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Legislative Version Ordinance - 3/25/2022 REDEVELOPMENT AGENCY of SALT LAKE CITY SALT LAKE CITY CORPORATION 451 SOUTH STATE STREET, ROOM 118 WWW.SLC.GOV · WWW.SLCRDA.COM P.O. BOX 145518, SALT LAKE CITY, UTAH 84114-5518 TEL 801-535-7240 · FAX 801-535-7245 MAYOR ERIN MENDENHALL Executive Director DANNY WALZ Director STAFF MEMO DATE: March 25, 2022 PREPARED BY: Cara Lindsley, Deputy Director RE: North Temple Strategic Intervention Fund REQUESTED ACTION: Discussion Item RECOMMENDATION: Consider expanding the purpose of the North Temple Strategic Intervention Fund BUDGET IMPACTS: N/A EXECUTIVE SUMMARY: In the RDA FY22 Budget, the RDA Board consolidated funding from multiple sources (North Temple Project Area tax increment, the Primary Housing Fund, and prior years’ North Temple Catalytic Project budget appropriations) to put $4MM toward the North Temple Strategic Intervention Fund. RDA Staff recommends that the Board consider expanding the use of the Strategic Intervention Fund to prioritize objectives identified in the North Temple Project Area Implementation Plan and within the context of the RDA Equitable and Inclusive Development Work Plan. Specifically, the Board may wish to permit the use of funds for the following three activities: 1. Property acquisition 2. Site development activities that may address environmental contamination and other site and utility issues that create barriers to redevelopment 3. Development support to facilitate the inclusion of community benefits in privately-initiated projects planned for the North Temple corridor ANALYSIS & ISSUES: The RDA Board appropriated $4MM for the North Temple Strategic Intervention Fund in the RDA’s FY22 budget. Since then, the RDA has created and presented to the Board the RDA Equitable and Inclusive Development Work Plan and the North Temple Project Area Implementation Plan (both are attached). These documents were used to guide this recommendation, acknowledging the rapid development of the North Temple Project Area and the RDA’s unique position to ensure the inclusion of equitable development strategies as new investments are being made in RDA project areas. The activities proposed for this funding – property acquisition, site development, and community benefits – are intended to address two overarching goals: preserving the existing, small-scale building fabric in which small, local businesses can thrive, and ensuring that new developments are an asset to the neighborhoods that surround them. 1. Property Acquisition The RDA could use Strategic Intervention funds to acquire property in an effort to preserve the existing small-scale building fabric and prevent the displacement of the City’s local, independent businesses. Small businesses need right-sized commercial spaces that are often left out of new developments in favor of larger spaces designed for national chain tenants that are considered a lower credit risk. In addition, newly developed spaces typically have much higher lease rates than spaces within older buildings. Through property ownership, the RDA could address both of these issues through the adaptive reuse of existing building stock and provision of affordable commercial spaces. 2. Site Development Costs The RDA participated in securing an EPA Brownfields grant for North Temple properties in 2012 and is aware of environmental contamination from past industrial and railroad uses. In cases where the RDA is the property owner, the RDA is eligible for EPA Brownfields cleanup grants up to $650,000 to address site contamination. Brownfields cleanup grants require a 20 percent cost share and are not available to individual property owners. These grants have been extremely competitive in the past, but recent federal infrastructure funding is anticipated to increase the available funds this year. In addition to funding environmental assessments and leveraging federal grants, Strategic Intervention funds could be used to address other site and utility issues that create barriers to redevelopment or adaptive reuse. 3. Development Support for Community Benefits Rapid development of the North Temple corridor is due in large part to investment spurred by the 2018 Opportunity Zone designation. New developments consisting primarily of micro apartment units and underutilized ground floor spaces are beginning to dominate the corridor. The RDA could use Strategic Intervention funds to facilitate the inclusion of community benefits in new projects, such as affordable commercial space that activates ground floor spaces with neighborhood businesses and amenities, and diverse housing unit types that address our City’s need for family-sized housing. These funds could also be used to encourage Folsom Corridor property owners to orient their businesses toward and interact with the recently completed Folsom Trail and future daylighted City Creek corridor. NEXT STEPS: If the Board concurs with the proposed uses for the North Temple Strategic Intervention Fund, it may wish to consider a straw poll and direct RDA staff accordingly. PREVIOUS BOARD ACTION: In the RDA FY22 Budget, the RDA Board consolidated funding from multiple sources (North Temple Project Area tax increment, the Primary Housing Fund, and prior years’ North Temple Catalytic Project budget appropriations) to put $4MM toward the North Temple Strategic Intervention Fund. ATTACHMENTS: A. North Temple Project Area Implementation Plan B. RDA Equitable and Inclusive Development Work Plan Page 1 North Temple Project Area Implementation Plan 2021-2024 Base Year: 2011 Term: 25 Years Trigger Year: 2013 Expiration Year: 2037 Base Year Value: $84,073,572 Current Value (2020): $156,240,759 Acreage: 319 Objectives: 1. Incentivize redevelopment along the North Temple Corridor that incorporates the principles of sustainable, equitable, transit-oriented development and enhances transit station areas as lively, walkable, people-oriented places. Facilitate the inclusion of ground floor commercial space in development projects that is affordable and available to small, local, community-serving businesses. 