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Transmittal - 11/24/2021SALT 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 MAYOR ERIN MENDENHALL Executive Director DANNY WALZ Director REDEVELOPMENT AGENCY of SALT LAKE CITY STAFF MEMO DATE: November 24, 2021 PREPARED BY: Tracy Tran and Lauren Parisi, RDA Project Managers RE: Consideration and Adoption of a Resolution Approving Funding Allocations through the Housing Development Loan Program. REQUESTED ACTION: Consider approving affordable housing funding allocations as selected through a Notice of Funding Availability for the Housing Development Loan Program. POLICY ITEM: Affordable housing. BUDGET IMPACTS: $8,000,000 of RDA funds set aside for affordable housing EXECUTIVE SUMMARY: The Redevelopment Agency of Salt Lake City (“RDA”) recently issued a Notice of Funding Availability (“NOFA”) to solicit applications for up to $8 million available through the Housing Development Loan Program (“HDLP”) to incentivize the development and preservation of affordable housing anywhere within Salt Lake City municipal boundaries. Of the $8 million in available funds, $2.7 million is to be allocated to projects located within high opportunity areas, or areas that improve a person’s chances at upward mobility. The remaining $5.3 million is to be allocated to projects located anywhere within Salt Lake City municipal boundaries. The HLDP is being administered pursuant to the Housing Allocation Funds Policy (“Funds Policy”), resolution R-4- 2021, and the Housing Development Loan Program Policy (“HDLP Policy”), resolution R-7-2021. The Funds Policy establishes policies for allocating and directing resources for the development and preservation of housing by various funding sources. Highlights of the Funds Policy include: •Housing Funds: The Policy establishes four housing funds based on fund source. The revenues, expenditures, interest, and payments for each fund source shall be separately accounted for to ensure the RDA control and oversight to comply with statutory requirements. •Annual Budgeting Process: The policy provides that on an annual basis, the RDA shall present for the Board’s consideration a Housing Development Funding Strategy that projects revenues for the upcoming fiscal year and proposes funding priorities and allocations. This will allow the RDA to be flexible to address current needs, leverage current opportunities, coordinate with other city resources, and allow funding priorities to align with evolving plans and policies. The HDLP Policy provides low-cost financial assistance to incentivize the development and preservation of affordable housing within Salt Lake City municipal boundaries. The HDLP provides a centralized application, underwriting, and approval process regardless of the fund source. The HDLP policy includes: • Funding allocations and priorities determined on an annual basis. This year’s funding priorities set by the Board can be found in Attachment A: Project Priorities and Interest Rate Reductions. These priorities were weighted by importance by the Board. • The transparent administration of funds through a Notice of Funding Availability (NOFA) process. Revenue from various funds may be combined into a consolidated NOFA or a NOFA may be issued for a specific funding source. NOFAs could be offered on an annual basis or multiple times per year and can be competitive or open-ended depending on availability of funds, priorities, and demand. • A standardized process for approving applications and a uniform set of underwriting policies. Pursuant to the policies, the RDA administered a competitive and transparent application process that resulted in eight (8) requests for funding totaling $11,476,37 - refer to Attachment A: Summary of Applications for additional information. All eight (8) requests for funding located outside of high opportunity neighborhoods. The RDA has evaluated application submittals and convened a review committee (“Committee”) to recommend applications for funding. This memorandum includes a summary of application submittals and the Committee’s recommendations for the Board’s consideration and determination of funding allocations. HDLP REVIEW COMMITTEE: Pursuant to the HDLP Policy, RDA staff convened a review committee that included members with experience relevant to the affordable housing industry. This year’s HDLP review committee was comprised of representatives from both the Housing Trust Fund Advisory Board (“HTFAB”) and the RDA Finance Committee/Redevelopment Advisory Committee , and representatives from the RDA, the City’s Division of Housing Stability, and the City’s Department of Community and Neighborhoods (“CAN”). HDLP REVIEW COMMITTEE RECOMMENDATION: On November 19, 2021, the Committee made recommendations regarding all received applications. Refer to Attachment C: HDLP Review Committee Funding Recommendation for recommendation detail. ANALYSIS & ISSUES: Below is an overview of the HDLP application process: I. Application Process The RDA solicited applications as follows: Citywide Funds – Applications were solicited on a time-limited basis, with a call for applications released on September 8, 2021 and an application deadline of October 29, 2021. On September 24, 2021, the RDA hosted a virtual informational meeting to provide an overview of the HDLP application, requirements, and selection process. The video was recorded and a link was provided on the RDA website for those who were unable to attend. Other outreach formats included press releases, website and email communications, social media, and notifications through secondary outlets. II.Funding Priorities and Project Evaluation As part of the application review process, RDA staff analyzed applications according to the HDLP Policy’s eligibility requirements and funding priorities set by the Board this year, which can be found in Attachment B. The housing priorities are weighted and include the ability for an applicant to receive an interest-rate reduction if priorities are met. When evaluating applications, the Committee considered funding priorities along with other factors, including developer experience, the completeness/qualit y of the application, the amount of requested funding per affordable unit, unit mix, community