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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 03/01/2016 - FIRST READING OF ORDINANCE NO. 028, 2016, AUTHORIZAgenda Item 8 Item # 8 Page 1 AGENDA ITEM SUMMARY March 1, 2016 City Council STAFF Beth Rosen, Affordable Housing Program Administrator SUBJECT First Reading of Ordinance No. 028, 2016, Authorizing the Release of Restrictive Covenants on Property at 520 Cherry Street Owned by the Fort Collins Housing Corporation. EXECUTIVE SUMMARY The purpose of this item is to authorize the release of the Agreement of Restrictive Covenants Affecting Real Property for the property located at 520 Cherry Street, Units A and B, currently owned by the Fort Collins Housing Corporation. STAFF RECOMMENDATION Staff is not making a recommendation. Staff supports the Fort Collins Housing Authority as a key partner in the provision of affordable housing to the community and achieving the long-term goals of the Affordable Housing Strategic Plan (AHSP) adopted by Council on October 6, 2015. Staff acknowledges that the immediate loss of affordable rental units does not align with the AHSP. BACKGROUND / DISCUSSION On February 21, 2003, the Fort Collins Housing Corporation, now known as Villages, Ltd., the non-profit development arm of the Fort Collins Housing Authority, received a grant in the amount of $258,000 in Community Development Block Grant (CDBG) funds to rehabilitate 16 units of permanent affordable rental housing in Fort Collins. At the time of contract, a Restrictive Covenant was placed on all 16 units, requiring the units provide affordable rental housing for a period of twenty years. This covenant is scheduled to be released February 21, 2023. The subject property of this request is a duplex located at 520 Cherry Street which received $30,100 in funding to cover the cost of a new roof, exterior repairs and interior renovation. Villages, Ltd. has since made the strategic decision to sell aging, high operating cost, single family homes and reinvest the funds into more cost effective, multi-family housing. This property was not included in that original restructuring plan. Villages, Ltd. has been approached by an adjacent property owner and would like to take advantage of this opportunity to sell. The proposed purchaser, whose primary residence shares a lot line with this duplex, has stated that the main objective in obtaining these properties is to replat the properties in order to increase the lot size of the residence at 412 North Whitcomb to 10,000 square feet. (Attachment 1) In order to accommodate this sale, the Fort Collins Housing Authority is requesting a release of the Agreement of Restrictive Covenant in exchange for the entire repayment of the CDBG Grant Funds in the amount of $30,100. (Attachment 2) To date, four single-family homes encumbered by this covenant have been sold with the original grant funding returned to the City. The approval of this request would further reduce the total affordable units under the covenant, with 10 units remaining out of the original 16. Agenda Item 8 Item # 8 Page 2 CITY FINANCIAL IMPACTS The approval of this request will initially result in the loss of two affordable rental units in the City. The repayment of $30,100 Community Development Block Grant funding will return to the City’s Competitive Process and be available to fund future affordable housing projects. It is more expensive to create new affordable housing than to retain the existing inventory. The return of these funds will most likely leverage but not fully fund one (1) additional unit at the time of allocation. Based on the most recent competitive process, the total amount of subsidy needed from the City to create new affordable housing is $38,310 per unit. Approval of this request will lessen the financial burden experienced by the Fort Collins Housing Authority related the operation of this property and free capital to be reinvested in future affordable housing. BOARD / COMMISSION RECOMMENDATION The Affordable Housing Board (AHB) recommends adoption of the Ordinance on First Reading. At a public meeting held February 4, 2016, the Affordable Housing Board voted to recommend the release of the Agreement of Restrictive Covenants Affecting Real Property with the requirement that Villages, Ltd. return the grant funds and place the balance of the deed restriction on two currently unrestricted units, if financially prudent. (Attachments 3 and 4) On February 16, 2016, Julie Brewen notified the City that Villages, Ltd. conducted a review of its units pursuant to the recommendation of the Affordable Housing Board and determined it was not feasible to restrict additional units. (Attachment 5) ATTACHMENTS 1. 412 North Whitcomb Replat (PDF) 2. Fort Collins Housing Authority Request (PDF) 3. Affordable Housing Board minutes, February 4, 2016 (draft) (PDF) 4. Affordable Housing Board memo, February 16, 2016 (PDF) 5. FCHA letter re: AHB recommendation (PDF) N Whitcomb St Sycamore St Cherry St © 412 N Whitcomb Replat 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 same 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. 