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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 03/20/2001 - FIRST READING OF ORDINANCE NO. 48, 2001, AMENDING AGENDA ITEM SUMMARY ITEM NUMBER: 18 FORT COLLINS CITY COUNCIL DATE: March 20, 2001 STAFF: Maurice I. Head SUBJECT: First Reading of Ordinance No. 48, 2001, Amending Chapter 23 of the City Code by the Addition of a New Article XI Entitled "Land Banking". RECOMMENDATION: Staff recommends adoption of the Ordinance on First Reading. The Affordable Housing Board and the Community Development Block Grant Commission both support and recommend implementation of the Land Bank Program. FINANCIAL IMPACT: The Land Bank Program will have no financial impact on the City. The funds to implement the program are reserved in the Affordable Housing Trust Fund budget. EXECUTIVE SUMMARY: At the January 9 Study Session, the City Council discussed the feasibility of land banking in Fort Collins. Staff and Bay Area Economics (BAE), consultants on the project, provided City Council with an evaluation for establishing an Affordable Housing Land Bank Program. Representatives from CARE and Neighbor-to-Neighbor also participated in the discussion. The objectives of the program include establishing a program that will facilitate the production of affordable housing by purchasing land today, and providing land to housing providers in the future for developing affordable housing. Six scenarios were discussed with Council. The baseline scenario (Pilot Project) was the preferred scenario. The Pilot Project scenario can be implemented with an initial investment of $925,000 which the City currently has available for this program. In addition to cash balances from prior years, the primary sources of funds for the Land Bank Program include debt proceeds, proceeds from the sale of Land Bank property and limited general City resources and/or reserves. In other words, the Pilot Project does not required any additional financial resources beyond those that are currently available ($925,000). DATE: March 20, 2001 2 ITEM NUMBER: 18 With this scenario, at the end of the 15-year period, the estimate of total returns yields a net cost of about $170,000. This means the City would spend about $170,000 more on the Land Bank Program than the Program would yield in terms of financial benefits. However, over a 15-year period, and with some additional limited funding, it is projected that the Pilot Program investment would purchase 53 acres yielding 600 affordable housing units and provide a steady supply of land for future affordable development projects. Council directed staff to follow-up with the Affordable Housing Board (AHB) and Community Development Block Grant Commission (CDBG) to get any comments concerning the Land Bank Program. The AHB discussed land banking at its February 1 meeting and voted 6 to 2 in favor of implementing the Land Bank Program, with the stipulation that staff will not submit a new application in the Competitive Process to fund the Land Bank Program. Additionally, the CDBG Commission voted 7 to 2 to approve the Program at its March 1 meeting, noting that the City would be eligible to compete for CDBG funds for the Land Bank Program. BACKGROUND: The land bank concept has been a goal in the City's housing policy since 1992. In 1998 a City team participating in the National League of Cities "Strengthening Partnerships for Housing Opportunities Workshop", identified available land resources as one of the major impediments in meeting future affordable housing needs. The land bank concept was presented as a strategy in the "Priority Affordable Housing Needs and Strategies Report" which was adopted by City Council in February 1999. Council directed staff to follow up the land bank strategy with a feasibility study to test the practical application of the program. In response the Advance Planning Department retained BAE to prepare a feasibility study for the establishment of a land banking program in Fort Collins. The feasibility study was completed in December 2000. At the January 9 Study Session, Council discussed the feasibility of land banking in Fort Collins. City staff and BAE provided City Council with an evaluation for establishing an Affordable Housing Land Bank Program. Representatives from CARE and Neighbor-to-Neighbor also participated in the discussion. The objectives of the Program include implementing a program that will facilitate the production of affordable housing by providing land that developers can feasibly purchase, and helping to ensure that appropriate sites are available in the future for developing affordable housing. Program Description The Land Bank Program is considered to be one more tool in the tool box of the City's affordable housing programs and strategies. Unlike