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04/06/2022 - Meeting Materials REGULAR MEETING OF THE REDEVELOPMENT ADVISORY COMMITTEE Wednesday, April 6, 2022 4:00 p.m. 451 S State Street Room 126 Salt Lake City, Utah 84111 The Redevelopment Advisory Committee has returned to a hybrid meeting approach. The hybrid meeting enables people joining remotely or in-person to listen to the meeting and participate during public comment items. To access and participate remotely, please visit https://saltlakecity.webex.com/saltlakecity/j.php?MTID=md0b675914890e452242fa27c02f4c7c8 Meeting Password: wiV9PwtAq83 1. Roll Call 2. Announcements by the Staff A. Staff Updates; B. Other items. 3. Approval of the minutes A. Review and Approval of January 5, 2022 and February 2, 2022 RAC Minutes RAC members will review the January 5, 2022 and February 2, 2022 meeting minutes and consider for approval. 4. Business A. Housing Development Loan Program—Emergency Gap Financing Criteria Update—Tracy Tran and Lauren Parisi, RDA Project Managers RDA staff will give an update on the Emergency Gap Financial Criteria in the Housing Development Loan Program. B. Housing Strategies—Tracy Tran and Lauren Parisi, RDA Project Managers RDA staff will give an update on the RDA Housing Strategies. 5. Adjournment People with disabilities may make requests for reasonable accommodation no later than 48 hours in advance in order to attend this Redevelopment Advisory Committee. Accommodations may include alternate formats, interpreters, and other auxiliary aids. This is an accessible facility. For questions, requests, or additional information, please contact the RDA at 801-535-7240. MINUTES FROM THE MEETING OF THE REDEVELOPMENT ADVISORY COMMITTEE Wednesday,January 5, 2022 4:00 p.m. This meeting was an electronic meeting pursuant to Salt Lake City Emergency Proclamation No. 2 of 2020 (2)(b). Chairperson Doughty read the following statement: I, Brian Doughty, Chair of the Redevelopment Advisory Committee, hereby determine that due to the increase in COVID-19 cases and mask and social distancing requirements, conducting the Redevelopment Advisory Committee meeting at an anchor location presents a substantial risk to the health and safety of those who may be present. 1. Roll Call The following members were present: Brian Doughty, Chairperson Nic Peterson, Member Rosa Bandeirinha, Member Jason Head, Member Mark Isaac, Member Claudia O'Grady, Member The following members were absent: Mojdeh Sakaki,Vice-Chairperson Also Present: Danny Walz, Director Kort Utley, Senior Project Manager Lauren Parisi, Project Manager Kathryn Hackman, Communications and Outreach Assistant Felina Lazalde, Office Facilitator Allison Parks, Senior City Attorney Ashley Ogden, Project Manager Tracy Tran, Project Manager Robyn Stine, Office Manager 2. Briefing by the Staff Director Walz introduced new employees Kathryn Hackman, Communications and Outreach Assistant and Eric Holmes, Data Manager. 3. Approval of the minutes of the November 5, 2021 meeting Ms. O'Grady made a motion to approve the minutes from the November 5, 2021 meeting. Ms. Bandeirinha seconded the motion. Upon roll call, the motion passed unanimously. 4. Business A. Proposed Revisions to the Agency's Housing Allocation Funds Policy—Danny Walz, RDA Director Director Walz explained to RAC the proposed revisions to the Agency's Housing Allocation Funds Policy, including the renaming of the Northwest Quadrant Housing Fund to Westside Community Initiative Fund. He said this will earmark the Inland Port Housing funds and any revenue from projects to the City's westside. There were no questions. Mr. Peterson made a motion to recommend the RDA Board adopt the proposed revisions to the Agency's Housing Allocation Funds Policy. Mr. Isaac seconded the motion. Upon roll call,the motion passed unanimously. B. Discussion whether future meetings should be held electronically, in-person or a hybrid option A discussion was held with RAC members, and it was decided that for the next several meetings they would be held electronically and thereafter the Chair would consider the current public health situation and make a determination prior to each meeting. A. 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 January 5, 2022 MINUTES FROM THE MEETING OF THE REDEVELOPMENT ADVISORY COMMITTEE Wednesday, February 2, 2022 4:00 p.m. This meeting was an electronic meeting pursuant to Salt Lake City Emergency Proclamation No. 2 of 2020 (2)(b). Chairperson Doughty read the following statement: I, Brian Doughty, Chair of the Redevelopment Advisory Committee, hereby determine that due to the increase in COVID-19 cases and mask and social distancing requirements, conducting the Redevelopment Advisory Committee meeting at an anchor location presents a substantial risk to the health and safety of those who may be present. 