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11/15/2023 - Meeting Materials MEETING OF THE REDEVELOPMENT AGENCY FINANCE COMMITTEE Wednesday, November 15, 2023 2:00 p.m. 451 S State Street Room 118 Salt Lake City, UT 84111 The Redevelopment Agency (RDA) Finance Committee meeting will be a hybrid meeting which enables people to join remotely or in-person to listen to the meeting. To access the electronic meeting please visit: https://us02web.zoom.us/j/87093887988?pwd=Wmovd 1 VNbUhEQUVESVZGWEZpVmN4dz09 Agenda 1. Roll Call 2. Approval of the minutes A. Review and Approval of the September 21, 2022 and December 21, 2022, Committee Minutes Members will review the September 21, 2022 and December 21,2022 meeting minutes and consider for approval. 3. Business A. The Front Loan—Austin Taylor, RDA Project Manager Members will receive a funding recommendation for a $2,000,000 loan to Rocky Ventures for expansion of The Front climbing gym located at 1470 South 400 West in the Redevelopment Agency's State Street Project Area. 4. Adjournment People with disabilities may make requests for reasonable accommodation no later than 48 hours in advance in order to attend this Redevelopment Agency Finance 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 of the REDEVELOPMENT AGENCY FINANCE COMMITTEE Monday, September 21, 2022 11:00am 1. Roll Call The following members were present: Erin Cunningham for Danny Walz, RDA Peter Makowski, Economic Development Blake Thomas, Community and Neighborhoods Tony Milner, Housing Stability Marina Scott for Mary Beth Thompson, Finance Claudia O'Grady was absent. Also Present: Tracy Tran, Project Manager; Sara Montoya, Senior City Attorney;Allison Parks, Senior City Attorney; Robyn Stine, RDA Office Manager; Donna McAleer, Bicycle Collective; Todd Reeder, Bicycle Collective; Felina Lazalde, RDA Office Facilitator. 2. Business A. Loan Request for the Bicycle Collective—Tracy Tran, RDA Project Manager Tracy Tran provided an overview of the Bicycle Collective's request for an additional$500,000 due to increased construction costs and supply chain issues, increasing their loan request to$2,250,000. She added that the Applicant is also requesting to maintain their current base interest rate through the Redevelopment Agency of Salt Lake City's (RDA) Loan Program. Ms. Tran explained that in May 2022,the RDA Board of Directors(Board)approved the original loan request of$1,750,000 for the development of 901 South Gale Street, adding that the additional funds would ensure the project would be all electric. Ms. Tran said the project meets four public benefit criteria, qualifying for interest rate reductions and primary financing through the RDA Loan Program: • Public Amenities:The project will include a public art amenity and it located along the 9 Line Corridor which connects the east with the westside neighborhoods. • Transit Alternatives: The objective of the Bicycle Collective is to encourage cycling as an effective and sustainable form of transportation.The project will also include employee showers and lockers. • Architecture& Urban Design:The project was included in an RDA design review process that reviewed how the project fits in with surrounding neighborhoods, how the project will enhance the public realm, and the buildings materials. • Sustainability: The project has been designed to a LEED-Silver equivalent standard and will include an all-electric building that will incorporate rooftop solar. The Bicycle Collective was recently awarded a Blue Sky Grant from Rocky Mountain Power. Discussion: Tony Milner asked if the increase was based on secure bids in hand, or if it was a certain percentage for contingency construction costs? He also asked regarding the sources and uses if they have$1.9MM in the capital campaign in terms of what has been raised? Ms. McAleer clarified the increase is based on bids in hand.A significant driver was the electrical system required for this project.When they received bids in April, the electrical portion was significant.They attempted to make changes to the electrical system to bring the cost down, but ran into a challenge, because the RDA Loan documents state that the building must be all-electric. Ms. McAleer also clarified that The Bicycle Collective has raised$2.6M and has a matching grant provided by the Ray&Tye Noorda Foundation of$500K. They will also match anything raised between 07/01/2020—03/2023,contingent on this contract being signed. Marina Scott noted the debt service on their loan would be$127,000, and asked if The Bicycle Collective has any other debt with any other financial institution? Ms. Scott also asked if there are any agreements for dollars currently?And if retail operations are expected to cover whatever the fundraising does not cover? Donna confirmed that they do not have any other debt and explained The Bicycle Collective has$1 MM from the Noorda Foundation, 100K from the George S. &Delores Eccles Foundation, $140K from Sorenson, and $250K from the Miller Family Foundation.All initial commitments have been turned into actual dollars in the bank, and 2nd requests are currently in process. Ms. McAleer also confirmed that they do think retail operations would cover anything that the fundraising does not cover, however a combination of both is expected. Tony Milner made a motion to recommend the RDA Board to approve the loan increase and lock in the rate as presented without condition. Marina Scott seconded the motion. Upon roll call,this motion passed unanimously. 3. Adjournment There being no further business the meeting was adjourned. Blake Thomas,Vice Chairperson This document along with the digital recording constitute the official minutes of the Redevelopment Agency Finance Committee held September 21,2022. MINUTES of the REDEVELOPMENT AGENCY FINANCE COMMITTEE Wednesday, December 21, 2022 2:00pm 1. Roll Call The following members were present: Danny Walz, RDA Peter Makowski, Economic Development Blake Thomas, Community and Neighborhoods Tony Milner, Housing Stability Marina Scott for Mary Beth Thompson, Finance Claudia O'Grady, Redevelopment Advisory Committee Also Present: Tracy Tran, Senior Project Manager; Kate Werrett, Project Manager;Austin Taylor, Project Manager;Allison Parks, Senior City Attorney; Lucas Goodrich, Project Coordinator; Cara Lindsley, Deputy Director; Marcus Lee Project Coordinator; Eric Holmes, Data Manager;Jonathan Hardy;Jon Olson; Tim Cohn; Ivan Carroll; Lee Dial; Christian Graf; Karl Niederer, GLC;Amanda Dillon; Keith; Chris; Felina Lazalde, RDA Office Facilitator. 2. Approval of the minutes of the July 13, 2022, July 20, 2022, and August 15,2022 meetings. Marina Scott made motion to approve the minutes from the July 13, 2022, July 20, 2022, and August 15,2022 meetings. Tony Milner seconded the motion. Upon roll call, the motion passed unanimously. 3. Business A. Funding Recommendations for the 2022 Annual Affordable Housing Funds Notice of Funding Availability through the Housing Development Loan Program—Tracy Tran, RDA Senior Project Manager, Kate Werrett,Austin Taylor, RDA Project Managers. Tracy Tran provided an overview of the 2022 Notice of Funding Availability(NOFA) recently issued to solicit applications for approximately$6 million available through the Housing Development Loan Program (HDLP). Ms. Tran said, based on the Redevelopment Agency(RDA) Board of Directors(Board) FY23 priorities, applicants were required to include deeply affordable units(40%AMI and below)and/or affordable family sized units (three bedrooms or more). Ms. Tran said all new construction projects were subject to the RDA Sustainable Development Policy,and all rehabilitation projects receiving $900,000 or more are also subject to the policy, noting that all applicants met or intend to meet these requirements. Ms. Tran said 11 applications were submitted with over$18 million in requests,one application was withdrawn, and one application modified their request to be in line with the requirements for a total of 10 applications with funding requests totaling over$16 million. Ms. Tran explained that an applicant from last year withdrew their$2.36 million loan commitment. RDA staff recommended incorporating those funds into the current NOFA, increasing the funding amount to$8.36 million,subject to approval by the RDA Board. Staff requested recommendations for the following funding amounts: 1. $6 million available. 