many of the City's other programs, the Land Bank Program is long term in scope, addressing long-range affordable housing needs. DATE: March 20, 2001 3 ITEM NUMBER: 18 The major elements of the proposed program include: The Land Bank Program is intended to acquire sites that are appropriate for affordable housing and hold them long-term so that they are available when needed. Although no maximum or minimum time limits will be set, in most cases, land would be held approximately 5-10 years. The Program would be limited to the City of Fort Collins Growth Management Area. This geographical area for land banking is consistent with City policy for the extension of infrastructure improvements and other services. Sites would be acquired in a wide variety of locations to distribute affordable housing throughout the City. _ A Pilot Project is proposed to begin immediately using existing funds for this purpose ($925,000). This would permit the Land Bank Program to initially acquire approximately 10-20 acres of land on 3-5 sites, which would be targeted to yield at least 120-240 affordable housing units (12 du/ac). Over a 15-year period, and with some additional funding, it is projected that the Pilot Program investment would purchase 53 acres yielding 600 affordable housing units. The Pilot Project is to be evaluated by staff and the findings reported back to City Council and the Affordable Housing Board. If the Pilot Project is deemed successful, the staff will then seek long-term funding, including a dedicated source of funds for future land banking. The long-term proposal is to use City general funds to continue and expand the Pilot Project, which would result in additional land for affordable housing units. The Alternative 3 Funding Scenario (Attachment A of this document) would allow the Land Bank Program to purchase an additional 38 acres of land over a 15-year period, benefitting additional 450 affordable housing units. _ The re-sale of the land bank properties will be targeted to non-profit agencies providing affordable housing for very low income and extremely low income families. Sites should be held long enough so that the appreciation in value covers the Land Bank Program's purchase, carrying costs, and possibly some program income (which would be reinvested in the Program). When a land bank property is sold for affordable housing, it would sell for no more than 90% of market value. The Program is intended to be as self-sustaining as possible over time. Land Availability The consultant identified over 5,000 acres of vacant land that could be considered for acquisition for land banking. These sites would potentially be suitable for eventual development of affordable housing, based on proximity to either existing or planned amenities such as schools, parks, commercial centers, employment centers and transit. These sites are available throughout the City, so land bank sites can be selected to avoid concentrations of sites in any particular neighborhood. DATE: arc ITEM NUMBER: 18 The Land Bank Program will purchase, on average, 3.5 acres each year. This amount of land for the Program in relation to the existing supply of vacant land is sufficiently small, so that the Program should not have a significant impact on the private residential land market in Fort Collins. The Land Bank Program will act as an intermediary for affordable housing non-profit developers like CARE and provide a future supply of land resources. Land bank sites will generally not be immediately ready for development and most likely would be in future developing areas. Properties acquired by the Land Bank Program will become more attractive within 5 or 10 years as infrastructure, community services and commercial development are in place to serve new neighborhoods. Non-economic Benefits In addition to the financial return, the consultant identified other benefits that would be derived from land banking. They are as follows: * Providing non-profit affordable housing developers with a supply of land for future development projects. * Pre-identifying sites for affordable housing development so those adjacent property owners are aware of the plans for the sites. * Systematically securing affordable housing sites so that the developments can be dispersed throughout the community. * Using strategic site selection for the affordable housing development process, so future residents benefit from housing developed in good locations. Staff Recommendation Staff recommends that Council implement the Land Bank Pilot Program as a long-term strategy for assisting non-profit developers with securing land for future affordable housing projects for very low and extremely low income families. If Council concurs, the action will be to approve Ordinance No. 48, 2001 which incorporates the