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HomeMy WebLinkAbout03-25-2010 Housing & Community Development Commission REVISED AGENDA HOUSING AND COMMUNITY DEVELOPMENT COMMISSION CITY HALL, EMMA HARVAT HALL 410 E. WASHINGTON STREET, IOWA CITY THURSDAY, MARCH 25, 2010 6:30 P.M. 1. Call Meeting to Order 2. Approval of the March 11, 2010 Minutes 3. Public Comment of Items Not on the Agenda 4. Staff/Commission Comment 5. Discussion of the FY10 HOME/CDBG allocation to The Housing Fellowship . Recommendation to Council per the Unsuccessful or Delayed Projects Policy (Additional correspondence received 03-22-10) 6. Discussion Regarding FY11 Community Development Block Grant (CDBG) and HOME Investment Partnership Program (HOME) Requests . Discuss FY11 CDBG\HOME Applications . Develop FY11 CDBG\HOME Budget Recommendation to Council 7. Adjournment 1 ~ 1 -"""'= -....!t ....---.... !~~~ ~ ~..., -,:. CITY OF IOWA CITY MEMORANDUM - TO: FROM: DATE: RE: Housing and Community Development Commission Tracy Hightshoe, Community Development Planner March 16, 2010 March 25 HCDC Meeting Enclosed are the revised allocations for your review. There were no changes to the ranking worksheets. At the March 25 meeting, HCDC will allocate the funds available to FY11 CDBG/HOME applicants and then forward this recommendation to the City Council for consideration. Unfortunately, at the time of this mailing HUD has not determined the HUD entitlement amounts yet. The Commission will need to consider if there is a change in the anticipated funding amounts, how to formulate the final budget recommendation to Council. This could be accomplished witlh a motion such as if the final budget is within 0-5% of the anticipated budget, the increase or decrease is pro-rated to each eligible, funded activity, or a specific activity, if over a 5% change, the commission will meet again to discuss. On the agenda, there is also an litem for the FY10 The Housing Fellowship - Affordable Rental project. The Housing Fellowship received $$220,000 ($191,671 HOME, $28,329 CDBG) to acquire land to construct affordable rental housing to be part of a Low Income Housing Tax Credit application. In FY10, The Housing Fellowship was the only Certified Housing Development Organization (CHDO) to receive funding. Our FY10 CHDO requirement was $102,354. The Housing Fellowship was not able to apply for L1HTCs by March 15, 2010, the Iowa Finance Authority deadlinE~. Based on the Unsuccessful or Delayed Projects Policy, HCDC must recapture the HOME funds and a recommendation be made to City Council for the re-use of the funds. According to the City Attorney, HCDC may recommend funds to a different project or may recommend the re-use of the funds to The Housing Fellowship. Since these are FY10 HOME funds, the funds must be committed to a project by July 31, 2011. As a reminder, to commit HOME funds means that a site location is known (and approved), the environmental review is done and an agreement for the use of funds has been entered with the City. The HOME recipient has up to 5 years to spend the funds. The March 25 meeting begins at 6:30 pm at City Hall, Council Chambers (Emma Harvat Hall). If you are unable to attend, please call me at 356.5244 or contact me by email at tracy- hig htshoe@iowa-city.org. MINUTES HOUSING AND COMMUNITY DEVELOPMENT COMMISSION MARCH 11, 2010 - 6:30 PM EMMA HARVAT HALL, CITY HALL MEMBERS PRESENT: MEMBERS ABSENT: STAFF PRESENT: OTHERS PRESENT: PRELIMINARY Andrew Chappell, Andy Douglas, Charlie Drum, Jarrod Gatlin Holly Jane Hart, Michael McKay, Brian Richman, Rachel Zimmermann Smith, Rebecca McMurray Tracy Hightshoe, Steve Long ThE! Housinq Fellowship: Maryann Dennis, Charlie Eastham Mavor's Youth Employment Proqram: Roger Lusala, Kim Downes, Katie Lammers Carinq Hands & More: Bruce Teague Dolphin International: Rafael Crespo BBSJC/lSU Extension: Gene Mohling, Scott Hansen Crisis Center of Johnson County: Beth Ritter Ruback ThE! Free Medical Clinic: Sandy Pickup ISI~~: Yolanda Spears, Ladiester Lamaster Iowa Valley Habitat for Humanity: Mark Patton Iowa City Housinq Authority: Steven Rackis RECOMMENDATIONS TO COUNCIL: (become effective only after separate Council action): None. CALL TO ORDER: The meeting was called to order by Chairperson Brian Richman at 6:35 p.m. APPROVAL OF THE FEBRUARY 10.11. & 16. 2010 MEETING MINUTES: Richman noted that the meetings on the 10th and 11 th consisted of the site visits done by the Commission. The meeting on thEl16th was the most recent formal meeting. Zimmermann Smith motioned to approve the minutes. Gatlin seconded. The minutes were approved 8-(1 (McMurray absent). None. PUBLIC COMMENT OF ITEMS NOT ON THE AGENDA: HOUSING AND COMMUNITY DEVELOPMENT COMMISSION MARCH 11,2010 PAGE 2 of 19 STAFF/COMMISSION COMMENT: Long handed out a map and gav1s an update on the Single Family New Homes Program. He explained that this is a program funded by CDSG flood recovery money. The intent is to replace the homes being bought out and demolished as part of the City's flood mitigation program. The State awarded the City funds to construct 77 homes throughout Iowa City. Long said that the City is now in round two of the project; 40 homes have already been constructed. The map outlines the locations and price ranges of the homes in phase two. Long said there are 19 homes priced under $150,000 and 18 priced under $180,000; the homes are scattered pretty evenly throughout the city. He said that construction on the second phase should begin sometime in May. Hightshoe said that the City received $1.7 million for round two. She said that income-eligible homebuyers will receive 25% off the acquisition of the home. Hightshoe said that there is currently not a wait list; but that once the program is ready for applicants they will do a press release and get the word out through the City website and through lenders, realtors, etc.... She said they must wait to advertise untillDED approves the development plan. Long provided an update on the UniverCity Neighborhood Partnerships Program, a program funded through I-Jobs in which the City and the University are partnering to acquire 20 homes that are currently rental properties close to downtown and campus. The program will renovate those homes with up to $50,000 in assistance (in the form of a forgivable loan) and then sell them as affordable homes, giving first priority to people who work in the downtown area or at the University of Iowa. Long said the first three homes were acquired this week. Hart asked if the targeted rental properties were single family rental homes. Long said that they have been to- date. Hart asked if this meant that the program was not taking one or two bedroom units off-line by converting houses with multiple units in them. Long reiterated that the first three had been single family rental units. Hart asked if there was a plan to ensure that the number of one and two-bedroom units available downtown would not be cut into by this conversion program. Long said that it was a good point and that it was unlikely that would occur since homes with multiple units are much more expensive than single family rental homes. He said that in order to acquire homes that can then be sold to income-eligible households, the cost of the unit must be relatively low. He said that it has been difficult to find inexpensive enough units. Long said that University employees can reCeiVE! up to $5,000 in down-payment assistance. He said that the first three properties purchased were located at 1207 Muscatine, 517 S. Governor and 310 Douglass Court. The price ranges had been $85,000-$180,000. He said he believed a good range of housing options were available in these properties. Hightshoe noted that part of the program was intended to invest in the neighborhood and get the housing stock in better condition. Long said that typically the targeted neighborhoods have more than 50% rental properties. Long said the goal is to keep the ratio of homeowner-occupied to rental-occupied fairly even. Hightshoe said that City Council did not approve The Housing Fellowship's (THF) site acquisition of 2500 Muscatine. Hiightshoe said that if the current policy is enforced, and if THF has not applied for low-income tax credit status by March 15th, then the $220,000 FY10 allocation to THF will be out of compliance. Hightshoe said that at the March 25th meeting, the Commission would then need to make a recommendation to either leave the funds with the THF project, or recommend a specific project the Commission would rather the funds went to. Hightshoe said she believed that $191,671 were HOME funds and about $28,329 were CDSG funds. In response to Richman's questions at a prior meeting regarding the future of the Low Income Housing Tax Credit program, Hightshoe said that she spoke with an Iowa Finance Authority HOUSING AND COMMUNITY DEVELOPMENT COMMISSION MARCH 11,2010 PAGE 3 of 19 (IFA) low-income tax-credit analyst. Hightshoe said she was told the project would keep moving forward as it is an Internal Revenue Service program. The analyst said that when the value of the price drops, gaps in financing occur, so the federal government created a program providing $72 million in gap