Council Provided Information - 1/10/2023CITY COUNCIL OF SALT LAKE CITY
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BOARD STAFF REPORT
THE REDEVELOPMENT AGENCY of SALT LAKE CITY
TO:RDA Board Members
FROM:Allison Rowland
Budget & Policy Analyst
DATE:January 10, 2023
RE: RESOLUTION: HOUSING DEVELOPMENT LOAN FUNDING ALLOCATIONS
FOR AFFORDABLE HOUSING
ISSUE-AT-A-GLANCE
The Board will review and potentially approve recommendations for allocating up to $8.36 million in affordable
housing funds offered through a Notice of Funding Availability (NOFA) in 2022. The purpose of these low-
interest, 40-year loans is to incentivize the inclusion of affordable housing in new construction and in
preservation projects. The ten applications forwarded to the Board have requested a total of nearly $16.8 million
(an eleventh application was withdrawn).
The applications were reviewed and ranked by the RDA’s Housing Development Loan Program (HDLP)
Selection Committee. Their specific recommendations for allocating $6.0 million of funds approved by the
Board in 2022 (as part of the fiscal year 2023 budget) are presented in the Transmittal’s Attachment C,
along with recommendations for an additional $2.36 million which became available when a project approved in
2021 was withdrawn. The Board makes the final determination of which applications to fund and for what
amount.
This competitive NOFA was administered under the RDA’s Housing Development Loan Program (HDLP) and
based on the Board’s April 2022 directive to require that proposals meet new “threshold criteria” for eligibility.
These include minimum environmental standards, and that 10% of total housing units in each project are either
deeply affordable, or family-sized—or both. (Additional information can be found in Section A below.) In the
same April meeting, the Board also approved the complete list of 2022 Funding Priorities for the HDLP, which
are used to encourage development that meets other key goals (see Section B).
The RDA has released multiple NOFAs since late 2016 to facilitate the development of affordable housing units
in Salt Lake City. This follows previous direction from the Council to concentrate housing development activities
Item Schedule:
Briefing: January 10, 2023
Set Date: N/A
Public Hearing: N/A
Potential Action: January 10, 2023
Page | 2
in the RDA and housing program activities in the Housing Stability Division of Community and Neighborhoods
(CAN).
Goal of the briefing: Discuss and consider adopting the Resolution entitled 2022 Affordable Housing –
Housing Development Loan Program (HDLP) Funding Allocations.
ADDITIONAL INFORMATION
A. 2022 Threshold Criteria. In April 2022, the Board adopted new “threshold criteria” for the HDLP, which
require that every application must meet the following criteria.
1.Environmental Criteria. The Board shifted two measures of environmental impact of a
proposed project to threshold criteria. These are that the completed building(s) would receive
an “Energy Star” score above 90, and that it would not install natural gas to power appliances,
relying instead on electricity for this purpose. These requirements would apply to all proposed
projects.
The other eligibility threshold could be met by fulfilling either of the two following requirements, or both:
2.Deeply Affordable Units. At least 10% of total units in a proposed project must be deeply
affordable, accessible for individuals or families that are homeless or at risk of homelessness.
These units will be rent and income deed-restricted to households earning 40% or less AMI.
3.“Family-Sized” Units. At least 10% of total units in a proposed project have three or more
bedrooms. These units will be rent and income deed-restricted to households earning 60% or
less AMI.
B. 2022 Funding Priorities. In addition to the Threshold Criteria, in April the Board set additional annual
Funding Priorities for 2022 (see Transmittal, Attachment E). The funding priorities are part of a point
system that is used in the evaluation process to encourage development that meets its additional Board
goals. A project with a higher point total is typically more highly ranked than one with a lower total.
1. Approved FY23 Priorities.
a. Priorities worth three points:
•Family Housing
•Target Populations
•Homeownership
•Missing Middle and Unique Housing Types
b. Priorities worth one point:
•Transportation Opportunities
•Neighborhood Safety
•Expand Opportunity
•Architecture and Urban Design
•Commercial Vitality
•Historic Preservation /Adaptive Re-use
•Public Art
•Sustainability
2.Interest-Rate Reductions. In addition to increasing their point total, applicants also can
receive interest-rate reductions on their HDLP loans, depending on the number of Board
Page | 3
priorities their project would meet. See also Policy Question #2 below. For each funding
priority included, a project is eligible to receive a 0.5% reduction to the Base Interest Rate,
down to a minimum of 1% for four or more priority incentives that would be met.