1 inch = 83 feet ^_ ¤£287 ¤£287 ¤£287 VU14 «¬1 ¦¨§25 ¦¨§25 ¦¨§25 Douglas Vine Mountain Vista Mulberry Trilby Lemay Shields Harmony Taft Hill Prospect Horsetooth Drake Timberline NCM N Whitcomb St Cherry St Vicinity Map Aerial Site Map Zoning Map 1 inch = 125 feet 1 inch = 17,493 feet ATTACHMENT 1 CONCEPTUAL REVIEW: APPLICATION Community Development & Neighborhood Services – 281 N College Ave – Fort Collins, CO 80522-0580 Development Review Guide – STEP 2 of 8 General Information All proposed development projects begin with Conceptual Review. Anyone with a development idea can schedule a Conceptual Review meeting to get feedback on prospective development ideas. At this stage, the development idea does not need to be finalized or professionally presented. However, a sketch plan and this application must be submitted to City Staff prior to the Conceptual Review meeting. The more information you are able to provide, the better feedback you are likely to get from the meeting. Please be aware that any information submitted may be considered a public record, available for review by anyone who requests it, including the media. Conceptual Reviews are scheduled on three Monday mornings per month on a “first come, first served” basis. One 45 meeting is allocated per applicant and only three conceptual reviews are done each Monday morning. Conceptual Review is a free service. Complete applications and sketch plans must be submitted to City Staff no later than 5 pm, two Tuesdays prior to the meeting date. Application materials must be e-mailed to currentplanning@fcgov.com. If you do not have access to e-mail, other accommodations can be made upon request. At Conceptual Review, you will meet with Staff from a number of City departments, such as Community Development and Neighborhood Services (Zoning, Current Planning, and Development Review Engineering), Light and Power, Stormwater, Water/Waste Water, Advance Planning (Long Range Planning and Transportation Planning) and Poudre Fire Authority. Comments are offered by staff to assist you in preparing the detailed components of the project application. There is no approval or denial of development proposals associated with Conceptual Review. At the meeting you will be presented with a letter from staff, summarizing comments on your proposal. *BOLDED ITEMS ARE REQUIRED* *The more info provided, the more detailed your comments from staff will be.* Contact Name(s) and Role(s) (Please identify whether Consultant or Owner, etc) ________________________ ______________________________________________________________________________________ Business Name (if applicable) ______________________________________________________________ Your Mailing Address _____________________________________________________________________ Phone Number ______________________Email Address _______________________________________ Site Address or Description (parcel # if no address) ____________________________________________ _______________________________________________________________________________________ Description of Proposal (attach additional sheets if necessary) ____________________________________ _______________________________________________________________________________________ _______________________________________________________________________________________ Proposed Use ______________________________ Existing Use _________________________________ Total Building Square Footage ___________ S.F. Number of Stories ______ Lot Dimensions _____________ Age of any Existing Structures _____________________________________________________________ Info available on Larimer County’s Website: http://www.co.larimer.co.us/assessor/query/search.cfm If any structures are 50+ years old, good quality, color photos of all sides of the structure are required for conceptual. Is your property in a Flood Plain? Ƒ Yes Ƒ No If yes, then at what risk is it? ___________________ Info available on FC Maps: http://gisweb.fcgov.com/redirect/default.aspx?layerTheme=Floodplains. Increase in Impervious Area __________________________________________________________ S.F. (Approximate amount of additional building, pavement, or etc. that will cover existing bare ground to be added to the site) Suggested items for the Sketch Plan: Property location and boundaries, surrounding land uses, proposed use(s), existing and proposed improvements (buildings, landscaping, parking/drive areas, water treatment/detention, drainage), existing natural features (water bodies, wetlands, large trees, wildlife, canals, irrigation ditches), utility line locations (if known), photographs (helpful but not required). Things to consider when making a proposal: How does the site drain now? Will it change? If so, what will change? Jordana Barrack 1427 W Mountain Ave. 760-310-7164 jordana.barrack@gmail.com 412 N Whitcomb St., 518 + 520 Cherry St. Replat the three lots to create 10,000 sq. ft. lot at 412 N Whitcomb St. and grant 520 Cherry St. frontage on Cherry Single family homes Single family homes/Duplex November 20 th , 2015 Fort Collins Zoning Department 281 North College Fort Collins, CO 80524 To the Members of the Fort Collins Zoning Board, We would like to move the lot lines for properties 412 N Whitcomb, 518 Cherry St, and 520 Cherry St. We own the 412 N Whitcomb property, and are under contract to purchase the 518 & 520 Cherry St properties from the Housing Authority, set to close on January 22nd. All properties are located within the NCM zone in Fort Collins. Our main objective is: 1. To create a 10,000 square foot lot for 412 N Whitcomb. 