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HomeMy WebLinkAbout03/18/2025 - Meeting Materials    Board of Directors of the SALT LAKE CITY COMMUNITY REINVESTMENT AGENCY AGENDA March 18, 2025 Tuesday 2:00 PM Council Work Room 451 South State Street, Room 326 Salt Lake City, UT  84111 CRA.SLC.GOV BOARD MEMBERS: Darin Mano, Chair Dan Dugan, Vice Chair Victoria Petro Alejandro Puy Chris Wharton Eva Lopez Chavez Sarah Young 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 CRA 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: 16:42:01 Comments:A.   1.General Comments to the Board ~ 2:00 p.m.  5 min. The CRA Board of Directors will receive public comments regarding Community Reinvestment Agency business in the following formats: 1.Written comments submitted to the CRA Board offices: 451 South State Street, Suite 304, P.O. Box 145476, Salt Lake City, UT. 84114-5476. 2.Comments to the CRA Board of Directors. (Comments are taken on any item not scheduled for a public hearing, as well as on any other CRA 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.Community Reinvestment Agency Business - The CRA Board of Directors will receive information and/or hold discussions and/or take action on:   1.Resolution: Housing Development Loan Program (HDLP) Allocations for Fiscal Year 2024-25 Funds ~ 2:05 p.m.  30 min. The Board will receive a briefing about and will consider adopting a resolution that would approve up to $5.3 million in FY25 affordable housing allocations from HDLP funds. The proposed projects were selected through a competitive Notice of Funding Availability (NOFA) issued in 2024. The HDLP funds are available to projects located anywhere within Salt Lake City municipal boundaries.   2.Resolution: Accessory Dwelling Unit (ADU) Financing Program Allocation for Fiscal Year 2024-25 Funds ~ 2:35 p.m.  30 min. The Board will receive a briefing about and will consider adopting a resolution that would approve $2.9 million in funding for the Community Development Corporation of Utah’s (CDCU) ADU Financing Program through a competitive Notice of Funding Availability (NOFA) issued in 2024. Approximately $1.9 million of these funds were set aside for use within the 9-Line Project Area and the balance can be used anywhere in the City.    3.Resolution: Wealth-Building Funding Allocations for Fiscal Year 2024-25 Funds ~ 3:05 p.m.  20 min. The Board will receive a briefing about and will consider adopting a resolution that would approve the proposed funding allocations for applications received through the Residential Wealth-Building Notice of Funding Availability (NOFA) issued in 2024. Nearly $3.3 million has been set aside to fund wealth-building opportunities through affordable housing, and through family and workforce housing with three or more bedrooms within City boundaries.   4.Resolution: Commercial Development Loan Program Policy ~ 3:25 p.m.  20 min. The Board will receive a briefing about and will consider adopting a resolution that would create the Commercial Development Loan Program (CDLP) policy to replace the existing Loan Policy and Granary Adaptive Reuse Policy. The adaptive reuse program would be made available in all CRA project areas. The CDLP is proposed to support the real estate and financial needs of local businesses and non-profits through several policy changes, including expanding applicant eligibility to long-term ground lessees and tenants, requiring residential and commercial displacement to be addressed, and making the Board’s annual priorities for the Housing Development Loan Program also apply to the CDLP among other changes.   5.Resolution: Pickle and Hide Mixed-Use Development Tax Increment Reimbursement Request ~ 3:45 p.m.  20 min. The Board will receive a briefing about and will consider adopting a resolution that would approve a Tax Increment Reimbursement Agreement with Mountain West Development, LLC, for Phase I and II of the Pickle & Hide development in the 900 South Housing and Transit Reinvestment Zone (HTRZ). The Pickle & Hide development is a mixed-use project located in the City’s Granary District and 900 South HTRZ to be constructed in two phases. Phase I features the renovation of the 1919 Bissinger Co. Hides building (Hide) and will serve as the entry to 5,500 square feet of commercial space and a new, multifamily addition. Phase II of the project includes the restoration of the 1894 Utah Pickle Co. building (Pickle) into 14,500 square feet of retail space.    