C. Applications for Projects in High Opportunity Areas. For the 2022 NOFA, none of the applications
proposed projects located within “high opportunity areas,” a designation for census tracts where residents
have relatively greater chances at upward mobility. In 2017, the Board first reserved $4.5 million for
projects located in such areas. Two years later, the Board approved a $1.8 million loan for the Richmond
Flats development, leaving the current balance at $2.7 million.
➢The Board may wish to consider the costs and benefits of continuing to reserve
affordable housing funds for projects in areas of high opportunity, or whether to
reserve additional funds for this purpose.
➢The map used by RDA staff to determine whether a proposed project is eligible for the loan funds
reserved for high opportunity areas was part of research published in 2015, and the underlying data
for the map dates from still earlier. Given the City’s rapid socioeconomic changes in the past decade,
the Board may wish to request that the Administration work with the Gardner
Policy Institute to update the map of high opportunity areas, at least to the extent new
data is available in time for the next NOFA process.
D. Evaluation Process.
1.Application Dates. The NOFA was released on September 6, 2022, and originally was closed
on October 24, 2022. The application process was then re-opened from October 31 to November
14, after RDA staff clarified the Sustainable Development Policy to ensure applicants had time
to apply the relevant requirements to their applications. The 2022 HDLP Annual Affordable
Housing Funds Guidelines and Application Handbook can be found here.
2.Project Evaluation. As part of the application review process, RDA staff first analyzed
applications to ensure they met the HDLP’s eligibility requirements. The Selection Committee
(see below) then considered the Board’s funding priorities, along with factors related to the
feasibility and technical qualities of each application. These include developer experience, the
completeness and quality of the application, the amount of requested funding per affordable
unit, the unit mix, community impact, and the financial and regulatory readiness of the
proposed project.
➢The Board may wish to request information about how the selection
committee balanced the Board’s annual priorities with the feasibility and
technical qualities of each application, particularly developer experience
and community impact.
3.Selection Committee. The selection committee was drawn from members of the Housing
Trust Fund Advisory Board, the RDA Finance Committee (a subset of the Redevelopment
Advisory Committee), and City staff in RDA and the Community and Neighborhoods
Department, including members of the Division of Housing Stability.
E. Background. The framework for allocating Housing Development Loan Program (HDLP) funds was
adopted over several stages beginning in 2020. Since then, the RDA Board discussed and adopted the
following:
Page | 4
1.Housing Funds Allocation Policy. This policy establishes four housing funds based on fund
source. The revenues, expenditures, interest, and payments for each fund source are separately
accounted for to ensure the control and oversight required by statute.
2.Housing Development Loan Program (HDLP) Policy. The purpose of the HDLP is to
incentivize the development and preservation of affordable housing in Salt Lake City through
low-cost financial assistance. The HDLP provides a centralized application, underwriting, and
approval process regardless of the fund source.
3.Setting Annual Affordable Housing Priorities. Under the recently adopted process, in
the spring of each year, the Board adopts annual priorities to provide policy direction for RDA
staff for reviewing applications to City affordable housing development support made available
through a NOFA. The goal of adopting priorities on an annual basis is to direct resources to
specific policy priorities depending on available resources, community need, and policy
objectives.
POLICY QUESTIONS
1.Does the Board agree with the strategy presented in the funding recommendations for
using the potential additional $2.36 million from the 2021 project that was withdrawn?
Alternatively, the Council may wish to consider:
a. concentrating this amount in one or two key projects, rather than splitting it among
several; or,
b. using some or all of this amount for “emergency gap funds” available to affordable
housing projects currently under construction that encounter funding shortfalls due to
current economic and market conditions. (The Board also may wish to ask whether any
HDLP funds are set aside for this purpose for FY23.)
c. Re-allocating these funds to different affordable housing programs, like Strategic
Acquisition, or to completely different uses.
2. The projects reviewed by the Selection Committee would be charged interest rates that range from 1% to
2.5% on 40-year loans. In the context of sharply rising interest rates in the broader economy,
would the Board like to discuss the potential advantages and disadvantages of changing
how the Base Interest Rate is set for HDLP loans?
