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07/11/2023 - Meeting Materials
Board of Directors of the
REDEVELOPMENT AGENCY OF
SALT LAKE CITY
AGENDA
July 11, 2023 Tuesday 2:00 PM
Council Work Room
451 South State Street, Room 326
Salt Lake City, UT 84111
SLCRDA.com
In accordance with State Statute and City Ordinance, the meeting may be held electronically. After 5:00
p.m., please enter the City & County Building through the main east entrance.
This is a discussion among RDA Board Directors and select presenters. The public is welcome to listen,
unless otherwise specified as a public comment period. Items scheduled may be moved and / or discussed
during a different portion of the Meeting based on circumstance or availability of speakers. Item start
times and durations are approximate and are subject to change at the Chair’s discretion.
Generated: 14:50:06
Comments:A.
1.General Comments to the Board ~2:00 p.m.
5 min
The RDA Board of Directors will receive public comments regarding Redevelopment
Agency business in the following formats:
1.Written comments submitted to RDA offices, 451 South State Street, Suite 118, P.O.
Box 145455, Salt Lake City, UT. 84114-5455.
2.Comments to the RDA Board of Directors. (Comments are taken on any item not
scheduled for a public Hearing, as well as on any other RDA Business. Comments
are limited to two minutes.)
B.Public Hearing - individuals may speak to the Board once per public hearing
topic for two minutes, however written comments are always accepted:
NONE.
C.Redevelopment Agency Business - The RDA Board of Directors will receive
information and/or hold discussions and/or take action on:
1.Informational: Tax Increment Reimbursement Program Policy and
Housing and Transit Reinvestment Zone Tax Increment
Reimbursement Policy
~ 2:05
p.m.
30 min.
The Board will receive a briefing about two policy updates. The first is a proposed
amendment to the existing tax increment policy, which is designed to support
development projects with wide-reaching, regional impact. The second would establish a
new Housing and Transit Reinvestment Zone (HTRZ) Tax Increment Reimbursement
Program Policy to account for the different requirements in a separate section of the Utah
Code governing HTRZs, which differ from traditional project areas.
2.Motion: Releasing Funding for the Affordable Housing Initiative -
Perpetual Housing Fund
~ 2:35
p.m.
25 min.
The Board will receive a briefing from RDA staff regarding a draft term sheet creating a
partnership with the Perpetual Housing Fund of Utah (PHF) for a tenant wealth building
program. The Administration is requesting the Board review the draft term sheet, and if
acceptable, release the $10 million from American Rescue Plan Act (ARPA) dollars
approved in Budget Amendment No. 6 of Fiscal Year 2022-23 for this purpose.
For more information on this item visit https://tinyurl.com/SLCHousingProposals.
3.Resolution: Amendment to Terms for Loan to Ville 1659, LLC, and
Clarification of Housing Development Loan Program
~ 3:00
p.m.
30 min.
The Board will be briefed about and will consider approving, a resolution that would
modify the terms of Ville 1659 project’s Housing Development Loan Program (HDLP)
loan located at 1659 West North Temple. Changing the type of loan from a construction
gap loan with cash-flow payments to a bridge loan with a balloon payment at the end of
the term. The term of the loan would be reduced from 40 years to three, at a one percent
interest rate rather than two percent.
4.Report and Announcements from the Executive Director TENTATIVE
5 min.
Report of the Executive Director, including a review of information items,
announcements, and scheduling items. The Board of Directors may give feedback or
policy input.
5.Report and Announcements from RDA Staff TENTATIVE
5 min.
The Board may review Board information and announcements. The Board may give
feedback on any item related to City business, including but not limited to;
•Property Update;
•Project Milestone Update; and
•Scheduling Items.
6.Report of the Chair and Vice Chair TENTATIVE
5 min.
Report of the Chair and Vice Chair.
D.Written Briefings – the following briefings are informational in nature and
require no action of the Board. Additional information can be provided to the
Board upon request:
NONE.
E.Consent – the following items are listed for consideration by the Board and can be
discussed individually upon request. A motion to approve the consent agenda is
approving all of the following items:
NONE.
F.Tentative Closed Session
The Board will consider a motion to enter into Closed Session. A closed meeting described
under Section 52-4-205 may be held for specific purposes including, but not limited to:
1.discussion of the character, professional competence, or physical or mental health of
an individual;
2.strategy sessions to discuss pending or reasonably imminent litigation;
3.strategy sessions to discuss the purchase, exchange, or lease of real property:
(i)disclose the appraisal or estimated value of the property under consideration; or
(ii)prevent the public body from completing the transaction on the best possible
terms;
4.strategy sessions to discuss the sale of real property, including any form of a water
right or water shares, if:
(i)public discussion of the transaction would:
(A)disclose the appraisal or estimated value of the property under
consideration; or
(B)prevent the public body from completing the transaction on the best possible
terms;
(ii)the public body previously gave public notice that the property would be offered
for sale; and<
(iii)the terms of the sale are publicly disclosed before the public body approves the
sale
5.discussion regarding deployment of security personnel, devices, or systems; and
6.investigative proceedings regarding allegations of criminal misconduct.
A closed meeting may also be held for attorney-client matters that are privileged pursuant to
Utah Code § 78B-1-137, and for other lawful purposes that satisfy the pertinent requirements of
the Utah Open and Public Meetings Act.
Adjournment G.
CERTIFICATE OF POSTING
On or before 5:00 p.m. on Thursday, July 6, 2023, the undersigned, duly appointed City Recorder,
does hereby certify that the above notice and agenda was (1) posted on the Utah Public Notice
Website created under Utah Code Section 63F-1-701, and (2) a copy of the foregoing provided to The
Salt Lake Tribune and/or the Deseret News and to a local media correspondent and any others who
have indicated interest.
CINDY LOU TRISHMAN
SALT LAKE CITY RECORDER
Final action may be taken in relation to any topic listed on the agenda, including but
not limited to adoption, rejection, amendment, addition of conditions and variations
of options discussed.
The City & County Building is an accessible facility. People with disabilities may make requests for
reasonable accommodation, which may include alternate formats, interpreters, and other auxiliary
aids and services. Please make requests at least two business days in advance. To make a request,
please contact the City Council Office at council.comments@slcgov.com, 801-535-7600, or relay
service 711.
1
BOARD STAFF REPORT
THE REDEVELOPMENT AGENCY of SALT LAKE CITY
TO:RDA Board Members
FROM: Allison Rowland
Budget & Policy Analyst
DATE:July 11, 2023
RE: INFORMATIONAL: POLICY UPDATES ON TAX INCREMENT REIMBURSEMENT
PROGRAM POLICY AND HOUSING AND TRANSIT REINVESTMENT ZONES (HTRZs)
ISSUE AT-A-GLANCE
The Board will receive a briefing on two proposed policy changes to the RDA’s tax increment reimbursement
policies. In the first, RDA staff proposes several amendments for its existing tax increment policy, which are
designed to simplify and strengthen project criteria for tax increment reimbursement, ensuring “only the most
transformative projects with wide-reaching public impact” are eligible (see section A below).
The second would create a new tax increment policy for areas known as Housing and Transit Reinvestment
Zones (HTRZs) (see section B below). Since 2021, State law has allowed municipalities to establish HTRZ
project areas around public transit facilities to encourage mixed-use, affordable housing development and
increased public transit use. RDA staff recommends that the Board adopt a policy specific to HTRZ tax
increment because these zones are subject to different requirements and regulated by a separate section of State
Code than traditional project areas.
Goal of the briefing: Discuss proposed modifications to existing tax increment policy and HTRZ tax
increment policy.
ADDITIONAL INFORMATION
A.Proposed Thresholds for Existing Tax Increment Policy. The proposed amendments for the
existing (non-HTRZ) tax increment policy are below.
1. Projects would be required either to:
Item Schedule:
Briefing: July 11, 2023
Set Date: n/a
Public Hearing: n/a
Potential Action: n/a
Page | 2
a. provide a significant economic impact by creating a regional amenity or use that incorporates a
significant amount of land area or is supported by a high level of private investment. The
criteria for significant land area and high level of private investment would be defined in policy.
OR
b. preserve a historic structure and be supported by a high level of private investment. The criteria
for a high level of private investment would be defined in policy.
In addition, projects would be required to:
c. include activated, ground-floor space.
d. comply with the RDA’s Sustainable Development Policy.
e. provide sufficient evidence that tax increment funding is necessary for the project to succeed.
f. for housing projects, include a minimum level of affordable housing. RDA staff notes that while
the HTRZ Act requires a minimum of 10% of units be affordable at 80% or less of Area Median
Income (AMI), the City’s HTRZ tax increment policy could require a higher threshold, for
example, 20% of units at 80% AMI, or 10% of units at 60% AMI. This threshold could also
include the RDA’s annual housing priorities.
g. for non-housing projects, meet at least two of the RDA’s qualifying livability benchmarks (see
the transmittal’s Attachment A).
Policy Question: In item 1a above, the Board may wish to ask RDA staff to further
elaborate the criteria for providing a “significant economic impact,” as well. For
example, would it be important to include who would benefit from this impact, or the
expected timing of the benefits?
2.Tax Increment Participation Rate and Term. The reimbursement rate and term (within the
remaining years of the project area’s collection period) would be negotiated according to both the level
of public benefit and the demonstrated financial need of each project. This would allow RDA staff to be
able to “consider increased participation for the most exceptional projects.”
B.Proposed Policy Components of RDA HTRZ Tax Increment Policy.
1.Background. The RDA’s first HTRZ application in the general area of the Granary District, submitted
in April 2023, is currently under review by the State. It proposes using 10% to 40% of tax increment
from an HTRZ for large public infrastructure projects in that area, with the remaining 60% to 90%
available as tax increment revenue to specific developments there. (One percent of the total would be
used for related RDA administration costs.) RDA staff plans to use the HTRZ tax increment policy as
guidance for negotiation and distribution of this revenue among specific projects for any applications
approved by the State.
2.Project Thresholds. RDA staff proposes that to be eligible for HTRZ tax increment revenue projects
must:
a. meet the standards and objectives of the HTRZ Act.
b. include activated, ground-floor space.
Page | 3
c. comply with the RDA’s Sustainable Development Policy.
d. provide sufficient evidence that tax increment funding is necessary for the project to succeed.
e. for housing projects, include a minimum level of affordable housing. RDA staff notes that while
the HTRZ Act requires a minimum of 10% of units be affordable at 80% or less of Area Median
Income (AMI), the City’s HTRZ tax increment policy could require a higher threshold, for
example, 20% of units at 80% AMI, or 10% of units at 60% AMI. This threshold could also
include the RDA’s annual housing priorities.
f. for non-housing projects, meet at least two of the RDA’s qualifying livability benchmarks (see
the transmittal’s Attachment A).
3.Tax Increment Participation Rate. RDA staff proposes that a project which meets the threshold
criteria would provide the developer 60% of the tax increment collected. An additional 10% increment,
reaching up to 90%, could be included to reflect each additional public benefit incorporated into the
project. This would include those related to the level and amount of affordable housing in a project.
4.Tax Increment Reimbursement Term. The State mandates the proposed maximum HTRZ terms
depending on the type of transit in the area. It is the lesser of 15 years for a light rail or bus rapid transit
station and 25 years for a commuter rail station, or the total remaining collection years on the project
parcels.
TAX Increment
reimbursement
Policy Updates
RDA Board
July 11, 2023
A financial incentive/tool in the RDA's toolbox ---
Allows for a portion of property tax generated by a
development to be reimbursed back to the
developer over time
Direct payments - don't need to be paid back
Post-performance based
Should be used to incentivize most
impactful development
WHAT IS A TAX
INCREMENT
REIMBURSMENT?
State standards within HTRZ Act
Activated ground floor space
Sustainable development policy
Financial need
Affordable housing minimum - 20% of units at 80% AMI, or, 10% of units at 60%
AMI
First four requirements
Policy needed to guide tax increment reimbursements in Housing and
Transit Reinvestment Zones (HTRZs)
THRESHOLDS ---
Housing projects:
Non-housing projects
+ Meet at least 2 of the RDA's qualifying livability benchmarks
TERM --- set by the State
PARTICIPATION RATE --- baseline of 60%, can garner more with more benefit
HTRZ
TAX INCREMENT
POLICY
PROPOSAL
Activated ground floor space
Sustainable development policy
Financial Need
Affordable housing minimum - 20% of units at 80% AMI, or, 10% of units at 60% AMI
Updated policy for tax increment reimbursements outside of HTRZs
(Community Reinvestment Areas)
THRESHOLDS ---
Regional in nature with wide-reaching, beneficial community and economic impact that
incorporates at least five acres of land or is supported by a significant level of private
investment, OR;
Preserves a historic structure that is at least 50 years old in a National Historic District to be
used for a beneficial, community-serving use and is supported by a significant level of private
investment.
AND;
+ Meet at least 2 of the RDA's qualifying livability benchmarks
TERM & PARTICIPATION RATE --- to be negotiated
TAX INCREMENT
POLICY
UPDATE
N E I G H B O R H O O D V I B R A N C YECONOMIC O P P O R T U N I T Y E Q U I T Y + I N C L U S I O N
V A L U E S
Leveraging
Timeliness
Return of Investment
Permanent Job Creation &
Retention
Affordable Commercial Spaces
Ownership
Transit Opportunities
Mixed-Income Neighborhoods
Neighborhood Safety
Community Engagement &
Support
Housing for Everyone
Displacement Mitigation
Affordable Housing Preservation
Public Space
Public Art
Architecture & Urban Design
Sustainability
Walkability
Building Preservation, Rehabilitation, &
Adaptive Reuse
Missing Middle & Unique Building Types
We prioritize people-focused projects and
programs that encourage everyone to
participate in and benefit from
development decisions that shape their
communities.
We cultivate distinct and livable built
environments that are contextually
sensitive, resilient, connected, and
sustainable.
We invest in the long-term prosperity and
growth of our local economy.
L I V A B I L I T Y B E N C H M A R K S
SALT LAKE CITY CORPORATION
451 SOUTH STATE STREET, ROOM 118 WWW.SLC.GOV · WWW.SLCRDA.COM
P.O. BOX 145518, SALT LAKE CITY, UTAH 84114-5518 TEL 801-535-7240 · FAX 801-535-7245
MAYOR ERIN MENDENHALL
Executive Director DANNY WALZ
Director
REDEVELOPMENT AGENCY of SALT LAKE CITY
DATE: June 23, 2023
PREPARED BY: Lauren Parisi, RDA Senior Project Manager
RE: Tax Increment Reimbursement Policy Updates
REQUESTED ACTION: Briefing on the Proposed HTRZ Tax Increment Reimbursement Policy and
Amendments to the Current Tax Increment Reimbursement Policy
POLICY ITEM: Tax Increment
BUDGET IMPACTS: N/A
EXECUTIVE SUMMARY: In 2021, the State of Utah passed the Housing and Transit Reinvestment
Zone (“HTRZ”) Act (“Act”) and subsequent amendments in 2022 and 2023. The Act allows for
municipalities to establish project areas known as HTRZs around public transit facilities to facilitate mixed-
use, affordable housing development and an increased utilization of public transit. Because HTRZs are
subject to different requirements and regulated by a separate section of State Code than traditional project
areas, the Redevelopment Agency of Salt Lake City (“RDA”) should consider adopting a separate policy to
guide the disbursement of tax increment (“TI”) in these areas.
In addition to establishing an HTRZ Tax Increment Reimbursement Program Policy (“HTRZ TI Policy”),
there are amendments that may be made to the RDA’s existing Tax Increment Reimbursement Program
Policy (“TI Policy”) to support the most transformative development projects with wide-reaching, regional
impact. This memo summarizes both policy proposals for the RDA Board of Director’s (“Board”) initial
review and discussion.
BACKGROUND:
Tax increment reimbursement (“TIR”) allows for a portion of the property tax generated by a development
to be reimbursed back to the developer over a given period of time. TIRs are a powerful tool to incentivize
high-quality development because unlike a loan, the funding is a direct payment that does not need to be
paid back. TIRs are post-performance based in that the amount of the reimbursement is calculated as a
percentage of the property tax revenue generated by the development. Projects often use TIRs to fund
significant development costs and it often allows developers to attract additional funding sources.
ANALYSIS:
HTRZ TI Policy Components – HTRZs differ from the more traditional RDA project areas like
Community Reinvestment Areas (“CRA”) in that they are intended to facilitate transit-oriented
development around public transit stops and, importantly, are regulated by a separate section of State Code
2
than CRAs. The RDA submitted its first HTRZ application to the State in April 2023 (currently under
review) and intends to submit additional requests in the future. A Board-approved HTRZ TI Policy will
help guide RDA staff in the negotiation and distribution of TIR to specific projects if/when an HTRZ is
approved by the State.
In the April 2023 HTRZ application, the RDA proposed using 10% to 40% of the tax increment collected
by the RDA from the HTRZ for large public infrastructure projects in the area. The Agency is authorized to
capture 1% for administration costs related to the HTRZ. The remainder of the increment (60% to 90% of
the tax increment collected by the RDA) would be available for TIR to specific developments.
Components of the draft HTRZ TI Policy have been outlined for the Board’s review below.
1. HTRZ TI Policy Thresholds –
Projects must
• Meet the standards and objectives of the HTRZ Act (Utah State Code 63N-3)
• Include activated, ground-floor space
• Comply with the RDA’s Sustainable Development Policy
• Provide sufficient evidence that tax increment funding is necessary for the project to succeed
• (Housing Projects) Include a minimum level of affordable housing – The HTRZ Act requires a
minimum of 10% of units be affordable to those at 80% of the Area Median Income (AMI) or
less. The HTRZ TI Policy could require an increased threshold of 20% of units at 80% AMI or
10% of units at 60% AMI to generate more affordable housing. This threshold may also
consider the RDA’s annual housing priorities.
• (Non-Housing Projects) Meet at least two (2) of the RDA’s qualifying livability benchmarks
(Attachment A).
2. Tax Increment Participation Rate –
Meeting the threshold criteria would allow for a developer to capture up to 60% of the tax
increment collected by the RDA from the subject property. The draft policy allows for an increased
participation rate of 10% for each additional public benefit (including an increased level/amount of
affordable housing) that is incorporated into the project, up to a total potential participation rate of
90%.
3. Tax Increment Reimbursement Term –
The maximum reimbursement term will be fifteen (15) years for an HTRZ centered around a light
rail or bus rapid transit station and twenty-five (25) years for an HTRZ centered around a commuter
rail station, or the total remaining collection years on the project parcels, whichever is less. These
terms are established by the State in the HTRZ Act.
Amended TI Policy Components – In addition to the RDA’s recommendations for creating a new HTRZ
TI Policy (as described above), multiple amendments are proposed for the current TI Policy. As the policy
is currently written, developments must generally align with the relevant RDA project area plan and meet
one public benefit. The intent of the proposed amendments is to simplify the policy and, most importantly,
3
strengthen the criteria by which projects are eligible for a TIR – reserving this tool for only the most
transformative projects with wide-reaching public impact.
Components of the amended TI Policy have been outlined for the Board’s review below.
1. TI Policy Thresholds –
Projects must
• Result in a significant economic impact by creating a regional amenity or use that incorporates
a significant amount of land area or is supported by a high level of private investment (criteria
for significant land area and high level of private investment to be defined in policy).
OR:
• Preserve a historic structure and be supported by a high level of private investment (criteria for
high level of private investment to be defined in policy).
AND:
• Include activated, ground-floor space
• Comply with the RDA’s Sustainable Development Policy
• Provide sufficient evidence that tax increment funding is necessary for the project to succeed
• (Housing Projects) Include a minimum level of affordable housing – 20% of units at 80% of the
Area Median Income (AMI) or 10% of units at 60% AMI to generate more affordable housing.
• (Non-Housing Projects) Meet at least two (2) of the RDA’s qualifying livability benchmarks
(Attachment A).
2. Tax Increment Participation Rate and Term –
The reimbursement participation rate and term will be negotiated based upon a project’s level of
public benefit as well as demonstrated financial need. This allows for the RDA to consider
increased participation for the most exceptional projects. The term would never exceed the
remaining years of project area’s tax increment collection period.
NEXT STEPS:
The Board may wish to review the proposed policy components and discuss whether they’re adequate
and/or if additional considerations should be made. Staff will return to the Board with formal policies for
additional discussion and potential adoption.
ATTACHMENT:
• Attachment A – RDA Livability Benchmarks
4
ATTACHMENT A – RDA Livability Benchmarks
Public Benefit Description & Intent
EC
O
N
O
M
I
C
O
P
P
O
R
T
U
N
I
T
Y
Leveraging To promote the leveraging of non-RDA/City sources of funding to maximize private
investment.
Timeliness To support projects that have a reasonable timeframe for completion.
Return of Investment To promote the return on RDA resources, thereby enabling resources to extend further in
the community.
Permanent
Job Creation To promote neighborhoods with a balanced economy that produces quality jobs.
Affordable Commercial Spaces
To reduce the displacement risk of existing community businesses and/or reduce barriers
to entry for new, underrepresented business and service types, particularly locally-owned
and independent businesses and non-profits that promote neighborhood identity, economic
vitality, and local economic multipliers
Ownership To encourage the creation of opportunities for residents/business owners to build wealth
and/or establish permanent roots through affordable home/commercial ownership.
EQ
U
I
T
Y
&
I
N
C
L
U
S
I
O
N
Transportation Opportunities To promote a multimodal transportation
network and ensure convenient and equitable access to a variety of transportation options.
Mixed-Income Neighborhoods To promote mixed-income developments, economically integrated communities, and
housing opportunities for low-income residents.
Neighborhood Safety To reduce the number of vacant and distressed buildings and lots to reduce crime and
return land to a productive use.