operational guidelines for the Land Banking Program into the City Code. Funding for the Program is from the Affordable Housing Trust Fund; the level of funding is determined by City Council through the budget appropriation process. Staff will evaluate the Pilot Program within two years of program initiation and present this information to City Council. ORDINANCE NO. 48, 2001 . OF THE COUNCIL OF THE CITY OF FORT COLLINS AMENDING CHAPTER 23 OF THE CODE OF THE CITY BY THE ADDITION OF A NEW ARTICLE XI ENTITLED "LAND BANKING' WHEREAS,information presented in the"Priority Affordable Housing Needs and Strategies Report" adopted by Resolution 99-16,and information obtained by a City team participating in the National League of Cities' June 1998 "Strengthening Partnerships for Housing Opportunities Workshop", identified the scarcity of available land resources as one of the major impediments in meeting future affordable housing needs; and WHEREAS,the City Council reviewed the concept of land banking at its October 27, 1998 Study Session and directed staff to study its feasibility for the purpose of assisting in the promotion and development of rental housing for extremely low income residents of the City(at or below 30% of AMI), and very low income residents (at or below 50% of AMI), as well as homeownership housing at or below 60% of AMI in the City; and WHEREAS, a Land Bank Committee was formed by staff from participants of the "Strengthening Partnerships for Affordable Housing Workshop" to assist staff in selecting a consultant to analyze the feasibility of land banking; and WHEREAS, the staff has received a feasibility study prepared for the City by Bay Area Economics, Davis, California; and WHEREAS, the Land Bank Committee has recommended land banking as a way to help affordable housing providers secure a steady supply of sites for affordable housing and to promote greater community awareness of affordable housing projects; and WHEREAS, the Community Development Block Grant Commission and the Affordable Housing Board have recommended approval of a land bank program to assist affordable housing providers in securing affordable housing sites in the future; and WHEREAS,the City Council has determined that such a program will provide a long term affordable housing strategy by holding land for 5-15 years and identifying sites for future development so that affordable housing is distributed community-wide to promote diverse neighborhoods in accordance with Policy HSG-2.5 of the City Plan; and WHEREAS, since land bank sites will generally be less expensive to purchase (due to existing infrastructure limitations), they will provide long term development potential and appreciation, which will allow land banking to be as self-sustaining as possible in the future; and WHEREAS,the Council has determined that the purpose of acquiring real property in order to ensure that the property will be available for future development to provide housing for extremely low and very low income families is in the best interests of the citizens of the City; and WHEREAS, Article XX of the Constitution of the State of Colorado authorizes home rule cities to, among other things, purchase, hold and sell real property; and WHEREAS, the Council has determined that the land banking of real property for the purpose of assisting housing providers (whether publicly affiliated, philanthropic or profit- motivated)in providing housing for extremely low and very low income families will not negatively impact the local real estate market under the proposed program, since it is anticipated that the program will acquire, on average, only three and one-half acres per year. NOW,THEREFORE,BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS that Chapter 23 of the Code of the City be amended by the addition of a new Article XI, to read as follows: low No . _ ............ put� �e firs Ott e r r �, .... IM Crtg}4lartgger is ' dob the .u acqutt Yafit 3fot the u_s ft 3 1 tY City llianaget sfl' gtlFeand under 16.4 granted iq Seo:23-351 onty' te acgaMtion'eomplte. the }eldwing criteria: Thgslattt ,ts ,. eiI#..;from<a. ?vlftitg,`. elter,r( ttto_ut , e,s: l4eat;pf cpr1 _a oW 2 o� � n�ucn ��ere mum cuF J3c�;man�� . X mrirf*e of � 3 6 folio W45 0 OWN 40 �xhe to tt�� �i �af�c�F,ttitii'suairt��o�t�1tY�?�Arti"��"� , . � =fnric�et� frt?