2. $2.36 million if approved by the RDA Board. Ms. Tran said based on the HDLP Guidelines, all applications were evaluated on the following criteria: • Alignment with project priorities—projects may qualify for interest rate reductions by meeting certain project priorities. • Content and quality of the project narrative. • Qualifications and experience of the applicant and development team. • Content, effectiveness, and appropriateness of the budget, sources and uses, operating proforma, and related assumptions. • The readiness of the project to proceed to construction. • Building and site design. Ms. Tran,Austin Taylor, and Kate Werrett provided the Committee with a summary of the applicants(see attached summaries): Project Developer Funding Request PREVIOUS RDA CURRENT LOAN REQUEST COMMITMENTS 1 Paul'%n.,,.%2amp"AuW Q10W�_�O 000 2.Victory Heights Phase 1 BCG Holdings/Jonathan Hardy $1,865,000 3.Victory Heights Phase 2 BCG Holdings/Jonathan Hardy $280,000 4.Atkinson Stacks Housing Authority/Daniel Nackerman $2,500,000 5. Book Cliffs Lodge" Housing Authority/Daniel Nackerman $1,000,000 $540,000 6.Citizens West 2 GIV Development/Chris Parker $1,850,000 7.Citizens West 3 GIV Development/Chris Parker $1,200,000 8.Ville 9 Ville 9, LLC/Keith Warburton $1,700,000 9.Ville 1659 Ville Property Management/Keith Warburton $1,825,000 10. Liberty Corner Cowboy Partners/Zachary Jones $3,000,000 11.9Ten West Great Lakes Capital/Karl Niederer $2,000,000 TOTAL FUNDING REQUEST:$16,760,000 AVAILABLE FUNDING:$6,000,000*** *This application was withdrawn due to a cancellation of the project. **This project has received other RDA loan commitment in a previous year. To streamline the administration of these loans,the loans will be consolidated if approved by the Board. ***Funds from a previous HDLP application may be available to include as an additional funding source. The Board will consider this during an upcoming RDA Board Meeting. This may provide an additional$2.36 million of funding. Danny Walz opened the floor to questions and invited the committee to share their recommendations. Questions: • Is the Committee able to adjust the amounts of each request? Ms. Tran said they can adjust the amounts as needed and each applicant was able to define a minimum and other funding sources they would seek if they do not receive the full amount requested. • Regarding Atkinson Stacks,what is the target population being served, is this permanent supportive housing, and will they be applying for tax credits? If so,they will need to have project- based vouchers? Mr. Taylor confirmed this project is permanent supporting housing,they are targeted to disabled and homeless individuals.A representative with Housing Assistance Management Enterprise also clarified that they have vouchers already and plan to apply for permanent support of housing in the next round of Low-Income Housing Tax Credits(LIHTC). • Liberty Corner has not applied for the 9%credits yet.What happens if they don't receive the 9% tax credits?Chris Zarek, a representative with Cowboy Partners clarified they plan to apply for the 9%tax credits in the next round. If they are not awarded the 9%tax credits,they would transition those units back to the 4% round at the later part of next year. • Liberty Corner shows a deferred fee of$8.4 Million, but in the uses it also shows a developer fee of$8.4 Million.Are you deferring the entire fee?Cowboy Partners confirmed they are deferring the entire fee and will contribute the site;they will also be contributing the equity. The rest has a mortgage on it that will be paid as they bring in construction financing. • What is the current ownership status for Atkinson Stacks? Mr. Taylor explained The Housing Authority has an option to purchase the building but does not own it yet. • What is the current ownership status of 9Ten West?Are there any built-in remediation costs?And is any remediation expected due to the existing Laundromat? Karl Niederer confirmed that Phase I and Phase II inspections were completed. The only recommendation was to put a vapor barrier down and nothing beyond that. Mr. Niederer also stated that it is currently owned by the folks operating the Laundromat but noted they do have a Purchase and Sale Agreement. The Committee determined the following funding recommendations and rankings for the$6 million HDLP Committed Funds: HDLP Possible Funding Committed AdditionalTotal Funding Funding Project/Applicant Address Request Funds: $6 HDLP Recommendation Ranking million Funds: $2.36 million Victory Heights1 1060 E. $1,865,000 $1,865,000 $1,865,000 BCG Holdings 100 S. 1 Victory Heights2 1060 E. $280,000 $280,000 $280,000 BCG Holdings 100 S. 2 AtkinsNAME on Stacks 500 W. 2,500,000 $500,000 $500,000 8 Book Cliffs 1159 West $540,000 $540,000 $540,000 Lodge HAME Temple 7 Citizens West 509 W. $1,850,000 $1,850,000 $1,850,000 Giv Development 300 N. 3 Citizens West 3 509 W. $1,200,000 $1,200,000 $1,200,000 Giv Development 300 N. 4 Ville 9 Ville 1025 West Property Mgt. 900 North 1,700,000 $0 9/10 Ville 1659 1659 W. Ville Property North $1,825,000 $805,000 $195,000 $1,000,000 5 Management Temple Liberty Corner 265 W. $3,000,000 $1,125,000 $1,125,000 Cowboy Partners 1300 S. 6 9Ten West 910 W. Great Lakes North $2,000,000 $0 9/10 Capitol Temple TOTAL $16,760,000 $6,000,000 $2,360,000 $8,360,000 Peter Makowski made a motion to approve the Committees recommendation on the scoring of the NOFA Projects. Claudia O'Grady seconded the motion. Upon roll call,the motion passed unanimously. The Committee discussed whether to make the funding commitment contingent on the projects receipt of the 9%tax credit. Many were in favor of this; however, Tony Milner stated his concern about the statewide competitiveness of the 9%credits and recommended that instead of tying up those funds, projects be able to use these funds to keep moving their projects forward. After hearing concerns Chair Walz asked if anyone wanted to make any changes to the recommendation regarding the contingency on 9%tax credits. There were no changes. Claudia made a motion to recommend a contingency on the projects that need 9%tax credits, that if they don't get funded in the June 2023 round, the commitment of RDA funds would expire. Brent Beck seconded the motion. Upon roll call,the motion passed with the following breakdown: YES NO Danny Walz Tony Milner Peter Makowski Blake Thomas Claudia O'Grady Marina Scott 3. Adlournment There being no further business the meeting was adjourned. Danny Walz, Chairperson This document along with the digital recording constitute the official minutes of the Redevelopment Agency Finance Committee held December 21,2022. HOUSING DEVELOPMENT PROJECT NAME: 2 -VICTORY HEIGHTS PHASE 1 LOAN PROGRAM ADDRESS: 1060 EAST 100 SOUTH PROJECT SUMMARY Explanation on Phase 1 and 2: "100%of Phase 1 is included in the existing medical building. Phase 2 consists entirely of the new portion and has a few units on the ground floor and upper floor of the existing building. From the outside, the project will act as if everything is one single project (including city permitting, property management, contracts etc.). Due to the tax credit allocation cap, UHC allowed projects to submit for 2 LIHTC allocations for this previous cycle." RDA Note: Timeline for Phase 1 and 2 will be the same. From Developer: "Victory Heights Phase 1 Apartments is a mixed-income, sustainable, and historically significant development located on the East side of Salt Lake City. The project is part of a larger restoration in a historic district located at 1060 E 100 S, Salt Lake City, and will be a beacon of affordable housing in the rapidly unattainable east side of Salt Lake City. A neighborhood cornerstone, the project is essential in paving the way for affordability and sustainability in the city.Victory Heights will incorporate an array of amenities that will benefit the lives of its residents including a dedicated covered parking stall, raised garden beds, and shared outdoor space. Located within walking distance of the project is an elementary school, senior center, a core bus route, and a public park. The project will also be fully electric, contributing to better