6.Informational: Housing Development Funding Strategy Fiscal Year 2025-26 ~ 4:05 p.m.  20 min. The Board will receive an introductory briefing about the proposed Housing Development Funding Strategy for Fiscal Year 2025-26. The Housing Development Funding Strategy includes: a projected amount of revenue to be allocated to each Housing Fund for the upcoming fiscal year; proposed housing funding priorities for the upcoming fiscal year; and the proposed funding allocations for specific housing activities for the upcoming fiscal year.    7.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.   8.Report of the Chair and Vice Chair TENTATIVE  5 min. Report of the Chair and Vice Chair.   9.Report and Announcements from CRA 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: •Project Updates; •Staff Updates; •Gallivan Center Updates; and  •Scheduling Items.      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:   1.Informational: Semiannual Status Report on CRA Commercial Loan Portfolio Written Briefing  - The Board will receive a written briefing about the status of the CRA’s commercial loan portfolio. This report identifies the following:  •New loans approved between July 1, 2024 and December 30, 2024 •Remaining amount available in the existing portfolio •Outstanding principal for the Revolving Loan Fund •Any delinquencies   E.Consent – the following items are listed for consideration by the Board and can be Adjournment   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. G.   CERTIFICATE OF POSTING On or before 5:00 p.m. on Thursday, March 13, 2025, 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. KEITH REYNOLDS 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@slc.gov, 801-535-7600, or relay service 711. Item C1 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 MOTION SHEET COMMUNITY REINVESTMENT AGENCY of SALT LAKE CITY TO:City Council Members FROM:Allison Rowland Senior Policy Analyst DATE:March 18, 2025 RE: RESOLUTION: HOUSING DEVELOPMENT LOAN PROGRAM (HDLP) ALLOCATIONS FOR FISCAL YEAR 2024-2025 FUNDS Board Chair Darin Mano must recuse himself from Motion 1 because he serves on the board of the Housing Authority of Salt Lake City, of which the Housing Assistance Management Enterprise is a division. MOTION 1 – ADOPT THE RESOLUTION: HOUSING DEVELOPMENT LOAN PROGRAM (HDLP) ALLOCATIONS FOR FISCAL YEAR 2024-2025 EXCEPT THE NORTHWEST PIPELINE PROJECT I move that the Board adopt the resolution approving the Housing Development Loan Program allocations for fiscal year 2024-2025, except the Northwest Pipeline Project. MOTION 2 – ADOPT THE HOUSING DEVELOPMENT LOAN PROGRAM (HDLP) ALLOCATION FOR FISCAL YEAR 2024-2025 FOR THE NORTHWEST PIPELINE PROJECT. I move that the Board adopt the resolution approving the Housing Development Loan Program allocation for fiscal year 2024-2025 for the Northwest Pipeline Project funding. MOTION 3 – NOT ADOPT I move that the Council not adopt the resolution, and proceed to the next agenda item. BOARD STAFF REPORT THE COMMUNITY REINVESTMENT AGENCY of SALT LAKE CITY TO:RDA Board Members FROM:Allison Rowland Senior Budget & Policy Analyst DATE:March 18, 2025 RE: RESOLUTION: HOUSING DEVELOPMENT LOAN PROGRAM (HDLP) ALLOCATIONS FOR FISCAL YEAR 2024-2025 FUNDS ISSUE-AT-A-GLANCE The Board will review and potentially approve recommendations for allocating up to $5.77 million in affordable housing funds offered through a Notice of Funding Availability (NOFA) issued last year. The purpose of these low-interest loans is to incentivize the inclusion of affordable housing in new construction and in preservation/ rehabilitation projects. The five applications forwarded to the Board requested a total of nearly $7.5 million, and the CRA Finance Committee recommended funding four of these with available funds (see Attachment C1 for summary). The Board makes the final determination of which applications to fund and for what amount. Together, the projects recommended for funding would provide 482 units of new affordable housing. Goal of the briefing: Discuss and consider adopting the Resolution entitled Affordable Housing – FY2024- 2025 Competitive Housing Development Loan Program (HDLP) Funding Allocations. ADDITIONAL INFORMATION A. Process Overview. Since 2018, the CRA has released multiple NOFAs to facilitate the