financing this year, and plans to expand it for next year. Richman noted that there are no FY11 tax credit projects applying for CDBG/HOME funding. Hightshoe informed the Commission that the City Council also did not approve the revised Unsuccessful or Delayed Projects Policy. Hightshoe advised Commissioners that a copy of The Iowa City Housing Authority's (ICHA) annual report has been included in the HCDC packet and will be an agenda item at a later date. Hightshoe noted that the map in the Commissioners' packets shows all ICHA public housing units, rental units, transitional shelter, elderly rentals, and project-based rental housing. Hightshoe said that the only low-income housing not indicated on the map was Section 8 rental housing, and that is because it is a snapshot in time. Because Section 8 tenants live in units owned by private landlords, the location of any given Section 8 assisted household is variable. Hightshoe noted that HOME-assisted projects cannot refuse a tenant solely because they are Section 8 voucher holders. She said the map is intended to be a reference for future conversations. Hightshoe updated Commissioners on the Extend the Dream project. Hightshoe said that conflict of interest provisions under CDBG/HOME rules are very strict. As a result, Lepic Kroeger would not be able to accept any commission on the sale because the Board President is affiliated with the company. The original application was for a Public Facilities project, with no rental unit included in the application. Because of this, if the Commission recommends funding the space it must be used as strictly commercial space; no one can live there. Hightshoe noted that the applicant can always approach City Council directly after the Commission has made its recommendation and ask that the rental unit be allowed; however, the rental unit would have to be occupied by one of the business managers, and that business manager would have to be low-to-moderate income. Another condition for funding would be that Extend the Dream would have to institute new procedures for separation of financial duties. Hightshoe said that their financial auditor had said that he would come up with some strict recommendations for Extend the Dream sometime after April 15th. Hightshoe said it was likely that staff would make sure those recommendations had been in effect for a couple of months before releasing any funds to the organization. Hightshoe said that all of these matters had been discussed with Extend the Dream, and that staff is awaiting their response. She said that the response is expected prior 0 the Commission's March 25th meeting. Hightshoe said that she believed any other information that had been requested by the Commissioners could be found in their packets. DISCUSSION REGARDING FY11 COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) AND HOME INVESTMENT PARTENERSHIP PROGRAM (HOME) REQUSTS: Richman noted that there are two meetings left for the allocation cycle: tonight's meeting, and the March 25th meeting. He said that the meeting on March 25th will be to finalize allocations. Commissioners received a table outlining the suggested allocations and rankings for individual projects as proposed by each Commissioner. The purpose of this meeting is to discuss these proposed allocations and the thought-processes that went into them. Richman explained that new allocation forms would then be completed by Commissioners prior to the next meeting. Hightshoe said she would distribute new allocation forms to the Commissioners. Richman HOUSING AND COMMUNITY DEVELOPMENT COMMISSION MARCH 11,2010 PAGE 4 of 19 noted that typically Commissioners had not re-done their ranking sheets, but that they did generally move dollars around on their allocation sheets. Hightshoe explained that the recently revised CITY STEPS is what guides this funding cycle. She said that in that plan priorities were established as being high, medium, or low. Hightshoe said she had taken the Commissioners' ranking sheets and identified the high score, low score, the range and the average score. She said that CITY STEPS states that allocations will be based on priority, with the high priority items being funded first, then moving on to medium priorities, and lastly, if funding remains, the low priority items. Hightshoe said that the category rank was transposed to average allocation, and that that is what order the items are listed in. HOUSING ACTIVITIES: Richman asked if anyone wished to offer any comments as to how they had approached funding Housing Activities. Zimmermann Smith said that she had two main concerns in her allocation approach, one project-specific, and one more general in nature. First, she had specific concerns about the rental aspect of the UniverCity Neighborhood Partnerships Program. She said that it had been her impression that this was a homeownership program, as it had been promoted on the City's website and in the newspaper as such. She said that she was wondering about the shift in focus from homeownership to rental. Long said that the program was designed to stabilize neighborhoods in the downtown and University areas. Long said the current website focuses on the I-JOBS homeownership grant application, though the UniverCity program is much broader and includes the support of well managed affordable rental properties close to downtown and campus. He said the I-JOBS grant is focused strictly on homeownership, and that has sort of clouded the overall theme of the UniverCity message; but the whole idea is to provide safe, decent, affordable housing downtown whether it be rental or owner-occupied. Zimmermann Smith noted that all of the publications on the City's website focus on homeownership. Long said that actually the first part of the website focuses on the overall broad UniverCity program and the rest of the website focuses on the I-JOBS grant, but agreed that it is difficult to distinguish. Zimmermann Smith said that the more general issue she was concerned with involved the school district's efforts to redistrict. Zimmermann Smith said that some of the applications involve projects that could impact the free-and-reduced lunch percentages for schools in the project areas. Zimmermann Smith said that this concerned her not only because she is a parent of child in the school district, but also because she would like to see City Council and the School Board get together to come up with creative ways to disperse some of this housing. Zimmermann Smith said that none of the applicants, with the exception of Isis, have agreed not to purchase property in the two tracts identified in the 2007 map as having concentrations of low-income housing. She noted that Horace Mann is within the boundaries of the UniverCity Program, and that the school currently has a 55% free-and-reduced lunch population, which is approximately 20% above the district average. She said that if the Commission puts more low- income housing in that area and the school district does not wind up redistricting, the free-and- reduced population could become even greater at that school. She said that one redistricting option before the School Board lowers the free-and-reduced lunch population at Horace Mann to 13%; if that option was adopted, then the UniverCity Program could be a great option for that area. Zimmermann Smith said she would like to send a message to the City Council to take such issues into consideration when they are approving funding for projects, and that is why she funded various rental housing projects at zero. Long noted that City Council guidance for HOUSING AND COMMUNITY DEVELOPMENT COMMISSION MARCH 11,2010 PAGE 5 of 19 HCDC is based on location. Zimmermann Smith said she would like Council to provide more updated guidance in light of what is going on locally with other governmental organizations. Long asked if it was correct that free-and-reduced lunch was set at poverty level. Zimmermann Smith said she believed so. Steven Rackis of ICHA said that that information is in the ICHA pamphlet that had been distributed to Commissioners. Long said that to qualify for free-and- reduced lunch he believes that a family has to be at or below 30% of the median income; all HCDC-funded projects would be at or below 60% of the median income. Zimmermann Smith said that there are some statistics in the pamphlet that indicate that most of the program participants qualify for free-and-reduced lunch. Hightshoe said that that pamphlet refers to Section 8 clients, which is a different program. Rackis said that Zimmermann Smith was touching on a hot button issue. He said that the press and the school district would have people believe that all kids on free-and-reduced lunch are in assisted housing, affordable housing, or low-income housing. He said that the ICHA report shows that there are 1,200 kids on the Section 8 program. Of those 1,200 children, 1,100 are eligible for free-and-reduced lunch, though it is not known whether or not they have actually applied for it or received it. Rackis said that even if every eligible child on Section 8 did receive free-and-reduced lunch, that number still only represents one-third of the total number of children on free-and-reduced