HomeMy WebLinkAbout02/01/2024 - Meeting Minutes MINUTES of the
REDEVELOPMENT AGENCY FINANCE COMMITTEE
Thursday, February 1, 2024
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
Amy Rowland, Redevelopment Advisory Committee
Not present:
Baxter Reeser
Also Present:
Cara Lindsley, RDA Deputy Director; Tracy Tran, Senior Project Manager;Allison Parks, Senior City Attorney;
Sara Montoya, Senior City Attorney, Kate Werrett, Project Manager; Marcus Lee, Project Manager; Rusty Snow,
Lincoln Avenue Communities;Ashley Atkinson, Perpetual Housing Fund of Utah;Amanda Rainey, Perpetual
Housing Fund of Utah; Felina Lazalde, RDA Office Facilitator.
2. Approval of the minutes of the November 15, 2023 meeting.
Amy Rowland made a motion to approve the minutes from the November 15, 2023 meeting. Peter Makowski
seconded the motion. Upon roll call,this motion was passed unanimously.
3. Business
A. Funding Recommendation for the High Opportunity Area Affordable Housing Funds Notice of
Funding Availability through the Housing Development Loan Program (HDLP).
Tracy Tran provided an overview of the High Opportunity Area Affordable Housing Funds Notice of Funding
Availability via the Housing Development Loan Program (HDLP). Ms. Tran explained that the funds, established
in 2017, aim to promote affordable housing development in areas fostering economic mobility. Since 2019,the
RDA has approved a single loan in the amount of$1.8 million, leaving $2.7 million available for affordable
housing in high opportunity areas through the HDLP. Projects seeking funding through this program must adhere
to its guidelines, which detail various requirements, including eligibility criteria, project priorities, and standard
loan terms. Notably, projects must address Annual Housing Priorities,ensuring the inclusion of deeply affordable
or Affordable Family-Sized Housing. Specifically, at least 10%of the units must be affordable to those earning
40%AMI and below, or at least 10%of the units must have three or more bedrooms and be affordable to those
earning 60%AMI and below. Both applicants have fulfilled this requirement.All projects must also comply with
the RDA Sustainable Development Policy.Additionally, Ms.Tran presented project priorities used to evaluate
and provide interest rate reductions. The RDA Board selected specific priorities for Fiscal Year 23-24, it was
pointed out that items in bold were weighted slightly heavier than others.These include Family Housing,Target
Populations, Homeownership, Missing Middle and Unique Housing Types, Sustainability, Transportation
Opportunities, Neighborhood Safety, Expand Opportunity,Architecture and Urban Design, Commercial Vitality,
Historic Preservation/Adaptive Reuse, and Public Art.
Ms. Tran explained that the Committee is tasked with providing a recommendation for these two projects. She
pointed out that because the funds have been open for so long,they have not been administered in a
competitive manner. The group was informed that based on the guidelines, applications will be evaluated based
on the following criteria:
1. Alignment with project priorities
2. Content and quality of the project narrative
3. Qualifications and experience of the applicant and development team
4. Content,effectiveness, and appropriateness of the budget, sources, and uses,operating proforma, and
related assumptions.
5. Any and all content regarding building and site design.
The Committee was presented with a summary of applications totaling$5.35 Million (see attached summaries):
1. 515 Tower Conversion Phase I-$2.65 Million
2. Fairmont Heights II-$2.7 Million
Questions:
• Amy Rowland asked the Staff if the portion where the amount was being requested, in each case,
included all of the costs to the city or just this application.
o Tracy Tran clarified the application amounts are only for this request. For example, 6.8%
for the 515 Tower project does not include ARPA funds.Also,the Fairmont Heights
application only addresses Phase II of the project while excluding the additional$3.2
million they are seeking in their other application.
• The 515 Tower project includes a request for a cashflow loan. It looks like there is a deferred
developer fee to repay, a commitment with residents to split the cashflow, and a cashflow note.
Which party takes priority for payment?
o Ashley Atkinson with the Perpetual Housing Fund of Utah explained the reasoning behind
the request for a cashflow loan. The state offered a higher number of state tax credits.As
a result,the Perpetual Housing Fund of Utah offered more units in anticipation of
receiving state tax credits. Unfortunately,the Utah Housing Coalition(UHC) ran out of
state credits which in turn left them with a financial gap. Ms.Atkinson explained they tried
to work with the(UHC)to reduce the number of required units however they were
ultimately notified that 96 units are still required.They were instructed to secure gap
financing.Additionally, it was explained that Zions Bank has offered to partner with them
in obtaining Federal Home Loan Bank(FHLB)financing. This project is ready to start
construction in May of 2024. They cannot apply for the FHLB financing or some of the
other loans and grants until later in the year.Their plan is to pay off most of this cashflow
loan before the project is even stabilized. Since the FHLB is not awarded until late
December,they want to prevent any delays in getting these units up and running.As far
as repayment priority, if for some reason they don't secure any other financing,the RDA
is in the priority up to the 1.15 debt service coverage ratio.The tenants have shared
equity after the RDA, and any deferred fee would be paid very last.
