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8/2/2023 - Meeting Materials REGULAR MEETING OF THE REDEVELOPMENT ADVISORY COMMITTEE Wednesday, August 2, 2023 4:00 p.m. 451 S State Street Room 126 Salt Lake City, Utah 84111 AGENDA 1. Roll Call 2. Announcements by the Staff A. Staff Updates 3. Approval of the minutes A. Review and Approval of the May 3, 2023 Minutes Members will review the May 3, 2023 meeting minutes and consider for approval. 4. Business A. Open and Public Meetings Act Training—Allison Parks, Senior City Attorney Members will receive training on the Open and Public Meetings Act. B. Tax Increment Reimbursement Policy Updates— Danny Walz, Director RAC will receive a briefing on proposed HTRZ Tax Increment Reimbursement Policy and Amendments to the Current Tax Increment Reimbursement Policy. Members may provide comments and feedback to RDA staff. C. RDA Budget Overview for FY24— Erin Cunningham, RDA Financial Analyst IV and Danny Walz, Director RDA Staff will provide an overview of the Budget for FY24. Members may provide feedback to staff. 5. Adjournment People with disabilities may make requests for reasonable accommodation no later than 48 hours in advance to attend this Redevelopment Advisory Committee. Accommodation 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 OF THE REDEVELOPMENT ADVISORY COMMITTEE May 3, 2023 The following Members were present: Brian Doughty, Mojdeh Sakaki, Amy Rowland, Baxter Reecer, Rosa Bandeirinha, Nic Peterson, Mark Isaac Present Agency Staff: Tracy Tran - Senior Project Manager, Lauren Parisi —Senior Project Manager, Kate Werrett - Project Manager, Lucas Goodrich - Project Coordinator, Kathryn Hackman - Communications Coordinator, Robyn Stine - Office Manager 1. Announcements by the Staff Tracy Tran provided the following updates: • The Aster at 255 South State Street ribbon cutting ceremony was held on May 2, 2023. The Cramer House construction is underway with a projected late-winter completion date. • A groundbreaking ceremony was held for the 144 South Project on April 28, 2023. • The RDA closed on several loans in April, $1 million emergency gap loan to the 1700 South affordable housing project; a $2 million loan to The Nest located at 382 South Rio Grande; and a $1.4 million loan to the Bicycle Collection for construction of the 15,000 square foot headquarters for the nonprofit organization. • RDA staff submitted the first Housing and Transit Redevelopment Zone (HTRZ) to the Governor's Office of Economic Development. 2. Approval of the Minutes Brian Doughty made a motion to approve the minutes from the May 3, 2023 meeting. Nic Peterson seconded the motion. Upon roll call, the motion passed unanimously. 3. FY 2023-24 Housing Development Funding Strategy Tracy Tran and Lauren Parisi, Senior Project Managers provided a briefing on the Housing Development Funding Strategy for FY23-24: Ms. Parisi described the Housing Development Funding Strategy, which allocates funds to various housing projects and programs. The strategy involves four main housing funds: the Primary Housing Fund for citywide affordable housing, the Secondary Housing Fund for additional housing, the Housing Development Fund primarily used for the Housing Development Loan Program (HDLP), and the West Side Community Initiative fund for specific objectives on the city's West side. Ms. Parisi said to guide the funding strategy, staff reviewed current housing data and the city's overall housing goals. The data showed a higher median home value in Salt Lake City compared to the national average, indicating a need for increased ownership projects. A significant percentage of residents are renters, emphasizing the need for ownership options and affordable housing solutions for low-income households. She added that the city has adopted plans such as Housing SLC and Thriving In Place, which highlight the need for more housing, specifically deeply affordable options, and encourage investments in community ownership and acquisition of land for affordable housing. The West Side Master Plan also promotes the construction of accessory dwelling units (ADUs) to protect and invest in single-family neighborhoods on the West side. Ms. Tran explained in FY23 the RDA Board approved the following four housing priorities and activities: Priorities Activities o Affordable Home Ownership o Shared Equity Model o Family Housing o Housing Development Loan Program (HDLP) o Deeply Affordable Housing o ADU Assistance o Missing Middle Housing o Land Acquisition Ms. Tran said during FY23, staff collected information on shared equity programs to understand how they could be implemented through the Housing Development Loan Program (HDLP). The RDA Board (Board) instructed that family-sized housing or deeply affordable housing should be a requirement for projects applying for HDLP funds. Last year, approximately$10.8 million was allocated to 7 projects through the HDLP, supporting a total of 934 units. Among these, 189 units were affordable family-sized units, and 516 units were deeply affordable units. In October, the Board received a briefing on Accessory Dwelling Units (ADU), and currently, staff is in the process of developing a Request for Qualifications (RFQ) to identify partners and program ideas for a financing initiative in the 9-Line project area. Additionally, RDA staff are actively looking for opportunities to acquire land to advance their housing goals. Ms. Tran said in the upcoming FY24, the Agency's housing priorities will remain largely unchanged from the previous year. The four main priorities include Wealth Building Opportunities (formerly known as Home Ownership Priority), Affordable Family Housing, Deeply Affordable Housing, and Missing Middle Housing. The focus on Wealth Building Opportunities is to promote various pathways for wealth building through homeownership, including supplemental income opportunities, stipends for rent, community land trust, and co-ops. These housing priorities will guide the programs that the Board will fund. To support these priorities, staff has proposed four housing activities for potential funding in the coming year. These