2. To subdivide 520 and 518 Cherry St. so both lots have the required amount of square footage for a single family home. 3. To identify if a garage structure could be placed on a zero lot line between 518 & 520 Cherry St. 4. To ask for a variance on the rear setback of 520 Cherry St, in order to move the lot line for 412 N Whitcomb. Currently 412 N Whitcomb is 4497 square feet. 520 Cherry St sits behind the 412 N Whitcomb lot. We had a survey of the three properties completed by Stewart and Associates on November 12 th , 2015. See Attachment 1 for the plat drawing of the current lot lines. According to this survey, together 518 and 520 Cherry St provide 19,968 square feet. We would like to take 5503 square feet from the back of 520 Cherry St and add it to the 412 N. Whitcomb property. This would leave us with 14,465 square feet to divide between 520 and 518 Cherry St. 520 Cherry St currently has a duplex house on the lot. 518 Cherry St has a single family home on the lot. In a conversation with Clay Frickey at the Fort Collins Planning Office, we were informed that the duplex on 520 Cherry is already out of compliance with City code. We plan to convert the duplex into a single family home and bring the property into compliance. We also understand that a single family home has a minimum lot requirement of 5000 square feet. 520 Cherry St will also need to be given frontage access at Cherry St. The lot currently does not have a property line on Cherry St. Attachment 2 and Attachment 3 provide two options for subdividing the three properties. In both options 20 feet of Cherry St frontage is given to 520 Cherry St. We would like to add a shared garage structure on the 518 & 520 property, with a zero lot line passing through it. The garage will enhance the living experience for the residents of the Cherry St properties, and allow the lots to also maximize their outdoor space between the two lots. In Attachment 2, 520 Cherry St would be given a 8698 square foot lot, and 518 Cherry St would be given a 5749 square foot lot. A shared garage structure would be placed just off Cherry St. Both houses would have pedestrian walkways built from the garage to the home. This would allow for an open courtyard like space between the two homes, and maximize the exterior enjoyment of the properties. Attachment 2: In Attachment 3, 520 Cherry St would be given a 8698 square foot lot, and 518 Cherry St would be given a 5749 square foot lot. A shared garage structure would be placed in the alley off Cherry St with a zero lot line running through it. 520 Cherry St would have a 20 foot wide easement connecting to Cherry St, with off street parking. Attachment 3: Both 518 and 520 Cherry St meet the setback requirements, 15’ from the front lot line, and 5 feet from each side. The new proposed lot line will require a variance for 520 Cherry St as the back of the home will be 6’7’’ from the new lot line. The property use behind 520 Cherry will be used for yard space and a garage for the 412 N Whitcomb lot. A house will not be built near the lot line behind 520 Cherry St. We have lived in Fort Collins for many years and have seen the renewal of Old Town and North College. The City has done a lot of work to encourage the revitalization of Old Town and North College. Thank you for shaping Fort Collins into a great place to live. We plan to remodel the two homes at 520 and 518 Cherry St, doing our part to contribute to the aesthetic in the neighborhood, and being sustainable with resources we have onsite. Again, our main objective is to bring 412 N Whitcomb to a 10,000 square foot lot. We seek the City’s approval to subdivide 412 N Whitcomb, 518 Cherry St, and 520 Cherry St in order to achieve this goal. Additional photos are provided on the following page. Thank you very much for your time. Jordana Barrack On behalf of Kimberley Jordan 1427 West Mountain Ave, Fort Collins, CO 80521 (760) 310-7164 Jordana.barrack@gmail.com Property Photos Photo 1: View of 518 & 520 Cherry St looking north from the street. Photo 2: View of 518 & 520 Cherry St from the SW corner of the property line on 518 Cherry St. The current driveway is where we would like to set the 20’ easement for Cherry St frontage for 520 Cherry St. Photo 3: View from the alley next to 518 Cherry, with 520 Cherry in the back. Photo 4: View from the alley of the space between 518 & 520 Cherry where the garage could be placed, from Attachment 3. Photo 5: View of 520 Cherry St. There currently is a chain link fence located where we would like to put the new property line for 412 N Whitcomb. 