Troxell. A.Affordable Housing Fee Credits Victoria Shaw, FP&A Manager, Community Services Sue Beck-Ferkiss, Lead Specialist, Social Sustainability EXECUTIVE SUMMARY The purpose of this item is to seek feedback on requests from two development projects to provide fee credits from the City for qualifying affordable housing units. These units will serve households making no more than 30% area median income (AMI). At the discretion of City Council, fee credits of $14,000 per qualifying unit of new construction may be provided under the City Code to incentivize the development of units which serve families that earn up to 30% of Area Median Income (AMI) if the proposed credit will not jeopardize the financial interests of the City. ATTACHMENT 7 2 GENERAL DIRECTION SOUGHT AND SPECIFIC QUESTIONS TO BE ANSWERED 1. Is Council Finance Committee supportive of issuing fee credits to two affordable housing developments with qualifying units? 2. Does Council Finance Committee have direction on which City fund to provide these fee credits from? BACKGROUND/DISCUSSION The City has received requests for fee credits from two affordable housing developments: 1. Housing Catalyst (HC) is developing the Oak 140 project at 140 Oak Street in Fort Collins. This project will deliver 79 affordable apartment homes and 7 of them qualify for fee credits. Their request is for a total credit of $98,000. See HC’s request attachment 1. 2. Volunteers of America (VOA) is developing Cadence, a 55-unit age-restricted affordable housing development at 2555 Joseph Allen Drive. This project will have 55 apartment homes and 18 of them qualify for fee credits. Their request is for a total of $252,000. See VOA’s request attachment 2. Fee credits replaced the City’s prior fee waiver program and is currently the City’s only mechanism to specifically incentivize units which serve households that earn 30% or less of AMI. These units are the hardest to develop since they have the largest cost gap because resulting rents are extremely low. For instance, a household of two must earn no more than $22,590 annually to qualify. Most mechanisms to incentivize affordable housing are available for units that serve up to 80% of AMI. The table below illustrates the 2020 AMI thresholds for the Fort Collins – Loveland MSA. (2021 AMI thresholds have not yet been published). Household Size 100% AMI 80% of AMI 60% of AMI 50% of AMI 30% of AMI 1 $65,900 $52,700 $39,540 $32,950 $19,800 2 $75,300 $60,200 $45,180 $37,650 $22,600 3 $84,700 $67,750 $50,820 $42,350 $25,450 4 $94,100 $75,250 $56,460 $47,050 $28,250 5 $101,700 $81,300 $61,020 $50,850 $30,550 6 $109,200 $87,300 $65,520 $54,600 $32,800 7 $116,700 $93,350 $70,020 $58,350 $35,050 8 $124,300 $99,350 $74,580 $62,150 $37,300 Fee waivers were previously calculated based on the sum of eligible fees, prorated by the percent of the development’s total units which are restricted to serve ≤30% AMI. Fees historically considered eligible for waiver include: • Development Review Fees • Building Permit Fee • Capital Expansion Fees (including those for Fire, Police, Streets, and Parks) Other fees collected by the City that are not considered eligible for waivers include fees which are collected on behalf of other agencies (such as Larimer County or Poudre School District) and fees for utilities. In 2020, City Council changed this subsidy from a pro-rated waiver to a flat credit of subsidy. The amount was set to $14,000 per unit for new development units and $5,500 per unit for redevelopment units where the project gets the benefit of prior fees paid on the property. This simplified the process and provided predictability to developers. City Council retained discretion to authorize each request. Authorization is dependent on a determination that issuing the credits will not jeopardize the financial health of the City. City Council may also 3 direct staff on which fund, such as General Fund or Affordable Housing Capital Fund, to use when issuing waivers. The request from HC is for Oak 140 to be located at the site of the former Elks Lodge at Oak and Remington Streets in downtown Fort Collins. All 79 new apartments will be restricted affordable. It will have a mix of studio, one and two-bedroom apartments with the vast majority one bedroom. They will be priced to target households earning between 30% and 80% AMI. 7 units qualify for fee credits because they will be restricted to serve households with ≤30% AMI. This project, in partnership with the Fort Collins Downtown Development Authority, aims to fill a demand for downtown employees that find downtown housing costs a challenge to living near where they work. The request from VOA is for Cadence, a 55-unit age- and income restricted housing community in one building at 2555 Joseph Allen Drive near the corner of Drake