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HomeMy WebLinkAboutCOUNCIL - AGENDA ITEM - 11/21/2017 - SECOND READING OF ORDINANCE NO. 142, 2017, WAIVINGAgenda Item 6 Item # 6 Page 1 AGENDA ITEM SUMMARY November 21, 2017 City Council STAFF Sue Beck-Ferkiss, Social Sustainability Specialist Ingrid Decker, Legal SUBJECT Second Reading of Ordinance No. 142, 2017, Waiving Certain Fees for Housing Catalyst's Village on Horsetooth Affordable Housing Project and Appropriating Prior Year Reserves in Various City Funds to Pay Specified Fees. EXECUTIVE SUMMARY This Ordinance, unanimously adopted on First Reading on November 7, 2017, authorizes development fee waivers in the amount of $352,319 to Housing Catalyst for its Village on Horsetooth affordable housing project pursuant to City Code, the Land Use Code and an Intergovernmental Agreement between the City of Fort Collins and the Fort Collins Housing Authority dated July 3, 2013, and to make an appropriation to reimburse any waived capital expansion fees. STAFF RECOMMENDATION Staff recommends adoption of the Ordinance on Second Reading. ATTACHMENTS 1. First Reading Agenda Item Summary, November 7, 2017 (w/o attachments) (PDF) 2. Ordinance No. 142, 2017 (PDF) Agenda Item 9 Item # 9 Page 1 AGENDA ITEM SUMMARY November 7, 2017 City Council STAFF Sue Beck-Ferkiss, Social Sustainability Specialist Ingrid Decker, Legal SUBJECT First Reading of Ordinance No. 142, 2017, Waiving Certain Fees for Housing Catalyst's Village on Horsetooth Affordable Housing Project and Appropriating Prior Year Reserves in Various City Funds to Pay Specified Fees. EXECUTIVE SUMMARY The purpose of this item is to determine whether development fee waivers in the amount of $352,319 will be provided to Housing Catalyst for its Village on Horsetooth affordable housing project pursuant to City Code, the Land Use Code and an Intergovernmental Agreement between the City of Fort Collins and the Fort Collins Housing Authority dated July 3, 2013, and to make an appropriation to reimburse any waived capital expansion fees. This matter was heard by the Council Finance Committee. STAFF RECOMMENDATION Staff recommends adoption of the Ordinance on First Reading. BACKGROUND / DISCUSSION The Fort Collins Housing Authority, doing business as Housing Catalyst (HC), is a Fort Collins, mission-driven real estate developer that designs, builds and serves affordable communities in Northern Colorado. HC owns and operates a variety of properties located throughout Fort Collins and serves over 1,700 households in need of affordable housing. HC also manages the affordable housing properties owned by Villages, Ltd. HC is an experienced developer and property manager with a good history of running quality developments in Fort Collins. The purpose of this item is to present HC’s waiver request for $352,319 of certain permissible impact fees for the portion of the Village on Horsetooth development that targets households earning no more than 30% area median income. (AMI) HC is seeking the waiver of certain development and capital improvement expansion fees for the Village on Horsetooth affordable housing project as allowed by City Code, the Land Use Code, and an Intergovernmental Agreement between the City of Fort Collins and the Fort Collins Housing Authority dated July 3, 2013. The Village on Horsetooth is a 96-unit affordable housing community at 1506 West Horsetooth Road in Fort Collins. (Attachment 1) The project has received all its building permits and is currently under construction. HC purchased this property from the City’s Affordable Housing Land Bank Program. Of the 96 units that the Village on Redwood will deliver, 43 (or 45% of the total development) will be dedicated to households making no more than 30% of the area median income (AMI). The request from HC is attached. (Attachment 2) The total of the waiver eligible fees for the project is $782,929. The request is for 45% of that, $352,319, to be waived. See figure below for breakdown of fees. ATTACHMENT 1 Agenda Item 9 Item # 9 Page 2 Fee Type Total Fees Collected 45% Waiver Amount Development Review $38,435 $17,296 Building Fees $79,826 $35,922 Capital Improvement Expansion Fees $649,654 $292,345 Utilities - Stormwater Review Fee $15,014 $6,756 TOTAL $782,929 $352,319 The capital expansion fees are further broken down as follows: Capital Expansion Fees Total Fees Collected 45% Waiver Amount General Government $46,328 $20,848 Police $19,004 $8,552 Fire $38,114 $17,151 Street Oversizing $225,784 $101,603 Community Parkland $147,056 $66,175 Neighborhood Parkland $173,368 $78,016 TOTAL $649,654 $292,345 The 2017 income limits published by the U. S. Department of Housing and Urban Development for 30% of the Fort Collins AMI is $16,150 for a household of 1 and $24,600 for a household of 4. Households at this income level are some of the City’s most vulnerable residents. The 43 units at the Village on Horsetooth fit the definition and are eligible for fee waivers as established by City Code, the Land Use Code, and the Intergovernmental Agreement. (Attachment 3) The City has established affordable housing production goals in the 2015-2019 Affordable Housing Strategic Plan (AHSP). The need for financial support for these goals to be met is also stated in the Plan as well as in City Plan’s Policy LIV 8.3 Offer incentives to “offset the costs of City’s impact fees” and the City Strategic Initiative NLSH 1.1 Improve access to a broad range of quality housing that is safe, accessible, and affordable The annual production goal set by the AHSP is 188 units. This project’s 96 units are 51 % of the City’s goal. Since the City does not develop housing, development partners are relied on to bring this necessary housing product to the community. This project will increase the inventory of affordable rental units which are one of the strategies listed in the AHSP. Under Colorado Statutes and City of Fort Collins ordinances and resolutions dating back to 1988, projects of housing authorities are exempt from taxes and some fees. For many years, the City waived building permit and development review fees and some capital expansion fees for housing authority projects. Historically they had been small amounts. 