2. Provide a mix of housing typologies, with “missing middle” housing types used as a buffer between higher density in the transit corridor and single-family residential neighborhoods. Focus housing resources on developing and preserving rental and ownership products that create and support an income-diverse neighborhood. 3. Create an extension of City Creek Corridor from 800 West to the Jordan River, providing opportunities for new development around the public Folsom Trail. Create and renovate open spaces for the community that are safe, vibrant, and useful and that complement neighboring developments. 4. Facilitate strategic interventions to address properties that are characterized by high crime rates and negatively impact neighborhood livability. 5. Improve environmental conditions in the North Temple Project Area by facilitating new development and adaptive reuse on environmentally-challenged properties. Page 2 Project Area Budget Summary and Projections: Fiscal Year 2020/2021 2021/2022 2022/2023 2023/2024 Total North Temple Revenue (25% increase) $633,123 $791,404 $989,255 $1,236,568 North Temple School Safety and Infrastructure Improvements $44,319 $55,398 $69,248 $86,560 Administration, Maintenance & Operation Costs $63,312 $79,140 $98,925 $123,657 Tax Increment Reimbursements N/A N/A N/A N/A Housing $126,625 $158,281 $197,851 $247,314 Non-Obligated Fund Estimate (available for future projects and programs) $398,867 $498,584 $623,230 $779,038 RDA Assets: • SPARK! (Formerly ”Overniter Motel”): 1500 W. North Temple Priority Programs: 1. RDA Property Acquisition/Disposition – RDA has the ability to acquire properties for development of projects that support the master plan and project area objectives. RDA can also leverage the value of Agency-owned properties to support project area objectives. 2. RDA Housing Development Loan Program – The Housing Development Loan Program provides resources for the development and preservation of affordable housing. The RDA will work with project developers and lenders to bridge the funding gap between a project’s economics and market realities. In support of their mission, the RDA may assume a higher level of risk than traditional lenders to ensure that transformative projects get built. 3. RDA Storefront Activation Program (proposed) – RDA proposes developing a program to create opportunities for local businesses and nonprofit organizations to occupy ground-floor space in new developments that would be unaffordable without subsidy. 4. Adaptive Reuse Loan Program (proposed) – RDA proposes developing a program to facilitate improvements to existing building stock while preserving local community character, cultural diversity, and values. 5. Commercial Revitalization Loan Program (proposed) – RDA proposes developing a program focused on enhancing existing commercial buildings and stabilizing local, community-serving businesses. Page 3 Priority Projects (Current and Completed Projects Shown in Attached Map): 1. SHORT-TERM (CURRENTLY TAKING PLACE OR STARTING WITHIN A YEAR) a. Folsom Trail Landscape, Lighting, and Amenities – In cooperation with the Transportation, Engineering, and Parks & Public Lands Divisions, fund improvements to Folsom Corridor that supplement the landscape, lighting, and amenities in the Folsom Trail design. i. Development Partner: UTA and Salt Lake City ii. Project Cost: $3.8MM (total for trail plus supplemental landscape, lighting, and amenities) iii. RDA Budget Allocation: $350k b. City Creek Daylighting Design and Implementation Plan – In cooperation with Public Utilities and the Transportation, Engineering, Parks & Public Lands Divisions, and with fundraising and technical support from Seven Canyons Trust, procure design consultant to implement 2020 feasibility study recommendations. i. Development Partner: SLC and Seven Canyons Trust ii. Estimated Project Cost: $200k (for design plan; full construction cost estimated to range from $3MM to $15MM, depending on scale) iii. RDA Budget Allocation: $105k proposed (FY22 BA1) 2. MID-TERM (START AND COMPLETE WITHIN 1-3 YEARS) a. Property Acquisition for Strategic Intervention – Acquire a property to facilitate strategic redevelopment along the North Temple Corridor. i. Development Partner: TBD ii. Estimated Project Cost: TBD iii. RDA Budget Allocation: $4MM b. Folsom Corridor Interim Uses – Create and fund a small business incentives for temporary and interim uses of City property in Folsom Corridor to activate the corridor and provide amenities or points of interest to trail users. i. Development Partner: TBD ii. Estimated Project Cost: TBD iii. RDA Budget Allocation: TBD c. Folsom Corridor Public Art - Collaborate with the Arts Council and North Temple stakeholders to identify, plan, and execute a community-driven Folsom Corridor