1
Taylor, Austin
From:Taylor, Austin
Sent:Wednesday, July 5, 2023 12:30 PM
To:Taylor, Austin
Subject:FW: (EXTERNAL) RE: RDA Finance Committee: Proposed Modification for Ville 1659 Loan and HDLP
LIHTC Condition
From: Amy Rowland <amy@cdfautah.org>
Sent: Friday, June 30, 2023 7:11 PM
To: Taylor, Austin <Austin.Taylor@slcgov.com>
Cc: Tran, Tracy <Tracy.Tran@slcgov.com>; Werrett, Kate <kate.werrett@slcgov.com>
Subject: RE: (EXTERNAL) RE: RDA Finance Committee: Proposed Modification for Ville 1659 Loan and HDLP LIHTC
Condition
Austin –
I’m sorry I was unable to get back to you today, and thank you for your responses to my first questions.
From the available information, I’m still not comfortable that this is a good loan for the RDA. My primary concerns are
as follows:
‐ I can’t tell if this developer has a track record of experience in working with the homeless population and I don’t
see that the operating budget includes a line item paying for case management services from an organization
that does.
‐ Since the RDA’s loan will be subordinate to the construction/bridge loan, the ability to repay the RDA’s loan
hinges on whether they can get a permanent loan sufficient to pay off the construction/bridge loan. The size of
that permanent loan is unknown due to interest rate uncertainty, as well as the actual operating cash flow the
project will experience. The proforma used an interest rate with no cushion for that uncertainty.
‐ The proforma assumes all units will pay the Fair Market Rent of $910 from a HUD Section 8 voucher. However,
since the project doesn’t have project‐based rental subsidies, the rents they can charge any tenants who don’t
have vouchers will be much lower – approximately $556 including all utilities. If a significant number of their
tenants don’t come with vouchers, their proforma NOI will be much lower, and so will the term loan
amount. Without specifics on the guarantees required from the developer, I don’t understand how the RDA will
be able to force repayment in this case.
I understand the project will be moving forward to the RDA Board for approval, but due to the above concerns, I wanted
to be on record as not recommending this loan as structured.
Thanks for the opportunity to provide my input.
Amy Rowland
801‐557‐1537
REDEVELOPMENT AGENCY OF SLC
Ville 1659 Loan Term Changes &
HDLP Financing Condition Update
RDA BOARD OF DIRECTORS MEETING -JULY 11, 2023
VILLE 1659
•1659 West North Temple
•Conversion of mid-century motel (Ramada Inn)
•197 studio apartments
•10 RV parking sites
•30% AMI
•On-site mental healthcare
•Taste of India restaurant
UPDATED SOURCES AND USES
Sources Original Current
Sundance Bay Bridge Loan $7,500,000 $9,065,361
Olene Walker Fund Loan $1,000,000 $0
SLC RDA Loan $1,825,000 $1,000,000
Owner Equity $2,066,378 $953,000
SLC Grant $2,000,000 $2,000,000
State Grant $3,858,622 $3,850,000
Total Sources $18,250,000 $16,868,361
Uses Original Current
Property Acquisition $12,000,000 $9,500,000
Construction Costs $4,000,000 $4,297,653
Soft Costs $1,000,000 $1,000,000
Developer Fee $1,000,000 $280,000
Project Contingency $250,000 $265,000
Financing Costs $0 $1,525,708
Total Uses $18,250,000 $16,868,361
PROPOSED LOAN TERM CHANGES
Approved Proposed
Loan Type Construction to Perm Bridge
Loan Amount $1,000,000 $1,000,000
Payment Type Cash Flow Balloon Payment at End of Term
Interest Rate 2%1%*
Amortization Period 40 Years N/A; balloon payment
Term 40 Years 3 Years
*This change aligns with the HDLP Guidelines and does not require Board approval.
CONDITION CLARIFICATION FOR LAST ROUND OF HDLP
•Condition included to ensure funds would not be held up
•Condition states that if project does not receive 9% tax credits,
funds would be returned to RDA HDLP
•Proposed clarification: If project does not receive 9% tax
credits or allocation of tax-exempt bonds for 4%, funds would
need to be returned to RDA HLDP
REDEVELOPMENT AGENCY OF SALT LAKE CITY
RESOLUTION NO. _____
Affordable Housing–Gap Housing Development Loan Program (HDLP) Amendment to
Proposed Loan Terms
RESOLUTION OF THE BOARD OF DIRECTORS OF THE REDEVELOPMENT AGENCY
OF SALT LAKE CITY APPROVING AN AMENDMENT TO PROPOSED LOAN TERMS
FOR AN HDLP LOAN TO VILLE 1659, LLC.