2013 Waiver policy change In March 2013, City Council amended its policies on fee waivers for affordable housing to allow for more discretion in determining the kinds of housing authority sponsored projects for which City fees should be waived. This was after a large waiver was granted to a project that was being developed primarily by CARE Housing with the housing authority having only a very small interest. By adopting Ordinance No. 37, 2013, City Council limited the types of projects for which HC could ask for waivers. These projects are constructed for:  persons experiencing homelessness  disabled persons, Agenda Item 9 Item # 9 Page 3  or for households whose income is no greater than 30% of the area median income (AMI) of all City residents. Furthermore, these waivers will be granted at the discretion of City Council upon a determination that the proposed waiver will not jeopardize the financial interests of the City or the timely construction of the capital improvements to be funded by the fees for which a waiver is sought. This change also limited waiver eligibility to only the housing authority. City Council is currently considering changing this policy to allow all developers of units targeting households making no more than 30% AMI to be eligible to apply for these discretionary waivers. Funding for this $26.5 million project is a combination of city and state grants (including Disaster Relief funds), Low Income Housing Tax Credit financing, owner equity and conventional financing. Current pro formas rely upon these fee waivers to complete the project’s funding. The Affordable Housing Board (AHB) and the Council Finance Committee (CFC) support this waiver request. The City’s waiver policy has greatly limited the types of projects that qualify for waivers. This policy recognizes that households earning no more than 30% AMI cannot afford market rate housing in our City at this time. The average rent is currently over $1,200 a month. A one-person household at 30% AMI would need to pay 89% of their income to pay the average rent. A four-person household would need to pay 59% of their income to afford the average market rate. Ideally, renters would never pay more than 30% of their income on housing. Developers need public subsidy to produce housing that this demographic can afford. CITY FINANCIAL IMPACTS While Housing Catalyst delayed payment of most fees, some fees have already been paid to the City. Because of that an accurate accounting will need to determine the exact amount still owed by HC. The total waiver amount is $352,319. Of that amount, the Capital Expansion Fees of $292,345 will be reimbursed. Staff recommends that 25% of the current balance of the Affordable Housing Capital Fund, $112,500, be used to reimburse the capital expansion fees with the balance of that amount coming from General Fund reserves. BOARD / COMMISSION RECOMMENDATION The Affordable Housing Board and the Council Finance Committee support granting this waiver request. (Attachments 4 and 5) PUBLIC OUTREACH While extensive public outreach was done on the issue of waivers for the City’s Housing Affordability Policy Study and the Affordable Housing Strategic Plan, outreach beyond the AHB meeting and the CFC meeting has not been conducted specifically on this request. ATTACHMENTS 1. Location map (PDF) 2. Housing Catalyst Fee Waiver Request (PDF) 3. Intergovernmental Agreement- City Fee Waiver (PDF) 4. Affordable Housing Board minutes, October 5, 2017 (draft) (PDF) 5. Council Finance Committee minutes, October 16, 2017 (draft) (PDF) -1- ORDINANCE NO. 142, 2017 OF THE COUNCIL OF THE CITY OF FORT COLLINS WAIVING CERTAIN FEES FOR HOUSING CATALYST’S VILLAGE ON HORSETOOTH AFFORDABLE HOUSING PROJECT AND APPROPRIATING PRIOR YEAR RESERVES IN VARIOUS CITY FUNDS TO PAY SPECIFIED FEES WHEREAS, Housing Catalyst (“HC”), also known as the Fort Collins Housing Authority, was formed by the City Council in 1970 pursuant to the authority contained in Section 29-4-101, et seq. of the Colorado Revised Statutes, for the purpose of providing affordable, safe and sanitary housing in the City that is within the means of families of low or moderate income; and WHEREAS, by adoption of Ordinance No. 065, 1999, the City Council exempted from the imposition of the City’s capital improvement expansion fees the land development projects of housing authorities formed pursuant to the provisions of Section 29-4-101, et seq., and specified various other City fees from which such projects are also to be exempted; and WHEREAS, the financial impact of such fee waivers on the City can be substantial, depending upon the size of the project that is exempted, and whether the lost fee revenues need to be replaced by the City; and WHEREAS, on March 19, 2013, the City Council adopted Ordinance No. 037, 2013 (the “2013 Ordinance”), which made amendments to the City Code and Land Use Code limiting the types of projects for which HC could request fee waivers, and specifying that those waivers are to be granted at the discretion of City