impact, and the financial and regulatory readiness of the proposed project. III.Funding Allocations, Conditional Commitment, and Loan Closing Pursuant to the Policy, the Board will make the final determination of applications to fund. Subsequently, the RDA will issue a conditional commitment letter to those applications that are selected for funding. The conditional commitment letter between the RDA and the applicant will contain the covenants, terms and conditions upon which the RDA will provide financial assistance to the proposed project once financial, legal, regulatory, and design approvals are obtained. Prior to closing on a loan, RDA staff will ensure that the project is financially viable, underwriting standards are met, and the use of public funds is necessary for the project to succeed. PREVIOUS BOARD ACTION: •August 2021: The Board adopted FY21-22 Affordable Housing Funding Priorities. •June 2021: The Board adopted the 2021-2022 budget, which allocated a total of $3,482,627 to Housing Development Loan Program funds included in this year’s affordable housing NOFA. The Housing Development Loan Program fund’s previous balance of $1,840,000 was also included in this year’s NOFA, bringing the total citywide affordable housing offering to approximately $5,300,000. $2,700,000 was also offered for high opportunity areas. •March 2021: The Board adopted the Housing Development Loan Program Policy •February 2021: The Board adopted the Housing Allocation Funds Policy •December 2019: The Board approved $1,800,000 for a loan in a high opportunity area in 2019, which leaves a balance of $2,700,000 in high opportunity area funds. •December 2017: The Board adopted the third amendment for FY 2017-2018, which includes $4,500,000 for a high opportunity area NOFA. ATTACHMENTS: A.Application Overview B.RDA Board Housing Priorities FY21-22 C.HDLP Review Committee Funding Recommendation D.Project Summary Sheets E.Map of Project Locations F.HDLP 2021 Funding Allocation Resolution 1 ‐ 915 W North Temple       915 W North Temple2 ‐ The Nest382 Rio grande3 ‐ Cleveland Court            375 E Cleveland St4 ‐ Silos425 West 500 South5 ‐ 144 S 500 E                144 S 500 E6 ‐ University Heights        1060 E 100 S7 ‐ Schmidt Apts1265 S 300 W8 ‐ CDCU ADUs$1,000,000$19,050,0005.25%$52,632$1,800,000$52,685,7013.42%$8,182$1,451,375$3,359,75443.2%$207,339$2,360,000$23,639,5109.98%$22,264$775,000$32,546,9912.77%$7,045$2,000,000$20,553,8039.73%$133,333$1,590,000$40,926,9693.88%$10,000$500,000 10/301%Hard payments with balloon payment in Y1020/401.5% interestHard payments with balloon payment in Y201% interest only construction loan; convert to soft second loan.RDA paid back upon unit sales for land.  TBD for soft seconds40/401.5% Amortizing Loan No interest until stabalization40/401%Amortizing Loan35/351%Amortizing Loan30/301%Amortizing LoanRDA subsidy ‐ not paid backFor Profit ‐ LLCFor Profit ‐ LLCFor Profit ‐ LLC501 c(3)For Profit ‐ LLCFor Profit ‐ LLCFor Profit ‐ LLC501 c(3)JF Development & Strategic Builders have significant experienceW3 PartnersPeter Corroon/Principals have experience in SLC and Ogden etc.GIV est 2011  &  BCG ARC Fund inc. 2018 experiencedRed Gate est. 1995Valmont est. 2010EMG est. 1985BCG Holdings has municipal leadership experience in housing and financingIn business since 2001, EMG (Mgmt.) est 1985Development would be completed by Homeowner with limited Development experienceNew ConstructionNew ConstructionNew Construction(Condominium Townhomes)New ConstructionNew ConstructionRehabilitationNew ConstructionNote Eligible Activites:Financing/LoansDemolition & New Construction Gap Financing for LIHTCConstruction & Development Soft CostsConstPredevelopment & Construction CostsConstruction CostsConstruction CostsADU ConstructionPurchase Agreement. Expected Settlement Date 12/1/21Deed of Trust with Ground Lease to Project llcQuit Claim DeedGround Lease Special Warranty Deed (100% interest)Special Warranty Deed , Applicant is joint owner of property50 year Ground LeaseN/A20% @ 50% AMI80% @ 80% AMI220 (100%) @ 60% AMIFor Sale Townhomes for families @80% AMI84 units (80%) @ 60% AMI22 units (20%) @ 40% AMI100% 60@ AMI15 unit (28%) @ 60% AMI149 units @ 60@AMI10 units @ 30% AMI10 ADU's @ 60% AMI Total              50%Studio    40 (42%)       8 (42%)1BR         55 (58%)      11(58%)Total  ‐ all @ 60%           Studio      140 (64%) 1BR            80  (36%) 1BR   12BR   43BR   2 Total            60%        40%1BR  88 (83%)    70 (83%)  18 (82%)3BR    18  (17%)   14 (17%)   4 (18%)   Total ‐ all @ 40‐60% Studio    53  (48%)1BR         57  (52%)  Total           40‐60%1BR      45 (85%)       15 (28%)2BR         8 (15%)      Total          60%             30%Studio    40 (25%)      35 (23%)     5 (50%)1BR       103 (65%)      98 (66%)    5 (50%)2BR       16   (10%)       16 (11%)N/ANot AvailablePreliminary Letter for ComplianceNot CompleteNet Zero, Plan to get 80, letter from consultantAll electric, zero emissions96Developer statementN/AProject PrioritiesWeight1.Family Housing3003300 002.Target Populations3300300 003.Neighborhood Safety3330000 304.Homeownership3003000 005. Transportation Opportunities3330033 306. Missing Middle and Unique HousingTypes2002000 007. Expand Opportunity2000000 008. Neighborhood Impact2220022 209. Commercial Vitality2000002 2010. Historic Preservation/Adaptive Reuse1000001 0011.Public Art1001111 10Priority Points 1189769110APPLICATIONS OVERVIEW AND THRESHOLDS ‐ SLCRDA HOUSING DEVELOPMENT LOAN PROGRAM APPLICATIONSRequest AmountProject Cost% of ProjectRDA Funds per UnitProposed Loan TermsTerm/AmortizationInterestRepayment Type Eligible Applicants: 1) For Profit,Partnersp,JV or Sole2) Private 501c33) Public Housing agency, unit of govtDevelopment Team Experience:1) Experience, Financial and technical cap.2) LT viability and complianceSustainability:1) E‐Star Score > 80Eligible Project Types:1) New Construction2) Adaptive Reuse3)Rehab: SubstantialEligible Activities: Land/Prop Acq, Hard Construction Costs, Site imp and soft costsSite Control:Ownership, option, sale agreement or LT LeaseMinimum Affordability:1) 20% @ 60 AMI Unit MixAttachment A: Application Overview PROJECT PRIORITIES AND INTEREST RATE REDUCTIONS The information below was included in the HDLP Guidelines. Project priority criteria will be utilized to evaluate and rank applications as well as provide for interest rate reductions. Priority will be given to projects that meet housing and community priorities, as follows: CATEGORY POLICY OBJECTIVE BENCHMARK NOFA RANKING WEIGHT* 0.5% INTEREST RATE REDUCTION** 1 Family Housing Provide opportunities for families to enjoy the many benefits of urban living by encouraging the development of housing that is more conducive to larger household sizes. At least 10% of the total units are 3+ bedroom units. 