1. Roll Call The following members were present: Brian Doughty, Chairperson Mojdeh Sakaki, Vice-Chairperson Rosa Bandeirinha, Member Mark Isaac, Member Claudia O'Grady, Member The following members were absent: Nic Peterson, Member Jason Head, Member Also Present: Cara Lindsley, Senior Project Manager Kort Utley, Senior Project Manager Lauren Parisi, Project Manager Kathryn Hackman, Communications and Outreach Assistant Felina Lazalde, Office Facilitator Allison Parks, Senior City Attorney Ashley Ogden, Project Manager Tracy Tran, Project Manager Robyn Stine, Office Manager 2. Briefing by the Staff Cara Lindsley gave an update on the Jackson Apartments re-opening event rescheduled for Thursday, February 24 at 10 a.m. The Mayor and RDA Board Chair Valdemoros will be speaking. 3. Business A. Housing Development Loan Program—Emergency Gap Financing Criteria—Tracy Tran and Lauren Parisi, RDA Project Managers Tracy Tran and Lauren Parisi presented information to RAC on the proposed Emergency Gap Financing criteria in the Housing Development Loan Program. Discussion: - Ms. O'Grady expressed concern that a 6-month window was too long due to construction costs changing daily and recommended a shorter timeframe for closing of the loan. - Ms. O'Grady said that the process would need to be flexible with the RDA Finance Committee meet on an as needed basis. - Ms. O'Grady suggested that there be a requirement for the developer to come with matching funds from another source for the gap. - Mr. Isaac agreed with Ms. O'Grady that the process would need to move swiftly, or it would provide little to no value. - Mr. Isaac also said that if the RDA could give a conditional approval with the formal approval in X number of weeks,this would provide more value for emergency gap funding. Ms. O'Grady suggested Staff incorporate the following suggestions into the Emergency Gap Financing criteria: 1. Re-evaluate criteria such that the 6-month window is shortened to a much shorter timeframe that represents a truly ready-to-close timeframe(90 days at most); 2. Approval process is re-eval to allow for very quick action,very quick approval process, maybe contingent approval; and 3. Consider a matching fund component to the emergency fund; Mr. Doughty and Ms. Sakaki agreed and requested Staff return to RAC with an update following presentation of the item to the RDA Board. B. Election of Chairperson and Vice-Chairperson Mr. Doughty nominated himself for Chairperson and seconded by Mr. Isaac. Ms. Sakaki was nominated for Vice Chairperson by Mr. Doughty and seconded by Mr. Isaac. Upon roll call,the motion passed unanimously. 4. 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 February 2, 2022. „,„ ,,,,,,,. y '/// MAYOR ERIN MENDENHALL 1 10�?�� DANNY WALZ Executive Director Director ll5v-v REDEVELOPMENT AGENCY of SALT LAKE CITY STAFF MEMO DATE: March 25, 2022 TO: Redevelopment Advisory Committee (RAC) PREPARED BY: Tracy Tran&Lauren Parisi, RDA Project Managers RE: Housing Development Loan Program—Emergency Gap Financing Follow- Up REQUESTED ACTION: Briefing only POLICY ITEM: Affordable housing BUDGET IMPACTS: N/A EXECUTIVE SUMMARY: The Redevelopment Advisory Committee(RAC) asked staff to return to update RAC on the outcome of the Board's discussion and direction on including emergency gap financing criteria. At the February 8, 2022, Salt Lake City Redevelopment Agency("RDA”)Board of Directors ("Board")meeting,RDA staff discussed proposed amendments to the Housing Development Loan Program("HDLP") Policy that would add Emergency Gap Financing Criteria and direct the RDA Finance Committee as the review body for HDLP applications. The proposed Emergency Gap Financing Criteria included: a. Projects must be ready to break ground within 6 months of applying for the emergency gap financing NOFA. b. Projects must have secured financing for at least 90% of the total project cost and provide proof of such secured financing upon submission of the NOFA application. c. Projects shall submit a funding gap analysis that explains what is causing the gap and provide supporting documents that demonstrate need for the specific amount being requested. In addition, the Board also discussed the Redevelopment Advisory Committee's ("RAC's") recommendation: Recommend approval with the following considerations: 1.Re-evaluate criteria such that the 6-month window is shortened to a much shorter timeframe that represents a truly ready-to-close timeframe (90 days at most) 2.Re-evaluate approval process to allow for very quick action, very quick approval process,maybe contingent approval first and then finance committee approval (remove Board approval?) 