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11/3/2021 - Meeting Materials REGULAR MEETING OF THE REDEVELOPMENT ADVISORY COMMITTEE Wednesday, November 3, 2021 4:00 p.m. To access and participate in the meeting please visit https://saltlakecity.webex.com/saltlakecity/j.php?MTID=md0b675914890e452242fa27c02f4c7c8 Meeting Password: wiV9PwtAq83 I, Brian Doughty, Chair of the Redevelopment Advisory Committee, hereby determine that under the current local emergency, the increase in COVID-19 cases and updated mask 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. Revised Agenda 1. Roll Call 2. Briefing by the Staff None 3. Approval of the minutes A. Review and Approval of September 1, 2021 RAC Minutes RAC members will review the September 1, 2021 meeting minutes and consider for approval. 4. Business A. Draft North Temple Project Area Implementation Plan —Cara Lindsley, Senior Project Manager Staff will provide a briefing on the Administration's Draft Implementation Plans for the North Temple Project Area B. Guiding Framework update— Kort Utley, Senior Project Manager Staff will provide an update on the potential revisions to the Agency's Guiding Framework. C. Sustainable Development Policy— Lauren Parisi, Project Manager and Cara Lindsley, Senior Project Manager Staff will provide an update and request feedback on the Sustainable Development Policy. 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, September 1, 2021 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 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, and that the City and County building has been ordered closed to the public for health and safety reasons. 1. Roll Call The following members were present: Brian Doughty, Chairperson Mojdeh Sakaki, Vice-Chairperson Nic Peterson, Member Claudia O'Grady, Member Rosa Bandiernha, Member The following members were absent: Jason Head, Member Mark Isaac, Member Also Present: Danny Walz, RDA Director Tammy Hunsaker, RDA Deputy Director Kort Utley, RDA Senior Project Manager Ashley Ogden, RDA Project Manager Allison Parks, Senior City Attorney Feline Lazalde, RDA Office Facilitator Robyn Stine, RDA Office Manager 2. Briefing by the Staff None 3. Approval of the minutes of the August 4, 2021 meeting Ms. O'Grady made a motion to approve the minutes from the August 4, 2021 meeting. Ms. Sakaki seconded the motion. Upon roll call,the motion passed unanimously. 4. Business A. Guiding Framework Update—Kort Utley, Senior Project Manager Kort Utley explained that in the fall of 2019 the RDA Board of Directors(Board)adopted the RDA Guiding Framework (Framework)which is an operational guide that includes the Agency mission,values and project evaluation process outlining the process staff uses to identify public benefits potential projects provide. Mr. Utley said staff always viewed the Framework as a"living document"that would be adjusted and updated as needed. He added that because of that,there have been revisions made,which is why it was presented to the Redevelopment Advisory Committee (RAC)to inform them of the updates. In addition to some minor language changes, other updates include: Under Values: • Changing Economic Growth to Economic Opportunity and updating language. • Changing Community Impact to Equity&Inclusion and updating the value language. Under Livability Benchmarks: • Updating specific targets under each benchmark to better define what the Agency will require. Discussion: - RAC members said the changes in the language are very good, and that the clarification in the benchmarks and values make it more concise. - There was a question raised regarding walkability and what benchmark that might fall in to. It was stated it was absorbed into the other criteria in creating a vibrant street frontage and interface between public and private spaces. Next Steps: - Staff will consider RAC's feedback and return to RAC for a recommendation on the proposed revisions that will be forwarded to the RDA Board. B. Westside Community Initiative—Tammy Hunsaker, Deputy Director Tammy Hunsaker said in early 2021 the Board directed Agency staff to develop a new program specifically for the utilization of the Inland Port Housing Funds which were allocated to the RDA by the Utah State legislature. She explained in that legislation, 10%of all tax increment collected by the Inland Port Authority is to be designated to the RDA's NWQ Housing Fund,which will be renamed the Westside Community Initiative(WCI)for affordable housing purposes. Ms. Hunsaker said the purpose of the WCI is the implementation of transformative housing and mixed-use projects with a focus on homeownership and affordability as a way of building community cohesion and personal wealth. Ms. Hunsaker said housing projects will be leveraged with additional public benefits including neighborhood services, economic opportunities, and transit-oriented development. She then shared the goals for this program: • Develop Land with a Long-Term Approach to Continuously Serve a Community-Defined Purpose • Create Opportunities for Revenue Generation while Balancing the Implementation of Public Benefits •Assist the Westside in Mitigating Gentrification and Displacement • Give Lower Income Households the Opportunity to Build Wealth Through Ownership • Engage Community Members in Development Decisions • Leverage Resources for Other Neighborhood Development Purposes • Collaborate with Other Partners to Broaden the Pool of Funding and Expertise • Carry Out Efforts with a"Collective Impact"Approach Ms. Hunsaker said that while funding would come primarily from the Inland Port Housing Differential, the Board could allocate additional funding sources on an annual basis, and there could be potential revenue generation from the WCI program. The three funding revenues would go to the WCI Housing Fund. Ms. Hunsaker explained the various activities that staff is proposing to be eligible through this new program such as: a. Strategic Acquisition that may include distressed properties, properties located at target locations,and other opportunities that align with the City's objectives. Properties will be redeveloped as elevated real estate development projects that have profound impacts on people, particularly low-income and vulnerable populations,to uplift others, create economic opportunities, improve health outcomes, and influence the physical and socioeconomic landscape of Salt Lake City. b. Shared Equity Development would have two parts to it. i. Land Trust Development where the Agency would retain ownership of land and provide for eh sale or rental of housing to lower-income households. To ensure potential homeowners and renters benefit in perpetuity, resale prices and rents of the housing would be capped to maintain affordability. ii. Multifamily Cooperative Housing Development which the Agency would facilitate the development of cooperating housing projects to provide a homeownership framework bringing people together to own the building which they live.A housing cooperative(Co-op)is a type of residential housing option that is a corporation whereby the owners do not own their units outright, but each resident is a shareholder in the corporation based in part on the relative size of the unit they live in. This housing model provides low-income households a way to accumulate personal wealth through equity accumulation and mortgage interest deductions. c. Residential&Mixed-use development would focus on traditional rental housing development. d. Other Public Benefits would include infrastructure improvements, housing fora broad array of AMIs,job creation, and small-business development. Ms. Hunsaker said that though these are primarily housing funds, staff believes they can implement projects that leverage other public benefits for the neighborhood and to engage the community to learn what they would want to carry out in their neighborhood. She added that the Agency will promote the homeownership component as well as continue the efforts implementing rental housing development on the Westside. Discussion: - A concern was made regarding the viability of affordable homeownership under the co-op model. - A question was raised on whether if tax credits could be used on a co-op project. - A recommendation was made to consider a condo association where the Agency would be able to ensure affordability. - Staff mentioned that the RDA could remain the landowner and provide a ground lease to the co-op entity ensuring affordability in perpetuity. Next Steps: - Staff will continue to research multi-family cooperative housing and bring an update back to RAC at a future meeting. C. Strategic Alignment of RDA Values and Resources—Tammy Hunsaker, Deputy Director Ms. Hunsaker said that staff has been reviewing Agency policies and programs in a strategic effort to improve the RDA's approach to community investment. She said that staff has identified exciting policies and programs that could be revised and new programs that could be developed so the RDA could better target resources and align with community needs including to: • Ensure the inclusion of equitable development strategies. • Set sustainable development standards and incentives. • Distribute funding on a competitive basis to ensure resources are allocated to projects providing the highest level of public benefit. • Increase threshold requirements for funding access. • Make resources available to a diverse array of partners. • Expand resources available, better target funding and improve tracking of financial indicators to ensure the financial sustainability of the RDA. • Take a long-term approach to development project while retaining ongoing interest. The following are programs and policies that RDA staff are currently working on and anticipate bringing before RAC and the RDA Board in the coming months for feedback and direction. Program/Policy Description Initial Board Discussion Equity Work Plan An administrative work plan that identifies goals and actions to align RDA Q3 2021 programs and tools with equity principles.The RDA will not have a stand-alone equity policy but will rather infuse equity principles into