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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 02/15/2022 - RESOLUTION 2022-029 SUPPORTING A GRANT APPLICATION Agenda Item 15 Item # 15 Page 1 AGENDA ITEM SUMMARY February 15, 2022 City Council STAFF Sue Beck-Ferkiss, Social Policy and Housing Programs Manager Meaghan Overton, Housing Manager Ingrid Decker, Legal SUBJECT Resolution 2022-029 Supporting a Grant Application for an Affordable Housing Development Incentives Grant from the Colorado Department of Local Affairs. EXECUTIVE SUMMARY The purpose of this item is to seek a Council support of the City's application to the Colorado Department of Local Affairs for an Affordable Housing Development Incentives Grant for the Kechter Townhomes development project as required to submit an application for funding. The City's Letter of Intent was accepted and the City was invited to apply for funding to offset water fees relat ed to the development of this land bank parcel. STAFF RECOMMENDATION Staff recommends adoption of the Resolution. BACKGROUND / DISCUSSION On January 21, 2022, the City was formally invited to apply to the Catalyst round of funding for a $2.2 million grant from the Affordable Housing Development Incentives Grant program through the Colorado Department of Local Affairs (DOLA). The grant would be used to offset utility costs related to water for Kechter Townhomes , which will be constructed as a land bank d evelopment at 3620 Kechter Road. (Attachment 1) Applications opened on January 31 with a submittal deadline of March 7, 2022. The application must include a Council resolution to: • Confirm that the elected body is aware of; and • Approves of the intent to apply for grant funds. The Kechter Townhomes project is the result of a 2017 Council priority seeking to develop a land bank property for home ownership. The partnership team for a specific project was assembled in 2019. The partnership is led by TWG (as developer) and includes Elevation Community Land Trust (ECLT) and Housing Catalyst (HC) and was formed for the purpose of developing 54 permanently affordable for -sale townhomes. Every entity involved in this private-public partnership has been working diligently to bring additional resources to this innovative, permanently affordable ownership project. On November 2, 2021, Council conveyed the City-owned property to the partnership to develop the 54 permanently affordable townhomes. About the Affordable Housing Development Incentives Grant Program This grant program is funded through the State’s American Recovery Plan Act (ARPA) allocation. Colorado HB 21-1271 created the Affordable Housing Development Incentives Grant program to provide grants to loc al governments to develop one or more affordable housing developments in their community that are livable, Agenda Item 15 Item # 15 Page 2 vibrant, and driven by community benefits. These grants can be used to offset tap fees, infrastructure, and other needs and amenities that support affordable housing projects. Local governments were encouraged to pick one or two shovel-ready projects that could spend all the funds by June 2024 to apply for gap funding. Approximately $37,728,000 is available in the Affordable Housing Development Incen tives Grant program. Funding will be phased, with 3-5 Catalyst projects funded in the first round. Catalyst projects should exceed the requirements of the grant guidelines, be ready to implement quickly, and will have demonstration value. The goal of the Catalyst round is to complete exemplary and innovative examples of affordable housing projects or programs to celebrate local governments who have made strong commitments in reducing barriers to affordable housing development and have time-sensitive projects ready for investment that will serve as examples for applicants in the main round of funding. About the Proposal Staff submitted the Kechter Townhomes project for consideration under the Catalyst round of funding on October 29, 2021 through an initial Letter of Intent (LOI). While it is scheduled to break ground soon, a funding gap still exists, currently being covered by partner loans to the project. The City’s grant funding request is for $2.2 million in tap fees levied by a special district, the Fort Collins - Loveland Water District, which is a defined eligible expense under the grant program guidelines. Staff chose the Kechter Townhomes project because it exceeds the grant program guidelines, is shovel -ready but still has a funding gap and has demo nstration value for future affordable home ownership projects. The Kechter Townhomes project exceeds the program guidelines set by DOLA in several ways including: • Targeting sale prices to 70% area median income (AMI) and restricting the land to 80% AMI when the grant program allows up to 140% AMI for home ownership. • Implementing more than the minimum number of required adopted land use strategies. • The project has more than the required 20% funding match already committed including investments from the Division of Housing, Elevation Community Land Trust, and the City’s in -kind contribution of the land for the project. • Extra points are awarded for projects that are restricted for more than 30 years and this project will be affordable in perpetuity. CITY FINANCIAL IMPACTS If granted, these funds would directly benefit the Kechter Townhome development