3 X 2 Target Populations Expand the availability of units for extremely low-income households and special populations, thereby providing housing options for individuals or families that are homeless or at risk of homelessness. At least 10% of the units are set aside for special populations in partnership with a governmental or nonprofit entity. 3 X 3 Neighborhood Safety Utilize the development of housing as a method to remove blight, reduce crime, revitalize neighborhoods, and stabilize communities. Projects are located within an active RDA project area, refer to Attachment B: RDA Project Area Map and incorporate documented Crime Prevention through Environmental design (CPTED) principals. 3 X 4 Homeownership Create opportunities for those who have historically rented in the community to build wealth and establish permanent roots through homeownership. Project is a for-sale product that will be sold to income qualified individuals/families. 3 X 5 Transportation Opportunities Promote a multimodal transportation network and ensure convenient and equitable access to a variety of transportation options. Projects must meet two of the following: •Includes a car sharing, bike sharing, or transit pass program that is widely available to employees/residents •Includes a commercial project that includes employee shower, locker, and bicycle facilities •Is located within 1/3 mile walking distance of a TRAX 3 X 4 Attachment B: RDA Board Housing Priorities station or S-Line station •Implements reduced parking strategies without negatively impacting the neighborhood •Incorporates majority of parking within a primary structure to minimize the need for a surface parking lot. 6 Missing Middle & Unique Housing Types Promote an array of scale of project types to diversify the City’s housing stock/forms and provide more affordable living options for residents. Projects are either a missing middle housing type (i.e. townhomes, courtyard apartments, small- scale apartments) or a housing type that is not commonly built: tiny homes, modular homes, pre-fab homes, accessory dwelling units (ADUs) 2 X 7 Expand Opportunity Provide for Neighborhoods of Opportunity by promoting the economic diversity of the housing stock within neighborhoods. Projects are located within a High Opportunity Area, which is defined as an area that provides conditions that expand a person’s likelihood for social mobility as identified through an analysis of quality-of- life indicators. Refer to Attachment A: High Opportunity Area Map and Table. 2 X 8 Neighborhood Impact Encourage housing that is high- quality, enduring, and that contributes to neighborhood context and livability through architectural and urban design best practices. Buildings shall include an active ground floor use, significant ground floor glass, durable building materials and engaging building entrances. 2 X 9 Commercial Vitality Foster a mix of land uses and unique neighborhood business districts that adequately meet the local community’s needs. Projects are mixed-use and establish new services, amenities, or underrepresented business types in the neighborhood that the local community 2 X 5 identifies as lacking and desired. 10 Historic Preservation /Adaptive Reuse Encourage the preservation and/or reuse of buildings to preserve the character of neighborhoods. Projects that preserve buildings that are 50 years old or older and/or projects that adaptively reuse an existing building 1 X 11 Public Art 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. Project contributes at least 1.5% of the RDA contribution towards the installation of art onsite or towards the RDA art fund as outlined in the RDA Art Policy. 1 X *Note: NOFA Ranking Weight: Uses a number (the weight) between 1 and 3 to assess the importance of the funding priority, with 1 being of lower importance and 3 being of the highest importance. **Note: .05% Interest Rate Reductions: While 12 interest rate reductions will be available, the maximum a project can quality for is four, thereby reducing the interest rate to a minimum of 1%. 6 The HDLP review committee (“Committee”) recommends the following - *The final loan terms shall comply with the requirements, standard loan terms and conditions, interest-rate reductions, and all other details laid out within the 2021 Housing Development Loan Program (HDLP) Guidelines If the RDA Board would like to fund the full requests for The Nest and Schmidt Apartments, RDA staff could allocate some of the ~$2M in “emergency funds” that the RDA plans to issue early next year for another Notice of Funding Availability (“NOFA”). If the full amounts of The Nest and Schmidt Apartments are funded, approximately $775,000 would be available for the next round of the NOFA for the Housing Development Loan Program. PROJECT/APPLICANT ADDRESS FUNDING REQUEST PRELIMINARY TERMS* FUNDING RECOMMENDATION FUNDING RANKING Silos on 5th 425 W. 500 South $2,360,000 1.5% interest, 40-year term, 40-year amortization $2,360,000 1 Giv Communities 144 S. 500 East 144 S. 500 East $775,000 1% interest, 40-year term, 40-year amortization $775,000 2 Red Gate The Nest 382 Rio Grande $1,800,000 1.5% interest, 20 year term, 40 year amortization, regular payments w/ balloon payment end of term $1,082,500 3 W3 Partners Schmidt Apartments 1265 S. 300 West $1,590,000 1% interest, 30 year term, 30 year amortization $1,082,500 3 Westates University Heights 1060 E. 100 South $2,000,000 1% interest, 35 year term, 35 year amortization $0 BCG 915 W. North Temple 915 W. North Temple $1,000,000 1% interest, 10 year term, 30 year amortization, regular payments w/ balloon payment end of term $0 JF Development Group Cleveland Court 375 E. Cleveland Street $1,451,375 1% interest only construction