lunch in the Iowa City School District. This means that over 2,000 children throughout the community participate in the free-and-reduced lunch program and do not receive Section 8 rental assistance. Rackis said that the notion that free-and-reduced lunch equals assisted/affordable housing which equals bad test scores is not a notion that is supported by any facts. Zimmermann Smith said she had made not contentions about test scores. However, Zimmermann Smith said, there is a direct impact of free-and-reduced percentages on schools. She said this is not because the children are bad kids, but that there are quantifiable effects of high free-and-reduced populations. Rackis said that there is no cause and effect between free-and-reduced lunch and low test scores. Zimmermann Smith said she was not interested in debating free-and-reduced lunch; rather, it is obvious to her that the City Council is concerned about these issues at some level or they would not have had the 2007 map drawn, which happens to include a couple of schools with high populations of children eligible for free-and-reduced lunch. Zimmermann Smith said she was not trying to start a big argument, she simply wanted people to take this under consideration, and she wanted City Council to think about it. She said that it is frustrating as a citizen to see bodies of government failing to communicate on these issues, and failing to come up with more comprehensive plans for resolution. She said this was the rationale she used in awarding zero allocations to the projects she did. Charlie Eastham of THF said that his recollection of the HCDC guidelines for housing funding was that they said nothing at all about the school district. Rackis noted that the original 2007 map did allow for affordable housing in Census Tract 18, the Grant Wood neighborhood; however, City Council did not adopt that recommendation. Richman asked if anyone else had guiding principles they would like to discuss, or if the discussion could move into individual projects. No one offered comment so the discussion moved to the Shelter House/NAMI rental project. Shelter House/NAMI . Rental ($200.000 reauest): Richman noted that on this project he was somewhat of an outlier, saying that it looked as though most everyone but he and McMurray had funded the project at a high level. Richman said his primary concern with this project was the fairly high per-bedroom cost of $33,000. He said the model was an interesting one, but it was a new model for the community, which also impacted his decision. He said he is certainly in favor of new options for addressing problems in the community, but that the novelty of this idea was a bit of a concern for him. HOUSING AND COMMUNITY DEVELOPMENT COMMISSION MARCH 11,2010 PAGE 6 of 19 Chappell said the novelty was not an issue for him, though he respected Richman's concern. He said that he recommended full funding for the two projects for which his numbers were highest. To an extent, he then tried to recommend funding proportional to his rankings. He said that the cost per bedroom, while high, did not seem inordinate to him. Chappell said that this project was one of the few that he thought was offering something a little more innovative. McKay said he felt somewhat the same as Chappell. Additionally, he said that this group was putting up about half the funds themselves, and had demonstrated success in the past. He said he also liked the target population for this project. He said this population is one that every community struggles with and that this seems like an innovative approach. Richman asked if this was a project that would work with less than full funding. Hightshoe said she believed so. Long said that their application said that the project could proceed with less than full funding. He said their application listed three priorities depending on the level of funding, which are: first, property purchase; second, site development through partial building rehab; and lastly, completion of rehab. Richman asked if Hart or Douglas cared to share their thoughts on the program as they had only partially funded it. Hart said that while the project came out highly rated for her, but that does not in and of itself make it worthy of funding. She said that she too is highly impressed with the level of funding support the applicant is able to secure on its own, as well as its proven success in being able to manage these projects. She said she had concerns about fully funding the project from the perspective that Shelter House had been heavily funded in recent years in order to complete their new facility. She said that her thinking was to provide enough funding to keep the project going, while still spreading funding around to other projects and agencies. She said she was open to funding at a higher or lower level if need be. Douglas said that he pretty much agreed with Hart's statements. He said he could have given more as he feels it is a great project. He said the project is especially important as it seems to be the only one focusing on mental illness and homelessness during this funding cycle. He said he could conceivably go higher on his allocation. There were no further comments on the Shelter House/NAMI application, and discussion moved to Isis Investments. Richman noted that as the Commission works through the allocation worksheet, items/projects can certainly be revisited if need be. Isis Investments, LLC - Rental ($250,000 reauest): Hart said she had a question about the Isis application. She said that she did not fully fund Isis as she was trying to spread the money around. She said she noticed that the project targeted the 0-30% income range, and that she was interested in knowing if there had been any success in the program at getting people at that income level into homeownership. Yolanda Spears spoke on behalf of Isis Investments and said that at this point the focus was still on building their clients up so that they could reach a level at which homeownership was possible. Hart asked if the idea was that presently Isis rented to people at that income level with the plan of selling the home to the renter in the future. Spears said this was correct. Spears said that Isis works closely with their renters, building relationships and trust. She said that the program counsels clients on finances, credit, and other aspects necessary to homeownership, as well as offering a wealth of services and referrals on other topics that help maintain successful families. HOUSING AND COMMUNITY DEVELOPMENT COMMISSION MARCH 11,2010 PAGE 7 of 19 Gatlin said that while he did not fully fund Isis, it is a project that he really likes. He said he is impressed with their philosophy of relationship building, and the idea of investing not only in the community but in the individual as a means of getting the family out of the rental track and into homeownership. Richman said that one of the things he likes about this project is that it gets affordable units on- line quickly. Because it is an acquisition and rehab project there is no long construction or financing period. He said that this fact, in addition to the populations served and the services offered, carries a lot of weight with him. Drum said he has always been impressed with the success of Isis. He said their past successes score very highly with him. Richman noted that Zimmermann Smith allocated zero to this project. She said that the reasons were the same general ones she had given at the outset of the Housing Activities discussions. Zimmermann Smith said that she understood that Isis had actually put into their application that they would try not to put projects in the two census tracts discussed. However, she feels there still needs to be some more guidance from Council. Hightshoe said that Isis has followed the Council-directed map in all of their projects to-date. Zimmermann Smith said she had noticed that and does believe that this is a good project. Iowa City Housing Authoritv/Domestic Violence Intervention Program. TBRA ($40,OOO reQuest): Richman said this was the one project on which there seemed to be universal consensus on fully funding it, something he did not believe had ever happened on a Housing project during his time on the Commission. There was no further discussion on the matter. The Housing Fellowship - CHDO Operating ($40,OOO reQuest): Richman noted that there is a fixed limit on what can be allocated for THF's CHDO Operating expenses of 5%, which is approximately $40,000 this year. Chappell said he did not recommend any funding for operating expenses for either THF or Isis. Chappell said that it was not clear to him if the Commission was required to spend some of its funds in this manner or not, noting that he would obviously adjust his allocations if required. Chappell said it seemed to him that both of those organizations seem pretty well established. He said that in response to staff questions as to whether or not the operating funds would continue to be requested, THF had indicated that they would continue to apply for operating expenses because the federal regulations say that this is a good thing to fund. Chappell said that in comparison to the