development of affordable housing units in Salt Lake City. The FY24 NOFA was released on October 30, 2024, and applications were due on December 19, 2024. This year, the five HDLP applications recommended to the Board requested a total of $7.75 million. CRA staff indicated that four other applications were submitted but were later withdrawn, so they are not included in their transmittal. B. Available Funding. The $5.77 million in available funding this year includes $4.59 million approved by the Board in 2024 as part of the FY25 CRA budget, plus one-time funding of $475,330 in HOME Community Development Housing Organization funds from the Housing Stability Division (see policy question XX below). If the Board chooses, an additional $710,000, which became available when the loan Item Schedule: Briefing: March 18, 2025 Set Date: N/A Public Hearing: N/A Potential Action: March 18, 2025 for a project approved for FY24 was rescinded. (The developer for Project Open 3 was able to make the project work without the HDLP funding.) Funds Availability Total Available Recommended Funding Funds Remaining CRA HDLP Funds $4,586,859 $4,241,714 $ - Possible Additional CRA Funds (rescinded application) $710,000 $710,000 $ - HOME Community Housing Development Organization (CHDO) Funds $475,330 $0 $475,330 Total Potential HDLP Funds $5,772,189 $5,296,859 $475,330 The $475,330 remaining in the HDLP would result from receiving no applications that would meet the relatively narrow criteria for the U.S. Department of Housing and Urban Development’s HOME Community Housing Development Organization Funds. These funds may be used only for projects that are owned, developed, or sponsored by a nonprofit that qualifies as a Community Housing Development Organization (CHDO), as defined in Federal regulations. The Housing Stability Division in the Community and Neighborhoods Department (CAN) has worked to recruit new CHDOs over the years, but local organizations typically do not meet the regulatory requirements. If no qualified applications for these funds are received in the next two years, HUD regulations allow them to be recaptured and proposed for reallocation during the next annual HUD application process through the HDLP as regular HOME funds. The Housing Stability Division has not initiated such a process in the past. C. Project Evaluation. As part of the application review process, CRA staff analyzes applications first to ensure they meet the HDLP eligibility requirements. The CRA Finance Committee then considers 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. All of the eligible applications were reviewed and ranked by the CRA Finance Committee, and their specific recommendations for allocating $4.95 million of the $5.77 million available are summarized in Attachment C1. Four of the five applications were recommended for HDLP funding. Of those four, three were recommended for the full amounts requested, and one was recommended for less than the full amount. All four of the recommended projects include both 2- and 3-bedroom units, and together they would provide 108 new 2-bedroom units and 79 new 3-bedroom units. The only project that the Finance Committee did not recommend for any funding was Flats at Folsom, which includes only studio and one-bedroom units. POLICY QUESTIONS 1. The funding application for the North West Pipeline project is from Housing Assistance Management Enterprise (HAME), which also applied for fundings in the separate Wealth-Building NOFA (also to be discussed on March 18). The Council may wish to discuss with the CRA the potential advantages and risks of funding both applications. 2. All of the proposed projects intend to apply for 4% tax credits. Board Members may wish to inquire whether any or all these projects will be viable if these tax credits are not approved. 3. In past years, many HDLP projects included at least some market rate units, but this year they do not. Would Board Members like to discuss with RDA staff the potential causes of this change, and whether there are significant benefits to including market rate units in HDLP-funded projects? 