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 Housing Development Loan Program (“HDLP”) was created to enable the
RDA to incentivize the development and preservation of affordable housing.
WHEREAS, the RDA Board of Directors (“Board”) previously approved the Housing Funds
Allocation Policy (“Funds Policy”), which establishes policies with respect to dedicating and
directing resources for the HDLP based on funding source (“Housing Funds”).
WHEREAS, the Board also adopted the amended and restated Housing Development Loan
Program Policy (the “HDLP Policy”) to provide a centralized application, underwriting, and
approval process for accessing the Housing Funds, including granting the authority for review
and approval of applications by the RDA Finance Committee (“Finance Committee”).
WHEREAS, pursuant to resolution R-3-2023, the Board previously approved funding
allocations and preliminary loan terms for eight projects selected to meet the goals established by
the HDLP, amounting to a total allocation of $8,360,000.
WHEREAS, included in that funding allocation was a proposed loan in the amount of
$1,000,000 to Ville 1659, LLC (“Developer”) for development of a deeply affordable housing
project to be located at 1659 West North Temple (the “Ville 1659 Project”).
WHEREAS, preliminary loan terms for the approved funding allocation for Ville 1659
originally included a two percent (2%) interest rate, forty-year term, forty-year amortization, and
cash flow repayments.
WHEREAS, due to changes to Developer’s overall financing structure, RDA staff proposes
making modifications to the preliminary loan terms, changing the type of loan from a
construction gap loan to a bridge loan, to support the Ville 1659 Project until it reaches
stabilization.
WHEREAS, the proposed modifications include shortening the term to three years and changing
the repayment structure from cash flow payments to a balloon payment due upon expiration of
the term.
WHEREAS, the Board agrees to allocate the funding with the preliminary loan term
modifications as reflected in the Amended HDLP RDA Board Funding Allocations attached
hereto as Exhibit A.
NOW THEREFORE, BE IT RESOLVED by the Board of Directors of the
Redevelopment Agency of Salt Lake City that it approves the funding allocations and preliminary
terms as amended in the Amended HDLP RDA Board Funding Allocations attached hereto as
Exhibit A, subject to revisions that do not materially affect the rights and obligations of the RDA
hereunder. The Board authorizes the waiver of the Policy to set the base interest rate at the rate
stated on the Term Sheet, which waiver shall be valid for three months from the date of this
resolution. The Board authorizes the Executive Director to negotiate and execute the loan
agreement and any other relevant documents consistent with the Amended and Restated Term
Sheet, and incorporating such other terms and agreements 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 July, 2023.
________________________________
Alejandro Puy, Chair
Approved as to form: __________________________________
Salt Lake City Attorney’s Office
Sara Montoya, Senior City Attorney
Date:
The Executive Director:
____ does not request reconsideration
____ requests reconsideration at the next regular Agency meeting.
________________________________
Erin Mendenhall, Executive Director
Attest:
________________________
City Recorder
July 6, 2023
EXHIBIT A: AMENDED HDLP RDA BOARD FUNDING ALLOCATIONS
PROJECT/APPLICANT ADDRESS
PROJECT
PRIORITIES/INTERES
T RATE REDUCTION
AND WEIGHTED
NOFA RANKING**
FUNDING
REQUEST
PRELIMINAR
Y TERMS*
TOTAL
FUNDING
ALLOCATIO
N
FUNDIN
G
RANKIN
G
2 -Victory Heights 1
1060 E 100 S
Family Housing: 3
Target Populations:
3
Transportation
Opportunities: 1
Architecture & Urban
Design: 1
Adaptive Reuse: 1
Public Art: 1
TOTAL: 10
$1,865,00
0
1% interest
rate, 40-year
term, 40-year
amortization,
hard
repayments
$1,865,00
0 1
BCG Holdings
3 - Victory Heights 2
1060 E 100 S
Family Housing: 3