other projects, operating expenses did not rank as high for him. Hightshoe said that the Commission did not have to spend 5% of its allocations on CHDO operating expenses. Chappell said that he did recommend funding for both of the projects for those organizations. just not the operating expenses. Chappell said that he assumes that there is some level of operating expenses built into the budgets for the projects. Hightshoe said there is now; in the past there had not been. Long noted that CHDO operating expenses are used for more than just one individual project; they are for the entire entity. Long said that while funding CHDOs is not mandatory, it is strongly encouraged by the Department of Housing and Urban Development (HUD). Additionally, The Affordable Housing Market Analysis completed three years ago encourages the City to support CHDO operating expenses. Hightshoe said that when the City began administering the HOME program, a lot of affordable housing was funded without developer fees and with as minimal funding as possible for operating expenses. Over time, Hightshoe HOUSING AND COMMUNITY DEVELOPMENT COMMISSION MARCH 11,2010 PAGE 8 of 19 said, that philosophy strained the organizations. She said that 15% of funds have to be allocated to a CHDO; in Iowa City there are two: HACAP and THF. Allocating to CHDO operating expenses does not affect your requirements under the HOME program. Hightshoe said that the City does try to support the CHDOs that it has. She said Cedar Rapids had only one CHDO and it went bankrupt. Hightshoe said she had discussed this with some Commission members in the past, but that the City does try to encourage CHDO development because there are only two. Hightshoe said some communities in Iowa only have one CHDO, and they fund the same organization every year. Hightshoe asked if that had answered Chappell's question. Chappell said he had not really had a question; rather, he felt he should offer an explanation as to why he opted not to fund the request. Richman said that when THF first began requesting operating expenses three or four years ago he had been not terribly enthusiastic about it. Over time, he has concluded that there are two ways that HCDC supports operations and future development initiatives at THF. One way is through HOME funded operating expenses, and another is through the developer fees associated with specific projects. Richman said that in a lot of ways he feels like the direct CHDO allocation is a lot more transparent than the developer fees, and he likes that aspect of it. The Housina Fellowship - Rental ($682.443 reQuest): Gatlin said that in some ways he believes more in the rental programs than in the homeownership programs, and that this guided some of his funding decisions. Gatlin said that THF has a history of doing a good job with rental properties, and that is why he allocated a large amount to this project. Richman said he had asked Hightshoe to prepare a sheet that outlined the terms requested by the various applicants which would indicate the proposed affordability periods and the proposed repayment terms (if any). Richman said that one of the things he likes about the THF rental project is that there is a relatively long 20-year affordability period, giving the Commission a long- term bang for its buck. Richman said he believes that nearly all of the projects this time around requested either no repayment or forgivable loans. He said that as he has expressed in previous years, he does have some concerns about that, and would like to see the Commission look at a developer's potential ability to pay back at least a portion of the allocated funds. Chappell said that the amount of funding he had allocated to the project was just a function of making the numbers work. McKay said that he ended up with an oddball number because he had looked at all of the projects and wanted to give this project as much as he could in balance with the needs of the other projects. Richman said that he and Zimmermann Smith were the only two people who did not allocate the full amount available for Housing Activities. He asked staff what the Commission was required to spend on Housing. Hightshoe said that the Commission is required to spend about $1.4 million on Housing. Zimmermann Smith pointed out that if the full amount is not spent then the money is reallocated. Hightshoe said that it can be reallocated, but the applicant has only two years to commit and the clock starts on July 31, 2010. The housing provider would have to find a site, do an environmental review, and enter an agreement within that timeframe. If that statutory requirement is not met, there is no going back to City Council, the funds are automatically recaptured by HUD. Hightshoe said that if there is a large amount of money that is not allocated, that becomes problematic and the Commission would be looking at a mid-year HOUSING AND COMMUNITY DEVELOPMENT COMMISSION MARCH 11,2010 PAGE 9 of 19 allocation. If the amount of money is smaller, then carrying it over for a year is not as problematic. Richman said that he guessed the concept behind not allocating all of the money is an underlying assumption that some other project is going to come along that is more worthy of funding, which of course mayor may not be the case. Dolphin Lake Point - Rental ($584.000 reauest): Richman invited discussion on the Dolphin Lake Point project. He noted that this project seemed to have Commissioners divided, with five Commissioners allocating no money and four Commissioners allocating some level of funding. He asked someone who had allocated to the project for comment. Chappell said that he liked the size of the units. He said studio apartments are not going to draw large numbers of people to congregate in them, they tend to target single parents or individuals. Chappell said he would like to see more money from other sources in the project, and that he was initially concerned by the for-profit status of the applicant; however, upon review he came to the conclusion that other for-profit entities had also been funded and been successful in the past. Chappell said that he was comfortable allocating the same amount of money for this project as had been allocated for the failed homeownership project. Chappell said that he also felt confident that the construction should be able to move quickly since the buildings were down to bare walls and they had done a lot of rehab in that area before. Drum said his concern was that the property was in the exact same state when he had toured it a year ago for the other project. He said the fact that the project is not moving at all is a concern to him. He said it was also a concern for him that the project has been given money in the past and was not successful enough to actually use it. He said that he understands that this is a different request and a different proposal, but it troubles him that they were not successful in the past. Gatlin said he is in full agreement with Drum. He said he did not have enough confidence in the organization to allocate funds to it. McKay said that he came at it from the angle that developers are sometimes successful and sometimes are not. He said that the fact that they came up on the wrong end of this project once was not reason enough to discontinue support forever. However, McKay said he also likes to see a developer bring some of their own money to the table, and he did not see that happening here. He said that Dolphin was requesting $584,000, but had not demonstrated that they were willing to risk any more of their own money. He said it just felt more like a bailout than an investment to him, and one that still did not have a high probability of success at that. Hightshoe said that some of these concerns may be the result of staff's directions to the applicant. She said that when the applicant was applying to the program, staff advised them against subjecting all 300-400 units to the requirements of the HOME program, and instead encouraged them to focus only on units they wished to have HOME restrictions on. The applicant chose to apply for funding on only one building. Hightshoe said they are continuing to rehab other buildings, and the reason they did not put a local match toward the HOME funded building is because they felt it would enable them to move more quickly with their other rehab projects. Long said that staff also advised Dolphin not to start construction until July 1 st because of the environmental review requirements. Long noted that there was a representative of Dolphin present if there were any questions from the Commission. HOUSING AND COMMUNITY DEVELOPMENT COMMISSION MARCH 11,2010 PAGE 10 of 19 Richman said he agreed with McKay's sentiments. He said he was concerned that this project seems to create a lot of affordable rental units in an area of town where there is not necessarily as much of a need for them. He said he respected that these are a different type of unit in that they are efficiencies and studios, which is an underserved market in the city. However, he had a hard time with the number of affordable rental units there. Douglas asked what Richman meant when he~ said there was not a need for