�tt the g , . Sec35d llhp+dsibist ratid bankalYi�IrtY exceptkt acr sidance:wtetfe`fpIlownng criezitt 4a � ARE b�` Of, . boy; to the t u aOf,j germs of such °sale to picEvi t tal h t t r fli ! vtt K the"•: o�isiiariof marketrra �:_ irig:'. b} utrtacga,litiri properotn the c lsml;rS echhatl copm, a I eo s � e > owl acttC# ditI Qbri btttditper#ttt4s fo ttuctlt1An hoti`° fhUs f� t�et{ � 8�� e 1 suc is: rsve pq'N)eetl Q e af, lr,., pertnttskhave not bi en iss t d invert $Ite tZk Y :,kt'o c5tc ball be contained,in any deeds ecEnyeying seii] Iar[d ta sit,.hbutbg provd4r, '' Y 3 V man. slaw' 'M t Introduced,considered favorably on first reading, and ordered published in summary form this 20th day of March, A.D. 2001, and to be presented for final passage on the 17th day of April, A.D. 2001. Mayor ATTEST: City Clerk Passed and adopted on final reading this 17th day of April, A.D. 2001. Mayor ATTEST: City Clerk 4 ATTACHMENT A Alternative 1:Baseline Scenario,but with Administrative Costs and Property Taxes Charged to the Pro�a1n_. Whereas the baseline scenario assumes that the City will absorb the administrative staffing costs for the Program and that the Program will not pay property taxes,this alternative charges these costs to the Program. These additional costs would range from about $35,000 per year at the beginning of the Program and would rise to about $141,000(inflated $) per year, by year 15. The net program cost under this scenario would increase to about$1 million over 15 years,because of the added expenses charged to the Program. This added cost would occur in the form of greater annual City investments in the Program to support cash flow needs. Alternative 2: Baseline Scenario, but with 10-Year Hold. This alternative assumes that the Land Bank Program will hold properties for ten years, instead of five years, before selling them to affordable housing developers. A key feature of this alternative is that the Land Bank Program would build a much larger portfolio of property, for which it would require greater amounts of financing. Also, net Program costs would tend to increase because in the baseline scenario it is assumed that the future land sales price will appreciate at a rate that will not cover the increased interest and operating costs during the extended holding period. The net 15-year program cost to the City would increase modestly,to about$204,000,in comparison to a net cost of about$170,000 for the Baseline Scenario. The key difference is the amount of debt that this alternative would require. Because the Land Bank Program would build its portfolio of property every year until Year 11, when it would sell land for the first time, it would.have a much greater outstanding loan balance than the Baseline Scenario by year 15. At that time,the projected outstanding loan balance would be$4.4 million. In addition to the increased debt requirements,this alternative would need to wait five additional years(beyond the baseline 5-year hold period)to begin providing benefits to affordable housing developers. Generally,longer hold periods will be financially beneficial only if the rate of land price appreciation is also assumed to be greater, so that the increased sales price offsets the increased cost to hold the land over a longer period of time. Alternative 3:Cash Infusion Scenario.$925,000Initial Investment Plus$500,000 Annual Investment for 10 Additional Years. All operating assumptions are the same as the Baseline Scenario,with the exception of the additional $500,000 investments in the Program. Instead of relying primarily on loans to finance purchases of land,this alternative assumes that the Land Bank Program would use City investments to purchase the land and that these investments would be retained in the Program as long as it continued to operate. Another key aspect of this Program is that it would allow the Land Bank Program to purchase an estimated 91 acres of land over a 15-year period, instead of the 53 acres assumed for the Baseline Scenario and Alternatives 1, 2, and 5. In this case,the net 15-year program cost drops to$112,000. This means that the City's returns on its investments(in the form of the appreciated value of the Land Bank Program portfolio of property) would be estimated to be$112,000 less than if the City invested its funds in keeping with its current practices. Of the Baseline Scenario and the five different alternatives, this scenario is projected to have the lowest net cost to the City. This, combined with the fact that it would support greater quantities of land purchases (and thus affordable housing production) may make this an attractive alternative, if funds are available to invest for affordable housing in this manner. Alternative 4: Cash Infusion Scenario but With 10-Year Hold. This alternative is the same as Alternative 3, above, except the Land Bank Program is assumed to hold property for ten years instead of five years. In this scenario, the Land Bank Program would require access to significant debt in addition to the City investments in order to purchase the targeted amount of land each year. The net program cost for this alternative rises to$875,000 for the 15-year period. This is primarily due to the increased costs of holding land for a 10-year period instead