Council upon a determination that proposed waivers will not jeopardize the financial interests of the City or the timely construction of capital improvements to be funded by the fees; and WHEREAS, the 2013 Ordinance also authorized and directed the Mayor to enter into an intergovernmental agreement between the City and HC documenting HC’s intent to limit future fee waiver applications to affordable housing projects that meet the criteria established by such Ordinance (the “Intergovernmental Agreement”); and WHEREAS, the Intergovernmental Agreement was executed on July 3, 2013; and WHEREAS, the 2013 Ordinance states that the City Council can waive, by ordinance, fees that would otherwise be imposed for an affordable housing project wholly or partially owned by a housing authority only if the City Council determines that: (1) the proposed project is intended to house homeless or disabled persons, as such terms are defined by the Department of Housing and Urban Development (HUD), 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, as published by HUD; and (2) the proposed waiver will not jeopardize the financial interests of the City or the timely construction of the capital improvements to be funded by the fees for which a waiver is sought; and -2- WHEREAS, HC is seeking the waiver of certain development and capital improvement expansion fees for the Village on Horsetooth, a 96-unit affordable housing community being constructed at 1506 West Horsetooth Road in Fort Collins (the “Project”); and WHEREAS, HC is constructing the Project on property it acquired from the City as part of the City’s Affordable Housing Land Bank Program; and WHEREAS, the City has established affordable housing production goals in the 2015-2019 Affordable Housing Strategic Plan (Plan) with an annual production goal for this five-year plan of 188 units; and WHEREAS, the Project will deliver 96 units, 51% of the City’s annual goal for new affordable housing units; and WHEREAS, 43 of the Project units (or 45% of the total development) will be dedicated to households making no more than 30% of AMI; and WHEREAS, HC is therefore requesting waivers totaling $352,319, which represents 45% of the total waivable Project fees based on the number of units eligible for such fee waivers; and WHEREAS, the Project is partially owned by HC, as HC is the sole member of a limited liability company that has a .009% ownership interest in a limited liability, limited partnership that owns the Project; and WHEREAS, the Project fits the definition of a project eligible for fee waivers under the City Code and Land Use Code as amended by the 2013 Ordinance, and the Intergovernmental Agreement; and WHEREAS, City Finance staff has determined that waiver of these fees will not jeopardize the financial interests of the City or the timely construction of the capital improvements to be funded by the fees for which the waiver is sought; and WHEREAS, HC has already paid certain building permit and development review fees, for the Project, and if the City Council approves the waiver request City staff proposes offsetting the amount that would be due as a refund to HC against the remaining Project fee amounts still due from HC; and WHEREAS, if City Council grants the fee waivers, staff is requesting the appropriation of $292,345 from General Fund reserves and the Community Capital Improvement Fund to cover the capital improvement expansion fees waived, as follows: General Fund $179,845 Community Capital Improvement Fund $112,500 Total $292,345 and WHEREAS, Article V, Section 9, of the City Charter permits the City Council to -3- 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, City staff have determined that the appropriations as described herein are available and previously unappropriated in the various funds. 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 45% of the Project is 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, as published by HUD. Section 3. That the City Council further finds that the fee waiver requested by HC will not jeopardize the financial interests of the City or the timely construction of the capital improvements to be funded by the fees for which a waiver is sought. Section 4. That the City Council hereby approves the waiver of $352,319 in fees that were previously paid to the City or would otherwise be payable to the City upon the issuance of building permits for the Project, consisting of: Development Review Fees $ 17,296 Building Fees 35,922 Capital Improvement Expansion Fees 292,345 Utilities - Stormwater Review Fee 6,756 Total $ 352,319 Section 5. That there is hereby appropriated for expenditure from reserves in the General Fund the sum of ONE HUNDRED SEVENTY-NINE THOUSAND EIGHT HUNDRED FORTY-FIVE DOLLARS ($179,845) to cover a portion of the waived Capital Improvement Expansion Fees for the Village on Horsetooth Affordable Housing Project. Section 6. That there is hereby appropriated for expenditure from reserves in the Community Capital Improvement Fund the sum of ONE HUNDRED TWELVE THOUSAND FIVE DOLLARS ($112,500) to cover a portion of the waived Capital Improvement Expansion Fees for the Village on Horsetooth Affordable Housing. -4- Introduced, considered favorably on first reading, and ordered published this 7th day of November, A.D. 2017, and to be presented for final passage on the 21st day of November, A.D. 2017. _________________________________ Mayor ATTEST: _____________________________ City Clerk Passed and adopted on final reading on the 21st day of November, A.D. 2017. _________________________________ Mayor ATTEST: _____________________________ City Clerk