air-quality in the area and improving the health and wellbeing of its tenants. The units will not only be affordable, but will be built within the criteria for Enterprise Green Communities 2020. The focus of the layouts will be on a trauma-informed design, being informed by Volunteers of America and their experience in low-income housing." DEVELOPER SUMMARY From Developer: "The project is being developed by BCG ARC Fund and Volunteers of America with Giv Development as a development consultant. VOA, on a national scale, is one of the largest nonprofit providers of affordable housing in the country. In Salt Lake City, their mission of providing low-income housing led to the recently completed Denver Apartments PSH where they successfully utilized the Low-Income Housing Tax Credit program administered by Utah Housing Corp. BCG ARC Fund is owner of the currently under construction Post District mixed-use project in Salt Lake City. The experience gained through successful development and operation of projects spanning everything from Denver Apartments PSH to the high-end Post District show the project team's capacity to renovate historic structures and bring necessary affordability to this East-side location. Giv Development has successfully developed or consulted on over a thousand affordable housing units utilizing the Low-Income Housing Tax Credit, OWHLF, and SLC loan programs along the Wasatch Front." 8 HOUSING DEVELOPMENT LOAN PROGRAM PROJECT NAME: 3 -VICTORY HEIGHTS Phase 2 ADDRESS: 1060 EAST 100 SOUTH PROJECT SUMMARY Developer Explanation of Phase 1 and 2: "100%of Phase 1 is included in the existing medical building. Phase 2 consists entirely of the new portion and has a few units on the ground floor and upper floor of the existing building. From the outside, the project will act as if everything is one single project (including permitting, property management, contracts, etc.)" RDA Note: Timeline for Victory Heights Phase 1 and 2 will be the same. From Developer: "Victory Heights Phase 2 Apartments is a mixed-income, sustainable, and historically significant development located on the East side of Salt Lake City. The project is part of a larger restoration in a historic district located at 1060 E 100 S, Salt Lake City, and will be a beacon of affordable housing in the rapidly unattainable east side of Salt Lake City. A neighborhood cornerstone, the project is essential in paving the way for affordability and sustainability in the city.Victory Heights will incorporate an array of amenities that will benefit the lives of its residents including a dedicated covered parking stall, raised garden beds, and shared outdoor space. Located within walking distance of the project is an elementary school, senior center, a core bus route, and a public park. The project will also be fully electric, contributing to better air-quality in the area and improving the health and wellbeing of its tenants. The units will not only be affordable, but will be built within the criteria for Enterprise Green Communities 2020. The focus of the layouts will be on a trauma-informed design, being informed by Volunteers of America and their experience in low-income housing." DEVELOPER SUMMARY From Developer: "The project is being developed by BCG ARC Fund and Volunteers of America with Giv Development as a development consultant. VOA, on a national scale, is one of the largest nonprofit providers of affordable housing in the country. In Salt Lake City, their mission of providing low-income housing led to the recently completed Denver Apartments PSH where they successfully utilized the Low-Income Housing Tax Credit program administered by Utah Housing Corp. BCG ARC Fund is owner of the currently under construction Post District mixed-use project in Salt Lake City. The experience gained through successful development and operation of projects spanning everything from Denver Apartments PSH to the high-end Post District show the project team's capacity to renovate historic structures and bring necessary affordability to this East-side location. Giv Development has successfully developed or consulted on over a thousand affordable housing units utilizing the Low-Income Housing Tax Credit, OWHLF, and SLC loan programs along the Wasatch Front." 11 HOUSING DEVELOPMENT PROJECT NAME: 4-Atkinson Stacks LOAN PROGRAM ADDRESS: 543 South 500 West PROJECT SUMMARY From Developer: "This development will have full access to the ground floor clinic at Pamela's place. HASLC/HAME contracted with Sacred Circle Health Care (SCHC), a Federally Qualified Health Center, to offer services for all 100 apartments at Pamela's Place at their onsite clinic. These services may include occupational, mental health, social, housing, and financial case management in addition to general continuing case management. Our current contract is supplied as an attachment. The new development will include a breezeway that connects the two locations relocating the entrance for both buildings as part of this structure. This connection will offer all the amenities incorporated in the original building to the addition. These include, clinic space, onsite fitness space, community room, kitchen, and outdoor area which will be expanded with this addition. Each floor of the new development will have laundry facilities." RDA Staff Note: The Housing Authority of Salt Lake City's Atkinson Stacks project is an acquisition and repositioning of Eco Box Fabricators' Box 500 project—an apartment building built out of shipping containers in which the construction has started, but has not been completed yet. DEVELOPER SUMMARY From Developer: "HASLC/NAME is a seasoned real estate developer with over 50 years of expertise and almost 1800 units in its inventory. These apartments offer housing for the homeless, market, seniors, survivors of domestic violence, and those with disabilities." SITE MAP © r ■ i 14 HOUSING DEVELOPMENT PROJECT NAME: 5- Book Cliffs Lodge LOAN PROGRAM ADDRESS: 1159 South West Temple PROJECT SUMMARY From Developer: "The Housing Authority of Salt Lake City is proposing a new 55-unit apartment complex named Book Cliffs Lodge. Book Cliffs Lodge will provide a mix of one-bedroom and three-bedroom units in an area of Salt lake City that has experienced substantial growth in recent years. The unit mix at Book Cliffs Lodge will be composed of 45 standard one-bedroom units and 10 three-bedroom units serving families. The development will provide a mix of 25%, 30%, 40%, and 50%of AMI rents, as well as 8 market rate units(7 one-bedroom units and 1 three-bedroom unit). The broad range of rent and income targeting will allow the development to address the community need. Additionally, through the tenant selection plan, the development is committed to setting aside 5 units for persons experiencing homelessness and 5 units for veterans. All apartments will be well equipped with amenities such as air conditioning, energy star appliances, microwaves and vent hoods, self-cleaning ovens, garbage disposals and water saving fixtures. The project is located at 1159 South West Temple in Salt Lake City, which will provide residents the convenience of living in close proximity to services, shopping, recreation, and employment. The site is within an easy walk to public transportation, including the Ball Park Station TRAX line, recreation and employment. Additionally, the site has achieved a walk-score of 83, or "very walkable" which will allow residents to accomplish most errands by foot if they choose. Within a half mile radius of the site, there are many restaurants, parks, grocery stores, and numerous employment opportunities. Project Design: Book Cliff Lodge Apartments is a .84-acre Multifamily Housing Development located on 1159 South West Temple, SLC, Utah 84101. The building is approximately 46,588 square feet, four story slab on grade wood construction and designed to meet both Energy Star and Enterprise Green Community standards. The building will provide 55 total units with 45 one-bedroom units and 10 three-bedroom units. Roof and parking storm water runoff will be managed on site with a rain garden system as approved by Salt Lake City. Landscaping will consist of native and drought tolerant plants. The building will include a mail area, leasing office, work out facility, wellness room, bicycle storage, patios for each unit and community kitchen for tenant use. The building will be designed to meet both Enterprise Green Communities and Energy Star certification as well as being equipped with electronic access cards and CCTV cameras for security and monitoring the premises." DEVELOPER SUMMARY From Developer: "HASLC/NAME is a seasoned real estate developer with over 50 years of expertise and almost 1800 units in its inventory. These apartments offer housing for the homeless, market, seniors, survivors of domestic violence, and those with disabilities." 