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 3.Consider a matching fund component from developer to the emergency fund The Board's discussion included the following points: • Desire to maintain control and Board approval in the process. • Options to expedite the beginning of the review process, but include stricter requirements and require reporting once the loan closes. • Acknowledgement that the current market is volatile with increasing and unstable construction costs. • Possibility of convening RDA meetings during other City Council nights to allow for additional meeting days for emergency requests. • Loan amounts, interest rates, and anticipated number of applications. • 90 days process from time of application to groundbreaking seems tight—consider requests under these emergency funds would need to close withing 90 days of approval. • Emergency funds should meet the priorities for the board. • Consider making process easier but affordability and thresholds stricter. • Desire to include additional requirements for projects asking for emergency funds. • Emergency funds must meet HDLP requirements anyway. Acknowledged that creating an emergency process but then including additional standards may be counterintuitive. Based on the discussion and desire for the Board to provide final approval,RDA staff recommended to not amend the HDLP to include emergency standards,but only amend the language that would direct application reviews to the RDA Finance Committee. ANALYSIS & ISSUES: RDA Recommendation Emergency Funds RDA staff considered the Board's discussion and how changes would impact the HDLP Policy. For funds to be truly"emergency"to respond to requests that need to fill a gap within weeks and to prevent further price escalations to occur during that period, a quicker and more nimble process would need to exist. Given the importance of the process, RDA staff recommends maintaining a set of funds that could be used on an open-ended until expended basis but would not be subject to a shortened process. These funds could be accessed by developers who have come across a financing gap and/or were unable to apply during the competitive Notice of Funding Availability("NOFA") process. Additionally, these non-competitive, open-ended until expended funds could be subject to a shorter conditional commitment period and staff would ensure loan closing would happen quickly after Board approval. This limited conditional commitment period would naturally support projects that are further along in the process that have financial commitments in place. This along with the developer's project details would meet the intent of RDA staff's initial emergency gap financing criteria without having to add language to the HDLP. Review Committee RDA Staff recommended amending the HDLP to clarify and direct reviews of applications to the RDA Finance Committee. The RDA Finance Committee meets monthly and is charged with providing recommendations for requests related to items such as loans, tax increment reimbursements and land write downs and therefore, should review HDLP loan requests. This would 2 allow a more streamlined review process and simplified administrative procedures. HDLP Process and Annual Housing Funding Strategy: Regardless of the NOFA offering,whether it's offered on a competitive or on an open-ended until expended basis, all applications would be subject to the HDLP requirements and process. The HDLP Process allows for a consistent method to administer the allocation of affordable housing funding requests. The HDLP requirements and process ensures projects meet a range of threshold requirements including developer experience, affordability, eligible activities, sustainability, financing standards. Additionally, as part of the annual housing funding strategy("Strategy"),the Board approves the budget that would determine which type of funds staff would offer each year. Given the Board discussion at the February Board meeting,the Board could offer open-ended until expended funds and as part these funds, staff would ensure that projects seeking this type of funding would need to break ground within a certain period of closing. If they do not,the condition would not be met, and the applicant would need to re-apply if they still need funding. In addition, the Strategy allows for flexibility in how NOFAs could be offered each year. Given the volatility and rising construction costs in the current market,having