• Regarding the Fairmont project,there is a question for Staff about the ground floor activation
piece, how would we ensure those obligations are met?
o To clarify,the Fairmont project technically does not qualify for the commercial vitality
priority,which would require commercial ground floor use.The project received points for
the architecture urban design,the amount of ground floor glass, and ensuring there is not
just a parking lot behind the walls. These requirements will be incorporated in the loan
documents. If there is no follow-through on the part of the applicant,there will be
recourse allowing for a default on the loan. It was noted that ensuring affordable rents is a
vital piece.
• Is it correct to say that specific benefit is tied to an interest rate reduction and the first recourse in
the event of non-compliance would be an increase to their interest rate?
o That is correct.
• Would the developers of the Fairmont project like to provide some clarification regarding their
schedule in order to ensure the provided information is correct?
o Rusty Snow with Lincoln Avenue Communities explained they intend to apply for tax
credits in 2024.The application for this project is related to an acquisition process. The
acquisition would take place sometime around May. However,they will apply for tax
credits, receive those credits, and close on the larger tax credit project some time in
2025.
• What alternate plans do the Developers have if this particular gap financing fails?
o Fairmont:We have a hard date of May to acquire an A+Affordable site in SLC. If they do
not receive these funds,they will borrow from banks and other things of that nature.
Obviously,that option is more strenuous for them and their partner with the Housing
Authority for various reasons including higher interest rates.
0 515 Tower:They are going after several other different options, but it is really the time
constraint that would hurt them. The Plans will be complete in less than a month. They
will obtain a Tenant Improvement Permit from the City.As mentioned before,they expect
to be able to start construction in early May. Since this project is a conversion, it will have
a very quick construction turnaround.They will do everything they can to keep the project
going. If this particular gap financing fails it will cause a delay, however it will not shut the
project down.
• Can the funding be split between the two projects?
o Yes.
Chair Walz explained that the objective of the meeting was to get a recommendation from the Committee to
take the RDA Board of Directors for potential funding. Chair Walz made a request for any additional
comments or discussion.
Amy Rowland commented that when a project has 9%tax credits awarded,there is a delay as to when they
are received. Until then it is just a gleam in the Developer's eyes. Since there are two applications that came
in at the same time, and one that already has the tax credits in addition to the readiness to proceed with
construction; it is clear who should receive the award.Amy then made a motion that we provide the$2.6
Million in funding requested for the 515 Tower project. Marina Scott seconded the motion. Upon Roll call,
the motion was passed unanimously.
4. Adjournment
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 February 1, 2024.
HOUSING
DEVELOPMENT PROJECT NAME: 515 Tower- Conversion Phase I
LOAN PROGRAM
ADDRESS: 515 E 100 S
OVERVIEW HOUSING UNITS
- - • •- Perpetual Housing Fund of Utah = -• •• • . 0'.
LLC fount
• - •- HDLP Loan Studio 40 - 25 15
• - •- Adaptive Reuse 1 Bed 8 - 6 2
• Underutilized 2 Bed - - - -
3 Bed 32 - 30 2
RDA FUNDING REQUEST 4 Bed 16 - 15 1
M. -Y'R
• - $2650,000 Total 96 - 76 20
$39,231,648
' •. 6.75% CONSTRUCTION DEBT AHEAD OF RDA
PROPOSED TERMS Senior Debt $16,960,000
2%
• 15 Yr PERMANENT SOURCES
•. Cash Flow . • •
Lien Priority Subordinate to permanent 7RDA
ebt $6,508,958 16.7%
debt n $2,650,000 6.8%
$1,000,000 2.6%
HDLP THRESHOLDS AND PRIORITIES Utility Rebates $76,800 0.2%
-• Family-Sized Units and LIHTC Equity $27,696,083 71%
• -- • Deeply Affordable Units SLCO ARPA Grant $598,584 1.5%
• • • • - Deferred Feel $500,000 1.3%
• Yes Total $39,030,425 100%
0'. Electric Yes
Priorities Met Family Housing, Target USES
Populations, Expand
Opportunity, Historic Land $16,000,000 41.0%
Preservation/Adaptive Hard Costs $15,466,320 39.6%
Reuse, Transportation Soft Costs $1,097,907 2.8%
Opportunities, Commercial Developer Fee $2,249,922 5.8%
Vitality Financing Expense $1,921,418 4.9%
TIMELINE Contingency $1,686,134 4.3%
Reserves $608,724 1.6%
• May 1, 2024 Total $39,030,425 100%
• •, • - I December 31, 2024
LOW-INCOME HOUSING TAX CREDIT
NNO
-• Yes
- • Yes, 9%, 2023
1 The Developer is committing an additional$625,000 of
developer fee from the project to create an equity line of credit so
that residents can access their equity prior to a refinance or sale
event,for a total of$1,125,000 deferred developer fee.