of a 5-year period before selling it. Like Alternative 3, Alternative 4 would involve purchasing 91 acres of land over a 15- year period. Unlike Alternative 3, in addition to the City "investments," Alternative 4 would also require that the Land Bank Program obtain additional capital through borrowing in order to purchase the targeted amount of land each year. Alternative 5:Baseline.but Borrow Capital at Conventional Rates. This scenario is the same as the Baseline Scenario,but it assumes that rather than borrowing funds from internal City sources at the City's cost of funds, the Land Bank Program would borrow funds from a commercial bank at prevailing market rates,which are assumed to be approximately 13.5 percent annually. This reflects interest rates charged by banks for the acquisition of undeveloped land. In this case, the projected net program cost is about $660,000. This increased program cost is directly attributable to the assumption that the Land Bank Program would have to pay an interest rate for borrowed capital that is approximately twice the interest rate that the Land Bank Program is assumed to pay the City for internal loans under the Baseline Scenario. As the debt interest rate increases,the benefits of holding land for extended periods of time decrease,unless land appreciation rates also increase commensurately. If the Land Bank Program pays higher interest rates to purchase and hold property, it must secure greater amounts of subsidy. CITY OF FORT COLLINS AFFORDABLE HOUSING BOARD MEETING MINUTES February 1, 2001 Bob Browning, chair (970) 225-0137 Kay Rios, Vice-Chair Ken Waldo, Staff Liaison (970) 221-6753 Chuck Wanner, City Council Liaison (970) 484-0810 Members present. Bob Browning, Stacy Overton, Isabel Garity, David Danforth, Kay Rios, Billie Rosen, and Jane Phelan. Staff Present: Ken Waldo, Maurice Head, Joe Frank City Council Present Chuck Wanner Bob Browning called the meeting to order with a quorum present. Lou Stitzel supports the affordable housing board's review of land planning and a revisit of economic development. She feels it will keep the economy strong by increasing sales and property tax revenue and that by supporting local developers, monies will remain in the area. LAND BANK TELECONFERENCE AND DISCUSSION Bob Browning presented a brief review of the history of this issue stating that it has not been supported in the past, offering no explanation of why. Maurice Head conducted a slide presentation of the land bank research that has been completed with the consultant, Matt Kowta, on speaker phone. The research has been detailed in a mailing. • The purpose of the program is to establish a source of land for affordable housing to local developers at a reasonable price therefore ensuring land availability in the long term. • Fort Collins land banking program would be unique because it would be as self- supporting as possible as the price of the land when sold, 5 to 10 years from now, will likely be higher than the purchasing price. • Land banking would not compete with local non-profits, such as CARE. Kay Rios questioned the process itself regarding land acquisition, the creation of infrastructure, and productivity including transit services for residents of the housing projects. Bob Browning also questioned the availability of land within urban growth • Affordable Housing Board February 1,2001 Meeting Minutes Page 2 boundaries and infrastructure. He suggested that outside companies building infrastructure will in turn want to use the land. Bob Browning questioned the process for appraisal of land. According to Maurice Head, real estate officials would be consulted for their expertise regarding fair market value. However, because the land would be purchased without infrastructure, it would be sold at a discounted rate. Concerns were also raised in regards to the competition for land that would be created between the land banking system and non-profit programs. Billie Rosen addressed city council's concerns in regards to staffing costs. Staff present feel the additional work for this project could be absorbed if approved. Kay Rios expressed concern about using money for long term that competes with projects that need money today. David Danforth supported this argument as well. (see letter he distributed). Billie Rosen questioned this argument stating that the money for land banking is additional funding and will not be taken from any other project. Kay Rios feels this additional funding could be allotted to another project that would help more immediately. David Danforth is in agreement. He addressed the purpose of the Affordable Housing Board and the need of the board to advocate for those in need of affordable housing. Bob Browning raised concerns about tax payer monies being prioritized appropriately