18 HOUSING DEVELOPMENT PROJECT NAME: 6-Citizens West 2 LOAN PROGRAM ADDRESS: 509 West 300 North PROJECT SUMMARY Developer's explanation of Phases 2 and 3: "Phases 2 and 3 will be built concurrently and be part of the same building. The main difference in the two phases is unit count with phase 2 having 50 units and phase 3 having 30 units. The building will be condo-ed so that each phase owns its respective units, common spaces, and shared amenities...While ownership of the building will be divided between two phases due to a tax credit allocation cap, the building will be constructed as one project. We will have one contract for work with architects and contractors. One set of plans will be submitted to the City for permitting." From Developer: "Citizens West 2 is the second phase of a transit-oriented, carbon-neutral, mixed-income, mixed-use development in SLC's rapidly gentrifying North Temple corridor. This phase looks to produce homes for large-household, multigenerational, refugee, and unhoused populations that have a particularly difficult time finding suitable housing in our state. This project's quick access to transit, employment, and schools is almost unheard of for an affordable family product. As part of a larger developer including phase 1, it will be able to take advantage of phase 1's amenities including, sport court, tot lot, club house, carshare, garden boxes and composting." DEVELOPER SUMMARY From Developer: "Giv Development(proposed developer) has successfully completed several 9%tax credit projects including Imagine Jefferson (phases 1&2), North Sixth, Startup Crossing, Project Open (phases 1 &2), Diamond Rail Apartments(DBA Citizens West phase 1), and Exchange Place (Avis and Mya). Citizen West 2's overall ownership team further adds to this experience with several key members well versed in Utah LIHTC Development (BAM Development (ownership in Project Open 1 &2, and Citizens West), CIA Development (ownership in Citizens West), and Housing Opportunity Inc (Hub of Opportunity II, Bud Bailey Apartments I & II, Bodhi Apartments, and Kelly Benson Apartments). Evergreen Management Group (EMG)will do property management, having section 42 compliance experience for decades on numerous different properties across the state of Utah." 23 HOUSING DEVELOPMENT PROJECT NAME: 7 -Citizens West 3 LOAN PROGRAM ADDRESS:509 West 300 North PROJ ECT SU M MARY Giv Development's explanation of Phases 2 and 3: "Phases 2 and 3 will be built concurrently and be part of the same building.The main difference in thetwo phases is unit count with phase 2 having 50 unitsand phase3 having 30 units.The building will be condo-ed so that each phase owns its respective units,common spaces, and shared amenities...While ownership of thebuildingwill be divided between two phases due to a tax credit allocation cap,the buildingwill be constructed as one project.We will have one contract for workwith architects and contractors.Oneset of plans will be submitted to the City for permitting." From Giv Development: "Citizens West 2 is the second phase of a transit-oriented,carbon-neutral, mixed-income, mixed-use development in SLC's rapidly gentrifying North Temple corridor. This phase looks to produce homesfor large-household, multigenerational, refugee, and unhoused populations that have a particularly difficult time finding suitable housing in ourstate. This project'squick access to transit,employment,and schools is almost unheard of for an affordable family product.As part of a larger developer including phase 1, it will be able to take advantage of phase 1's amenities including,sport court,tot lot, club house, carshare,garden boxes and composting." DEVELOPER SUMMARY From Giv Development: "Giv Development(proposed developer) has successfully completed several 9%tax credit projects including Imagine Jefferson (phases 1&2), North Sixth, Startup Crossing, Project Open (phases 1 &2), Diamond Rail Apartments(DBA CitizensWest phase 1),and Exchange Place(Avia and Mya).Citizen West 2's overall ownership team further adds to this experience with several key memberswell versed in Utah LIHTC Development(BAM Development(ownership in Project Open 1 &2, and Citizens West),CIA Development(ownership in Citizens West),and Housing Opportunity Inc(Hub ofOpportunity II, Bud Bailey Apartments &II, Bodhi Apartments,and Kelly Benson Apartments). Evergreen Management Group(EMG)will do property management, havingsection 42 compliance experience for decades on numerous different properties across the state of Utah." 28 HOUSING DEVELOPMENT PROJECT NAME: 8-Ville 9 LOAN PROGRAM ADDRESS: 1025 North 900 West PROJECT SUMMARY From Developer: "Ville 9 is a hotel conversion housing complex, consisting of 35 studio apartments, that has been housing individuals experiencing literal homelessness, individuals that have previously experienced homelessness, and individuals that are at risk for becoming or returning to homelessness, since 2020. Ville 9 has purchased the adjacent lot to the property and will be constructing 30 one-bedroom apartments, as well as fully renovate the current 35 studio apartments. VPM is the developer in partnership with Camp Construction, Design West, and Ward Engineering. Ville 9 will offer much needed affordable housing that is targeted towards housing the most vulnerable individuals within our community. The project provides on-site case management (CM), to support housing stability, and will expand the CM team to support the additional tenants. We will continue to prioritize housing individuals experiencing literal homelessness, individuals that have previously experienced homelessness, and individuals that are at risk for becoming or returning to homelessness. Tenancy and Rental Rate: Ville 9 will prioritize tenancy based on: 1) SLVCEH and the local LHC's coordinated entry process to house individuals that are literally homeless, 2) coordination with the above listed service provider partners to house individuals that need rehousing (currently are housed and are being evicted or facing a non- renewed lease) and have a housing subsidy, and 3) individuals within the community that are at or below 30%AMI and are at risk of entering into homelessness. Ville 9 will match FMR set by HUD for all units and will include all utilities, regardless of whether the tenant has a housing subsidy. On-site Case Management: Ville 9 is where VPM developed our on-site case management program that has decreased eviction rates across our Salt Lake County properties by 95%.We have achieved this through our housing stability programming, which includes a three-step lease violation process and delinquent payment plan, as well as our partnerships with our tenant's housing case management team and partnering service providers. Safety and Security: Ville 9 will have 24-hour on-site security staff and surveillance. The housing facility will be surrounded by a security fence that is secured and monitored through a key-fob entry system. EMS is located within 1.3 miles and can be contacted 24/7 through security staff. On-site Mental Health Services: Ville 9 will also have a satellite office for Mental Health America of Utah (MHAU), that will provide mental health and substance abuse support to our tenants through peer coaching and partnering with our case management team to augment our housing stability efforts. Together we will provide community programming for our tenants and community residents that offers peer support groups and community engagement activities (e.g. yoga, cooking classes, bingo, movie nights, skill and job building courses, etc.)