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08/03/2006 - Minutes (2) PROCEEDINGS OF THE CITY COUNCIL OF SALT LAKE CITY, UTAH WORK SESSION THURSDAY, AUGUST 3 , 2006 The City Council of Salt Lake City, Utah, met in a Work Session on Thursday, August 3, 2006, at 5 : 00 p.m. in the Sprague Library, 2131 South 1100 East, Salt Lake City, Utah. In Attendance : Council Members Carlton Christensen, Van Turner, Eric Jergensen, (bus tour only) Jill Remington Love, Dave Buhler and Soren Simonsen. Absent: Councilmember Nancy Saxton Also in Attendance : Cindy Gust-Jenson, Executive Council Director; Jan Aramaki, Council Constituent Liaison/Research and Policy Analyst; Janice Jardine, Council Land Use Policy Analyst; Lehua Weaver, Council Constituent Liaison; Edwin Rutan, City Attorney; Kevin Young, Transportation Planning Engineer; Valda Tarbet, Redevelopment Agency Deputy Director; Mack McDonald, Redevelopment Agency Project Coordinator; Rocky Fluhart, Chief Administrative Officer; Alison McFarlane, Mayor' s Senior Advisor for Economic Development; Doug Wheelwright, Deputy Director/Community Planning/Land Use and Transportation/Support Staff; Alexander Ikefuna, Planning Director; Dell Cook, Engineering Landscape and Architect Project Manager; Lex Hemphill, Sugar House Park Authority President; Tina Rowell, Jack' s Drum/Guitar Store; David Forbush, Salt Lake Granite Stake; Rawlins Young, Sugar House Community Council Trustee; Phillip Carlson, Sugar House Community Council Trustee; Barbara Green, Sugar House Community Council; Laurel Young, Salt Lake City School Board; Ruth Price, Sugar House Community Council Trustee; Emil Kmet, Sugar House Community Council Trustee; Senator Karen Hale; Representative Roz McGee; Walt Gilmore, Salt Lake County Parks and Recreation; Robin Carbaugh, PRATT Board of Directors; and Scott Crandall, Deputy City Recorder. A bus tour of Council District 7 was held at 5 : 00 p.m. (See attached itinerary) . Councilmember Buhler presided at and conducted the Work Session meeting which was called to order at 7 : 12 p .m. 7 : 12 : 41 PM OPENING CEREMONY: 7 : 13 : 04 PM Boy Scout Troop #176 presented the Pledge of Allegiance . WORK SESSION: #1 . COMMENTS FROM DISTRICT 7 RESIDENTS . 7 : 14 : 39 PM The following spoke or submitted written comments : Sheila O'Driscoll, Stephen Callis, Cathy Chambless, Ira Berman, Deborah Callister, Doug White, Julie Berreth, Russ Callister, Pam Pedersen, 06 - 1 PROCEEDINGS OF THE CITY COUNCIL OF SALT LAKE CITY, UTAH WORK SESSION THURSDAY, AUGUST 3 , 2006 Cynthia Osmun and Ruth Price. Comments included Sugar House rezoning, impact on small businesses, diverse customer appeal, opportunity for public input, allow more cats, forced relocation, affordability of redeveloped areas, escalating costs, retain neighborhood retail, walkable neighborhoods, collaborative vision, light rail funding/implementation, architectural design, height restrictions, ground level store fronts, subtle changes, long-lasting consequences, concerns about proposed changes, viable communities, long-term planning, and retaining unique architecture. #2 . 7 : 37 : 45 PM (TENTATIVE) RECEIVE A FOLLOW-UP BRIEFING REGARDING A LOAN APPLICATION FROM THE HOUSING TRUST FUND TO WASATCH ADVANTAGE GROUP, LLC FOR THE CONSTRUCTION OF THE PROVIDENCE PLACE APARTMENT PROJECT TO BE LOCATED AT 309 EAST 100 SOUTH. (ITEM E-1) View Attachments Item was pulled. #3 . 7 : 37 : 50 PM RECEIVE AN UPDATE ON THE PARLEY' S CREEK CORRIDOR TRAIL (PRATT TRAIL) , WHICH WILL CONNECT THE BONNEVILLE SHORELINE TRAIL ON THE EAST WITH THE JORDAN RIVER PARKWAY TRAIL ON THE WEST. Walt Gilmore and Robin Carbaugh briefed the Council . Councilmember Love said when the meeting aired on Channel 17, a contact number for PRATT needed to be displayed for people who want to make donations or get involved. Councilmember Buhler said an address could also be included for mailing purposes . #4 . 7 : 53 : 13 PM RECEIVE A FOLLOW-UP BRIEFING REGARDING AN ORDINANCE TO ZONE PROPERTIES ON LAKELINE DRIVE TO FOOTHILL RESIDENTIAL (FR- 3) (ROMNEY LUMBER ANNEXATION) (PETITION NO. 400-05-41) (ITEM E-3) . View Attachments Doug Wheelwright, Alexander Ikefuna and Janice Jardine briefed the Council with the attached handout . Councilmember Christensen said the Council had concerns/questions regarding the ability to install fencing along property lines . He said it appeared the FR-3 zone was more restrictive than the Open Space zone. Mr. Wheelwright said that was correct. He said a petition had been initiated through the Planning Commission to address fencing issues in the Open Space zone . Councilmember Buhler said the issue was scheduled for action during the formal meeting. #5 . 8 : 00 : 40 PM REPORT OF THE EXECUTIVE DIRECTOR, INCLUDING A REVIEW OF COUNCIL INFORMATION ITEMS AND ANNOUNCEMENTS . See File M 06-5 for announcements . 06 - 2 PROCEEDINGS OF THE CITY COUNCIL OF SALT LAKE CITY, UTAH WORK SESSION THURSDAY, AUGUST 3 , 2006 The meeting adjourned at 8 : 15 p.m. Council Chair Chief Deputy City Recorder This document along with the digital recording constitute the official minutes of the City Council Work Session meeting held August 3, 2006 . sc 06 - 3 District 7 Neighborhood Work Session Tour Itinerary Begin: Sprague Library — 2131 South 1100 East at 5:00 p.m. Tour Sites / Stops (in no particular order) ■ Granite Block — along McClelland and 2100 South • 1300 East at Wilmington — view future site of Sugar House Draw project ■ Foothill Place Apartments project (2260 South Foothill Drive) (also view Rick Plewe Development progress) ▪ KMART store at 2705 Parley's Way ▪ Sugar House Park • Hidden Hollow • Sugar House Commons and other retail along Highland Drive ® Sugar House Plaza Please note — a portion of this tour will be walking (approximately % of a mile). If you plan to join us, bring comfortable shoes and attire. COUNCIL DISTRICT NO. 7 BUS TOUR August 3, 2006 NAME: PLEASE PRINT TITLE AND/OR COMPANY YOU REPRESENT La IIe qhW cct tr/{ooe /ter A fy (frier: 9 I h G o (,J `.,t i e4c-V 5 r(it.m )-1 u 1-4 v h AU s D 6 �-7-Z,4 / VA-to IN s Yo&ou sic ,f i L C 6 � i�a4v,,e ,4,4 e'yn t.-7,4(-&-/ _a tA rl i.k.-\- 1 6 SDI accArd ' UTN- k-2(Z - , `-)(-A C .c_, - Trz i s r &A; L I S I-1 CC -ro sre€ Date ;1�•-- � SALT LLAKE CITY COUNCIL /'�, F/3 `f'V)II PUBLIC M�Nn REcis-rRATION Foiw�+- ii - Agenda Item .......4-1-71sprosik. ( ....t . _ ii,7,7A--.- 7. ) She/ A a -7. ' c a phoneC l) u ` / - del Name (please print deariy) i �""�/ /�,C Address S + / )d 5L C' l ( b E-Mail Address Subject ha LY d Siel. , i ,43.654 lAsuLf--- ,. I wish to speak (CI in support of) -or- (CI in opposition to) the subject noted above. ► 0 I do not wish to speak; however, I would like to sub it remarks (please use back of card). How did you learn about this meeting? 1 I would like to receive information about: 0 my community council serving on a city board. To learn more about Salt Lake City government, view cable television channel 71 or visit our web site ltat http://www.slc.ut.us. The Council Office phone number is 535-7600. To 651t e-mail comments tv duel the �ounake City Co : call the 24hour comment line at 535-7654; send a fax to Members'arrom the web site or e-mail all Council Members at council.co► nts@cislc.ut.us 10 1 � SALT LAKE CITY COUNCIL _ Date PUBLIC MEETING REGISTRATION FORM -} D a'�T- Agenda Item Name -7HA �' - Phone 46) (please print • ( 9L1 Address / 7 ` ' ( f % E-Mail Address Subject r :t . I wish to speak (0 in support of) -or- (0 in opposition to) the subject noted above. 0 I do not wish to speak; however, I would like to submit remarks (please use back of card). How did you learn about this meeting? I would like to receive information about: 0 my community council 0 serving on a city board. To learn more about Salt Lake City government, view cable television channel 71 or visit our web site at http://www.slc.ut.us. The Council Office phone number is 535-7600. To submit comments to the Salt Lake City Co call the 24-hour comment line at 535-7654; send a fax to ' -7651; e-mail individual Council Member§trom the web site or e-mail all Council Members at coundl.co►, nts@ci.slc.ut.us SALT LAKE CITY COUNCIL Date *11 Pusuc MEETING REGISTRATION FoRM 1.414:) 'woo , Agenda Item Name / I C / �112 j Phone 2/ C (Please print clearly) Address / i .-5; ) v I/ / .1> ,l ; „ti L E-Mail Address 1' -..A(ram)a h C` � y ; Al Subject (P✓ni/„//I 7 i7 m '/2 �� ; ;� i/\; S ✓:7 h 1,m iJ .I J /J// T *71 wish to speak in support of) -or- (0 in opposition to) the subject noted above. 0 I do not wish to speak; however, I would like to submit remarks (please use back of card). How did you learn about this meeting? 11/1/6 � I would like to receive information about: 0 my community council O serving on a city board. To learn more about Salt Lake City government, view cable television channel 71 or visit our web site at http://wwwslc.ut.us. The Council Office phone number is 535-7600. To submit comments to the Salt Lake City Cour call the 24-hour comment line at 535-7654; send a fax to `` -7651; e-mail individual Council Members the web site or e-mail all Council Members at coundl.cormrrients@d.sic.utus 111_ 41, . Dat SALT LAKE CITY COUNCIL ) e/ ?-/-3/ 01,1,1 PUBLIC MEETING REGLSTRATION FORM 121 !„-, _ Agenda Item - V, 4 J....).fc 44 gloadeetir*-414.- 1.7 Name c r ..k (1 sk-r- Phone(go() 5F80 (please print dearly) Address Ie38 E-Mail Address elenAtilLe (Le-L-i Subject — I wish to speak 5in support of) -or- (0 in opposition to) the subject noted above. kr--f ,s, I do not wish to speak; however, I would like to submit remarks (please use back of card). How did you learn about this meeting? or --- I would like to receive information about: 0 my community council CI serving on a city board. To learn more about Salt Lake City government, view cable television channel 71 or visit our web site at http://www.sic.utus. The Council Office phone number is 535-7600. To submit comments to the Salt Lake City Courcnciall the 24-hour comment line at 535-7654; send a fax to r' 7651; e-mail individual Council Members the web site or e-mail all Council Members at coundl.comitrents@d.slc.utus a% Date = SALT LAKE CITY COUNCIL � PUBLIC MEETING REGISTRATION FORM r : T ` Agenda Item Name DO UJ�. e Phone C31- \532 (please print clearly) Address Cz 5# �'� c `�' `' E-Mail Address a- J Subject TQ/A or- -MD) ❑ I wish to speak (0 in support of) -or- (O in opposition to) the subject noted above. • 0 I do not wish to speak; however, I would like to submit remarks (please use back of card). How did you learn about this meeting? I would like to receive information about: 0 my community council 0 serving on a city board. To learn more about Salt Lake City government, view cable television channel 71 or visit our web site at http://www.slc.ut.us. The Council Office phone number is 535-7600. To submit comments to the Salt Lake City Co I, call the 24-hour comment line at 535-7654; send a fax to 5-7651; e-mail individual Council MembeNltom the web site or e-mail all Council Members at coundl.cc .rents@ci.slc.ut.us 1,_ s. Date SALT LAKE CITY COUNCIL 4 CI PUBLIC MEETING REGISTRATION FORM r<1-ri .44L,_ ...t, ............: -.1...... Agenda Item ) vs. -- Name / ( (id ' L, iliZA5 / / , Phone Z ir ci 00 print dearly) Address .), 2 r/ 171,; ' ;€41/:::„/ 4: , ' l'' '-' 2-- A i I . .0t. , 14P'. 1... 4' .1. IC .i- E '' D'e: \ '' C ) VV1 E-Mail Address ,_., .. 0 , , ,, -r, , --,, _L. , Subject A 1--( 00:46:6/.47 "-7,.., 0,i'llivt_W 0 I wish to spec (0 in support of) -or- t4(! opposite to) the subject noted above. 0 I do not wish to speak; however, I would like to submit remarks (please use back of card). A How did you learn about this meeting? c-v;i)etly0 f., el.., I would like to receive information about 0 my community coundl 0 serving on a city board. To learn more about Salt Lake City government, view cable television channel 71 or visit our web site at http://www.slc.utus. The Council Office phone number is 535-7600. To submit comments to the Salt Lake City Couctm, clall the 24-hour comment line at 535-7654; send a fax to '-7651; e-mail individual Council Members the web site or e-mail all Council Members at coundl.corretents@ci.slc.utus //lb_ ` '` SALT L CITY COUNCIL Date I '- I PUBLIC MEETING RE6ssfl AT:oN Fotw g-0 ‘ ) 1;111- „.,� ' 1, ( Agenda Item + +....tom Name f l V 5-5 C \\; \ a r Phone L1 Ll- A -7 3 (please print clearly) Address 2 I 9 `I S c:. ►,‘ ; ti liL 1 r E-Mail Address 2 Sub'ect Cot) n \ ) v\ h_01.,►'t C t,/rvl S op-e.IA ` S rn U 1r1 S ' L'l ..) , I wish to speak (O in support of) -or- ( in opposition the subject noted above. O I do not wish to speak; however, I would like to submit remarks (please use back of card). How did you learn about this meeting? I would like to receive information about: O my community council O serving on a city board. To learn more about Salt Lake City government, view cable television channel 71 or visit our web site at http://wwwslc.utus. The Council Office phone number is 535-7600. To submit comments to the Salt Lake City Coup call the 24-hour comment line at 535-7654; send a fax to '-7651; e-mail individual Council Members om the web site or e-mail all Council Members at coundl.cor ents@d.s c.utus sn•2n•DIs•p©s3uawwoYIpunoo Te siagwaW IpunoD IIe I!ew-a JO aT!s qaM aye WWI sJagwaW IPuno3 Ienp!n!pu! 