4. This year, for the first time, potential ownership units are recommended for funding through the CRA. The Board may wish to discuss questions like those listed below. a. Is the HDLP structured in a way that facilitates applications for home ownership projects? b. What are the key differences between rental projects and home ownership projects? Examples may include income and wealth levels of potential residents, unit sizes, etc. c. What are the potential benefits and disadvantages for the City of funding home ownership projects versus rental projects? d. Are there models of home ownership or wealth-building that Board Members have encountered elsewhere which they would like CRA staff to research? 5. The projects reviewed by the CRA Finance Committee would be charged interest rates that range from 1% to 2.5%. In the context of continued high interest rates in the broader economy (relative to recent previous decades), would the Board like to discuss the potential advantages and disadvantages of changing how the Base Interest Rate is set for HDLP loans? ATTACHMENTS Attachment C1. Summary of CRA Finance Committee Recommended FY25 HDLP Funding. Item C2 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 MOTION SHEET COMMUNITY REINVESTMENT AGENCY of SALT LAKE CITY TO:City Council Members FROM:Allison Rowland Senior Policy Analyst DATE:March 18, 2025 RE: RESOLUTION: ACCESSORY DWELLING UNIT (ADU) FINANCING PROGRAM ALLOCATION FOR FISCAL YEAR 2024-2025 FUNDS MOTION 1 – ADOPT THE RESOLUTION: ACCESSORY DWELLING UNIT (ADU) FINANCING PROGRAM ALLOCATION FOR FISCAL YEAR 2024-2025 I move that the Board adopt the resolution approving the Accessory Dwelling Unit (ADU) Financing Program Allocation for Fiscal Year 2024-2025. MOTION 2– NOT ADOPT I move that the Board not adopt the resolution, and proceed to the next agenda item. 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 COMMUNITY REINVESTMENT AGENCY of SALT LAKE CITY TO:RDA Board Members FROM:Allison Rowland Budget & Policy Analyst DATE:March 18, 2025 RE: RESOLUTION: ACCESSORY DWELLING UNIT (ADU) FINANCING PROGRAM ALLOCATION FOR FISCAL YEAR 2024-2025 FUNDS ISSUE AT-A-GLANCE The Community Reinvestment Agency (CRA) Board will consider adopting a resolution that defines the terms of a homeowner financing program designed to encourage the construction of Accessory Dwelling Units (ADUs) in the 9-Line Project Area and other Westside locations. A proposal from the Community Development Corporation of Utah (CDCU) to administer an ADU Financing Program was unanimously recommended by the RDA Finance Committee in late 2024 as the result of a competitive Notice of Funding Availability (NOFA). In the December 2024 Community Reinvestment Agency meeting, the Board directed RDA staff to negotiate a final agreement to fund this $2,913,215 program with $1.9 million in 9-Line CRA Project Area funds and $1 million in Housing Development funds, which could be used anywhere west of the I-15 freeway. Goal of the briefing: Review the terms of the proposed ADU Financing Program and consider adopting the resolution that defines how the Community Development Corporation of Utah will operate the program. ADDITIONAL AND BACKGROUND INFORMATION A.CDCU Program. The Community Development Corporation of Utah would provide qualified homeowners with financial assistance for the construction of ADUs which would be offered as rental units on the homeowners’ properties. CDCU would establish a combination grant and loan program, as well as helping participants with property management and establishing a loan-loss reserve fund. The program would be piloted for up to two years, or until the full $2.9 million is spent. The CRA would disburse funds to CDCU on a per-project basis, and quarterly progress reports would be provided to the CRA. The deadline for spending the funds is June 30, 2027, and any funds not distributed by that date would revert to the CRA. Item Schedule: Briefing: March 18, 2025 Set Date: n/a Public Hearing: n/a Potential Action: March 18, 2025 Page | 2 1.Construction. CDCU anticipates facilitating the construction of 15-20 ADUs during the two-year pilot program. Homeowners would be required to comply with all local, state, and federal regulations, including zoning, environmental, and fair housing laws. Detached ADU projects would comply with the CRA Sustainable Development Policy, which requires all new construction projects to achieve a “Designed to Earn the ENERGY STAR” score of 90 or more and be designed to operate without onsite fossil fuel combustion. 