affordable rental units in that area. Richman said that he did not know what the rental market rate was on that side of town, but he did not know how much subsidy is really needed for people who would want to live in these units. Chappell said he had thought about that too, however, in the end he figured that the units would wind up being affordable units in some way shape or form, so ultimately, denying funding would not change that there would be that number of affordable units in that area. Richman asked what the value of allocating money to the project would be if the units will be affordable regardless. Chappell said that it was his impression that the City wanted more affordable units. Douglas said he supports the project to a degree because it proposes to support the stock of affordable rental units which he feels is an important goal. He said that while there have been issues with the applicant in the past, this is a different project. Douglas said that the bottom line is that it would increase the number of long term affordable units in Iowa City. Hart said her thinking was in line with that of Douglas. She noted that the owners have been able to regroup from the homeownership model and are pursuing a more practical approach to fixing the units up for rentals. Richman asked the applicant if the proposed affordability period of ten years could be extended to a period of twenty years. Rafael Crespo, Dolphin International, said he was pretty sure that they would be open to that but would have to check. Richman asked Crespo to look into it and e-mail Hightshoe or Long. Crespo asked if he could address the Commission. Richman asked Commissioners if they were willing to hear from Dolphin and they indicated they would listen to a brief comment. Crespo said that the developers have invested about $150,000 into rehabilitation of that building to-date. He reiterated that work had stopped when they learned about the application opportunity. Crespo said that the initial project had failed because the prospective homeowners had failed to secure financing. He said that at one point the units had actually been sold, but that the banks did not want to get involved once the economy took a downturn so the buyers could not get financed. Richman said he did not want to get into an argument about what constitutes a "sold" unit, but that he went to this project and actually went through the files last year and what he saw was a lot of applications with un-cashed $100 checks serving as deposits. He said in his mind that did not really constitute a sold unit. He said that he felt there were a lot of issues with that project. Richman said that this project could be a particular challenge because half of the Commission voted not to fund the project at all. He said that as people go through the second round of allocations they need to consider whether they can get comfortable with either some level of funding or no funding at all. Habitat for Humanitv - Home Ownership ($190,000 reauest): Discussions moved to the Habitat for Humanity application. Gatlin said that he did not fund this project because he does not see a connection to the community after the home is created. He HOUSING AND COMMUNITY DEVELOPMENT COMMISSION MARCH 11,2010 PAGE11of19 said he is looking for more of a connection to the property as it relates to the community as a whole. Gatlin said it seems somewhat like Habitat puts up a house and then leaves as soon as they put a family in it. He said he just could not fund it on those terms. Douglas asked Gatlin if he could provide an example of what kind of ongoing support he was looking for. Gatlin said he was thinking long-term; he said that Habitat would likely not come back and rehab the house in five years or help pay for its upkeep. He said that it seems as though the program drops low- income housing into a neighborhood and makes no connection to the community beyond the initial purchase. Hightshoe said that Habitat does retain the right of first refusal, which allows Habitat to buy the home back from the homeowner if the homeowner decides to sell. Hightshoe acknowledged that the home is indeed the homeowners and not Habitat's once the sale is final. Mark Patton of Iowa Valley Habitat for Humanity noted that Habitat serves as the lender, as well as the developer; as a result, the home remains affordable for a twenty year period. Patton said the homeowner pays full property taxes, and is required to take homeownership classes for a full year after the purchase. Gatlin asked what Habitat's success rates were for having families remain in the home for ten or twenty years. Patton said that they have had one foreclosure out of 56 loans. He noted that Habitat feels the rankings are somewhat misleading as their program often charges less for a mortgage than would be paid in rent. There were no further comments on Habitat's project. Richman noted that Hightshoe would be putting together something on affordability terms and financial terms for Commissioners to review. He asked if she could indicate if repayment might be appropriate for a particular project, and whether she had recommendations for specific terms. Hightshoe said she could give general recommendations. There were no further discussions on Housing Activities. Long noted that those in attendance from agencies whose projects had already been discussed could leave the meeting if they wished, as their topics would likely not be returned to. PUBLIC FACILITIES: Mavor's Youth Empowerment Proaram -Facilitv Rehab ($97.237 reauest): Richman noted that a lot of Commissioners had funded the Mayor's Youth Empowerment Project (MYEP) at the mid-range level. Richman asked if anyone had comments for the way they funded these projects. Chappell said that all of his numbers were based on the scores. He said that in general he started off trying to have a specific formula, but that in the end he had to adjust them. He said the higher the score, the higher the percentage for funding for the most part. McKay said that in this case he looked at the applicant's priorities, knowing that there would not be enough money to fund all projects fully. McKay said that there are an awful lot of good projects, but that he tried to look at a fair distribution. Drum said he was guided for the most part by the scores, as well as how much of the money came from HCDC and how much came from elsewhere. He said that where partial funding would be of benefit, he tried to do so. In the case of MYEP, he said, they have already invested a tremendous amount of their own money already. HOUSING AND COMMUNITY DEVELOPMENT COMMISSION MARCH 11,2010 PAGE 12 of 19 Extend the Dream - Acquisition ($200,000 request): Richman said that this project and Big Brothers/Big Sisters both requested $200,000. He said that his take was that he could either fund one or the other, or split them. Richman said that most of the Commissioners came in at around $200,000 combined for the two projects combined. Richman said that he likes Extend the Dream and wants them to find a permanent home; however, it seemed to him that there were outstanding issues that were not going to be resolved prior to the Commission having to make decisions. That is the reason he allocated zero for this project. Chappell said he liked the project and the two projects Richman mentioned scored the highest for him. Chappell said he proposed funding Extend the Dream at a higher percentage because he got the impression that the Big Brothers/Big Sisters project was going to happen with or without funding from HCDC. He said he has the same concerns as Richman about Extend the Dream's application, and if the outstanding issues are not taken care of by next week his funding allocation will also be changed to zero. Hart said she based some of her allocations on what kind of public facilities work was being requested. She said that having tripped on one of the requested items, some of them seemed like actual safety issues, and it is those to which she gave priority. Chappell said that it had seemed to him that Extend the Dream would not be able to go through with their project without HCDC funding. Richman asked if it was correct that Big Brother/ Big Sisters was moving forward regardless if HCDC funding. Chappell said that was his impression from the timelines they presented. Gene Mohling of Big Brothers/Big Sisters said that they would be waiting until they have word on the annexation application before proceeding. He said there would be no construction prior to July 1 st. Scott Hansen of Big Brothers/Big Sisters commented that it has been a long process for them to get into this new facility. He said that over the past eight years the program has gone from serving 200 kids to serving 800 kids annually. Richman said that one of the things he likes about this project is the number of people it serves. He said that it is a big investment, but it serves a large section of the community. Mohling said that there have been two years of planning to get where they are now. Chappell noted that while most Commissioners had allocated $200,000 for Big Brothers/Big Sisters and Extend the Dream combined, his allocations were closer to a combined $300,000 for the two projects. Douglas asked if it was known when the issues regarding the Extend the Dream project might be cleared up. Hightshoe said she had spoken with them last Friday. She said that Extend the Dream was weighing the money they could get from CDBG versus the money they would have to forego in rental income for the apartment, and considering their options. Hightshoe said staff had asked for an update on their intentions by no later than a week before March 25th. Long said there would definitely be some kind of resolution prior to the next HCDC meeting. Richman asked for clarification on the possible scenarios, asking if it was correct that Extend the Dream had to refrain from renting the apartment altogether or be granted an exception so as to rent the unit to one of the business operators. Hightshoe said that was the case. Hightshoe said that the outstanding issues were the financial management issues, conflict of interest regarding realtor fees, as well as the apartment and how it can/will be used. Richman said he kind of felt HOUSING AND COMMUNITY DEVELOPMENT COMMISSION MARCH 11,2010 PAGE 13 of 19 like the conflict of interest and financial management issues either would or would not resolve themselves regardless of HCDC action. Long said that the first order of business is that the person who has the listing has to agree to give it up and forego the commission. The second issue would be what the agency decided to submit to City Council, as far as a plan to deal with the apartment. The third issue is whether it is ultimately worth it for Extend the Dream to accept CDBG money at all. Hightshoe said that she felt like Extend the Dream liked the idea of keeping the unit as an apartment; however, if the Commission recommended funding, then they would ask the Council to consider allowing them to rent to low and moderate income folks. Richman said he still did not understand exactly what it was that City Council had to do if the Commission recommended funding. Hightshoe said that the Commission would be recommending funding and Council would review it. Extend the Dream would have to ask Council directly if they could be allowed to keep the apartment and lease it to one of the business managers. Richman asked why it was that the last step was necessary. Hightshoe said that the Legal Department had determined that once an application has been submitted it cannot be substantially changed. Because the application was for Public Facilities, only the Public Facility use can be funded. Richman noted that this would not affect how the Commission allocated its funding. Hightshoe said that was correct. Richman commented that having to lease the unit to someone who works on-site would leave a fairly limited tenant pool. Hightshoe said the same type of concept for a live-work building was done by Extend the Dream successfully on F Street. Hightshoe said this arrangement would be more restrictive than that model. DVIP - Facilitv Rehabilitation ($76.000 reQuest): Drum said that his scores came out very low for this project and for the Iowa City Free Medical Clinic project. Drum said that both of those agencies are among his very favorites in the community. He said that he is not a structural engineer, but he had a hard time seeing the amount of work that needed to be done as being so expensive. He said that this combined with the low score made him fund the project at zero. He said that he could easily be convinced to fund it higher, and that in previous years DVIP has been at the top of his list. Hart said that when she made her allocations she was hoping to fund a portion at least for DVIP and MECCA because both were safety issues. She said it was possible the estimate was high, but she really had no idea either way. Richman said that it is a lot of money, and the project did seem like one in which the allocation needed to be all or nothing. He noted that building half a ramp does not maintain or increase accessibility. He asked if the applicant was open to partial funding. Hightshoe said she would call DVIP and ask. She said they likely would not turn down funding. Richman said that given the size of the funding request that would be useful information. MECCA - Facilitv Rehabilitation ($15.850 reQuest): This request was for the replacement of the door, the concrete in the entryway, and the carpet. Hart said was that her thought was the carpet was not a dire situation, whereas the door and concrete seemed like serious safety issues. Gatlin said that he agreed with Hart and that the price of the projects made them very do-able. Douglas said that in comparing this project to some of the others the crucial nature of it had not jumped out at him as much as it had for other projects, so he had funded it at zero. He said he could be persuaded. HOUSING AND COMMUNITY DEVELOPMENT COMMISSION MARCH 11,2010 PAGE 14 of 19 Iowa City Free Medical Clinic - Facilitv Rehab ($97.975 reauest): Drum said that he had not been convinced that this was a project that had to be done this year. He said it is a compelling project and if more money was available he could see funding it, but that he could not see the urgent need for the space to be converted. Zimmermann Smith said that she had felt the same way, and that she too thought the world of Sandy Pickup and the Free Medical Clinic, but that given some of the needs of the other applicants, this did not seem as critical. Drum said that another factor for him had been the potential redevelopment of the Towncrest area, and the uncertainty surrounding the area's future. Richman said that any redevelopment was presumably pretty far down the road. Hightshoe said that was correct. She said it could be several years before any major redevelopment was seen in that area. McKay said that some of the things Free Med was trying to do with this project were going to have a positive impact on its operating costs, so he supported those aspects, while some of the other things could probably wait for another day. That was his rationale for partial funding. Chappell said that the project had received a low score from him. He said that he considered all of the Public Facilities projects to be worthy of funding. He said his recollection had been that Pickup had indicated some of the HVAC work could be done for about $30,000 and that is how he settled on his figure. Chappell said that he felt the site visit presentation clearly outlined the facility's priorities. Drum said he had not gotten that same sense from the site visit. Richman said that he wished to remind people that how much money is spent on the categories for Housing and Public Services is interdependent. If Housing is allocated beyond $1.4 million, then the amount of funding available for Public Facilities allocation is reduced; however, spending less than $1.4 million on Housing does not increase the amount of money available for Public Facilities. PUBLIC SERVICES: Richman noted that there were three projects where there seemed to be a broad consensus of opinion: The Crisis Center, Shelter House and EccoCast Communications. Richman reminded Commissioners that a policy had been adopted a couple of years ago that said a Public Service project would receive a minimum of $2,500 in funding; that being the case, the Commission can only fund four projects at most in this category. Douglas noted that the Free Medical Clinic falls in with the categories above as well as seven people supported funding for it. Richman said that he had just noted that Isis too had eight votes for zero funding. Hightshoe noted that if the Sheridan house sells before July 1 st, 15% of the sale price can be used for Public Services allocations. Long said that the price had just been lowered today, and that the sale could mean an additional $15,000. Hightshoe said that Commissioners could have that idea in the backs of their minds. Long suggested that the Commission might want to pick a second funding scenario for when the property sells. Hightshoe said that the rest of the money from the sale can go to CDBG eligible projects. Richman said that as it seems unlikely that the sale of the home would go through before City Council considers their allocations, it seems unnecessary to him to come up with two separate allocation scenarios. Hightshoe said that if HOUSING AND COMMUNITY DEVELOPMENT COMMISSION MARCH 11,2010 PAGE 15 of 19 the money is not allocated by July 1 S\ then the additional money for Public Services is lost. Richman asked if a separate meeting could not just be held, and Hightshoe said it could. Long said the Commission could consider as well if they wanted to have a completely separate funding round at that time, or if they wanted to just go with the same applications before them currently. Crisis Center - Operations ($10,625 reauest): Beth Ritter Ruback of the Crisis Center reminded Commissioners that the funding was for additional staff time for the emergency assistance program. Douglas said that he felt this was a good project to fund because of the distressed economy. Richman said that if one assumed that McKay would succumb to peer pressure, then it looks as though the Crisis Center and Shelter House would be two