and will be cost neutral to the City. If these grant funds are awarded, the project will not need to seek additional funding from the City’s Competitive Grant Process. BOARD / COMMISSION RECOMMENDATION The Affordable Housing Board monitors the Land Bank Program and supports this project. (Attachment 1) PUBLIC OUTREACH This project furthers the City’s Housing Strategic Plan’s goals of adding affordab le inventory and leveraging City investments which were prioritized through extensive community outreach. ATTACHMENTS 1. Location Map (PDF) 2. Affordable Housing Board Minutes (excerpt) (PDF) ATTACHMENT 1 AFFORDABLE HOUSING BOARD REGULAR MEETING 2/3/2022 – MINUTES Page 1 February 3, 2022, 4:00‐6:00pm  Remote/Online via Zoom due to COVID‐19 DRAFT  CALL TO ORDER  At 4:00 the meeting was called to order by Tatiana Zentner  1.ROLL CALL a.Board Members Present: Tatiana Zentner, John Singleton, Jennifer Bray, Bob Pawlikowski, Stefanie Berganini and Seth Forwood joined in progress. b.Board Members Absent: Kristin Fritz c.Staff Members Present: Sue Beck‐Ferkiss, Staff Liaison – City of Fort Collins Taylor Reynolds, Minutes – City of Fort Collins Clay Frickey – City of Fort Collins, Urban Renewal Authority Manager 2.AGENDA REVIEW – No changes. 3.CITIZEN PARTICIPATION – Marilyn Heller from the League of Women Voters Affordable Housing Team announced a panel titled “Housing Insecurity: A Threat to Behavioral Health?” on Monday, April 11 at 7:00 p.m. via Zoom. 4.APPROVAL OF MINUTES Bob Pawlikowski moved to approve January minutes. Stefanie Berganini seconded.  Approved 5‐0.  ATTACHMENT 2 AFFORDABLE HOUSING BOARD REGULAR MEETING 2/3/2022 – MINUTES Page 2   5. NEW BUSINESS  a. Officer Introductions and Liaison Assignments ‐ Items retracted.  b. Housing Strategic Plan – Items retracted.  c. Land Use Code Update  • City staff is requesting support from City Council on February 15 to apply for a State DOLA  (Department of Local Affairs) Grant for the Kechter Land Bank Project. The City’s Letter of  Intent was approved, and staff were invited to complete the full application. The application  requires a Council Resolution.  Tatiana Zentner moved for the Affordable Housing Board to support staff’s request to City  Council for a Resolution supporting an application for the state incentive’s grant program.  Seth Forwood seconded. Approved 6‐0.    6. BOARD MEMBER REPORTS – ITEMS RETRACTED  7. OTHER BUSINESS – ITEMS RETRACTED    8. ADJOURNMENT  Meeting adjourned at 6:13 PM  -1- RESOLUTION 2022-029 OF THE COUNCIL OF THE CITY OF FORT COLLINS SUPPORTING A GRANT APPLICATION FOR AN AFFORDABLE HOUSING DEVELOPMENT INCENTIVES GRANT FROM THE COLORADO DEPARTMENT OF LOCAL AFFAIRS WHEREAS, in 2021 the Colorado General Assembly passed H.B.21-1271, creating the Affordable Housing Development Incentives Grant program, managed by the Colorado Department of Local Affairs (DOLA), to provide grants to local governments to develop one or more affordable housing developments in their communities; and WHEREAS, grants funds can be used to offset tap fees, infrastructure costs, and other needs and amenities that support affordable housing projects; and WHEREAS, in January 2022 DOLA invited the City to apply in the “Catalyst” round of funding for a grant of $2.2 million; and WHEREAS, Catalyst projects must be shovel-ready, exceed the requirements of the grant guidelines, have demonstration value, and be able to spend the funds by June of 2024; and WHEREAS, on November 2, 2021, the City Council adopted Ordinance No. 138, 2021, authorizing the conveyance of the City-owned Affordable Housing Land Bank Property at 3620 Kechter Road to TWG, LLLP, to construct an affordable home-ownership townhome project (the “Project”); and WHEREAS, while TWG is scheduled to break ground on the Project soon, the Project still has a funding gap currently being covered by loans from development partners to the Project; and WHEREAS, City staff is recommending that the Project be considered for a Catalyst grant, as it meets the grant program requirements; and WHEREAS, if the City is awarded a grant the funds would be used to pay tap fees for the Project to the Fort Collins – Loveland Water District, which is an eligible expense for grant program funds, and the Project would not need to seek additional funding for these costs through the City’s Competitive Process; and WHEREAS, if DOLA selects the City’s application for funding the City would have to provide a local cash match equal to 20% of the Project cost, and this requirement has already been met through investments in the Project by the Division of housing, Elevation Community Land Trust, and the City’s in-kind contribution of the land for the Project; and WHEREAS, DOLA requires the City to include in its grant application a resolution of the City Council confirming that the Council is aware of, and approves of, the intent to apply for grant funds. -2- NOW, THEREFORE, BE IT RESOLVED 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 supports the development of the Project on the Kechter Road property and approves of the City’s intent to apply for an Affordable Housing Development Incentives Grant for the Project as described above. Passed and adopted at a regular meeting of the Council of the City of Fort Collins this 15th day of February, A.D. 2022. __________________________________ Mayor ATTEST: _____________________________ City Clerk