applicable policies and programs. Guiding Framework for Update to the current policy, resolution R-22-2019 adopted in November of 2019, Q4 2021 Mission and Values to strengthen equity and sustainability components within the framework. Sustainability Policy A new policy that will establish minimum standards and incentives for sustainable Q4 2021 building practices to increase resiliency and reduce negative impacts on the environment. RDA Housing Minor update to the current policy,resolution R-4-2021 adopted in February Q4 2021 Allocation Funds 2021,to contemplate the Westside Community Initiative. Policy Westside Community A new program intended to utilize Inland Port Housing Funds to advance Q4 2021 Initiative community wealth building through affordable homeownership,increase the supply of affordable rental housing, implement cooperative housing projects,and revitalize distressed properties on the City's west side. Shared Equity A new program that facilitates the development of shared-equity housing Q1 2022 Housing Program projects.The RDA will retain long-term ownership of the land and provide for the sale or rental of housing to lower-income households. Commercial Revisions to the RDA Loan Program,resolution R-37-2016 adopted in October of Q1 2022 Development Loan 2016,to better leverage resources,target community needs,support smaller- Program scale projects,and facilitate anti-displacement strategies. Housing Development Update to the current policy, resolution R-7-2021 adopted in March of 2021,to Q1 2022 Loan Program include a financing option for accessory dwelling units("ADUs"). Storefront Activation A new program intended to facilitate the occupancy of ground-floor commercial Q2 2022 Program space by local and underrepresented businesses. Discussion: - A question was asked about the Housing Development Loan Program and "ADUs". Ms. Hunsaker said staff is considering several options regarding the HDLP and ADUs, but the details have not yet been worked out. - A question was asked about the storefront activation program. Ms. Hunsaker said that staff has considered options including a tax increment reimbursement to developers and the Agency leasing the retail space and subleasing to guarantee a constant revenue stream for the developer, but details have not been finalized. D. North Temple Implementation Plan—Cara Lindsley, Senior Project Manager Item was bumped to the October RAC meeting due to time. 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 September 1,2021. MAYOR ERIN MENDENHALL ,1 ;"' DANNY WALZ Executive Director 11-P,1j n_- Director t • REDEVELOPMENT AGENCY of SALT LAKE CITY STAFF MEMO DATE: October 6,2021 PREPARED BY: Cara Lindsley RE: Draft North Temple Project Area Implementation Plan REQUESTED ACTION: Briefing on the Administration's Draft Implementation Plan for the North Temple Project Area POLICY ITEM: N/A BUDGET IMPACTS: N/A EXECUTIVE SUMMARY: The RDA is in the process of developing work plans to guide and focus the RDA's efforts in seven active project areas over the next three to five years. These plans are intended to identify specific objectives that incorporate and balance the goals of the City(expressed in adopted master plans),the RDA(expressed in adopted project area plans), and the community. Priority projects that are identified in the plans will guide the development of the RDA's annual funding requests that are brought to the RDA Board each fiscal year. ANALYSIS & ISSUES: The North Temple Project Area Implementation Plan is attached. Each plan identifies objectives for a three-to five-year period, summarizes the project area's budget and projections over that period, identifies RDA assets within the project area, lists the RDA's programs that are especially applicable to meeting the RDA's objectives in the project area, and identifies short-,mid-, and long-term projects where the RDA will focus its efforts. In addition to using the City's North Temple Boulevard Plan and the RDA's North Temple Project Area Plan to identify key projects,RDA staff met with the RDA Board and community-based organizations in Fall 2019 to seek input on priorities and project ideas for the North Temple Project Area. The short,mid, and long-term projects that are listed in the attached implementation plan reflect the input we received. The implementation plan is intended to be an administrative living document that,while the general objectives will remain unchanged over the three-to-five-year term,will be updated as budget allocations are made,projects progress,programs are established,and property is acquired and/or disposed of The RDA Board's role in the implementation plan is to make budget allocations and approve policies for the project area. The attached draft North Temple Project Area Implementation Plan is proposed for the Redevelopment Advisory Committee's review. ATTACHMENTS: Draft North Temple Project Area Implementation Plan 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 SLCRDA MAKEc North Temple Project Area Implementation Plan 2021 -2024 Base Year: 2011 Term: 25 Years Trigger Year: 2013 Expiration Year: 2037 Base Year Value: $84,073,572 Current Value (2020): $156,240,759 Acreage: 319 Objectives: 1. Incentivize redevelopment along the North Temple Corridor that incorporates the principles of sustainable, equitable, transit-oriented development and enhances transit station areas as lively, walkable, people-oriented places. Facilitate the inclusion of ground floor commercial space in development projects that is affordable and available to small, local, community-serving businesses. 2. Provide a mix of housing typologies, with "missing middle" housing types used as a buffer between higher density in the transit corridor and single-family residential neighborhoods. Focus housing resources on developing and preserving rental and ownership products that create and support an income-diverse neighborhood. 3. Create an extension of City Creek Corridor from 800 West to the Jordan River, providing opportunities for new development around the public Folsom Trail. Create and renovate open spaces for the community that are safe, vibrant, and useful and that complement neighboring developments. 4. Facilitate strategic interventions to address properties that are characterized by high crime rates and negatively impact neighborhood livability. 5. Improve environmental conditions in the North Temple Project Area by facilitating new development and adaptive reuse on environmentally-challenged properties. Page 1 Project Area Budget Summary and Projections: Fiscal Year 2020/2021 2021/2022 2022/2023 2023/2024 Total North Temple Revenue $633,123 $791,404 $989,255 $1,236,568 (25%increase) North Temple School Safety and Infrastructure $44,319 $55,398 $69,248 $86,560 Improvements Administration, Maintenance $63,312 $79,140 $98,925 $123,657 &Operation Costs Tax Increment N/A N/A N/A N/A Reimbursements Housing $126,625 $158,281 $197,851 $247,314 Non-Obligated Fund Estimate (available for future projects and $398,867 $498,584 $623,230 $779,038 programs) RDA Assets: • SPARK! (Formerly"Overniter Motel"): 1500 W. North Temple Priority Programs: 1. RDA Property Acquisition/Disposition — RDA has the ability to acquire properties for development of projects that support the master plan and project area objectives. RDA can also leverage the value of Agency-owned properties to support project area objectives. 2. RDA Housing Development Loan Program —The Housing Development Loan Program provides resources for the development and preservation of affordable housing. The RDA will work with project developers and lenders to bridge the funding gap between a project's economics and market realities. In support of their mission, the RDA may assume a higher level of risk than traditional lenders to ensure that transformative projects get built. 3. RDA Storefront Activation Program (proposed)— RDA proposes developing a program to create opportunities for local businesses and nonprofit organizations to occupy ground-floor space in new developments that would be unaffordable without subsidy. 4. Adaptive Reuse Loan Program (proposed)— RDA proposes developing a program to facilitate improvements to existing building stock while preserving local community character, cultural diversity, and values. 5. Commercial Revitalization Loan Program (proposed)— RDA proposes developing a program focused on enhancing existing commercial buildings and stabilizing local, community-serving businesses. Page 2 Priority Projects (Current and Completed Projects Shown in Attached Map): 1. SHORT-TERM (CURRENTLY TAKING PLACE OR STARTING WITHIN A YEAR) a. Folsom Trail Landscape, Lighting, and Amenities— In cooperation with the Transportation, Engineering, and Parks & Public Lands Divisions, fund improvements to Folsom Corridor that supplement the landscape, lighting, and amenities in the Folsom Trail design. i. Development Partner: UTA and Salt Lake City ii. Project Cost: $3.8MM (total for trail plus supplemental landscape, lighting, and amenities) iii. RDA Budget Allocation: $350k b. City Creek Daylighting Design and Implementation Plan — In cooperation with Public Utilities and the Transportation, Engineering, Parks & Public Lands Divisions, and with fundraising and technical support from Seven Canyons Trust, procure design consultant to implement 2020 feasibility study recommendations. i. Development Partner: SLC and Seven Canyons Trust ii. Estimated Project Cost: $200k (for design plan; full construction cost estimated to range from $3MM to$15MM, depending on scale) iii. RDA Budget Allocation: $105k proposed (FY22 BA1) 2. MID-TERM (START AND COMPLETE WITHIN 1-3 YEARS) a. Property Acquisition for Strategic Intervention —Acquire a property to facilitate strategic redevelopment along the North Temple Corridor. i. Development Partner: TBD ii. Estimated Project Cost: TBD iii. RDA Budget Allocation: $4MM b. Folsom Corridor Interim Uses—Create and fund a small business incentives for temporary and interim uses of City property in Folsom Corridor to activate the corridor and provide amenities or points of interest to trail users. i. Development