." DEVELOPER SUMMARY From Developer: "Ville Property Management (VPM) has experience leasing, managing, and providing services across a range of affordable and market rate housing programs. VPM's current portfolio includes experience working with Housing Subsidies (Permanent Supportive Housing, Section 8, and Rapid Re-Housing). VPM also offers deeply affordable housing to individuals that earn between 60%and 30%and below the Area Median Income (AMI) for the region. VPM also provides on-site Case Management services to the Salt Lake County residential properties to help tenants maintain their housing through our Case Management Model. Our focus is to provide affordable housing and extensive support to our tenants who have experienced homelessness and/or live below 30%AMI, to strengthen the wellness and livelihood of our tenants. 33 HOUSING DEVELOPMENT LOAN PROGRAM PROJECT NAME: 9-Ville 1659 ADDRESS: 1659 W North Temple PROJECT SUMMARY From Developer: "Ville 1659 is a hotel conversion project that will create 197 studio apartments and 10 RV stalls that will be deeply affordable and low barrier for singles and couples near downtown Salt Lake City. Our organization, Ville Property Management(VPM), will be the developer, in partnership with Camp Construction, Design West, and Ward Engineering. Ville 1659 will offer much needed affordable housing that is targeted towards housing the most vulnerable individuals within our community and provides on-site case management to support housing stability. We will prioritize housing individuals experiencing literal homelessness, individuals that have previously experienced homelessness, and individuals that are at risk for becoming or returning to homelessness. Our service provider partnerships include: SLVCEH, The Road Home, the VA, Volunteers of America, Housing Connect, Housing Authority of Salt Lake City, Fourth Street Clinic, First Step House, Valley Behavioral Health, Mental Health America of Utah, and Salt Lake City Police Department." DEVELOPER SUMMARY From Developer: "Ville 1659 is an entity of Ville Property Management (VPM). VPM has over 20 years of experience leasing, managing, and providing services across a range of affordable and market rate housing programs. VPM's current portfolio includes management of 580 units with experience working with Housing Subsidies(Permanent Supportive Housing, Section 8, and Rapid Re-Housing). VPM also offers deeply affordable housing to individuals that earn between 60%and 30%and below the Area Median Income (AM I) for the region. VPM also provides on- site Case Management services to the Salt Lake County residential properties to help tenants maintain their housing through our Case Management Model. Our focus is to provide affordable housing and extensive support to our tenants who have experienced homelessness and/or live below 30%AMI, to strengthen the wellness and livelihood of our tenants. Our unique team is dedicated in providing the needed services, supports, and programming to positively impact our tenants and community. Whether market rate or deeply affordable, we believe that everyone deserves the right to fair and supportive housing." SITE MAP Pam=- T b, 38 HOUSING DEVELOPMENT PROJECT NAME: 10- Liberty Corner LOAN PROGRAM ADDRESS:265 West 1300 South PROJ ECT SU M MARY From Developer: "Liberty Corner is a mixed-use development located on the Northeast corner of the 1300 South 300 West intersection.The community will feature 200 affordable unitswith the purpose of providing deeply targeted,family- sized units. The unit mix will feature a majority of 3- and 4-bedroom units along with a significant number of 2- bedroom units. All units in the project will have at least 2 bedrooms. The project, while primarily flats, will include two-level townhousesat the street level. Liberty Corner is unique in that it not only provides family housing units in an urban setting, but includes deeply targeted affordable units, reaching to provide housing at 30% AMI. Liberty Corner is designed for the family. In addition to large, family-sized units, the community will feature indoor and outdoor amenities and spaces meantto serve a broad rangeof ages, interests and needs. Liberty Corner will also be a sustainable community. The community will promote accessible and equitable transportation options as the Ballpark TRAX Station is within walking distance, at less than a quarter mile away. In addition, the community will feature bicycle amenities in order to encourage alternative means of transportation. The communitywill be all electric and achieve Energy Star certification." DEVELOPER SUMMARY From Developer: "Cowboy Partners is a multifamily developer based out of Salt Lake City, Utah.Cowboy Partners was established in 2001, rebranded from a companythat had been developing housing in the Salt Lake Valley sincethe 1960s.Cowboy Partners is a recognized leader in the development, construction, and management of affordable housing; the company has experience in developing luxury, market rate, mixed-income and affordable housing communities through its development ofdozensof communities within Salt Lakeand across the State of Utah.Cowboy Properties, the sister company to Cowboy Partners, operates as the property management company for these communities. Cowboy Properties has deep experience with multifamily property management, including affordable housing and compliance, as the sole operator of Cowboy communitiesfor decades. " SITE MAP 1- ,R la ., 41 HOUSING DEVELOPMENT PROJECT NAME: 11 -9Ten West LOAN PROGRAM ADDRESS:910 W North Temple PROJ ECT SU M MARY From Developer: "The project will be transit oriented,affordable housing with amenity space and Community Service Facility on the ground floor. Located in the rapidly developing North Temple/Fairpark neighborhood, an affordable project with studio units will provide affordable housing in the Fairpark neighborhood for 50+ years. The project will also incorporate sustainability featuresto acheive Energy Starand Enterprise Green Communities certifications." DEVELOPER SUMMARY From Developer: "Karl Niederer has been developing affordable housing in Arizona, Colorado, and Utah for eight years and has directed the development of over one hundred million dollars of affordable and supportive housing throughout the western states.Great Lakes Capital is a Real Estate Development and Private Equity Firm that invests in several core property types including Multifamily, Industrial, Mixed-Use, Flex, Office, Medical and Life Science, and Hotels Properties. Multifamily, Industrial, and Mixed-Use properties remain Great Lakes' highest growth segments. Since opening its doors in 2005, Great Lakes has successfully invested in billions of dollars of real estate projects and currently enjoys development pipeline in excess of$923 million. Great Lakes' six principals have nearly 170years of experience and have closed more than $7 billion of commercial real estate investment across all property types, geographies, capital structures,and economic cycles." SITE MAP 6 � 1•� - t Jlr � • • N 4 ik 1 44 0 SLCRDA RDA FINANCE COMMITTEE MEETING MEMORANDUM Loan Request for The Front(Rocky Ventures) Meeting: Wednesday,November 15,2023, City and County Building,Room 118 DATE: November 15,2023 TO: RDA Finance Committee 1. Danny Walz, SLC Redevelopment Agency 2. Blake Thomas, SLC Community and Neighborhoods 3. Peter Makowski, SLC Department of Economic Development 4. Tony Milner, SLC Housing Stability 5. Mary Beth Thompson, SLC Finance 6. Amy Rowland, RAC Member 7. Baxter Reecer, RAC Member FROM: Austin Taylor,Project Manager RE: RDA Finance Committee Meeting—Funding recommendation for a$2,000,000 loan to Rocky Ventures for expansion of The Front climbing gym located at 1470 S 400 W in the RDA's State Street project area I. PROJECT OVERVIEW The Front,located at 1470 S 400 W,is a climbing gym located within the Redevelopment Agency's State Street project area. The Front is working to expand its gym by remodeling the existing structure and adaptively reusing an adjacent vacant warehouse, combining two buildings into one single facility that will offer approximately 70,000 square feet of space. This expansion project will add climbing walls, fitness studios,bathrooms and showers, a staff break room, storage space, and various mechanical, electrical, and fire suppression systems. The project has already begun construction;the owner is paying for