Community Engagement &
Support
To provide a stronger platform for community members to inform and influence
development project during initial planning stages and to preserve cultural heritage.
Housing for Everyone To promote housing for families, underserved populations
Displacement Mitigation
To mitigate the displacement of current residents and residents with generational ties to the
neighborhood or provide opportunities for those who have already been displaced to
return.
Affordable Housing Preservation To preserve existing affordable housing
NE
I
G
H
B
O
R
H
O
O
D
V
I
B
R
A
N
C
Y
Public
Space
To promote community amenities that provide opportunity for social interaction; support
cultural events; promote neighborhood identity; and reinforce neighborhood character.
Public Art To promote cultural expression and add to the experience and value of the built
environment through art that is publicly visible or accessible for all to experience.
Architecture & Urban Design To promote high quality architecture that enhances the public realm, strengthens the
neighborhood’s unique character, and uses enduring materials.
Sustainability To promote a built environment that assists with protecting resources and promoting
greater resiliency.
Walkability To promote walkable neighborhoods and connectivity, and support a safe, engaging
pedestrian experience.
Building Preservation,
Rehabilitation, or Adaptive Reuse
To acknowledge a neighborhood’s history and maintain its unique character through
preservation, rehabilitation, or repurposing of historic or underutilized structures.
Missing Middle & Unique Housing
Types
Promote an array of scale of project types to diversify the City’s housing stock/forms and
provide more affordable living options for residents.
STAFF REPORT
BOARD OF THE REDEVELOPMENT AGENCY of SALT LAKE CITY
TO:RDA Board Members
FROM: Jennifer Bruno, Deputy Director
DATE: July 11, 2023
RE: Releasing City ARPA Funds for
Perpetual Housing Fund (PHF) Investment
PROJECT TIMELINE:
Briefing: May 2, 2023 & July
11, 2023
Set Date: April 18, 2023
Public Hearing: May 2, 2023
Potential Action: TBD
ISSUE AT-A-GLANCE
The Board will receive a briefing from RDA staff regarding a draft term sheet creating a partnership
with the Perpetual Housing Fund of Utah (PHF) for a tenant wealth building program, using City
American Rescue Plan Act (ARPA) dollars. The Administration is requesting the Board review the
draft term sheet, and if acceptable, adopt a motion to release the $10 million from ARPA dollars
approved by the Council in Budget Amendment #6 of FY 23 for this purpose.
Goal of the briefing: Review the proposed term sheet and consider releasing funds previously
appropriated in conjunction with Budget Amendment #6.
Draft Term Sheet
Based on the Council’s discussion during Budget Amendment #6, and consistent with the motion
adopted by the Council in June 2023 (see attached), the Administration/RDA have returned with a
draft term sheet to formalize the City’s partnership with PHF and expectations as it relates to the
City’s $10 million investment. The project (515 East 100 South) and wealth building tools are detailed
in the Administration’s transmittal and in the previous staff report (starting on page 2 of this memo),
along with general goals of the PHF. The following are some key elements of the draft term sheet,
which is included as an attachment to the Administration’s transmittal:
•The funding is tied specifically to property at 515 East 100 South
•The $10 million in City funds will be used to purchase property by June 30, 2024
•RDA will be treated like an equity investor and receive a 2-6% annual return paid each year
•PHF commits to an additional 1,000 by year 20, although these additional projects are NOT
tied to the $10 m investment. From the term sheet: “These additional projects shall also
include the tenant wealth building initiative and, if new construction, will achieve an energy
star score of 90 or higher, participate in the City’s Elevate Buildings Program, and be designed
to operate without onsite fossil fuel combustion.”
•The term sheet allows for the waiver of the RDA’s Sustainability Policy if necessary, due to the
adaptive re-use element of the 515 project.
Page | 2
•It outlines the terms of a restrictive covenant and the plans for wealth-building opportunities
(which means these opportunities would be included in the contract)
•“Receive approval from the RDA and the City Attorney’s Office on all matters pertaining to
title, legality of the funding agreement, and the legality, sufficiency, and form and substance of
all other documents that are deemed reasonably necessary for the funding transaction.”
•PHF will provide biannual progress reports to the RDA
•Remedy if the project defaults (PHF fails to construct 515 project in timeframe, fails to
maintain affordability or reports, fails to comply with other city, state, federal requirements) –
RDA may file a breach of contract claim for damages, relief, or “any other remedy available at
law or equity”
➢The Board may wish to discuss elements of the term sheet with RDA Staff.
Concerted Community Revitalization Plan (CCRP)
The Perpetual Housing Fund is also planning to develop and submit a Concerted Community
Revitalization Plan (CCRP), which would outline and formalize it’s partnership with the City. This
would increase the scoring points for Perpetual Housing Fund LIHTC proposals into the future. The
transmittal indicates that the CCRP document “is a plan from a local jurisdiction which establishes
an active partnership between local government and a community=-based organization that
commits to measurable goals, actions, and timetables to foster the construction or rehabilitation of
affordable housing. This document must be approved by the local jurisdiction’s governing body…”.
Staff note: The CCRP is not yet before the Board/Council for consideration.
➢The Board may wish to discuss with the Administration if there are other
community partners that it would make sense to include in this kind of plan
before it is transmitted to the Board/Council for consideration.
Attachments
Attachment 1 – Budget Amendment #6 Motion Adopting $10 Million ARPA with contingency –
June 6, 2013
Attachment 2 – PHF Presentation to City Council - May 2, 2023
The following information was provided for the Council discussion on May 2. It is
provided again for reference.
Staff note: Council staff is working with the Administration to clarify exact figures referenced in this
report, as new information was received immediately prior to publishing.
The Administration has transmitted a proposal in Budget Amendment #6 that would invest $10
million of the City’s American Rescue Plan Act (ARPA) dollars to create “lasting, generational changes
for families in Salt Lake City”. These dollars would be provided to the Perpetual Housing Fund of
Utah, LLC, (PHF) an external non-profit housing developer. This non-profit would then leverage tax
credits and other private dollars to acquire properties and/or existing structures for the construction
of affordable units. The City’s investment would essentially be seed money for a portion of an initial
development (515 East 100 South), and profits in the form of both equity and cash flow, would shared
with residents on a 75% basis. 2-6% of cash flow would be paid to the City/RDA for administrative
expenses, and the remaining project profits would be used to construct additional projects in the City.
The Perpetual Housing Fund is a non-profit affordable housing developer with a mission to share
profits and equity with PHF project residents, unlike a typical non-profit housing development model
that uses profits to build more units. See www.perpetualhousing.org for more information.
Page | 3
The transmittal indicates that over a period of 15-20 years, the City’s partnership with PHF could
create as many as 1500 affordable units, whose profits and equity would be shared with the residents
(see Policy Question #1). The transmittal indicates that PHF’s first Salt Lake City project would create
just over 100 wealth/equity sharing units over multiple phases and break ground by 2024, with a
priority to acquire additional land in the City for subsequent projects. Staff note: Council Staff is
working with the Administration to clarify exactly how many units will be built with the City’s $10
million investment, and in which phases. See key elements section for more details on the first
project.
The PHF would share profits from the City’s component part of any project in the following ways
(note: these are not mutually exclusive, but amounts would be dependent on actual cash flow and
actual equity created. Accessing cash flow is a different tool than accessing equity in the sense that
Equity is based on the total value of the project in current and future years, whereas cash flow is
actual cash generated from the project after bills and operating expenses are paid):
•Annual Rent Rebate (funded from Cash flow) – a portion of the annual cash flow (after paying
all building operating expenses and debt service) would be allocated via cash payment
distributed on an annual basis. This would be paid to the tenant each year automatically.
•Profit Payout (funded from Equity) – If the developer refinances, or if there is another “event”
that generates profit, all the cumulative residents over time will receive a payment that
represents a proportional share (proportionate based on the length of time they lived in a PHF
unit). This would be paid to the tenant automatically. Note: if the property is financed with
LITHC this would not occur until at least 15 years into the life of the project b/c of LIHTC
investor exits.
•Profit advance (funded from Equity) – PHF will set aside a portion of its initial developer fee to
establish an account that a resident could access for a zero interest loan in the event of an
emergency or major life event (medical, educational, entrepreneurial, etc). This is an optional
benefit and each resident could access only their proportionate amount of equity accrued.
•Profit Tradeup (funded from Equity) – PHF will be partnering with the Rocky Mountain Homes
Fund to build missing-middle home ownership options for households at 60-120% AMI. The
first 100 units planned are in the 515 East 100 South project, although more are contemplated
in SLC. The transmittal indicates that PHF tenants could transfer accruals from a PHF project
for a reduction in purchase price on an RMHF home. This is an optional benefit and each
resident could access only their proportionate amount of equity accrued.
Goal of the briefing: Review the proposed Perpetual Housing Fund and consider appropriating
funds in conjunction with Budget Amendment #6.
KEY ELEMENTS
A.The Model – the following graphics from the PHF website illustrate the model in concept:
As compared to the typical funding model for projects:
Page | 4
B. Initial Projects - The Administration has provided information on the first two projects using
this model, so that ARPA funds can be expended by the middle of 2024.
1. The first project, which includes two to three phases, is an adaptive reuse of a 14 story
commercial office building and a new build residential tower into approximately 250
mixed-income units, and is located at 515 East 100 South. Construction estimated to begin
in late 2023/early 2024.
i. The City’s investment would initially build 38 equity-sharing units as the first phase
of the project, that would operate under the above-mentioned equity/wealth
sharing model.
ii. These units would be a mix of 1, 3 and 4 bedrooms, targeted to 25-50% Area
Median Income (AMI).
iii. The project is unique in its financing mechanism, as it is split into several
component parts and phases to ensure project profits from one area are tracked
separately from other areas. The City’s $10 million investment would be directed
solely towards those 38 equity/wealth sharing units. See attached cash flow which
illustrates one phase of the project. Staff is working with the Administration to get
information about how the City’s initial investment relates to the overall project
cash flow.
iv. The Administration and PHF notes that absent the City’s investment “…the overall
number of SLC households served…would be significantly reduced and [units
would] take far longer to come online…”.
v. Other components of the project – information from the Administration indicates
that the second phase would be constructed in partnership with the Rocky
Mountain Homes Fund, and would build 100 for-sale condominium units targeting
60-120% AMI, and two additional equity-sharing phases one in the office
conversion tower which would be around 40 units, one in a new-build tower which
would be around 48 units.
2. The Administration indicates that they have selected the June 2024 deadline for all the
City investment to be spent with the PHF, so that if there is a delay in construction for
some reason, the City can deploy those ARPA resources in other ways before the December
2024 federal deadline.
C.Conditions for funding – The Administration’s transmittal proposes a number of conditions,
with an invitation for Council feedback, that the Administration (via the RDA) would include in a
contract with the PHF:
1. PHF will deploy 100% of the City’s Rescue Plan Funds on eligible projects in Salt Lake City
and in compliance with ARPA requirements before June 30, 2024. More specifically, the
funds will be spent by PHF on the purchase of the condominium-ized affordable units and
construction costs for the project at 515 east 100 south.
2. The Rescue Plan Funds will be distributed concurrently with PHF closing on the
acquisition of the affordable units.
Page | 5
3. At the same time that the Rescue Plan Funds are distributed, PHF will record a restrictive
covenant requiring PHF to maintain affordable housing at the 515 east 100 south project at
25-50% AMI, construct and maintain a mix of unit sizes, and wealth building (as detailed
above) for a period of not less than 30 years. The restrictive covenant will also require PHF
to provide a quarterly report to the RDA.
4. The funding agreement will require PHF to commit to developing future projects in Salt
Lake City and ensure those projects contain units affordable to those at 65% AMI and
below.
5. PHF will implement an equitable process for tenant selection and, as permitted by law,
potentially prioritize certain applicants if the City desires.
6. As permitted by ARPA, the RDA, as a transformational seed funder, will be treated like an
equity investor and receive between a 2% and 6% return on its capital contribution, paid
annually every year.
7. RDA to approve all legal agreements as recommended by the City Attorney.
8. Prior to distributing the funds, PHF will have received all required City approvals for the
project to move forward.
9. Prior to distributing the funds, PHF will demonstrate sufficient construction financing for
the project to move forward.
10. Prior to distributing the funds, PHF will demonstrate compliance with the RDA’s
sustainability policy, which requires the project demonstrate that the units be designed to
achieve an energy star score of 90 or higher and participate in the City’s Elevate Buildings
Program. The units must also be designed to operate without on-site fossil fuel
combustion.
11. Adequate security and remedies should PHF default on their obligations under the funding
or restrictive use agreement.
D.Logistical Arrangements with tenants –
1. While the RDA would have a contract with the PHF containing the conditions above to
receive the $10 million, each project would create a tenant non-profit organization, who
would administer contracts with each tenant in order to receive their project benefits. The
RDA would receive quarterly reports.
2. The tenant non-profit would contract with a third party property management company to
handle day-to-day logistical issues and track/manage payments to tenants. The
Administration notes that it expects these tenant NPOs to have annual meetings to
establish rules of the fund and management of the payments.
3. Tenants would not be kicked out of the project if their income situation changed, and the
Administration notes that LIHTC rules allow incomes to increase by 40% before changing
rent categories.
4. The following graphic is provided on the perpetual housing fund’s website and illustrates
how the longer a resident stays in a unit, the greater their potential benefit is:
Page | 6
POLICY QUESTIONS
1.Timeline for projects/potential investment needed in the future – the Administration’s
information from the PHF indicates an aggressive financing and construction schedule, with 2-4
projects annually in the near terms, and 6-8 projects annually in the 5-10 year term. The Council
may wish to ask the PHF or Administration how inflation and increasing interest rates may impact
these projections, and whether the PHF will return to the City for additional funding.
2.Coordination with the City’s Community Land Trust or RDA’s Westside Community
Initiative – The Administration indicates that this model is well suited to both of those City
programs, although no official relationship has been proposed. The Council may wish to discuss
this further with the Administration, particularly as conversations about how to creatively
grow/maximize those City programs continue.
3. Questions relating to the 515 East 100 South project
a. The Council may wish to clarify if the 38 units will be spread around the building or if they
will be on floors 2-4. The pro forma indicates floors 2-4 while the transmittal indicates they
are on floors 9-11. Staff received information from the Administration immediately prior
to publishing that the attached pro forma relates to a future phase of the project. Staff is
working with the Administration to get information relating to the City’s initial
investment.
b. Separating project components. The Council may wish to discuss with the Administration
and PHF the legal logistics and reasoning for separating project components from within
the project (100 for sale units, 38 rental equity-sharing units, separately tracked mixed-
income units), and advantages and potential disadvantages this approach.
ATTACHMENTS
Attachment 1 – Cash flow for a future phase in 515 East 100 South conversion project –
38 Units within the project located at 515 East 100 South
Attachment – Motion for Budget Amendment #6 – Adopted June 6, 2023
(Staff note: both the main and optional motions were adopted by the Council)
MOTION 2 – ADOPT PERPETUAL HOUSING FUND ITEM
I move that the Council adopt an ordinance amending the Fiscal Year 2023 final budget of Salt
Lake City including the employment staffing document for item A-15 as shown on the motion
sheet.
Optional Additional Motion: I further move that funding for item A-15 is a contingent
appropriation subject to Council approval of a term sheet, and the adoption ordinance shall be
updated to reflect this condition.
Item Being Adopted A-15: ARPA Funding to Perpetual Housing Fund External Developer ($10
Million from ARPA
Solutions for Uta h’s Most
Intractable Housing
Problems
May 2, 2023
The Problem
Source: 2019 Federal Reserve Board’s
Survey of Consumer Finance
$255,000
Net Worth
40x
$6,300
Net Worth
Net Worth
2019
Average
Homeowner
2019
Average
Renter
Homeownership is vital to the American Dream.
The opportunity for homeownership is disappearing
for the average Utahn.
The Problem
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
2015
77%
82%
77%
Percentage of Utah Home Sales
Aordable to Households Earning Area Median Income*
67%
48%45%
32%
11%
2016 2017 2018 2019 2020 2021 2022
Sources: Federal Reserve Economic Data; US Census Data;
Utah Multiple Listing Service; Freddie Mac HFA Advantage
*Include single family and multifamily. Five percent down payment, prevailing interest rate.
Mortgage is 80 percent of payment remaining 20 percent taxes, insurance, and PMI.
Ratio of mortgage to income 28%.
Current State of Utah Housing Market
Estimated $42B
Home ownership subsidized
RENTAL SUBSIDY
Rental costs stabilized, but no
pathways to wealth generation
Mortgage Interest
Tax Deduction
Housing Choice Vouchers &
Public Housing
LIHTC
Estimated $30B
High/Middle Income
Homeowners
Middle/Moderate Income
Renters
Moderate/Low Income
Renters
Wealth Generation
Wealth Stagnation
Can’t aord a home,
but makes too much to qualify
for assitance
Estimated $8B
Traditional ownership opportunities
are leaving most Utahns behind.
OWNERSHIP SUBSIDY
Wealth Stagnation
Density - A Potential Solution
Land
$150K/Unit
Construction Construction
$350K/Unit
Traditional
Single Family
Traditional
Multifamily
$315K/Unit
Density has the potential to create aordability by
lowering land costs per unit.
Land
$35K/Unit
Potential
Build Cost
$500,000
Potential
Build Cost
$350,000
Density - A Missed Opportunity
Apartments vs. Condos
• Condos are dicult to develop.
- Apartments are easier to conceptualize, finance, build, and
exit than condo projects.
• Architects, engineers, contractors, investors, and banks will
charge substantially more to be involved in condo projects.
- Insurance costs are much higher in condo projects for all
parties involved.
- Current tax law favors apartments over condos for investor
exit strategies.
• Condos are a risky product type.
- Selling individual condos is harder, takes longer, and is
generally more risky than leasing or selling a traditional
apartment building. Only high-end condos make enough
money to justify this additional risk.
Developers are building more multi-family than ever,
but almost none of it creates ownership for residents.
Traditional
Condo
Building residents own
and finance legally
separate units
Benefits of
Shared Ownership:
1. Shared ownership avoids
the additional liability, cost,
complexity, and risk of
traditional condos.
2. Residents enjoy the
flexibility and ease of
apartment living.
3. Residents gain benefits of
ownership without the
often prohibitive
requirements of
traditional mortgages.
Shared
Ownership
Building residents each
own shares of an entity that
owns their entire building
Density - Shared Ownership
Shared ownership oers residents the benets of both
apartments and condos.
Estimated $42B
RENTAL SUBSIDY
Housing Choice Vouchers &
Public Housing
LIHTC
Moderate/Low Income
Renters Wealth Stagnation
Potential Utah Housing Market
OWNERSHIP SUBSIDY
Mortgage Interest
Tax Deduction
Estimated $30B
High/Middle Income
Homeowners
Middle/Moderate Income
Renters
Wealth Generation
Wealth Generation
DENSE OWNERSHIP
Real Missing Middle
Shared ownership creates opportunities for more families,
but still leaves some behind.
Estimated $8B
Home ownership subsidized
Rental costs stabilized, but no
pathways to wealth generation
Can’t aord a home,
but makes too much to qualify
for assitance
OWNERSHIP SUBSIDY
Mortgage Interest
Tax Deduction
Estimated $30B
High/Middle Income
Homeowners Wealth Generation
Home ownership subsidized
Aordable Housing - Potential Solution
Low Income Housing Tax Credits (LIHTC), a federal
subsidy, can signicantly decrease rents for residents.
Debt
Market Return
Market Project
Capital Stack
LIHTC Project
Capital Stack
Debt
Market Return
Amount of Private
Capital Requires
Market Rents
Equity
Market Return
LIHTC
Gov. Subsidy
Reduced Debt
Service Allows
Affordable Rents
Aordable Housing - A Missed Opportunity
Aordable
Rent
Existing Tax
Credits
Investors
Residents
LIHTC
Apartment
Project
Project Equity &
Annual Return
Upfront
Construction
Subsidies
With LIHTC, residents benet from aordable rents, but
annual returns and wealth generation goes to investors.
Our Solution - The Perpetual Housing Fund
Aordable
Rent
Existing Tax
Credits
PHF
Project
Project Equity &
Annual Return
Upfront
Construction
Subsidies
PHF pairs existing LIHTC subsidies with shared ownership
to benet building residents.
Special
Purpose
Entity
PHF
Residents
25%
75%
Wealth Generation
Estimated $42B
RENTAL SUBSIDY
Housing Choice Vouchers &
Public Housing
LIHTC + PHF
Moderate/Low Income
Renters
Wealth Generation
Wealth Generation
Potential Utah Housing Market
OWNERSHIP SUBSIDY
Mortgage Interest
Tax Deduction
Estimated $30B
High/Middle Income
Homeowners
Middle/Moderate Income
Renters
DENSE OWNERSHIP
Real Missing Middle
The PHF will use this model to provide ownership
opportunities to low income households.