as well. Kay Rios made a motion to amend the proposal of land banking stipulating that this issue does not return to the Affordable Housing Board or to CDBG for competitive funding. Billie Rios seconded this amendment. The Affordable Housing Board passed a recommendation of land banking with the amendment to city council with a vote of 6 to 2. The minutes from December 7th were presented. Isabel Garity recommended change to "subcommittee reports," the menus have now been updated. Kay Rios moved to accept with this update, Isabel Garity 2nd, motion carried. SUBCOMMITTEE REPORTS Kay Rios suggested she be placed on the agenda for the next meeting. Bob Browning reminded the board that a new chair and vice-chair will be elected at the next meeting. Ken Waido reported that the CBC is putting a committee together a forum on affordable housing and would like a member from the Affordable Housing Board to sit on the steering committee. Jane Phelan and Kay Rios volunteered to sit on this committee. Affordable Housing Board February 1,2001 Meeting Minutes Page 3 Also, city council has scheduled an Affordable Housing Board review in July. Preparation will be made as it approaches. The meeting adjourned at 6:00 p.m. Respectfully submitted, Jodi M. Goldman DRAFT CITY OF FORT COLLINS COMMUNITY DEVELOPMENT BLOCK GRANT Meeting Minutes March 1, 2001 Phil Majerus, Chair Alfred Flores, Vice Chair Bill Bertschy, City Council Liaison Chairman Phil Majerus called the meeting of the Community Development Block Grant Commission to order at 6:35 p.m., at 281 North College Avenue, Fort Collins, Colorado. Board members present included: Chairman Phil Majerus, Alfred Flores, Terri Bryant, Vi Guthrie, Jennifer Molock, Dennis Vandenheiden, and Cheryl Zimlich. Ms. Coxen arrived late. Staff present: Ken Waido, Heidi Phelps, Maurice Head, Julie Smith, and Stacy Kelly. _ STAFF ROLE CHANGES Mr. Waido introduced Heidi Phelps. Ms. Phelps and Ms. Smith will share administration of HOME and CDBG program jointly. Ms. Phelps has been a City employee within the Department for eight years. The philosophy behind the shared responsibility is customer server from a shared expertise and knowledge base. ELECTION OF OFFICERS (CHAIR AND VICE CHAIR) Mr. Majerus called for nominations. Ms. Zimlich nominated Mr. Majerus to continue as share. No other nominations were named. Mr. Steffes moved to close nominations for chair and elect Mr. Majerus by acclamation. Ms. Zimlich seconded the motion. Motion approved unanimously. Mr. Majerus opened nominations for vice chair. Mr. Majerus nominated Mr. Flores to continue as vice chair. No other nominations were made. Mr. Majerus closed nominations and called for the vote. Mr. Flores was elected unanimously. APPROVAL OF JANUARY 11, 2001 MEETING MINUTES Changes were noted: Year from 1999 to 2001. Mr. Vandenheiden noted that his name had been misspelled. Mr. Flores asked for clarification of the BAVA subarea plan on page 8; Mr. Waido noted that the minutes accurately reflected the situation. Ms. Guthrie noted the following: Awkward language on page 2. Page 5; fifth paragraph; "aided" should be "added." Page 4, "16" should be "6." Page 6, fifth paragraph: "Once side" should be "aside." Moved by Mr. Steffes, seconded by Mr. Flores: To approve the minutes of January 11, 2001, as amended. Motion approved unanimously. Community Development Block Grant Commission Meeting of March 1,2001 Page 2 RE-PROGRAMMING OF KING PROPERTY FUNDING Mr. Waido distributed a memo stating that the Housing Authority was abandoning its efforts on the King property. The onsite and offsite improvements that are needed would bring the project into a nonaffordable status. The project is not feasible as presently postured. The CDBG funds are being returned for reallocation. Discussion was held about use of the funds as a contingency for more immediate funding needs in the upcoming funding cycle. Reprogramming does not affect the public service and administration allocations of the present- year funding. The land involved may be subject for review within the new land bank program. Mr. Majerus inquired whether drainage and improvements are assessed to the landowner. Mr. Waido explained the requirements of the improvements and sharing of expenses between the property owner and the City. The landowner bears the cost of required improvements for that property; the City contributes for additional improvements needed to be made on that property for improvements for the basin generally. LAND BANK MEMO DISCUSSION Mr. Head noted a memo in the Commission packet that summarized the discussion with City Council. He summarized the contents of the memo, the philosophy of land banking, and the presentation as made to City Council. Certain salient portions included: Nonprofits targeted for 30 to 50 