public art project that celebrates the neighborhood’s character and identity. i. Development Partner: TBD ii. Estimated Project Cost: TBD iii. RDA Budget Allocation: TBD 3. LONG-TERM (TO COMPLETE IN 3+ YEARS) a. Fairpark Redevelopment and Master Plan Implementation - Facilitate the redevelopment of the State Fairpark in a manner that maintains its historic integrity, Page 4 increases active uses, provides a community benefit, and creates new pedestrian connections. i. Development Partner: Utah State Fair Corporation ii. Estimated Project Cost: TBD iii. RDA Budget Allocation: TBD b. Large Property Redevelopment – Facilitate the redevelopment of large and strategic properties in the North Temple Corridor in a manner consistent with the RDA’s goals. i. Development Partner: TBD ii. Estimated Project Cost: TBD iii. RDA Budget Allocation: TBD 4. COMPLETED PROJECTS a. North Temple Brownfields Assessment Grants (2011-2015) – The RDA and Salt Lake City were awarded a grant from the Environmental Protection Agency (EPA) to fund site assessments in the North Temple Project Area, and the RDA administered the grant by engaging an environmental consultant to identify and investigate environmentally- challenged properties. The RDA specifically worked with property owners along the Folsom Corridor that were interested in preparing for the redevelopment of their properties. i. Development Partner: N/A ii. Project Cost: $300k iii. RDA Budget Allocation: N/A b. North Temple Marketing and Branding (2014) – The RDA worked with NeighborWorks Salt Lake to promote and brand North Temple as Salt Lake City’s gateway by funding the design, fabrication, and installation of 92 banners on poles that were installed in the corridor during the North Temple TRAX construction. i. Development Partner: NeighborWorks Salt Lake ii. Project Cost: $30k iii. RDA Budget Allocation: $30k c. Red Iguana 2 Loan (2015) – Provided a renovation loan to develop expanded dining space, an inviting street-side patio, a large kitchen, catering support space, administrative offices, an employee break room, and several other amenities. i. Red Iguana 2 ii. Project Cost: $2.7MM iii. RDA Budget Allocation: $500k d. Fairpark Public Market Study (2019) – Engaged a consultant to assess the feasibility of creating a permanent, year-round public market at the Utah State Fairpark. i. Development Partner: N/A ii. Project Cost: $175k iii. RDA Budget Allocation: $175k e. North Temple I-15 Underpass Pedestrian Improvements and Public Art (2019) – In cooperation with the Arts Council and the Property Management and Engineering Page 5 Divisions, provided public art and a safe pedestrian connection between the west and east sides of the City at the North Temple I-15 Underpass. i. Development Partner: N/A ii. Project Cost: $250k ($168,782: NT Bond Proceeds, $85,000: Art Council Funds iii. RDA Budget Allocation: N/A f. City Creek Daylighting Feasibility Study (2019-2020) - In cooperation with the Transportation, Engineering, and Parks & Public Lands Divisions, engaged a consultant to study the feasibility of bringing a portion of City Creek’s flow to the surface in the Folsom Corridor. i. Development Partner: UTA ii. Project Cost: $100k iii. RDA Budget Allocation: $25k NORTH TEMPLE PROJECTS 1 1 2 3 4 5 6 7 2 34 5 6 North Temple TRAX Line Red Iguana 2 Folsom Trail Design/Construction City Creek Daylighting Study SPARK! (Overniter Motel) Fair Park Public Market Feasibility study 7 I-15 Underpass Public Art Private Development Potentially Underway August 27, 2021 1,000 0 1,000500 Feet ±North Temple Project Area Folsom Trail Legend RDA Equitable and Inclusive Development Work Plan PURPOSE: In 1969, the Redevelopment Agency of Salt Lake City (“Agency”) was first created to stimulate economic growth and revitalize the downtown area of Utah’s capital city. Today, the Agency operates under Utah Code Title 17C, which authorizes the Agency to identify parts of the city that are experiencing disinvestment or neglect, and work to reverse this trend through investments in affordable housing, commercial and non-profit uses, historic preservation, public art, neighborhood business districts, environmental remediation, infrastructure improvements, and more. The Agency acknowledges the negative impacts that traditional economic development and redevelopment strategies have historically had on targeted communities with concentrated poverty, lower levels of housing stability, and higher shares of minority populations. As part of its mission to revitalize neighborhoods and business districts in a way that fosters livability and neighborhood vibrancy, the Agency is in a unique position to ensure the inclusion of equitable development strategies that encourage everyone to participate in and benefit from new investments being made in their neighborhoods. These goals are often ignored by developers in attractive real estate markets like Salt Lake City’s, who capitalize on declining neighborhoods through projects that prioritize economic return at the expense of community and environmental benefits. GOALS: 1. Utilize socioeconomic data to define needs and inform where and how Agency resources should be used and prioritized, within existing project areas, as part of the project area creation process, and for citywide housing efforts. 2. Provide opportunities that make it more financially feasible for existing residents and business owners to remain living and doing business in their neighborhoods (or return to the neighborhoods that they were already priced out of). 