Partner: TBD ii. Estimated Project Cost: TBD iii. RDA Budget Allocation: TBD c. Folsom Corridor Public Art-Collaborate with the Arts Council and North Temple stakeholders to identify, plan, and execute a community-driven Folsom Corridor public art project that celebrates the neighborhood's character and identity. i. Development Partner: TBD ii. Estimated Project Cost: TBD iii. RDA Budget Allocation: TBD 3. LONG-TERM (TO COMPLETE IN 3+YEARS) a. Fairpark Redevelopment and Master Plan Implementation - Facilitate the redevelopment of the State Fairpark in a manner that maintains its historic integrity, Page 3 increases active uses, provides a community benefit, and creates new pedestrian connections. i. Development Partner: Utah State Fair Corporation ii. Estimated Project Cost: TBD iii. RDA Budget Allocation: TBD b. Large Property Redevelopment— Facilitate the redevelopment of large and strategic properties in the North Temple Corridor in a manner consistent with the RDA's goals. i. Development Partner: TBD ii. Estimated Project Cost: TBD iii. RDA Budget Allocation: TBD 4. COMPLETED PROJECTS a. North Temple Brownfields Assessment Grants (2011-2015)—The RDA and Salt Lake City were awarded a grant from the Environmental Protection Agency (EPA)to fund site assessments in the North Temple Project Area, and the RDA administered the grant by engaging an environmental consultant to identify and investigate environmentally- challenged properties. The RDA specifically worked with property owners along the Folsom Corridor that were interested in preparing for the redevelopment of their properties. i. Development Partner: N/A ii. Project Cost: $300k iii. RDA Budget Allocation: N/A b. North Temple Marketing and Branding (2014)—The RDA worked with NeighborWorks Salt Lake to promote and brand North Temple as Salt Lake City's gateway by funding the design, fabrication, and installation of 92 banners on poles that were installed in the corridor during the North Temple TRAX construction. i. Development Partner: NeighborWorks Salt Lake ii. Project Cost: $30k iii. RDA Budget Allocation: $30k c. Red Iguana 2 Loan (2015)— Provided a renovation loan to develop expanded dining space, an inviting street-side patio, a large kitchen, catering support space, administrative offices, an employee break room, and several other amenities. i. Red Iguana 2 ii. Project Cost: $2.7MM iii. RDA Budget Allocation: $500k d. Fairpark Public Market Study(2019)— Engaged a consultant to assess the feasibility of creating a permanent, year-round public market at the Utah State Fairpark. i. Development Partner: N/A ii. Project Cost: $175k iii. RDA Budget Allocation: $175k e. North Temple 1-15 Underpass Pedestrian Improvements and Public Art(2019)— In cooperation with the Arts Council and the Property Management and Engineering Page 4 Divisions, provided public art and a safe pedestrian connection between the west and east sides of the City at the North Temple 1-15 Underpass. i. Development Partner: N/A ii. Project Cost: $250k ($168,782: NT Bond Proceeds, $85,000: Art Council Funds iii. RDA Budget Allocation: N/A f. City Creek Daylighting Feasibility Study(2019-2020) - In cooperation with the Transportation, Engineering, and Parks & Public Lands Divisions, engaged a consultant to study the feasibility of bringing a portion of City Creek's flow to the surface in the Folsom Corridor. i. Development Partner: UTA ii. Project Cost: $100k iii. RDA Budget Allocation: $25k Page 5 \..,1 'Si,, MAYOR ERIN MENDENHALL = 9 • warg DANNY WALZ Executive Director = — - .. Director _Efl Willi; '',,, SS- ,,,,, 0%*• REDEVELOPMENT AGENCY of SALT LAKE CITY STAFF MEMO DATE: October 29, 2021 PREPARED BY: Kort Utley RE: Potential Revisions to the Agency's Guiding Framework REQUESTED ACTION: Consider making a recommendation to Agency Board of Directors regarding potential revisions to the Guiding Framework POLICY ITEM: Redevelopment Agency Guiding Framework for Strategic Operations, Resolution No. R-22-2019 BUDGET IMPACTS: Not applicable EXECUTIVE SUMMARY: Staff presented potential revisions to the Agency's Guiding Framework to the Redevelopment Advisory Committee (RAC) in August and the Board of Directors (Board) in October. The Board requested a few minor revisions, which are explained below. Staff will present those new revisions to the RAC. The RAC will consider making a recommendation to the Board regarding adopting the revisions via resolution. ANALYSIS & ISSUES: In November 2019, the Agency Board of Directors adopted the Guiding Framework("Framework"), an operational document that strategically guides and prioritizes the Redevelopment Agency's work. The Framework includes three components: • A mission statement clarifying the Agency's purpose; • Core values articulating the intended economic, social, and physical outcomes expected of Agency projects; and • A methodology for prioritizing the Agency's work based on a given project's ability to achieve certain threshold requirements, demonstrate public benefits, and comply with the criteria in the Agency's programs and policies. Staff has utilized the Framework throughout the past two years to analyze requests for Agency financial assistance. During that time, staff has noted where the Framework might be improved to better serve its purpose. Concurrently, staff has been working on a plan for the Strategic 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 Alignment of Agency Values and Resources and an Equitable & Inclusive Development Work Plan,both presented at the September 2021 Board meeting. Additionally, the Board has recently had in-depth discussions on housing priorities. As a follow up to these efforts and discussions, staff felt it was important to consider ways in which the Framework could be updated accordingly, with a focus on the principles of equity& inclusion. Staff presented potential revisions to the Framework at the October 12, 2021 Board meeting and the following additional revisions were discussed: 1. Change the words "economic growth" in the mission statement to "economic opportunity"to match the change to the value of Economic Opportunity proposed by staff. 2. Revise the Description& Intent for the Livability Benchmark for"Affordable Commercial Space"to incorporate language from the Livability Benchmark for"Local Business Opportunities,"which staff has proposed removing. 3. Consider incorporating the names of the Agency values into the mission statement. Staff has made the first two revisions requested by the Board and they're highlighted in yellow in Attachments A and B. Incorporating the third revision requested by the Board has been a challenge. The Agency mission statement is intended to be concise, clear and memorable. Attempts to incorporate the names of the Agency values into the mission statement resulted in a more cumbersome and lengthy mission statement. Consequently, revision three from the list above has not been made to the Framework at this time. Following is a summary of the proposed revisions to the Framework staff presented to the Board October 12. These revisions are also shown in Attachment "A, "Redline version of the Guiding Framework showing potential revisions. Proposed revisions to the Agency Mission: The Agency's mission currently reads as follows: The Redevelopment Agency of Salt Lake City revitalizes neighborhoods and business districts to improve livability, spark economic growth, and foster authentic communities, serving as a catalyst for strategic development projects that enhance the City's housing opportunities, commercial vitality,public spaces, and environmental sustainability. Staff proposes two minor revisions to the mission statement: • Replace the word"revitalizes"with"strengthens." The word"revitalizes"may be interpreted as a pejorative, suggesting a neighborhood has problems. The word "strengthens"more accurately reflects the Agency's mission to improve an area, without making a value judgement about its current condition. • Change the phrase "spark economic growth"with"create economic opportunity." • Incorporate equity into the mission statement to acknowledge equity as an essential part of the Agency's mission. 2 With these revisions, the Agency mission would read as follows: The Redevelopment Agency of Salt Lake City strengthens neighborhoods and business districts to improve livability, create economic opportunity, and foster authentic, equitable communities, serving as a catalyst for strategic development projects that enhance the City's housing opportunities, commercial vitality,public spaces, and environmental sustainability. Proposed revisions to the Agency Value: Economic Growth: The Agency's value of Economic Growth currently reads as follows: Economic Growth: We act as a responsible steward of public funds, taking a long-term view of investment, return, and property values. Staff proposes a complete revision of this value, including its title, to broaden the economic expectations of the Agency's work. Rather than focusing on growth, investment, return, and property values, the proposed revisions would expand this value to reflect economic opportunity and prosperity for all. The revised Economic value would reads as follows: Economic Opportunity: We invest in the long-term prosperity and growth of our local economy. Proposed revisions to the Agency Value: Community Impact: The Agency's value of Community Impact currently read as follows: Community Impact: We prioritize projects and programs that demonstrate commitment to improving equity and quality of life for residents and businesses in Salt Lake City. Staff proposes completely revising this value to focus on the principles of equity and inclusion. Consequently, the title of the value would change to "Equity& Inclusion" and the supporting language would articulate the Agency's commitment to prioritizing projects that grow out of the community's desires and interests and benefit the community as a whole. The proposed revision would read as follows: Equity &Inclusion: We prioritize people focused projects and programs that encourage everyone to participate in and benefit from development decisions that shape