Street and Timberline Road. All 55 new apartments will be affordable. They will be priced to target adults 55+ earning between 20% and 80% AMI. 18 units qualify for fee credits because they target households at or below 30% AMI. Including 20% AMI targets is unusual and will serve extremely low-income households. The location of this community is near a bike path, a bus route and a supermarket which are well suited to the special population (seniors) targeted by this project. These two requests are the first requests to be considered under the new fee credit process. Both requests are for qualifying new units of construction. Therefore, the flat fee to be applied to these requests is $14,000 per unit. The total of the two requests is $350,000. In the past, fee waiver reimbursements have been funded from General Fund Reserves or the Affordable Housing capital Fund (AHCF), which is part of the Community Capital Improvement Project funding. Often the cost was split between these two sources, as shown in the below table: The AHCF currently has $810,359 available, and 28% of AHCF dollars through 2020 have been used to fund fee waivers. *U.S. Census Quarterly Retail E-Commerce Sales 4th Quarter 2020 **Top 10 US companies based on % of e-commerce sales, eMarketer, July 2018 Discussion / Next Steps: Ken Summers: we have $810K in the Affordable Housing Fund – gives us 43% of our goal units Sounds like a good deal – 1/3 of the fund for 43% of the goal sounds like a good deal Ross Cunniff; I support doing this - appreciate the renaming from waiver to rebate I think a split between General Fund and Affordable Housing Fund – 50/50 might be the most rational split – view it as a matching type fund – I don’t have a hard and fast – a split makes sense Mayor Troxell; are there any other funding sources? Project Total Waivers % Backfilled Total Backfill General Fund Transportation Fund AHCF Redtail Ponds 274,762$ 85%233,781$ 274,199$ -$ -$ Village on Redwood 100,708$ 0%-$ -$ -$ -$ Oakridge Crossing 90,923$ 100%90,923$ -$ -$ 90,923$ Village on Horsetooth 352,319$ 83%292,345$ 179,845$ -$ 112,500$ Mason Place 326,081$ 90%294,054$ 190,554$ 3,500$ 100,000$ Total 1,144,793$ 80%911,103$ 644,598$ 3,500$ 303,423$ Backfill SourcesBackfill of Waivers 4 Victoria Shaw; largely these two funds; General Fund and the Affordable Housing Capital Fund Mayor Troxel; the question is more the split than from what source I am fully supportive – fee credits with qualifying units is a good outcome - let’s start with 50/50 split unless a case can be made for something else – this is my current thinking Ken Summers; would this be coming out of General Fund reserves? Travis Storin; this would come from the unassigned reserve bucket - I think historically this committee has been comfortable using 25% from the Affordable Housing Capital Fund toward this purpose and 75% General Fund unassigned reserves. Mayor Troxell; I am ok however it is presented and codified then. More basis for where you are coming from right now. Ross Cunniff; balanced 25% from Affordable Housing Capital Fund – that makes sense as a rational basis - Other uses for Affordable Housing Capital Fund – this is an important use but not the only use. Ross Cunniff; ballot language lists a variety of other uses Sue Beck-Ferkiss; the ballot language allows for this fund to be used for 1 or more affordable housing developments or rehab -it has to be for affordable housing – the development or rehabilitation of affordable housing Ken Summers; is there a certain balance that we are required to maintain in the Affordable Housing Capital Fund? Travis Storin; it has a fixed amount around how much would be allocated to this one relative to the other 16 funds - across 10 years this fund has a $4M projected revenue stream- so far we are exceeding that amount as a component of the CCIP ¼ cent tax - no minimum fund balance Ross Cunniff; I would like to keep the purchase of land as an option from this fund which is one of the reasons for trying to keep funds in there. GENERAL DIRECTION SOUGHT 1. Is Council Finance Committee supportive of issuing fee credits to two affordable housing developments with qualifying units? 