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How did you learn about this meeting? . =----- I would like to receive information about: 0 my community council ❑serving on a city board. To learn more about Salt Lake City government, view cable television channel 71 or visit our web site at http://www.slc.utus. The Council Office phone number is 535-7600. To submit comments to the Salt Lake City Cou call the 24-hour comment line at 535-7654; send a fax to 7651; e-mail individual Council Members ..om the web site or e-mail all Council Members at council.cor,d.,ents@ci.slc.ut.us 4' Date SALT L CITY COUNCIL J / 06 PUBLIC MEETING REGISTRATIONtFORM - f i ,�•�' �, Agenda Item Name -C-cl P f-1E&1 C-i) Li t S' Phone (SO — (please print dearly) Address 331 F , M4R2)SC" AWE, E-Mail Address I ki t 4 P 1 J C,i i C. vifilear a Subject SA V' i a H /CM1"S° L 1 V EC 74 I wish to speak (tii in support of) -or- (a in opposition to) the subject noted above. o I do not wish to speak; however, I would like to submit remarks (please use back of card). How did you learn about this meeting? V g P 7 I v I would like to receive information about: 0 my community council o serving on a city board. To learn more about Salt Lake City government, view cable television channel 71 or visit our web site at http://www.slc.ut.us. The Council Office phone number is 535-7600. To submit comments to the Salt Lake City Council, call the 24-hour comment line at 535-7654; send a fax to 535-7651; e-mail individual Council Members from the web site or e-mail all Council Members at council.comments@ci.slc.ut.us 1,-\ ( (ti i ;_'i Stephen Callis 1331 East Harrison Avenue Salt Lake City, Utah 84105 (801)582-6627 I only want to save my cats' lives- please do not let them be taken from me and murdered! A city inspector, we suspect, noticed our cats while inspecting the neighborhood yards. We have had these cats for 10 and more years and have never had any complaints from any of the neighbors. The neighbors have signed statements saying they do not have any complaints. The cats are clean, healthy, stay indoors, are spayed and neutered, and always have fresh air, food, water, and litterboxes. They do not bother anyone; as innocent beings why should they die because of an unjust law that is based on number of cats when it should be based on hygienic conditions? The Bible says, a law from God, "Thou shalt not kill." This law does not say, thou shalt not kill people; it simply says, "Thou shalt not kill." I think that God meant this to apply to cats also! Please allow the people who want to help out with the cat overpopulation to rescue cats, to be rewarded by legally allowing unlimited numbers of cats if the conditions in the home are sanitary! Please choose the obvious moral choice- vote for more cats per dwelling! Please save our cats' lives-we need them and they need us! Thank you very much for your time! SALT LAKE CITY COUNCIL STAFF REPORT DATE: August 1,2006 SUBJECT: Proposed Housing Trust Fund Loan to Wasatch Advantage Group for construction of the Providence Place Apartments 309 East 100 South AFFECTED COUNCIL DISTRICTS: District 4 STAFF REPORT BY: Gary Mumford ADMINISTRATIVE DEPT. Housing and Neighborhood Development AND CONTACT PERSON: LuAnn Clark Salt Lake City has a Housing Trust Fund from which loans can be made to encourage affordable and special needs housing development within the City. Wasatch Advantage Group has applied to the City for an$850,000 loan from the City's Housing Trust Fund as partial financing to construct the Providence Place Apartment Project to be located at 309 East 100 South that will consist of 125 affordable rental housing units for residents at 60% of the City's area median income or lower. This group had previously applied for and received an$850,000 City loan for a 200 unit apartment project on 200 East but wasn't able to obtain the site. On July 11,2006,the Council held a briefing and discussion on the proposed loan. The current balance in the City's Housing Trust Fund is$2,767,000 before considering this loan request. Subsequent to the briefing,Salt Lake County started the process to submit an application relating to an 84-unit homeless project. Three other developers have expressed an interest in applying for City loans. The Housing Authority has indicated that it may sell a portion of its public housing, which could result in several loan requests for retrofit. The developers are asking for the same loan amount($850,000) as was awarded for the City Plaza project. Council Members asked during the briefing how the cost per unit of the Providence • Place Apartments compares with the cost per unit of the City Plaza project. At this loan amount, the City's participation per unit will be$6,800. The City's average per unit participation has been $6,379 for multi-family projects from the housing trust fund for long-term loans including market rate units. The estimated total cost per unit for the City Plaza project was$112,794 (total uses as provided on the loan application including land,parking structure,development fees,etc. divided by 200 units). Some of the costs are related to the commercial aspects of the City Plaza project including some parking for commercial customers. The total cost per unit for the Providence Place Apartments is$114,207(total uses as proposed on the loan application divided by 125 units). One of the reasons why the per-unit cost does not show a greater increase is that the costs of the City Plaza project included a commercial aspect. In addition,the land for the Providence Place Apartments was obtained at a favorable price,which helps to lower the cost per unit even though construction costs have significantly increased from the time when the City Plaza project was proposed. Mr.Kevin Keating representing the developers explained that the construction cost per square foot for the City Plaza Project was estimated to be$68 to$70 per square foot while construction cost for the Providence Place Apartments is approaching$100 per square foot. 1 The developers originally asked for a 40-year loan,but the developers have modified their request to include a balloon payment after 30 years. Both the Housing Trust Fund Board and the Mayor recommended a 30-year loan term. In the event that the developers refinance the project earlier,they will pay off the loan earlier. Typically,the developers' tax credit financing requires • the developers to be involved in the project for at least 15 years following construction. Mr. Keating and his partners agreed that they would remain in the project for at least 15 years. Low- income restrictions stay with the property for 51 years. The developers requested a 2.45% interest rate on the City's loan,and the Mayor proposed a 4.65% rate based on the City's investment earnings. As an option,the developers have recently proposed an interest rate that starts out at 2.45% and steps up to 6.8% over 30 years for an average interest rate of 4.65%. This would fit the developers'need during the early years of the loan and would provide the City with a 4.65% average interest rate over the life of the loan. The propose interest rates are as follows: Years Interest Rate 1-5 2.45% 6-10 3.65% 11-15 4.85% 16-20 5.90% 21-25 6.55% 26-30 6.80% In order to provide a debt coverage ratio of 1.15 ($115 of projected net rents for every$100 of debt),the developers have recently proposed decreasing the permanent loan by$35,000 and increasing the deferred developer fee by the same amount. The Utah Housing Corporation sets a standard debt coverage ratio of 1.15. The ratio excludes deferred developers fees. Developer fees provide most of the financial incentive for development of affordable housing since operating profit is limited. For the Providence Place Apartments,most of the developers' fee (approximately$1,200,000 depending on escalating construction costs) is available once the project achieves 93% stabilized occupancy for 90 days,but a portion($377,790 including the $35,000 above) is deferred over a 10-year period to be paid from net rent after all other expenses and loan payments are made. The senior lender is also requiring the Developer to provide construction completion guarantees,which means if there are construction cost over-runs,the developer will have to contribute funds to pay for the cost over-runs or defer more developer fee. The City has a preference for mixed-income projects,but Mr. Keating pointed out that there are already a number of very low-income projects in the downtown area as well as market-rate and for-sale projects. He asserts that the Providence Place Apartments will help the city to start to meet the cross section of income levels in the downtown by focusing on upper lower-income households. Based on a market study, the project will fill a niche in the current housing inventory for those with income at 60% of area median income or less. Mr. Keating said that the project will appeal to potential renters because of quality of construction, affordability and downtown location. Mr. Keating also explained that the project benefits the local economy with local sub-contractors,local suppliers,local architects,and includes S5 million of federal funding through tax credits to the benefit of the local economy. 2 The project meets the following new housing polices currently being considered: • Creation of a variety of city-wide residential housing units,including affordable housing • Proximity to mass transit,retail and commercial services • Housing units that are consistent with the Federal Americans with Disabilities Act • New housing development within the Downtown area • Per unit construction costs are within the industry standards • Provision of adequate off-street parking • Property acquisition was at or below market value • Developer fees are consistent with criteria adopted by the Utah Housing Corporation • A preference that developer ownership will continue for a minimum of seven years The project is NOT consistent with the following new housing policies/preferred criteria currently being considered: • The preference for mixed-income projects • The preference for the number of affordable units to exceed the percentage of market rate units if the project is located in an area with a median income of 60% or above the City's AMI(the AMI for this area is lower than 60%) Inconsistencies with guidelines and usual practice are: a. The amount of the requested loan is in excess of the$300,000 maximum guideline. b. The interest rate requested is less than a Council resolution stating that interest on loans will exceed the interest rate the City earns on its investments. c. Repayment of the loan is requested to begin 90 days following construction with interest- only payments prior to this time. Typically,the City's loans require the first payment of both interest and principal to begin within 60 days of issuing a loan. POTENTIAL MOTIONS: Because of escalating costs of construction,Council Member Simonsen suggested that the Council be prepared to make a decision. The attached resolution is per the Mayor's recommendation. The resolution will be revised if the Council approves a loan at another dollar amount or with different rates or terms. The loan documents will require that the project be developed as proposed. If a Council Member makes a motion to authorize a loan,the Council Member may wish to include some of the following points: • The Council recognizes the need for housing in this area of the City. • The Council recognizes the need for housing with this income level. • The Council recognizes the need for a variety of housing including studio,one bedroom and two bedroom units. • The Council recognizes the investment from other resources including$5 million in federal tax credits and$8 million invested through private activity bonds. • The Council re-affirms its long-term goal of supporting mixed income housing with emphasis on disbursing low-income housing throughout the city rather than concentrating low-income housing in a few areas,and believes that this project furthers the goal to a limited extent in that it enhances the income level in this neighborhood and may prompt other development. 3 The City Council has several options relating to this loan request including the following potential motions. 1. ["I move that the Council'] Adopt a resolution authorizing 30-year$600,000 loan at 4.65% from the Salt Lake City Housing Trust Fund to Wasatch Advantage Group for construction of the Providence Place Apartments with interest and principal payments beginning within 60 days'of issuing the loan. (Mayor's recommendation) 2. ["I move that the Council'] Adopt a resolution authorizing 30-year$500,000 loan at 5% from the Salt Lake City Housing Trust Fund to Wasatch Advantage Group for construction of the Providence Place Apartments with interest and principal payment beginning within 60 days of issuing the loan. (Housing Trust Fund Board's recommendation) 3. ["I move that the Council"] Adopt a resolution authorizing 30-year$850,000 loan from the Salt Lake City Housing Trust Fund with a 40-year amortization and balloon payment at the end of the 30-year term and at an average interest rate of 4.65%with stepped rates beginning at 2.45%and increasing to 6.8%and with payments of interest during the construction period and loan principal payments to begin within 90 days following construction completion. (Developers' modified request) 4. ["I move that the Council"] Adopt a resolution authorizing a loan from the Salt Lake City Housing Trust Fund to Wasatch Advantage Group for construction of the Providence Place Apartments (specify loan amount,loan term,interest rate,and when loan principal repayments begins) 5. ["I move that the Council'] Deny the loan request. The following information was provided previously. It is provided again for your reference. On April 19,2005, the City Council approved a 40-year$850,000 loan at an interest rate of 2.45% for the City Plaza Apartment project on 200 East that was to provide 200 affordable units for households with income at 60% of area median income or less. There were some delays between the loan request and approval because the city was drafting a new loan policy. Shortly after the loan was approved, the developer determined that the site was no longer available. After months of looking for a similar site,one of the original partners of the City Plaza project along with additional partners/investors acquired land at 309 East 100 South and requested a similar loan for a project to be known as the Providence Place Apartments. The Providence Place Apartments will consist of 125 rental units comprised of 30 two bedroom/two bath units (rent$767),69 one-bedroom/one bath units (rent$641),and 26 studio units with one bath (rent$604). Rents will be restricted and targeted to households at 60% of the area median income or lower. The Administration's transmittal points out that rents are in line with the independent market study. The$14,000,000 project will remain affordable for 51 years. The City's loan will be leveraged with$8,100,000 of private activity bonds issued by the Utah Housing Corporation and$4,983,000 of tax credits. The permanent financing will reimburse the partners for the cost of the land and predevelopment costs. The project will include 125 covered parking spaces in a tiered parking structure and an outdoor plaza and/or roof garden. All units will be handicap accessible. The project will include the following amenities: controlled access, on-site management office,club room/computer resource 4 center/library,and fitness room. The units will have walk-in closets, dishwashers,and clothes washers and dryers. The project provides additional affordable housing units in the downtown area and increases the property tax base for the City. The local economy benefits with the use of local contractors and architects as well as from the increase ill the number of city residents living near the central business district. A letter from the Central City Neighborhood Council dated May 3,2006 states that there was general support for this project. 