loan converted to soft second loan(s). RDA paid back for land upon sale of units $0 Sentry Financial ADU Financing Program CDCU Citywide $500,000 RDA Grant $0 TOTAL $11,476,375 $5,300,000 Attachment C: HDLP Review Committee Funding Recommendations PROJECT NAME: #1 – 915 W North Temple ADDRESS: 915 E North Temple DOES THE PROJECT MEET NOFA THRESHOLD REQUIREMENTS?: Yes, will need to ensure project meets Energy Star Statement of Design Intent requirement once the project is further along. PROJECT SUMMARY: According to the developer: “This project is in the initial concept phase with construction expected to start in Summer 2022 and completion by Summer 2023. Our goal is to provide a high quality, affordable housing TOD project without using Section 42 LIHTC. We plan to work with other key stakeholders in our community, including Housing Connect, Intermountain Healthcare Impact Fund, Utah Center for Neighborhood Stabilization, and others to maximize the affordability targets of this project. The project will include a minimum of 20% of units at 50% of AMI through a LURA and the remaining units at 80% AMI through sponsor-initiated (self imposed) affordability. We will seek to layer in deeper affordability, additional deed-restrictions, and targeted populations through additional community partnerships. We will include robust resident services or work non - profits to include services such as ESL, financial literacy, after-school activities, community events, and other socially-oriented programming.” OVERVIEW: DEVELOPER: Ryan Davis/JF Development Group REQUEST TYPE: Construction Costs PROJECT TYPE: New Construction EXISTING LAND USE: Commercial/Retail HOUSING UNITS: 95 TOTAL TOTAL MARKET 60 - 40% AMI <40% AMI Studio 32 ($1292) 8 ($808) 1-Bed 44 ($1384) 11($865) TOTAL 76 19 FUNDING REQUEST: NOFA REQUEST TOTAL PROJECT COST $1,000,000 5.2% $19,050,000 TIMELINE: Commence Construction June 2022 Complete Construction September 2023 TAX CREDITS: Applying for Tax Credits (Y/N): N Tax Credits Awarded (Y/N): n/a SOURCES: FUNDING SOURCES AMOUNT Cash Equity $5,665,066 29.7% RDA HDLP Loan $1,000,000 5.2% Bank Debt $12,385,000 65.0% TOTAL SOURCES: $19,050,066 100% USES: FUNDING USES AMOUNT Land $2,000,000 10.5% A&E $653,462 3.4% Hard Costs $13,069,231 68.6% FF&E $200,000 1.0% Soft Costs $800,000 4.2% Financing Costs $848,750 4.5% Developer Fee $700,051 3.7% Contingency $778,572 4.1% TOTAL USES: $19,050,066 100% PROPOSED TERMS: Interest Rate: 1% Term: 10 yr term/ 30 yr Am Details Hard repayments, subordinated to senior lender. Balloon payment due at end of term. Attachment D: Project Summary Sheets 8 DEVELOPER SUMMARY: According to the developer, “JF has been actively developing multifamily housing for over a decade and has delivered over 2,000 multifamily units, including 900 deed-restricted affordable housing units. JF has developed over $200M of affordable housing projects in Utah and has over $150M of affordable/workforce housing projects in our pipeline. We have completed projects with 100% affordable units at 60% AMI, projects with tiered rents at 40-50-60% AMI, mixed-income projects with affordable and market-rate, and mixed-use with ground-floor commercial space.” SITE MAP: PROJECT RENDERINGS: 9 PROJECT NAME: #2 – The Nest ADDRESS: 382 S Rio Grande St DOES THE PROJECT MEET NOFA THRESHOLD REQUIREMENTS?: Yes, will need to ensure project meets Energy Star Statement of Design Intent requirement. PROJECT SUMMARY: According to developer “W3 Partners has purchased land consisting of three parcels totaling approximately 1.59 acres and located at 358 and 382 South Rio Grande Street and 365 South 500 West in Salt Lake City, Utah. OVERVIEW: DEVELOPER: Janet West/W3 Partners, LC REQUEST TYPE: Construction Costs PROJECT TYPE: New Construction EXISTING LAND USE: Office and Vacant Land HOUSING UNITS: 220 TOTAL TOTAL MARKET 60 - 40% AMI <40% AMI Studio 140 ($926) 1-Bed 80 ($988) TOTAL 220 FUNDING REQUEST: NOFA REQUEST TOTAL PROJECT COST $1,800,000 3.42% $52,644,890 TIMELINE: Commence Construction June 2022 Complete Construction November 2024 TAX CREDITS: Applying for Tax Credits (Y/N): Y, 4% Tax Credits Awarded (Y/N): N SOURCES: FUNDING SOURCES AMOUNT Perm Loan $29,600,000 56.2% Tax Credit Equity $18,480,345 35.1% Deferred Developer Fee $1,387,545 2.6% Olene Walker Loan $1,000,000 1.9% RDA Loan $1,800,000 3.4% Investor Equity $312,000 .6% Questar Rebate $5,000 .01% Rocky Mountain Power Rebate $60,000 .1% TOTAL SOURCES: $52,644,890 100% USES: FUNDING USES AMOUNT Land (demo) $90,000 .2% Construction $41,057,255 78% A&E $3,774,739 7.2% Reserves $1,214,600 2.3% Development Fee $4,427,486 8.4% Financing Costs $1,715,166 3.3% Bond Issuance Expenses 364,750 .7% TOTAL USES: $52,644,890 100% PROPOSED TERMS: Interest Rate: 1.5% Term/Am: 20 yr term/ 40 yr Am Details: Hard repayments annually with balloon payment in Y20. The land will be leased to the project llc and will be based on cashflow. Land lease payments are paid prior to debt service. 10 Located on Parcel 1 is an existing office building consisting of approximately 27,000 rentable square feet that is 100% leased until 2028. Parcel 2 is adjacent to, and south of, the office building and currently has a surface parking lot that parks the office building. Parcel 3 is vacant land and is adjacent to both parcels on their west boundary. Parcels 2 and 3 can be developed immediately (1.08 acres), and this is the land upon which the Low-Income Housing Tax Credit (LIHTC) multi-family housing will be built. The LIHTC multi-family project (The Nest @ Rio Grande) will consist of six floors, with five levels of residential units totaling 220 units situated over one level of structured parking (50 stalls). Additional parking (22 stalls) will be built on the north portion of Parcel 3 and situated behind the office building. This parking will be used by the office building during business hours Monday through Friday and used by the tenants of the apartment building during the nights and weekends. We are anticipating a 100% LIHTC project at 60% of the Average Median Income (AMI). We have a market study performed by Western States Multifamily that suggests this is a great location for an affordable project, with LIHTC rents being on average 14%-29% less than the surrounding market