activities include an Equity Building Model (previously Shared Equity Model) that aims to achieve equity building through homeownership and other shared equity models, a Housing Development Loan Program, an ADU Partnership initiative, and standard Land Acquisition and Disposition efforts. To facilitate equity building, the RDA plans to release a notice of funding availability (NOFA) to support external programs and developments that help low to moderate-income individuals and families build wealth and create generational assets. These priorities and activities form the basis of the housing funding strategy for the upcoming fiscal year. The RDA Board approved the FY24 housing priorities during the April meeting. The proposed funding allocations to housing activities will be presented to the Board along with the budget for FY24 in May, and upon approval, they will become part of the official budget and strategy for the upcoming year. Discussion • The definition of family housing and how it relates to tax credits was mentioned and how in the past, family housing was defined based on a certain percentage of units with a specific number of bedrooms (e.g., 10% with 4 bedrooms and 20% with 3 bedrooms). It was suggested that a different approach might be to consider a project as family housing if it has a majority of units suitable for smaller families, such as 2-bedroom units with better amenities for families and a focus on providing spaces suitable for children. • It was suggested that staff could further assess the specific types of housing demand in Salt Lake City. For example, consider the needs of seniors who may prefer studio units, as well as individuals with disabilities or those who live alone and may require specific accommodations. Conducting a deeper analysis of these specific demands would be beneficial. • It was recommended for RDA staff to include family-friendly amenities in the family housing component, and though it may not be mandatory, it could suggest that applicants consider such amenities and cater to the needs of families beyond just the number of bedrooms in the units. • It was recommended for staff to consider various forms of transportation for children and how kids will safely commute to schools near potential housing developments. This includes assessing options such as biking, walking, taking the bus, and identifying safe intersections for their travel routes. • RDA staff could consider including sustainable energy requirements in the equity building model NOFA for Affordable Family Housing and Wealth Building Opportunities. • It was requested that the ADU data be sent to RAC members. 4. Adjournment There being no further business the meeting was adjourned. Mojdeh Sakaki, Chairperson This document along with the digital recording constitute the official minutes of the Redevelopment Advisory Committee held May 3, 2023. MAYOR ERIN MENDENHALL DANNY WALZ Executive Director Director REDEVELOPMENT AGENCY of SALT LAKE CITY DATE: July 25, 2023 PREPARED BY: Danny Walz, RDA Director RE: Tax Increment Reimbursement Policy Updates REQUESTED ACTION: Briefing on the Proposed HTRZ Tax Increment Reimbursement Policy and Amendments to the Current Tax Increment Reimbursement Policy POLICY ITEM: Tax Increment BUDGET IMPACTS: N/A EXECUTIVE SUMMARY: In 2021,the State of Utah passed the Housing and Transit Reinvestment Zone ("HTRZ") Act("Act") and subsequent amendments in 2022 and 2023. The Act allows for municipalities to establish project areas known as HTRZs around public transit facilities to facilitate mixed-use, affordable housing development and an increased utilization of public transit. Because HTRZs are subject to different requirements and regulated by a separate section of State Code than traditional project areas, the Redevelopment Agency of Salt Lake City("RDA") should consider adopting a separate policy to guide the disbursement of tax increment("TI") in these areas. In addition to establishing an HTRZ Tax Increment Reimbursement Program Policy ("HTRZ TI Policy"), there are amendments that may be made to the RDA's existing Tax Increment Reimbursement Program Policy ("TI Policy") to support the most transformative development projects with wide-reaching, regional impact. Agency staff requests the Redevelopment Advisory Committee's ("RAC") recommendations for the policy proposals and will bring RAC's recommendations to the Board for upcoming discussion and potential adoption of the policy proposals. BACKGROUND: Tax increment reimbursement ("TIR") allows for a portion of the property tax generated by a development to be reimbursed back to the developer over a given period of time. TIRs are a powerful tool to incentivize high-quality development because unlike a loan,the funding is a direct payment that does not need to be paid back. TIRs are post-performance based in that the amount of the reimbursement is calculated as a percentage of the property tax revenue generated by the development. Projects often use TIRs to fund significant development costs and it often allows developers to attract additional funding sources. 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: HTRZ TI Policy Components—HTRZs differ from the more traditional RDA project areas like Community Reinvestment Areas ("CRA") in that they are intended to facilitate transit-oriented development around public transit stops and, importantly, are regulated by a separate section of State Code than CRAB. The RDA submitted its first HTRZ application to the State in April 2023 (currently under review)and intends to submit additional requests in the future. A Board-approved HTRZ TI Policy will help guide RDA staff in the negotiation and distribution of TIR to specific projects if/when an HTRZ is approved by the State. In the April 2023 HTRZ application,the RDA proposed using 10%to 40%of the tax increment collected by the RDA from the HTRZ for large public infrastructure projects in the area. The Agency is authorized to capture 1% for administration costs related to the HTRZ. The remainder of the increment (60% to 90% of the tax increment collected by the RDA)would be available for