the project with the business's cash reserves. The RDA loan would allow the owner to complete the project quicker and begin offering expanded services sooner. The Front's owner,Rocky Ventures("Applicant"), is requesting a$2,000,000 RDA loan(40% loan to hard cost) for Phases I-III of its four-phase expansion project. Rocky Ventures is proposing a 3-year term with a 20-year amortization schedule,which fits within the RDA loan policy. The project would require two waivers from the RDA Board for aspects of the project that do not follow RDA policy: one waiver from the Sustainable Development Policy that prohibits on-site natural gas combustion, and a second waiver from the Revolving Loan Fund Policy that requires projects receiving primary loans to meet six or more Public Benefit Criteria. RDA staff believes that the project meets five of the six required Public Benefit Criteria. II. APPLICANT INFORMATION The Front is a climbing gym owned by Rocky Ventures, an S Corp 100%owned by Dustin Buckthal. The Front was founded in 1989 in Sandy,Utah and—after being acquired by a new owner—moved to its current location in 1998. Current owner Dustin Buckthal purchased The Front in 2005. In 2016,The Front built its current building,which features 60-foot climbing walls,bouldering walls, fitness rooms, saunas, a climbing retail shop,restaurant, and more. The Front now operates facilities in three locations: Salt Lake City(opened at its current location in 1998), Ogden(opened in 2010), and Millcreek(opened in 2020). At its Salt Lake City location, The Front operates a climbing gym, small climbing-focused retail store,cafe, fitness studios, weightlifting area, and ongoing classes, and it hosts competitions and community events throughout the year. Rocky Ventures received a$350,000 EDLF loan from Salt Lake City Economic Development for its 2016 new building project and is current on its debt service obligations. III. FUNDING REQUEST The Applicant is requesting a$2 million loan with a 3-year term and 20-year amortization schedule through the RDA Loan Program to pay for Phases 1-111 of its 4-phase expansion project. The Front explains its four-phase expansion project as follows: • Phase 1, started March 2023, estimated completion November 2023: additional entry to facility, addition of fitness class studios, gender-neutral bathrooms and showers, and temporary climbing training areas,replacement of mechanical and electrical systems, addition of large windows. • Phase 2,November 2023 to February 2024: removal of buildouts and addition of climbing walls, addition of large windows,connection of 1420 and 1450 [400 West] buildings,replacement of mechanical and electricals,addition of fire suppression system, addition of staff break room. • Phase 3,March 2024 to May 2024: addition of fire suppression system,replacement of electrical and mechanical system, connection of direct courtyard access, addition of gender-neutral bathrooms. • (NOT IN SCOPE OF RDA LOAN)Phase 4,June 2024 to June 2025: raising building to 60ft, adding additional space for weights and cardio equipment, addition of yoga facilities,addition of World Cup and Olympic style route and bouldering walls for athlete training and hosting international competitions,replacement of mechanical and electrical systems. Primary Financing The Applicant is requesting primary financing through the RDA because bank loans have been difficult to get due to recent nationwide credit tightening, especially in"opportunistic"investment types. Banks are also wanting to refinance the entire four-building property into one large permanent loan.Doing so would drastically increase The Front's debt service payments due to recent interest rate hikes. The Applicant has provided documentation verifying that the project's ability to secure traditional financing is limited. RDA policy allows the RDA to provide primary financing if the project includes at least six of the following Public Benefit Criteria: Sustainability,Public Amenities,Adaptive Reuse,Historic Preservation,Permanent Job Creation/Retention,Architecture/Urban Design, Transit Alternatives,Economic Impact,and Affordable Housing. RDA staff believes this project meets five of the Public Benefit Criteria(Public Amenities,Adaptive Reuse,Permanent Job Creation, Transit Alternatives, and Economic Impact), and that it is close to meeting another two criteria but cannot because of factors specific to the project(as discussed in Section V below). Loan Terms Pursuant to RDA Loan Program Policy("Policy"),the project is eligible for a 3-year term with a 20-year amortization period. Based on the Policy,the project qualifies for a 5.45%interest rate, calculated by subtracting 50 basis points for each qualifying Public Benefit from the RDA Loan Program Base Rate as follows: RDA Loan Program Base Rate 7.95% (U.S. Treasury Yield plus 3%) Public Benefit Interest Rate Reduction*: • Public Amenities** -0.5% • Adaptive Reuse*** -0.5% • Permanent Job Creation**** -0.5% • Transit Alternatives***** -0.5% • Economic Impact****** -0.5% Final Interest Rate******* 5.45% *To be eligible for interest rate reductions, the project will be required to meet the criteria outlined in Section V.Maximum interest rate reduction of 250 basis points. "Project Project will provide significant public art amenity and meet RDA public art policy ***Project will repurpose existing warehouse buildings ****Expansion will create 40permanent jobs *****Project will provide showers,lockers,bike storage,and a dedicated car-sharing parking space """Project will prioritize space for locally-owned business *******The interest rateprovided is an estimate. The final interest rate will be based on the U.S. Treasury Yield Curve Rate,as determined by the term of the loan,at loan closing. Refer to Attachment A:Loan Term Sheet for additional detail on proposed loan terms and conditions. IV. FINANCIAL OVERVIEW Sources RDA Loan $2,000,000 40% Equity Contribution $3,000,000 60% Total Sources $5,000,000 100% Uses Hard and Soft Construction Costs $5,000,000 100% Total Uses $5,000,000 100% V. POLICY ALIGNMENT: RDA LOAN PROGRAM Waivers This loan request mostly aligns with RDA Loan Program Policy("Program"), as adopted by the RDA Board of Directors; however,it will require waivers for two exceptions: • Exception from RDA Sustainable Development Policy. This policy requires (1)projects that receive more than$200,000 in RDA funding to achieve an Energy Use Intensity value corresponding with a"Designed to Earn the ENERGY STAR"score of 90 or higher, and(2)projects that receive more than$900,000 in RDA funding to operate solely on electric power—not fossil fuels such as natural gas. An exception from these threshold requirements would be required for this project for the following reasons: o Fitness Centers/Health Clubs/Gyms are a recognized property type in the ENERGY STAR system,but they are not eligible to receive an ENERGY STAR Score. This is because ENERGY STAR scores are calculated by comparing a project's energy use to a nationally representative data set of similar facilities, and this information is not available for fitness centers/health clubs/gyms. o The Front's expansion project will include natural gas-powered heating systems because, as a renovation and adaptive reuse project with ceiling heights over 60 feet,the facility cannot be efficiently heated with electricity alone. • Exception from the Loan Policy requirement of meeting six Public Benefit Criteria to qualify for primary financing. The project meets five Public Benefit Criteria. It is unable to meet Sustainability for the reasons stated above,but the project otherwise demonstrates a commitment to sustainable building design and operation. The project is also unable to meet Architecture and Urban Design because construction has begun and there is no opportunity for the required design review,but the project uses high quality, lasting materials and enhances the public realm. The five qualifying and two additional public benefit criteria are discussed in the Public Benefit Analysis below. Public Benefit Analysis RDA staff believes this project meets the following five Public Benefit Criteria: • Public Amenities o RDA Policy: The project includes one of the following public amenities that reinforces neighborhood character and