rents.” DEVELOPER SUMMARY: According to the developer, “W3 Partners, LC, was founded in 2020 to continue the investment, development and management of real estate assets that the three principals have been engaged in for many years. On a combined basis, the three principals have been engaged in this business for over 100 years. Their previous company began as Cottonwood Partners in 1997 and had an established record of very successfully investing over $2 billion in new development and existing properties over its 28-year history. Founders of W3 Partners were owners of Cottonwood and/or its assets and were, respectively, the CEO, CFO and Director of Asset Management, and Broker, Directing of Leasing and Development Officer for Cottonwood. The focus of W3 Partners is to invest in properties that can be significantly enhanced by development or redesign and refurbishment. This philosophy has been successfully executed in many projects, and they include the 1 million square-foot Cottonwood Corporate Center, the Scowcroft Office Building, the Newpark Office Buildings, and the 45-acre Forge development. These are all in Utah and are representative of the company’s expertise and success. The capital necessary for the these, and other projects, has been provided by wealthy individuals, private equity firms, institutional investors, banks and insurance companies.” SITE MAP: 11 PROJECT RENDERINGS: 12 PROJECT NAME: #3 – Cleveland Court ADDRESS: 375 E Cleveland St DOES THE PROJECT MEET NOFA THRESHOLD REQUIREMENTS?: No, HDLP funds are limited to 10% or less of the project’s financing sources. The RDA has not traditionally worked on homeownership projects so this concept would be new for the RDA to undertake. Since affordable homeownership is a priority for the RDA Board, the RDA Board may want to consider this project and waive the 10% limit. OVERVIEW: DEVELOPER: Peter Corroon/Sentry Financial REQUEST TYPE: Construction and Soft Costs PROJECT TYPE: New Construction/Homeownership EXISTING LAND USE: Vacant HOUSING UNITS: 7 TOTAL TOTAL 80% AMI 1-Bed 1 2-Bed 4 3-Bed 2 TOTAL 7 FUNDING REQUEST: NOFA REQUEST TOTAL PROJECT COST $1,451,375 43.2% $3,359,754 TIMELINE: Commence Construction Q4 2021 Complete Construction Q3 2022 TAX CREDITS: Applying for Tax Credits (Y/N): N Tax Credits Awarded (Y/N): N SOURCES: FUNDING SOURCES AMOUNT % Equity $1,908,379 56.8% RDA Loan $1,451,375 43.3% TOTAL SOURCES: $3,359,754 100% USES: FUNDING USES AMOUNT % Land $500,000 14.9% Construction $2,301,606 68.5% Soft Costs $415,097 12.4% Reserves $131,952 3.9% Development Fee - 0% Financing Costs $11,099 .3% TOTAL USES: $3,359,754 100% PROPOSED TERMS: Interest Rate: 1% interest only construction loan on $951,375 that will convert to soft second loan Term/Am: Construction loan that would convert to permanent loan for a period of at least 15 years Details: The applicant is requesting that the RDA purchase the property for $500,000 in which that amount could be paid back to the RDA upon the sales of the units. The other $951,375 would be a construction loan that would convert to soft second loans. The developer has stated that alternatively, the RDA could provide just the $951,375 loan if we did not want to purchase the land. 13 PROJECT SUMMARY: From the Developer: “The project concept is to provide affordable "missing-middle" home ownership opportunities in Salt Lake City. The units will be built and sold to persons and families at or below 80% of the area median income (AMI). The seven condominiums are broken up into two buildings in order to provide a more neighborhood residential feel to the project. The Cleveland Court project is environmentally sustainable (equipped with solar generation and high insulation values), is visually attractive and appealing, and is designed with dog runs, a fire pit, patios, balconies, and an internal courtyard – all of which encourage residents to engage with one another and with the surrounding neighborhood. The project has gone through the city's Planned Development process which provided additional design elements to make the project more attractive on the exterior, such as more windows and pedestrian entries with canopies.” The RDA currently does not have specific policies related to affordable homeownership to guide the details of this request. The details would need to be further negotiated with the developer and will require policy direction and approval from the RDA Board. The developer has provided some flexibility in their request since the RDA currently does not have detailed policies for affordable homeownership. DEVELOPER SUMMARY: According to the developer, “The principals of Cleveland Court, LLC co-own with their partners thousands of apartments in the Intermountain West. Most recently, the firm has developed the Tower View Apartments in Ogden, Utah (144 units) and the Downington Place Condominiums in Salt Lake City (3 units), a for-sale townhome project. Peter Corroon, who will oversee this development, has constructed or renovated hundreds of units of affordable housing over the last two decades. Most recently, he has completed projects in Salt Lake City, including the Casa Milagros Apartments (61 units), a senior affordable housing project serving tenants between 25% and 50% of the area median income, and Cornell Place (146 units), a project serving tenants between 40% and 60% of the area median income.” SITE MAP: 14 PROJECT RENDERINGS: 15 PROJECT NAME: #4 – Silos on 5th Phase 1 and 2 ADDRESS: 425 West 500 South DOES THE PROJECT MEET NOFA THRESHOLD REQUIREMENTS?: Yes, will need to ensure project meets Energy Star Statement of Design Intent requirement. PROJECT SUMMARY: Silos on 5th Phase 1 and 2 is a a part of a larger development plan and will be located west of the former Utah Cereal Mill property. From Developer: “Giv Group has been building all-electric, zero-emission buildings since 2017. The project will leverage best practices in all-electric design and assembly, including solar-ready, battery-ready, and EV charging. Per LIHTC, units will be Enterprise Green communities certified and include Energy Star appliances. Long-term ownership entices the ownership team to optimize for operations and maintenance (O&M) and repair & replacement cycyles. The ownership strategy rebalances