1. Loan amount-The developers requested the same loan amount as the City Plaza Apartment project of$850,000. Even though the project will be for 125 units rather than the 200 units proposed for the City Plaza Project,the high cost of land and construction costs have significantly increased since the time of the City Plaza project. The Housing Trust Fund Board set a guideline in March 2004 of a maximum loan of$300,000. The Board apparently recognized the value of this project and recommended a loan of$500,000. Mayor Anderson forwarded a proposal for a$600,000 loan. Mr.Kevin Keating,representing Wasatch Advantage Group,told council staff that a condition of the private activity bond allocation was obtaining an$850,000 loan from the city's housing trust fund. The applicant indicates that the project may not be financially feasible without the higher city loan. 2. Interest rate-The developers requested the same interest rate (2.45%) as approved for the City Plaza Apartment loan approved in 2005 (but not issued). Interest rates on the city's pooled investments have increased since that time(4.61% in April 2006,4.77% in May,and 4.91% in June). The Housing Trust Fund Board generally recommends loans at slightly greater than the City's average pooled investment earnings rate unless the project provides housing for the very low income residents,seniors,and disabled or special needs residents. The Board recommended an interest rate of 5%. Mayor Anderson forwarded a proposal for a loan at 4.65% (approximate average earnings rate for April 2006). Mr.Kevin Keating told Council staff that this interest rate greatly reduces the incentive for the project since the permanent financing is only a little higher at about 5.5%,and indicated that the project may not be feasible at this higher interest rate. Mr.Keating noted the following additional information: "The lower the interest rate the lower the debt service. This increases cash flow for sizing the permanent loan.Since the senior mortgage is sized based on how much net cash flow is available,the lower monthly debt service allows us to borrow more from the senior lender. To maximize our senior loan amount we have assumed a 2.45%interest rate on the Housing Trust Fund loan." 3. Loan period-The developers requested the same loan period(40 years) as approved for the City Plaza loan. The Housing Trust Fund Board typically recommends 30-year loans. The Board forwarded a recommendation for a 30-year loan for the Providence Place Apartment project. Mr.Kevin Keating told Council staff that the higher debt service of a 30-year loan may result in an unfeasible project. Mr. Keating noted the following additional information: "Here again, a longer amortization period means the loan pays off over a longer period of time and as a result the monthly debt service amount is lower. Since the senior mortgage is sized based on how much net cash flow is available,the lower monthly debt service allows us to borrow more from the senior lender. We have assumed a 40-year amortization period on the Housing Trust Fund loan to help fill the financing gap in the project numbers." 4. Preference for mixed-income projects-The housing policy currently being considered includes a preference for mixed-income projects. This project will be entirely for those at 60% of area median income or less. The draft housing policy also contains a preference for the 5 number of affordable units to exceed the number of market rate units only if the median income of the area is 60% or above. The average median income for this area is lower than 60%. Mr. Keating noted that the addition of 125 households at 60% average median income could significantly increase the average area median household income for the census tract. 5. Deferred developer fee-The deferred developer fee is$342,790,which is the maximum that can be deferred per Utah Housing Corporation for tax credit financing. The deferred developer fee gets paid out of net operating income from project operations in lieu of receiving net operating income (or net profits)from operations. The developers are not earning both net operating income and deferred developer fees;its one or the other. Conversely,that means that if the project is paying off the deferred developer fee,it has no net profits available to distribute to the developers from current operations. According to Mr. Kevin Keating,the sole benefit of converting net operating income to a deferred developer fee is that developer fee expense is an eligible expense and therefore includable in determining a projects eligible basis. The eligible basis is in turn used to compute the amount of tax credits that the project is eligible to receive. 6. Impact fee waiver-The developer will be eligible for an impact fee waiver of$162,500. The traditional source for funding these waivers is from fund balance,which is already most likely below 10% of general fund revenue. 6 ��l) I 1 , A. LOUIS ZUNGUZE :w.`\ 'I! �S`a�ally T5��TORO D�e �� ROSS C. "ROCKY" ANDERSON DIRECTOR DEPT. OF COMMUNITY DEVELOPMENT MAYOR OFFICE OF THE DIRECTOR BRENT B. WILDE DEPUTY DIRECTOR CITY COUNCIL TRANSr p . TO: Rocky Fluhart, Chief Administrative Officer DATE: J e 23, 2006 FROM: Louis Zunguze, Community Development Directo SUBJECT: A resolution authorizing the Mayor to execute a Housing st and loan agreement between Salt Lake City Corporation and Wasatch Advantage Group, LLC, for the construction of the Providence Place Apartment Project to be located at 309 East 100 South. STAFF CONTACTS: LuAnn Clark, Housing&Neighborhood Development Director, at 535-6136 or luann.clark@slcgov.com ACTION REQUIRED: City Council adoption of the sol oltie DOCUMENT TYPE: Resolution i iv.41?°41fill Ili BUDGET IMPACT: None DISCUSSION: if i\‘' Issue Origin: \IP Kevin Keating, on behalf of Wasatch Advantage Group, LLC, is requesting a loan in the amount of$850,000.00 from the Salt Lake City Housing Trust Fund for construction of the Providence Place Apartment Project to be located at 309 East 100 South in Salt Lake City. They are requesting these funds at an annual interest rate of 2.45%to be amortized over 40 years with interest only for the first 24 months of the loan during the construction and lease-up phase of the project. The project is proposed to consist of 125 rental units that will be rent restricted and targeted to households at 60%of the area median income or lower. The building will contain 30 two bedroom/two bath units, 69 one-bedroom/one bath units, and 26 studio units with one bath. The units will remain affordable for 51 years. The City would be in third position on the loan. It is anticipated the total cost of the project will be $14,275,867. Analysis: Housing and Neighborhood Development staff prepared a staff evaluation for the Housing Trust Fund Board regarding the application submitted for funding. The evaluation contains information on the project's weaknesses and strengths and compliance with statutory regulations and housing plan goals and priorities. The project was also reviewed by Dave Miner, President 451 SOUTH STATE STREET, ROOM 404, SALT LAKE CITY, UTAH B41 1 1 TELEPHONE: B01-535.7105 FAX: B01-535-6005 WWW.SLCGOV.COM If tr R[cvc�eo vn PCA of Municipal Bond Consulting, Inc.,because of Staff's limited experience with projects funded with private activity bonds. His review has been incorporated into Staff's evaluation. The key issues are listed below: • The project would provide 125 additional units of affordable housing in the City that would remain affordable for 51 years. The proposed loan would be leveraged with low- income housing tax credits and a private activity bond. • The project meets priority goals of the existing Salt Lake City Community Housing Plan to increase the City's housing stock,particularly by increasing the number of affordable housing units. (Please note that this is not the housing plan currently being discussed by the City Council. An analysis of the project and the new proposed housing plan is included on page four of the Staff evaluation—Attachment B.) • The project would be located near the Downtown area in proximity to mass transit and retail and commercial services. • The project did receive a letter of support from the Central City Community Council. • The Debt Coverage Ratio (DCR) for this project is below the standard DRC of 1.15. This standard is used by the Utah Housing Corporation on all tax credit and bond projects. The initial pro forma submitted with the application indicated that the DRC is 1.15. The pro forma did not include the repayment of the City's loan or repayment of the applicant's deferred developer fee. The applicant subsequently provided a new pro forma the date of the Housing Trust Fund meeting showing the DCR of 1.053 after calculating repayment of the City's loan and the deferred developer fee. • The applicant is requesting that the City's loan be a cash flow loan where payments would be made to the City only if there is sufficient net operating income available for repayment. The applicant needs this so they can meet the DRC of 1.15 for their other lenders. A loan guarantee will be provided by the project partners for the construction loan. • The developer's equity investment is only the deferred developer fee. There is no developer equity in the permanent financing of the project. • The loan is nearly three times the amount of the loan guideline of$300,000 established by the Housing Trust Fund Board in March of 2004. • The applicant is requesting an interest rate of 2.45%. As part of the annual budget process, the City Council adopts a resolution accepting a study performed in compliance with Utah Code Section 10-8-2 approving the Housing Trust Fund appropriation and establishing loan criteria. The resolution outlines as a tangible benefit that in many cases the interest on loans will exceed the interest rate the City earned on its pooled investment. Without the tangible benefit the intangible benefits need to be higher. The City's average interest rate for fiscal year 2005 was 2.42%. Most loans the Housing Trust Fund Board Housing Trust Fund Loan for the Providence Place Project Page 2 of 4 recommended were within that range. One exception was the loan for the Milestone Apartment project that received a 1%interest rate because it provided a higher than normal intangible benefit to the City because it preserved housing for very low income residents,many of whom are seniors, disabled or have special needs. The average AMI of the tenants of the Milestone is 32%. Interest rates have been increasing and the rate the City received on its pooled investments for April 2006 is 4.60%with an average rate of 4.37%since January 2006. • The applicant is requesting they be given a 40 year term. The only 40 year amortization terms the City has previously approved were required by the U.S. Department of Housing and Urban Development on Section 8 projects that were done in order to retain and rehabilitate existing affordable housing stock and prevent its conversion to market rate housing. The entire Staff evaluation on this project is attached(see Attachment B). An analysis of how this project meets new policies currently being considered by the City Council is included on page four of the Staff evaluation. The developer will be eligible for an impact fee waiver in the amount of$162,500. The current balance of the Housing Trust Fund is$2,767,086. Approval of this loan would leave the fund balance at$2,267,086. Recommendations: A. Housing Trust Fund Board and Recommendation Following an extensive review and discussion on the key issues relevant to this project,the Housing Trust Fund Advisory Board unanimously recommended approval of a loan for $500,000.00 at 5% annual interest over 30 years,recognizing that Salt Lake City will be in a junior lien position and that any guarantees on the loan need to be resolved by Staff and the appropriate attorneys. The Board recommended the loan be hard debt and not a cash flow loan. As directed by the Board, Housing &Neighborhood Development Division Staff checked with Dave Miner and the City Attorney's Office regarding a guarantee because of the concerns raised by the applicant. Mr. Miner is of the opinion that the City cannot require this guarantee. Mr. Miner recommended that if a cash flow loan is given, the