scale: ■ A significant open space or other publicly accessible amenity, or ■ A significant public art amenity. o Staff Analysis: The Front has committed to providing a significant public art amenity on the exterior of the buildings. Pursuant to the RDA Art policy, an applicant meets the criteria for this public benefit criteria if 1.5%of the RDA contribution($30,000)goes towards the installation of art onsite. • Adaptive Reuse o RDA Policy: The project will preserve or repurpose a building through the conversion of existing structures into new land uses that contribute positively to its surrounding neighborhood. o Staff Analysis: The Front's Phase 1-111 expansion repurposes two existing cinder block warehouse buildings along 400 West, integrating them with the existing facility and resulting in a positive contribution to the surrounding neighborhood. • Permanent Job Creation o RDA Policy: The project will attract employers as permanent occupants that provide or retain jobs at or above a living wage.Project will create or retain at least one job per$50,000 receive in program funding. Jobs must be projected to pay a living wage of at least$15.00 per hour to qualify. o Staff Analysis: The Front's expansion is expected to create opportunities for approximately 30-40 new jobs, all starting at$15 per hour or higher. 40 new jobs qualifies the project for$2,000,000 in funding. • Transit Alternatives o RDA Policy: The project meets one of the following standards: ■ Includes a car sharing,bike sharing,or transit pass program that is widely available to employees/residents, or ■ Is a commercial project that includes employee shower,locker, and bicycle facilities. o Staff Analysis: The project will add employee showers,lockers, and indoor bicycle parking. The project will also incentivize car share with a dedicated parking stall. • Economic Impact o RDA Policy: The project will catalyze economic impacts through one of the following: ■ The project will remove blight through the rehabilitation/replacement of a vacant and distressed building,or construct a new building on vacant and distressed buildings,or construct a new building on vacant and underutilized land, or ■ The project will provide essential services that are currently lacking in the neighborhood. ■ The project will prioritize space for locally owned businesses. o Staff Analysis: The project will rehabilitate two older warehouse buildings and dedicate 100%of the space to locally owned business operations. The expansion is projected to directly increase property valuation by$5 million as well as increase the valuation of the surrounding properties by enhancing existing property and increasing foot traffic which could reduce crime. Projected revenue increase of$25 million over 5 years is projected to generate$2 million in local and state sales tax. In addition,RDA staff believes this project is close to meeting two additional Public Benefit Criteria but cannot because of factors specific to the project: • Sustainability—Not met; unique circumstances associated with facility type o RDA Policy: The project meets the RDA Sustainable Development Policy by avoiding the use of on-site fossil fuel consumption and achieving an Energy Use Intensity value corresponding with a Designed to Earn the ENERGY STAR score of 90 or greater. o Staff Analysis: The Front is committed to integrating sustainable design and building operation principles into its project. The Front sources 100%of its electricity from renewable sources through a rooftop solar array and the Rocky Mountain Power Blue Sky program. The Front's expansion project is designed to result in a 24%decrease in electricity consumption, 3 1%decrease in electric peak, 3%decrease in gas consumption, and 2 1%decrease in utility costs compared to a building built to code. However,this project will be reusing and installing new natural gas heating systems due to the owner's assessment that electric heating systems cannot efficiently heat this project because it is a renovation/adaptive reuse project and the facility's ceiling heights are unusually tall. The project is also unable to calculate a Designed to Earn the ENERGY STAR score because energy use comparison data is limited for fitness/centers/health clubs/gyms. • Architecture and Urban Design—Not met; construction has already started o RDA Policy: The project will participate in a more thorough design review allowing the further refinement of design. Design review will promote developments that are constructed with high-quality materials,respond to the surrounding context,and enhance the public realm. o Staff Analysis: The design uses high-quality and lasting materials such as masonry, large windows,and Type II non-combustible construction. The project responds to the surrounding context by planting a landscape buffer between I-15 and the building,acting as a sound barrier to I-15, frames east-facing mountain views with large second-story windows in the new fitness studio, and turns part of an existing parking lot into an outdoor plaza space.The project enhances the public realm by punching street-facing windows into existing masonry walls. However,the renovation project has already been designed and is under construction so there is no opportunity for RDA to conduct a design review nor provide input on the design. VI. POLICY ALIGNMENT: STATE STREET CRA PLAN The Project aligns with the RDA's goals for the neighborhood,as adopted through the State Street Community Reinvestment Area Plan, as follows: • Neighborhood Revitalization o Ensure that RDA activities support high quality, enduring projects and promote sound architectural and urban design principles to encourage safe, sustainable, and livable neighborhoods. • Commercial Corridors o Target RDA programs and tools to leverage private investment for the revitalization of existing commercial and retail space while avoiding the displacement of established, locally-owned businesses. • Employment Centers o Ensure appropriate levels of office, commercial,and retail spaces are integrated into redevelopment projects to create synergies between uses and encourage a critical mass of people. o Work with Salt Lake City's Business Development team to retain,recruit, and expand businesses within the Project Area,especially through the redevelopment of prime parcels along State Street or other corridors. VII. PROJECT VIABILITY & ABILITY TO REPAY THE LOAN Rocky Ventures' The Front Salt Lake City climbing gym buildings are financed with typical market loan-to-value rates. The two buildings being renovated by this expansion project(1420 S 400 W and 1450 S 400 W)were valued at a total of$6,300,000 in 2021. Together,they are financed at 57%loan to value as of June 30,2023: Property 2021 Appraised Value Debt LTV 1420 S 400 W $ 3,600,000 $2,580,799 72% 1450 S 400 W $ 2,700,000 $ 1,022,341 38% Total $6,300,000 $3,603,140 57% When adding a$2,000,000 RDA loan,the potential loan-to-value lies somewhere between 52% and 68%,depending on how much appraised value the expansion project adds to the existing buildings. The applicant does not yet have an as-built appraisal but may be able to provide one upon request. 