2. Does Council Finance Committee have direction on which City fund to provide these fee credits from? Result: Committee would be supportive of $200K allocated from the Affordable Housing Capital Fund and $150K from the General Fund Reserves / unassigned. An interest in additional codification needed and noted. -1- ORDINANCE NO. 070, 2021 OF THE COUNCIL OF THE CITY OF FORT COLLINS AUTHORIZING A FEE CREDIT AND APPROPRIATING PRIOR YEAR RESERVES IN THE GENERAL FUND FOR THE HOUSING CATALYST OAK 140 AFFORDABLE HOUSING DEVELOPMENT WHEREAS, the Fort Collins Housing Authority, doing business as Housing Catalyst (“HC”), is currently developing Oak 140, a 79-unit affordable housing project at Oak and Remington Streets in downtown Fort Collins (the “Project”); and WHEREAS, on November 17, 2020, the City Council passed Ordinance No. 137, 2020, establishing a flat, per-unit fee credit for the construction of qualifying affordable housing units, now codified in Chapter 7.5, Article VIII of the City Code (the “Fee Credit Ordinance”); and WHEREAS, pursuant to the Fee Credit Ordinance, a developer of affordable housing units, prior to the issuance of certificates of occupancy, may apply to the City for funding that the City will use, at the direction of the developer, to pay all or a portion of City development and capital expansion fees on behalf of the developer; and WHEREAS, the City Council may, by ordinance, approve a credit if the City Council determines that: (1) the affordable housing units are intended to house homeless or disabled persons, as such terms are defined by the United States Department of Housing and Urban Development, or households with an annual income that does not exceed 30% of the area median income (AMI) for the applicable household size in the Fort Collins- Loveland metropolitan statistical area; and (2) the proposed credit will not jeopardize the financial interests of the City. WHEREAS, the maximum amount of the credit is $14,000 per affordable unit for new construction projects and $5,500 per affordable unit for adaptive reuse projects; and WHEREAS, seven of the units in the Project qualify for fee credits because they will target households at or below 30% AMI, so HC has requested a fee credit of $98,000, which amount is proposed to be appropriated from reserves in the General Fund; and WHEREAS, this appropriation benefits public health, safety and welfare of the residents of Fort Collins and serves the public purpose of supporting the development of affordable housing for low-income residents in the downtown area; and WHEREAS, the Affordable Housing Board and the Council Finance Committee have both recommended providing the fee credit described herein; and WHEREAS, Article V, Section 9 of the City Charter permits the City Council, upon the recommendation of the City Manager, to appropriate by ordinance at any time during the fiscal -2- year such funds for expenditure as may be available from reserves accumulated in prior years, notwithstanding that such reserves were not previously appropriated; and WHEREAS, the City Manager has recommended the appropriation described herein and determined that this appropriation is available and previously unappropriated from the General Fund and will not cause the total amount appropriated in the General Fund to exceed the current estimate of actual and anticipated revenues to be received in that Fund during this fiscal year, and will not jeopardize the financial interests of the City. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: Section 1. That the City Council hereby makes and adopts the determinations and findings contained in the recitals set forth above. Section 2. That the City Council hereby finds that the fee credit of NINETY-EIGHT THOUSAND DOLLARS ($98,000) requested by HC is for affordable housing units that are intended to house households with an annual income that does not exceed 30% of the area median income for the applicable household size in the Fort Collins-Loveland metropolitan statistical area and will not jeopardize the financial interests of the City. Section 3. That there is hereby appropriated for expenditure from reserves in the General Fund the sum of NINETY-EIGHT THOUSAND DOLLARS ($98,000) for a fee credit for the Project. Section 4. That pursuant to Section 7.5-102 of the City Code, the funds appropriated herein are to be deposited into a trust account held by the City for the benefit of HC, from which HC may direct the City to pay balances due to the City for development review fees and capital expansion fees for the Project. Introduced, considered favorably on first reading, and ordered published this 18th day of May, A.D. 2021, and to be presented for final passage on the 1st day of June, A.D. 2021. _________________________________ Mayor ATTEST: _____________________________ City Clerk -3- Passed and adopted on final reading on the 1st day of June, A.D. 2021. _________________________________ Mayor ATTEST: _____________________________ City Clerk -1- ORDINANCE NO. 071, 2021 OF THE COUNCIL OF THE CITY OF FORT COLLINS AUTHORIZING A FEE CREDIT AND APPROPRIATING PRIOR YEAR RESERVES IN THE GENERAL FUND FOR THE VOLUNTEERS OF AMERICA CADENCE AFFORDABLE HOUSING DEVELOPMENT WHEREAS, the Volunteers of America (“VOA”) is currently developing Cadence, a 55- unit age-restricted affordable housing development at 2555 Joseph Allen Drive, near the corner of Drake Road and Timberline Road in