their communities. Proposed revisions to the Agency Value: Neighborhood Vibrancy: The Agency's value of Neighborhood Vibrancy currently read as follows: 3 Neighborhood Vibrancy: We cultivate distinct and livable built environments that are contextually sensitive, resilient, connected, and sustainable. Staff proposes revising two words in the value of Neighborhood Vibrancy to clarify the Agency's intent: • Replace the word"built environments"with"places." The purpose of this revision is make the language more accessible by removing development-industry jargon. • Replace the word"resilient"with"durable." The proposed revision to the value of Neighborhood Vibrancy would read as follows: Neighborhood Vibrancy: We cultivate distinct and livable places that are contextually sensitive, durable, connected, and sustainable. These potential revisions to the Agency's mission and values necessitate changes to the Livability Benchmarks ("Benchmarks"), as the Benchmarks further articulate the Agency's values. Staff proposes a number of revisions to the Benchmarks to incorporate the principles of equity and inclusion and to also refine and clarify language and intent. These proposed revisions are summarized in the list below and are shown in detail in Attachment "B"-Redline version of the Livability Benchmarks showing potential revisions. • Staff proposes combining Benchmarks where possible to simplify and prevent overlap: o Combine the benchmarks for Business Districts and Local Business Opportunities into a new benchmark titled Affordable Commercial Space. o Combine the benchmarks for Building Design & Architecture, Quality Materials and Site & Urban Design into a new benchmark titled Architecture & Urban Design. o Combine the benchmarks for Historic Preservation and Adaptive Reuse into a new benchmark titled Building Preservation, Rehabilitation, or Adaptive Reuse • Staff proposes adding four Benchmarks to better incorporate the principles of equity and inclusion into the Framework: o Add a Benchmark encouraging home and business Ownership o Add a Benchmark promoting Housing for Everyone o Add a Benchmark addressing Displacement Mitigation o Add a Benchmark addressing Affordable Housing Preservation 4 • Staff proposes adding a Benchmark for Missing Middle & Unique Building Types to foster creation of"missing middle"commercial and residential building forms that play an important role in diversifying the City's building stock. • Staff proposes moving the Public Space and Public Art benchmarks to the Neighborhood Vibrancy category with the other Benchmarks that relate to the Agency's preferred characteristics in the built environment. • Staff proposes removing the benchmark for Targeted Resources because project area boundaries are sufficient to geographically target Agency resources. Moving forward staff envisions utilizing the Benchmarks in a number of ways. The Agency doesn't expect every project or recipient of Agency funding to achieve every Benchmark. Rather, the Benchmarks are a comprehensive menu of public benefits the Agency will pull from to identify goals when structuring projects and programs and when evaluating developer requests for financial assistance. This helps ensure Agency projects and programs align with the Framework and Benchmarks. For example, future notices of funding availability will reference the Framework and utilize select Benchmarks to evaluate and rank applications as well as provide for interest rate reductions. It is envisioned that annual housing funding priorities, to be adopted annually by the Board, will generally align with the Framework while allowing for additional specificity and/or emphasis on specific focus areas. In addition, staff will utilize the Benchmarks when redeveloping Agency-owned property, picking specific Benchmarks from the overall menu that are most germane to the redevelopment project and utilizing them to articulate the project's objectives and to select the developer/ project that achieves them. Attachments "A" and`B"to this memo show all of the revisions to the Mission, Values and Benchmarks mentioned above. PREVIOUS BOARD ACTION: The Board adopted Resolution No. R-22-2019, Redevelopment Agency Guiding Framework for Strategic Operations,November 12, 2019. ATTACHMENTS: A. Redline version of the Guiding Framework showing potential revisions B. Redline version of the Livability Benchmarks showing potential revisions 5 • RDA Guiding Framework This Guiding Framework is a strategic operational document outlining the methodology for evaluating and prioritizing projects requesting RDA financial assistance. The RDA's Mission and Values form the foundation of the Guiding Framework, declaring the RDA's purpose and the intended economic, social, and physical outcomes expected of RDA projects and partnerships. MISSION: The Redevelopment Agency of Salt Lake City strengthens revitalizes neighborhoods and business districts to improve livability, spark create economic grewth,opportunity and foster authentic,equitable communities,serving as a catalyst for strategic development projects that enhance the City's housing opportunities, commercial vitality, public spaces, and environmental sustainability. VALUES: Economic Opportunity ♦}- Equity&Inclusion Neighborhood Vibrancy- WWe prioritize projects and programs that We cultivate distinct and livable places built taking a long term view of investment, return, demonstrate commitment to improving equity environments that are contextually sensitive, and property values. We invest in the long-term and quality of lifc for residents and businoc cs durableresilient, connected, and sustainable. prosperity and growth of our local economy. in Salt Lake City We prioritize people-focused projects and programs that encourage everyone to participate in and benefit from development decisions that shape their communities. PROJECT EVALUATION PROCESS: In the context of the Mission and Values, The RDA prioritizes projects that demonstrate a commitment to the Mission and Values,the RDA evaluatesing projects via three steps,which answer the following questions: 1.) Does the project meet the minimum THRESHOLDS required for RDA participation?2.)To what degree does the project benefit the public by achieving defined LIVABILITY BENCHMARKS, thereby warranting RDA assistance? 3.) Does the project meet the CRITERIA outlined in existing RDA programs and policies, such as the RDA Loan Program or Tax Increment Reimbursement Program? Step 1: • Alignment with adopted City policies&plans THRESHOLDS • Alignment with RDA Project Area Work Plans* • Financial viability with a demonstrated and reasonable need for public assistance Economic ♦}Opportunity Equity&Inclusion Neighborhood Vibrancy • Leveraging Public Space • Public Space • Timeliness • Transit Opportunities • Public Art • Return of Investment • Local Business Opportunities Quality Materials Step 2: • Permanent Job Creation &Retention • Mixed-Income Neighborhoods Site &Urban Design LIVABILITY • Business Districts • Neighborhood Safety • Building Design &Architecture&Urban BENCHMARKS _Targeted Resourcos Public Art Design • Affordable Commercial Spaces _Community Engagement&Support • Sustainability • Ownership • Housing for Everyone • Walkability • Displacement Mitigation Historic Preservation • Affordable Housing Preservation _Adaptive RcuccBuilding Preservation, rehabilitation, or adaptive reuse • Missing Middle&Unique Building Types Step 3: PROGRAM Evaluation of project according to respective RDA policies, programs and procedures CRITERIA *Spanning a 1-3 year time frame,Project Area Work Plans identify redevelopment objectives and strategic redevelopment projects for each project area,along with a corresponding schedule&budget for each project. The Project Area Work Plans will be based on relevant City policies and plans and the Project Area Plans that were adopted when the project area was created and will provide direction for the annual RDA budget process. DRAFT 10.28.21 LIVABILITY BENCHMARKS RDA Public Benefit Description &Intent 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 of RDA resources,thereby enabling resources to extend further in the community. Permanent To promote neighborhoods with a balanced economy that produces quality jobs. Job Creation ce To reduce the displacement risk of existing community businesses and/or reduce barriers to entry for new, Oa Affordable Commercial underrepresented business and service types, particularly locally-owned and independent businesses and d Spaces O 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. Business Districts To foster unique neighborhood business districts with distinct commercial,office,retail,transportation,and cultural aspects. To prioritize and align resources in a unified and targeted manner to maximize impacts in the community. Targeted Resources Transportation To promote a multimodal transportation network and ensure convenient and equitable access to a variety of Opportunities transportation options. Mixed-Income To promote mixed-income developments,economically integrated communities,and housing opportunities Neighborhoods 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 .To provide a Engagement&Support stronger platform for community members to inform and influence development projects during initial planning stages and to preserve cultural heritage. e. Housing for Everyone To promote housing for families and 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 To preserve existing affordable housing Preservation Local To support locally owned and independent businesses and non profits that promote neighborhood identity, Business Opportunities cconomic vitality,and local cconomic multipliers. 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 publically visible or accessible for all to experience. Quality Materials }ho noinhhnrhnnrl• ore hinh niioli}v onrl onrli irinn } To support pedestrian accessible building placement,the character of the streetscape,parking lot screening, z Site&Urban Design cfficicnt traffic circulation,and transition of scale. Building Design& To support ground level transparency,prominent entrances and signage,exclusion/treatment of blank walls, Architecture&Urban articulation,pedestrian scale lighting. Unique and timely architecture. Design To promote high quality architecture that enhances the public realm,strengthens the neighborhood's unique O character,and uses enduring materials. 