of the projects that would be funded at some level, which means that at most there would be two other projects to receive funding in this category. He noted that Douglas had pointed out there was fairly broad consensus on the Free Medical Clinic, although Hart and Drum had allocated that project at zero. Drum said he did not know what was wrong with him to do such a thing. Hightshoe said she needed to note that Isis is the one Public Service application that could possibly be funded under HOME, and thus would not count against the Public Service cap. Hightshoe said that the guidance she had received from HUD was very unclear, but that it seemed as though HOME-related tenant counseling could be covered under HOME funding. She said that Isis does provide a much broader array of counseling services, and those extra services could not be funded under the HOME program. Douglas asked if this meant that Isis would not be allowed to offer those additional services if they were funded under HOME. Hightshoe said it meant that HOME funds could not pay for those services. Richman noted that the following comment goes entirely against what he said about funding CHDOs earlier, but he wondered if Isis could not simply build in a developer fee. Hightshoe said he believed they did build in some developer fees. Chappell said the developer fee was only $7,000. Richman noted that it was too late for Isis to change their application. Long noted that in a manner of speaking the applicant cannot change the application at this point but the Commission can: if the Commission makes a recommendation to Council and Council approves it then the application is in essence changed. Hightshoe said that any developer would be glad to increase their developer fee. Long said that while the applicant cannot increase their total request, the Commission could recommend above the requested amount if they chose to. Douglas asked if Hightshoe was saying they could be funded under Public Facilities. Hightshoe said the funding would be under Housing as a HOME eligible activity. Richman said the Commission could certainly ask Spears if they would be interested in operating under those kinds of restrictions. He said that if they have a model that works he is disinclined to start putting restrictions on what a counselor can talk about with their client. Hightshoe noted that it is what the Commission can pay for that is restricted, not the services being offered. Spears said that it would simply be a matter of HCDC funding only the housing related counseling; there would be no change to their model, just how it was funded. Hightshoe said the project is completely CDBG eligible, it is just that moving the funding would remove them from the Public Services cap equation. Douglas asked if the Commission needed then to decide how to fund the request. Richman asked how Commissioners felt about it. Hart asked HOUSING AND COMMUNITY DEVELOPMENT COMMISSION MARCH 11,2010 PAGE 16 of 19 for clarification on whether moving the funding to Housing meant that this would subtract from the total available for Housing. Douglas said that it would. Richman said that in looking at the numbers for the Housing allocations, it seems unlikely that Isis would get the full $250,000 request; however, the Commission could recommend to Council that the developer fee be raised beyond what was stated in the application. Extend the Dream - Operations ($3,600 reQuest): McKay said he had been operating on assumptions in making his allocation for this project that he is no longer sure are valid. McKay said that if the larger project is still up in the air, then he could easily be talked into moving his allocation elsewhere in Public Services. Douglas said that Extend the Dream does come to the Commission pretty much every year for operations assistance. Hightshoe said they had requested operations assistance for 2006, 2007,2008, and 2009. Douglas said that the argument could be made that they are not moving toward becoming self-sustaining. He said he likes what they do. Hart said that to their credit, they have gotten through some rough spots, and have used funds to sustain and improve their business operations. She said she would certainly consider increasing her allotment. She said she hoped this part of their operation would continue to become more self-sustaining in the future. Chappell said he did not necessarily have strong feelings about any of these projects. He said that when he got to Public Services his high-minded attempts to fund according to his numbers went out the window and he got into spreading money around and comparing allocations in the other categories. Chappell said that frankly he had assumed that they would quickly figure out where consensus lay and work toward that. Zimmermann Smith said she went with basic human needs versus programs and operating costs. She said that Shelter House, Crisis Center and the Free Medical Clinic all provide basic human needs so she just divided it among those three programs. Richman asked if it would be useful to decide tonight whether to fund three or four Public Services in the final round. The Commissioners agreed to try to make that determination. Chappell noted that three Commissioners had funded three projects and six Commissioners had funded four projects. It was agreed to fund four projects in the Public Services category. Mayor's Youth Empowerment Proaram I FAS TRAC ($8,322 reQuest): Douglas said that as the agency applied for funding in another category in which they will likely be given quite a bit of money, he opted not to fund them in Public Services, where money is sparse. Arc of Southeast Iowa -EQuipment ($3,184 reQuest): Hart said she felt this was a really good project, but that she believed Arc would have a good chance of raising this amount of money for this purpose. The Free Medical Clinic - Operations ($10,OOO reQuest): _Richman said the relationship between their Public Facilities request and their Public Services request has been noted. HOUSING AND COMMUNITY DEVELOPMENT COMMISSION MARCH 11,2010 PAGE 17 of 19 EccoCast Communications - Operations ($8.320 reauest): Hart said she had funded this project knowing that they likely would not ultimately receive funding. She said she wanted to note that this is actually an important item that they are bringing up. She said that it will increase in importance in the future, and that she is very sorry that they did not show up to any of these meetings to discuss their application. Long noted that there was a representative present. Hart said she thought there was a possibility that this could be a good project but that she feared they would fall by the wayside because they did not provide enough information in support of their cause. She said that she hoped that even if they were not funded this year they would consider reapplying next year because she believes this service will become more critical. Amos Peterson, a representative of EccoCast, told the Commission he had brought pamphlets and materials to help answer any questions they might have. Richman asked staff if materials had been accepted from other applicants. Hightshoe explained that the materials Peterson had were in response to staff analysis questions, not questions brought up by Commissioners. Long said that in that case other materials would not have been accepted. Richman thanked Peterson but said the Commission could not accept the materials. Richman said that the next step was completing a new allocation sheet to be returned to staff by Tuesday, March 16th. Hightshoe said she would send out a blank allocation spreadsheet tomorrow. Chappell asked how consensus was generally reached on the allocations. He said that in an instance where he is the sole funder of a project and it is clear that others are not interested in moving his way he would likely back off and go with the group. He asked if this was generally the case, or if there were often holdouts. Richman said that this certainly is not the first time where half the Commission likes a project and half of it does not. He said that ultimately it is a matter of which side persuades the other of the project's worthiness of funding. He said that certainly there have been some contentious issues in the past, but that ultimately somebody gives some ground. Hightshoe noted that attendance is very important because every vote counts. Richman said there are some contentious issues every year, but that he felt like in some respects the second meeting was no longer necessary except as a means of shortening the third meeting. Several Commissioners expressed that they had found the second meeting to be very helpful. Hart said she did not recall a lot of contentious issues. Hightshoe said there is always a difference of opinion but that people are always respectful about it. Hart said she had been yelled at by some of the applicants before but not other Commissioners. Zimmermann Smith asked if the Extend the Dream would have cleared up their issues by the Tuesday deadline for turning in the new allocations. Long said staff would try to get clarification to Commissioners by Tuesday. Richman said that he is assuming they'll resolve the issues about the conflict of interest and the financial management. Gatlin commented that the realty commission would be tough to give up. Hightshoe said that Extend the Dream has to analyze what they currently pay against what they could pay. She said the mortgage in the new building would less than what they pay in rent now. Richman asked if Jeff Edberg is the listing agent on the property. Hightshoe said he is not, but he works there and is also the Board President for Extend the Dream. Richman said that Edberg is then charged with talking someone else into giving up that commission. Hightshoe said that was correct. She said the conflict of interest rules say that the director of the agency or any board member cannot benefit for a period of one year. Hightshoe said that if Edberg left the board today, the conflict of interest clauses would govern for a whole year. HOUSING AND COMMUNITY DEVELOPMENT COMMISSION MARCH 11,2010 PAGE 18 of 19 Drum said that before the meeting adjourned he wanted to apologize for being late but that it was due to an important and unavoidable personal matter. ADJOURNMENT: Zimmermann Smith motioned to adjourn. McKay seconded. The motion carried 8-0. The meeting was adjourned at 8:26 p.m. z Q en ~ ::z: ::z: o (.) I- Z Wo ::z:~ ...10 0.