percent AMI. Land sold at discount to nonprofits. Land sites must be close to certain existing amenities. Purchases will be too small to affect the retail housing market. The program will cost $170,000 more than the total placed into the fund over a 15-year period but will provide ready sites for future affordable development. Mr. Head noted that the Affordable Housing Board supported the concept by a 6- 2 margin. City Council is supportive. The memo to the Commission is for the Commission's information and introduction to the anticipated amendment reading on March 20, 2001. Mr. Head distributed: a memo from Rusty Collins; an opinion column on the issue; and a headline article on affordable housing land needs. Community Development Block Grant Commission Meeting of March 1,2001 Page 3 Ms. Zimlich inquired about the time period needed to hold acquired land. Mr. Head stated that after the first few parcels had been purchased, the evaluation would be made at that point as to future disposition and funding. Mr. Waldo noted that the Affordable Housing Board feels that the land bank program should not be an applicant for funding in the competitive process. It was noted that other City departments are generally in search of property, sometimes obtaining more land than necessary due to property-owner requirements to purchase the entire property. A possibility is seen for cooperation with those entities in obtaining land bank property from the excess property acquired by those departments. In response to questions, Mr. Head noted that feasibility evaluations would be made quickly upon approval of the land bank process. Mr. Head feels that many opportunities will be opened in this process. The success of the program will be seen by the results garnered when compared against the land bank goals. The value of availability of land for affordable housing years down the road arguably supersedes any narrow study of program profitability or complete funding self- sufficiency. It is foreseen that a nonprofit entity would apply for CDBG funding to purchase property acquired by the land bank program. HUD has been consulted and is agreeable to this process. The City Attorney is keeping a close eye on the program to ensure that the City is not engaging in land speculation. There are City Charter and ordinance prohibitions against land speculation. Mr. Head stated that City Council will not need to approve each sale. It is unknown at this time whether future discounted land will, by itself, make a 30 percent AN project feasible. It does present another"tool" in the City's affordable housing toolbox. Moved by Mr. Flores, seconded by Ms. Coxen: To support the land .bank program; the Commission is not averse to future applications for moneys through the CDBG and Affordable Housing Fund funding process. In discussion, Commission members stated that it was their intent to review all possibilities that would generate affordable housing. Mr. Waldo noted that the City cannot be the sole source of funding for these projects. In response to questions, Mr. Waldo noted that the difference between this process and the SID problems in the past is that these properties are being picked and chosen by a certain and specific City site selection. It was questioned why an affordable housing developer searching for property could not simply find land that was available to the City. Staff members noted that the land bank process is a long-range program, and that history shows that affordable housing developers are generally not prepared when a parcel Community Development Block Grant Commission Meeting of March 1,2001 Page 4 becomes available. This program would make the parcel more affordable when the developer is prepared to proceed on a worthy project. Land held by the City is tax-exempt. Motion failed, 4-5. Moved by Mr. Flores, seconded by Mr. Steffes: To support the land bank program. Concerns and comments: One year is a short time to evaluate the program. A flat future real estate market would be counterproductive to the land bank efforts. A question was raised whether the Commission was acquiescing to restrictions that others would place on the process. It was noted that no potential applicant was being encouraged or excluded by this motion. Motion approved 7-2. AFFORDABLE HOUSING FORUM UPDATE Ms. Smith gave a history of an educational forum originally scheduled for March. That forum has been delayed, in potential favor of a task force to be formed to address the target of the process. Other Staff members noted that the education process has been aggressive over the years. The mission of the Affordable Housing Board fills the role of a "task force." Other strategies are being explored. MANUFACTURED HOUSING REPORT Mr. Head gave a review of the report. This report grew out of