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08/05/2020 - MinutesMINUTES FROM THE MEETING OF THE REDEVELOPMENT ADVISORY COMMITTEE Wednesday, August 5, 2020 4:00 p.m. This meeting was an electronic meeting pursuant to Salt Lake City Emergency Proclamation No. 2 of 2020 (2)(b). Vice Chairperson Dunkley read the following statement: I, Lance Dunkley, Redevelopment Advisory Committee Vice-Chair, hereby determine that conducting the Redevelopment Advisory Committee meeting at the anchor location presents a substantial risk to the health and safety of those who may be present at the anchor location. The World Health Organization, the President of the United States, the Governor of Utah, the Salt Lake County Health Department, Salt Lake County Mayor, and the Mayor of Salt Lake City have all recognized a global pandemic exists related to the new strain of the coronavirus, SARS- CoV- 2. Due to the state of emergency caused by the global pandemic, I find that conducting a meeting at an anchor location under the current state of public health emergency constitutes a substantial risk to the health and safety of those who may be present at the location. Moreover, the City & County Building, which is the anchor location for Redevelopment Advisory Committee meetings, is presently closed for regular occupation due to damages sustained during the March 2020 earthquakes. 1. Roll Call The following members were present: Lance Dunkley Brian Doughty, Chairperson Mojdeh Sakaki, Vice-Chairperson Claudia O’Grady Jason Head The following members were absent: Mark Isaac Also Present: Danny Walz, Chief Operating Officer; Tammy Hunsaker, Deputy Chief Operating Officer; Robyn Stine, Office Facilitator; Kort Utley, Senior Project Manager; Tracy Tran, Project Manager; Allison Parks, Senior City Attorney 2. Briefing by the Staff A. Update on the RDA Housing Implementation Framework – Tammy Hunsaker Ms. Hunsaker acknowledged that the housing policy has been brought before RAC often and said that the RDA is in a place where the Framework and the Housing Policy, in terms of both account structure and program structure, are finalized. She said the next time the Framework is brought before RAC it will be formalized into a policy resolution for Members to provide a formal recommendation to the RDA Board. Ms. Hunsaker explained that in December of 2017, the RDA Board directed staff to create an RDA Housing Allocation Policy, adding that staff quickly realized that housing within the City and the different functions that need to be carried out is rather complex. She said between May 2018 and February 2020 staff held a series of briefings on various aspects of housing coordination and in February 2020 staff brought the Salt Lake City Housing Implementation Framework to RAC and the RDA Board. The framework was the vision of how housing should function across all City divisions and departments. It was decided the RDA should be the department over the administration of funds for housing development in the City. Ms. Hunsaker said that RDA staff has been working to create a centralized one stop shop program for housing developers to access funds including gap financing. Ms. Hunsaker then explained the chart in the packet, which shows how the housing funds are separated under the RDA budget. She said it must be this way to comply with various State statutes which require that funds be tracked and accounted for separately and the eligible activities for funds are different. She added that under the State statute, the funds that the RDA is required to set aside for affordable housing will be placed under the Primary Housing Account. She said the RDA Board has generally allocated housing funds above and beyond what is required by State statute so those funds will be placed into the Secondary Housing Account. Ms. Hunsaker said that part of the Inland Port legislation now includes that 10% of all tax differential collected will be set aside for affordable housing and that those funds will be allocated to the RDA for housing. She said that the RDA was also allocated the Sales Tax funds for affordable housing development by the City Council adding that staff is structuring a policy where four different accounts are created and funds are tracked separately making certain to meet all State and local statutes. Ms. Hunsaker said it is considered that these different accounts might have different funding priorities. For Example, the RDA Board has said it would like to see the housing funds from the Inland Port and Northwest Quadrant be prioritized for neighborhoods west of I-15, because those are the neighborhoods adjacent to the Inland Port development and will be impacted most by the development.. Ms. Hunsaker said that staff recognized that within the City housing needs change rather quickly and this will be a long-term policy. She said that RDA staff is proposing an annual strategy that staff will present to RAC and the RDA Board for approval each year. She added that the strategy will be flexible enough so that staff could align the proposed budget with current opportunities. She said that staff could potentially do a large Notice of Funding Availability for gap financing adding that it would allow staff to be nimble in its reaction to current opportunities and priorities. Ms. Hunsaker said this is the overall structure of how staff would account for funds as well as budget funds each year. Ms. Hunsaker explained the Housing Development Trust Fund (HDTF) program, which would utilize funds potentially from all four of the accounts described and create a one-stop shop for housing developers to access the funds. She said funds are currently available through the RDA for gap financing and through Housing and Neighborhood Development (HAND) for various programs, but that it was a challenge for Developers to know where to go, or which application to complete. Ms. Hunsaker said the HDTF would consolidate all the funds into one program, with one application process, one set of underwriting standards, and one approval process. Ms. Hunsaker explained that there are currently two different review bodies, the RDA Finance Committee and the Housing Development Trust Fund. She said that staff wants to have one consolidated review body, one underwriting standard process, and one approval process moving forward. Ms. Hunsaker added that staff is looking for