following language should be included in the loan documents to protect the City's interest in this project as follows: 1. The note would become due upon a refinance before the owner could take money out; 2. The note would become due upon sale of the property, including a partnership interest sale in excess of 50%; and 3. A clear definition of which project expenses could be paid by cash flow ahead of City loan repayments which would limit the distributions to the partners to reasonable management fees. Housing Trust Fund Loan for the Providence Place Project Page 3 of 4 The City could require that the City loan be paid before the developer takes out the developer fee. B. Mayor's Recommendation Mayor Anderson reviewed the applicant's request and the Housing Trust Fund Advisory Board's recommendation on May 30, 2006. Mayor Anderson recommended the loan request be approved for$600,000 at 4.65% annual interest amortized over 30 years as hard debt and not as a cash flow loan. The applicant has submitted a letter regarding the impact that the loan recommendation from the Housing Trust Fund Advisory Board would have on their project(see Attachment D). PUBLIC PROCESS: This loan request was reviewed by the Salt Lake City Housing Trust Fund Advisory Board on May 9, 2006. The minutes from the Housing Trust Fund Advisory Board meeting are included as Attachment C of this document. RELEVANT ORDINANCES: Chapter 2.80 of the Salt Lake City Code: Housing Trust Fund Advisory Board Resolution#47 of 2005: Housing Trust Fund Appropriations and Loan Criteria Housing Trust Fund Loan for the Providence Place Project Page 4 of 4 TABLE OF CONTENTS Attachment A: Resolution Attachment B: Staff Evaluation of the Providence Place Apartment Project Attachment C: May 9, 2006 Housing Trust Fund Advisory Board Minutes Attachment D: Impact Letter from Applicant Attachment E: Loan Application ATTACHMENT A Resolution RESOLUTION NO. OF 2006 AUTHORIZING A LOAN FROM SALT LAKE CITY'S HOUSING TRUST FUND TO WASATCH ADVANTAGE GROUP, LLC FOR THE PROVIDENCE PLACE APARTMENT PROJECT WHEREAS, Salt Lake City Corporation (the City) has a Housing Trust Fund to encourage affordable and special needs housing development within the City; and WHEREAS, Wasatch Advantage Group, LLC, has applied to the City for a loan from the City's Housing Trust Fund in order to construct the Providence Place Apartment Project to be located at 309 East 100 South in Salt Lake City that will consist of 125 affordable rental housing units for residents at 60% of the City's area median income or lower. THEREFORE, BE IT RESOLVED by the City Council of Salt Lake City, Utah: 1. It does hereby approve Salt Lake City to enter into a loan agreement with Wasatch Advantage Group, LLC, for$600,000.00, with the appropriate guarantees, at four and sixty-five one hundredths percent (4.65%) per annum for thirty (30) years from Salt Lake City's Housing Trust Fund. 2. Wasatch Advantage Group, LLC, will use the loan funds to construct the Providence Place Apartment project at 309 East 100 South in Salt Lake City, Utah. 3. Ross C. Anderson, Mayor of Salt Lake City, Utah, following approval of the City Attorney, is hereby authorized to execute the requisite loan agreement documents on behalf of Salt Lake City Corporation and to act in accordance with their terms. Passed by the City Council of Salt Lake City, Utah, this day of , 2006. SALT LAKE CITY COUNCIL By: CHAIR ATTEST: APPROVED A O SALT LAKE I Y OFFICE BY: DATE: CHIEF DEPUTY CITY RECORDER ATTACHMENT B Staff Evaluation EVALUATION SALT LAKE CITY HOUSING TRUST FUND Name of Organization: Wasatch Advantage Group, LLC Name of Project: Providence Place Apartments Location of Project: 309 East 100 South Project Description: The project is proposed to consist of 125 apartment units that will be rent restricted and targeted to households at 60% of area median income or lower. The building will contain 30 two-bedroom/two-bath units, 69 one-bedroom/one-bath units and 26 studios with one bathroom. One parking stall will be set aside for each apartment unit. All units will be handicapped accessible. AMI Targets: Rents: 60% - 26 studio/one-bath units $604 60% - 69 one-bedroom/one-bath units $641 60% - 30 two bedroom/two-bath units $767 Amount and terms requested: $850,000.00 at 2.45% interest over 40 years Interest only is requested for the first 24 months during the construction and lease-up period. Is the entire project eligible for Housing Trust Fund money? Yes Are the funds leveraged with non-government dollars? Yes SOURCES OF FUNDS — Construction Financing: Source Amount Construction Loan Calif. Bank & Trust $ 7,151,575 Predevelopment Loan Alliant Capital 4,983,077 Equity— General Partner General Partners 1,291,215 Gap Financing SLC HTF 850,000 TOTAL: $14,275,867 SOURCES OF FUNDS - Permanent Financing: Equity LIHTC—Alliant Capital $ 4,983,077 Equity Deferred Developer Fee 342,790 1st Mortgage Private Activity Bond 8,100,000 2nd Mortgage SLC HTF Loan 850,000 TOTAL $14,275,867 1 USES OF FUNDS Land/Building Acquisition Costs $ 952,781 Site Work 352,583 Construction Costs 8,934,349 Construction Contingency 434,237 Architectural/Engineering Fees 388,000 Gen. Contractor & Developer Profit & Overhead 1,715,500 Interim Financing Expenses 422,896 Permanent Financing Expenses 325,197 Soft Costs (Survey, Market Study, Environmentals, etc.) 279,086 Syndication Costs 207,906 Project Reserves 263,331 TOTAL $14,275,867 Cost per unit: $114,207 per unit Does the requesting agency have sufficient cash flow to repay the loan? Repayment of the loan will come from the project's net operating income; therefore, the net operating income must be sufficient to support all of the project's debt. The Board may want to clarify the intent of the developer to repay this loan. The applicant refers to the possibility of needing this loan to be a cash flow loan wherein payments would only be made if net operating income is available. It has always been the Administration's policy not to support cash flow loans without extenuating circumstances. Those circumstances might include projects that provided housing to 1) clients at very, very low- incomes (30% AMI or lower), 2) clients with special needs, 3) clients transitioning out of homelessness, or 4) clients living with HIV/AIDS. The Administration has limited staff resources to properly audit cash flow loans to ensure all available funds are returned to the City. Staff is only aware of four cash flow loans approved by the City during the past 20 years: 1) the Milestone Apartment project (HTF funds) which is a Section 8 preservation project that would have resulted in a loss of 141 existing affordable housing units and was required by HUD (the primary lender) to be a cash flow, non-federal funds loan, 2) the Valor House project (CDBG funds) that provides housing to homeless veterans, 3) the Lowell Senior Apartment project (HOME and Renter Rehab funds) for very low-income senior citizens, and 4) the Hartland Apartment project (HDAG funds)that was approved twenty years ago consisting of 300 units, of which, 120 have been rent restricted for low-income residents. The Hartland project has been a continual challenge for the City to monitor and from which no payments have been provided by the developer/owner during the project's 20-year history. Only one of the above projects was funded through the Housing Trust Fund. The City has not experienced the requirement suggested by the applicant that the senior lender will require this loan to be a cash flow loan, with the exception mentioned above on the Milestone project. The City subordinates on superior loans which provides the security that senior lenders usually require. 2 Does the project have demonstrated community support? The applicant has requested a letter of support from the Central City Community Council since this is a new construction project. The letter of support provided in the application was for a different project. Does the requesting agency have a track record of owning, operating and maintaining this type of housing project? The applicant has provided a list of local projects owned, operated and/or maintained by several of his partners. The applicant, however, does not have a loan history with Salt Lake City. Private Activity Bond Projects Because staff has limited experience on private activity bond projects, we requested Dave Miner, President of Municipal Bond Consulting, Inc., to review the bond portion of this project. Information from Mr. Miner's report has been incorporated into this evaluation. Project Strengths: The project would provide 125 additional units of affordable housing in the City. Project rents are in line with the market study. The market study supports the construction of this project. The market study was completed by an appraiser on Utah Housing Corporation's list of approved appraisers The project meets priority goals of the existing Salt Lake City Community Housing Plan to increase the City's housing stock, particularly by increasing the number of affordable housing units. The project will remain affordable for 51 years. The project would be located near the downtown area in proximity to mass transit, retail and commercial services. Project Weaknesses: The applicant is requesting an annual interest rate of 2.45% over 40 years. Interest rates are climbing and the Board needs to look at increasing the interest rates on all Salt Lake City Housing Trust Fund loans. One of the criteria outlined in the Resolution that authorizes the yearly appropriation for the Housing Trust Fund states that the interest charged on City loans should exceed the interest the City earns on its pooled investments. The rate of interest on the City's pooled investments for the last six months averages out at 3.86%. The interest earned in March 2006 was 4.42%. 4.5% is the minimum interest rate the Board should approve at this time for those projects that offer a significant, intangible benefit to the City. 5% is a more appropriate interest rate for projects that do not provide a higher than normal, intangible benefit to the City. Intangible benefits include providing housing to very low- to low-income residents, seniors, and disabled or special needs residents. The only forty-year amortization periods the Board has previously approved, other than the one for the City Plaza project, were required by the U.S. Department of Housing and Urban Development on Section 8 projects that were done in order to retain and rehabilitate existing affordable housing stock and prevent its conversion to market rate housing. 3 Debt coverage ratio for this project is low. The standard ratio is 1.15. The DCR for this project is 1.15 with no repayment of the City's loan or the deferred developer's fee reflected in the proforma. Therefore, the DCR would not meet the standard ratio if repayments for our loan and deferred developer fees were included in that ratio. The Board may wish to have the applicant clarify these issues. Construction casualty insurance of$150,000, listed in the bond portion of the application, appears to be excessive. Operating expenses and the applicant's estimate of the property tax liability appear to be on the low side which may significantly, negatively impact operating income if the actual numbers are higher than estimated. The applicant used 0.86% as the estimated tax rate and it should be closer to 1.45% or higher. The Board may wish to have the applicant clarify this issue. The applicant is requesting nearly three times the amount of the loan cap previously established by the Housing Trust Fund Board. The $850,000 to previously approved for the City Plaza project that the applicant refers to in the application, was for an entirely different proposal for 200 units at a different street address and consisting of a different group of investors/partners. No set aside units have been included in the project for any special populations such as persons living with HIV/AIDS, developmentally disabled persons or those transitioning out of homelessness. Most of the 30-40 unit projects that utilize HTF funding include 4-6 set aside units that also provide more tax credit points for the applicant. Contingency has been calculated at 4%. This figure may be too low considering the rapidly escalating construction costs of the recent past. Developer's equity investment is only the deferred developer fee. There is no developer equity in the permanent financing of the project. A loan guarantee on this project has been/will be provided on the primary loan by the project partners but was not offered to the City. A loan guarantee would eliminate the concerns a cash flow loan creates. Though one has been requested, no letter of support from the Central City Community Council has been provided. The project previously reviewed by the CCCC was the City Plaza project, not this project. Housing Policies and Preferred Housing Criteria for City-funded Protects This project meets the following new housing policies currently being considered by the City Council: Creation of a variety of city-wide residential housing units, including affordable housing Proximity to mass transit, retail and commercial services Housing units that are consistent with the Federal Americans with Disabilities Act New housing development within the Downtown area Per unit construction costs are within the industry standards Provision of adequate off-street parking 4 • Property acquisition was at or below market value Developer fees are consistent with criteria adopted by the Utah Housing Corporation This project is NOT consistent with the following new housing policies/preferred criteria currently being considered by the City Council for projects requesting City funding: The preference for mixed-income projects. This project is not a mixed-income project. The applicant states that 100% of the units will be provided for those at 60% of area median income or less. However, the project will not cash flow if rents are actually collected at a rate lower than 60%. A preference for the number of affordable units to exceed the percentage of market rate units if the project is located in an area with a median income of 60% or above the City's AMI. 100% of the proposed units will be for those at 60% AMI. The AMI for this area is lower than 60%. A preference that developer ownership will continue for a minimum of seven years. The developer"anticipates" having a continuing role in the project throughout the compliance period but has not committed to do so. No design information was presented that would allow for the evaluation of how design features would fit in with policies and preferences being considered by the City Council at this time. Board Options 1. Table the matter and request amended financial documents assuring repayment of the City's loan and adequate operating income. 