Estimated $8B
Home ownership subsidized
Rental costs stabilized, but no
pathways to wealth generation
Can’t aord a home,
but makes too much to qualify
for assitance
Wealth Generation
OWNERSHIP SUBSIDY
Mortgage Interest
Tax Deduction
Estimated $30B
High/Middle Income
Homeowners
Home ownership subsidized
SLC's Investment Projected Outcomes
Salt Lake City's $10MM ARPA Investment in PHF will provide:
•2-6% Return on Investment for 20+ Year Term
•1,000 Equity-Sharing PHF Units for individuals and families making 65% of AMI and below
•500 Condo Units in Salt Lake City affordable to individuals and families making 60%-120% of AMI
100 Units
515 New Tower
200 Units
Condo Project
200 Units
Condo Project
20
2
3
20
2
4
20
2
5
20
2
6
20
2
7
20
2
8
20
2
9
20
3
0
20
3
1
20
3
2
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
SLC Unit Delivery Schedule
9% Projects
25% to 50% AMI
4% Projects OR Combined 4% + 9%
25% to 60% AMI
Condo Projects
80% to 120% AMI
38 Unit
515 Conversion
38 Units
515 Conversion
39 Units
515 New Tower
50 Unit Project
200 Unit Project200 Unit Project200 Unit Project200 Unit Project
50 Unit Project 215 Units
800 Units
500 Units
Typical Future 200 Unit Project
10-Year PHF Projections
Year 1 2 3 4 5 6 7 8 9 10
Potential Gross Income 2,943,351 3,002,218 3,062,262 3,123,508 3,185,978 3,249,697 3,314,691 3,380,985 3,448,605 3,517,577
Additional Income 87,480 89,230 91,014 92,834 94,691 96,585 98,517 100,487 102,497 104,547
Cell Tower/Commercial Lease Income - - - - - - - - - -
Total Potential Income 3,030,831 3,091,448 3,153,276 3,216,342 3,280,669 3,346,282 3,413,208 3,481,472 3,551,101 3,622,123
Less Vacancy (151,542) (154,572) (157,664) (160,817) (164,033) (167,314) (170,660) (174,074) (177,555) (181,106)
Effective Gross Income 2,879,289 2,936,875 2,995,613 3,055,525 3,116,635 3,178,968 3,242,547 3,307,398 3,373,546 3,441,017
Operating Expenses (842,310) (867,580) (893,607) (920,415) (948,028) (976,469) (1,005,763) (1,035,936) (1,067,014) (1,099,024)
Capital Reserve (60,000) (60,000) (60,000) (60,000) (60,000) (60,000) (60,000) (60,000) (60,000) (60,000)
Net Operating Income 1,976,979 2,009,295 2,042,006 2,075,110 2,108,608 2,142,500 2,176,785 2,211,463 2,246,533 2,281,993
Debt Service 1,676,543 1,676,543 1,676,543 1,676,543 1,676,543 1,676,543 1,676,543 1,676,543 1,676,543 1,676,543
Net Cash Flow 300,436 332,752 365,462 398,566 432,065 465,956 500,242 534,920 569,990 605,450
DSCR (all loans)1.18 1.20 1.22 1.24 1.26 1.28 1.30 1.32 1.34 1.36
Asset Value 35,945,072 36,532,645 37,127,374 37,729,265 38,338,321 38,954,537 39,577,906 40,208,416 40,846,051 41,490,788
Debt Reduction 123,794 156,185 165,030 174,460 195,239 206,677 218,879 231,898 245,790 260,615
Equity in Project 13,708,069 14,295,642 14,890,371 15,492,262 16,101,318 16,717,534 17,340,903 17,971,413 18,609,048 19,253,785
Cash Flow to Residents (75% of net)225,327 249,564 274,097 298,925 324,048 349,467 375,181 401,190 427,492 454,088
Annual Cash Flow per Resident 1,127 1,248 1,370 1,495 1,620 1,747 1,876 2,006 2,137 2,270
Residents' Share of Equity (75%)10,281,052 10,721,731 11,167,778 11,619,197 12,075,988 12,538,150 13,005,677 13,478,560 13,956,786 14,440,338
Avg New Equity Generated Per Resident 51,405 2,938 2,974 3,009 3,045 3,081 3,117 3,153 3,188 3,224
Accumulated Equity Per Resident 51,405 53,609 55,839 58,096 60,380 62,691 65,028 67,393 69,784 72,202
Pro Forma Assumptions:
2.00%Annual Increases in Rent & Additional Income
5.00%Vacancy Rate
3.00%Annual Increases in Operating Expenses
4,212 Operating Expenses/Unit Yr 1
300 Per Unit Capital Reserve Yr 1
6.75%Construction Loan Rate
6.75%Perm Loan Rate/40 Yr Am
Resident
Typical 200 Unit Project - Resident Perspective
$1,127
1/200 Share
YEAR 1
CASHFLOW
SHARE**
per person
EQUITY SHARE AT
STABILIZATION
$51,405*
1/200 Share
per person
*Asset appreciation will be distributed upon events such as a renance event or sale of building. Tenants will also have
the ability to "draw" on their equity for "allowed events" in a vehicle similar to a HELOC (funded and run by the PHF).
**Cashow Share will be distributed as rent rebates to the extent that LIHTC rules allow.
$1,500,000
$1,000,000
Dev. Fee Deferred to Project
Funding Resident HELOC Vehicle
$225,327
75% to Residents
Annual Rent
Per Resident
$10,281,052
75% to Residents
$2,500,000
To Project/
Resident Benet
Special Purpose
Entity
PHF
Residents
25%
75%
SPE Pro Forma Year 1
SPE Value + Equity Upon Stabilization
Rents + Additional Income
Less Op Expenses + Capital Reserve
Net Operating Income
Less Debt Service
Net Cash Flow
Asset Value
Owner’s Equity
Developer Fee Contribution
($902,310)
$14,396
$1,976,979
($1,676,543)
$300,436
$35,945,072
$13,708,069
$2,879,289
Typical 200 Unit Project - Developer Perspective
SPE Pro Forma Year 1
SPE Value + Equity Upon Stabilization
Rents + Additional Income
Less Op Expenses + Capital Reserve
Net Operating Income
Less Debt Service
Net Cash Flow
Asset Value
Owner’s Equity
Developer Fee Contribution
$1,500,000Dev. Fee Upon Groundbreaking
$1,500,000Dev. Fee Upon Stabilization
Forms SPE + Retains
25% Ownership
and Control
Special
Purpose
Entity
PHF
Residents
25%
75%
PHF
Develops and
Manages Project
YEAR 1
CASHFLOW
SHARE
$75,109
(25% Share)
EQUITY SHARE AT
STABILIZATION
$3,427,017
(25% Share)
DEVELOPER FEE
$3,000,000
(100% to PHF)
$2,879,289
($902,310)
$1,976,979
($1,676,543)
$300,436
$35,945,072
$13,708,069
Asset Appreciation + Debt Reduction
Conceptual Graph
Shared Ownership - How It Works (200 Unit Project)
25% PHF
Resident
Share
Annual
Cashflow
UNIT 1
UNIT 2
$19.3MM
$4.9MM
$14.4MM
$13.7MM
$3.4MM
$10.3MM
Ye
a
r
1
Ye
a
r
2
Ye
a
r
3
Ye
a
r
4
Ye
a
r
5
Ye
a
r
6
Ye
a
r
7
Ye
a
r
8
Ye
a
r
9
Ye
a
r
1
0
Re
n
a
n
c
e
E
v
e
n
t
Resident A - 10 Years
Resident B - 3 Years
Equity Share - $72,202
Cashflow Share - $16,559
Equity Share - $21,660
Cashflow Share - $3,745
Equity Share - $50,541
Cashflow Share- $13,152
Resident C - 7 Years
$225,327 $249,564 $274,097 $298,925 $324,048 $349,467 $375,181 $401,190 $427,492 $454,088
Example Resident Dividend
Typical PHF 9% Project
10-Year PHF Projections
Year 1 2 3 4 5 6 7 8 9 10
Potential Gross Income 433,169 441,832 450,669 459,682 468,876 478,253 487,818 497,575 507,526 517,677
Additional Income 17,059 17,400 17,748 18,103 18,465 18,834 19,211 19,595 19,987 20,387
Commercial Lease Income - - - - - - - - - -
Total Potential Income 450,227 459,232 468,417 477,785 487,341 497,087 507,029 517,170 527,513 538,063
Less Vacancy (22,511) (22,962) (23,421) (23,889) (24,367) (24,854) (25,351) (25,858) (26,376) (26,903)
Effective Gross Income 427,716 436,270 444,996 453,896 462,974 472,233 481,678 491,311 501,137 511,160
Operating Expenses (183,247) (188,745) (194,407) (200,239) (206,247) (212,434) (218,807) (225,371) (232,132) (239,096)
Capital Reserve (11,700) (11,700) (11,700) (11,700) (11,700) (11,700) (11,700) (11,700) (11,700) (11,700)
Net Operating Income 232,769 235,825 238,889 241,956 245,027 248,099 251,171 254,240 257,305 260,364
Debt Service 199,609 199,609 199,609 199,609 199,609 199,609 199,609 199,609 199,609 199,609
Net Cash Flow 33,160 36,217 39,280 42,347 45,418 48,490 51,562 54,631 57,696 60,755
DSCR (all loans)1.17 1.18 1.20 1.21 1.23 1.24 1.26 1.27 1.29 1.30
Asset Value 5,172,635 5,240,566 5,308,634 5,376,805 5,445,044 5,513,312 5,581,571 5,649,779 5,717,892 5,785,864
Debt Reduction 25,928 32,149 33,337 34,589 35,910 37,305 38,778 40,335 41,979 43,718
Equity in Project (Value less debt)1,830,781 1,904,934 1,974,189 2,043,612 2,113,172 2,182,835 2,252,567 2,322,331 2,392,089 2,461,801
Cash Flow to Residents (75% of net)24,870 27,163 29,460 31,761 34,064 36,368 38,671 40,973 43,272 45,566
Annual Cash Flow Per Resident 638 696 755 814 873 933 992 1,051 1,110 1,168
Residents' Share of Equity (75%)1,373,086 1,428,700 1,480,642 1,532,709 1,584,879 1,637,127 1,689,425 1,741,748 1,794,067 1,846,350
New Equity Generated Per Resident 35,207 1,426 1,332 1,335 1,338 1,340 1,341 1,342 1,341 1,341
Accumulated Equity Per Resident 35,207 36,633 37,965 39,300 40,638 41,978 43,319 44,660 46,002 47,342
2.00%Annual Increases in Rent & Additional Income
5.00%Vacancy Rate
3.00%Annual Increases in Operating Expenses
4,699 Operating Expenses/Unit Yr 1
300 Per Unit Capital Reserve/Yr
6.10%Construction Loan Rate
6.50%Perm Loan Rate/40 Yr Am
4.50%Cap Rate
Pro Forma Assumptions:
Solutions for Utah’s Most
Intractable Housing
Problems
May 2, 2023
Investor
Initial Capitalization Utilization
$10MM
$2MM Project Capital
Pre-Development
Reimbursement
Land Acquisition &
Pre-Development
Capital
Additional Capital for
Land Acquisition &
Pre-Development
Annual Cashflow &
Developer Fee at
Groundbreaking
2-6% Return on
Investment
Initial
Capitalization
Guarantor
Reserve
Interest-Bearing
Impact
Investments
(6% Return)
PHF
PHF Model
Project
PHF OF
UTAH
0-2% Return for
Operating Expenses
(501-c-3)
Tax credit equity & construction lenders require $12MM
(2MM liquid) to fund a meaningfully-sized LIHTC vehicle.
75%
Cashow
90%
Cashow
100% Developer Fee
to PHF of Utah
10%
Cashow
25%
Cashow
2-7%
Return on Initial
Investment
Remaining
Cashow
Initial
$12MM
Investment
How It Works - The Perpetual Housing Fund
200 Unit
PHF
Building
$2MM$10MM
Operating
Account
PHF of Utah
Interest
Bearing
Account*
Special Purpose
Entity
25% Owner (M.M.)
PHF
0.01% Owner, M.M. (PHFU)
501(c)(3)
Investor
99.9% Owner (PHFU)
Impact Investor
Resident Entity
75% Owner
(200 Shareholders)
Managing
Member
0.01% Owner (SPE)
Tax Credit
Investor
99.9% Owner (SPE)
515 Use + Unit Mix
PHF Portion of New Building48 Units
AMI
25%-65%38
25%-65%40
PHF Phase 1
PHF Phase 2*
78Total
Existing Tower Residential
Units
AMI
80%-120%100+
25%-65%48
Condo Portion
PHF Portion
148+Total
Addition Tower Residential
Units
100+ Condo Unitsin partnership with RMHF
Mixed-Income Childcareand Playground
Impact Oce &Building Amenities
PHF Conversion Phase 138 Units
PHF Phase 2 of Conversion~40 Units
Impact Food &Retail
Break Ground in 2024
Units Completed in 2026
(Break Ground Q4 2023,
Units Completed Q4 2024)
(Phase & timing dependent
on U of U leasing plans)
515 Tower - Conversion of Floors 9-11
10-Year PHF Projections - Projected Groundbreak Q4 2023/Q1 2024
Year 1 2 3 4 5 6 7 8 9 10
Potential Gross Income 372,358 379,805 387,401 395,149 403,052 411,113 419,335 427,722 436,276 445,002
Additional Income 16,621 16,954 17,293 17,639 17,991 18,351 18,718 19,093 19,474 19,864
Commercial Lease Income - - - - - - - - - -
Total Potential Income 388,979 396,758 404,694 412,787 421,043 429,464 438,053 446,814 455,751 464,866
Less Vacancy (19,449) (19,838) (20,235) (20,639) (21,052) (21,473) (21,903) (22,341) (22,788) (23,243)
Effective Gross Income 369,530 376,920 384,459 392,148 399,991 407,991 416,151 424,474 432,963 441,622
Operating Expenses (162,770) (167,653) (172,683) (177,863) (183,199) (188,695) (194,356) (200,187) (206,192) (212,378)
Capital Reserve (11,400) (11,400) (11,400) (11,400) (11,400) (11,400) (11,400) (11,400) (11,400) (11,400)
Net Operating Income 195,360 197,867 200,376 202,885 205,392 207,896 210,395 212,887 215,371 217,844
Debt Service 168,677 168,677 168,677 168,677 168,677 168,677 168,677 168,677 168,677 168,677
Net Cash Flow 26,683 29,191 31,699 34,208 36,715 39,219 41,718 44,210 46,694 49,168
DSCR (all loans)1.16 1.17 1.19 1.20 1.22 1.23 1.25 1.26 1.28 1.29
Asset Value 4,341,330 4,397,053 4,452,804 4,508,553 4,564,265 4,619,906 4,675,439 4,730,824 4,786,022 4,840,988
Debt Reduction 26,928 33,321 34,471 35,675 36,939 38,264 39,654 41,114 42,646 44,256
Equity in Project (Value less debt)1,250,612 1,312,728 1,369,629 1,426,582 1,483,558 1,540,524 1,597,447 1,654,292 1,711,022 1,767,598
Cash Flow to Residents (75% of net)20,012 21,893 23,775 25,656 27,536 29,414 31,288 33,158 35,021 36,876
Annual Cash Flow Per Resident 527 576 626 675 725 774 823 873 922 970
Residents' Share of Equity (75%)937,959 984,546 1,027,221 1,069,937 1,112,669 1,155,393 1,198,086 1,240,719 1,283,266 1,325,698
New Equity Generated Per Resident 24,683 1,226 1,123 1,124 1,125 1,124 1,123 1,122 1,120 1,117
Accumulated Equity Per Resident 24,683 25,909 27,032 28,156 29,281 30,405 31,529 32,651 33,770 34,887
2.00%Annual Increases in Rent & Additional Income
5.00%Vacancy Rate
3.00%Annual Increases in Operating Expenses
4,274 Operating Expenses/Unit Yr 1
300 Per Unit Capital Reserve Yr
6.10%Construction Loan Rate u
5.75%Perm Loan Rate/40 Yr Am
4.50%Cap Rate
Pro Forma Assumptions:
515 New Tower - Floors 2-4
10-Year PHF Projections - Projected Groundbreak 2024
Year 1 2 3 4 5 6 7 8 9 10
Potential Gross Income 433,169 441,832 450,669 459,682 468,876 478,253 487,818 497,575 507,526 517,677
Additional Income 17,059 17,400 17,748 18,103 18,465 18,834 19,211 19,595 19,987 20,387
Commercial Lease Income - - - - - - - - - -
Total Potential Income 450,227 459,232 468,417 477,785 487,341 497,087 507,029 517,170 527,513 538,063
Less Vacancy (22,511) (22,962) (23,421) (23,889) (24,367) (24,854) (25,351) (25,858) (26,376) (26,903)
Effective Gross Income 427,716 436,270 444,996 453,896 462,974 472,233 481,678 491,311 501,137 511,160
Operating Expenses (183,247) (188,745) (194,407) (200,239) (206,247) (212,434) (218,807) (225,371) (232,132) (239,096)
Capital Reserve (11,700) (11,700) (11,700) (11,700) (11,700) (11,700) (11,700) (11,700) (11,700) (11,700)
Net Operating Income 232,769 235,825 238,889 241,956 245,027 248,099 251,171 254,240 257,305 260,364
Debt Service 199,609 199,609 199,609 199,609 199,609 199,609 199,609 199,609 199,609 199,609
Net Cash Flow 33,160 36,217 39,280 42,347 45,418 48,490 51,562 54,631 57,696 60,755
DSCR (all loans)1.17 1.18 1.20 1.21 1.23 1.24 1.26 1.27 1.29 1.30
Asset Value 5,172,635 5,240,566 5,308,634 5,376,805 5,445,044 5,513,312 5,581,571 5,649,779 5,717,892 5,785,864
Debt Reduction 25,928 32,149 33,337 34,589 35,910 37,305 38,778 40,335 41,979 43,718
Equity in Project (Value less debt)1,830,781 1,904,934 1,974,189 2,043,612 2,113,172 2,182,835 2,252,567 2,322,331 2,392,089 2,461,801
Cash Flow to Residents (75% of net)24,870 27,163 29,460 31,761 34,064 36,368 38,671 40,973 43,272 45,566
Annual Cash Flow Per Resident 638 696 755 814 873 933 992 1,051 1,110 1,168
Residents' Share of Equity (75%)1,373,086 1,428,700 1,480,642 1,532,709 1,584,879 1,637,127 1,689,425 1,741,748 1,794,067 1,846,350
New Equity Generated Per Resident 35,207 1,426 1,332 1,335 1,338 1,340 1,341 1,342 1,341 1,341
Accumulated Equity Per Resident 35,207 36,633 37,965 39,300 40,638 41,978 43,319 44,660 46,002 47,342
2.00%Annual Increases in Rent & Additional Income
5.00%Vacancy Rate
3.00%Annual Increases in Operating Expenses
4,699 Operating Expenses/Unit Yr 1
300 Per Unit Capital Reserve/Yr
6.10%Construction Loan Rate
6.50%Perm Loan Rate/40 Yr Am
4.50%Cap Rate
Pro Forma Assumptions:
515 Tower - Conversion of Floors 6-8
10-Year PHF Projections - Projected Groundbreak 2027
Year 1 2 3 4 5 6 7 8 9 10
Potential Gross Income 372,358 379,805 387,401 395,149 403,052 411,113 419,335 427,722 436,276 445,002
Additional Income 16,621 16,954 17,293 17,639 17,991 18,351 18,718 19,093 19,474 19,864
Commercial Lease Income - - - - - - - - - -
Total Potential Income 388,979 396,758 404,694 412,787 421,043 429,464 438,053 446,814 455,751 464,866
Less Vacancy (19,449) (19,838) (20,235) (20,639) (21,052) (21,473) (21,903) (22,341) (22,788) (23,243)
Effective Gross Income 369,530 376,920 384,459 392,148 399,991 407,991 416,151 424,474 432,963 441,622
Operating Expenses (162,770) (167,653) (172,683) (177,863) (183,199) (188,695) (194,356) (200,187) (206,192) (212,378)
Capital Reserve (11,400) (11,400) (11,400) (11,400) (11,400) (11,400) (11,400) (11,400) (11,400) (11,400)
Net Operating Income 195,360 197,867 200,376 202,885 205,392 207,896 210,395 212,887 215,371 217,844
Debt Service 168,677 168,677 168,677 168,677 168,677 168,677 168,677 168,677 168,677 168,677
Net Cash Flow 26,683 29,191 31,699 34,208 36,715 39,219 41,718 44,210 46,694 49,168
DSCR (all loans)1.16 1.17 1.19 1.20 1.22 1.23 1.25 1.26 1.28 1.29
Asset Value 4,341,330 4,397,053 4,452,804 4,508,553 4,564,265 4,619,906 4,675,439 4,730,824 4,786,022 4,840,988
Debt Reduction 26,928 33,321 34,471 35,675 36,939 38,264 39,654 41,114 42,646 44,256
Equity in Project (Value less debt)1,250,612 1,312,728 1,369,629 1,426,582 1,483,558 1,540,524 1,597,447 1,654,292 1,711,022 1,767,598
Cash Flow to Residents (75% of net)20,012 21,893 23,775 25,656 27,536 29,414 31,288 33,158 35,021 36,876
Annual Cash Flow Per Resident 527 576 626 675 725 774 823 873 922 970
Residents' Share of Equity (75%)937,959 984,546 1,027,221 1,069,937 1,112,669 1,155,393 1,198,086 1,240,719 1,283,266 1,325,698
New Equity Generated Per Resident 24,683 1,226 1,123 1,124 1,125 1,124 1,123 1,122 1,120 1,117
Accumulated Equity Per Resident 24,683 25,909 27,032 28,156 29,281 30,405 31,529 32,651 33,770 34,887
2.00%Annual Increases in Rent & Additional Income
5.00%Vacancy Rate
3.00%Annual Increases in Operating Expenses
4,274 Operating Expenses/Unit Yr 1
300 Per Unit Capital Reserve Yr
6.10%Construction Loan Rate u
5.75%Perm Loan Rate/40 Yr Am
4.50%Cap Rate
Pro Forma Assumptions:
REDEVELOPMENT AGENCY OF SLC
PERPETUAL HOUSING FUND
RDA BOARD OF DIRECTORS MEETING – JULY 11, 2023
PERPETUAL HOUSING FUND OF UTAH (PHF)
Utah non-profit affordable housing organization with mission
of reimagining housing programs to share profits with
project residents.