feedback from RAC because this is a high- level framework of how these policies will function. She explained that RDA staff will come back to RAC with the details laid out in the policy, including those underwriting standards, how the review committee should be structured, eligible uses of funds, and the way funds will be released. Ms. Hunsaker said that the primary use of affordable housing construction funds throughout the City has been focused on gap financing, adding that the RDA also allows funds to be utilized for site acquisition through its loan program. She noted that developers can only access these loan funds for affordable housing developments, not commercial use. Ms. Hunsaker said staff would like thoughts from the Committee on continuing with the allowance of acquisition funds for affordable housing. Ms. Hunsaker asked the Committee to consider how affordable housing fund applications should be reviewed and how funds should be awarded. She explained that the RDA was considering offering a competitive NOFA twice a year instead of the annual notice in order to have funds more readily available. She added there has been a lot of discussion on equity in the community and the RDA Board has been discussing how to have more projects in areas of opportunity where affordable housing is currently in limited supply. Ms. O’Grady said that the plan looks very well thought out and on the right track in combining efforts with the Housing Trust Fund to make the process simpler for developers. Ms. Hunsaker said that the big difference between the RDA Finance Committee and the Housing Trust Fund Advisory Board (HTFAB) is that the RDA Finance Committee is an internal committee made up of primarily City staff with a few members from RAC, while the HTFAB is a formal committee subject to GRAMA and the Open Meetings Act. She said these meetings include discussions of housing development applications, financial information, and the ability and capacity of the developer to carry out the project. She asked the Committee for its thoughts on whether it could adequately evaluate that type of sensitive information in a public meeting. Ms. O’Grady said no and added that dealing with the purchase of property is sensitive and is a negotiation between the buyer and the seller and that it should not be discussed in public and should not be subject to GRAMA. She said it was important for developers to feel like they can discuss details of the project and know that it is confidential. Mr. Dunkley agreed, adding that he believed there would be fewer developers coming forward and it would be very difficult if they know that a lot of their financial information will be made public. He said it would be very easy for a competitor to come in and figure out a lot of information about developers. Ms. Hunsaker asked if there was any input on the funds being competitive and offered through a NOFA. Ms. O’Grady said that the competitive aspect will guide the RDA staff to the best projects that align with RDA goals and objectives and are the best fit based on the criteria in the Framework. Mr. Head, who works for a developer, said that developers tend not to do affordable housing unless it is negotiated as part of some other aspect of the development. He said by time the acquired property is closed, the capital stack is already lined up and oftentimes the developer tried to have entitlements done before closing, though it is not always possible. He said, as a developer who does not primarily focus on affordable housing, if the NOFA was available during the acquisition process that it is much more likely to be considered as opposed to raising the capital stack, putting the line down to acquire property, and then going through a competitive process to add affordable housing to the project. Ms. Hunsaker said the RDA recently used funds for acquisition for a loan to Community Development Corporation of Utah (CDCU) to secure some property on the East side of the City near Brickyard, in what the RDA calls a High Opportunity Neighborhood. Ms. Hunsaker said it is important to note that there is a difference between neighborhoods with naturally occurring affordable housing due to market conditions, and where affordable housing is concentrated, and deed restricted. She said there is a narrative that the North Temple corridor has a lot of affordable housing, but much is due to market conditions and not deed restricted projects. She said the RDA is aware and that it is a goal to make sure there is an adequate supply of deed restricted affordable housing because the market rate affordable housing can change quickly as development starts to ramp up and occur. In relation to the RDA’s ability to help developers acquire land, Mr. Dunkley said that he supports anything that creates greater flexibility for the RDA to further the mission. He also asked about the potential for the RDA to purchase a struggling motel or if that is in consideration. Ms. Hunsaker said that the policy priority to purchase motels would be for the ones that are more distressed in nature, however the cost of those types of motels are probably above market value because they are a cash business and they bring in a lot of revenue for the owners. Mr. Walz agreed and said that there is a balance of having the flexibility or the available resources to potentially target a motel. He explained that motels are difficult to acquire and resell because of the financial impact the sale has on the purchase price of the property. He added it is a challenging model for the RDA to try to work with right now. B. Update on the Northwest Quadrant Housing Policy – Tracy Tran Ms. Tran said that in April 2020, the RDA Board discussed policy considerations related to the Northwest Quadrant (NWQ) Housing tax differential that would be set aside for affordable housing. Ms. Tran said the RDA prepared information on the following: Demographic and housing information for neighborhoods adjacent to the NWQ in neighborhoods primarily west of I-15; Eligible uses of the tax differential to address potential impacts from the development of the Inland Port within the NWQ pursuant to State code 17 C; A proposed structure for how the NWQ housing funds may be organized in the context of the draft RDA Housing Allocation Policy. Ms. Tran explained how RDA staff compiled demographic and housing information by utilizing the