2. Approve the request at 5% over thirty years with either a balloon payment or rate adjustment in the 17th or 18th year of the loan to a market rate for a subordinate real estate loan if the project is cash flowing adequately. This would ensure the City would not be subsidizing the project unnecessarily after 15 years of rent appreciation. The City should also require the same guarantee that exists on the primary loan. 3. Approve the request at a lower loan amount with an amended amortization period of 30 years at 5% interest with interest only for the first 24 months. The City should also require the same guarantee that exists on the primary loan. 4. Approve the request for the requested loan amount with an amended amortization period of 30 years at 5% interest with interest only for the first 24 months. The City should also require the same guarantee that exists on the primary loan. 5. Approve the request as presented for$850,000 at 2.45% over 40 years. The City should also require the same guarantee that exists on the primary loan. 6. Deny the request 5 ATTACHMENT C May 11 , 2006 Minutes HOUSING TRUST FUND ADVISORY BOARD Meeting of May 11, 2006 The following board members were in attendance: Curtis Anderson, Karen Cahoon, Cara Lingstuyl, Kent Moore, Peter Morgan, Nancy Pace, and Faina Raik. Staff members in attendance were LuAnn Clark, Director of Housing and Neighborhood Development, Sandra Marler, CD Programs Administrator, City Council staff Janice Jardine and Jan Davis, Administrative Secretary. Chairperson Kent Moore called the meeting to order at 12:29 p.m. Cara Lingstuyl motioned to approve the March 16th minutes. Faina Raik seconded the motion. All voted "Aye." The motion passed. Consider a request from Kevin Keating, representing Wasatch Advantage Group, for a loan in the amount of$850,000 at 2.45% interest over 40 years to construct the Providence Place Apartment project to be located at 309 East 100 South. The project is proposed to consist of 125 apartment units that will be rent restricted and targeted to households at 60% of area median income or lower. The building will contain 30 two-bedroom/two-bath units, 69 one-bedroom/one-bath units and 26 studios with one bathroom. Mr. Kevin Keating representing Wasatch Advantage Group introduced Mr. Kip Sheppard, Mr. Jeff Nielson and Mr. Tony Hladek, managing members for the Providence Place Apartment project. Mr. Keating presented an overview of the project and answered the Board's questions pertaining to the project. He further explained that Wasatch Advantage Group would use the HTF monies for construction posts, land acquisition and provide permanent gap financing to make this project financially feasible Mr. Keating provided a detailed description of the project outlining the amenities and how the building design will complement the downtown neighborhood. Ms. Sandra Marler commented that Mr. Keating had submitted a current community council letter of support. Mr. Keating said the property site is in the downtown area near the proposed site for the City Plaza project that was presented to the Board a couple of years ago. Mr. Keating said that the property will be purchased from The Corporation of the Episcopal Diocese. Mr. Keating stated that due to a smaller parcel, this project will contain 75 less units than the City Plaza project, but they are requesting the same $850,000 due to higher construction costs. Mr. Keating remarked that the market study supports the construction of the project and the project will help meet the goals of the existing Salt Lake City Community Housing Plan. Mr. Keating explained that the senior lenders would require this loan to be a cash flow loan but said he believed the project would have sufficient operating revenues to meet the payments on a timely basis A discussion followed between the Board, staff, Mr. Keating and Mr. Sheppard in regard to guaranteeing repayment of the loan, security of the loan, and loan documents so that the project partners, the City and the tax credit investors would be comfortable. Mr. Keating said that the property secures the loan and that during construction they would be providing a construction completion guarantee for the senior lender. If an issue of nonpayment arises due to insufficient cash flow, the agreement would be to carryover the shortfall at simple interest to the next year. Mr. Keating further explained that if there was a shortfall, and the property foreclosed, the equity in the property would satisfy the loan. The Board asked for clarification pertaining to the debt coverage ratio. Mr. Keating explained that the 1.15 DCR is debt service before payment to the City and the developer. Mr. Sheppard confirmed that the partners would be guaranteeing the construction loan. Ms. Clark stated that Mr. Dave Miner, of Municipal Bond Consulting, recommended that the HTF loan have the same guarantee as the other lenders. Ms. Clark said the Board would like to be assured that the City will be repaid on this loan. Mr. Sheppard said they want to demonstrate their desire to pay back the funds but it could eliminate their ability to obtain tax credits if the loan is guaranteed. A lengthy discussion followed regarding tax credit laws, tax credit investors and debt coverage ratio. Mr. Sheppard said they would be willing to commit to a guarantee, in writing, for the HTF loan that all available cash flow be available to pay the subordinate debt. Peter Morgan moved to approve a loan in the amount of$500,000 for the Providence Place Apartment project at 5% annual interest over 30 years recognizing that Salt Lake City will be in a junior lien position and that the issues relative to any guarantees on the loan be resolved by the staff and the appropriate attorneys. Cara Lingstuyl seconded the motion. All voted "Aye." The motion passed. HTF Update by Luann Clark Ms. Clark said that there is a potential preservation project coming up which is the New Grand Hotel and that the meeting will probably be scheduled within the next couple of months. There being no further business, the meeting adjourned at 1:47 p.m. 2 LIHTC PROFORMA Providence Place Apartments Units Ann.Incr. Per Mo. ;Yr:1 ;.::.:_:Yr;:2`. ' :':Yr,3 :Yr,d" Yr;S Affordable Units 125 3.00% 82,943 995,316 1,025,175 1,055,931 1,087,609 1,120,237 Market Rate Units 0 2.50% 0 0 0 0 0 0 Other Income 45 1.25% 5,625 67,500 68,344 69,198 70,063 70,939 Federal Operating Subsidies 0.63% 0 0 0 0 0 0 Vacancy Rate 7.0% (6,200) (74,397) (76,546) (78,759) (81,037) (83,382) TOTAL OPERATING INCOME 82,368 988,419 1,016,973 1,046,370 1,076,635 1,107,793 Ann.incr. TOTAL OPERATING EXPENSES $ 2,999 3% 31,243 374,917 386,165 397,749 409,682 421,972 NET INCOME FROM OPERATIONS 51,125 613,502 630,808 648,620 666,953 685,821 Capitol Replacement $ 250 2,604 . 31,250 31,250 31,250 31,250 31,250 CUMULATIVE RESERVES 31,250 62,500 93,750 125,000 156,250 NET CASH FLOW FROM PROJECT 48,521 582,252 599,558 617,370 635,703 654,571 Principal Amort. Rate Term Mo.Pay. Annual Pay 7,450,032 420 5.450% 420 39,764 477,170 477,170 477,170 477,170 477,170 850,000 480 2.450% 480 2,780 33,357 33,357 33,357 33,357 33,357 0 360 0.000% 360 0 0 0 0 0 0 0 360 0.000% 360 0 0 0 0 0 0 342,790 120 4.500% 120 3,553 42,631 42,631 42,631 42,631 42,631 0 360 0.000% 360 0 0 0 0 0 0 0 360 0.000% 360 0 0 0 0 0 0 0 360 0.000% 360 0 0 0 0 0 0 0 360 0.000% 360 0 0 0 0 0 0 0 0 . 0 0 0 0 0 0 0 DEBT SERVICE EXPENSE 46,096 553,158 553,158 553,158 553,158 553,158 Per Mo Yt..1: Yt;:2 :.:1:: Yr..3; Yr.4 Yr:5.,.. . Income Available to service LIENS 48,521 582,252 599,558 617,370 635,703 654,571 Debt Service Expense FIRST Mtge 39,764 477,170 477,170 477,170 477,170 477,170 NOI after First Mtge 8,757 105,082 122,389 140,201 158,533 177,401 COVERAGE RATIO ON FIRST LIEN MTGE 1.22 1.22 1.26 1.29 1.33 1.37 Subordinate Loans: SLC HTF 2,780 33,357 33,357 33,357 33,357 33,357 0 0 0 0 0 0 0 0 0 0 0 0 Deferred Developer's Fee 3,553 42,631 42,631 42,631 42,631 42,631 Local Funds 0 0 0 0 0 0 Local Funds 0 0 0 0 0 0 Local Funds 0 0 0 0 0 0 0 0 0 0 0 0 OWHLF HOME Funds 0 0 0 0 0 0 Subtotal: Subordinate Mortgages 6,332 75,988 75,988 75,988 75,988 75,988 Debt Service All Mtge 46,096 553,158 553,158 553,158 553,158 553,158 Before Tax NI 2,425 29,094 46,401 64,213 82,545 101,413 COVERAGE RATIO ON ALL LOANS 1.053 1.05 1.08 1.12 1.15 1.18 CENTRAL CITY NEIGHBORHOOD COUNCIL Liberty Senior Center 251 East 700 South Salt Lake City, Utah 84111 Date: May 3`d, 2006 To: Jeff Nielson Re: Proposed 125 unit apartment complex at 309 E. 100 S. Central City Neighborhood Council(CCNC) has heard the proposal by Wasatch Advantage Group regarding a 125 unit apartment complex. There was general support for this project with many people complimenting the size and look of the complex. We look forward to this addition to our Community. Thank you Thomas Mutter Chair CCNC ATTACHMENT D Applicant's Impact Letter WASATCH ADVANTAGE GROUP,LLC 12553 Eagle Run Dr. Omaha,NE 68164 Telephone: (402)504-1942 Facsimile: 9402)504-1966 Email: kkeating@netwasatch.com May 19,2006 Luann Clark,Director Salt Lake City Corporation Housing&Neighborhood Development 451 So. State St.,Room 406 Salt Lake City, UT 84111 Re: Housing Trust Fund Loan Application for Providence Place Apartments (fk.a. City Plaza Apartments)309 East 100 South, Salt Lake City,Utah 84111 Dear Luann, We first want to thank you,your staff and the Housing Trust Fund Advisory Board("Advisory Board")for considering our Housing Trust Fund loan application. As you know,the Advisory Board convened on May 11th to consider our loan request for the proposed construction of a 125 unit affordable housing development at 309 East 100 South(hereinafter referred to as the"Project"or "Providence Place Apartments"). After significant discussion regarding the merits of this Project, the Advisory Board concluded the Providence Place Apartments was worthy of the City's financial support and passed a motion to approve a$500,000 loan to the Project. We are very appreciative of the Advisory Board's action in support of the proposed development. However, after careful review of the loan terms proposed by the Advisory Board, we became concerned about how these loan terms would affect our overall project financing. Our original loan application requested an $850,000 loan with a 40 year term,40 year amortization period and 2.45 percent interest rate. These were the same loan terms previously approved by the Advisory Board, Mayor Anderson's office and the Salt Lake City Council for the original City Plaza Apartments project in 2005. The Advisory Board's motion to recommend approval of only$500,000 leaves us with a$350,000 funding gap. The only way to fund the gap is to borrow more from the senior lender at a higher interest rate. In addition,the Advisory Board's motion approving the loan reduced the loan amortization period from 40 to 30 years and increased the interest rate from 2.45 percent to a 5.0 percent interest rate. Together,the higher senior loan amount,the reduced amortization period and increased interest rate significantly increases the annual debt service payments required and reduces the available cash flow to below an acceptable 1.15 debt coverage ratio. Without additional help from the City this project may not be financially feasible. To keep the development moving forward,we respectfully request your assistance in bringing our concerns to the Mayor and the City Council and requesting,on our behalf,that they consider approving the $850,000 loan with our original loan terms. If the interest rate of 2.45 percent is not achievable due to increased costs of borrowing to the City,then we ask that the interest rate on the loan not be any higher than necessary and, in any event,not higher then the cost of funds to the City. We are committed to developing decent, safe,and affordable apartment communities. With the City Council's approval of this final aspect of our project financing we hope to start preparing the construction site within the next few weeks. The lack of affordable housing in downtown Salt Lake has been well documented in the City's own housing needs analysis. The 125 affordable apartment units proposed for the Providence Place Apartments will help the City satisfy its affordable housing needs and will benefit all the citizens of Salt Lake by addressing a very real affordable housing problem within the city. We are grateful for your continued assistance with regard to this loan application and look forward to partnering with the City to address the need for quality affordable housing downtown. Thank you again for your time and consideration of this request. Please do not hesitate to call me if you have any additional questions concerning any aspect of our proposed development or in connection with the loan application. You can reach me at(402) 504-1942 or by email at kkeating@netwasatch.com. Sincerely, Kevin M.Keating Vice President Acquisitions& General Counsel ATTACHMENT E Loan