the problems generated from the Harmony Mobile Home Park issues. The mobile home market in the city and county is tight and is growing tighter. The report evaluates the inventory of mobile home parks in Larimer County and assesses the potential for developing manufactured housing sites for affordable housing. Outside private funding was obtained to assist with the report from the Enterprise Foundation and the Colorado Manufactured Housing Association. Mr. Head reviewed the list of the issues studied and addressed by the report. Staff has consulted with a mobile home park developer (CWS), who may be considering construction of a park in Fort Collins. That developer, due to its methods and capitalization, can be a competitive player in making such a project profitable. Staff is working with that developer in addressing the market realities in Fort Collins. Two needs are seen: To preserve existing stock; and to develop viable new stock. The developer is interested in Fort Collins specifically and is as yet undaunted by the planning process. The product is superior to existing stock, and land ownership options are seen as still open. Development, impact, and utility fees were discussed, particularly in view of the density of the type of project being discussed. Mr. Waido gave a complete Community Development Block Grant Commission Meeting of March 1,2001 Page 5 • overview of the vagaries of fees apportionment in light of public interest, practicality, and legal precedent. In response to questions, Mr. Waido stated that rehab fees are appropriate for both CDBG and HOME funding. Ms. Smith noted that any house on a permanent foundation is available for homebuyer assistance. Mobile home units are generally not considered to be eligible. Further, because of the rent situation, these units are subject to eviction. Parcel sales have been discussed but have not been advanced at this point. The demographics of a mobile home park were discussed. They are generally considered to be quite diverse. STATUS REPORTS Ms. Smith distributed a written report. She noted that homebuyer assistance applications have increased with lower rates. General discussion was held over individual items, with no amendments offered. Ms. Smith noted that Woodlands project has not made payments; the new management is not cognizant of the agreement and will review it. Mr. Waido and Ms. Smith explained the history of his issue. Ms. Smith gave a review of administration expenses. DISTRIBUTION OF FY2001 CDBG PROPOSALS The FY2001 CDBG proposals were distributed. Mr. Waido distributed and explained a memo on the housing proposals. He distributed a score sheet as prepared by staff. He then distributed a summary score in spreadsheet fashion. Blanks are provided for Commission member scores next to Staff scores. Mr. Waido then distributed summaries of the nonhousing proposals, divided into facilities and public service projects. In response to questions, Mr. Waido explained the terms of a conflict of interest. The City definition relates to direct financial benefit. If there is a direct financial benefit, a conflict of interest exists. HUD rules are broader and address more the perception of a conflict of interest. Mr. Waido advised the Commission to be conservative in its approach and declaration of conflict of interest. A conflict of interest for one applicant would preclude involvement in the entire process in that category. The Affordable Housing Board will review the housing proposals, create a priority list and recommendations, and will present their findings to the Commission at a meeting to be set. The Board will also attend the Commission deliberations . session. Community Development Block Grant Commission Meeting of March 1,2001 Page 6 Staff explained the process of accumulating scoring. It has proven to be consistent methodology of the years. Staff provided Commission members with overall numbers within the various categories. In response to questions, Mr. Waido gave a brief overview of a building that was originally bought with CDBG funding and is now being applied to be bought by a different entity, again using CDBG funding. SCHEDULE OF INTERVIEWS Public service interviews will be held on Wednesday, April 4, 2001; housing and facilities interviews will be held on Thursday, April 5. Both sessions will be held at the CIC room. Dinner will be at 5:30 p.m., with interviews beginning at 6:00 p.m._ Deliberations will be held Thursday, April 12, 2001. That meeting will be held at 5:30 p.m. at 281 North College Avenue. OTHER BUSINESS Staff distributed a packet on the Boards and Commissions Manual. Mr. Waido noted that an attorney from the City Attorney's office could be present for any legal questions. Upon motion, second, and unanimous approval, the meeting adjourned at 8:35 p.m.