•RENT-RESTRICTED UNITS – serve those at 25% to 125% AMI
•ANNUAL RENT REBATES – from project's cashflow
•PROFIT PAYOUTS – at time of refinancing or exit of partner
•PROFIT ADVANCE – funds available for major life events
•PROFIT TRADEUP – funds applied to home purchase
GOALS & OBJECTIVES – 515 EAST 100 SOUTH
•$10M in ARPA Funds for acquisition and development of affordable housing
•Adaptive reuse of existing office building will include 60+ housing units
•All 60 units affordable between 25%-50% Area Median Income (AMI)
•Overall project will also include additional housing, co-working, retail, and daycare space
•Family housing with 3-4 bedroom units
•Significant opportunity to promote wealth building for Salt Lake City residents
RDA GUIDING FRAMEWORK
RDA GUIDING FRAMEWORK
515 PROJECT BENCHMARKS MET:
•LEVERAGING: Our investment will help project secure tax credits
•OWNERSHIP: Project will provide an opportunity for residents to build wealth
•RETURN OF INVESTMENT: The initial investment will garner 2-6% RDA return
through the PHF
•HOUSING FOR EVERYONE: Project provides 3- and 4-bedroom units for families and
targets underserved populations at 25-50% AMI
•MIXED-INCOME NEIGHBORHOODS: The larger 515 project will include a mix of
affordable AMIs and market rate housing units
•BUILDING PRESERVATION, REHABILITATION, OR ADAPTIVE REUSE: The project will
repurpose and rehabilitate an existing office building for housing.
FY24 ANNUAL HOUSING PRIORITIES
AFFORDABLE
FAMILY
HOUSING
DEEPLY
AFFORDABLE
HOUSING
MISSING
MIDDLE
HOUSING
WEALTH
BUILDING
OPPORTUNITY
Project meets priority
PROPOSED TERMS
AMOUNT: $10,000,000 in American Rescue Plan Act funds
TERM: 50-year deed-restriction recorded against portion of property that obligates PHF to develop 60
or more rent and income restricted units at 25-50% AMI
DISBURSEMENT: One lump sum to be paid as part of acquisition of units subject to recording of
restrictive covenant on the property and associated subdivision plat process.
USE OF FUNDS: PHF must deploy 100% of funds by June 30, 2024 of ARPA eligible uses
SUSTAINABILITY: PHF will work to comply with RDA's sustainability policy, but may be waived if
necessary due to the adaptive reuse element of the 515 project
RETURN:RDA to receive 2-6% return paid annually every year
ADDITIONAL PROJECTS: Develop 1,000 additional units in Salt Lake City that will be affordable for
those between 25% and 65% AMI
NEXT STEPS
•The RDA Board may wish to discuss the proposed terms to determine if any
additional considerations should be made for funding
•Upon approval of Term Sheet, staff will negotiate the necessary agreements
Solutions for Uta h’s Most
Intractable Housing
Problems
July 11, 2023
The Problem
Source: 2019 Federal Reserve Board’s
Survey of Consumer Finance
$255,000
Net Worth
40x
$6,300
Net Worth
Net Worth
2019
Average
Homeowner
2019
Average
Renter
Homeownership is vital to the American Dream.
The opportunity for homeownership is disappearing
for the average Utahn.
The Problem
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
2015
77%
82%
77%
Percentage of Utah Home Sales
Aordable to Households Earning Area Median Income*
67%
48%45%
32%
11%
2016 2017 2018 2019 2020 2021 2022
Sources: Federal Reserve Economic Data; US Census Data;
Utah Multiple Listing Service; Freddie Mac HFA Advantage
*Include single family and multifamily. Five percent down payment, prevailing interest rate.
Mortgage is 80 percent of payment remaining 20 percent taxes, insurance, and PMI.
Ratio of mortgage to income 28%.
Current State of Utah Housing Market
Estimated $42B
Home ownership subsidized
RENTAL SUBSIDY
Rental costs stabilized, but no
pathways to wealth generation
Mortgage Interest
Tax Deduction
Housing Choice Vouchers &
Public Housing
LIHTC
Estimated $30B
High/Middle Income
Homeowners
Middle/Moderate Income
Renters
Moderate/Low Income
Renters
Wealth Generation
Wealth Stagnation
Can’t aord a home,
but makes too much to qualify
for assitance
Estimated $8B
Traditional ownership opportunities
are leaving most Utahns behind.
OWNERSHIP SUBSIDY
Wealth Stagnation
Density - A Potential Solution
Land
$150K/Unit
Construction Construction
$350K/Unit
Traditional
Single Family
Traditional
Multifamily
$315K/Unit
Density has the potential to create aordability by
lowering land costs per unit.
Land
$35K/Unit
Potential
Build Cost
$500,000
Potential
Build Cost
$350,000
Density - A Missed Opportunity
Apartments vs. Condos
• Condos are dicult to develop.
- Apartments are easier to conceptualize, finance, build, and
exit than condo projects.
• Architects, engineers, contractors, investors, and banks will
charge substantially more to be involved in condo projects.
- Insurance costs are much higher in condo projects for all
parties involved.
- Current tax law favors apartments over condos for investor
exit strategies.
• Condos are a risky product type.
- Selling individual condos is harder, takes longer, and is
generally more risky than leasing or selling a traditional
apartment building. Only high-end condos make enough
money to justify this additional risk.
Developers are building more multi-family than ever,
but almost none of it creates ownership for residents.
Traditional
Condo
Building residents own
and finance legally
separate units
Benefits of
Shared Ownership:
1. Shared ownership avoids
the additional liability, cost,
complexity, and risk of
traditional condos.
2. Residents enjoy the
flexibility and ease of
apartment living.
3. Residents gain benefits of
ownership without the
often prohibitive
requirements of
traditional mortgages.
Shared
Ownership
Building residents each
own shares of an entity that
owns their entire building
Density - Shared Ownership
Shared ownership oers residents the benets of both
apartments and condos.
Estimated $42B
RENTAL SUBSIDY
Housing Choice Vouchers &
Public Housing
LIHTC
Moderate/Low Income
Renters Wealth Stagnation
Potential Utah Housing Market
OWNERSHIP SUBSIDY
Mortgage Interest
Tax Deduction
Estimated $30B
High/Middle Income
Homeowners
Middle/Moderate Income
Renters
Wealth Generation
Wealth Generation
DENSE OWNERSHIP
Real Missing Middle
Shared ownership creates opportunities for more families,
but still leaves some behind.
Estimated $8B
Home ownership subsidized
Rental costs stabilized, but no
pathways to wealth generation
Can’t aord a home,
but makes too much to qualify
for assitance
OWNERSHIP SUBSIDY
Mortgage Interest
Tax Deduction
Estimated $30B
High/Middle Income
Homeowners Wealth Generation
Home ownership subsidized
Aordable Housing - Potential Solution
Low Income Housing Tax Credits (LIHTC), a federal
subsidy, can signicantly decrease rents for residents.
Debt
Market Return
Market Project
Capital Stack
LIHTC Project
Capital Stack
Debt
Market Return
Amount of Private
Capital Requires
Market Rents
Equity
Market Return
LIHTC
Gov. Subsidy
Reduced Debt
Service Allows
Affordable Rents
Aordable Housing - A Missed Opportunity
Aordable
Rent
Existing Tax
Credits
Investors
Residents
LIHTC
Apartment
Project
Project Equity &
Annual Return
Upfront
Construction
Subsidies
With LIHTC, residents benet from aordable rents, but
annual returns and wealth generation goes to investors.
Our Solution - The Perpetual Housing Fund
Aordable
Rent
Existing Tax
Credits
PHF
Project
Project Equity &
Annual Return
Upfront
Construction
Subsidies
PHF pairs existing LIHTC subsidies with shared ownership
to benet building residents.
Special
Purpose
Entity
PHF
Residents
25%
75%
Wealth Generation
Estimated $42B
RENTAL SUBSIDY
Housing Choice Vouchers &
Public Housing
LIHTC + PHF
Moderate/Low Income
Renters
Wealth Generation
Wealth Generation
Potential Utah Housing Market
OWNERSHIP SUBSIDY
Mortgage Interest
Tax Deduction
Estimated $30B
High/Middle Income
Homeowners
Middle/Moderate Income
Renters
DENSE OWNERSHIP
Real Missing Middle
The PHF will use this model to provide ownership
opportunities to low income households.
Estimated $8B
Home ownership subsidized
Rental costs stabilized, but no
pathways to wealth generation
Can’t aord a home,
but makes too much to qualify
for assitance
Wealth Generation
OWNERSHIP SUBSIDY
Mortgage Interest
Tax Deduction
Estimated $30B
High/Middle Income
Homeowners
Home ownership subsidized
SLC's Investment Projected Outcomes
Salt Lake City's $10MM ARPA Investment in PHF will provide:
•2-6% Return on Investment for 20+ Year Term
•1,000 Equity-Sharing PHF Units for individuals and families making 65% of AMI and below
•500 Condo Units in Salt Lake City affordable to individuals and families making 60%-120% of AMI
515 Tower Phase I
AMI
25%-65%25
25%-65%5
Studio
1 Bedroom
60Total
Phase 1 Unit Mix
Units
3 Bedroom
4 Bedroom
25%-65%
25%-65%
20
10
Future Mixed-Income Childcare &Playground
Impact Oce & Building Amenities
PHF Conversion Phase 160 Units
RMHF or PHF Phase 246 Units
Impact Food & Retail
Inline AdditionPhase II
515 Tower - Floors 7-11
10-Year PHF Projections
Year 1 2 3 4 5 6 7 8 9 10
Potential Gross Income 699,650 713,643 727,916 742,474 757,324 772,470 787,919 803,678 819,751 836,146
Additional Income 38,244 39,009 39,789 40,585 41,397 42,224 43,069 43,930 44,809 45,705
Commercial Lease Income - - - - - - - - - -
Total Potential Income 737,894 752,652 767,705 783,059 798,720 814,695 830,988 847,608 864,560 881,852
Less Vacancy (36,895) (37,633) (38,385) (39,153) (39,936) (40,735) (41,549) (42,380) (43,228) (44,093)
Effective Gross Income 700,999 715,019 729,320 743,906 758,784 773,960 789,439 805,228 821,332 837,759
Operating Expenses (282,179) (290,644) (299,363) (308,344) (317,595) (327,123) (336,936) (347,044) (357,456) (368,179)
Capital Reserve (18,000) (18,000) (18,000) (18,000) (18,000) (18,000) (18,000) (18,000) (18,000) (18,000)
Net Operating Income 400,820 406,375 411,956 417,562 423,189 428,837 434,503 440,183 445,877 451,580
Debt Service 349,809 349,809 349,809 349,809 349,809 349,809 349,809 349,809 349,809 349,809
Net Cash Flow 51,011 56,566 62,147 67,753 73,380 79,028 84,694 90,374 96,068 101,771
DSCR (all loans)1.15 1.16 1.18 1.19 1.21 1.23 1.24 1.26 1.27 1.29
Asset Value 8,907,121 9,030,557 9,154,581 9,279,147 9,404,209 9,529,717 9,655,617 9,781,855 9,908,371 10,035,104
Debt Reduction 38,974 48,654 50,820 53,108 55,525 58,081 60,783 63,641 66,663 69,860
Equity in Project (Value less debt)3,211,888 3,345,003 3,471,192 3,598,047 3,725,527 3,853,590 3,982,193 4,111,288 4,240,826 4,370,756
Cash Flow to Residents (75% of net)38,259 42,425 46,610 50,814 55,035 59,271 63,520 67,781 72,051 76,328
Annual Cash Flow Per Resident 638 707 777 847 917 988 1,059 1,130 1,201 1,272
Residents' Share of Equity (75%)2,408,916 2,508,752 2,603,394 2,698,535 2,794,145 2,890,193 2,986,644 3,083,466 3,180,619 3,278,067
New Equity Generated Per Resident 40,149 1,664 1,577 1,586 1,593 1,601 1,608 1,614 1,619 1,624
Accumulated Equity Per Resident 40,149 41,813 43,390 44,976 46,569 48,170 49,777 51,391 53,010 54,634
2.00%Annual Increases in Rent & Additional Income
5.00%Vacancy Rate
3.00%Annual Increases in Operating Expenses
4,274 Operating Expenses/Unit Yr 1
300 Per Unit Capital Reserve Yr
6.10%Construction Loan Rate
6.10%Perm Loan Rate/40 Yr Am
4.50%Cap Rate
Pro Forma Assumptions:
Resident
515 Phase I - Resident Perspective
$638
1/60 Share
YEAR 1
CASHFLOW
SHARE**
per person
EQUITY SHARE AT
STABILIZATION
$40,149*
1/60 Share
per person
*Asset appreciation will be distributed upon events such as a renance event or sale of building. Tenants will also have
the ability to "draw" on their equity for "allowed events" in a vehicle similar to a HELOC (funded and run by the PHF).
**Cashow Share will be distributed as rent rebates to the extent that LIHTC rules allow.
$250,000
$500,000
Dev. Fee Deferred to Project
Funding Resident HELOC Vehicle
$38,259
75% to Residents
Annual Rent
Per Resident
$2,408,916
75% to Residents
$750,000
To Project/
Resident Benet
Special Purpose
Entity
PHF
Residents
25%
75%
SPE Pro Forma Year 1
SPE Value + Equity Upon Stabilization
Rents + Additional Income
Less Op Expenses + Capital Reserve
Net Operating Income
Less Debt Service
Net Cash Flow
Asset Value
Owner’s Equity
Developer Fee Contribution
($300,179)
$11,683
$400,820
($349,809)
$51,011
$8,907,121
$3,211,888
$700,999
515 Phase I - Developer Perspective
SPE Pro Forma Year 1
SPE Value + Equity Upon Stabilization
Rents + Additional Income
Less Op Expenses + Capital Reserve
Net Operating Income
Less Debt Service
Net Cash Flow
Asset Value
Owner’s Equity
Developer Fee
$500,000Dev. Fee Upon Groundbreaking
$500,000Dev. Fee Upon Stabilization
Forms SPE + Retains
25% Ownership
and Control
Special
Purpose
Entity
PHF
Residents
25%
75%
PHF
Develops and
Manages Project
YEAR 1
CASHFLOW
SHARE
$12,752
(25% Share)
EQUITY SHARE AT
STABILIZATION
$802,972
(25% Share)
DEVELOPER FEE
$1,000,000
(100% to PHF)
$700,999
($300,179)
$400,820
($349,809)
$400,820
$8,907,121
$3,211,888
Asset Appreciation + Debt Reduction
Conceptual Graph
Shared Ownership - How It Works (515 Phase I)
25% PHF
Resident
Share
Annual
Cashflow
UNIT 1
UNIT 2
$4.37MM
$1.09MM
$3.28MM
$3.2MM
$.8MM
$2.4MM
Ye
a
r
1
Ye
a
r
2
Ye
a
r
3
Ye
a
r
4
Ye
a
r
5
Ye
a
r
6
Ye
a
r
7
Ye
a
r
8
Ye
a
r
9
Ye
a
r
1
0
Re
n
a
n
c
e
E
v
e
n
t
Resident A - 10 Years
Resident B - 3 Years
Equity Share - $54,634
Cashflow Share - $9,535
Equity Share - $16,390
Cashflow Share - $2,122
Equity Share - $38,244
Cashflow Share- $7,413
Resident C - 7 Years
$38,259 $42,425 $46,610 $50,814 $55,035 $59,271 $63,520 $67,781 $72,051 $76,328
Example Resident Dividend
Solutions for Utah’s Most
Intractable Housing
Problems
July 11, 2023
Investor
Initial Capitalization Utilization
$10MM
$2MM Project Capital
Pre-Development
Reimbursement
Land Acquisition &
Pre-Development
Capital
Additional Capital for
Land Acquisition &
Pre-Development
Annual Cashflow &
Developer Fee at
Groundbreaking
2-6% Return on
Investment
Initial
Capitalization
Guarantor
Reserve
Interest-Bearing
Impact
Investments
(6% Return)
PHF
PHF Model
Project
PHF OF
UTAH
0-2% Return for
Operating Expenses
(501-c-3)
Tax credit equity & construction lenders require $12MM
(2MM liquid) to fund a meaningfully-sized LIHTC vehicle.
75%
Cashow
90%
Cashow
100% Developer Fee
to PHF of Utah
10%
Cashow
25%
Cashow
2-7%
Return on Initial
Investment
Remaining
Cashow
Initial
$12MM
Investment
How It Works - The Perpetual Housing Fund
200 Unit
PHF
Building
$2MM$10MM
Operating
Account
PHF of Utah
Interest
Bearing
Account*
Special Purpose
Entity
25% Owner (M.M.)
PHF
0.01% Owner, M.M. (PHFU)
501(c)(3)
Investor
99.9% Owner (PHFU)
Impact Investor
Resident Entity
75% Owner
(200 Shareholders)
Managing
Member
0.01% Owner (SPE)
Tax Credit
Investor
99.9% Owner (SPE)
Resident
Typical 200 Unit Project - Resident Perspective
$1,127
1/200 Share
YEAR 1
CASHFLOW
SHARE**
per person
EQUITY SHARE AT
STABILIZATION
$51,405*
1/200 Share
per person
*Asset appreciation will be distributed upon events such as a renance event or sale of building. Tenants will also have
the ability to "draw" on their equity for "allowed events" in a vehicle similar to a HELOC (funded and run by the PHF).
**Cashow Share will be distributed as rent rebates to the extent that LIHTC rules allow.
$1,500,000
$1,000,000
Dev. Fee Deferred to Project
Funding Resident HELOC Vehicle
$225,327
75% to Residents
Annual Rent
Per Resident
$10,281,052
75% to Residents
$2,500,000
To Project/
Resident Benet
Special Purpose
Entity
PHF
Residents
25%
75%
SPE Pro Forma Year 1
SPE Value + Equity Upon Stabilization
Rents + Additional Income
Less Op Expenses + Capital Reserve
Net Operating Income
Less Debt Service
Net Cash Flow
Asset Value
Owner’s Equity
Developer Fee Contribution
($902,310)
$14,396
$1,976,979
($1,676,543)
$300,436
$35,945,072
$13,708,069
$2,879,289
Typical 200 Unit Project - Developer Perspective
SPE Pro Forma Year 1
SPE Value + Equity Upon Stabilization
Rents + Additional Income
Less Op Expenses + Capital Reserve
Net Operating Income
Less Debt Service
Net Cash Flow
Asset Value
Owner’s Equity
Developer Fee Contribution
$1,500,000Dev. Fee Upon Groundbreaking
$1,500,000Dev. Fee Upon Stabilization
Forms SPE + Retains
25% Ownership
and Control
Special
Purpose
Entity
PHF
Residents
25%
75%
PHF
Develops and
Manages Project
YEAR 1
CASHFLOW
SHARE
$75,109
(25% Share)
EQUITY SHARE AT
STABILIZATION
$3,427,017
(25% Share)
DEVELOPER FEE
$3,000,000
(100% to PHF)
$2,879,289
($902,310)
$1,976,979
($1,676,543)
$300,436
$35,945,072
$13,708,069
Asset Appreciation + Debt Reduction
Conceptual Graph
Shared Ownership - How It Works (200 Unit Project)
25% PHF
Resident
Share
Annual
Cashflow
UNIT 1
UNIT 2
$19.3MM
$4.9MM
$14.4MM
$13.7MM
$3.4MM
$10.3MM
Ye
a
r
1
Ye
a
r
2
Ye
a
r
3
Ye
a
r
4
Ye
a
r
5
Ye
a
r
6
Ye
a
r
7
Ye
a
r
8
Ye
a
r
9
Ye
a
r
1
0
Re
n
a
n
c
e
E
v
e
n
t
Resident A - 10 Years
Resident B - 3 Years
Equity Share - $72,202
Cashflow Share - $16,559
Equity Share - $21,660
Cashflow Share - $3,745
Equity Share - $50,541
Cashflow Share- $13,152
Resident C - 7 Years
$225,327 $249,564 $274,097 $298,925 $324,048 $349,467 $375,181 $401,190 $427,492 $454,088
Example Resident Dividend
Typical Future 200 Unit Project
10-Year PHF Projections
Year 1 2 3 4 5 6 7 8 9 10
Potential Gross Income 2,943,351 3,002,218 3,062,262 3,123,508 3,185,978 3,249,697 3,314,691 3,380,985 3,448,605 3,517,577
Additional Income 87,480 89,230 91,014 92,834 94,691 96,585 98,517 100,487 102,497 104,547
Cell Tower/Commercial Lease Income - - - - - - - - - -
Total Potential Income 3,030,831 3,091,448 3,153,276 3,216,342 3,280,669 3,346,282 3,413,208 3,481,472 3,551,101 3,622,123
Less Vacancy (151,542) (154,572) (157,664) (160,817) (164,033) (167,314) (170,660) (174,074) (177,555) (181,106)
Effective Gross Income 2,879,289 2,936,875 2,995,613 3,055,525 3,116,635 3,178,968 3,242,547 3,307,398 3,373,546 3,441,017
Operating Expenses (842,310) (867,580) (893,607) (920,415) (948,028) (976,469) (1,005,763) (1,035,936) (1,067,014) (1,099,024)
Capital Reserve (60,000) (60,000) (60,000) (60,000) (60,000) (60,000) (60,000) (60,000) (60,000) (60,000)
Net Operating Income 1,976,979 2,009,295 2,042,006 2,075,110 2,108,608 2,142,500 2,176,785 2,211,463 2,246,533 2,281,993
Debt Service 1,676,543 1,676,543 1,676,543 1,676,543 1,676,543 1,676,543 1,676,543 1,676,543 1,676,543 1,676,543
Net Cash Flow 300,436 332,752 365,462 398,566 432,065 465,956 500,242 534,920 569,990 605,450
DSCR (all loans)1.18 1.20 1.22 1.24 1.26 1.28 1.30 1.32 1.34 1.36
Asset Value 35,945,072 36,532,645 37,127,374 37,729,265 38,338,321 38,954,537 39,577,906 40,208,416 40,846,051 41,490,788
Debt Reduction 123,794 156,185 165,030 174,460 195,239 206,677 218,879 231,898 245,790 260,615
Equity in Project 13,708,069 14,295,642 14,890,371 15,492,262 16,101,318 16,717,534 17,340,903 17,971,413 18,609,048 19,253,785
Cash Flow to Residents (75% of net)225,327 249,564 274,097 298,925 324,048 349,467 375,181 401,190 427,492 454,088
Annual Cash Flow per Resident 1,127 1,248 1,370 1,495 1,620 1,747 1,876 2,006 2,137 2,270
Residents' Share of Equity (75%)10,281,052 10,721,731 11,167,778 11,619,197 12,075,988 12,538,150 13,005,677 13,478,560 13,956,786 14,440,338
Avg New Equity Generated Per Resident 51,405 2,938 2,974 3,009 3,045 3,081 3,117 3,153 3,188 3,224
Accumulated Equity Per Resident 51,405 53,609 55,839 58,096 60,380 62,691 65,028 67,393 69,784 72,202
Pro Forma Assumptions:
2.00%Annual Increases in Rent & Additional Income
5.00%Vacancy Rate
3.00%Annual Increases in Operating Expenses
4,212 Operating Expenses/Unit Yr 1
300 Per Unit Capital Reserve Yr 1
6.75%Construction Loan Rate
6.75%Perm Loan Rate/40 Yr Am
SALT LAKE CITY CORPORATION
451 SOUTH STATE STREET, ROOM 118 WWW.SLC.GOV · WWW.SLCRDA.COM
P.O. BOX 145518, SALT LAKE CITY, UTAH 84114-5518 TEL 801-535-7240 · FAX 801-535-7245
MAYOR ERIN MENDENHALL
Executive Director
DANNY WALZ
Director
REDEVELOPMENT AGENCY of SALT LAKE CITY
STAFF MEMO
DATE: June 23, 2023
PREPARED BY: Danny Walz, Director
RE: Affordable housing and tenant wealth building initiative led by the
Perpetual Housing Fund (PHF)
REQUESTED ACTION: Review the proposed Perpetual Housing Fund term sheet
POLICY ITEM: Affordable housing
BUDGET IMPACTS: $10 million in American Rescue Plan Act funds (Rescue Plan Funds)
EXECUTIVE SUMMARY
When the City first received notice of the significant Rescue Plan Funds that it would receive,
the Administration set out to identify the principles by which it would propose this money be
allocated. In addition to taking care of the City’s most urgent needs (revenue replacement, public
safety, and emergency shelter), the Administration’s goal is to allocate a large portion of Rescue
Plan Funds in a way that leverages private investment and creates lasting, generational changes
for families in Salt Lake City.