Application FUNDING APPLICATION SALT LAKE CITY HOUSING TRUST FUND Cover Sheet Project Name: PROVIDENCE PLACE APARTMENTS Applicant/Sponsor/Organization: Wasatch Advantage Group, LLC, a Utah limited liability company and its successors and assigns Mailing Address: Wasatch Advantage Group, LLC C/O Kevin M. Keating 12553 Eagle Run Dr. Omaha, NE 68164 Contact Person: Kevin Keating Phone Number: 402-504-1942 Fax Number: 402-504-1066 E-mail: kkeating@netwasatch.com Federal Employee Identification Number: To be applied for upon organization of operating entity. Project Name: Providence Place Apartments Project Location: 309 East 100 South, near Salt Lake City's Central Business District. Amount Requested: $850,000 This is the same amount previously awarded to the City Plaza Apartments project by the Housing Trust Fund advisory committee and approved by Mayor Anderson and the City Council. For business reasons the original site was sold and the project was relocated to 309 East 100 South. The requested loan amount represents $6,800 per unit. On a per unit basis this is significantly less than loan amounts approved by the City in support of many other affordable housing developments. Terms Requested: Construction/Permanent Gap Financing, 40 year term, 40 year amortization at 2.45% interest. Interest only for first 24 months (i.e. during construction & lease-up period). Please contact Sandi Marler at 535-7269 if you have questions or need assistance completing this application. The application is typed in Microsoft Word and is available on disc. Project Description Part 1. Describe the scope of the project(how many total units, how many affordable units, type of project, etc.). Please address how your project will be accessible/visit-able. Please attach site plan, floor plan, and elevation of your project, if available. The Providence Place Apartments project will include 125 apartment units, 125 parking spaces in a tiered parking structure and an outdoor plaza and/or roof garden. All 125 apartment units will be rent restricted and targeted to households at 60% or below of Salt Lake County's area median income (AMI). The apartment building will contain 30 two-bedroom/two-bath units, 69 one-bedroom/one-bath units, and 26 studios with one bath. There will be one parking stall set aside for each apartment unit. There are also metered parking stalls on 300 East and 100 South streets. All units will be handicap accessible and comply with federal, state and local housing laws. The Developer's current plans include the following amenities: Project Based Amenities: • Controlled access • On-Site Management Office • Covered Parking • Club Room/Computer Resource Center/Library • Fitness Room Unit Based Amenities: • Balcony (Some Units) and/or Terrace Roof Garden • Dishwasher/disposal • Washer/dryer • Walk-in Closets The building design will take into consideration and complement the residential/commercial nature or this transitional downtown neighborhood. 2 2. Does the project conform to the City's Master Plans for the area? Please indicate which master plan(s). Briefly restate the master plan objectives the project will meet. Yes, the project conforms to the Salt Lake City Five-Year Consolidated Plan for 2000-2005 and the Salt Lake City Community Housing Plan Development. The Project was designed to accomplish several goals set forth in the Salt Lake City Five-Year Consolidated Plan. First, it will achieve the goal of benefiting primarily low-to-moderate income citizens. Because the residents of this neighborhood are primarily low-to-moderate income individuals and families, the Project will provide much needed affordable housing to those residents. It will also increase the availability of newer, higher quality housing units in an area that currently holds the distinction of having a disproportionately high number of substandard quality units in its housing inventory. Having newer, higher quality units available with affordable rents will put pressure on owners of older neighboring rental properties to reinvest in their properties. In order to remain competitive owners of older properties in the area will have a real economic incentive to reinvest cash-flow back into their properties to make them more attractive and marketable. As owners of competing rental properties reinvest in their properties, the City will benefit by the increased property values, increased tax revenues and greater sense of community pride as older projects and neighborhoods are rehabilitated and repopulated. The Community Housing Plan Development stated that the goal of Salt Lake City was to enhance, maintain and sustain a livable community that includes a vibrant downtown integrated with surrounding neighborhoods that offer a wide range of housing choices, mixed uses, and transit-oriented design. According to data cited in the Community Housing Plan Development (data provided by Equimark Properties Inc., Greater Salt Lake Multifamily Report, January 2000) 45% of the renters in the Salt Lake City metropolitan statistical area are unable to afford Fair Market Rents based on their income. Furthermore, the Central City district is identified as having a disproportionately high number of substandard units in its housing inventory. According to its own "Affordable Housing Needs Analysis" Salt Lake City has a tremendous need for more affordable housing to be developed within the boundaries of Salt Lake City. The Providence Place Apartments project addresses these issues and accomplishes several of the objectives set forth in the Salt Lake City Community Housing Development Plan. Restated below are the objectives, identified in the Salt Lake City Community Housing Plan that this Project is designed to address: • the creation of a variety of housing types across the City; • the development of mixed use and mixed income housing; • the creation of affordable and transitional housing; • the use of innovative funding mechanisms for the development of affordable housing; 3 • architectural designs that are compatible with the neighborhood, incorporate open space, interface with public spaces, address parking issues and are aesthetically pleasing. The Providence Place Apartments will generate positive social and economic benefits throughout the Salt Lake City community through job creation, community building, and by facilitating business vitality by bringing more consumers to the downtown business district. The project is within walking distance of nearly 2 million square feet of retail located in the Central Business District. Tenants will enjoy excellent proximity to mass transportation (UTA and TRAX). A TRAX station is located two blocks west of the site on Main Street and the UTA bus line stops within the block on 100 East. This will allow tenants easy access to their employment and other city destinations in a reliable and environmentally friendly manner using existing transit resources. The apartment building and enclosed parking facility will be designed to be aesthetically pleasing and compatible with neighboring buildings. The high price of land and increased cost of construction associated with building below-grade parking and a high density mid-rise apartment building are obstacles that would make this project financially unfeasible as market rate housing. However, utilizing an innovative combination of funding sources including a Salt Lake City loan, bond financing, low income housing tax credits and deferred developer fees, the development team has assembled the sources of funds needed to bridge the financing gap. 3. What is the property zoned? The subject property is zoned "R-MU". The R-MU zoning designation allows for the type of multifamily residential development being proposed. 4. All new construction projects will need to be reviewed by the appropriate Community Council. Please provide a copy of the Community Council's response to the review of your project. Letters of support are attached as Exhibit A. 5. Please include a breakdown of the number of units that will be provided for the various percentages of area median income (i.e., how many units for those at 80%, 50% AMI, etc.), along with a list of the rents that will be charged to each group. Unit Type Total Number of AMI Target Monthly Base SRO/Studio Bathrooms Units Rent Per Unit Studio 1 26 60% $604 1 1 69 60% $641 2 2 30 60% $767 4 6. How will the project be accomplished if the Salt Lake City Trust Fund is unable to fund this request? Due to the high cost of land and mid-rise construction design, some form of financial assistance will be required to make this project financially feasible. 7. How do you intend to use funds provided by Salt Lake City Corporation? The funds will be used to fund construction costs, land acquisition and to provide permanent gap financing for the project. Project Funding Part II 1. Please list the sources of all funds as of the date of the application. If this is a tax credit project, please provide one complete copy of the tax credit application. Sources of Funding/Construction: Source Amount Const Loan California Bank &Trust $ 7,151,575 Predevelopment Loan Alliant Capital $ 4,983,077 Equity-General Partner General Partners $ 1,291,215 Loan Salt Lake City/HTF $ 850,000 Total Sources $14,275,867 Sources of Funding/Post Construction: Source Amount Equity LIHTC Equity-Alliant Capital $ 4,983,077 Equity-General Partner General Partners- Deferred Fees $ 342,790 1st Mortgage Private Activity Bond-CB&T $ 8,100,000 2nd Mortgage Salt Lake City HTF Loan $ 850,000 Total Sources $14,275,867 Ia. Ratio of Salt Lake City Trust Funding to total funding: Approximately 5.95% 2. Please list the uses of all funds for the proposed project, being as specific as possible. The total of Uses of Funds should equal the total project cost. 5 Uses: Land Cost $ 952,781 Site Work $ 352,583 Construction Cost $ 8,934,349 Construction Contingency $ 434,237 Architectural & Engineering $ 388,000 General Contractor& Developer Profit&Overhead $ 1,715,500 Interim Financing Expense $ 422,896 Permanent Financing Expenses $ 325,197 Soft Costs (Survey, Mkt. Study, Environmental, etc.) $ 279,086 Syndication Costs $ 207,906 Project Reserves $ 263,331 Total Uses $14,275,867 3. What will be the value of the project at the time of completion? A professional valuation has not yet been completed. Using a cost based valuation method we estimate a project value of$14,000,000. If an income based valuation method were utilized the value would be considerably less due to the rent restrictions imposed by the land use restriction agreement. 4. Please attach sales or operating projections for the project for the first five years after completion. Please list below the assumptions made to prepare the operating projection. Please show revenue and expense categories in as much detail as possible. Assumptions: The 1st year revenue and expense projections assume the project is leased and stabilized on January 1 of the 1st year of operation. Also assumed is a project vacancy rate of 7% annually, project revenues increase 3% annually and project operating expenses increase 3% annually. For detailed operating expense and revenue projections, please see attached Exhibit B. 5. What is the source of repayment of the funds? Net Cash Flow from Project Operations. 6. What type of security is being offered to the City? A security interest in land and improvements to the extent allowed by senior funding sources. 7. Please list all other governmental grants, loans, tax credits, licenses, etc., necessary for this project to proceed. Please include information on the status of all funding required for the completion of this project. 6 Private Activity Bonds ("PAB")($ 8,100,000) bond issuance at approximately 5.25% interest rate, which rate includes credit enhancement). A private activity bond application was submitted to the Utah Department of Community and Economic Development on March 20, 2006. It is anticipated that we will receive notification of a volume cap award from the PAB review board on April 12, 2006. California Bank &Trust has expressed an interest in purchasing the private activity bond following issuance. Low Income Housing Tax Credits (estimated $4,983,077). Following a technical review, Projects funded with PAB's generally receive an allocation of LIHTC's based on a percentage of the projects eligible basis. The LIHTC/PAB application is currently under consideration by Utah Housing Corporation. Alliant Capital has provided a letter of intent to purchase the tax credits. Salt Lake City Housing Trust Fund ($850,000 loan, 40 year term, 2.45% interest, interest only during construction and lease-up to stabilized occupancy). These are the same loan terms previously awarded to the City Plaza Apartments project by the Housing Trust Fund advisory committee and approved by Mayor Anderson and the City Council in 2005. Salt Lake City, Planning Division, Demolition Permit. Application has not been submitted. Salt Lake City, Planning Division, Building Permit. Application has not been submitted. 8. Please describe the purchase terms under which the applicant will/has acquire(d) the property. How much of the purchase price will be paid with equity provided by the applicant? By others? The applicant will acquire the real property from The Corporation Of The Episcopal Church In Utah for a purchase price of$925,281. The purchase price will be paid from owner's equity and proceeds derived from the sale of the low income housing tax credits. 9. If an appraisal of the property has been obtained, please attach a copy. Please see the attached Exhibit C. 10. Please state the number of years you will maintain this property as affordable. This property will remain rent restricted for 51 years pursuant to the terms of the land use restriction agreement (LURA) to be recorded by Utah Housing Corporation. 