0 Sustainability To promote a built environment that assists with protecting resources and promoting greater resiliency. et O Walkability To promote walkable neighborhoods and connectivity,and support a safe,engaging pedestrian experience. = To promote the historic character of the city's neighborhoods through preservation of existing and historic O Historic Preservation architecture, buildings,and landmarks. LLI Adaptive-Re- �o To promote the revitalization of underutilized buildings that preserve the character of neighborhoods while �` promoting new land uses. Building Preservation, To acknowledge a neighborhood's history and maintain its unique character through preservation, Rehabilitation,or rehabilitation,or repurposing of historic or underutilized structures. Adaptive Reuse Missing Middle& To promote an array of scale of project types to provide neighborhood-scale commercial,diversify the City's Unique Building Types housing stock/forms,and provide more affordable living options for residents. October 28, 2021 - DRAFT %%%%% ''''' MAYOR ERIN MENDENHALL 9w�rg DANNY WALZ Executive Director = - - .. Director "''rnnN`% REDEVELOPMENT AGENCY of SALT LAKE CITY STAFF MEMO DATE: October 29, 2021 TO: Redevelopment Advisory Committee(RAC) PREPARED BY: Lauren Parisi and Cara Lindsley,RDA Project Managers RE: Sustainable Development Policy REQUESTED ACTION: Provide feedback and may wish to make a recommendation regarding the proposed sustainable development policy POLICY ITEM: RDA project-area-wide sustainable development policy BUDGET IMPACTS: N/A EXECUTIVE SUMMARY: The Redevelopment Agency of Salt Lake City("RDA")recognizes the great impact development has on local air quality and is currently working on a sustainable development policy to promote smarter,more sustainable growth across the city. Since the policy was presented to the Redevelopment Advisory Committee(RAC)in early August(see Attachment C for August report), updates have been made to the policy to address comments from RAC members and the RDA Board of Directors("Board"). This memo will review the pending updates including: • Reducing the dollar amount that triggers"Threshold"sustainability requirements • Providing flexibility for loan interest rate reductions • Clarifying"on-site and off-site"net zero building standards • Establishing penalties for noncompliant projects The updated sustainable development policy is provided as Attachment A for the RAC's review. ANALYSIS: Policy Updates—A few reoccurring comments have been addressed in the updated policy document and described in greater detail below. 1. Threshold Dollar Amount.At their October meeting,the RDA Board expressed interest in reducing the dollar amount of RDA funding that would trigger compliance with the first Threshold Requirement to earn a"Designed to Earn Energy Star"score of at least 90 and participate in the City Sustainability Department's Elevate Buildings programs. Staff initially set this trigger to $400,000 to exclude smaller,potentially urgent gap financing requests for rehab projects that have an inherent level of sustainability because they preserve an existing structure. 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 To capture even more RDA projects while still allowing flexibility for smaller adaptive reuse loans,the first Threshold requirement has been updated to apply to all projects receiving over $200,000 from the RDA. It should be noted that all new construction projects must meet the Threshold Requirements,regardless of the amount of RDA funding. The updated requirement would not apply to projects participating in the Granary District's Adaptive Reuse Program that offers forgivable loans up to $200,000. Obtaining an ENERGY STAR score typically requires that an energy model be completed. This additional expense could deter an applicant from applying for a smaller amount of RDA funding and result in fewer RDA- supported adaptive reuse projects. Still,the RDA will work to encourage energy efficiency in all projects by highlighting other energy incentive programs that are available for small businesses,including: • Rocky Mountain Power: WattSmart Incentives&Programs for Businesses provides incentives for typical energy upgrades to equipment such as lighting,HVAC, compressed air and more. In addition,this program offers assistance on energy analysis,project manager co-funding,and other in-depth energy management tools. Local business Red Iguana received$3,785 from the WattSmart program to upgrade to more efficient LED lighting in their restaurants. This lowered their annual energy bill by $1,300 a year. Rocky Mountain's current LED lighting incentive will pay for 75%of a lighting upgrade project,up to $4,000 total. • Commercial Property Assessed Clean Energy(C-PACE)helps property owners access private financing to install energy efficient building improvements and increase the value of their property. Because the long-term financing can cover up to 100% of a building's modernization project cost and often requires no money down, C-PACE may enable property owners to make substantial upgrades to their buildings. The project's energy savings may outweigh the C-PACE payments, creating positive cash flow for the property owner whose upgraded building may be more valuable after a C-PACE project. Salt Lake City's convention center hotel received$54.7 million in C-PACE financing to cover improvements such as heating and cooling systems, interior lighting and equipment,fans,heat rejection,pumps, and water systems.As a result,the hotel's energy performance is projected to exceed the energy code compliance level by over 20 percent. Smaller commercial projects can apply for this funding as well. • Energy Efficient Tax Deductions of up to $1.80 per square foot are available to owners or designers of commercial buildings or systems that demonstrate a 50%reduction in energy usage accomplished solely through improvements to the heating,cooling,ventilation,hot water, and interior lighting systems. Partial deductions of up to $.60 per square foot can be taken for qualifying measures. • A list of additional energy incentive programs available in Utah can be found HERE. 2 2. Interest Rate Reductions.Both the Board and the RAC have asked staff if the proposed interest rate reductions are sufficient to incentivize net zero projects. Reviewing past RDA projects, a 1%- 2%additional interest rate reduction could provide significant cost savings as detailed in Attachment B. While there are premiums to participating in utility tariff programs to meet off-site net zero standards,these costs should be partially offset by the energy efficiency of the building. Rocky Mountain Power indicates that their Subscriber Solar program could potentially reduce electric bills for some customers during the summer when solar block rates are less expensive. There may also be a premium to installing on-site renewables such as solar. These costs vary from project to project; however,there are various incentives as discussed earlier to help with these initial costs. In addition,reduced monthly energy costs could increase a project's net operating income,resulting in a higher debt coverage ratio and more favorable terms for the project's primary loan. For the case that the policy's standard interest rate reductions do not provide enough savings for a project to be feasible, language has been added to the policy that allows the RDA to consider additional reductions down to a minimum interest rate of 1%. This language aligns with the RDA's Housing Development Loan Program,which states: Projects are eligible for one sustainability-related interest rate reduction, with the ability to reduce the interest rate to a minimum of 1%. Interest rates are subject to an adjustment, of up to a 1%deviation, based on project cash flow and debt coverage ratio calculated at time of application and underwriting. 3. Off-Site and On-Site Net Zero.These standards have been clarified as follows: Off-Site Net Zero -To be eligible for the Off-Site Net Zero incentives,projects must meet the Threshold Requirements and also supply 100%of the building's electricity needs with renewable energy.Available utility-sponsored renewable electricity programs/tariffs include the Blue Sky or Subscriber Solar programs. On-Site Net Zero -To be eligible for the On-site Net Zero incentives,projects must meet the Threshold Requirements and also supply 100%of the building's electricity needs with renewable energy. Renewable energy must include on-site renewable energy sufficient to: 1) Supply at least 50%of the project's total estimated annual electricity consumption (measured as kWh/year); or, 2) Utilize at least 50%of the project's available roof space for on-site renewable energy generation. Any remaining renewable energy generation that can't be accommodated on- site must be procured through off-site renewable energy generation,including utility- sponsored renewable electricity programs or tariffs "Available roof space"means roof spaces that are flat or face South,East, or West, are not shaded by trees or structures, or not obstructed by building architectural features. This requirement can be met through installation of an equivalently size solar array on another structure on the property (carport, ground mount, etc.). Roof space is exempt from being considered part of the"available roof space"if it is so shaded that solar panels would produce less than 70%of the energy they would generate without shading. For example, if 20%of a project's roof is so shaded that solar panels would generate less than 70%of their intended output,then a project can still meet the 3 requirement by installing solar on half of the other 80%that is suitable for solar,i.e. 40%of the roof total. 