7
HOUSING
DEVELOPMENT PROJECT NAME: 515 Tower- Conversion Phase I
LOAN PROGRAM
ADDRESS: 515 E 100 S
RDA APPLICATION NOTES
The RDA, through the City's American Rescue Act Plan (ARPA) funds, allocated $10,000,000 to the Perpetual
Housing Fund of Utah, LLC to purchase this property for an affordable housing development with a tenant wealth
building program. This$10,000,000 was used for the purchase of the property that would then allow PHF to
develop additional projects that carry out their goals to provide 1,000 affordable homes that will help families and
individuals build wealth. This is a unique model in which the developer will be contributing their own profits, which
they will share with the tenants of the building. This development also applied for funding through the competitive
HDLP, which will be in front of the RDA Finance Committee at a future date. The 515 Tower needs a total of
$2,650,000 and if the full amount is received through this round of high opportunity area funding, they will not
need to request funds through the competitive HDLP process.
PROJECT SUMMARY
From Developer: 515 Conversion Phase I a mixed-income, sustainable, adaptive-reuse project located on the East
side of Salt Lake City. The project is part of multi-phase, mixed-use project on the site and will be a beacon of
affordable housing in the rapidly unattainable east side of Salt Lake City. The overall project is planned to include a
mixed-income daycare, local retailers, and impact-focused commercial and co-working space. This project is
being developed by Perpetual Housing Fund and all 96 units in this phase will feature a shared-equity model -
sharing 75%of the phase's profits and appreciation with the residents living here. 515 will incorporate an array of
amenities that will benefit the lives of its residents including a fitness center, a clubhouse, a Greenbike station on
site (with annual passes included at no charge), indoor bike storage, a bike-repair station, and shared outdoor
space. Located within walking distance of the project is an elementary school, 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 also be built within the criteria for Enterprise Green Communities 2020.
DEVELOPER SUMMARY
The project is being developed by Perpetual Housing Fund with Giv Communities as a development consultant.
The team 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. Recent affordable housing
projects by the development team include:
Exchange - Salt Lake City
Project Open Phases 1 and 2 -Salt Lake City
Citizens West Phase I -Salt Lake City
Denver Street Apartments-Salt Lake City
Pamela's Place-Salt Lake City
Imagine Jefferson -Ogden
Startup Crossing- Provo
Harris Village Shelter and Permanent Supportive Housing-Tooele
8
HOUSING
DEVELOPMENT PROJECT NAME: Fairmont Heights II
LOAN PROGRAM
ADDRESS: 2257 S 1100 E
OVERVIEW LOW-INCOME HOUSING TAX CREDIT
- - • •- Lincoln Avenue Capital and • • -• Yes, 9%
Housing Authority of Salt Lake
City No
' - •- HDLP Loan
' - •- New Construction ACQUISITION SOURCES
• Office . • •
7RDAHighvnpp
$3,200,000 45.1%
RDA FUNDING REQUEST
• _• ' -• - $2,700,000 Funds $2,700,000 38.1%
• ' • - $34,009,242 HASLC Cash $800,000 11.3%
PK •. 7.9% LAC Cash $390,000 5.5%
Total $7,090,000 100%
PROPOSED TERMS
2.81% 1% ACQUISITION USES
• 16 Yr, 40 Yr . • •
•. Cash Flow Acquisition $7,000,000 98.7%
• Subordinate to permanent Insurance 1 $40,000 1 0.6% 1
debt Closing Costs 1 $50,000 1 0.7% 1
Total 1 $7,090,000 1 100%
HDLP THRESHOLDS AND PRIORITIES
-• Family-Sized Units and CONSTRUCTION DEBT AHEAD OF RDA
• -- • Deeply Affordable Units
• • • • - Senior Debt $21,767,665
• Yes
Yes PERMANENT SOURCES
• Target Populations, Expand •. •
Opportunity, Senior Debt $3,790,000 11.1%
Transportation RDA Loan $2,700,000 7.9%
Opportunities, Architecture Utility Rebates $142,500 .42%
and Urban Design LIHTC Equity $26,147,384 76.9%
TIMELINE Deferred Fee $1,229,257 3.6%
GP Capital $100 0.0%
• May 1, 2024 Contribution
• :4451W I December 31, 2024 Total $34,009,242 100%
HOUSING UNITS PERMANENT USES
Bedroom Total Market .0• 0•
Count Units Rate AMI AMI Land $3,500,000 10.3%
Studs 40 - - - Hard Costs $23,702,904 69.7%