7 • Applicant Information Part III 1. Please check each of the following which is true for the Applicant (a) The Applicant is an individual doing business under his/her own name. X _(b) The Applicant has the status indicated below and is organized or to be organized under the laws of Utah A corporation A nonprofit or charitable institution or corporation A partnership known as or to be known as: A business association or joint venture known as or to be known as: A Federal, State or local government or instrumentality thereof Individual known as: Social Security Number of Individual: X Other (explain): a Utah limited liability company. 2. If the Applicant is not an individual or a government agency, give date of organization: The operating entity will be a to-be-formed limited liability company authorized to do business in Utah. The applicant Wasatch Advantage Group, LLC is a Utah limited liability company formed on November 4, 2004. 3. Please provide a list of the officers, director or trustees, board of trustees or board of directors, or partners of the applicant's organization. The operating company that will own and operate the project has not yet been organized. A new special purpose limited liability company (the "Operating Company") will be organized as the ownership entity for the Providence Place 8 Apartments. It is anticipated that Wasatch Advantage Group, LLC (or its assigns), will be the managing member of the new Operating Company. Kevin Keating, Kipling Sheppard, Dell Loy Hansen, Jeff Nielson, and Tony Hladek are members in Wasatch Advantage Group, LLC. 4. Who will manage the property once it has been acquired? Wasatch Premier Properties, LLC a Utah limited liability company will provide the local on-site property management and compliance monitoring of the proposed project. Kevin Keating will provide management over-sight with respect to IRC Section 42 compliance matters. Wasatch Premier Properties, LLC currently manages other affordable properties in Utah, including the Palladio Apartments at 200 West 300 North in Salt Lake and the Springwood Apartments in Bountiful, Utah, along with a portfolio of over 10,000 market rate units across the western half of the united states. Please see development team resumes attached hereto as Exhibit D. 5. Please provide a brief description of your organization. Wasatch Advantage Group, LLC has put together a development team that includes Kipling S. Sheppard, company president and industry veteran in affordable housing, Dell Loy Hansen, real estate developer and financial partner, and Kevin Keating, an attorney and development specialist in affordable housing. Tony Hladek, VP of Development for Wasatch Advantage Group, will head up the project management for Providence Place. In addition, Architectural Nexus, a Salt Lake based architectural firm has been engaged as the architect for the project and discussions have been initiated with Ingenuity Builders, Inc. as the general contractor for the project. 6. Who will be responsible for this project? Wasatch Advantage Group, LLC (or its assigns). Kevin Keating, Kip Sheppard, Jeff Nielson, Dell Loy Hansen, and Troy Hladek are each members in Wasatch Advantage Group, LLC. Wasatch Advantage Group, LLC will be the managing member in the to-be-created managing member (the "Managing Member") of the new Operating Company. The Managing Member will be responsible for the day to day operations of the project. 7. Please provide examples of experience your organization has with this type of project. Development Team resumes are attached hereto as Exhibit D. 9 Current Ownership Information Part IV 1. Who is the current owner of the property? The Corporation of the Episcopal Diocese of Utah is the Seller. 2. Who is the current manager of the property? Stephen Hutchinson, Chancellor, currently manages the property for the Diocese. 3. Please provide a list of the officers, director or trustees, board of trustees or board of directors, or partners of the organization that currently owns the property. Officers: See below Directors or Trustees: Mr. George Gibson, President The Rev. Stan W.Ver Straten, Vice President Mr. Mark LeTourneau, Secretary The Rev. Adam S. Linton Ms. Patricia Vidiella The Rev. Susan Wiltsey Certification I, Kevin Keating, certify that this Applicant Disclosure of Ownership and Control is true and correct to the best of my knowledge and belief. Name: Kevin M. ating Title: Vice President, Wasatch Advantage Group, LLC Address: 12553 Eagle Run Dr. Omaha, NE 68164 Date: March 24, 2006 io JUN 0 3 2006 A-I JAL 0�© �PNRA�II,O �A. LOUIS ZUNGUZE .ram �_1\a '' .� r,y�i�� ROSS C. "ROCKY" ANDERSON DIRECTOR DEPT. OF COMMUNITY DEVELOPMENT MAYOR BRENT B. WILDE OFFICE OF THE DIRECTOR DEPUTY DIRECTOR CITY COUNCIL SUPPLEMENTAL TRANSMITTAL TO: Rocky Fluhart, Chief Administrative Officer DATE: J •- 0, '006 FROM: Louis Zunguze, Community Development Director 'I RE: Supplemental Transmittal for Petition No. 400-05-41 by Ro ' .. ber Company and Robert and Honora Carson, which is a request to annex approximately 405.59 acres of land into the corporate limits of Salt Lake City. The supplemental information is regarding the proposed zoning of six properties (Buffer Parcels) identified below, which abut the rear of residential properties that front on Lakeline Drive. STAFF CONTACTS: Sarah Carroll, Principal Planner, at 535-6260 or sarah.carroll@slcgov.com RECOMMENDATION: That the City Council consider individual property owner 4111110 preferences and adopt the ordinance to zone these six properties as appropriate DOCUMENT TYPE: Supplemental Transmittal BUDGET IMPACT: None MAP OF SUBJECT PROPERTIES: 1) 16-23-201-017, owned by Benjamin Buehner 2) 16-23-201-016, owned by Andrea& Louis Barrows it, 3) 16-23-201-013, owned by • — Alan& Orlene Cohen #; ' I - 4) 16-23-201-014, owned by Alan& Orlene Cohen 5) 16-23-201-018 (partial), owned by Lynn Mabey 6) 16-23-201-019, owned by Axxon Investment Company (Lynn p y Mabey) 451 SOUTH STATE STREET, ROOM 404, SALT LAKE CITY, UTAH 841 1 1 TELEPHONE: 801-535-71 05 FAX: 801-535-6005 WWW.SLCGOV.COM DISCUSSION: Issue Origin: At the City Council briefing for the annexation request, held on May 2, 2006,the City Council members had two questions which needed additional analysis and research. The first question concerned the potential that the Foothill Residential (FR-3) zoning that was requested by these property owners might allow for perimeter property line fencing that could result in a solid fence being constructed up the hillside. Secondly, Council members also wanted more information on the development potential of these properties before deciding on a zoning designation. Council member Soren Simonsen stated that he would also like to meet with the owners of the property identified on page 1 before determining whether or not Open Space (OS)or Foothill Residential(FR-3) zoning would be most appropriate for their land. Analysis: In regards to the first question,the information below summarizes the fencing requirements for the OS and FR-3 zones. In regards to the second question, a slope analysis along with potential development analysis is provided below. 1) Fencing Requirements: An analysis of the fencing requirements for the OS and FR zones has been provided to address the City Councils' first question. (See attachment 1 for exact Ordinance wording). A. Open Space Zones: The Open Space(OS)Zone does not have any special fencing restrictions. Standard fencing regulations include a height limit of six feet,which is applicable to the Open Space(OS)Zone. B. Foothill Residential Zones: Fencing restrictions for the Foothill Residential (FR)Zones are outlined as follows: i. Field Fencing of Designated Undevelopable Areas is addressed in Section 21A.24.010.10.b. In undevelopable areas, fencing is limited to 42 inches in height using metal "T"posts with four strands of non-barbed wire. ii. Buildable Area Fencing is addressed in Section 21A.24.010.10.c. and includes fencing on any portion of a lot identified as the buildable area of that lot. Two types of fences are allowed in the buildable area, as outlined: 1. An open, see through fence may be constructed of tubular steel, wrought iron or similar materials, finished with a flat black nonreflective finish and constructed to a height of six feet or less; or 2. A sight obscuring or privacy type fence shall be of earth tone colors, or similar materials to the primary dwelling, and located in a way to screen private outdoor living spaces from off-site view. Petition 400-05-41 —Parley's Pointe Annexation Page 2 of 4 C. Summary: In summary, fencing restrictions for the FR-3 zone are more restrictive than for the OS zone. 2) Preliminary Slope and Development Analysis: An analysis of the slopes and the potential for development has been provided in order to address the City Council's second question(See attachment 2 for slope analysis map). A. Slope Analysis: Planning Staff prepared a preliminary slope analysis map for the Lakeline Drive Lots and the Buffer Parcels(see Attachment 2). The attached topographical map generally identifies the slope of the land. Orange represents slopes greater than 30 percent and yellow identifies slopes of less than 30 percent. B. Development Potential for lots that front on Lakeline: Under the current Foothill Residential -3/12,000(FR-3)Zoning for the Lakeline Drive Subdivision lots, additions to existing residences could extend to within 35 feet of the rear(east) lot lines of the original Arcadia Height subdivision lots. Based upon existing aerial photographs and ownership plat records, approximately 30-foot deep additions could be made to the rear of all the existing subject homes without amendment to the original subdivision plats, or inclusion of any of the Buffer Parcel properties. C. Development Potential for Buffer Parcels: Of the six Buffer Parcels, only the northerly Cohen parcel and the southern most Axxon Investments' parcel have any substantial area of less than 30 percent slope,to allow the expansion of the buildable area across existing subdivision lot lines. (Note: A subdivision plat amendment application would need to be approved by the Planning Commission if any of the Buffer Parcels are to be combined with the lots in the Arcadia Heights Subdivision). The Buffer Parcel owned by the Cohens' has a narrow corridor located in the bottom of the minor drainage channel, which extends eastward and could be developed as buildable area or improved landscaped area or lot rear yard area—provided the Foothill Residential- 3/12,000(FR-3)Zoning is extended to the Buffer Parcels. Similarly,the southern Axxon Investments/Arcadia Heights subdivision lot could be amended to extend the buildable area or rear yard area to the southeast along the side hill into the southwestern part of the triangularly shaped Buffer Parcel. The other four Buffer Parcels do not,in Planning Staff opinion, contribute to the potential expansion of the buildable area of the original Arcadia Heights subdivision lots. Since all of the(6)Buffer Parcels were created by deed without formal subdivision approval and within Salt Lake County's political jurisdiction,there are no "grandfathered"lot issues, as these parcels never met minimum zoning requirements for the zoning while in the County and never had street frontage. Salt Lake City's slope restrictions would apply to these Buffer Parcels, because the parcels are not a part of any City or County approved subdivision plat. There is no possibility of these Buffer Parcels being used for homes behind the existing homes, as they lack Petition 400-05-41 —Parley's Pointe Annexation Page 3 of 4 the necessary street frontage, and will be restricted from development by the 30% slope restrictions, as stated in the City Zoning Ordinance. 3) Meeting with Council Member Soren Simonsen: On May 24, 2006, Council member Soren Simonsen and Deputy Planning Director Doug Wheelwright met with the property owners and discussed the potential zoning of their properties. Each of the property owners requested FR- 3, rather than OS, zoning. In light of the data provided above, FR-3 is an appropriate zone for these properties and will provide stricter fencing requirements than the OS zone. An ordinance designating these properties for FR-3 zoning is attached(Attachment 3). PUBLIC PROCESS Not Applicable to this supplemental transmittal. See prior transmittal for public process details. RELEVANT ORDINANCES: Salt Lake City Ordinance: Amendments to the Zoning Ordinance and Maps are authorized under Section 21A.50 of the Salt Lake City Zoning Ordinance, as detailed in Section 21A.50.050: "A decision to amend the text of this title or the zoning map by general amendment is a matter committed to the legislative discretion of the City Council and is not controlled by any one standard."It does,however, list five standards which should be analyzed prior to rezoning property(Section 21A.50.050 A-E). The five standards are discussed in detail starting on page 6 of the Planning Commission Staff Report(see Attachment 5B). Utah State Code:Utah State Code Section 10-2 regulates requirements for annexations. Section 10-9a-204 and -205 regulates the requirements for noticing a general plan amendment and land use ordinance amendment. Notice of the requested Zoning Map and Master Plan amendments were published in the newspaper on February 8, 2006,meeting State Code noticing requirements. Section 10-9a-404, states that the Planning Commission must hold a Public Hearing to consider general plan amendments and that the legislative body may adopt or reject the proposed amendment either as proposed by the Planning Commission or after making any revision that the legislative body considers appropriate. Section 10-9a-503 states that the legislative body may not make any amendment unless the amendment was first submitted to the Planning Commission for its recommendation. The Planning Commission held a Public Hearing on February 22, 2006, to consider the Zoning Map and Master Plan amendments related to the original annexation petition and recommended approval of that petition as proposed. Petition 400-05-41—Parley's Pointe Annexation Page 4 of 4 Contents 1. Zoning Ordinance for Fencing Restrictions 2. Slope Analysis Map 3. Ordinance to Zone Properties FR-3 4. City Council Hearing Notice 5. Mailing Labels Attachment 1 Zoning Ordinance, Fencing Restrictions Fencing for Each Zone Foothills Residential (FR)zoning 21A.24.010 General Provisions O.Special Foothills Regulations: The FP foothills protection district, section 21A.32.040 of this part, and the FR-1/43,560, FR-2/21,780 and FR-3/12,000 districts shall be subject to the regulations of this subsection, other general provisions for residential districts, and the district regulations of each district. 