funds that are available on open- ended until expended basis may currently make sense. For other years, given the status of the market, it may make more sense to conduct only competitive NOFAs. The current HDLP policy provides a consistent framework and process for either a NOFA for competitive funds or for funds that could be offered on an open-ended until expended basis. PREVIOUS BOARD ACTION: • March 8, 2022: The Board adopted amendments to the Housing Development Loan Program that would direct the RDA Finance Committee as the review body for loans. • February 2022; The Board discussed emergency funds and provided feedback regarding proposed amendments to the HDLP. • December 2021: The Board approved$5.3 million in funding allocations for 4 affordable housing developments. • August 2021: The Board adopted FY21-22 Affordable Housing Funding Priorities. • March 2021: The Board adopted the Housing Development Loan Program Policy • February 2021: The Board adopted the Housing Allocation Funds Policy 3 R - MAYOR ERIN MENDENHALL ''I -�= DANNY WALZ Executive Director " '" =� cc "' cc!! Director C' 1„ i REDEVELOPMENT AGENCY of SALT LAKE CITY DATE: March 25, 2022 TO: Redevelopment Advisory Committee (RAC) PREPARED BY: Lauren Parisi & Tracy Tran, RDA Project Managers RE: FY 2022-23 Housing Development Funding Strategy REQUESTED ACTION: Recommendation regarding the FY 2022-23 Housing Development Funding Strategy POLICY ITEM: Affordable Housing BUDGET IMPACTS: N/A EXECUTIVE SUMMARY: In 2021, the Board of Directors ("Board") of the Redevelopment Agency of Salt Lake City("RDA") adopted two policies to facilitate the funding and development of affordable housing within City boundaries. First,the RDA Housing Allocations Funds Policy("Funds Policy") establishes guidelines for allocating and directing resources for the development and preservation of housing by funding source. Second, the Housing Development Loan Program ("HDLP") Policy creates a program that centralizes the application,underwriting, and approval process across all funding sources, providing a one-stop-shop for community partners to access resources for the development and preservation of affordable housing. Both policies contemplate that annually,prior to the annual budget process, the RDA shall present to the Board a Housing Development Funding Strategy("Funding Strategy")that includes: • A projected amount of revenue to be allocated to each Housing Fund for the upcoming fiscal year (approved as a part of RDA budget) • Proposed housing funding priorities ("Funding Priorities") for the upcoming fiscal year (approved as separate resolution) • Proposed funding allocations for specific housing activities(i.e. gap financing loans,property acquisition, etc.) for the upcoming fiscal year (approved as a part of RDA budget) See Figure 1 for a process graphic. This first step in the Funding Strategy process is to establish the Funding Priorities to guide funding decisions and housing activities. This memo reviews the proposed Funding Priorities and housing activities for the upcoming fiscal year. The RAC should provide a recommendation to the Board regarding this proposal for their consideration. 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 Figure 1: FY23 ANNUAL HOUSING FUNDING STRATEGY HOUSING FUND ANNUAL HOUSING HOUSING ALLOCATIONS PRIORITIES ACTIVITIES HOUSING LAND .EVELOPME113 ACQUISITION FUND AFFORDABLE 11 MISSING SHARED ADU GI SECONDARY HOME MIDDLE EQUITY OWNERSHIP HOUSING HOUSING ASSISTANCE i WESTSIDE DEEPLY HOUSING COMMUNITY I AFFORDABLE DEV.LOAN INITIATIVE HOUSING PROGRAM ANALYSIS: 4 FY 2022-23 Proposed Funding Priorities—At their March 2022 meeting,the Board reviewed and discussed potential Funding Priorities for the upcoming fiscal year—FY 23. The Board seemed to come to a censuses regarding the approval of four priorities including: • Affordable Homeownership—Create opportunities for those who have historically rented in the community to build wealth and establish permanent roots through affordable homeownership. • Family Housing—Provide opportunities for families to enjoy the many benefits of urban living by encouraging the development of housing that is more conducive to larger household sizes. Family housing is generally defined as units with three or more bedrooms. • Deeply Affordable Housing—Expand the availability of units for extremely low-income households,thereby providing housing options for individuals or families that are homeless or at risk of homelessness. Deeply affordable housing is generally defined as housing affordable to those earning 40%of the area median income(AMI) or below. • Missing Middle Housing—Promote an array of housing forms such as smaller apartment buildings, townhomes and accessory dwelling units to diversify the City's housing stock and provide more affordable living options for residents. 