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06/01/2022 - Meeting Materials REGULAR MEETING OF THE REDEVELOPMENT ADVISORY COMMITTEE Wednesday, June 1, 2022 4:00 p.m. 451 S State Street Room 126 Salt Lake City, Utah 84111 To access and participate remotely, please visit https://saltlakecity.webex.com/saltlakecity/j.php?MTID=md0b675914890e452242fa27c02f4c7c8 Meeting Password: wiV9PwtAg83 AGENDA 1. Roll Call 2. Announcements by the Staff A. Project Updates; B. Upcoming Events; C. Other items. 3. Approval of the minutes A. Review and Approval of April 6, 2022 RAC Minutes RAC members will review the April 6, 2022 meeting minutes and consider for approval. 4. Business A. RDA Commercial Assistance Opportunities—Ashley Ogden and Lauren Parisi, RDA Project Managers RDA staff will provide a briefing on the Administration's preliminary proposal to develop a package of Commercial Assistance Programs and request feedback from RAC members. 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,April 6, 2022 4:00 p.m. 1. Roll Call The following members were present: Brian Doughty, Chairperson Mojdeh Sakaki,Vice-Chairperson Nic Peterson, Member Rosa Bandeirinha, Member Mark Isaac, Member The following members were absent: Claudia O'Grady, Member Also Present: Cara Lindsley, Deputy Director Tracy Tran, Project Manager Lauren Parisi, Project Manager Kort Utley, Senior Project Manager Amanda Greenland, Communications and Outreach Manager Kathryn Hackman, Communications and Outreach Assistant Felina Lazalde, Office Facilitator Allison Parks, Senior City Attorney Kate Werrett, Project Manager Austin Taylor, Project Manager Robyn Stine, Office Manager 2. Briefing by the Staff Amanda Greenland gave RAC an update on the 650 South Main Trax Station and a general update that there are across the board cost increases for all RDA projects. She also introduced new RDA Project Managers, Kate Werrett and Austin Taylor, and announced the promotion of Cara Lindsley to Deputy Director. 3. Approval of the minutes of the January 5, 2022 and February 2, 2022 meetings Mr. Isaac made a motion to approve the minutes from the January 5,2022 and February 2, 2022 meetings. Ms. Sakaki seconded the motion. Upon roll call,the motion passed unanimously. 4. Business A. Housing Development Loan Program—Emergency Gap Financing Criteria—Tracy Tran and Lauren Parisi, RDA Project Managers Ms. Tran said at the February RAC meeting, RAC recommended the Board adopt the HDLP—Emergency Gap Financing Criteria 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?) 3) Consider a matching fund component from developer to the emergency fund Ms. Tran said that 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. To avoid non-emergency requests, staff also suggested adding the requirement that projects must close within 90 days as a condition of approval.This can be done administratively and does not require amending the HDLP standards. Discussion: None B. Housing Strategies—Lauren Parisi and Tracy Tran, RDA Project Managers Lauren Parisi provided RAC with an update to the fiscal year 22/23 Annual Housing Development Funding Strategy. Ms. Parisi said the RDA FY 2022-23 Proposed Funding Priorities include the following: Affordable Homeownership Family Housing Deeply Affordable Housing Missing Middle Housing Ms. Parisi said RDA staff proposed allocating funding to the following programs and tactics as part of the RDA's FY 2022-23 budget. Housing Priority Housing Activities 1) Affordable Homeownership • Shared Equity Model • Land Acquisition 2) Family Housing • Shared Equity Model • Land Acquisition • Housing Development Loan Program 3) Deeply Affordable Housing • Housing Development Loan Program 4) Missing Middle Housing • Land Acquisition Discussion: • Mr. Peterson asked about inventory versus demand. • Mr. Doughty asked if RDA has inventory for land acquisition. Staff sent Property Report to RAC post meeting. • Mr. Doughty asked if funds for ADU's for FY 21/22 used. Ms. Parisi said no, but staff is currently working to create an ADU program to that this funding will go towards. • Ms. Sakaki asked about sustainability with affordability and Ms. Parisi stated that sustainability is included in almost all RDA projects per the recently adopted sustainable development policy • Ms. Sakaki asked about the possibility of funding for tiny homes. Ms. Parisi said staff would investigate this option. Ms. Parisi requested a recommendation of the Housing Priorities for FY 2022-23 from the Committee to the Board. Mr. Isaac made a motion to recommend the Board adopt the RDA Housing Priorities for FY 2022-23. Mr. Peterson seconded the motion. 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 April 6, 2022. o•�^" 1\,) `\ 7.4///2 ma's MAYOR ERIN MENDENHALL =9 � DANNY WALZ ir Executive Director : __ ; u' = Director nEsiw4 REDEVELOPMENT AGENCY of SALT LAKE CITY STAFF MEMO DATE: May 26, 2022 PREPARED BY: Ashley Ogden&Lauren Parisi, Project Managers RE: RDA Commercial Assistance Opportunities REQUESTED ACTION: Briefing on the Administration's preliminary proposal to develop a package of Commercial Assistance Programs POLICY ITEM: Revision of existing RDA Loan and Granary Adaptive Reuse Loan Programs; creation of new programming BUDGET IMPACTS: None at this time EXECUTIVE SUMMARY: Salt Lake City is currently experiencing rapid population and economic growth, which is resulting in unprecedented levels of real estate demand. While these trends contribute to a strong and thriving city, studies show that they're often followed by the displacement of our most vulnerable residents, many of whom have