3. Support the creation of opportunities for those who have historically rented in the community to build wealth and establish permanent roots through home and commercial ownership. 4. Advance the rights of all to live in and enjoy a clean and healthy environment by supporting the equitable relocation of residents being displaced by new development, or those living in unsafe conditions. 5. Provide opportunities to establish new services, amenities, or underrepresented business types in the neighborhood that the local community identifies as lacking and desires. 6. Promote the rights of the communities we serve to enjoy the same degree of protection from environmental health hazards and ensure the equitable distribution of environmental benefits, including environmental remediation, sustainable development, and safe spaces to recreate. 7. Preserve and protect neighborhood character and cultural assets—once a neighborhood’s culture is displaced, we will find ourselves expending effort to recreate that local character, but it will never be as authentic. 8. Help strengthen local organizations and support leadership building by participating in community-led initiatives and partnering with neighborhood and cultural groups. 9. Strengthen the Agency’s community outreach efforts in ways that provide a platform for community members’ life experiences and knowledge to inform and influence the Agency’s work. 10. Enhance ability of non-traditional applicants to apply for Agency programs and offerings through increased outreach, education, and technical assistance. 1. SCOPE OF WORK:Assemble a database that speaks to the levels of vulnerability and displacement risk (both residential and commercial) and opportunity access, and continually monitor these indicators over time to inform the Agency’s decisions. Metrics may include (not comprehensive or final): Transit Access # daily unique transit trips within quarter-mile walking distance of a location: quantifies # unique transit trips someone can access during an entire weekday Proximity to commuter/light rail and streetcar Walking distance to a current or future rail stop Proximity to core businesses Locations within walking distance of core businesses: within 0.5 mile of supermarket/grocery, 0.25 mile of a pharmacy, 0.25 of a restaurant, café or diner Proximity to school, park, community center, or library # locations within specified distances: school (0.25 mile), community center (0.25 mile), Library (0.25 mile), Park (varies by acreage) Access to Banking Services # banking institutions per 10,000 residents Broadband Internet % housholds with subscriptions to broadband internet service Access to Primary Care # primary care physicians (per # population) People of color Percent of population that is non-Hispanic white (Census block) Increase in white population as share of total population over time Linguistic isolation % HH that are linguistically isolated (Census tract): a HH in which no one 14 years or older speaks English only / no one 14 years + speak both a language other than English and English "very well" Educational attainment Percentage of population 25 years + who does not have Bachelor's degree Increase in share of population 25 years + with bachelor's degree or higher over time High School Graduation On-time high school graduation rate Rental tenancy % population in occupied housing units that are renters (Census block) Increase in share of owner-occupied housing units as share of total occupied housing units over time Housing Cost Burden % HHs (owner and renter) with income below 80% of the AMI that are cost burdened (Census tract): cost-burdened is a HH that pays between 30- 50% of income on housing costs Severe Housing Cost Burden % HHs (owner and renter) with income below 80% of the AMI that are severely cost burdened (Census tract): severely cost-burdened is a HH that pays more than 50% of income on housing costs Household income Increase in AMI over time % population with income below Federal poverty level (Census tract) Proximity to already-gentrified or affluent neighborhood Median HH income relative to AMI (Census tract): broken down by 120% of AMI, less than 80% of AMI, "spillover tract" "spillover" tract is one that a) has a median HH income under 80% of the AMI and b) abuts a tract where the median HH income is above 120% of the AMI Development capacity Difference between existing and potential development, excludes parcels unlikely to redevelop (parks, landmark sites, airport), parcels have to allow for residential uses per zoning Median rent Change in neighborhood rents over peiod of time Ratio of average rent per Census tract to City average: based on multifamily buildings with 20 or more units, for all unit sizes, in dollars per net rentable sf Housing Market Change Change in neighborhoods' median home values over period of time Ratio of average housing cost per geographic area to City average: based on dollars per sf a. For work in existing project areas, use data to inform the need for Agency assistance or new, targeted programming. b. When evaluating project area creation or extension requests, use these metrics to assess proposals within a citywide context and ensure that efforts are being focused in areas that have the greatest need for Agency assistance. 