2 FY 2022-23 Proposed Housing Activities—To encourage the incorporation of the four proposed Funding Priorities in RDA-funded housing projects, RDA staff proposes allocating funding to the following programs and tactics as part of the RDA's FY 2022-23 budget. Some of the housing activities may achieve multiple Funding Priorities as illustrated in Figure 2. HOUSING PRIORITY HOUSING ACTIVITIES 1. AFFORDABLE HOME OWNERSHIP Shared E i ui Mode A shared equity housing model such as a community land trust provides the opportunity to hold title to land to preserve its long-term availability for affordable housing.This model allows for both home ownership and shared equity.As part of the Westside Community Initiative(WCI),the RDA will explore some form of a shared equity program or partnership to facilitate affordable ownership. Land Ac i uisition The RDA will seek opportunities to acquire land to accommodate ownership products.Land could potentially be contributed to a community land trust or marketed by an RFP to partner on homeownership projects or other housing priorities. 2. FAMILY HOUSING Shared E i ui Model This model will also be utilized to facilitate family housing with 3+bedrooms in particular.Family housing is likely to take the form of missing-middle type housing or condominiums. Land Ac i uisition Similar to homeownership,land acquisition can be used to facilitate family-sized units through a targeted RFP. ousin Develo ment Loan Pro!ram(HDLP)*Family housing and/or deeply affordable housing will be made a threshold for projects to qualify for the HDLP's competitive affordable housing NOFA. To meet this threshold,at least 10%of a project's units must have three or more bedrooms.Projects will also be eligible for a.5%interest rate reduction for meeting other RDA benchmarks as outlined in last year's(2021) competitive affordable housing NOFA. 3. DEEPLY AFFORDABLE Housin• Develo ment Loan Pro!ram(HDLP)* Deeply affordable HOUSING housing and/or family housing will be made a threshold for projects to qualify for the HDLP's competitive affordable housing NOFA. To meet this threshold,at least 10%of a project's units must be affordable to those earning 40%AMI or below.Projects will also be eligible for a.5%interest rate reduction for meeting other RDA benchmarks as outlined in last year's (2021)competitive affordable housing NOFA. 4. MISSING MIDDLE HOUSING Land Ac i uisition Similar to homeownership,land acquisition can be used to facilitate missing middle housing such as small-scale apartment buildings and townhomes through a targeted RFP. 3 • ccessor Dwellin! Unit(ADUs)Assistance ADU assistance was proposed as a strategy within the FY22 budget and should be carried over to FY23.ADUs are considered as a type of missing middle housing/unique housing type as they can be added to a lot without changing the character of a neighborhood.These units accommodate different walks of life from young professionals to retirees looking to age in place. The RDA will work to establish some form of an ADU program or partnership to facilitate the construction of ADUs on the City's westside or citywide. Staff recommends allocating more funding to this program in addition to the $250,000 allocated is last year's budget,especially as the average ADU costs$140,000(including utilities)+$8,000 in permit fees. *Housing Development Loan Program("HDLP")—In its essence,the HDLP is a gap financing tool for affordable housing projects.This fmancing can be marketed for specific project types (i.e. family housing NOFA);however,this year staff is proposing to allocate funding to the following activities: • Competitive Affordable Housing NOFA • Open-Ended Affordable Housing NOFA • High Opportunity Affordable Housing NOFA Figure 2: FY23 HOUSING ACTIVITY M ACT HOUSING ACTIVITIES HOUSING PRIORITIES Shared Equity Model Housing Development ADU Assistance Land Acquisition Loan Program Affordable Home Ownership V -v/ Family Housing ✓ ✓ ✓ 1 J Deeply Affordable Housing L MissingHo Middle Housing 4 NEXT STEPS: • RAC should consider providing a recommendation regarding the Housing Development Funding Strategy(specifically,the proposed Funding Priorities and housing activities)for their consideration. • The Funding Priorities must be approved by the Board before the FY 2022-23 budget is adopted • The housing fund allocations and housing activities will be approved by the Board in conjunction with the adoption of the FY 2022-23 budget. 5