1 Bed Soft Costs $898,000 2.6%
2 Bed 15 2 4 9 Tax Credit Fees $308,375 .9%
3 Bed - - - - Developer Fee $3,091,512 9.1%
4 Bed - - - - Financing Expense $2,146,018 6.3%
Total 55 9 19 27 & Reserves
Escrow& Reserves $362,432 1.1%
Total $34,009,242 100%
11
HOUSING
DEVELOPMENT PROJECT NAME: Fairmont Heights II
LOAN PROGRAM
ADDRESS: 2257 S 1100 E
RDA APPLICATION NOTES
This project also applied for$3,200,000 for their Fairmont Heights I project through the competitive HDLP
process. Both phases of the project will be located on the same parcel with Phase 1 being built first and Phase 2 to
follow. The developer is seeking an acquisition to permanent financing loan, which means initial funds would be
used to buy the property, but the developer would need to obtain tax credits, financing, and building approvals
within 2 years. If successful, they would be able to convert their acquisition loan to a longer-term permanent
financing loan. If they are not successful, they will be required to pay back the loan at the end of the acquisition
loan term. This project is seeking funding from both sources of funds.
PROJECT SUMMARY
From Developer: This is Phase 11 of a two (2) phase project. Phase 11 is 55 units with 40 1 bed/1 bath units at 710
sf/unit, and 15 2 bed/2 bath units at 1038 sf/unit, with an emphasis on deeply affordable senior housing. The
structure will be a 7-story midrise building comprised of a 2-story parking deck and a 5-story wooden structure
containing the housing. The site is located near the Fairmont stop on the TRAX S-Line. 5 units will be set aside for
the chronically homeless, 5 units for mobility impaired individuals, and 9 units for the disabled. The site presents
an incredible opportunity to tie into the neighborhood fabric and locate housing near transit, employment,
recreation, and services. Both phases are designed to mirror the surrounding neighborhood. The project
transitions into the neighborhood using elements in both the contemporary form of the building and the materials
that clad its skin. The space on the ground floor along Simpson Avenue and 1100 S will activate the building to the
public and bring the design into the neighborhood. The pedestrian nature of the activities within and the rhythm of
the living units help the project feel comfortable.
DEVELOPER SUMMARY
From Developer: Lincoln Avenue Communities was founded with the mission to expand access to high-quality,
affordable homes for families, individuals, and seniors. This work is more important than ever amid historic
inflation and a nationwide housing affordability crisis that have weighed heavily on communities across the
country. These complex challenges have inspired us to continue developing innovative housing solutions that
embody the bold and creative spirit of our growing company. Over the past year, we've reaffirmed our commitment
to preserve and create thousands of affordable housing units, and we are excited to have recently broken ground
on several ground-up developments, adding much-needed units to communities across the country. Today, we're
proud that more than 50,000 residents at 119 properties across 22 states call an LAC community their home.
We've maintained a resident-first approach across our portfolio, connecting families, individuals, and seniors with
local organizations, health resources, and opportunities to further their educational and career goals.
12
2024-02-01 FC Minutes APPROVED
Final Audit Report 2024-04-26
Created: 2024-04-25
By: Felina Lazalde(felina.lazalde@slcgov.com)
Status: Signed
Transaction ID: CBJCHBCAABAAPAQS01xdYa8n12ORjK-5ad7sHLIKzz3R
"2024-02-01 FC Minutes APPROVED" History
Document created by Felina Lazalde (felina.lazalde@slcgov.com)
2024-04-25-10:09:04 PM GMT
Document emailed to Danny Walz (danny.walz@slcgov.com) for signature
2024-04-25-10:10:34 PM GMT
Email viewed by Danny Walz (danny.walz@slcgov.com)
2024-04-26-2:36:30 AM GMT
it Document e-signed by Danny Walz (danny.walz@slcgov.com)
Signature Date:2024-04-26-2:36:53 AM GMT-Time Source:server
® Agreement completed.
2024-04-26-2:36:53 AM GMT
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