2. Amend Agency Guiding Framework & Livability Benchmarks to add project criteria that are meant to address goals above and make it clear that they are Agency priorities. 3. Complete inventory of existing City & Agency programming and identify areas where requirements or incentives meant to support goals above could be created or strengthened. 4. Design and implement new Agency programming meant to directly address goals outlined above. 5. Identify areas where more technical assistance could be provided for non-traditional applicants. 6. Utilize guidelines and best practices issued by the Salt Lake City Civic Engagement Team to develop more intentionally inclusive and culturally specific community engagement that empowers residents to make their voices heard. 7. Communicate a clear value for racial and social equity in communication materials (web site, newsletters, social media, events, and other points of contact). 8. Identify opportunities to use marketing/outreach tools to reach a broader range of project types/applicant pool. POTENTIAL PROGRAMMING IDEAS: (to be refined during policy creation processes) 1. Infuse tenant preferences in RDA funding programs and property dispositions: Aimed at mitigating displacement of residents and businesses with generational ties to the area or bringing back residents and business owners who have already been displaced. Rationale & Function: • When Agency helps to fund development of affordable housing or commercial spaces, could strongly encourage developer to utilize preference-based system to select tenants. • When disposing of Agency property, could make preference-based system mandatory when developer selects housing or commercial tenants. a. Preference types may include applicants who are members of vulnerable populations, current or former residents/business owners, have family members who are current or former residents/business owners, or someone with community ties or who utilizes community services in the neighborhood. b. Could include early notification of opportunities to preferred tenant types or lottery system. • As an example, Seattle stresses that partnering with local organizations to “affirmatively market” opportunities is key to a successful community preference program. 2. Affordable Storefront Activation program: Agency partners with developers to maintain or acquire control of ground-level commercial spaces and leases/subleases them at below market rates and under established tenant preferences. Rationale & Function: • Zoning requires active ground floor uses in mixed-use/transit-oriented zones; this is not always embraced and sometimes seen as a leasing burden; often results in undesirable activation like residential amenity areas/national chains. • Project areas may lack supply of quality commercial spaces that address the neighborhood’s needs and preferences, and newly constructed spaces will likely be rented for a premium (will use data to explore these assumptions further). • When part of RDA property disposition, could be a way for the Agency to maintain assets and generate ongoing revenues, in this case, commercial rents. • Reduce displacement risk of existing businesses or non-profits and reduce barriers to entry for new, underrepresented businesses or service types. • Tenant preferences may include minority or women-owned businesses/relocations of existing businesses already in neighborhood/new businesses being created by existing neighborhood residents/land uses desired by local community/local non-profits. 3. Funding for community-led cultural initiatives: Rationale & Function: • Would strengthen existing community organizational structures and enable them to better carry out their missions. • Would empower local leaders through Agency funding and support. • Would fund initiatives that convey that the neighborhood has an established history that deserves to be kept alive—not an “up and coming” neighborhood for newcomers to define. • Would help the Agency establish stronger ties with the communities we work in. • Could create a tiered grant program with match requirements for larger funding requests (for example, 2:1). • Applicants would need to be non-profits, government agencies, or community-based organizations. • Eligible projects would need to include significant community involvement and desire for the project. • Would likely require more hands-on technical assistance to applicants. 4. Accessory Dwelling Unit (ADU) incentive program: Rationale & Function: • Provide opportunity for homeowners to generate income and build wealth through property ownership, mitigating their inclination to sell for a profit and be displaced. • Increase the City’s stock of affordable housing units. • Way to increase density in single-family neighborhoods, which is otherwise impossible without rezoning. • Would allow for affordable multi-generational living. • Would help the Agency establish stronger ties with the communities we work in due to direct contact with homeowners. • Offer varying levels of financial assistance/incentives based on applicant’s financial need and/or level of affordability commitment. • Work with other departments to streamline or incentivize the process in order to carry out the City’s goals. • Would likely require strong marketing effort/heavy upfront technical assistance for applicants. • Could provide a variety of pre-approved architectural plans that work for standard lots with little or no tweaking (CAN initiative). • Could provide list of certified contractors vetted by the Agency/City.