4. Noncompliant Projects.As detailed in Section 4c of the policy,projects that are not in compliance with applicable RDA Sustainability Measures within 30 months of receiving a certificate of occupancy may either default on RDA agreements and/or be required to pay back all or a portion of the RDA incentive that was granted. Terms of default shall be specified in associated contracts between the RDA and beneficiary. Additional Updates— 1. Cooperation with Rocky Mountain Power.Agency staff met with representatives from Rocky Mountain Power(RMP)to discuss the proposed Sustainable Development Policy and its potential impact on RMP's infrastructure. RAC members and industry professionals expressed concern that there may not be sufficient infrastructure in place to support all-electric buildings.RMP indicated that this policy should not overburden their infrastructure's capacity as there is not a large difference between supplying energy to traditional buildings vs. all-electric buildings. RMP did indicate that developers should connect with them early in the development process before a building permit is issued. If a project has a large cumulative electrical load,a system impact study may be required that can take 30-45 days to complete. RMP is also in the process of drafting equipment room design standards to help developers plan for infrastructure space needs on a given site. In addition to reviewing individual project needs, RMP goes through a new infrastructure planning process at least once a year. They indicated it would be helpful if the City informs them of areas in the city where dense development is planned. 2. Environmental Justice Practices.During the August RAC meeting,a RAC member noted that ensuring equal access to energy efficient buildings—no matter if the units are affordable—is an important environmental justice practice. Therefore, affordable housing developments will not be exempt from this policy. Energy efficient housing developments should see reduced energy costs as a result of more energy efficient appliances and more efficient building envelopes.A goal focused on environmental justice has also been added to the RDA's equity work plan as follows: Promote the rights of the communities we serve to enjoy the same degree of protection from environmental health hazards and ensure the equitable distribution of environmental benefits, including environmental remediation, sustainable development, and safe spaces to recreate. Next Steps—The RAC may wish to make a recommendation to the RDA Board or request the policy be brought back to the December meeting for further review. Attachments: • Attachment A: Updated Sustainable Development Policy • Attachment B: Sustainability Interest Rate Reduction Scenarios • Attachment C: August RAC Memo 4 Attachment A: Updated Sustainable Development Policy 01V SLCRDA lAK6 The Redevelopment Agency of Salt Lake City Sustainable Development Policy 1. Purpose: The purpose of the RDA sustainable development policy is to promote a built environment that incorporates sustainable building practices and technologies to reduce building- related greenhouse gas emissions, improve local air quality, preserve natural resources and enhance community resiliency. 2. Threshold Requirements:* a. Enhanced Energy Performance -All new construction building projects and building projects that receive over two hundred thousand dollars ($200,000) in RDA funding shall be designed to achieve a "Designed to Earn ENERGY STAR" score of 90 or higher or a Design Target Site Energy Use Intensity (EUI) value corresponding with such a score that is generated by the Designed to Earn ENERGY STAR tool and participate in the City Sustainability Department's Elevate Buildings Program. The EUI target shall be based on the Designed to Earn ENERGY STAR tool or comparable source.1 b. Emission-Free Building Operation - In addition to meeting the Threshold Requirement for enhanced energy performance, all new construction building projects and building projects that receive nine hundred thousand dollars ($900,000) or more in RDA funding shall also be designed to operate without on-site fossil fuel combustion (i.e., propane, natural gas).2 *Threshold requirements must be met as described above for all projects that receive a building permit on or after January 1, 2023, except for projects that receive a tax increment reimbursement agreement for which this policy becomes effective immediately. Projects receiving a loan that meet the threshold requirements before January 1, 2023,shall earn a 1%interest rate reduction. 3. RDA Program Requirements: Sustainable development requirements and/or incentives beyond the threshold requirements are determined by the applicable RDA program type as listed in Table 1 below. If an RDA program type is not listed, no further sustainability measures will be required beyond the threshold requirements. 1See`Designed to Earn ENERGY STAR' program:https://www.energystar.gov/buildings/resources topic/commercial new construction/achieve designed earn energy star 2 Projects may utilize the All-Electric provisions of the New Building Institute's Building Decarbonization Code or comparable standard.See: https://newbuildings.org/resource/building-decarbonization-code/ TABLE 1: RDA Program Sustainability Requirements RDA Program Type Sustainability Measures— Requirement or Incentive as Indicated Tax Increment Reimbursement Program (TIRA) over$500,000 • On-Site Net Zero building status is required • Off-Site Net Zero is required Land Dispositions (RFP) • On-Site Net Zero will receive higher rankings for competitively marketed projects • Off-Site Net Zero will receive interest rate RDA Loan Programs—applicable to any RDA reduction of 1% loan* • On-Site Net Zero will receive interest rate reduction of 2% * Projects are eligible for one sustainability-related interest rate reduction, with the ability to reduce the interest rate to a minimum of 1%. Interest rates are subject to an adjustment, of up to a 1% deviation, based on project cash flow and debt coverage ratio calculated at time of application and underwriting. RDA Program Sustainability Measures Projects must meet the 2021 IECC Zero Energy Appendix standards or obtain a third-party certification to achieve Off-Site or On-Site Net Zero status. Examples of code-based and third-party certifications for net zero buildings are included in Table 2. Alternative code- based or third-party certifications not listed in Table 2 will be considered on a case-by-case basis. i. Off-Site Net Zero -To be eligible for the Off-Site Net Zero incentives, projects must meet the Threshold Requirements and also supply 100% of the building's electricity needs with renewable energy. Available utility-sponsored renewable electricity programs/tariffs include the Blue Sky or Subscriber Solar programs. ii. On-Site Net Zero -To be eligible for the On-site Net Zero incentives, projects must meet the Threshold Requirements and also supply 100% of the building's electricity needs with renewable energy. Renewable energy must include on-site renewable energy sufficient to: 1) Supply at least 50% of the project's total estimated annual electricity consumption (measured as kWh/year); or, 2) Utilize at least 50% of the project's available roof space for on-site renewable energy generation.3 Any remaining renewable energy generation that can't be 3"Available roof space"means roof spaces that are flat or face South,East,or West,are not shaded by trees or structures,or not obstructed by building architectural features.This requirement can be met through installation of an equivalently size solar array on another structure on the property(carport,ground mount,etc.).Roof space is exempt from being considered part of the"available roof space"if it is so shaded that solar panels would produce less than 70%of the energy they would generate without shading.For example,if 20%of a project's roof is so shaded that solar panels would generate less than 70%of their intended output,then a project can still meet the requirement by installing solar on half of the other 80%that is suitable for solar,i.e.40%of the roof total. 2 accommodated on-site must be procured through off-site renewable energy generation, including utility-sponsored renewable electricity programs or tariffs. TABLE 2: Examples of Code-based or Third-Party Certifications for Net Zero Buildings EXAMPLE CODE OFF-SITE NET ON-SITE NET ZERO COMPLIANCE OR ZERO INCENTIVE INCENTIVE BUILDNG TYPE NTENT CERTIFICATION (1%REDUCTION) (2%REDUCTION) Code-Based Pathway for Net Zero 2021 IECC Meets required EUI Meets required EUI Any building subject to This is a code-based Appendix CC Zero targets and 100%of targets and includes the IECC Commercial performance approach to Energy renewable electricity as much onsite solar provision(generally achieving net zero energy in Commercial is supplied by as defined in Section 4+stories) a project that is determined Building offsite sources 3(c)(ii),with the through compliance with the Provisions(LINK) approved in the remaining renewable Zero Energy Commercial 2021 IECC electricity supplied by code language rather than a Appendix CC. offsite sources third-party certification. approved in the 2021 IECC Appendix CC. Third-Party Certification Pathways for Net Zero Passive House Passive House with Passive House with Any building type This approach adds a (LINK) 100%offsite as much onsite solar renewable energy renewable energy as defined in Section requirement to a project that 3(c)(ii),with the uses Passive House remaining renewable strategies for ultra-low electricity supplied by energy use. offsite sources approved in the 2021 IECC Appendix CC. Enterprise Green EGC Standards 5.4 EGC Standards 5.4 Any affordable Enterprise Green Communities (Zero Energy)with (Zero Energy)and housing project Communities is a state-and Certification Plus offsite and-5.5b 5.5b(Zero Carbon). nationally-recognized 2020(LINK) (Zero Carbon) Projects must include affordable housing as much onsite solar sustainability certification. as defined in Section The 2020 criteria awards 3(c)(ii),with the increased points for projects remaining renewable that achieve energy-related electricity supplied by innovations, including Zero offsite sources Energy status(100%on or approved in the 2021 off-site)and Zero Carbon IECC Appendix CC. status(all-electric). Enterprise Green Communities is recognized in the Utah Housing Corporation's Qualified Allocation Plan for Low Income Housing Tax Credits. 