the first cost/lifecycle equation to focus on durability, efficiency, and OVERVIEW: DEVELOPER: Matthew Abbot/Giv Communities REQUEST TYPE: Construction Costs PROJECT TYPE: New Construction EXISTING LAND USE: Commercial/Industrial - Vacant HOUSING UNITS: 106 TOTAL TOTAL MARKET –80%60 - 40% AMI <40% AMI 1-Bed - 70 ($716-$803) 18 ($370-$613) 2-Bed - 0 0 3-Bed - 14 ($976-$1096) 4 ($497-$832) TOTAL - 84 22 FUNDING REQUEST: NOFA REQUEST TOTAL PROJECT COST $2,360,000 9.98% $23,673,260 TIMELINE: Commence Construction August 2022 Complete Construction August 2023 TAX CREDITS: Applying for Tax Credits (Y/N): Y, 9% Tax Credits Awarded (Y/N): Yes for phase 1, not yet for phase 2 SOURCES: FUNDING SOURCES AMOUNT LIHTC Investor $16,120,978 68.2% RMCRC $2,639,283 11% RDA Loan $2,360,000 10% OWHLF $1,500,000 6.4% Deferred Developer Fee $1,000,000 4.2% Utility Rebates $53,000 .2% TOTAL SOURCES: $23,673,260 100% USES: FUNDING USES AMOUNT Land - - Hard Costs $18,408,055 80.8% Soft Costs $1,059,854 4.5% Developer Fee $2,063,892 8.7% Financing Expense $900,500 3.8% Contingency $830,000 3.5% Reserves $410,960 1.7% TOTAL USES: $23,673,260 100% PROPOSED TERMS: Interest Rate: Qualify for 1.5% but asking for 1% Term/Am: 40 yr/40yr Details: Hard repayments, subordinated to senior lender. Ground lease 16 total cost of ownership. At a minimum, apartment amenities will include: bike racks, gated parking, raised garden beds, electric charging (L2),quartz countertops, high-efficiency water heaters, low flow fixtures, LED lighting, and washer dryers”. DEVELOPER SUMMARY: From Developer: “Giv has completed and manages multiple projects in Salt Lake City, Provo, and Ogden. These projects include Citizens West, Exchange, Project Open (One & Two), North Sixth, Startup Crossing, Imagine Jefferson (One & Two) and as a consultant on many other projects, including the Denver Apartments and Pamela’s Place. More on Give Group and the team here: https://giv.group/ BCG holdings, the project guarantor, has been actively developing The Granary District recently completing Industry, amongst other projects. Jonathan Hardy, part of the BCG team, was formerly the head of Housing and Community Development for the State of Utah and a board member for Utah Housing Corporation. In this role, he managed compliance for over 500 projects. BCG and Giv are currently collaborating on The Silos on 5th Phase 1 &2 as part of a broader redevelopment project.” SITE MAP: PROJECT RENDERINGS: 17 18 PROJECT NAME: #5 – 144 South ADDRESS: 144 S. 500 East DOES THE PROJECT MEET NOFA THRESHOLD REQUIREMENTS?: Yes PROJECT SUMMARY: From Developer – The developer, 144 South Apartments, LLC, proposes to build the 144 South project, a 6-story (above- grade), 110-unit apartment building on a 0.62-acre parcel located at 144 S 500 East in Salt Lake City. The project will include a 420 square-foot cafe (or other retail) which is integrated into the entry lobby, an approximately 1,600 sf co-working business center, plus an abundance of amenity spaces including a club house, exercise facility, pet wash, secure bike parking and large outdoor deck. There will be 53 studio units and 57 one-bedroom units. The developer is seeking Low-Income Housing Tax Credits so that building contains 110 affordable housing units (100%) with rents for tenants at or below 60% Area Median Income. OVERVIEW: DEVELOPER: Peter Corroon – 144 South Apartments LLC REQUEST TYPE: Pre-Development & Construction Costs PROJECT TYPE: New Construction EXISTING LAND USE: Vacant Office Building/House HOUSING UNITS: 110 TOTAL TOTAL MARKET 60 - 40% AMI <40% AMI Studio 53 ($925) 1-Bed 57 ($988) TOTAL 110 FUNDING REQUEST: NOFA REQUEST TOTAL PROJECT COST $775,000 2.3% $32,547,991 TIMELINE: Commence Construction February 2022 Complete Construction October 2023 TAX CREDITS: Applying for Tax Credits (Y/N): Y – 4% Tax Credits Awarded (Y/N): N SOURCES: FUNDING SOURCES AMOUNT Senior Lender Debt $16,900,000 51% Seller Land Note $2,702,000 8.3% Deferred Developer’s Fee $1,057,335 3.2% RDA Loan $775,000 2.3% Olene Walker $500,000 1.5% County HOME Funds $250,000 .7% LIHTC Equity $10,303,156 31% Energy Rebates $65,000 2.3% TOTAL SOURCES: $32,547,991 100% USES: FUNDING USES AMOUNT Acquisition (land & demo) $4,823,000 14.8% Site Work $1,458,954 4.4% Construction $17,980,171 55% Contingency $1,572,631 4.8% Architect and Engineering Fees $423,500 1.3% Profit and Overhead $3,047,253 9.3% Financing $1,159,386 3.5% Soft Costs $453,036 1.3% Interim Proration Schedule Exp. $958,796 2.9% Project Reserves $671,264 2% TOTAL USES: $32,547,991 100% PROPOSED TERMS: Interest Rate: 1% Term/Amortization: 40/40 Loan Details Hard Repayments Repayment Priority: Subordinate to Senior Lender 19 The building will consist of five floors of wood frame construction over a 3-level concrete parking structure with 113 parking spaces available for tenants. The Department of Housing and Urban Development is requiring at least one-to-one parking for each apartment in order to obtain its funding. DEVELOPER SUMMARY: From Developer – 144 South Apartments, LLC consists of two partners, Red Gate Properties and Valmont Investments. Red Gate Properties was founded in 1995 by brothers Peter and Christopher Corroon. Red Gate Properties has developed, rehabilitated and/or managed several multi-family and commercial real estate properties in Utah, including seven multi-family properties as well as a self-storage facility, two office buildings and two warehouses. Peter Corroon has completed three affordable tax-credit projects. More recent affordable housing projects include the Cornell Street Apartments with 146 units and the Casa Milagros by Centro Civico Housing with 61 apartments. Valmont Investments, LLC invests in single-family and multi-family investment properties in the Salt Lake valley. Once completed, the property will be professionally managed on a day-to-day basis by the EMG Management which has many years of experience with multi-family affordable housing projects. SITE MAP: PROJECT RENDERINGS: 20 21 PROJECT NAME: #6 – University Heights ADDRESS: 1060 E. 100 South DOES THE PROJECT MEET NOFA THRESHOLD REQUIREMENTS?: Yes PROJECT SUMMARY: From Developer: “This project proposes to adaptively reuse an existing office building for 53 apartments units and