many City adopted master plans associated with the Westside, along with Citywide data assembled by the Kem C. Gardner Policy Institute. Ms. Tran stated that Westside neighborhoods, compared to the rest of the City are/have: Growing at a slower rate. Higher rate of homeownership. Higher percentage of owner-occupied homes. Higher share of family households. Higher share of households below the poverty rate. Lower share of low-income housing tax credit (LIHTC) projects, as LIHTC projects are concentrated in the Central City area and along the TRAX line east of I-15. Larger family size. Larger minority population. A lower rate of access to opportunity or resources that improve an individual’s chance at upward mobility. Ms. Tran said strategies in adopted master plans describe the areas of focus: Opportunities for redevelopment near neighborhood nodes. Transit oriented developments. Build on existing assets of the Jordan River and 9Line corridor. Majority of housing is comprised of single-family homes within this area. Ms. Tran explained that the eligible uses of tax differential pursuant to 17C of the State code, funds must be used to provide housing to households earning 80% AMI and below. She said within these parameters, the funds could be used towards the following: Purchase land for the development of affordable and mixed-income housing. Pay for construction cost for the development or rehabilitation of housing. Lend, grant, or contribute money to a person, public entity, housing authority, private entity or business, or nonprofit corporation for housing. Plan or otherwise promote housing. Replace housing units lost as a result of the project area development. Make payments on or establish a reserve fund for bonds for housing. Ms. Trans added that eligible uses of funds also include paying part or all the cost of land or installation, construction, or rehabilitation of any building. She explained that funds may be used for housing related infrastructure improvements or for the development of housing for households above 80% AMI if the project is located in a project area where a development impediment has been determined to exist. Ms. Tran said that in terms of the Northwest Quadrant, some policy considerations of how the RDA may want to focus those funds in the Westside neighborhoods adjacent to the NWQ would be: Implement projects to improve access to opportunity; Increase housing units to provide jobs-housing connectivity; Target resources to promote diverse range of housing options; Identify catalytic project sites to target housing and/or mixed-use projects; Remove development barriers, including environmental remediation and infrastructure improvements; and Preserve and improve existing housing stock. Ms. Tran said this gives a general overview of how the Northwest Quadrant Housing Accounts fits with the overall RDA Housing Allocation Framework. She said based on this and the considerations of the funding priority, staff wanted to hear from RAC members on their perspective. Ms. Hunsaker added that Ms. Tran took this before the Board in July 2020 and the Board commented that it could be a policy priority to invest the funds west of I-15 adjacent to the Inland Port because that is where the funds are being generated. She said there were also some concerns as to whether the Westside has more than its fair share of affordable housing and whether concentrating additional affordable housing funds is the best thing for the Westside. She said Director Johnston felt that the Westside was not getting its fair share of investment in general and that any development or any investment on the Westside could be a good thing because investing in affordable housing is new development that positively contributes to the neighborhood. Ms. Sakaki agreed with the Board’s previous comments and added that when the Inland Port is developed you would want to have some housing in the area. Mr. Dunkley disagreed that there is affordable housing on the Westside, adding there is not affordable housing for those in lower incomes ranges. He said a typical 1-2-bedroom apartment is anywhere from $1,000 to $1,300 dollars for folks who are making minimum wage. He said if you compare the cost of a home on the Westside to the cost of the home on the Eastside, it seems affordable, but you do not have buying power on the Westside, so it is significantly less affordable than the Eastside for those who are purchasing Eastside homes. Ms. Hunsaker said there is, in general, a desire from the Mayor and the City Council to have an equitable share of affordable housing in all areas of the City. She said it is not only a question of whether the Westside has more than its fair share but the fact that the Eastside by far does not have its fair share of affordable housing. She added that there are not enough opportunities for those of lower and moderate incomes to live on the Eastside. Ms. Hunsaker explained that it is a matter of where funds should be focused as well, adding the Board did discuss the homeownership issue, wanting to see more homeownership opportunities on the Westside. Ms. Sakaki asked whether parks and green space could be part of the development on the Westside. Ms. Hunsaker explained that by State statute the funds must be used for the eligible activities for housing for 80% AMI and below, adding that it can be part of the capital stack of a project that includes green space, green infrastructure, and commercial development as long as the funds are allocated to the housing component. 3. Approval of the minutes of the April 1, 2020 meeting Ms. Sakaki made a motion to approve the minutes from the April 1, 2020 meeting. Ms. O’Grady seconded the motion. Upon roll call, the motion passed unanimously. 4. Business A. Election of Chairperson and Vice-Chairperson Mr. Doughty was nominated for Chairperson by Mr. Dunkley and seconded by Ms. O’Grady. Upon roll call, the motion passed with Ms. O’Grady, Ms. Sakaki, and Mr. Dunkley voting Yes, and Mr. Head voting No. Ms. Sakaki was nominated for Vice Chairperson by Ms. O’Grady and seconded by Mr. Head. Upon roll call, the motion passed unanimously. 5. Adjournment. There being no further business the meeting was adjourned. Brian Doughty, Chairperson This document along with the digital recording constitute the official minutes of the Redevelopment Advisory Committee held August 5, 2020.