99.92' 79.84 ' 55.10' 10,002.29' 99.88' 89.93' 89.96' CHERRY ST ALLEY 99.90' 23'-9" 10'-0" 8'-2" 28'-6" 5505' sq ft 55'-2" 12'-0" 11'-6" 12'-6" 20'-6" 6'-7" 12'-0" 20.0' ' 5'-0" 15'-0" existing curb cut sidewalk 72' zero lot line Existing Duplex Existing Single Family\ Home 520 Garage 518 Garage pedestrian access walkway walkway curb 520 Cherry 8698 sq ft 518 Cherry 5749 sq ft current lot line new lot line 412 Whitcomb 4497.25' sq ft Single Family Home Garage for 412 Whitcomb A Proposed Replat of 520 and 518 Cherry St 11/17/15 72.86' 99.92' 79.84 ' 55.10' 10,002.29' 99.88' 89.93' 89.96' CHERRY ST ALLEY 99.90' 23'-9" 10'-0" 8'-2" 28'-6" 5505' sq ft 55'-2" 12'-0" 11'-6" 12'-6" 20'-6" 6'-7" 12'-0" 20.0' ' 5'-0" existing curb cut sidewalk 72' zero lot line Existing Duplex Existing Single Family\ Home 520 Garage 518 Garage pedestrian access walkway curb 520 Cherry 8698 sq ft 518 Cherry 5749 sq ft current lot line new lot line 412 Whitcomb 4497.25' sq ft Single Family Home Garage for 412 Whitcomb Proposed Replat of 520 and 518 Cherry St 11/17/15 B zero lot line off street parking 72.86' ATTACHMENT 2 CITY OF FORT COLLINS AFFORDABLE HOUSING BOARD DRAFT BOARD MEETING MINUTES 300 Laporte Ave. Fort Collins, Colorado February 4, 2016 EXCERPT FROM DRAFT MINUTES: AGENDA ITEM 3: FCHA Covenant Release Request—Beth Rosen Beth presented letter FCHA provided to the City requesting release of covenant in exchange for repayment of the grant. Provided rehab funding for roof, interiors, and landscaping in 2003 as a grant. Deed restriction ends in 2023. Adjacent property owner is interested in obtained duplex and single family home—intends to re-plat through P&Z. Intention is to do modest renovations to single family home and convert duplex back to single family and sell. Re-plats property lines and allows owner to build a garage. (Kristin recused herself) Comments/Q&A  Jeff: remodeled housing would be sold at market rate? o Beth: Yes. Covenant would be released. o Chadrick: Would reinvest funds and give affordability of 20-50 years. o Jeff: In 2023 the City would get zero dollars back. o Chadrick: If deed restriction not removed, would still do this in seven years. o Jeff: FCHA has looked at this site for potential redevemopment and concluded not feasible.  Chadrick: Has been looked at twice and cannot get density needed. Have systematically been going through portfolio and liquidate single family, underperforming units to invest in economy of scale. Duplex has $44K in deferred capital needs. The unrestricted property is problematic for many reasons. Has had exceedingly high capital needs. Underperforming assets. Could do better leveraging proceeds with larger projects.  Curt: Location of homeowner who wants to buy? o Maldinado house—412 N. Whitcomb.  Jeff: Staff comments? o Beth: Took proposal to staff. Looking at alignment to AHSP, and acknowledging temporary net loss of units, while FCHA is strong development partner who is bringing a lot of product online. Would like Council to make policy decision. Forwarding without staff position. Long term goals of FCHA are in alignment with AHSP, but net loss in current market. o Chadrick: FCHA would be willing to shift seven years of affordability to something else in portfolio that would otherwise be market rate rents.  Jeff: Then grant would not come back to City?  Chadrick: Would still pay back grant.  Jeff: on Council agenda? o Beth: working on AIS after this meeting. Can put forward with no staff position. AIS asks if presented to any boards. ATTACHMENT 3 Will add AHB position there. Negotiations and discussions have happened between City CSO and FCHA director.  Jeff: Two units? o Chadrick: Would look at Villages units. but negates fact that pushing 200K into multifamily development. Horsetooth property is underway. Have submitted to CHFA. Fully intend for that project to go forward. Would be nice to have money from this to shift to another development. Horsetooth is sources correctly, but market pressures/changes come up. Would be good to have dollars for potential gaps.  Jeff: Vacancy in duplex? o Chadrick: Had an eviction unrelated to sale. Have left vacant. 518 has been kept vacant to consider a sale and that is not deed restricted. Occupant has voucher. On Howes street, completed fire restoration and could consider that for resident. Same neighborhood. o Diane: People getting displaced due to these kinds of shifts, do they get higher priority for placement?  Chadrick: Certainly. Would have to have conversation with seller. She might want tenants for a period of time. Otherwise, would put staff in place to help.  Jeff: Current tenant not at risk of losing voucher?  Chadrick: No. can even move outside community with that voucher. Property manager is aware of potential sale.  Diane: position of FCHA that removing single family and duplexes out of portfolio and completely to apartments?  Chadrick: RAD (rental assistance demonstration project) process to dispose of public housing. Allows housing authorities to liquidate non-performing units.  