10. Fence Restrictions: Fences and walls shall only be constructed after first obtaining a building permit subject to the standards of this section. a. Site Plan Submittal: As part of the site plan review process, a fencing plan shall be submitted which shall show: i. Any specific subdivision approval conditions regarding fencing; ii. Material specifications and illustrations necessary to determine compliance with specific approval limitation and the standards of this section. b. Field Fencing Of Designated Undevelopable Areas: Fencing on areas identified as undevelopable areas or transitional areas on any subdivision granted preliminary approval by the planning commission after November 4, 1994, or any lot previously platted which identifies undevelopable areas or transitional areas shall be limited to the following standards unless subdivision approval granted prior to November 4, 1994, included specific fencing requirements which are more restrictive. The more restrictive requirement shall apply. i. Low visibility see-through fencing shall consist of flat black colored steel "T"posts and not more than four(4) strands of nonbarbed steel wire, strung at even vertical spacing between such "T"post, and erected to a height of not more than forty two inches (42") above the natural ground surface. ii. When fencing lot boundary lines, vegetation or native brush shall not be cleared so as to create a visible demarcation from off site. iii. The existing surface of the ground shall not be changed by grading activities when erecting boundary fences. iv. Fence materials and designs must not create a hazard for big game wildlife species. v. No field fencing shall be erected in conflict with pedestrian easements dedicated to Salt Lake City. c. Buildable Area Fencing: Fencing on any portion of a lot identified as buildable area or required side yard on any subdivision granted preliminary approval by the planning commission after November 4, 1994, or any lot previously platted which identifies undevelopable area or transitional areas shall be limited to the following standards unless subdivision approval granted prior to November 4, 1994, includes specific fencing requirements which are more restrictive. The more restrictive requirement shall apply. i. Open, see-through fencing constructed of tubular steel, wrought iron or similar materials, finished with a flat black, nonreflective finish constructed to a height of six feet (6') or less; or ii. Sight obscuring or privacy type fencing shall be of earth tone colors, or similar materials to the primary dwelling, and located in a way which screens private outdoor living spaces from off site view. d. Front Yard Fencing: Walls and fences located within the front yards and along roadways shall not exceed a maximum of forty two inches (42") in height. Open Space(OS)zoning 21A.32.100 OS Open Space District: No specific fencing restrictions are stated in the zoning ordinance for the OS zone. Foothills Protection (FP)zoning 21A.32.040 FP Foothills Protection District: I. Fence Restrictions: Fences and walls shall only be constructed after first obtaining a building permit subject to the standards of this subsection. 1. Site Plan Submittal: As a part of the site plan review process, a fencing plan shall be submitted which shall show: a. Any specific subdivision approval conditions regarding fencing; b. Material specifications and illustrations necessary to determine compliance with specific subdivision approval limitations and the standards of this Section. 2. Field Fencing Of Designated Undevelopable Areas: Fencing on areas identified as undevelopable areas or transitional areas on any subdivision granted preliminary approval by the Planning Commission after November 4, 1994, or any lot previously platted which identifies undevelopable areas or transitional areas shall be limited to the following standards unless subdivision approval granted prior to November 4, 1994, included specific fencing requirements which are more restrictive. The more restrictive requirement shall apply. a. A low visibility see-through fence shall consist of flat black-colored steel "T"posts and not more than four(4) strands of nonbarbed steel wire, strung at even vertical spacing on the "T"post, and erected to a height of not more than forty two inches (42") above the natural ground surface. b. When fencing lot boundary lines, vegetation or native brush shall not be cleared so as to create a visible demarcation from off-site. c. The existing surface of the ground shall not be changed by grading activities when erecting boundary fences. d. Fence materials and designs must not create a hazard for big game wildlife species. e. No field fencing shall be erected in conflict with pedestrian easements dedicated to Salt Lake City. 3. Buildable Area Fencing: Fencing on any portions of a lot identified as buildable area or required side yard on any subdivision granted preliminary approval by the Planning Commission after November 4, 1994, or any lot previously platted which identifies undevelopable areas or transitional areas shall be limited to the following standards unless subdivision approval granted prior to November 4, 1994, includes specific fencing requirements which are more restrictive. The more restrictive requirement shall apply. a. An open, see-through fence shall be constructed of tubular steel, wrought iron or similar materials, finished with a flat black, nonreflective finish constructed to a height of six feet(6') or less; or b. A sight-obscuring or privacy-type fence shall be of earth tone colors, or similar materials to the primary dwelling, and located in a way to screen private outdoor living spaces from off-site view. 4. Front Or Corner Side Yard Fencing: Walls and fences located within the front or corner side yards or along dedicated roads shall not exceed a maximum of forty two inches (42") in height. (Ord. 26-95 § 2(16-3), 1995) Attachment 2 Slope Analysis Map , E. 1 ,cl 1 6 0 Ci .:-. ...... \ -1 /,, - \ f.„„,\ / ' :•4"k.'•-' '' • \ i •(,----- . ,,,\L::,., „:„: ,,, ( , - __11 __.,,--- , ,( ,, -Iv - , „., , \ --,-----------[ i / ' ,. , 44 -.-t 'i•: \ , ...— \\. .. •N\ Ax,it ':. 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' / / ••.,, ., Cr, a-t / ------- : Attachment 3 Ordinance to zone properties FR-3 SALT LAKE CITY ORDINANCE No. of 2006 (Zoning properties previously annexed into the City located between 2111 South Lakeline Drive and 2167 South Lakeline Drive) AN ORDINANCE ZONING SIX PROPERTIES, WHICH WERE PREVIOUSLY ANNEXED INTO THE CITY, LOCATED BETWEEN 2111 SOUTH LAKELINE DRIVE AND 2167 SOUTH LAKELINE DRIVE, AS FOOTHILL RESIDENTIAL(FR-3). WHEREAS, on May 2, 2006 the Salt Lake City Council adopted Ordinance No. 24 of 2006, pursuant to Petition No. 400-05-41, by which the City approved the Parley's Pointe Annexation, filed by the Romney Lumber Company and Robert and Honora Carson, requesting the annexation of approximately 400.59 acres of unincorporated territory into Salt Lake City; and WHEREAS, as part of that ordinance, six small properties located between 2111 South Lakeline Drive and 2167 South Lakeline Drive (the "Properties") were also annexed, but were left unzoned; and WHEREAS, after having reviewed this matter further, the City Council has now determined that zoning these properties Foothill Residential would be in the best interest of the City; NOW, THEREFORE, be it ordained by the City Council of Salt Lake City, Utah: SECTION 1. Zoning. The six properties located between 2111 South Lakeline Drive and 2167 South Lakeline Drive, which are more particularly described on Exhibit A attached hereto, shall be and hereby are zoned as Foothill Residential (FR-3). SECTION 2. Amendment of Zoning Map. The Salt Lake City Zoning Map, as previously adopted by the Salt Lake City Council, shall be and hereby is amended consistent with this ordinance. SECTION 3. Effective Date. This Ordinance shall become effective upon the effective date of Ordinance No. 24 of 2006, such that the zoning of these Properties shall become effective immediately upon the annexation of these Properties. Passed and adopted by the City Council of Salt Lake City, Utah this day of , 2006. CHAIRPERSON ATTEST: CHIEF DEPUTY CITY RECORDER Transmitted to Mayor on . Mayor's Action: Approved. Vetoed. MAYOR CHIEF DEPUTY CITY RECORDER ;,t:N,k w 'WED A.'; 'C' ,- i_, .4 'St=bt Lake City Att;rte s;t'; Office BY/irfm. -- 4 — (SEAL) Bill No. of 2006. Published: I:\Ordinance 06\Zoning Lakeline Drive Properties 06-12-06.doc 2 Exhibit"A" Properties to be zoned FR-3 The following parcels have been incorporated into the corporate limits of Salt Lake City, through petition number 400-05-41, and shall be zoned as follows: 1) 16-23-201-016, owned by Andrea&Louis Barrows, to be zoned FR-3 2) 16-23-201-017, owned by Benjamin Buehner, to be zoned FR-3 3) 16-23-201-018 (partial), owned by Lynn Mabey, to be zoned FR-3 4) 16-23-201-019, owned by Axxon Investment Company, to be zoned FR-3 5) 16-23-201-013, owned by Alan& Orlene Cohen, to be zoned FR-3 6) 16-23-201-014, owned by Alan & Orlene Cohen, to be zoned FR-3 All 6 parcels: Zoning: FR-3 Legal Descriptions for each parcel: 16-23-201-016, owned by Andrea&Louis Barrows BEGINNING AT THE NORTHEAST CORNER OF LOT 602, ARCADIA HEIGHTS SUBDIVISION PLAT F, SALT LAKE CITY SURVEY; SOUTH 89°41'10" EAST 516.82 FEET; SOUTH 00°18'50" WEST 85.23 FEET; NORTH 89°41'10" WEST 505.36 FEET; NORTH 07°20'40" WEST 86 FEET TO BEGINNING. 1 ACRE. 16-23-201-017, owned by Benjamin Buehner BEGINNING AT NORTHEAST CORNER OF LOT 601,ARCADIA HEIGHTS SUBDIVISION PLAT F SALT LAKE CITY SURVEY; SOUTH 89°41'10" EAST 597.67 FEET; SOUTH 00°18'50" WEST 73.49 FEET; NORTH 89°41'10" WEST 587.79 FEET; NORTH 07°20'40" WEST 74.148 FEET TO BEGINNING. 1 ACRE. 16-23-201-018 (partial), owned by Lynn Mabey LOT 607, ARCADIA HEIGHTS PLAT F. ALSO BEGINNING AT MOST EASTERLY CORNER OF SAID LOT 607; SOUTH 62°EAST 15.08 FEET; SOUTH 34° WEST 98.76 FEET; NORTH 54°45' WEST 15 FEET; NORTH 34° EAST 96.86 FEET TO BEGINNING. 16-23-201-019, owned by Axxon Investment Company BEGINNING SOUTH 89°41'10" EAST 130 FEET & SOUTH 7°20'40" EAST 348.755 FEET & SOUTH 7°30' WEST 110.172 FEET FROM NORTH 1/4 CORNER OF SECTION 23, TOWNSHIP 1 SOUTH RANGE 1 EAST SALT LAKE BASE AND MERIDIAN; SOUTH 7°30' WEST 112.166 FEET; SOUTH 12°30'EAST 220.793 FEET; WEST 193.348 FEET TO WEST LINE OF EAST 1/2 OF SAID SECTION 23; NORTH 89.26 FEET;NORTH 34°EAST 79.794 FEET; SOUTH 54°45'EAST 15 FEET; NORTH 34° EAST 98.76 FEET; NORTH 62° WEST 15.08 FEET; NORTH 34° EAST 109.831 FEET TO BEGINNING. 0.71 ACRES 16-23-201-013, owned by Alan & Orlene Cohen: BEGINNING AT THE NORTHEAST CORNER OF LOT 603, ARCADIA HEIGHTS SUBDIVISION, PLAT F, SALT LAKE CITY SURVEY; SOUTH 89°41'10" EAST 516.82 FEET; SOUTH 00°8'50" WEST 85.23 FEET NORTH 89°41'10" WEST 505.36 FEET; NORTH 07°20'40" WEST 86 FEET TO BEGINNING. 1 ACRE. 16-23-201-014, owned by Alan& Orlene Cohen BEGINNING AT THE NORTHEAST CORNER OF LOT 604, ARCADIA HEIGHTS SUBDIVISION, PLAT F, SALT LAKE CITY SURVEY; SOUTH 89°41'l0" EAST 435.20 FEET; SOUTH 00° EAST 8'50" WEST 101.69 FEET; NORTH 89°41'10" WEST 421.53 FEET; NORTH 07°20'40" WEST 102.61 FEET TO BEGINNING. 1 ACRE. GjC Attachment 4 City Council Hearing Notice NOTICE OF PUBLIC HEARING This notice is regarding a public hearing that will be held to determine the appropriate zone for the following properties: 1) 16-23-201-017, owned by Benjamin Buehner 2) 16-23-201-016, owned by Andrea&Louis Barrows 3) 16-23-201-013, owned by Alan& Orlene Cohen 4) 16-23-201-014, owned by Alan& Orlene Cohen 5) 16-23-201-018 (partial), owned by Lynn Mabey 6) 16-23-201-019, owned by Axxon Investment Company(Lynn Mabey) These properties are being annexed into the corporate limits of Salt Lake City through the Parley's Pointe Annexation(Petition No. 400-05-41). The appropriate zone for your properties has been under discussion. The City Council will make a decision on the zoning of these properties at a public hearing that will be held: DATE: TIME: 7:00 p.m. PLACE: City Council Chambers City and County Building 451 South State Street, Room 315 Salt Lake City, Utah If you have any questions relating to this proposal,please attend the meeting or call Sarah Carroll at 535-6260 between the hours of 8:00 a.m. and 5:00 p.m., Monday through Friday. Salt Lake City complies with ADA guidelines. Assistive listening devices and interpretive services will be provided upon a 24-hour advance request. Attachment 5 Mailing Labels Benjamin Buehner 2111 South Lakeline Drive Salt Lake City, UT 84109 Andrea and Louis Barrows 2119 South Lakeline Drive Salt Lake City, UT 84109 Alan and Orlene Cohen 2133 South Lakeline Drive Salt Lake City, UT 84109 Lynn Mabey/Axxon Investment Co. 2155 South Lakeline Drive Salt Lake City, UT 84109 Benjamin Buehner 2111 South Lakeline Drive Salt Lake City, UT 84109 Andrea and Louis Barrows 2119 South Lakeline Drive Salt Lake City, UT 84109 Alan and Orlene Cohen 2133 South Lakeline Drive Salt Lake City, UT 84109 Lynn Mabey/Axxon Investment Co. 2155 South Lakeline Drive Salt Lake City, UT 84109