3 U.S.Green LEED Zero Energy LEED Zero Energy Any building with This approach utilizes the Building Council certification(building certification(building LEED NC or EB+O U.S.Green Building LEED Zero(LINK) with 100%of source with 100%of source certification,or Council's LEED Zero energy supplied or energy supplied or seeking these program for projects already offset with offset with renewable certifications. certified as LEED or renewable energy energy over 12- seeking LEED certification. over 12-month month period—with period at least 50%of (LEED Zero Carbon renewable energy also qualifies) being located on- site) (LEED Zero Carbon also qualifies) International N/A Zero Energy Any building type This standard requires the Living Future certification(LINK) elimination of on-site Institute combustion and 100%on- site renewable energy. Zero Carbon(LINK) Any building type This standard allows off-site renewable energy in certain situations. 4. Project Compliance:All projects must verify compliance with Threshold and/or RDA Program Sustainability Measures as follows: a. Threshold Requirements i. Enhanced Energy Performance—A Statement of Energy Design Intent(SEDI)4 verifying that the project has been designed to meet a Designed to Earn ENERGY STAR target of 90 or higher or a corresponding EUI target must be submitted to the RDA. A year after the building has received a certificate of occupancy (CofO), the project must begin to participate in the City Sustainability Department's Elevate Buildings Programs and submit building operation data on an annual basis. If the project does not meet an ENERGY STAR score within five (5) points of what was originally projected within two (2) years of receiving CofO, building updates will be required aimed at achieving the target score. ii. Emission-Free Building Operation—A letter from a licensed architect or engineer verifying that the project has been designed without on-site fossil fuel combustion and describing the energy system(s) utilized must be submitted to the RDA. 4 An ENERGY STAR Statement of Energy Design Intent(SEDI)document includes the Design Target ENERGY STAR Score and the Design Target Site EUI.Energy modeling will be necessary to estimate the annual energy consumption of a building,which is required to input into the ENERGY STAR Portfolio Manager and complete the SEDI.An example SEDI document can be accessed here:https://www.energystar.gov/sites/default/files/tools/SEDI_Sample%281%29.pdf?f4b0-a781 5 See'Elevate Buildings'Program:https://www.slc.gov/sustainability/elevate-buildings/ 4 b. RDA Program Sustainability Measures i. Projects must meet the 2021 IECC Zero Energy Appendix standards (verified in a letter by a licensed architect or engineer) or obtain a third-party certification to submit to the RDA as indicated within Table 2. Where certifications are not issued until after the building has been put into service, a letter from a licensed architect or engineer verifying that the building has been designed to meet certification standards and noting the anticipated certification date must be submitted to the RDA. The completed certification checklist must also be attached to the letter. H. Off-Site Net Zero Building Incentives -An energy bill verifying participation in an available renewable energy utility tariff program must be submitted to the RDA within three (3) months of receiving a CofO. iii. On-Site Net Zero Building Incentives -A letter from a certified renewable energy system designer illustrating that the project meets at least one of the On-Site Net Zero renewable energy generation requirements (from 3(c)(ii)) must be submitted for RDA approval. c. Noncompliant Projects — Projects that are not in compliance with applicable RDA Sustainability Measures within 30 months of receiving a certificate of occupancy may either default on RDA agreements and/or be required to pay back all or a portion of the RDA incentive that was granted. Terms of default shall be specified in associated contracts between the RDA and beneficiary. 5. Exceptions: The RDA Board of Directors, by a majority vote of those present, may waive requirements or make exceptions to the foregoing criteria and procedures with a finding that the RDA's mission and values will be furthered by such waiver or exception. RDA staff will prepare a written recommendation and statement regarding the waiver or exception. The statement will be placed in the project file. 5 Attachment B: Sustainability Interest Rate Reduction Scenarios The following scenarios illustrate the amount of interest a project could save over the life of an RDA loan by implementing off-site and on-site net zero sustainability measures. These projections are approximate. 1. Union Pacific Hotel: a. Total loan amount— $7,000,000 b. Loan terms— 12-year term; 20-year amortization; 2.39%interest Original Loan(2.39%) Off-Site Net Zero On-Site Net Zero (-1%=1.39%) (-2%=lowest 1%) Total Interest Paid($) $1,476,236 $842,878 $601,828 Savings($) n/a $633,358 $874,408 2. Congregation Spirits: a. Total loan amount— $850,000 b. Loan terms— 10-year term; 20-year amortization;2.87%interest Original Loan(2.87%) Off-Site Net Zero On-Site Net Zero (-1%=1.87%) (-2%=lowest 1%) Total Interest Paid($) $191,927 $123,244 $65,012 Savings($) n/a $68,683 $125,915 3. Wasatch Community Gardens: a. Total loan amount— $250,000 b. Loan terms—30-year term; cash flow loan; 2.5%interest Original Loan(2.5%) Off-Site Net Zero On-Site Net Zero (-1%=1.5%) (-2%=lowest 1%) Total Interest Paid($) $100,233 $49,885 $30,642 Savings($) n/a $50,348 $69,591 Loan Paid Off* 26 years 23 years 22 years *Assumes savings are applied as cash flow payments to the RDA. 4. Diamond Rail Apartments: a. Total loan amount— $1,000,000 b. Loan terms—30-year term; 30-year amortization;2.25%interest Original Loan(2.25%) Off-Site Net Zero On-Site Net Zero (-1%=1.25%) (-2%=lowest 1%) Total Interest Paid($) $371,890 $198,505 $157,149 Savings($) n/a $173,385 $214,741 5 Attachment C: August RAC Memo ,•%" 'Si,,, s.s MAYOR ERIN MENDENHALL 9w�rg DANNY WALZ Executive Director = — Director .n�>••••C 4 . I-T-- ,, n ,,,rn REDEVELOPMENT AGENCY of SALT LAKE CITY STAFF MEMO DATE: July 30,2021 TO: Redevelopment Advisory Committee(RAC) PREPARED BY: Lauren Parisi and Cara Lindsley,RDA Project Managers RE: Sustainable Development Policy REQUESTED ACTION: Provide feedback and make a recommendation regarding the proposed sustainable development policy POLICY ITEM: RDA project-area-wide sustainable development policy BUDGET IMPACTS: N/A EXECUTIVE SUMMARY: The Redevelopment Agency of Salt Lake City("RDA")recognizes the great impact development has on local air quality and is working to promote smarter,more sustainable growth across the city and to become a model for the state.Under the current RDA loan program,projects that meet certain sustainable building certification standards receive a .5%interest rate reduction. However, achieving City and the RDA climate goals will require a sustainable development policy that applies to most all RDA-funded projects. The RDA's proposed sustainable development policy can be broken down into two categories: 1)Threshold Sustainability Measures that are required of all new-construction projects and other building projects that receive a certain level of RDA funding; and, 2)RDA Program-Specific Sustainability Measures that are either required or are used to further incentivize sustainability in projects participating in RDA loan programs,the tax increment reimbursement program and RDA land dispositions. Threshold Sustainability Measures require sustainable building design and efficient energy systems for projects receiving over$400,000 in RDA funding, and emission-free operation for projects receiving over $900,000 in RDA funding. Program-Specific Sustainability Measures require 100% of a building's electricity to be supplied with off-site or on-site renewable energy, depending on the RDA program, and net-zero certification. The attached draft sustainable development policy is proposed for the Redevelopment Advisory Committee's review. 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 ANALYSIS: According to 2020 U.S. Census data,Utah was the fastest-growing state in the nation from 2010 to 2020, at 18.4%. Much like the State, Salt Lake City is also experiencing record growth. This growth comes at a time when our community continues to face air quality challenges and the detrimental impacts of climate change including increased temperatures, changes in water systems and extreme weather events. In Salt Lake City, electricity consumption accounts for 50.4%of greenhouse gas emissions and natural gas combustion accounts for 26.3%. (Climate Positive 2040,2016). Both sources are primarily consumed in buildings and together account for three quarters of all greenhouse emissions within the city—much more than what is produced by the transportation sector. Electricity, and building energy in general, offer the greatest opportunity for emissions reductions (SLC Community Carbon Footprint,2010). The RDA recognizes the great impact development has on local air 2O15 Carbon Footprint m7 COIe 4,769,171 quality and is working to promote smarter,more sustainable growth 1% Emissions Sources,Son Lake Lity across the city and become a model for the state.Under the current ` t � ®Manon fuels RDA loan program,projects that meet certain sustainable �`;: -, i + D�e1 development certification standards receive a.5% interest rate tii •E'"'"`"' •Ga,.,,me reduction;however, in order to meet both the City's and the RDA's �--=— •N,,,,a,gas climate goals, sustainable development strategies must be considered •Other(annpnsud natural gas. propane) for all RDA-funded projects. Similar organizations to the RDA across the U.S.require sustainable technology to be incorporated in all government-funded projects. Thus,the attached draft sustainable development policy has been proposed for the Redevelopment Advisory Committee's review. City Goals—In 2016,the City passed a Mayor-Council joint resolution(updated in 2019)to achieve the following sustainability goals derived from the Climate Positive 2040 plan: 1. 