called Salt Lake City home for generations. The City's focus on the provision of affordable housing is vital and necessary, but the RDA has identified a need to extend similar benefits to the local businesses and non-profits that contribute so much to the health and vibrancy of our neighborhoods. To address this need,the RDA is proposing to amend two (2) existing programs and potentially create two (2) new programs to better support the real estate and financial needs of the local business and non-profit sectors. The following memo outlines Staffs preliminary proposal for a set of Commercial Assistance Programs,which will be further refined through Redevelopment Advisory Committee (RAC) and Board discussions, and community engagement activities to be conducted throughout summer 2022. ANALYSIS & ISSUES: Identifying the Challenges and Impacts This section is a high-level summary of challenges faced by local retailers and impacts of their displacement. The trends described below were assessed on a national level but likely apply to any city experiencing high levels of real estate demand and redevelopment. Staff will continue to evaluate challenges and impacts specific to Salt Lake City through community engagement and data analysis. 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 Challenge#1: Strong market forces are causing commercial rents to become increasingly unaffordable. • High Demand o A global surplus of capital seeking higher returns is flooding into urban real estate, causing a speculative run-up in prices. o Cities are increasing in popularity as more people desire to live in walkable,mixed-use urban districts. While this has increased opportunities for businesses, it has also driven demand for small storefront space, with the rise in rents often outpacing sales growth. o National chains have saturated the suburbs and face pressure from shareholders to show market growth year over year, leading them to turn to cities to sustain their expansion. • Limited Supply o Older urban buildings are being redeveloped or razed, and the projects that replace them either provide no retail space at all, or spaces designed for chains that are too large to be suitable or affordable for local entrepreneurs. o Banks and other lenders often provide lower interest rates or better terms if a property developer has signed national,brand-name tenants.' Challenge #2: COVID-19 severely impacted local businesses, especially those owned by people of color. • Since February 2020, a quarter(1/4)to one-third(1/3) of all U.S. small businesses have closed.2 • Studies show that businesses owned by people of color and immigrants tend to be concentrated within the food,personal services, and retail sectors that are most vulnerable to economic downturn. This led to disproportionate COVID impacts: o In early months of the pandemic,the number of Black business owners fell by 41 percent (41%). o The number of Latinx business owners fell by 32 percent(32%). o The number of Asian business owners fell by 26 percent(26%). o The number of white business owners fell by 17 percent(17%). o A November 2020 survey of Black and Latinx business owners indicated that one-fifth (1/5) expected to close their businesses by mid-2021. 3 Much is lost through the closure or displacement of local businesses: • Goods, services, and amenities that are geared toward the needs, tastes, and desires of residents • Community landmarks and gathering spaces that foster relationship-building • Business-sponsored programs and other investments • Character and cultural identity that make each neighborhood a unique and interesting place to be • Economic stability of the neighborhood(less local circulation of dollars, local employment)3 1 LaVecchia,O. &Mitchell, S.(2016).https://ilsr.org/wp-content/uploads/2018/03/ILSR-AffordableSpace-FullReport.pdf. 2 Voltolini,Patricia,Melissa Kim,David M.Greenberg,Julia Duranti-Martinez,and Michelle Harati. (2022). https://nextcity.org/ebooks/equitable-pathways-to-small-business-recovery-an-all-hands-approach. 3 Lung-Amam. (2021).https://www.bloomberg.com/news/articles/2021-05-19/small-businesses-are-victims-of- gentrification-too. Preliminary Proposal The RDA will rely heavily on feedback received from the local business and non-profit community to inform the final proposal. In this early stage, Staff envisions the creation of a package of Commercial Assistance Programs where RDA tools are more intentionally utilized to: • Provide opportunities to establish new services, amenities, or underrepresented business types within a neighborhood • Incentivize the construction of right-sized commercial spaces in new projects • Activate existing, underutilized commercial spaces • Create affordable rental or ownership opportunities for local businesses and non-profits • Counter the displacement of existing local businesses from their neighborhoods • Implement tenant preferences for local businesses, especially those that are women/minority- owned, and community-serving non-profits • Promote the preservation,rehabilitation, or adaptive reuse of existing building stock • Enhance the capacity for non-traditional applicants to apply for and utilize RDA programs RDA COMMERCIAL ASSISTANCE PROGRAM Revolving Loan Adaptive Reuse Affordable Storefront Fund (RLF) Loan Program Activation Program Education&Technical Assistance 1. Revolving Loan Fund(RLF): The existing RDA Loan Program is flexible with gap financing available to facilitate development projects that: • are located within an RDA Project Area and meet at least one Project Area Objective as provided in