2021 Appraised Plus 50% Plus 100% Amount Value Project Cost Project Cost Current Debt $ 3,603,140 $ 6,300,000 Debt with RDA Loan $ 5,603,140 $ 8,300,000 $ 10,800,000 LTV 1 57% 68% 52% RDA staff is confident that the debt—likely lower than 70%LTV in all scenarios—is appropriate and likely to be repaid through regular business cash flow, or through the value of the collateral in a worst-case foreclosure scenario. VIH. UNDERWRITING PROCESS QUESTIONS Is the request for funds in accordance with RDA Loan Program Guidelines? The request is in accordance with most of the RDA Loan Program Guidelines,with the exception of the Sustainable Development Policy and the number of Public Benefit Criteria needed for the RDA to be a primary financer. Is the project financially feasible to complete development? After a review of The Front's balance sheet,historic and current profit and loss statements, and future projections,RDA staff believes the project is financially feasible. Are there any undue financial benefits to the applicant, or is the owner's projected return on equity unreasonably high? The Front invests a significant portion of profits back into the business. In his 2022 IRS tax return,the owner is shown to have taken a salary from Rocky Ventures,Inc which is below the 2023 Salt Lake City,UT HUD Metro FMR Area Median Family Income. RDA staff believes this salary is not unreasonably high and that the practice of reinvesting money into the business is aligned with RDA goals of encouraging private investment in its project areas. Additionally,The Front matches members' ongoing donations to selected local nonprofit organizations. To date, The Front and its members have collectively donated over$540k to local nonprofit organizations. Are the capital sources for financing identified and reasonable? The Front is proposing two sources of capital for this expansion project: $3,000,000 in cash from the business' cash flow and$2,000,000 in RDA debt. Staff believes the sources are secure and reasonable. Are RDA funds necessary and appropriate to the development? The project could potentially be completed without an RDA loan—as evidenced by the project starting construction without debt in place. While this expansion project could be completed with The Front's cash flow,this would lengthen the timeline of the project, as The Front would be able to hire labor to do the work only when there is sufficient cash flow.Additionally,if The Front were able to secure financing from a traditional source,it would likely necessitate a refinance of the entire campus of properties at a higher interest rate,drastically increasing debt service payments. Are the developer's capabilities and strength of collateral identified and reasonable? The owner is proposing to include 1420 South 400 West and 1450 South 400 West as collateral. As of June 30,2023, The Front had$2,696,860 in equity between these two buildings. The Front's owner,Dustin Buckthal, is also proposing to give the RDA a personal guarantee. IX. PROPERTY OVERVIEW Rocky Estates,LLC(property ownership entity for Rocky Ventures)owns 5 parcels of land on 400 West between 1396 South and 1470 South. In total,the property measures 3.85 acres in size. The two properties being impacted by this expansion project are 1450 South and 1420 South. Each property holds a concrete masonry warehouse building. The building at 1450 South is home to the original The Front climbing gym in Salt Lake City and continues to house climbing walls. 1420 South is vacant and currently undergoing renovations and build out. All Rocky Estates,LLC properties in this area are zoned Commercial General. X. ATTACHMENTS A. Loan Term Sheet B. Site Map C. Site Plan and Rendering D. Public Art Concept Plan E. Photos F. Construction Cost Estimate ATTACHMENT A: RDA TERM SHEET LAN TERM SHEET _ RDALOAN THE FRONT SLC EXPANSION RDA LOAN PROGRAM APPLICANT Rocky Ventures ADDRESS 1470 South 400 West PROPOSED LOAN TERMS • Amount: $2,000,000 (40% LTC) • Interest Rate: RDA Loan Program Base Rate 7.95% (U.S. Treasury Yield plus 3%) Public Benefit Interest Rate Reduction*: • Public Amenities** -0.5% • Adaptive Reuse*** -0.5% • Permanent Job Creation**** -0.5% • Transit Alternatives***** -0.5% • Economic Impact****** -0.5% Final Interest Rate******* 5.45% *To be eligible for interest rate reductions, the project will be required to meet the criteria outlined in Section V.Maximum interest rate reduction of 250 basis points. "Project Project will provide significant public art amenity and meet RDA public art policy ***Project will repurpose existing warehouse buildings ****Expansion will create 40 permanent jobs *****Project will provide showers,lockers, bike storage,and a dedicated car-sharing parking space """Project will prioritize space for locally-owned business *******The interest rateprovided is an estimate. The final interest rate will be based on the U.S. Treasury Yield Curve Rate,as determined by the term of the loan,at loan closing. • Term: 3 years • Amortization; 20 years • Disbursement: Loan proceeds shall be disbursed through construction draws. Any funds not disbursed 24 months after closing will be used to pay all outstanding interest and principal from the loan. To the extent that project sources exceed project uses at project close out as documented by the cost certification. • Expenses: Applicant will pay all loan expenses and closing costs, including title insurance. • Recourse: The loan shall be full recourse. COLLATERAL AND GUARANTEES • Second position lien on the properties at 1450 South 400 West and 1420 South 400 West. As of June 30, 2023, The Front had $2,696,860 in equity between these two buildings. • Personal guarantee from Dustin Buckthal, 100% owner of Rocky Ventures. CONDITIONS FOR LOAN CLOSING Prior to loan closing, the Applicant will complete the following: • RDA approves all terms of the loan. • Execute loan documents (e.g. promissory notes, loan agreements, security documents, and guarantees) as deemed necessary by the RDA and its legal counsel. • Receive approval from the RDA and its legal counsel of all matters pertaining to title, legality of the loan, and the legality, sufficiency, and the form and substance of all documents that are deemed reasonably necessary for the loan transaction. • Provide evidence of insurance in such amounts and with such coverage as deemed necessary by the RDA for the Property. • Obtain all required City approvals. • Such other terms as recommended by the RDA's legal counsel and staff. OTHER CONDITIONS • The Project shall operate as the intended use over the term. • The Project shall remain in good financial and legal standing over the term. ATTACHMENT B: SITE MAP 15 - �� - � • . • ss i- .-. o I ' • r� 1 t , • • 1 1 i ,W.A t SALT LAKE CITY`" J'_ 1 rr g all lum Yellow—Rocky Estates,LLC property Green—Properties used in Phase I-IV expansion project ATTACHMENT C: SITE PLAN AND RENDERING DH65E N o � i I NIaE T, !"� w2ff vM 4 1 MINE Ilw / I I u-iofar Nrs ME .f' _t• J tau � -� - _ y• �JJ►vL4 - ATTACHMENT D: PUBLIC ART CONCEPT PLAN t t,t:Fro9 nt E, FRONT HO -- --- = STREET SCAPE/PUBLIC ART .E E CURRENT,POTENTIAL PUBLIC ART LOCATIONS: 1.Architectural art wall: •- ' Currently planned,articulated I CMU with integrated protected bicycle puking. 2.Dumpster enclosure:Potential location for dumpster enclosure as ,j art object,or for a mural. i 2 ' Art object/sculpture!seating: Pot 4 Potential location for art object! 3 sculpture/seating that resonates with the industrial history of the surroundings and/or with the greater Salt Lake region and its material character. 3 9 NOVEMBER 2023 v'IRCNI1ECr0AE 3 ATTACHMENT E: SITE PHOTOS Aerial Photo jo i � Y AZ _ l �- Photo of 1450 South 400 West .kFe. l y;f ME■ i ot . Aw Photo of 1420 South 400 West a ATTACHMENT F: CONSTRUCTION COST ESTIMATE jr COl+15Thu CTIO N CO NTROL CO RPO RATION 12&2a? PROJECT NAME.......-..--THE FRONT-O REMODELrADDI- :-'J LOCATION.....................-SALT LAKE CITY,UT ARCHITECT.....................VYALRCHPECTUIRE 47,851 TOTAL SF TAG E OF DESIGN..........BID SET Si DESCRIPTION PHASE i 3 P-IASE TOTAL 9 UILDI NG COST SUMMARY D2 EXISTING CON DITIONS $ 21GA845 $ 29-D,287 # 507.134 08 CON-CRETE $ 145AG2 $ 43A,572 $ Se.o,)34 D4 MASONRY $ 33M2 $ 11,09 $ 45,131 0a METALS $ M,521 $ 2,431,q)55 $ 3,1HAT& DC WGODS &PLASTICS $ 11G,704 $ 9U=6 $ 1 T-6.990 D7 THERMAL 8 MOISTURE PROTECTION $ 117,L5.3 $ 1,2115,327 $ 1.322.780 08 DOORS &WIN DOWS # 492,16E 390,455 # 822,"2 N FINISHES $ 417A35 $ 539.551 # 95Gd046 1G SPECIALTIES $ 29,202 $ 12r58a $ 41,782 11 EQUFMENT $ - $ 4S,�0a $ 45,000 12 FURNISHINGS - $ 13 SPECIAL CONSTRUCTION 14 CONVEYING 3 Y'STEN S $ 95�008 $ 0.01) 155,000 21 FIRE SUPPRESSION j 93.981E 97A24 $ 191,404 22 PLUMBING $ 1132,449 $ 73,082 2NA41 23 HVAC j 355,811 4 560,-621; 8 92A,437 2G ELECTRIC AL $ 47OA00 4 391..035 8 MA35 27 COMMUNICATION $ 117,4?5 $ 121,78a $ 23M,255 28 ELECTRONIC SAFETY&SECURITY $ 82= $ 0S;249 $ 1 G7,+n 31 EAETHWORK t G2,4109 4 21;1,10G 8 &n 112 32 EXTERIOR IMPROVEMENTS 4 144,4190 $ 137-737 8 27CA27 33 UTILITIES 421840 4 14.775 8 57.G19 SUBTOTAL $ 3"5,1167 $ 7,157,231; $ 11.052,322 GENERAL CONDMONS olk $ 311)GOT $ 575,775 $ 897,389 BONGS IS IHS U RANC E 2% $ T7.502 $ 143A 5 $ 221,846 OVERHEAD a PROFIT 4% $ 155A03 $ 287..085 $ 4 3,£98 CONTINGENCY 3% 1k 116,853 215.817 332,770 TOTAL CONSTRUCTION COST $ 4,557.251 5 8A120,786 $ 12.57B4O17 'THIS ESTMATE 13 PRICED IN TODAY"S DOLLARS IT DOES NOT INCL U DE E3CALATIOW