This proposal, to be carried out in partnership with the Perpetual Housing Fund of Utah (PHF),
provides funding for an affordable housing development with a unique tenant wealth building
program. The City’s funds are anticipated to be used as transformational seed funds for
development costs, including the cost for PHF to acquire existing structures to construct
affordable units. With the help of other partners and the leveraging of City funds, PHF’s ultimate
organizational goal is to provide approximately 1,000 safe, stable, and affordable homes in Salt
Lake City that benefit individuals and families by helping them build income. Over the next 20
years, PHF anticipates that this investment will translate into $50 million in the hands of lower-
and middle-income City residents.
1
On June 6, 2023, Salt Lake City Council adopted an ordinance to amend the final budget of Salt
Lake City, which included the approval of a $10 million contribution in Rescue Plan Funds to
PHF, contingent on the Council’s approval of an associated term sheet. This memo reviews
PHF’s proposal and the terms or conditions upon which the approved funding would be released
to the organization.
BACKGROUND/DISCUSSION
About the Perpetual Housing Fund of Utah
PHF is a Utah non-profit affordable housing organization whose mission is to reimagine existing
housing programs to share profits with PHF project residents. PHF exists to help remove
financial barriers that keep a rapidly expanding portion of population from building wealth
where they live. Unlike other non-profit affordable housing development entities that use profits
to build more affordable units, PHF will share their profits with residents in a variety of ways, as
detailed in the next section.
PHF plans to develop projects in Salt Lake City that provide rent and income restricted
affordable units. PHF anticipates breaking ground on two affordable housing projects in Salt
Lake City in 2024 that will serve those at 25-120% AMI. From there, they plan to develop over
1,000 affordable units over the next decade. PHF’s first two projects will be located in Salt Lake
City, with a priority to acquire additional land in the City for subsequent projects.
Through this investment from the City, PHF will be able to develop wealth-building affordable
housing units at the 515 east 100 south location, and ensure that future PHF projects are not
driven by maximizing return to financial investors but rather remain committed to sharing wealth
with PHF project residents.
How the profit-sharing model works
PHF projects are anticipated to be financed with traditional affordable housing resources and
may include Low Income Housing Tax Credits (LIHTCs). Under PHF’s model, PHF will share
with PHF project residents the majority of profits generated from annual cash flow, long-term
equity generation, and future refinance and sale proceeds. The amount of cash flow and profit
(which will translate into payouts to the tenants) will largely depend on annual rent increases and
the paydown of the project’s mortgage. Over the past several years, area median incomes (AMIs)
have been increasing much faster than is projected when development projects are underwritten
and financed. With LIHTC-funded projects, rental rates are tied to AMIs and, as such, rents have
been increasing faster than projected. Traditional developers and their investors have been
receiving the financial benefits of these rapidly escalating rents that increase annual cash flow of
the project. Instead of reaping these benefits for the developer and investors, PHF would share
these financial benefits with PHF project residents.
PHF will establish a nonprofit tenant entity that, while not having a fee ownership interest in the
development, will have a permanent interest in the development and the contractual obligation to
2
ensure PHF project residents will receive profits from the project. The ownership and profits-
interest structure will vary slightly, depending on if the project utilizes LIHTCs and has a tax
credit investor in the ownership structure during the first years after a PHF project is placed into
service. The ownership structure and profits-interest will generally be as follows:
LIHTC PROJECTS: YEAR 1 – 15
OWNERSHIP
%
PROFIT
%
LIHTC INVESTOR 99.99% 10%
PHF & FUND
INVESTORS 0.01% 15%
RESIDENTS/TENANT
NPO 0.00% 75% NON LIHTC PROJECTS &
LIHTC PROJECTS: YEAR 16 +
OWNERSHIP % PROFIT %
PHF & FUND
INVESTORS 99.99% 25.00%
RESIDENTS/TENANT
NPO 0.00% 75.00%
The profits-interest not otherwise allocated to the PHF project residents will offset costs
associated with developing and managing the units. PHF project residents will not have
ownership or shares in the real estate itself. Rather, there will be an agreement between the
tenant nonprofit entity and the PHF project residents to distribute proceeds in the following
ways.
• Annual rent rebate – A portion of the project’s annual cash flow (profit after collecting
all rent and other income, paying all operating expenses, paying debt service, and setting
aside cash reserves for future repairs) that would typically be received by the developer
will be allocated to current PHF project residents as a rent rebate via cash payment to be
distributed on an annual basis.
• Profit payout – When there is an event that generates profit, or further cashflow
(refinance, exit of the limited partner, etc.), all the cumulative residents over time will
receive a payment that represents a proportionate share of the available profit. The
proportion of the profit a household receives will depend on the length of time they lived
in a PHF unit. With projects that involve LIHTCs, the profit generating event will often
happen 15 years after the project is placed into service because that's when the tax credits
end and the LIHTC investor exits the ownership structure.
3
• Profit advance – PHF will set aside a portion of its initial developer fee for the project to
fund a 0%, zero payment revolving fund to help PHF project residents access a portion
of their anticipated profits early in the event of an emergency or major life event
(medical, educational, entrepreneurial, etc.). These funds are replenished from the PHF
project resident’s share of profit whenever a profit payout would naturally happen.
• Profit tradeup – PHF will be co-developing hundreds of units with the Rocky Mountain
Homes Fund (RMHF), an entity that provides a missing-middle home ownership option
for households making 60-120% AMI (and occasionally less). Subject to availability,
PHF tenants will be able to transfer their accruals from a PHF project for a 1:1 reduction
in purchase price on a RMHF home.
PROJECT DETAILS
515 East 100 South
• Adaptive reuse of an existing office building and new construction of an additional
building, to occur in phases.
• This property will have multiple social-equity based future uses and is slated to be
acquired by Fall 2023. The floors on which affordable units are constructed will be
condominiumized and separated and then sold to PHF prior to ARPA City funds being
utilized on the project.
o Phase 1: Adaptive reuse.
Estimated to begin construction Q2 2024 and be completed by the end of
2024.
60 or more units with a mix of studios, 3-Bedrooms, and 4-Bedrooms
located on floors 3-11 of the existing office tower.
All 60+ residential units will be affordable to incomes at 25%-50 of AMI.
Currently slated to also include profit-sharing coworking/office model
similar to PHF in other floors.
o Phase 2: New building. (Note: Depending on PHF’s pipeline, PHF may choose to
begin a different project in Salt Lake City with more units prior to beginning this
project which could delay or alter the amount of units in this project.)
Estimated to begin construction Q3 2024 and be completed in 2026.
Approximately 40 new units (depending on final construction
estimates/cost constraints) with a planned mix of 5% Studios, 25% 3-
Bedroom, and 70% 2-Bedroom (depending on final construction
estimates/cost constraints)
All ~40 units will be PHF affordable to (25-50% AMI)
Affordable daycare on bottom floor, available to building users and
community members of all incomes.
4
CONDITIONS FOR FUNDING
The Administration (acting through the RDA) and PHF must execute a funding agreement with
conditions to ensure that Rescue Plan Funds are deployed in accordance with federal regulations
and in a manner that brings the greatest public benefit for City residents and prospective
residents. These conditions have been outlined within the term sheet under Attachment A for the
Board’s initial review. As a condition of the $10 million budget allocation, the Board must
review and approve the final term sheet.
PHF is also working to establish a Concerted Community Revitalization Plan (CCRP) as a part
of this partnership with Salt Lake City. A CCRP is a plan from a local jurisdiction, which
establishes an active partnership between local a government and community-based organization
that commits to measurable goals, actions, and timetables to foster the construction or
rehabilitation of affordable housing. This document must be approved by the local jurisdiction’s
governing body and may be brought to next month’s RDA Board or City Council meeting for
potential adoption. Partnership details and goals within the CCRP will align the information
included in the attached term sheet. Establishing this plan would garner additional points for
PHF’s LIHTC proposals (for projects that are within Salt Lake City and incorporate the wealth-
generation model described in this term sheet) to Utah Housing Corporation within a very
competitive application process, and especially in this upcoming competitive cycle for the 515
Phase I project. Establishing this CCRP will ensure PHF can achieve its 1,000-unit commitment
and help to accelerate the delivery of the units.
NEXT STEPS
The Board should review the draft term sheet included under Attachment A to determine if
adequate for future approval.
ATTACHMENTS
A. Draft Funding Agreement Term Sheet – Perpetual Housing Fund
5
ATTACHMENT A
DRAFT
Funding Agreement Term Sheet
Perpetual Housing Fund
Parties
The Perpetual Housing Fund of Utah, LLC, a Utah limited liability company (PHF), and the
Redevelopment Agency of Salt Lake City (RDA).
Property
515 East 100 South, Salt Lake City, Utah 84102
Project Description and Affordability
PHF will use the Rescue Plan Funds by June 30, 2024 to acquire real property that will have
been converted into large condominiums that will be subsequently subdivided into 60 or more
residential units in the existing building at 515 east 100 south (515 Project). These units will be
converted from office spaces to residential apartments and will be affordable to those at 25-55%
of the area median income (AMI). The 515 Project tenants will participate in the tenant wealth
building initiative, which shares the profits of the residential project through rent rebates, profit
payouts, profit advances, and profit trade-ups.
Proposed Funding Terms
• Amount: $10 million in America Rescue Plan Act funds (Rescue Plan Funds).
• Term: Concurrently with the distribution of the Rescue Plan Funds, PHF shall record a
restriction against the condominiumized portion of the building that obligates PHF to
develop 60 or more rent and income restricted apartments for those at 25-55% AMI for
50 years. The restriction will also require the wealth building initiative to be maintained
for a term of 50 years (the Restrictive Covenant).
• Disbursement: One lump sum upon meeting the conditions for funding, as detailed
below. PHF will not be required to repay the funds like a traditional loan.
• Return on Investment: As permitted by the American Rescue Plan Act (ARPA), as a
transformational seed funder, the RDA will be treated like an equity investor in PHF and
receive a 2-6% return paid annually every year.
• Use of Funds: PHF must deploy 100% of the funds by June 30, 2024 on ARPA eligible
uses.
• Additional Projects: For non-monetary consideration in addition to the $10 million
investment, PHF will commit to developing additional affordable housing projects in Salt
Lake City. More specifically, by year 20, PHF or its affiliates and subsidiaries will have
6
developed 1,000 additional units in Salt Lake City that will be affordable for those
between 25% and 65% AMI. These additional projects shall also include the tenant
wealth building initiative and, if new construction, will achieve an energy star score of 90
or higher, participate in the City’s Elevate Buildings Program, and be designed to operate
without onsite fossil fuel combustion.
• Waiver of Sustainable Development Policy: PHF’s is obligations to comply with the
RDA’s Sustainable Development Policy may be waived, if necessary, in part due to the
adaptive reuse element of the 515 Project as well as PHF’s commitment to incorporate
these standards into the new construction of the additional projects, even though such
incorporation is not required under the policy.
Conditions for RDA to Distribute Funds
Prior to dispersing the Rescue Plan Funds, the PHF will complete the following:
• PHF will be ready to close on the acquisition of the condominium spaces within which to
build 60 or more affordable apartments on or before June 30, 2024. Implied in this
requirement is that PHF’s predecessor-in-interest will have acquired the Property and
condominiumized the Property so the portions within which the residential apartments
will be constructed can be acquired by PHF.
• PHF and RDA will agree on the form of the Restrictive Covenant to be recorded against
the Property concurrently with funding. The Restrictive Covenant will require PHF to
maintain, for a term of 50 years, 60 or more affordable housing units at 25-55% AMI,
maintain a mix of unit sizes, and the following wealth building opportunities for tenants:
o Annual rent rebate – A portion of the project’s annual cash flow (profit after
collecting all rent and other income, paying all operating expenses, paying debt
service, and setting aside cash reserves for future operations and repairs) that
would typically be received by the owner will be allocated to current PHF project
residents as a rent rebate via cash payment to be distributed on an annual basis.
o Profit payout – When there is a capital transaction event that generates profit, or
further cashflow (refinance, exit of the limited partner, etc.), all the cumulative
residents over time will receive a payment that represents a proportionate share of
the available profit. The proportion of the profit a household receives will depend
on the length of time they lived in a 515 Project unit. With projects that involve
Low Income Housing Tax Credits (LIHTC), the profit generating event will often
happen at the end of the LIHTC compliance period, which is typically 15 years
after the project is placed into service.
o Profit advance – PHF will set aside a portion of its initial developer fee for the
project to fund a 0%, zero payment revolving fund to help PHF project residents
access a portion of their anticipated profits early in the event of an emergency or
major life event (medical, educational, entrepreneurial, etc.). Disbursements
7
made to a PHF project resident from this revolving fund will be replenished from
the PHF project resident’s share of profit whenever a profit payout would
naturally happen.
o Profit tradeup – PHF will be co-developing hundreds of units with other impact
partners that target missing middle home ownership opportunities for households
making 60%-120% AMI (and occasionally less). Subject to availability, PHF
tenants will be able to transfer their accruals from a PHF project for a 1:1
reduction in purchase price on these homes.
• PHF shall establish all required legal entities to fulfill the profit-sharing obligations and
demonstrate such establishment to RDA’s satisfaction.
• Receive approval from the RDA and the City Attorney’s Office on all matters pertaining
to title, legality of the funding agreement, and the legality, sufficiency, and form and
substance of all other documents that are deemed reasonably necessary for the funding
transaction.
• Provide evidence of insurance in such amounts and with such coverage as deemed
necessary by the RDA.
PHF’s Obligations after the Funds are Distributed
• Prior to the Rescue Plan Funds being distributed, PHF and RDA will agree on the form of
a funding agreement. The funding agreement will require PHF to do the following after
the funds are distributed:
o PHF shall demonstrate to RDA’s satisfaction, sufficient sources of project
financing for the 515 Project. Sources of financing must equal the total project
cost.
o PHF will have applied for Low Income Housing Tax Credits for the 515 Project
by June 30, 2024.
o PHF shall obtain all required city approvals to convert the 515 Project office
spaces to residential units, including all necessary approvals from the City’s
Planning and building services’ division. Additionally, PHF will commit to
commencing and diligently pursing the completion of construction.
o PHF will provide RDA biannual progress reports on the construction and
operation of the units.
o PHF will agree to implement an equitable process for tenant selection and as
permitted by law, potentially prioritize certain applications.
o PHF will commit to develop additional affordable housing projects in Salt Lake
City to meet the following terms and conditions:
Within 20 years, PHF or its affiliates and subsidiaries will have developed
1,000 affordable housing units in Salt Lake City for those at 65% AMI and
below.
8
These additional housing units must also participate in the tenant wealth
building initiative as detailed above.
All newly constructed PHF projects shall achieve an energy star score of
90 or higher, participate in the City’s Elevate Buildings Program, and be
designed to operate without onsite fossil fuel combustion.
Defaults and Remedies
Events of default under the restrictive use or funding agreements may include, but are not limited
to:
• PHF fails to construct the 515 Project within the timeframe provided in the funding
agreement.
• PHF fails to maintain the affordability (as required under the Restrictive Covenant) of the
515 Project units or the tenant wealth building initiative in the 515 Project.
• PHF fails to provide regular development reports.
• PHF fails to develop and maintain the additional affordable housing/tenant wealth
building projects in Salt Lake City.
• PHF fails to comply with any other city, state, or federal requirements.
Remedies if PHF fails to cure in the event of a default may include, but are not limited to:
• If PHF does not meet the initial conditions for funding, the RDA will not distribute the
funds.
• Once funds are distributed and upon an event of default, the RDA may:
o File a breach of contract claim, which may include claims for:
Liquidated damages,
Injunctive relief, and/or
Specific performance.
o File a direct action against PHF to comply with their obligations.
o Any other remedies available at law or equity.
9
1
BOARD STAFF REPORT
THE REDEVELOPMENT AGENCY of SALT LAKE CITY
TO:RDA Board Members
FROM: Allison Rowland
Budget & Policy Analyst
DATE:July 11, 2023
RE: RESOLUTION: AMENDMENT TO TERMS FOR LOAN TO VILLE 1659, LCC, AND
CLARIFICATION OF HOUSING DEVELOPMENT LOAN PROGRAM
ISSUE AT-A-GLANCE
The Board will consider approving two modifications to the $1 million Housing Development Loan Program
(HDLP) loan approved in January 2023 to the Ville 1659 project for development of deeply affordable housing at
1659 West North Temple, the former Ramada Inn. The Board may also wish to consider changes to the plans for
this property, which the Board approved last January based on information in its HDLP application (see section
C, below). These result from changes to the developer’s overall financing structure, as well as additional RDA
staff review of the project.
The RDA Finance Committee chose not to discuss this proposed amendment before forwarding it to the Board
for its review, but the transmittal includes an email from one member of the Committee that outlines some
concerns. These are listed in Policy Question 2 for the Board’s review and consideration.
In addition to the proposed changes to the Ville 1659 project, RDA staff also requests that the Board consider
approving a clarification within the HDLP resolution approved last January. This would apply to all projects
approved for funding at that time, including the Ville 1659 project (see section D below).
Goal of the briefing: Discuss and consider approving: 1. proposed modifications to RDA financing of $1
million for the Ville 1659 development at 1659 West North Temple; and 2. a clarification within the HDLP
resolution approved in January 2023 which would apply to all projects approved for funding at that time
which rely on the Low Income Housing Tax Credit (LIHTC).
Item Schedule:
Briefing: July 11, 2023
Set Date: n/a
Public Hearing: n/a
Potential Action: TBD
Page | 2
ADDITIONAL INFORMATION
A.Ville 1659 Background. Previously approved funding for this project includes a loan from the RDA and a
grant from a grant program administered by the Community and Neighborhoods Department (CAN).
1. In its January 2023 meeting, the Board approved funding allocations and preliminary loan terms for
eight projects totaling nearly $8.4 million through the RDA’s 2022 Notice of Funding Availability
(NOFA). This included a $1 million loan for the Ville 1659 adaptive reuse project, with a forty-year term
and two percent interest rate, which would be amortized over forty years, with cash flow repayments.
The purpose was to transform the former motel into 197 studio units, which would be rented at 30%
AMI (Area Median Income) or below, with preference to people who have experienced or are at risk of
becoming homeless.
2. Last fall, the Council approved the Administration’s proposal to open a NOFA managed by CAN to
award $6 million for a new Homeless Housing Grant Program. The funds came from money originally
allocated by the Council to CIP and re-purposed in fiscal year 2023 for affordable housing initiatives to
avoid exceeding the 25% fund balance threshold. The purpose of the program is to provide “a critical
subsidy for housing that is the most difficult to develop,” allowing qualified projects to leverage other
sources of funds specifically to acquire and rehabilitate former motels as new permanent supportive
housing. The Ville 1659 project was awarded $2 million from these funds for 197 units and case
management services, including community and behavioral health and substance use support.