(.) Ow w~ > wwo o(.)e; ~~N -0 Zz ::)w ::Z:I- ~~ (.) o z c( C) z en ::) o ~ 't"'" W 't"'" X X X X X X ...... X X - 0 CO) cg 't"'" X X X X X X X X X - N co ~ X X X X X X X X X 't"'" N ...... 0 N 0 ...... ...... 0 N ::z:. ...... ...... ...... ...... 't"'" ...- ...- ...... ...... 0:::0.. 0 ...... ...... 0 ...... ...... ...... ...... 0 ~ ...... ...... N ...... ...- ...- ...... N w>< 0 0 ...... 0 0 0 0 ...... ....w ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... (j) (j) ...... (j) (j) (j) (j) ...... (j) 0 0 (j) 0 0 0 0 (j) <( 3: u w w u ::x:: 0::: >- Z ..J W !:: c <( !Xl Z C C W 0 W W <( :IE z ::::i .., <( Z 0::: >- 0::: ii2 en <( <( 0::: ::x:: 0::: ..J U ~ !Xl Z ..,j c:i <( <( ..J <( ..J ::x:: .., 0 :IE z :IE..J w U ::x:: 0::: <( D- ..J Z S 0::: O:::w W D- C) :IE ::::i ..= ::) :IE w::x:: :E <( ::) ::) ~ 0::: :E ::x:: :Eu <( ::x:: 0 0::: <( CJ CJ U ~~ Z U C C C) ::x:: :E :IE ii2 "'0 Q) ~ C/) Q) 13 OJ.o X c: E W:;::;Q) c:glE~ ~Q)~ro ~.2 0-0 o..c<zz II II II II ~ ~~: ~Ixoz : Housing and Community Development Commission Unsuccessful or Delayed Projects Policy Adopted by City Council March 2, 2004 in Resolution 04-68 From time to time there may be Community Development Block Grant (CDBG) and/or HOME Investment Partnership Program (HOME) projects that do not meet the anticipated schedule for implementation as presented to the Housing and Community Development Commission (HCDC). These circumstances may be due to unforeseen events (e.g. unfunded applications for other financing). HCDC recognizes the need to utilize CDBG, HOME and other funding as effectively and efficiently as possible to meet the needs of low-moderate income household for housing, jobs and services within Iowa City. To assist HCDC in evaluating a project's status and ability to proceed the following policy is hereby adopted to begin with Fiscal Year '04 projects beginning July 1, 2003: 1. All CDBG and HOME projects will have entered into a formal agreement with the City of Iowa City for the utilization of federal funds by September 30 each year. Should a recipient fail to meet this threshold, the project will be reviewed by HCDC to evaluate if extenuating circumstances exist. If extenuating circumstances exist and it is anticipated the project will proceed, a new timeline will be established for the completion of the project. If circumstances do not warrant an extension of time, HCDC may recommend the recapture and re-use of the funds to the City Council. 2. All CDBG projects (except applicants for L1HTCs) will have expended a minimum of fifty percent (50%) of the assistance provided for the proposed project by March 15 each year. This provides the recipient with approximately 255 days following the start of the fiscal year to reach this threshold for CDBG projects. All HOME projects will expend their funds on a timely basis per the applicable HOME regulation. Should a recipient fail to meet these thresholds, all unexpended CDBG/HOME funding will be recaptured by the City of Iowa City and recommendations be made by the HCDC for re-use of the funds or HCDC may allow the recipient to retain the funds for the previously approved project. 3. If housing projects are applying for other funds through various state or federal agencies, the recipient must apply for those funds in the first available application period offered. Should a recipient fail to meet this application threshold, all CDBG/HOME funding will be recaptured by the City of Iowa City and recommendations be made by the HCDC for re-use of the funds. 4. Should a recipient be unsuccessful in obtaining the funds listed in the application in the application round immediately following the allocation of local CDBG\HOME funds, and the project will not be able to proceed without the aforementioned funds, all CDBG/HOME funds will be recaptured by the City of Iowa City and recommendations be made by the HCDC for re-use of the funds or HCDC may allow the recipient to retain the funds for the previously approved project. If the project is unsuccessful in obtaining the required funds listed in the application after two consecutive funding rounds following the allocation of local CDBG/HOME funds, the City of Iowa City will recapture all CDBG/HOME funds. Fellowshi March 22, 2010 Brian Richman, Chair Housing and Community Development Commission City of Iowa City 410 East Washington Street Iowa City, IA 52240 Dear Brian and Commissioners: I am writing to ask the Housing and Community Development Commission recommend to the Iowa City City Council that The Housing Fellowship's (THF) FYI0 allocation of $220,000 for land acquisition for the construction of affordable rental housing be re-allocated to THF to be used for the same purpose. Due to circumstances beyond the control ofTHF, an application for low Income Housing Tax Credits was not submitted in the first available application deadline. As you know, successful affordable housing projects often Include several sources of financing. The City HOME allocation for land acquisition serves as the first step In a complex process of securing financing and complying with a myriad of regulations. THF has a competent development team that has been formed to ensure successful projects utilizing the complicated low Income Housing Tax Credit program and other sources of financing. Midwest Housing Equity Group, the tax credit syndicator and Foundations Development, the tax credit consultant recommended that THFA not submit an application. Please see the attached letter from Dan Garrett, Executive Vice-President of Midwest HousIng Equity Group. The collapse of the equity market as a result of the national economic crisis proved too risky for The Housing Fellowship to expend the extensive pre-development costs of the application. The Housing Fellowship followed the advice of our experienced partners. The FYI0 allocation provides enough time within the allowed HUD HOME time schedule regulations for a viable project - two years to commit and five years to complete. I am confident that THF can locate a suitable site and proceed with all applications and complete a successful project. Thank you for your consideration of this request. Sincerely, .~~ Maryann DennIs Executive Director UnIted Way of Johnson County ---._~ ~ ~.. MIDWEST HOUSING EQUITY GROUP INC. Marchi 7,2010 Rc: The Housing Fellowship - No Low Income Housing Tax Credit Application in 2oio. . . To Whom It May Concern- We havc been asked to advise those interested as to why The Housing Fellowship did not submit a Low Income Housing Tax Credit applicution in 2010. Three years ago, wc approached The HOllsing Fellowship about doing Berry Court, L.P., which they did and the projcct has been operating successfully. Then we started work on Aniston Village which was awarded credits last year and successfully closed that project ill December 2009. Due (0 the collapse of the equity market ill 2008-2009 (literally 70% equity capacity lost), gelling a project finalized with a syndicator proved to be vcry difficult, and we were vCJ'Y lucky 10 get Aniston Village closed. The inveslor market started to focus on for- profit developers with very deep financial pockets, Jeaving the nOllwpl'ofit developers out of lhe picture, OJ' worse, heavily leveraged inlctl11s of projects ancl guarantees. As it non-profit housillg syndicator, part of our role is to not only invest into projects in our ~tilteJ bill to assisl in developing the non-profit housing providers as well. Tn the Inst decade, numerous. non-profit hOllsing providers have ceased to exist in IowlI, most notably in Cedar Rapi<ls lInd DavcnporL This has left a huge hole in non-profit dew/opers, olle that had to be explored cantiously. ]t was based on our anaJysis of the market Ihat we strongly suggest to Tile Housing Fellowship to concentrate solely on Aniston Village, from start to finish, which they are doing, and do it s\lccessfully. 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