Curt: non-performing asset as a house—because maintenance is so expensive. o Chadrick: deteriorating assets—don’t generate enough revenue to keep property at level needed. Also have property managers driving between many sites. o Curt: FCHA can save money by consolidating units?  Chadrick: Yes. There were single family assets that were bought from foreclosures. Made sense at the time. Trying to bundle social services, property management, etc. for economy of scale. Leveraging sale for more units. right now, dumping money into them and not breaking even.  Curt: what is wanted from this board. Tabled a letter of recommendation last month. o Beth: Three choices—can opt out of making a recommendation of any kind (with notes provided to Council), vote to recommend an ordinance to release the covenant, or choose to not recommend. o Jeff: Can accept amendments to last month’s motion.  Curt: goal is to sell regardless. Behooves City to do this. If get funds back now, potential for money to be leveraged five or six times. Would like to see an ADU on the garage. o Diane: Value—over time partnership with FCHA and great work they are doing getting housing online and funding stacked properly to get it done. Appreciate seven year option. Recognizing that pulling something and showing respect value of units. good compromise. $30K is a lot of money. To not get it back in seven years, worth having those dollars recycled into the process. o Curt: Terence commented last month that disappointing to see lack of single family affordable housing. Should have a separate discussion on this aspect. o Jeff: would advise board to take a position. Support this, and offer friendly amendment that support is with request that FCHA move deed restriction to two current market rate units that would not displace residents.  Curt: does that take funds out of leveraging pool?  Chadrick: No.  Diane: Units that are not deed restricted. Not market rate.  Jeff: basically 20 years of free affordable housing. o Terence: Would add caveat that only do this if financially prudent. Terence moved to approve the Fort Collins Housing Authority request to support the ordinance to Council to vacate the covenant on these properties, with the requirements of the return of grant funds, and placing the balance of the deed restriction on two currently unrestricted units, if financially prudent. Jen seconded. Motion passed, 5-0-1. Kristin recused herself.  Curt: If sold now, additional $30K that goes into affordable housing.  Jeff: Opportunity to appear before Council when this goes for approval. o Beth: If a discussion item, must wait until discussion. Not sure about consent agenda.. o Jeff: Would speak during three minutes of public comment. o Terence: If on Council agenda, cannot speak to it during public comment. o Beth: Could go to Council third Tuesday of February instead. Can also include letter from AHB in AIS. Due February 17. o Diane: Have often done a letter before the Council meeting.  Beth: Appreciates having a position from board. ACTION ITEMS: Jeff will give public comment on the release of covenant. He will draft a letter and circulate via email. ATTACHMENT 4 February 16, 2016 Ms. Jacqueline Kozak-Thiel Chief Sustainability Officer City of Fort Collins 300 LaPorte Avenue Fort Collins, CO 80521 Re: Release of Restrictive Covenant 520 Cherry Street Dear Jacqueline, Thank you for the opportunity to respond to the Affordable Housing Board’s recommendation in regard to our request for a release of the Restrictive Covenants and allowing repayment of the $30,100 CDBG loan for the duplex property owned by Villages Ltd. located at 520 Cherry Street. I appreciate the Affordable Housing Board’s thoughtful conversation and understanding that the sale of this property that has $44,000 in deferred capital repairs leverages additional housing units in our community. It is my understanding that the Affordable Housing Board recommended this request be approved but suggested that if financially feasible, Villages Ltd. offer two units from its portfolio for replacement deed restrictions. We have analyzed the entire portfolio of properties owned by Villages Ltd., and while we have found four properties without current deed restrictions, we will not offer those as replacement units for the remaining seven years of the 520 Cherry Street property agreement. These particular units actually have families in place that may not meet the income requirements for replacement restricted units. While these families have higher incomes, they have higher needs. There are situations in which families find their way to us who have great need for support. Sometimes they have bad rental histories because of their social situation, and they have a great need for resident services and support from a landlord like us who is willing to give them extra services and patience. Having the flexibility of keeping a few unrestricted units is very important to us and for mission and business reasons we are unable to commit these as replacement deed restricted units. We are, however, more than happy to additionally restrict units in the Horsetooth development. Sincerely, Julie J. Brewen CEO ATTACHMENT 5 -1- ORDINANCE NO. 028, 2016 OF THE COUNCIL OF THE CITY OF FORT COLLINS AUTHORIZING THE RELEASE OF RESTRICTIVE COVENANTS ON PROPERTY AT 520 CHERRY STREET OWNED BY THE FORT COLLINS HOUSING CORPORATION WHEREAS, on February 21, 2003, the City entered into a Recipient Contract with the Fort Collins Housing Corporation, now known as Villages, Ltd. (the “Corporation”), the non- profit development arm of the Fort Collins Housing Authority (the “Authority”); and WHEREAS, through the Recipient Contract, the Corporation received a grant from the City of $258,000 in Community Development Block Grant (CDBG) funds to rehabilitate 16 affordable rental housing units in Fort Collins; and WHEREAS, the Corporation used $30,100 of the CDBG funds to replace the roof and make interior and exterior repairs to a duplex at 520 Cherry Street owned by the Corporation (the “Property”); and WHEREAS, the terms of the Recipient Contract require the Corporation to use the Property for affordable rental housing in accordance with federal law for not less than twenty years; and WHEREAS, the Recipient Contract gave the City the right to require a deed of trust or other security interest in properties improved using the CDBG funds and to require, in addition to or in lieu of a deed of trust, a deed restriction on such properties to protect the City’s interest in the funds provided under the Recipient Contract; and WHEREAS, on February 21, 2003, the Corporation and the City also entered into an Agreement of Restrictive Covenants Affecting Real Property (the “Covenant”), which placed a twenty-year affordability requirement on multiple properties owned by the Corporation and improved with CDBG funds under the Recipient Contract, including the Property; and WHEREAS, the Covenant gives the City the right to enforce the terms and conditions of the Covenant should the Corporation ever fail to comply with them; and WHEREAS, the terms of the Recipient Contract do not require the Corporation to repay the CDBG funds, and neither the Recipient Contract nor the Covenant allows for the Covenant to be released before the twenty-year affordability period expires if the Property is sold or the funds are repaid; and WHEREAS, the Corporation has been approached by the owner of a residential property adjacent to the Property who would like to buy the Property and replat it to increase the size of her existing lot; and -2- WHEREAS, the Corporation would like to sell the Property to the neighbor and so has asked the City to release the Covenant with respect to the Property in exchange for repayment of the $30,100 of CDBG funds invested in the Property; and WHEREAS, the City’s right under the Covenant to restrict the use of the Property constitutes an interest in real property owned by the City that the City would be giving up by releasing the Covenant; and WHEREAS, Section 23-111(a) of the City Code states that the City Council is authorized to sell, convey or otherwise dispose of any interest in real property owned in the name of the City, provided that the City Council first finds, by ordinance, that such sale or other disposition is in the best interests of the City; and WHEREAS, approval of this request will result in the loss of two affordable rental units in the City, but the sale of the Property will generate sales proceeds that the Authority can use for future affordable housing projects, and the repayment to the City of $30,100 in CDBG funds will allow the City to make those funds available for future affordable housing projects; and WHEREAS, the Affordable Housing Board reviewed the Corporation’s request at the Board’s regular meeting on February 4, 2016, and voted to recommend the release of the Covenant so long as the CDBG funds were repaid and the Corporation agreed to restrict two currently unrestricted units for the duration of the Covenant, if such a restriction would be financially prudent; and WHEREAS, the Corporation has since notified the City that it has determined it would not be feasible to restrict two additional units. 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 releasing the Covenant on the Property on the terms and conditions described herein is in the best interests of the City. Section 3. That the City Manager is hereby authorized to execute such documents as are necessary to release the Property from the Covenant upon repayment of the CDBG funds, on terms and conditions consistent with this Ordinance, along with such other terms and conditions as the City Manager, in consultation with the City Attorney, determines are necessary or appropriate to protect the interests of the City or effectuate the purposes of this Ordinance. -3- Introduced, considered favorably on first reading, and ordered published this 1st day of March, A.D. 2016, and to be presented for final passage on the 15th day of March, A.D. 2016. __________________________________ Mayor ATTEST: _______________________________ City Clerk Passed and adopted on final reading on the 15th day of March, A.D. 2016. __________________________________ Mayor ATTEST: _______________________________ City Clerk