B.Proposed Changes to Ville 1659 Loan.
1. The first modification to the loan as approved would change the type of loan from a construction gap
loan with cash-flow payments to a bridge loan with a balloon payment at the end of the term. The
second would reduce the term of the loan from 40 years to three.
The current RDA proposal results from changes to the developer’s overall financing structure and
additional RDA staff review of the project. In total, the cost of the project drops to $16.9 million from
$18.3 (see chart below). That section reflects a sharp reduction to the amount needed for property
acquisition, which would drop from $12 million to $9.5 million based on documentation received by the
RDA after the application was filed. The other major reduction would be in the developer fee, which
would fall by nearly three-quarters, to $280,000.
Sources and Uses in Original and Revised Ville 1659 Project
ORIGINAL APPLICATION REVISED APPLICATION
Sources Amount
% of
Total Sources Amount
% of
Total Difference
Senior Debt $7,500,000 41.1%
Senior Debt
(Sundance
Bay Bridge)$9,065,361 53.7%$1,565,361
RDA Loan $1,825,000 10.0%RDA Loan $1,000,000 5.9%$ (825,000)
OWHLF $1,000,000 5.5%OWHLF $- 0.0%$(1,000,000)
Owner Equity $2,066,378 11.3%Owner Equity $953,000 5.6%$(1,113,378)
Utah Office of
Homeless
Services $3,858,622 21.1%
Utah Office of
Homeless
Services $3,858,622 22.9%$-
SLC HHGP
Funding $2,000,000 11.0%
SLC HHGP
Funding $2,000,000 11.9%$-
Deferred Fee --Deferred Fee --$-
Total Sources $18,250,000 100%
Total
Sources $16,868,361 100%$(1,381,639)
Page | 3
In terms of Sources, the developer did not receive $1 million from the Olene Walker Housing Loan Fund
(OWHLF), as was anticipated in the original application. In the revised application to the RDA, OWHLF
would contribute $0 to Sources, and the amount of Owner Equity also is reduced by $1.1 million. The
apparent reduction in the RDA Loan reflects the Board’s decision in January 2023 to fund the project at
$1.0 million, rather than $1.8 million. At the same time, the amount of “senior debt,” which takes
precedence for repayment over the RDA loan, increases by $1.6 million.
C.Changes to the Ville 1659 Project.
1. The revised project would add ten dedicated recreational vehicle (RV) parking spaces to the parking lot.
In response to Council staff questions about servicing these spaces and whether the developer plans to
apply for any of the Fiscal Year 2024 funds approved by the Council for subsidizing camping spaces,
RDA staff stated:
“The revised site plan shows the RV parking spots located behind a secured
fence. The developer has told staff Ville 1659 will provide electrical, water,
and sewer services, for which it is projecting a total of $450/month rent per
RV site.”
and
“Our analysis and transmittal were being finalized around the same time the
Council was approving the FY24 Budget. We have not discussed any potential
terms or conditions for the funds related to this project or if it would qualify to
apply.”
RDA staff also noted that the construction costs for the RV parking spaces have been included in the
Construction Costs line item of the sources and uses document (summary in section B3 above).
2. Ville Property Management (the project’s property manager) has leased space to Mental Health America
of Utah (MHA) to provide mental health services to tenants and the general public. In response to
Council staff questions about the terms of access for potential clients and other information, and the
length of the contract with this organization, RDA staff replied that MHA’s specific operations or
requirements for clients to qualify for services are not know and that the organization “is currently on a
month-to-month lease with an intent to sign a 10-year lease at project stabilization.”
D.Clarification to Tax Credit Requirement. In addition to the changes in the loan outlined above, RDA
staff requests that the Board approve a clarification within the approved HDLP resolution to state that if a
Uses Uses
Source Amount
% of
Total Source Amount
% of
Total Difference
Property
Acquisition $12,000,000 65.8%
Property
Acquisition $9,500,000 56.3%$(2,500,000)
Construction
Costs $4,000,000 21.9%
Construction
Costs $4,297,653 25.5%$297,653
Soft Costs $1,000,000 5.5%Soft Costs $1,000,000 5.9%$-
Developer Fee $1,000,000 5.5%Developer Fee $280,000 1.7%$(720,000)
Project
Contingency $250,000 1.4%
Project
Contingency $265,000 1.6%$15,000
Financing Costs $0 0.0%
Financing
Costs $1,525,708 9.0%$1,525,708
Total Uses $18,250,000 100%Total Uses $16,868,361 100%$(1,381,639)
Page | 4
project does not receive tax credits in the next allocation cycle, the funding would need to be returned to the
RDA. This would apply to all projects approved for funding in 2023 that rely on the Low-Income Housing
Tax Credit (LIHTC). The clarification would state:
“If these projects do not receive 9% tax credits in the 2024 Utah Housing Corporation
9% allocation cycle, or these projects do not receive an allocation of Tax Exempt
bonds for the 4% tax credits by December 31, 2023, these funding commitments shall
be returned to the RDA's Housing Development Loan Program.
POLICY QUESTIONS
1.Board Resolution on Affordability Limits. It has been the Board’s policy to try to disperse new
affordable housing units across parts of the City where access to opportunities for residents is greatest,
while encouraging greater diversity in the housing choices offered on the West Side. Would the Board
like to request an update on the geographical distribution of currently funded
affordable housing developments?
2.RDA Finance Committee Member Concerns. The Board may wish to consider asking
RDA staff about the reasons one RDA Finance Committee Member stated she could not
recommend the loan as structured. The reasons are summarized by Council staff below; the full
email sent to the RDA was attached to responses to staff questions (see Attachment C2).
a. It is unclear whether the operating budget includes a line item paying for case management
services from an organization with experience working with the people experiencing
homelessness.
b. The size of the permanent loan ultimately needed to pay off the construction/bridge loan is
unknown due uncertainty about: 1. potential shifts in interest rates, and 2. estimates of the
actual operating cashflow. These factors affect the project’s ability to repay the RDA loan
because it is subordinate to the construction/bridge loan.
c. The specifics of the guarantees required from the developer apparently were not made available
to the RDA Finance Committee, so it is not clear how the RDA would be able to force repayment
of the loan.
d. The issue above may be of particular concern because the proposed project does not have
project‐based rental subsidies. This means that any tenant who does not have HUD Section 8
vouchers would be charged only $556 per month (including utilities), rather than HUD’s Fair
Market Rent of $910 for Section 8 voucher holders. The proforma assumes that all units would
pay the larger Section 8 voucher amount, but if the number of non-Section 8 tenants is
significant, it could result in a significant shortfall for RDA loan repayment.
ATTACHMENT
Attachment C1. RDA Staff Report, January 10, 2023.
Attachment C2. RDA Finance Committee Member email listing concerns with project loan repayment.
CITY COUNCIL OF SALT LAKE CITY
451 SOUTH STATE STREET, ROOM 304
P.O. BOX 145476, SALT LAKE CITY, UTAH 84114-5476
SLCCOUNCIL.COM
TEL 801-535-7600 FAX 801-535-7651
BOARD STAFF REPORT
THE REDEVELOPMENT AGENCY of SALT LAKE CITY
TO:RDA Board Members
FROM:Allison Rowland
Budget & Policy Analyst
DATE:January 10, 2023
RE: RESOLUTION: HOUSING DEVELOPMENT LOAN FUNDING ALLOCATIONS
FOR AFFORDABLE HOUSING
ISSUE-AT-A-GLANCE
The Board will review and potentially approve recommendations for allocating up to $8.36 million in affordable
housing funds offered through a Notice of Funding Availability (NOFA) in 2022. The purpose of these low-
interest, 40-year loans is to incentivize the inclusion of affordable housing in new construction and in
preservation projects. The ten applications forwarded to the Board have requested a total of nearly $16.8 million
(an eleventh application was withdrawn).
The applications were reviewed and ranked by the RDA’s Housing Development Loan Program (HDLP)
Selection Committee. Their specific recommendations for allocating $6.0 million of funds approved by the
Board in 2022 (as part of the fiscal year 2023 budget) are presented in the Transmittal’s Attachment C,
along with recommendations for an additional $2.36 million which became available when a project approved in
2021 was withdrawn. The Board makes the final determination of which applications to fund and for what
amount.
This competitive NOFA was administered under the RDA’s Housing Development Loan Program (HDLP) and
based on the Board’s April 2022 directive to require that proposals meet new “threshold criteria” for eligibility.
These include minimum environmental standards, and that 10% of total housing units in each project are either
deeply affordable, or family-sized—or both. (Additional information can be found in Section A below.) In the
same April meeting, the Board also approved the complete list of 2022 Funding Priorities for the HDLP, which
are used to encourage development that meets other key goals (see Section B).
The RDA has released multiple NOFAs since late 2016 to facilitate the development of affordable housing units
in Salt Lake City. This follows previous direction from the Council to concentrate housing development activities
Item Schedule:
Briefing: January 10, 2023
Set Date: N/A
Public Hearing: N/A
Potential Action: January 10, 2023
Page | 2
in the RDA and housing program activities in the Housing Stability Division of Community and Neighborhoods
(CAN).
Goal of the briefing: Discuss and consider adopting the Resolution entitled 2022 Affordable Housing –
Housing Development Loan Program (HDLP) Funding Allocations.
ADDITIONAL INFORMATION
A. 2022 Threshold Criteria. In April 2022, the Board adopted new “threshold criteria” for the HDLP, which
require that every application must meet the following criteria.
1.Environmental Criteria. The Board shifted two measures of environmental impact of a
proposed project to threshold criteria. These are that the completed building(s) would receive
an “Energy Star” score above 90, and that it would not install natural gas to power appliances,
relying instead on electricity for this purpose. These requirements would apply to all proposed
projects.
The other eligibility threshold could be met by fulfilling either of the two following requirements, or both:
2.Deeply Affordable Units. At least 10% of total units in a proposed project must be deeply
affordable, accessible for individuals or families that are homeless or at risk of homelessness.
These units will be rent and income deed-restricted to households earning 40% or less AMI.
3.“Family-Sized” Units. At least 10% of total units in a proposed project have three or more
bedrooms. These units will be rent and income deed-restricted to households earning 60% or
less AMI.
B. 2022 Funding Priorities. In addition to the Threshold Criteria, in April the Board set additional annual
Funding Priorities for 2022 (see Transmittal, Attachment E). The funding priorities are part of a point
system that is used in the evaluation process to encourage development that meets its additional Board
goals. A project with a higher point total is typically more highly ranked than one with a lower total.
1. Approved FY23 Priorities.
a. Priorities worth three points:
•Family Housing
•Target Populations
•Homeownership
•Missing Middle and Unique Housing Types
b. Priorities worth one point:
•Transportation Opportunities
•Neighborhood Safety
•Expand Opportunity
•Architecture and Urban Design
•Commercial Vitality
•Historic Preservation /Adaptive Re-use
•Public Art
•Sustainability
2.Interest-Rate Reductions. In addition to increasing their point total, applicants also can
receive interest-rate reductions on their HDLP loans, depending on the number of Board
Page | 3
priorities their project would meet. See also Policy Question #2 below. For each funding
priority included, a project is eligible to receive a 0.5% reduction to the Base Interest Rate,
down to a minimum of 1% for four or more priority incentives that would be met.
C. Applications for Projects in High Opportunity Areas. For the 2022 NOFA, none of the applications
proposed projects located within “high opportunity areas,” a designation for census tracts where residents
have relatively greater chances at upward mobility. In 2017, the Board first reserved $4.5 million for
projects located in such areas. Two years later, the Board approved a $1.8 million loan for the Richmond
Flats development, leaving the current balance at $2.7 million.
➢The Board may wish to consider the costs and benefits of continuing to reserve
affordable housing funds for projects in areas of high opportunity, or whether to
reserve additional funds for this purpose.
➢The map used by RDA staff to determine whether a proposed project is eligible for the loan funds
reserved for high opportunity areas was part of research published in 2015, and the underlying data
for the map dates from still earlier. Given the City’s rapid socioeconomic changes in the past decade,
the Board may wish to request that the Administration work with the Gardner
Policy Institute to update the map of high opportunity areas, at least to the extent new
data is available in time for the next NOFA process.
D. Evaluation Process.
1.Application Dates. The NOFA was released on September 6, 2022, and originally was closed
on October 24, 2022. The application process was then re-opened from October 31 to November
14, after RDA staff clarified the Sustainable Development Policy to ensure applicants had time
to apply the relevant requirements to their applications. The 2022 HDLP Annual Affordable
Housing Funds Guidelines and Application Handbook can be found here.
2.Project Evaluation. As part of the application review process, RDA staff first analyzed
applications to ensure they met the HDLP’s eligibility requirements. The Selection Committee
(see below) then considered the Board’s funding priorities, along with factors related to the
feasibility and technical qualities of each application. These include developer experience, the
completeness and quality of the application, the amount of requested funding per affordable
unit, the unit mix, community impact, and the financial and regulatory readiness of the
proposed project.
➢The Board may wish to request information about how the selection
committee balanced the Board’s annual priorities with the feasibility and
technical qualities of each application, particularly developer experience
and community impact.
3.Selection Committee. The selection committee was drawn from members of the Housing
Trust Fund Advisory Board, the RDA Finance Committee (a subset of the Redevelopment
Advisory Committee), and City staff in RDA and the Community and Neighborhoods
Department, including members of the Division of Housing Stability.
E. Background. The framework for allocating Housing Development Loan Program (HDLP) funds was
adopted over several stages beginning in 2020. Since then, the RDA Board discussed and adopted the
following:
Page | 4
1.Housing Funds Allocation Policy. This policy establishes four housing funds based on fund
source. The revenues, expenditures, interest, and payments for each fund source are separately
accounted for to ensure the control and oversight required by statute.
2.Housing Development Loan Program (HDLP) Policy. The purpose of the HDLP is to
incentivize the development and preservation of affordable housing in Salt Lake City through
low-cost financial assistance. The HDLP provides a centralized application, underwriting, and
approval process regardless of the fund source.
3.Setting Annual Affordable Housing Priorities. Under the recently adopted process, in
the spring of each year, the Board adopts annual priorities to provide policy direction for RDA
staff for reviewing applications to City affordable housing development support made available
through a NOFA. The goal of adopting priorities on an annual basis is to direct resources to
specific policy priorities depending on available resources, community need, and policy
objectives.
POLICY QUESTIONS
1.Does the Board agree with the strategy presented in the funding recommendations for
using the potential additional $2.36 million from the 2021 project that was withdrawn?
Alternatively, the Council may wish to consider:
a. concentrating this amount in one or two key projects, rather than splitting it among
several; or,
b. using some or all of this amount for “emergency gap funds” available to affordable
housing projects currently under construction that encounter funding shortfalls due to
current economic and market conditions. (The Board also may wish to ask whether any
HDLP funds are set aside for this purpose for FY23.)
c. Re-allocating these funds to different affordable housing programs, like Strategic
Acquisition, or to completely different uses.
2. The projects reviewed by the Selection Committee would be charged interest rates that range from 1% to
2.5% on 40-year loans. In the context of sharply rising interest rates in the broader economy,
would the Board like to discuss the potential advantages and disadvantages of changing
how the Base Interest Rate is set for HDLP loans?
1
Taylor, Austin
From:Taylor, Austin
Sent:Wednesday, July 5, 2023 12:30 PM
To:Taylor, Austin
Subject:FW: (EXTERNAL) RE: RDA Finance Committee: Proposed Modification for Ville 1659 Loan and HDLP
LIHTC Condition
From: Amy Rowland <amy@cdfautah.org>
Sent: Friday, June 30, 2023 7:11 PM
To: Taylor, Austin <Austin.Taylor@slcgov.com>
Cc: Tran, Tracy <Tracy.Tran@slcgov.com>; Werrett, Kate <kate.werrett@slcgov.com>
Subject: RE: (EXTERNAL) RE: RDA Finance Committee: Proposed Modification for Ville 1659 Loan and HDLP LIHTC
Condition
Austin –
I’m sorry I was unable to get back to you today, and thank you for your responses to my first questions.
From the available information, I’m still not comfortable that this is a good loan for the RDA. My primary concerns are
as follows:
‐ I can’t tell if this developer has a track record of experience in working with the homeless population and I don’t
see that the operating budget includes a line item paying for case management services from an organization
that does.
‐ Since the RDA’s loan will be subordinate to the construction/bridge loan, the ability to repay the RDA’s loan
hinges on whether they can get a permanent loan sufficient to pay off the construction/bridge loan. The size of
that permanent loan is unknown due to interest rate uncertainty, as well as the actual operating cash flow the
project will experience. The proforma used an interest rate with no cushion for that uncertainty.
‐ The proforma assumes all units will pay the Fair Market Rent of $910 from a HUD Section 8 voucher. However,
since the project doesn’t have project‐based rental subsidies, the rents they can charge any tenants who don’t
have vouchers will be much lower – approximately $556 including all utilities. If a significant number of their
tenants don’t come with vouchers, their proforma NOI will be much lower, and so will the term loan
amount. Without specifics on the guarantees required from the developer, I don’t understand how the RDA will
be able to force repayment in this case.
I understand the project will be moving forward to the RDA Board for approval, but due to the above concerns, I wanted
to be on record as not recommending this loan as structured.
Thanks for the opportunity to provide my input.
Amy Rowland
801‐557‐1537
REDEVELOPMENT AGENCY OF SLC
Ville 1659 Loan Term Changes &
HDLP Financing Condition Update
RDA BOARD OF DIRECTORS MEETING -JULY 11, 2023
VILLE 1659
•1659 West North Temple
•Conversion of mid-century motel (Ramada Inn)
•197 studio apartments
•10 RV parking sites
•30% AMI
•On-site mental healthcare
•Taste of India restaurant
UPDATED SOURCES AND USES
Sources Original Current
Sundance Bay Bridge Loan $7,500,000 $9,065,361
Olene Walker Fund Loan $1,000,000 $0
SLC RDA Loan $1,825,000 $1,000,000
Owner Equity $2,066,378 $953,000
SLC Grant $2,000,000 $2,000,000
State Grant $3,858,622 $3,850,000
Total Sources $18,250,000 $16,868,361
Uses Original Current
Property Acquisition $12,000,000 $9,500,000
Construction Costs $4,000,000 $4,297,653
Soft Costs $1,000,000 $1,000,000
Developer Fee $1,000,000 $280,000
Project Contingency $250,000 $265,000
Financing Costs $0 $1,525,708
Total Uses $18,250,000 $16,868,361
PROPOSED LOAN TERM CHANGES
Approved Proposed
Loan Type Construction to Perm Bridge
Loan Amount $1,000,000 $1,000,000
Payment Type Cash Flow Balloon Payment at End of Term
Interest Rate 2%1%*
Amortization Period 40 Years N/A; balloon payment
Term 40 Years 3 Years
*This change aligns with the HDLP Guidelines and does not require Board approval.
CONDITION CLARIFICATION FOR LAST ROUND OF HDLP
•Condition included to ensure funds would not be held up
•Condition states that if project does not receive 9% tax credits,
funds would be returned to RDA HDLP
•Proposed clarification: If project does not receive 9% tax
credits or allocation of tax-exempt bonds for 4%, funds would
need to be returned to RDA HLDP
REDEVELOPMENT AGENCY OF SALT LAKE CITY
RESOLUTION NO. _____
Affordable Housing–Gap Housing Development Loan Program (HDLP) Amendment to
Proposed Loan Terms
RESOLUTION OF THE BOARD OF DIRECTORS OF THE REDEVELOPMENT AGENCY
OF SALT LAKE CITY APPROVING AN AMENDMENT TO PROPOSED LOAN TERMS
FOR AN HDLP LOAN TO VILLE 1659, LLC.
WHEREAS, the Redevelopment Agency of Salt Lake City (“RDA”) was created to transact the
business and exercise the powers provided for in the Utah Community Reinvestment Agency Act
(the “Act”).
WHEREAS, the Act provides that tax increment funds may be used for the purpose of
increasing the affordable housing supply within the boundaries of Salt Lake City.
WHEREAS, the Housing Development Loan Program (“HDLP”) was created to enable the
RDA to incentivize the development and preservation of affordable housing.
WHEREAS, the RDA Board of Directors (“Board”) previously approved the Housing Funds
Allocation Policy (“Funds Policy”), which establishes policies with respect to dedicating and
directing resources for the HDLP based on funding source (“Housing Funds”).
WHEREAS, the Board also adopted the amended and restated Housing Development Loan
Program Policy (the “HDLP Policy”) to provide a centralized application, underwriting, and
approval process for accessing the Housing Funds, including granting the authority for review
and approval of applications by the RDA Finance Committee (“Finance Committee”).
WHEREAS, pursuant to resolution R-3-2023, the Board previously approved funding
allocations and preliminary loan terms for eight projects selected to meet the goals established by
the HDLP, amounting to a total allocation of $8,360,000.
WHEREAS, included in that funding allocation was a proposed loan in the amount of
$1,000,000 to Ville 1659, LLC (“Developer”) for development of a deeply affordable housing
project to be located at 1659 West North Temple (the “Ville 1659 Project”).
WHEREAS, preliminary loan terms for the approved funding allocation for Ville 1659
originally included a two percent (2%) interest rate, forty-year term, forty-year amortization, and
cash flow repayments.
WHEREAS, due to changes to Developer’s overall financing structure, RDA staff proposes
making modifications to the preliminary loan terms, changing the type of loan from a
construction gap loan to a bridge loan, to support the Ville 1659 Project until it reaches
stabilization.