2.Homeowner Incomes. The program would be open to two types of homeowners: those who earn up to 80% of AMI, and those who earn more than that. Lower-income homeowners could rent their ADUs at market rate, while higher-income owners would be required to keep the rental price affordable to those earning 80% of AMI or less. CDCU would provide compliance monitoring, as well as a website for applications to the program, and would market it through websites, social media, events, and community partnerships. 3.Loan Terms. A qualified homeowner would be eligible for a loan of up to $200,000 with 30-year amortization, a five-year term, and a 3% fixed interest rate. At the end of the five years, the homeowner could request a five-year extension or choose to make a balloon payment for the remaining balance. The latter would include a discount of 10% on the outstanding payoff amount, provided affordability requirements had been met. CDCU would charge standard fees for loan origination, annual income verification, and ongoing compliance monitoring. B.9-Line CRA Revenue for the RDA. When Salt Lake City and Salt Lake County established the 9-Line Community Reinvestment Area in 2021, the parties agreed (in part) to condition the RDA’s portion of the tax increment revenue received upon establishing an ADU program, developing an anti-displacement policy, and creating a sustainable development policy by 2025. By establishing an ADU program, and meeting the other two conditions, beginning in 2026, the RDA’s share of project area revenue would rise to 60% of the tax increment from 50% currently. The projected FY25 County portion of tax increment was $652,769, which suggests the CRA would gain about$65,000 per year more in RDA 9-Line Project Area increment collection. POLICY QUESTIONS 1. The Board may wish to ask CRA staff whether deed restrictions would be placed on the property of participating homeowners, and whether there would be restrictions on selling the property during the loan periods. 2. What happens when rental receipts push a homeowner’s income above the 80% AMI threshold? Is this amount deducted from the AMI calculation? 3. Would the Board like to consider eventually extending the ADU program to certain high-opportunity areas beyond the Westside? It could be attractive to long-time owners, like seniors, who may meet the income limitations of the program. If so, the Board might also wish to request updates to the underlying data used to determine the location and boundaries of the City’s high- opportunity areas. Item C3 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 MOTION SHEET COMMUNITY REINVESTMENT AGENCY of SALT LAKE CITY TO:City Council Members FROM:Allison Rowland Senior Policy Analyst DATE:March 18, 2025 RE: RESOLUTION: AFFORDABLE HOUSING – RESIDENTIAL WEALTH BUILDING PILOT PROGRAM FUNDING ALLOCATIONS Board Chair Darin Mano must recuse himself from Motion 1 because he serves on the board of the Housing Authority of Salt Lake City, of which the Housing Assistance Management Enterprise is a division. MOTION 1 – ADOPT ORDINANCE HOUSING ASSISTANCE MANAGEMENT ENTERPRISE (HAME) I move that the Board adopt the resolution approving Citywide affordable housing project-funding allocation for the Residential Wealth-Building Pilot Program awarded to the Housing Assistance Management Enterprise (HAME). MOTION 2 – ADOPT ORDINANCE the Community Development Corporation of Utah (CDCU). I move that the Board adopt the resolution approving Citywide affordable housing project-funding allocation for the Residential Wealth-Building Pilot Program awarded to the Community Development Corporation of Utah (CDCU). MOTION 3 – NOT ADOPT I move that the Council not adopt the resolution, and proceed to the next agenda item. Item C4 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 MOTION SHEET COMMUNITY REINVESTMENT AGENCY of SALT LAKE CITY TO:City Council Members FROM:Jennifer Bruno DATE:March 18, 2025 RE: RESOLUTION: Commercial Development Loan Program Policy MOTION 1 – ADOPT RESOLUTION AS PROPOSED I move that the Board adopt the resolution approving the proposed Commercial Development Loan Program. MOTION 1 – ADOPT RESOLUTION WITH MODIFICATION I move that the Board adopt the resolution approving the proposed Commercial Development Loan Program with the exception of the aspect of the proposal enabling the finance committee to approve loans under $500,000. MOTION 2 – NOT ADOPT I move that the Council not adopt the resolution, and proceed to the next agenda item.