Target Populations:
3
Transportation
Opportunities: 1
Architecture & Urban
Design: 1
Adaptive Reuse: 1
Public Art: 1
TOTAL: 10
$280,000
1% interest
rate, 40-year
term, 40-year
amortization,
hard
repayments
$280,000 2
BCG Holdings
4 - Atkinson Stacks***
543 S 500 W
Target Populations:
3
Unique Housing
Types: 3
Architecture & Urban
Design: 1
Sustainability: 1
TOTAL: 8
$2,500,00
0
1% interest
rate, 40-year
term, 40-year
amortization,
hard
repayments
$500,000 8
HAME
5 - Book Cliffs Lodge***
1159 S West
Temple
Family Housing: 3
Target Populations:
3
Transportation
Opportunities: 1
Neighborhood Safety:
1
TOTAL: 8
$540,000
1% interest
rate, 40-year
term, 40-year
amortization,
hard
repayments
$540,000 7
HAME
6 - Citizens West 2
509 W 300 N
Family Housing: 3
Target Populations:
3
Transportation
Opportunities: 1
Architecture & Urban
Design: 1
Commercial Vitality:
1
Public Art: 1
TOTAL: 10
$1,850,00
0
1% interest
rate, 40-year
term, 40-year
amortization,
hard
repayments
$1,850,00
0 3
Giv Development
7 - Citizens West 3 509 W 300 N Family Housing: 3
Target Populations:
$1,200,00
0
1% interest
rate, 40-year
$1,200,00
0 4
Giv Development 3
Transportation
Opportunities: 1
Architecture & Urban
Design: 1
Commercial Vitality:
1
Public Art: 1
TOTAL: 10
term, 40-year
amortization,
hard
repayments
8 - Ville 9
1025 N 900 W
Unique Housing Type:
3
Commercial Vitality:
1
Adaptive Reuse: 1
TOTAL: 5
$1,700,00
0
2.5% interest
rate, 40-year
term, 40-year
amortization,
cash flow
repayment
$0 9/10
Ville Property Mgmt
9 - Ville 1659
1659 W North
Temple
Target Populations:
3
Unique Housing Type:
3
Transportation
Opportunities: 1
Commercial Vitality:
1
Adaptive Reuse: 1
TOTAL: 9
$1,825,00
0
2% interest
rate, 40-year
term, 40-year
amortization,
cash flow
repayment
1% interest
rate, 3-year
term, balloon
payment
$1,000,00
0 5
Ville Property Mgmt
10 - Liberty Corner***
265 W 1300 S
Family Housing: 3
Target Populations:
3
Missing Middle: 3
Transportation
Opportunities: 1
Neighborhood Safety:
1
Architecture & Urban
Design: 1
Commercial Vitality:
1
TOTAL: 13
$3,000,00
0
2% interest
rate, 40-year
term, 40-year
amortization,
cash flow
repayment
$1,125,00
0 6
Cowboy Partners
11 - 9Ten West
910 W North
Temple
Transportation
Opportunities: 1
Neighborhood Safety:
1
Architecture & Urban
Design: 1
Commercial Vitality:
1
Public Art: 1
TOTAL: 5
$2,000,00
0
2% interest
rate, 16-year
term, 30-year
amortization,
cash flow
repayment
$0 9/10
Great Lakes Capital
TOTAL $16,760,000 $8,360,000
*Final Terms shall comply with the requirements, standard loan terms and conditions, interest-rate reductions, and
all other details laid out within the 2022 Housing Development Loan Program (HDLP) Guidelines. Changes to
repayment type may occur (hard repayment versus cash flow repayment) and shall be based on requirements listed
in the HDLP Guidelines or if required by a senior lender. Changes in repayment type will cause a change in the
base interest rate. Repayment priority and lien position shall be based on the size of the loans.
**Projects receive a 0.5% interest rate reduction for each included priority. Sustainability allows for a 1% or 2%
reduction. The maximum reduction per development is 2%. The interest rate is calculated as follows: Base Interest
Rate minus (-) Interest Rate Reductions (up to 2%) = proposed interest rate; Base interest rate shall be locked
within a month of closing. Projects shall maintain project priorities and the same weighted score at closing.
Deviation from project priorities met may require Board approval.
***If these projects do not receive 9% tax credits in the next 2024 Utah Housing Corporation 9% allocation cycle, or
these projects do not receive an allocation of Tax Exempt Bonds for the 4% tax credits by December 31, 2023,
these funding commitments shall be returned to the RDA's Housing Development Loan Program.
Funds Availability
HDLP Committed Funds $6,000,000
Additional HDLP Funds Approved by
Board $2,360,000
Total Potential HDLP Funds $8,360,000