TIR to specific developments. Components of the draft HTRZ TI Policy have been outlined for RAC's review below. I. HTRZ TI Policy_ Thresholds— Projects must • Meet the standards and objectives of the HTRZ Act(Utah State Code 63N-3) • Include activated, ground-floor space • Comply with the RDA's Sustainable Development Policy • Provide sufficient evidence that tax increment funding is necessary for the project to succeed • (Housing Projects) Include a minimum level of affordable housing—The HTRZ Act requires a minimum of 10% of units be affordable to those at 80% of the Area Median Income (AMI) or less. The HTRZ TI Policy could require an increased threshold of 20% of units at 80% AMI or 10%of units at 60%AMI to generate more affordable housing. This threshold may also consider the RDA's annual housing priorities. • (Non-Housing Projects) Meet at least two (2) of the RDA's qualifying livability benchmarks (Attachment A). 2. Tax Increment Participation Rate— Meeting the threshold criteria would allow for a developer to capture up to 60% of the tax increment collected by the RDA from the subject property.The draft policy allows for an increased participation rate of 10% for each additional public benefit (including an increased level/amount of affordable housing)that is incorporated into the project,up to a total potential participation rate of 90%. 3. Tax Increment Reimbursement Term— The maximum reimbursement term will be fifteen (15) years for an HTRZ centered around a light rail or bus rapid transit station and twenty-five (25)years for an HTRZ centered around a commuter rail station, or the total remaining collection years on the project parcels, whichever is less. These terms are established by the State in the HTRZ Act. Amended TI Policy Components — In addition to the RDA's recommendations for creating a new HTRZ TI Policy(as described above),multiple amendments are proposed for the current TI Policy. As the policy is 2 currently written, developments must generally align with the relevant RDA project area plan and meet one public benefit. The intent of the proposed amendments is to simplify the policy and, most importantly, strengthen the criteria by which projects are eligible for a TIR reserving this tool for only the most transformative projects with wide-reaching public impact. Components of the amended TI Policy have been outlined for RAC's review below. 1. TI Policy Thresholds— Projects must • Result in a significant economic impact by creating a regional amenity or use that incorporates a significant amount of land area or is supported by a high level of private investment (criteria for significant land area and high level of private investment to be defined in policy). OR: • Preserve a historic structure and be supported by a high level of private investment (criteria for high level of private investment to be defined in policy). AND: • Include activated, ground-floor space • Comply with the RDA's Sustainable Development Policy • Provide sufficient evidence that tax increment funding is necessary for the project to succeed • (Housing Projects) Include a minimum level of affordable housing—20%of units at 80%of the Area Median Income (AMI) or 10%of units at 60%AMI to generate more affordable housing. • (Non-Housing Projects) Meet at least two (2) of the RDA's qualifying livability benchmarks (Attachment A). 2. Tax Increment Participation Rate and Term— The reimbursement participation rate and term will be negotiated based upon a project's level of public benefit as well as demonstrated financial need. This allows for the RDA to consider increased participation for the most exceptional projects. The term would never exceed the remaining years of project area's tax increment collection period. ATTACHMENT: • Attachment A—RDA Livability Benchmarks 3 ATTACHMENT A — RDA Livability Benchmarks 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 on 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 To reduce the displacement risk of existing community businesses and/or reduce barriers Affordable Commercial Spaces to entry for new,underrepresented business and service types,particularly locally-owned and independent businesses and 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. Transportation Opportunities To promote a multimodal transportation network and ensure convenient and equitable access to a variety of transportation options. Mixed-Income Neighborhoods To promote mixed-income developments,economically integrated communities,and housing opportunities 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 Engagement& To provide a stronger platform for community members to inform and influence Support development project during initial planning stages and to preserve cultural heritage. Housing for Everyone To promote housing for families,underserved populations To mitigate the displacement of current residents and residents with generational ties to the Displacement Mitigation neighborhood or provide opportunities for those who have already been displaced to return. Affordable Housing Preservation To preserve existing affordable housing Public To promote community amenities that provide opportunity for social interaction;support Space 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 publicly visible or accessible for all to experience. Architecture&Urban Design To promote high quality architecture that enhances the public realm,strengthens the neighborhood's unique character,and uses enduring materials. • Sustainability To promote a built environment that assists with protecting resources and promoting • greater resiliency. • Walkability To promote walkable neighborhoods and connectivity,and support a safe,engaging pedestrian experience. Building Preservation, To acknowledge a neighborhood's history and maintain its unique character through Rehabilitation,or Adaptive Reuse preservation,rehabilitation,or repurposing of historic or underutilized structures. Missing Middle&Unique Housing Promote an array of scale of project types to diversify the City's housing stock/forms and Types provide more affordable living options for residents. 4