100 X 2030: 100%Renewable Energy for Community Electricity Supply by 2030 2. 80 X 2040: 80%Reduction in Community Greenhouse Gas Emissions by 2040, Compared to 2009 Baseline (Goal includes at least 50%reduction in community footprint by 2030) RDA Target—Additionally, as directed by Mayor Mendenhall,the RDA will target: • Emission-Free Buildings by 2023 This means that the RDA will support the development and rehabilitation of buildings without on-site fossil fuel combustion(i.e.propane,natural gas)that receive a building permit from 2023 onwards. With these goals in mind,the overarching purpose of the RDA's sustainable development policy,once adopted, is to promote a built environment that incorporates sustainable building practices and technologies to reduce building-related greenhouse gas emissions, improve local air quality,preserve natural resources and enhance community resiliency. DRAFT Sustainable Development Policy—The RDA's sustainable development policy can be broken down into two categories, including 1)Threshold Sustainability Measures that are required of all new construction projects and other building projects that receive a certain level of RDA funding, and 2)RDA Program-Specific Sustainability Measures that are either required or are used to further incentivize sustainability in projects participating in RDA loan programs,the tax increment reimbursement program, and RDA-owned land dispositions. 2 To allow time for developers to meet all threshold requirements,this policy will apply to all projects receiving a building permit on or after January 1,2023,except for projects that receive a tax increment reimbursement agreement for which this policy becomes effective immediately. Projects seeking an RDA loan that meet the Threshold Sustainability Measures before January 1,2023, shall earn a 1%interest rate reduction. 1. Threshold Sustainability Measures: Enhanced Energy Performance— • Applicable Projects—All new construction projects and building projects that receive over$400,000 in RDA funds,no matter the RDA program. • Requirement—Projects shall be designed to achieve a"Designed to Earn ENERGY STAR" score of 90 and above or a Design Target Site EUI value corresponding with such a score that is generated by the Designed to Earn ENERGY STAR tool. Once the building is operating,projects shall also participate in Salt Lake City Sustainability's Elevate Buildings program and submit building operation data to the city on an annual basis. • Goal of Standard—This first"level"of the threshold sustainability measures has been proposed to encourage RDA-funded projects to take a step towards more sustainable building design through the incorporation of efficient energy systems(i.e. heating, cooling,lighting, appliances, insulation, etc.). An ENERGY STAR score and energy use intensity(EUI) are well-known industry metrics that applicants can calculate for free with the Portfolio Manager tool from ENERGY STAR;however, some energy modeling will be required to input into the Portfolio Manager tool. A building with an ENERGY STAR score of 75 and above indicates that it performs in the top 25%of similar building types nationwide,which some building codes require. Certain building types may not qualify for the"Designed to Earn ENERGY STAR,"which is why achieving a similar EUI target is an alternative option. The City Sustainability Department's Elevate Buildings program will be utilized to ensure RDA projects maintain projected ENERGY STAR scores. This program is currently in place and requires all qualifying commercial buildings 25,000 square feet and larger to submit ENERGY STAR data to the city on an annual basis. Per the RDA's proposed sustainable development policy,if the project does not meet an ENERGY STAR score within five(5)points of what was originally projected within two years of receiving a certificate of occupancy,building updates will be required aimed at achieving the target score. Emission-Free Building Operation— • Applicable Projects—All new construction projects and building projects that receive over$900,000 in RDA funds,no matter the RDA program. • Requirement—Projects shall be designed to operate without on-site fossil fuel combustion(i.e.,propane,natural gas). • Goal of Standard—This second"level"of the threshold sustainability measures aims to hit the RDA's target of supporting emission-free buildings by 2023 and achieve the City's overarching climate goals of increasing the renewable energy supply and reducing greenhouse gas emissions. This measure would eliminate the use of natural gas in 3 buildings for heating and cooking.Natural gas contributes to 26.3%of Salt Lake City's greenhouse gas emissions (Climate Positive 2040,2016). While the majority of today's electricity supply is generated from fossil fuels,the intent of building electrification is to prepare buildings for carbon-free operation when the electricity supply is entirely powered by renewable sources such as solar,wind and geothermal energy. 2. RDA Program Specific Sustainability Measures: To be eligible for certain RDA incentive programs or to receive larger incentives, "Off-Site Renewables"or"On-Site Renewables"will be required in addition to the Threshold Sustainability Measures as follows: RDA Program Sustainability Measures— Requirement or Incentive as Indicated Tax Increment Reimbursement Program —applicable to tax increment • On-Site Net Zero building status is required reimbursements over$500,000 • Off-Site Net Zero is required • On-Site Net Zero will receive higher rankings Land Dispositions for competitively marketed land dispositions • Off-Site Net Zero will receive interest rate RDA Loan Programs—applicable to any reduction of 1% RDA loan • On-Site Net Zero will receive interest rate reduction of 2% Off-Site Net Zero—Because the electrical grid is not sourced by 100%renewable energy, projects can meet this measure by participating in available renewable energy utility programs/tariffs. These programs are sometimes referred to as"green tariffs."A green tariff is a price structure, or an electricity rate,offered by a local utility that allows eligible customers to source up to 100%of their electricity from renewable resources. Here in Utah,the Blue Sky and Subscriber Solar green tariffs are in place,but more programs are on the horizon,including Utah 100 Communities. On-Site Net Zero—For projects that receive larger incentives,higher sustainability measures above and beyond the Threshold Measures will be required. This requirement promotes the incorporation of on-site renewable energy such as on-site solar. RDA staff acknowledges that some properties may not have the capacity to supply 100%on-site renewable energy for various reasons and administrative modifications to this requirement can be approved by staff, subject to verification. Certifications will be required to achieve"Off-Site Net Zero" status as the RDA finds value in the technical expertise and levels of monitoring that these certifications include.A limited amount of funding will be made available for certification fees during the first year that this policy is in place. Compliance—To meet the Threshold Enhanced Energy Performance requirement, a Statement of Energy Design Intent shall be submitted verifying an ENERGY STAR score of 90 and above. To meet the Threshold Emission-Free Building Operation standard,a letter shall be submitted from a licensed architect or engineer verifying the absence of on-site fossil fuel combustion and description the proposed energy system. 4 To meet the Off-Site Net Zero requirement, a utility bill verifying participation in a legitimate renewable energy utility tariff program shall be submitted within three months of the building having received its certificate of occupancy. To meet the On-Site Net Zero requirement,third-party certification is required as indicated within Table 2 of the sustainable development policy. Certification/building code options include: 2021 IECC Appendix CC Zero Energy Commercial Building Provisions;Passive House;U.S. Green Building Council LEED Zero; and International Living Future Institute. Exceptions—The RDA Board of Directors,by a majority vote of those present,may waive requirements or make exceptions to the foregoing criteria and procedures with a finding that the RDA's mission and values will be furthered by such waiver or exception. Community Engagement—Three roundtable discussions were held with local stakeholders on May 25th and 26t. Participating stakeholders had backgrounds that included engineering, architecture, development, finance,construction management, and affordable housing.Notes and key takeaways from these meetings are provided in Attachment B. The most substantive change to the draft policy resulting from stakeholder engagement was to eliminate the"On-Site Net Zero"requirement or participation in utility tariffs as a threshold,and instead,make it an optional RDA program requirement. Policy Questions— 1. The Threshold Sustainability Measures(`a' & `b')will apply to both new construction and rehabilitation projects. Because there is some inherent sustainability associated with rehabilitation projects, should these requirements only apply to new construction? 2. This policy will also apply to all new-construction affordable housing projects. The majority of housing projects that the RDA supports include some affordable housing. However, as the development of more affordable housing is a high priority for the City and the RDA, should certain administrative exceptions to this policy be made for affordable housing projects? 3. Should funding be made available to supplement the cost of sustainable certification fees to remove a barrier to be able to comply with this policy? Attachments: • Attachment A: RDA Sustainable Development Policy Draft • Attachment B: Notes from Professional Roundtable Discussions 5