Fort Collins (the “Project”); and WHEREAS, on November 17, 2020, the City Council passed Ordinance No. 137, 2020, establishing a flat, per-unit fee credit for the construction of qualifying affordable housing units, now codified in Chapter 7.5, Article VIII of the City Code (the “Fee Credit Ordinance”); and WHEREAS, pursuant to the Fee Credit Ordinance, a developer of affordable housing units, prior to the issuance of certificates of occupancy, may apply to the City for funding that the City will use, at the direction of the developer, to pay all or a portion of City development and capital expansion fees on behalf of the developer; and WHEREAS, the City Council may, by ordinance, approve a credit if the City Council determines that: (1) the affordable housing units are intended to house homeless or disabled persons, as such terms are defined by the United States Department of Housing and Urban Development, or households with an annual income that does not exceed 30% of the area median income (AMI) for the applicable household size in the Fort Collins- Loveland metropolitan statistical area; and (2) the proposed credit will not jeopardize the financial interests of the City. WHEREAS, the maximum amount of the credit is $14,000 per affordable unit for new construction projects and $5,500 per affordable unit for adaptive reuse projects; and WHEREAS, 18 of the units in the Project qualify for fee credits because they will target households at or below 30% AMI, so VOA has requested a fee credit of $252,000; and WHEREAS, $200,000 of the requested amount was previously appropriated in the Affordable Housing Capital Fund account within the Community Capital Improvement Project Fund and is available to be used for this Project; and WHEREAS, the remaining $52,000 is proposed to be appropriated from reserves in the General Fund; and WHEREAS, this appropriation benefits public health, safety and welfare of the residents of Fort Collins and serves the public purpose of supporting the development of affordable housing for older low-income residents; and -2- WHEREAS, the Affordable Housing Board and the Council Finance Committee have both recommended providing the fee credit described herein; and WHEREAS, Article V, Section 9 of the City Charter permits the City Council, upon the recommendation of the City Manager, to appropriate by ordinance at any time during the fiscal year such funds for expenditure as may be available from reserves accumulated in prior years, notwithstanding that such reserves were not previously appropriated; and WHEREAS, the City Manager has recommended the appropriation described herein and determined that these appropriations are available and previously unappropriated from the General Fund and the Community Capital Improvement Fund, as applicable, will not cause the total amount appropriated in the General Fund and the Community Capital Improvement Fund, as applicable, to exceed the current estimate of actual and anticipated revenues to be received in these funds during this fiscal year, and will not jeopardize the financial interests of the City. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: Section 1. That the City Council hereby makes and adopts the determinations and findings contained in the recitals set forth above. Section 2. That the City Council hereby finds that the fee credit of TWO HUNDRED FIFTY-TWO THOUSAND DOLLARS ($252,000) requested by VOA is for affordable housing units that are intended to house households with an annual income that does not exceed 30% of the area median income for the applicable household size in the Fort Collins-Loveland metropolitan statistical area and will not jeopardize the financial interests of the City. Section 3. That there is hereby appropriated for expenditure from reserves in the General Fund the sum of FIFTY-TWO THOUSAND DOLLARS ($52,000) for a fee credit for the Project. Section 4. That pursuant to Section 7.5-102 of the City Code, the funds appropriated herein, as well as TWO HUNDRED THOUSAND DOLLARS ($200,000) previously appropriated in the Affordable Housing Capital Fund account within the Community Capital Improvement Project Fund are to be deposited into a trust account held by the City for the benefit of VOA, from which VOA may direct the City to pay balances due to the City for development review fees and capital expansion fees for the Project. -3- Introduced, considered favorably on first reading, and ordered published this 18th day of May, A.D. 2021, and to be presented for final passage on the 1st day of June, A.D. 2021. _________________________________ Mayor ATTEST: _____________________________ City Clerk Passed and adopted on final reading on the 1st day of June, A.D. 2021. _________________________________ Mayor ATTEST: _____________________________ City Clerk