maintain some commercial office space on the ground floor. It is proposed to be a partnership with the University of Utah incorporating the existing transit infrastructure and elements to house incoming faculty looking to relocate to the University area and for employees that meet the income restricted nature of the units. Amenities will include high level amenities such as an indoor bike storage and locker area, fitness facility options, self serve dog wash station that can be commercially utilized by the neighborhood. New green landscaping will be incorporated to soften current concrete elements like the upper parking deck that serves the proposed commercial space. This project is an opportunity to create affordable housing without tax credits. Rather than RDA being a minor portion of creating affordability, this loan and the subsequent state match program grant will create affordability where market units would otherwise exist.” OVERVIEW: DEVELOPER: Jonathan Hardy/BCG Holdings REQUEST TYPE: Construction Costs PROJECT TYPE: Adaptive Reuse EXISTING LAND USE: Office Building HOUSING UNITS: 53 TOTAL TOTAL MARKET 60 - 40% AMI <40% AMI 1-Bed 30 15 ($1000) 2-Bed 8 TOTAL 38 15 FUNDING REQUEST: NOFA REQUEST TOTAL PROJECT COST $2,000,000 9.73% $20,553,803 TIMELINE: Commence Construction July 2022 Complete Construction September 2023 TAX CREDITS: Applying for Tax Credits (Y/N): N Tax Credits Awarded (Y/N): N SOURCES: FUNDING SOURCES AMOUNT Senior Lender Debt $14,593,455 71% RDA Loan $2,000,000 10% State of Utah Match Grant $1,057,335 5% Owner Equity $775,000 4% TOTAL SOURCES: $20,553,803 100% USES: FUNDING USES AMOUNT Land/Existing Structures $6,316,000 30.7% Hard Costs $11,495,674 55.9% Soft Costs $545,000 2.7% Developer Fee $768,387 3.7% Financing Expense $1,028,742 5% Reserves $400,000 1.9% TOTAL USES: $20,553,803 100% PROPOSED TERMS: Interest Rate: 1% Term/Amortization: 35/35 Loan Details Hard Repayments, subordinated to senior lender 22 DEVELOPER SUMMARY: From Developer: “BCG Holdings is a current guarantor and co-developer of the Silos on 5th. In addition, Jonathan Hardy on the BCG Holdings team managed the State of Utah Housing and Community Development Division (HCD) and its Olene Walker Housing Loan Fund for over 10 years. In addition, having served on the board of the Utah Housing Corporation and being responsible as a Trustee and in his position with HCD, Jonathan was charged with maintaining compliance over a portfolio of 10,000 plus units as a pass through entity for HUD. BCG is committed and has the experience to meet all objectives set forth and agreed to between the RDA and BCG.” SITE MAP: PROJECT RENDERINGS: 23 24 PROJECT NAME: #7 – Schmidt Apartments ADDRESS: 1265 S. 300 West DOES THE PROJECT MEET NOFA THRESHOLD REQUIREMENTS?: Yes. PROJECT SUMMARY: From Developer – “This is a proposed new construction project with 159 affordable units (100% affordable) and 3,500 square feet of commercial space on the found floor. The site is ideal for affordable housing due to its proximity to employment opportunities and public transportation. It is located withing walking distance to the TRAX Ballpark Station. In addition to the significant project attributes above, the projects will be designed to be a netZero project meaning it will generate sufficient energy through on-site solar panels to offset 100% of project energy usage. All appliances and HVAC will be electric only. The project will also meet Energy Star standards. The project will be a valuable asset to the neighborhood and the city.” OVERVIEW: DEVELOPER: Corey Johnson/Westates REQUEST TYPE: Construction Costs PROJECT TYPE: New Construction EXISTING LAND USE: Commercial Building HOUSING UNITS: 159 TOTAL TOTAL 60 - 40% AMI <40% AMI Studio 35 ($936) 5 ($484) 1-Bed 98 ($1,038) 5 ($519) 2-Bed 16 ($1,245) TOTAL 149 10 FUNDING REQUEST: NOFA REQUEST TOTAL PROJECT COST $1,590,000 3.9% $40,950,402 TIMELINE: Commence Construction July 2022 Complete Construction July 2024 TAX CREDITS: Applying for Tax Credits (Y/N): Y – 4% Tax Credits Awarded (Y/N): N SOURCES: FUNDING SOURCES AMOUNT Senior Lender Debt $20,100,000 49.1% RDA Loan $1,590,000 3.9% Tax Credit Equity $18,721,252 45.7% Deferred Developer Fee $404,000 1.0% Utility Rebates $135,150 .3% TOTAL SOURCES: $40,950,402 100% USES: FUNDING USES AMOUNT Demolition $75,000 .2% Site Work & Construction $30,446,948 74.4% Contingency $1,927,552 4.7% Architect and Engineering Fees $425,000 1.0% Development Fee $3,651,696 8.9% Financing Expenses $2,406,075 5.9% Soft Costs $213,856 .5% Syndication Costs $163,000 .4% Project Reserves $1,640,890 4.0% Misc. $386 .001% TOTAL USES: $40,950,402 100% PROPOSED TERMS: Interest Rate: 1% Term/Amortization: 30/30 Loan Details Hard Repayments, Subordinate to senior lender. Ground lease 25 DEVELOPER SUMMARY: From Developer: “Westates Companies is the principal partner within the general partnership. Westates is a Utah construction and development firm headquartered in Salt Lake City. It began operations in 2001. Westates is a partner in three 9% LIHTC projects and two 4% LIHTC projects. Furthermore, they have constructed or developed over 2,000 apartments and townhome units.” SITE MAP: PROJECT RENDERINGS: 26 PROJECT NAME: #8 – CDCU ADU Financing Program ADDRESS: Citywide DOES THE PROJECT MEET NOFA THRESHOLD REQUIREMENTS?: No – This request would require an exception from the Review Body and RDA Board. PROJECT SUMMARY: OVERVIEW: DEVELOPER: Community Development Corporation of Utah (CDCU) REQUEST TYPE: Construction Loan(s) PROJECT TYPE: ADU Financing Program EXISTING LAND USE: n/a HOUSING UNITS: ADU rent limited to 60% AMI for at least 3 years. FUNDING REQUEST: NOFA REQUEST TOTAL PROJECT COST $500,000 Average ADU Loan - $125,000 TIMELINE: Commence Construction Ongoing Complete Construction Ongoing TAX CREDITS: Applying for Tax Credits (Y/N): N Tax Credits Awarded (Y/N): N SOURCES: FUNDING SOURCES AMOUNT RDA Subsidy $500,000 US Treasury Grant Unknown at this time CDCU Funds Unknown at this time USES: FUNDING USES AMOUNT ADU Construction Amount (average) $150,000 each 100% PROPOSED TERMS – See pages 14 and 15 of project proposal for more detail. RDA Subsidy Does not get paid back CDCU Loan -Interest only for 12 months. -Thereafter, interest due monthly based on 20-year