most recent Project Area Strategic Plan; or • are located within Salt Lake City and provide affordable (80%AMI and below) or mixed-income housing. Staff would like to amend the existing program to provide funding for projects that include a commercial component, with threshold eligibility criteria that are specific to the objectives outlined above. Threshold criteria could include: • Projects being developed by local businesses or non-profits for their own end use; • Projects that dedicate commercial space to independent businesses or non-profits, with additional incentives for those that lease or sell: o To minority and/or women-owned local businesses o Below market rates; • Mixed-use developments that include ground-floor commercial uses and residential units affordable for those earning 80%AMI and below; • Projects that involve the reuse of existing building stock. Interest rate reductions could be utilized to encourage the implementation of additional criteria, beyond the initial threshold requirement. 2. Adaptive Reuse Loan Program: There is currently an adaptive reuse forgivable loan program in place in the Granary Project Area. Four adaptive reuse projects have been completed with RDA assistance, including Atmosphere Studios, Fisher Brewing Company, T.F. Brewing and Orchid Dynasty. To further promote the preservation of existing buildings and unique character of Salt Lake City neighborhoods,this proposal includes expanding the adaptive reuse program to all RDA Project Areas. To be more intentional with funding, eligible projects may be limited to particular corridors within Project Areas that have a higher concentration of historic building stock, including along State Street, Main Street, 900 West, the new Folsom Trail, etc. Eligible corridors may change over time depending on the need. In addition to expanding the program to all Project Areas, revisions may be proposed to the terms of the program to increase its effectiveness. Contemplated revisions include: • Expanding the definition of adaptive reuse to include the rehabilitation of underutilized buildings 50 years or older, and removing the requirement for projects to result in a change in land use; • Removing the escalating ratio match of private funds and instead requiring an equal match of RDA to private funds; • Exploring alternative collateral requirements that would allow tenants to apply for the program, in addition to property owners. 3. Affordable Storefront Activation Program: This would be a new program that is intended to support the development or activation of affordable(i.e.,below market rate) commercial spaces that are reserved for local businesses and community-supporting non-profits ("preferred tenant types"). In today's market, public ownership or control of commercial spaces may be one of the most effective ways to provide affordable commercial ownership or rental opportunities. Staff has identified the following ways that RDA tools could be used to achieve this goal: RDA Ownership: ➢ The RDA could gain ownership of commercial spaces through property acquisition or disposition efforts,then lease or sell spaces to preferred tenant types at affordable rates. In addition to the preferred tenant and affordability goals,this could also support the reuse of existing commercial building stock(through acquisition and rehabilitation), as well as the inclusion of right-sized commercial spaces within new construction projects on RDA- owned property(via disposition and RFP processes). RDA Master Lease: ➢ The RDA could master lease commercial spaces in new or struggling developments, then sub-lease to preferred tenant types at affordable rates. This would involve an ongoing lease obligation for the RDA,which may operate at a loss. However, it could serve as an intervention tactic to spur developers to include commercial space that they wouldn't otherwise plan for in new construction projects. 4. Education & Technical Assistance: Staff will explore ways to make RDA programming more accessible to non-traditional applicants who may not have development experience. Ideally, this would involve partnering with local organizations that provide capacity-building services to entrepreneurs who are looking to start a business or establish a physical location. NEXT STEPS: The purpose of this memo is to present the preliminary proposal for a set of Commercial Assistance Programs and gather important feedback from the RAC.Next steps in the program creation process include the following: Community Engagement Strategy: While Staff have preliminary ideas for how RDA tools could be utilized to meet program objectives, it is vital to connect with the local business and non-profit communities to get a better idea of how the programs can be tailored to meet their needs. In addition, Staff will meet with commercial developers and brokers to understand the issues from their perspective. Community engagement efforts will begin immediately and are anticipated to last the summer. Data Collection/Case Study Analysis: Staff has begun collecting relevant data points to learn more about demographic and small business trends within RDA Project Areas. Staff has also been studying other cities' programs that have similar commercial objectives. This information will inform program design. Proposal and Adoption: When the above tasks have been completed, Staff will provide an overall update to the RAC and RDA Board. Following those discussions, Staff will incorporate what has been learned into a final program proposal that will be presented to the both entities for their consideration.