WHEREAS, the proposed modifications include shortening the term to three years and changing
the repayment structure from cash flow payments to a balloon payment due upon expiration of
the term.
WHEREAS, the Board agrees to allocate the funding with the preliminary loan term
modifications as reflected in the Amended HDLP RDA Board Funding Allocations attached
hereto as Exhibit A.
NOW THEREFORE, BE IT RESOLVED by the Board of Directors of the
Redevelopment Agency of Salt Lake City that it approves the funding allocations and preliminary
terms as amended in the Amended HDLP RDA Board Funding Allocations attached hereto as
Exhibit A, subject to revisions that do not materially affect the rights and obligations of the RDA
hereunder. The Board authorizes the waiver of the Policy to set the base interest rate at the rate
stated on the Term Sheet, which waiver shall be valid for three months from the date of this
resolution. The Board authorizes the Executive Director to negotiate and execute the loan
agreement and any other relevant documents consistent with the Amended and Restated Term
Sheet, and incorporating such other terms and agreements as recommended by the City Attorney’s
office.
Passed by the Board of Directors of the Redevelopment Agency of Salt Lake City, this _______
day of July, 2023.
________________________________
Alejandro Puy, Chair
Approved as to form: __________________________________
Salt Lake City Attorney’s Office
Sara Montoya, Senior City Attorney
Date:
The Executive Director:
____ does not request reconsideration
____ requests reconsideration at the next regular Agency meeting.
________________________________
Erin Mendenhall, Executive Director
Attest:
________________________
City Recorder
July 6, 2023
EXHIBIT A: AMENDED HDLP RDA BOARD FUNDING ALLOCATIONS
PROJECT/APPLICANT ADDRESS
PROJECT
PRIORITIES/INTERES
T RATE REDUCTION
AND WEIGHTED
NOFA RANKING**
FUNDING
REQUEST
PRELIMINAR
Y TERMS*
TOTAL
FUNDING
ALLOCATIO
N
FUNDIN
G
RANKIN
G
2 -Victory Heights 1
1060 E 100 S
Family Housing: 3
Target Populations:
3
Transportation
Opportunities: 1
Architecture & Urban
Design: 1
Adaptive Reuse: 1
Public Art: 1
TOTAL: 10
$1,865,00
0
1% interest
rate, 40-year
term, 40-year
amortization,
hard
repayments
$1,865,00
0 1
BCG Holdings
3 - Victory Heights 2
1060 E 100 S
Family Housing: 3
Target Populations:
3
Transportation
Opportunities: 1
Architecture & Urban
Design: 1
Adaptive Reuse: 1
Public Art: 1
TOTAL: 10
$280,000
1% interest
rate, 40-year
term, 40-year
amortization,
hard
repayments
$280,000 2
BCG Holdings
4 - Atkinson Stacks***
543 S 500 W
Target Populations:
3
Unique Housing
Types: 3
Architecture & Urban
Design: 1
Sustainability: 1
TOTAL: 8
$2,500,00
0
1% interest
rate, 40-year
term, 40-year
amortization,
hard
repayments
$500,000 8
HAME
5 - Book Cliffs Lodge***
1159 S West
Temple
Family Housing: 3
Target Populations:
3
Transportation
Opportunities: 1
Neighborhood Safety:
1
TOTAL: 8
$540,000
1% interest
rate, 40-year
term, 40-year
amortization,
hard
repayments
$540,000 7
HAME
6 - Citizens West 2
509 W 300 N
Family Housing: 3
Target Populations:
3
Transportation
Opportunities: 1
Architecture & Urban
Design: 1
Commercial Vitality:
1
Public Art: 1
TOTAL: 10
$1,850,00
0
1% interest
rate, 40-year
term, 40-year
amortization,
hard
repayments
$1,850,00
0 3
Giv Development
7 - Citizens West 3 509 W 300 N Family Housing: 3
Target Populations:
$1,200,00
0
1% interest
rate, 40-year
$1,200,00
0 4
Giv Development 3
Transportation
Opportunities: 1
Architecture & Urban
Design: 1
Commercial Vitality:
1
Public Art: 1
TOTAL: 10
term, 40-year
amortization,
hard
repayments
8 - Ville 9
1025 N 900 W
Unique Housing Type:
3
Commercial Vitality:
1
Adaptive Reuse: 1
TOTAL: 5
$1,700,00
0
2.5% interest
rate, 40-year
term, 40-year
amortization,
cash flow
repayment
$0 9/10
Ville Property Mgmt
9 - Ville 1659
1659 W North
Temple
Target Populations:
3
Unique Housing Type:
3
Transportation
Opportunities: 1
Commercial Vitality:
1
Adaptive Reuse: 1
TOTAL: 9
$1,825,00
0
2% interest
rate, 40-year
term, 40-year
amortization,
cash flow
repayment
1% interest
rate, 3-year
term, balloon
payment
$1,000,00
0 5
Ville Property Mgmt
10 - Liberty Corner***
265 W 1300 S
Family Housing: 3
Target Populations:
3
Missing Middle: 3
Transportation
Opportunities: 1
Neighborhood Safety:
1
Architecture & Urban
Design: 1
Commercial Vitality:
1
TOTAL: 13
$3,000,00
0
2% interest
rate, 40-year
term, 40-year
amortization,
cash flow
repayment
$1,125,00
0 6
Cowboy Partners
11 - 9Ten West
910 W North
Temple
Transportation
Opportunities: 1
Neighborhood Safety:
1
Architecture & Urban
Design: 1
Commercial Vitality:
1
Public Art: 1
TOTAL: 5
$2,000,00
0
2% interest
rate, 16-year
term, 30-year
amortization,
cash flow
repayment
$0 9/10
Great Lakes Capital
TOTAL $16,760,000 $8,360,000
*Final Terms shall comply with the requirements, standard loan terms and conditions, interest-rate reductions, and
all other details laid out within the 2022 Housing Development Loan Program (HDLP) Guidelines. Changes to
repayment type may occur (hard repayment versus cash flow repayment) and shall be based on requirements listed
in the HDLP Guidelines or if required by a senior lender. Changes in repayment type will cause a change in the
base interest rate. Repayment priority and lien position shall be based on the size of the loans.
**Projects receive a 0.5% interest rate reduction for each included priority. Sustainability allows for a 1% or 2%
reduction. The maximum reduction per development is 2%. The interest rate is calculated as follows: Base Interest
Rate minus (-) Interest Rate Reductions (up to 2%) = proposed interest rate; Base interest rate shall be locked
within a month of closing. Projects shall maintain project priorities and the same weighted score at closing.
Deviation from project priorities met may require Board approval.
***If these projects do not receive 9% tax credits in the next 2024 Utah Housing Corporation 9% allocation cycle, or
these projects do not receive an allocation of Tax Exempt Bonds for the 4% tax credits by December 31, 2023,
these funding commitments shall be returned to the RDA's Housing Development Loan Program.
Funds Availability
HDLP Committed Funds $6,000,000
Additional HDLP Funds Approved by
Board $2,360,000
Total Potential HDLP Funds $8,360,000
REDEVELOPMENT AGENCY of SALT LAKE CITY
SALT LAKE CITY CORPORATION
451 SOUTH STATE STREET, ROOM 118 WWW.SLC.GOV · WWW.SLCRDA.COM
P.O. BOX 145518, SALT LAKE CITY, UTAH 84114-5518 TEL 801-535-7240 · FAX 801-535-7245
MAYOR ERIN MENDENHALL
Executive Director
DANNY WALZ
Director
STAFF MEMO
DATE: June 23 , 2023
PREPARED BY: Austin Taylor, Project Manager
Tracy Tran, Senior Project Manager
RE: Ville 1659 – Modified Terms for FY 2022-2023 Housing Development Loan
Program (“HDLP”) Funding Allocation and Clarify Condition in HDLP Resolution.
REQUESTED ACTION: Review and consider approving modified loan terms and clarification to
HDLP resolution
POLICY ITEM: Affordable Housing
BUDGET IMPACTS: Proposed modifications include a balloon repayment of the $1,000,000 loan
under a 3-year term versus the originally approved cash flow-based repayment
under a 40-year term.
EXECUTIVE SUMMARY
The Redevelopment Agency of Salt Lake City (“RDA”) and Ville 1659, LLC (“Developer”), are proposing
modifications to the previously-approved terms of the Housing Development Loan Program (“HDLP”)
loan for the Ville 1659 permanent supportive housing project located at 1659 West North Temple and to
clarify one of the conditions listed within the same Resolution. At the January 10, 2023, meeting, as part of
the larger competitive Notice of Funding Availability (NOFA) through the RDA’s HDLP, the RDA Board
of Directors (“Board”) approved a $1,000,000 construction to perm loan to the Ville 1659 project. As the
Developer moved towards closing, staff reviewed updated financials and details and determined that the
project would be able to pay off the loan within 3 years as opposed to 40 years.
In addition, RDA staff is requesting that the Board approve a clarification to a condition within the
approved HDLP resolution that states if a project does not receive 9% tax credits in the next allocation
cycle, the funding would need to be returned. The clarification would state that if a project does not receive
the 9% tax credits in the 2024 Utah Housing Corporation 9% allocation cycle, or if a project is not
allocated the 4% tax credits by December 31, 2023, funding would need to be returned to the RDA’s
Housing Development Loan Program.
1
BACKGROUND INFORMATION
Ville 1659 is an adaptive reuse real estate development project that will convert the former Ramada Inn at
1659 West North Temple into a permanent supportive housing complex. The project aims to convert 197
hotel rooms into studio apartments for households earning 30% AMI or less, with tenant priority given to
individuals who have been, currently are, or are at risk of becoming homeless . Ten (10) dedicated RV
parking spaces will also be added to the parking lot. Ville Property Management (the project’s property
manager) has leased space to Mental Health America of Utah to provide mental health services to tenants
and the general public.
PROPOSED LOAN MODIFICATIONS
At the January 10, 2023 RDA Board meeting, as part of the larger competitive Notice of Funding
Availability (NOFA) through the RDA’s HDLP, the RDA Board approved a $1,000,000 loan to the Ville
1659 project. Ville 1659 ranked fifth out of 10 applicants and was one of 8 projects that were allocated
HDLP funds in the FY 2022-2023 HDLP funding cycle. Please see Attachment C – Resolution Approving
2022 HDLP Funding Allocations.
Due to changes in the project’s financial sources and uses (Attachment B – Ville 1659 Updated Sources and
Uses), Staff finds that the project will not require RDA funds long-term, and as such the RDA and Ville
1659, LLC are proposing a change in terms. The primary change requiring Board approval is the type and
term of the loan.
The project applied for Gap Financing: Rental Construction to Permanent, which generally has a term of
30-40 years. The proposed modifications include changing the term to a 3-year bridge loan to support the
project during construction and through stabilization only.
Under the modified proposal, the RDA will be refinanced out of the capital stack after stabilization at the
project’s first refinance event—this is anticipated to occur within 3 years from the date of loan closing.
These term changes put the RDA in a better financial position and will result in the RDA being paid back
37 years earlier than expected. The RDA would then be able to use this money to finance the construction
of other affordable housing projects. This project is different than other projects the RDA has funded as the
project is not using Low Income Housing Tax Credits (LIHTC).
2
LOAN TERMS
The following table compares the loan terms that the RDA Board approved on January 10, 2023, to the
modified loan terms that the RDA and Ville 1659, LLC, are proposing now:
Approved Proposed
Loan Type Construction to Perm Bridge
Loan Amount $1,000,000 $1,000,000
Payment Type Cash Flow Single Balloon Payment at End
of Term
Interest Rate 2% 1%*
Amortization Period 40 Years N/A, no repayment schedule
Term 40 Years 3 Years
*This change aligns with the HDLP Guidelines and does not require Board approval.
CLARIFICATIONS TO CONDITION IN HDLP RESOLUTION
The RDA Board approved the HDLP allocation of funds in January 2023. As part of the approval, the
Board included a condition that states if a project does not receive 9% tax credits in the next allocation
cycle, the funding would need to be returned to the RDA’s HDLP. This condition was included to ensure
RDA funds would not be held up if a project experiences delays in receiving tax credits. RDA staff is
proposing to clarify this condition as some projects may be able to move forward with their development
by obtaining 4% tax credits. The clarification would state that if a project does not receive 9% tax credits
by in the 2024 Utah Housing Corporation 9% allocation cycle, or if a project is not allocated 4% tax credits
by December 31, 2023, funding would need to be returned to the RDA’s Housing Development Loan
Program.
NEXT STEPS
If the Board approves the amended loan terms, Staff will finalize loan documents and work toward closing
under the revised conditions.
PREVIOUS BOARD ACTION:
The Board approved a $1,000,000 HDLP loan for Ville 1659 at the January 10, 2023, meeting.
ATTACHMENTS
A.Ville 1659 Project Summary Sheet from January 2023
B.Ville 1659 Updated Sources and Uses
C.Resolution approving 2022 HDLP Funding Allocations
D.Amended Resolution
3
Attachment A:
Ville 1659 Project Summary Sheet from January 2023
4
PROJECT NAME: 9 - Ville 1659
ADDRESS: 1659 W North Temple
OVERVIEW
Developer Ville Property Management
Request Type HDLP Loan
Project Type Renovation
Existing Land Use Motel
RDA FUNDING REQUEST
Funding Request $1,825,000
Total Project Cost $18,250,000
RDA Loan to Cost 10%
PROPOSED TERMS
Interest Rate 2%
Term, Amortization 40 year, 40 year
Repayment Terms Cash Flow Repayment
Lien Priority Subordinate to senior
construction & permanent debt
HDLP THRESHOLD REQUIREMENTS & PRIORITIES
Family-Sized Units
and/or Deeply
Affordable Units
Deeply Affordable Units
Sustainability:
Energy Star Score of
90+
Condition of Approval
100% Electric Condition of Approval
Priorities Met Target Populations
Unique Housing Type
Transportation Opportunities
Commercial Vitality
Adaptive Reuse
HOUSING UNITS
Bedroom
Count
Total
Units
Market
Rate
41-60%
AMI
<40%
AMI
Studio 197 - - 197*
*All units restricted at or below 30% AMI
TIMELINE
Construction Start: 12/2022
Construction Completion: 5/2023
CONSTRUCTION DEBT AHEAD OF RDA
PERMANENT SOURCES
USES
LOW-INCOME HOUSING TAX CREDIT
Applying for Tax Credits
(Y/N)
No
Tax Credits Reserved (Y/N) No
Use Amount % of Cost
Senior Construction
Debt
$7,500,000 41.1%
Source Amount % of Cost
Senior Debt $7,500,000 41.1%
RDA Loan $1,825,000 10.0%
OWHLF $1,000,000 5.5%
Owner Equity $2,066,378 11.3%
Office of Homeless
Services
$3,858,622 21.1%
SLC HHGP Funding $2,000,000 11.0%
Deferred Fee - -
Total Sources 18,250,000 100.0%
Source Amount % of Total
Property Acquisition $12,000,000 65.8%
Construction Costs $4,000,000 21.9%
Soft Costs $1,000,000 5.5%
Developer Fee $1,000,000 5.5%
Project Contingency $250,000 1.4%
Total Sources $18,250,000 100.0%
5
PROJECT NAME: 9 - Ville 1659
ADDRESS: 1659 W North Temple
PROJECT SUMMARY
From Developer:
“Ville 1659 is a hotel conversion project that will create 197 studio apartments and 10 RV stalls that will be deeply
affordable and low barrier for singles and couples near downtown Salt Lake City. Our organization, Ville Property
Management (VPM), will be the developer, in partnership with Camp Construction, Design West, and Ward
Engineering. Ville 1659 will offer much needed affordable housing that is targeted towards housing the most
vulnerable individuals within our community and provides on-site case management to support housing stability.
We will prioritize housing individuals experiencing literal homelessness, individuals that have previously
experienced homelessness, and individuals that are at risk for becoming or returning to homelessness. Our service
provider partnerships include: SLVCEH, The Road Home, the VA, Volunteers of America, Housing Connect,
Housing Authority of Salt Lake City, Fourth Street Clinic, First Step House, Valley Behavioral Health, Mental Health
America of Utah, and Salt Lake City Police Department.”
DEVELOPER SUMMARY
From Developer:
“Ville 1659 is an entity of Ville Property Management (VPM). VPM has over 20 years of experience leasing,
managing, and providing services across a range of affordable and market rate housing programs. VPM's current
portfolio includes management of 580 units with experience working with Housing Subsidies (Permanent
Supportive Housing, Section 8, and Rapid Re-Housing). VPM also offers deeply affordable housing to individuals
that earn between 60% and 30% and below the Area Median Income (AMI) for the region. VPM also provides on-
site Case Management services to the Salt Lake County residential properties to help tenants maintain their
housing through our Case Management Model. Our focus is to provide affordable housing and extensive support to
our tenants who have experienced homelessness and/or live below 30% AMI, to strengthen the wellness and
livelihood of our tenants. Our unique team is dedicated in providing the needed services, supports, and
programming to positively impact our tenants and community. Whether market rate or deeply affordable, we
believe that everyone deserves the right to fair and supportive housing.”
SITE MAP
6
PROJECT NAME: 9 - Ville 1659
ADDRESS: 1659 W North Temple
PROJECT RENDERINGS
7
Attachment B:
Ville 1659 Updated Sources and Uses
Sources Original Current
Sundance Bay Bridge $7,500,000 $9,065,361
Olene Walker Fund $1,000,000 $0
SLC RDA $1,000,000 $1,000,000
Owner Equity $2,066,378 $953,000
SLC Grant $2,000,000 $2,000,000
State Grant $3,858,622 $3,850,000
National Housing Trust Fund $825,000 $0
Total Sources $18,250,000 $16,868,361
Uses Original Current
Property Acquisition $12,000,000 $9,500,000
Construction Costs $4,000,000 $4,297,653
Soft Costs $1,000,000 $1,000,000
Developer Fee $1,000,000 $280,000
Project Contingency $250,000 $265,000
Financing Costs $0 $1,525,708
Total Uses $18,250,000 $16,868,361
8
Attachment C:
Resolution Approving 2022 HDLP Funding Allocations
9
1
REDEVELOPMENT AGENCY OF SALT LAKE CITY
RESOLUTION NO. _______________
Affordable Housing – 2022 Housing Development Loan Program (HDLP)
Funding Allocations
RESOLUTION OF THE BOARD OF DIRECTORS OF THE REDEVELOPMENT AGENCY
OF SALT LAKE CITY APPROVING CITYWIDE AFFORDABLE HOUSING PROJECT
FUNDING ALLOCATIONS.
WHEREAS, the Redevelopment Agency of Salt Lake City (“RDA”) was created to transact the
business and exercise the powers provided for in the Utah Community Reinvestment Agency Act
the “Act”).
WHEREAS, the Act provides that tax increment funds may be used for the purpose of
increasing the affordable housing supply within the boundaries of Salt Lake City.
WHEREAS, the RDA Board of Directors (“Board”) approved the Housing Funds Allocation
Policy (“Funds Policy”), Resolution R-1-2022, which establishes policies with respect to
dedicating and directing resources for the development and preservation of housing based on
funding source (“Housing Funds”).
WHEREAS, the Board has set aside $6,000,000 of Housing Funds for affordable housing
through the RDA’s Housing Development Loan Program (“HDLP”). The Board may also
allocate an additional $2,360,000, which is the result of a loan commitment from the 2021 that
was rescinded. The allocation of funds is contingent upon an application and review process
administered by the RDA to facilitate funding of qualified projects that meet the goals
established by the HDLP.
WHEREAS, through a Notice of Funding Availability (“NOFA”), the RDA administered a loan
application and review process pursuant to the HDLP policy set forth in resolution R-2-2022 (the
HDLP Policy”) and the RDA’s Housing Funding Priorities for Fiscal Year 2022-2023 set forth
in R-4-2022 (“Funding Priorities”) that resulted in ten requests for funding totaling $16,760,000.
WHEREAS, on December 21, 2022, the RDA’s Finance Committee (“Finance Committee”)
reviewed the HDLP applications and recommended funding allocations and preliminary terms as
further described in on Exhibit A.
WHEREAS, based on the Finance Committee’s recommendations, RDA staff recommends that
the Board approve the funding allocations and preliminary terms described in Exhibit A.
WHEREAS, following the Board’s approval of the funding allocations and preliminary terms as
set forth on Exhibit B, the RDA shall provide a 24-month conditional commitment period during
which the approved applicant shall have the opportunity to obtain needed financial, legal, and
03 of 2023
10
2
regulatory approvals, as well as satisfy other conditions determined by the RDA, to finalize the
loan terms.
WHEREAS, pursuant to the HDLP Policy, applicants that successfully meet the conditions of
the conditional commitment shall be invited to execute a Letter of Commitment to finalize the
loan terms, subject to a set of conditions precedent to closing of the loan.
NOW THEREFORE, BE IT RESOLVED BY THE BOARD that it approves the
funding allocations and preliminary terms as further described in Exhibit B, subject to revisions
that do not materially affect the rights and obligations of the RDA hereunder. For approved
applicants that successfully meet the required conditions, the Board authorizes the Executive
Director to negotiate and execute the conditional commitment letter, the Letter of Commitment,
the loan agreements, and other relevant documents consistent with the funding allocations and
contained on Exhibit B and incorporating such other terms and conditions as recommended by the
City Attorney’s office.
Passed by the Board of Directors of the Redevelopment Agency of Salt Lake City, this _______
day of January 2023.
Approved as to form: __________________________________
Salt Lake City Attorney’s Office
Allison Parks
Date:____________________________
The Executive Director:
does not request reconsideration
requests reconsideration at the next regular Agency meeting.