amortization until maturity. -Loan term of 3 years. -When loan term expires, total loan amount must be paid back to CDCU or the total loan excluding the RDA’s $30-50K subsidy. If the latter, Deed of Trust must be maintained to rent to lessee at $60% AMI. 27 DEVELOPER SUMMARY: PROJECT RENDERINGS: (ADU Design to vary based upon owner preferences) 28 6 - University Heights5 - 144 S 500 E 2 - The Nest 4 - The Silos 1 - 915 W North Temple 7 - Schmidt Apts 3 - Cleveland Court ATTACHMENT E: Map of Project Locations Legend High Opportunity Area 2021 HDLP Submittals 1 REDEVELOPMENT AGENCY OF SALT LAKE CITY RESOLUTION NO. _______________ Affordable Housing – Housing Development Loan Program (HDLP) Funding Allocations RESOLUTION OF THE BOARD OF DIRECTORS OF THE REDEVELOPMENT AGENCY OF SALT LAKE CITY APPROVING CITYWIDE AFFORDABLE HOUSING PROJECT FUNDING ALLOCATIONS. WHEREAS, the Redevelopment Agency of Salt Lake City (“RDA”) was created to transact the business and exercise the powers provided for in the Utah Community Reinvestment Agency Act (the “Act”). WHEREAS, the Act provides that tax increment funds may be used for the purpose of increasing the affordable housing supply within the boundaries of Salt Lake City. WHEREAS, the RDA Board of Directors (“Board”) approved the Housing Funds Allocation Policy (“Funds Policy”), Resolution R-4-2021, which establishes policies with respect to dedicating and directing resources for the development and preservation of housing based on funding source (“Housing Funds”). WHEREAS, the Board has set aside $8,000,000 of Housing Funds for affordable housing through the RDA’s Housing Development Loan Program (“HDLP”) including $5,300,000 in HDLP funds and $2,700,000 in high opportunity funds. The allocation of funds is contingent upon an application and review process administered by the RDA to facilitate funding of qualified projects that meet the goals established by the HDLP. WHEREAS, through a Notice of Funding Availability (“NOFA”), the RDA administered a loan application and review process pursuant to the HDLP policy set forth in resolution R-7-2021 (the “HDLP Policy”) and the RDA’s Housing Funding Priorities for Fiscal Year 2021-2022 (“Funding Priorities”) that resulted in eight requests for funding totaling $11,476,375. All eight applications are for projects located outside of high opportunity area neighborhoods. WHEREAS, on November 19, 2021, the HDLP Review Committee (“Review Committee”) reviewed the HDLP applications and recommended funding allocations and preliminary terms as further described in on Exhibit A. WHEREAS, based on the Review Committee’s recommendations, RDA staff recommend that the Board approve the funding allocations and preliminary terms described in Exhibit A. WHEREAS, following approval of funding allocations and preliminary terms as set forth on Exhibit B, the RDA shall provide a conditional commitment period during which the approved Attachment F: HDLP 2021 Funding Allocation Resolution 2 applicant shall have the opportunity to obtain needed financial, legal, and regulatory approvals, as well as satisfy other conditions determined by the RDA, to finalize the loan terms. WHEREAS, pursuant to the HDLP Policy, applicants that successfully meet the conditions of the conditional commitment shall be invited to execute a Letter of Commitment to finalize the loan terms, subject to a set of conditions precedent to closing of the loan. NOW THEREFORE, BE IT RESOLVED BY THE BOARD that it approves the funding allocations and preliminary terms as further described in Exhibit B, subject to revisions that do not materially affect the rights and obligations of the RDA hereunder. For approved applicants that successfully meet the required conditions, the Board authorizes the Executive Director to negotiate and execute the conditional commitment letter, the Letter of Commitment, and the loan agreements and other relevant documents consistent with the funding allocations and terms contained on Exhibit B and incorporating such other terms and conditions as recommended by the City Attorney’s office. Passed by the Board of Directors of the Redevelopment Agency of Salt Lake City, this _______ day of December 2021. ________________________________ Ana Valdemoros, Chair Approved as to form: __________________________________ Salt Lake City Attorney’s Office Sara Montoya Date:____________________________ The Executive Director: ____ does not request reconsideration ____ requests reconsideration at the next regular Agency meeting. ________________________________ Erin Mendenhall, Executive Director Attest: ________________________ City Recorder November 23, 2021 3 EXHIBIT A: RDA HDLP REVIEW COMMITTEE RECOMMENDED FUNDING ALLOCATIONS The RDA HDLP Review Committee recommends that funding be allocated to projects in order of priority ranking. *The final loan terms shall comply with the requirements, standard loan terms and conditions, interest-rate reductions, and all other details laid out within the 2021 Housing Development Loan Program (HDLP) Guidelines PROJECT/APPLICANT ADDRESS FUNDING REQUEST PRELIMINARY TERMS* FUNDING RECOMMENDATION FUNDING RANKING Silos on 5th 425 W. 500 South $2,360,000 1.5% interest, 40-year term, 40-year amortization $2,360,000 1 Giv Communities 144 S. 500 East 144 S. 500 East $775,000 1% interest, 40-year term, 40-year amortization $775,000 2 Red Gate The Nest 382 Rio Grande $1,800,000 1.5% interest, 20 year term, 40 year amortization, regular payments w/ balloon payment end of term $1,082,500 3 W3 Partners Schmidt Apartments 1265 S. 300 West $1,590,000 1% interest, 30 year term, 30 year amortization $1,082,500 3 Westates University Heights 1060 E. 100 South $2,000,000 1% interest, 35 year term, 35 year amortization $0 BCG 915 W. North Temple 915 W. North Temple $1,000,000 1% interest, 10 year term, 30 year amortization, regular payments w/ balloon payment end of term $0 JF Development Group Cleveland Court 375 E. Cleveland Street $1,451,375 1% interest only construction loan converted to soft second loan(s). RDA paid back for land upon sale of units $0 Sentry Financial ADU Financing Program CDCU Citywide $500,000 RDA Grant $0 TOTAL $11,476,375 $5,300,000 4 EXHIBIT B: HDLP RDA BOARD FUNDING ALLOCATIONS (To add after Board Meeting)