Erin Mendenhall, Executive Director
Attest:
City Recorder
10th
Allison Parks (Jan 17, 2023 14:22 MST)
Jan 17, 2023
Alejandro Puy (Jan 18, 2023 15:16 MST)
rachel otto (Jan 18, 2023 16: 55 MST)
4
11
PROJECT/APPLICANT ADDRESS
PROJECT PRIORITIES/INTEREST
RATE REDUCTION AND
WEIGHTED NOFA RANKING**
FUNDING
REQUEST PRELIMINARY TERMS*
HDLP COMMITTED
FUNDS: $6M
POSSIBLE
ADDITIONAL HDLP
FUNDS: $2.36M
TOTAL FUNDING
RECOMMENDATION
FUNDING
RANKING
2 -Victory Heights 1
BCG Holdings
3 - Victory Heights 2
BCG Holdings
4 - Atkinson Stacks***
HAME
5 - Book Cliffs Lodge***
HAME
6 - Citizens West 2
Giv Development
7 - Citizens West 3
Giv Development
8 - Ville 9
Ville Property Mgmt
9 - Ville 1659
Ville Property Mgmt
10 - Liberty Corner***
Cowboy Partners
11 - 9Ten West
Great Lakes Capital
TOTAL $16,760,000 $6,000,000 $2,360,000 $8,360,000
Funds Availability
6,000,000 6,000,000$ Recommended Funding: HDLP Committed Funds
2,360,000 $0 Funds Remaining: HDLP Committed Funds
8,360,000 2,360,000$ Recommended Funding: Possible Additional HDLP Funds
0 Funds Remaining: Possible Additional HDLP Funds
8,360,000$ Recommended: Total Potential HDLP Funds
0 Funds Remaining - Total Potential HDLP Funds
HDLP Committed Funds
Possible Additional HDLP Funds
Total Potential HDLP Funds
8
540,000 7
1,865,000
Family Housing: 3
Target Populations: 3
Transportation Opportunities: 1
Architecture & Urban Design: 1
Adaptive Reuse: 1
Public Art: 1
TOTAL: 10
1
280,000 2
500,000
Target Populations: 3
Unique Housing Types: 3
Architecture & Urban Design: 1
Sustainability: 1
TOTAL: 8
Family Housing: 3
Target Populations: 3
Transportation Opportunities: 1
Neighborhood Safety: 1
TOTAL: 8
1060 E 100 S $280,000 $280,000
Family Housing: 3
Target Populations: 3
Transportation Opportunities: 1
Architecture & Urban Design: 1
Adaptive Reuse: 1
Public Art: 1
TOTAL: 10
1060 E 100 S $1,865,000 $1,865,000
1159 S West
Temple $540,000 $540,000
543 S 500 W $2,500,000 $500,000
0
Unique Housing Type: 3
Commercial Vitality: 1
Adaptive Reuse: 1
TOTAL: 5
Target Populations: 3
Unique Housing Type: 3
Transportation Opportunities: 1
Commercial Vitality: 1
Adaptive Reuse: 1
TOTAL: 9
3
509 W 300 N $1,200,000 $1,200,000 $1,200,000 4
509 W 300 N $1,850,000 $1,850,000 $1,850,000
Family Housing: 3
Target Populations: 3
Transportation Opportunities: 1
Architecture & Urban Design: 1
Commercial Vitality: 1
Public Art: 1
TOTAL: 10
Family Housing: 3
Target Populations: 3
Transportation Opportunities: 1
Architecture & Urban Design: 1
Commercial Vitality: 1
Public Art: 1
TOTAL: 10
FUNDING RECOMMENDATIONS
Final Terms shall comply with the requirements, standard loan terms and conditions, interest-rate reductions, and all other details laid out within the 2022 Housing Development Loan Program (HDLP) Guidelines. Changes to
repayment type may occur (hard repayment versus cash flow repayment) and shall be based on requirements listed in the HDLP Guidelines or if required by a senior lender. Changes in repayment type will cause a change in
the base interest rate. Repayment priority and lien position shall be based on the size of the loans.
6
910 W North
Temple
1,125,000
9/10
1659 W North
Temple $1,825,000 $805,000 $195,000 $1,000,000
2,000,000
265 W 1300 S $3,000,000 $1,125,000
Family Housing: 3
Target Populations: 3
Missing Middle: 3
Transportation Opportunities: 1
Neighborhood Safety: 1
Architecture & Urban Design: 1
Commercial Vitality: 1
TOTAL: 13
5
1025 N 900 W $1,700,000
Funds Recommended by Finance Committee
1% interest rate, 40-year
term, 40-year amortization,
hard repayments
1% interest rate, 40-year
term, 40-year amortization,
hard repayments
1% interest rate, 40-year
term, 40-year amortization,
hard repayments
1% interest rate, 40-year
term, 40-year amortization,
hard repayments
1% interest rate, 40-year
term, 40-year amortization,
hard repayments
1% interest rate, 40-year
term, 40-year amortization,
hard repayments
2.5% interest rate, 40-year
term, 40-year amortization,
cash flow repayment
2% interest rate, 40-year
term, 40-year amortization,
cash flow repayment
2% interest rate, 40-year
term, 40-year amortization,
cash flow repayment
Finance Committee Recommendation: If these projects do not receive 9% tax credits in the next Utah Housing Corporation allocation cycle, these funding commitments shall be returned to the RDA's Housing Development
Loan Program.
Transportation Opportunities: 1
Neighborhood Safety: 1
Architecture & Urban Design: 1
Commercial Vitality: 1
Public Art: 1
TOTAL: 5
Projects receive a 0.5% interest rate reduction for each included priority. Sustainability allows for a 1% or 2% reduction. The maximum reduction per development is 2%. The interest rate is calculated as follows: Base
Interest Rate minus (-) Interest Rate Reductions (up to 2%) = proposed interest rate; Base interest rate shall be locked within a month of closing. Projects shall maintain project priorities and the same weighted score at
closing. Deviation from project priorites met may require Board approval.
0 9/10
2% interest rate, 16-year
term, 30-year amortization,
cash flow repayment
EXHIBIT A: RDA FINANCE COMMITTEE RECOMMENDED HDLP FUNDING
ALLOCATIONS
The RDA Finance Committee recommends that funding be allocated to projects in order of priority ranking.
3 12
PROJECT/APPLICANT ADDRESS
PROJECT PRIORITIES/INTEREST
RATE REDUCTION AND
WEIGHTED NOFA RANKING**
FUNDING
REQUEST PRELIMINARY TERMS*
TOTAL FUNDING
ALLOCATION
FUNDING
RANKING
2 -Victory Heights 1
BCG Holdings
3 - Victory Heights 2
BCG Holdings
4 - Atkinson Stacks***
HAME
5 - Book Cliffs Lodge***
HAME
6 - Citizens West 2
Giv Development
7 - Citizens West 3
Giv Development
8 - Ville 9
Ville Property Mgmt
9 - Ville 1659
Ville Property Mgmt
10 - Liberty Corner***
Cowboy Partners
11 - 9Ten West
Great Lakes Capital
TOTAL $16,760, 000 $8,360,000
Funds Availability
6,000,000
2,360,000
8,360,000
Final Terms shall comply with the requirements, standard loan terms and conditions, interest-rate reductions, and all other details laid out within the 2022 Housing Development Loan
Program (HDLP) Guidelines. Changes to repayment type may occur (hard repayment versus cash flow repayment) and shall be based on requirements listed in the HDLP Guidelines or
if required by a senior lender. Changes in repayment type will cause a change in the base interest rate. Repayment priority and lien position shall be based on the size of the loans.
Projects receive a 0.5% interest rate reduction for each included priority. Sustainability allows for a 1% or 2% reduction. The maximum reduction per development is 2%. The interest
rate is calculated as follows: Base Interest Rate minus (-) Interest Rate Reductions (up to 2%) = proposed interest rate; Base interest rate shall be locked within a month of closing.
Projects shall maintain project priorities and the same weighted score at closing. Deviation from project priorites met may require Board approval.
If these projects do not receive 9% tax credits in the next Utah Housing Corporation allocation cycle, these funding commitments shall be returned to the RDA's Housing
Development Loan Program.
HDLP Committed Funds
Additional HDLP Funds Approved by Board
Total Potential HDLP Funds
8
540,000 7
1,865,000
Family Housing: 3
Target Populations: 3
Transportation Opportunities: 1
Architecture & Urban Design: 1
Adaptive Reuse: 1
Public Art: 1
TOTAL: 10
1
280,000 2
500,000
Target Populations: 3
Unique Housing Types: 3
Architecture & Urban Design: 1
Sustainability: 1
TOTAL: 8
Family Housing: 3
Target Populations: 3
Transportation Opportunities: 1
Neighborhood Safety: 1
TOTAL: 8
1060 E 100 S $280,000
Family Housing: 3
Target Populations: 3
Transportation Opportunities: 1
Architecture & Urban Design: 1
Adaptive Reuse: 1
Public Art: 1
TOTAL: 10
1060 E 100 S $1,865,000
1159 S West
Temple $540,000
543 S 500 W $2,500,000
0
Unique Housing Type: 3
Commercial Vitality: 1
Adaptive Reuse: 1
TOTAL: 5
Target Populations: 3
Unique Housing Type: 3
Transportation Opportunities: 1
Commercial Vitality: 1
Adaptive Reuse: 1
TOTAL: 9
3
509 W 300 N $1,200,000 $1,200,000 4
509 W 300 N $1,850,000 $1,850,000
Family Housing: 3
Target Populations: 3
Transportation Opportunities: 1
Architecture & Urban Design: 1
Commercial Vitality: 1
Public Art: 1
TOTAL: 10
Family Housing: 3
Target Populations: 3
Transportation Opportunities: 1
Architecture & Urban Design: 1
Commercial Vitality: 1
Public Art: 1
TOTAL: 10
6
910 W North
Temple
1,125,000
9/10
1659 W North
Temple $1,825,000 $1,000,000
2,000,000
265 W 1300 S $3,000,000
Family Housing: 3
Target Populations: 3
Missing Middle: 3
Transportation Opportunities: 1
Neighborhood Safety: 1
Architecture & Urban Design: 1
Commercial Vitality: 1
TOTAL: 13
5
1025 N 900 W $1,700,000
1% interest rate, 40-year
term, 40-year amortization,
hard repayments
1% interest rate, 40-year
term, 40-year amortization,
hard repayments
1% interest rate, 40-year
term, 40-year amortization,
hard repayments
1% interest rate, 40-year
term, 40-year amortization,
hard repayments
1% interest rate, 40-year
term, 40-year amortization,
hard repayments
1% interest rate, 40-year
term, 40-year amortization,
hard repayments
2.5% interest rate, 40-year
term, 40-year amortization,
cash flow repayment
2% interest rate, 40-year
term, 40-year amortization,
cash flow repayment
2% interest rate, 40-year
term, 40-year amortization,
cash flow repayment
Transportation Opportunities: 1
Neighborhood Safety: 1
Architecture & Urban Design: 1
Commercial Vitality: 1
Public Art: 1
TOTAL: 5
0 9/10
2% interest rate, 16-year
term, 30-year amortization,
cash flow repayment
EXHIBIT B: HDLP RDA BOARD FUNDING ALLOCATIONS
4 13
RDA Resolution 03 of 2023 Affordable Housing
Funding Allocations for 2022 Notice of Funding
Availability (NOFA) Process
Final Audit Report 2023-01-20
Created:2023- 01-17
By:Thais Stewart (thais.stewart@slcgov.com)
Status:Signed
Transaction ID:CBJCHBCAABAATrDTy6jfF_-BJnbFO3LWv20Mdpm4-Ixn
RDA Resolution 03 of 2023 Affordable Housing Funding Allocat
ions for 2022 Notice of Funding Availability (NOFA) Process" His
tory
Document created by Thais Stewart (thais.stewart@slcgov.com)
2023-01-17 - 9:11:30 PM GMT
Document emailed to Allison Parks (allison.parks@slcgov.com) for signature
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Email viewed by Allison Parks (allison.parks@slcgov.com)
2023-01-17 - 9:21:58 PM GMT
Document e-signed by Allison Parks (allison.parks@slcgov.com)
Signature Date: 2023-01-17 - 9:22:08 PM GMT - Time Source: server
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Signer alejandro.puy@slcgov.com entered name at signing as Alejandro Puy
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Signature Date: 2023-01-18 - 10:16:12 PM GMT - Time Source: server
14
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erin.mendenhall@slcgov.com)
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Agreement completed.
2023-01-20 - 10:38:33 PM GMT
15
Attachment D:
Amended Resolution
16
REDEVELOPMENT AGENCY OF SALT LAKE CITY
RESOLUTION NO. _______________
Affordable Housing –Gap Housing Development Loan Program (HDLP) Amendment to
Proposed Loan Terms
RESOLUTION OF THE BOARD OF DIRECTORS OF THE REDEVELOPMENT AGENCY
OF SALT LAKE CITY APPROVING AN AMENDMENT TO PROPOSED LOAN TERMS
FOR AN HDLP LOAN TO VILLE 1659, LLC.
WHEREAS, the Redevelopment Agency of Salt Lake City (“RDA”) was created to transact the
business and exercise the powers provided for in the Utah Community Reinvestment Agency Act
(the “Act”).
WHEREAS, the Act provides that tax increment funds may be used for the purpose of
increasing the affordable housing supply within the boundaries of Salt Lake City.
WHEREAS, the Housing Development Loan Program (“HDLP”) was created to enable the
RDA to incentivize the development and preservation of affordable housing.
WHEREAS, the RDA Board of Directors (“Board”) previously approved the Housing Funds
Allocation Policy (“Funds Policy”), which establishes policies with respect to dedicating and
directing resources for the HDLP based on funding source (“Housing Funds”).
WHEREAS, the Board also adopted the amended and restated Housing Development Loan
Program Policy (the “HDLP Policy”) to provide a centralized application, underwriting, and
approval process for accessing the Housing Funds, including granting the authority for review
and approval of applications by the RDA Finance Committee (“Finance Committee”).
WHEREAS, pursuant to resolution R-3-2023, the Board previously approved funding
allocations and preliminary loan terms for eight projects selected to meet the goals established by
the HDLP, amounting to a total allocation of $8,360,000.
WHEREAS, included in that funding allocation was a proposed loan in the amount of
$1,000,000 to Ville 1659, LLC (“Developer”) for development of a deeply affordable housing
project to be located at 1659 West North Temple (the “Ville 1659 Project”).
WHEREAS, preliminary loan terms for the approved funding allocation for Ville 1659
originally included a two percent (2%) interest rate, forty-year term, forty-year amortization, and
cash flow repayments.
WHEREAS, due to changes to Developer’s overall financing structure, RDA staff proposes
making modifications to the preliminary loan terms, changing the type of loan from a
construction gap loan to a bridge loan, to support the Ville 1659 Project until it reaches
stabilization.
17
WHEREAS, the proposed modifications include shortening the term to three years and changing
the repayment structure from cash flow payments to a balloon payment due upon expiration of
the term.
WHEREAS, the Board agrees to allocate the funding with the preliminary loan term
modifications as reflected in the Amended HDLP RDA Board Funding Allocations attached
hereto as Exhibit A.
NOW THEREFORE, BE IT RESOLVED BY THE BOARD by the Board of Directors
of the Redevelopment Agency of Salt Lake City that it approves the funding allocations and
preliminary terms as amended in the Amended HDLP RDA Board Funding Allocations attached
hereto as Exhibit A, subject to revisions that do not materially affect the rights and obligations of
the RDA hereunder. The Board authorizes the waiver of the Policy to set the base interest rate at
the rate stated on the Term Sheet, which waiver shall be valid for three months from the date of
this resolution. The Board authorizes the Executive Director to negotiate and execute the loan
agreement and any other relevant documents consistent with the Amended and Restated Term
Sheet, and incorporating such other terms and agreements as recommended by the City Attorney’s
office.
Passed by the Board of Directors of the Redevelopment Agency of Salt Lake City, this _______
day of July 2023.
________________________________
Alejandro Puy, Chair
Approved as to form: __________________________________
Salt Lake City Attorney’s Office
Sara Montoya, Senior City Attorney
Date:
The Executive Director:
____ does not request reconsideration
____ requests reconsideration at the next regular Agency meeting.
________________________________
Erin Mendenhall, Executive Director
Attest:
________________________
City Recorder
June 23, 2023
18
EXHIBIT A: AMENDED HDLP RDA BOARD FUNDING ALLOCATIONS
PROJECT/APPLICANT ADDRESS
PROJECT PRIORITIES/INTEREST RATE REDUCTION
AND WEIGHTED NOFA RANKING** FUNDING REQUEST PRELIMINARY TERMS*
TOTAL FUNDING
ALLOCATION
FUNDING
RANKING
2 -Victory Heights 1
1060 E 100 S
Family Housing: 3
Target Populations:
3 Transportation
Opportunities: 1
Architecture & Urban
Design: 1
Adaptive Reuse: 1
Public Art: 1 TOTAL: 10
$1,865,00
0
1% interest
rate, 40-year
term, 40-year
amortization,
hard
repayments
$1,865,000 1
BCG Holdings
3 - Victory Heights 2
1060 E 100 S
Family Housing: 3
Target Populations:
3
Transportation
Opportunities: 1
Architecture & Urban
Design: 1
Adaptive Reuse: 1
Public Art: 1 TOTAL: 10
$280,000
1% interest
rate, 40-year
term, 40-year
amortization,
hard
repayments
$280,000 2
BCG Holdings
4 - Atkinson Stacks***
543 S 500 W
Target Populations:
3
Unique Housing
Types: 3
Architecture & Urban
Design: 1
Sustainability: 1 TOTAL: 8
$2,500,00
0
1% interest
rate, 40-year
term, 40-year
amortization,
hard
repayments
$500,000 8
HAME
5 - Book Cliffs Lodge***
1159 S West
Temple
Family Housing: 3
Target Populations:
3
Transportation
Opportunities: 1
Neighborhood Safety:
1 TOTAL: 8
$540,000
1% interest
rate, 40-year
term, 40-year
amortization,
hard
repayments
$540,000 7
HAME
6 - Citizens West 2
509 W 300 N
Family Housing: 3
Target Populations:
3
Transportation
Opportunities: 1
Architecture & Urban
Design: 1
Commercial Vitality:
1
Public Art: 1 TOTAL: 10
$1,850,00
0
1% interest
rate, 40-year
term, 40-year
amortization,
hard
repayments
$1,850,00
0 3
Giv Development
7 - Citizens West 3 509 W 300 N Family Housing: 3
Target Populations:
$1,200,00
0
1% interest
rate, 40-year
$1,200,000 4
19
Giv Development 3
Transportation
Opportunities: 1
Architecture & Urban
Design: 1
Commercial Vitality:
1
Public Art: 1 TOTAL: 10
term, 40-year
amortization,
hard
repayments
8 - Ville 9
1025 N 900 W
Unique Housing Type:
3 Commercial Vitality:
1
Adaptive Reuse: 1 TOTAL: 5
$1,700,00
0
2.5% interest
rate, 40-year
term, 40-year
amortization,
cash flow
repayment
$0 9/10
Ville Property Mgmt
9 - Ville 1659
1659 W North
Temple
Target Populations:
3
Unique Housing Type:
3
Transportation
Opportunities: 1
Commercial Vitality:
1
Adaptive Reuse: 1 TOTAL: 9
$1,825,00
0
2% interest
rate, 40-year
term, 40-year
amortization,
cash flow
repayment
1% interest
rate, 3-year
term, balloon
payment
$1,000,000 5
Ville Property Mgmt
10 - Liberty Corner***
265 W 1300 S
Family Housing: 3
Target Populations:
3
Missing Middle: 3
Transportation
Opportunities: 1
Neighborhood Safety:
1
Architecture & Urban
Design: 1
Commercial Vitality:
1
TOTAL: 13
$3,000,00
0
2% interest
rate, 40-year
term, 40-year
amortization,
cash flow
repayment
$1,125,000 6
Cowboy Partners
11 - 9Ten West
910 W North
Temple
Transportation
Opportunities: 1
Neighborhood Safety:
1
Architecture & Urban
Design: 1
Commercial Vitality:
1
Public Art: 1 TOTAL: 5
$2,000,00
0
2% interest
rate, 16-year
term, 30-year
amortization,
cash flow
repayment
$0 9/10
Great Lakes Capital
TOTAL $16,760,000 $8,360,000
*Final Terms shall comply with the requirements, standard loan terms and conditions, interest-rate reductions, and
all other details laid out within the 2022 Housing Development Loan Program (HDLP) Guidelines. Changes to
repayment type may occur (hard repayment versus cash flow repayment) and shall be based on requirements listed
in the HDLP Guidelines or if required by a senior lender. Changes in repayment type will cause a change in the
base interest rate. Repayment priority and lien position shall be based on the size of the loans.
**Projects receive a 0.5% interest rate reduction for each included priority. Sustainability allows for a 1% or 2%
reduction. The maximum reduction per development is 2%. The interest rate is calculated as follows: Base Interest
Rate minus (-) Interest Rate Reductions (up to 2%) = proposed interest rate; Base interest rate shall be locked
within a month of closing. Projects shall maintain project priorities and the same weighted score at closing.
Deviation from project priorities met may require Board approval.
***If these projects do not receive 9% tax credits in the next 2024 Utah Housing Corporation 9% allocation cycle, or
these projects are not allocated the 4% tax credits by December 31, 2023, these funding commitments shall be
returned to the RDA's Housing Development Loan Program.
20
Funds Availability
HDLP Committed Funds $6,000,000
Additional HDLP Funds Approved by
Board $2,360,000
Total Potential HDLP Funds $8,360,000
21