Fort Walton Beach Council agenda — 03-23-2010 Special-Soundside Develp. Project — reading text

TRUST FUNDS OF 5 THE FORT WALTON BEACH COMMUNITY REDEVELOPMENT AGENCY 6 FOR SITE DEMOLITION, SITE IMPROVEMENTS FOR INFRASTRUCTURE, 7 SITE RESTORATION, AND OTHER COSTS FOR THE FORT WALTON 8 BEACH HOUSING AUTHORITY' S SOUND SIDE AFFORDABLE HOUSING 9 DEVELOPMENT; AND PROVIDING AN EFFECTIVE DATE. 10 11 BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF FORT 12 WALTON BEACH, FLORIDA, THAT: 13 14 Section 1. The Fort Walton Beach Housing Authority plans to redevelop Germany 15 Terrace, which lies along Carson Drive SE and Third Street SE, from a 50 -unit public 16 housing project to a 200 -unit affordable housing development. The project will be 17 financed via a conventional mortgage through the U.S. Department of Housing and 18 Urban Development ( HUD) and the Build America Bond ( BAB) Program. 19 20 Section 2. At its March 17, 2010, meeting, the Fort Walton Beach Community 21 Redevelopment Agency Board of Commissioners approved the use of up to $ 2. 5 million 22 in Revenue Trust Funds to provide funding for site demolition, site improvements for 23 infrastructure, site restoration, and other costs to allow the Sound Side Affordable 24 Housing Development to secure a HUD -insured conventional loan and proceed with the 25 Build America Bond program. 26 27 Section 3. The City Council of Fort Walton Beach supports the use of up to $ 2. 5 million 28 in Revenue Trust Funds, subject to appropriation and legal sufficiency, to provide 29 funding for site demolition, site improvements for infrastructure, site restoration, and 30 other costs for to allow the Sound Side Affordable Housing Development to secure a 31 HUD -insured conventional loan and proceed with the Build America Bond program. 32 33 Section 4. This resolution shall take effect immediately upon approval by the City 34 Council and signature by the Mayor. 35 36 37 38 Adopted Mike Anderson, Mayor 39 40 Attest: Approved for form and legal sufficiency. 41 42 43 Helen Spencer, City Clerk Toni L. Craig, City Attorney  Page 1 of 1 Carole Jones From: Toni Craig [toni @tonicraig. info] Sent: Thursday, March 18, 2010 3: 33 PM To: Michael Beedie Cc: Carole Jones Subject: Resolution 2010 -12 Sound Side Funding atty Attachments: Resolution 2010 -12 Sound Side Funding atty.doc My revised Reso. 2010 -12 is attached for your use. Thank you. Toni L. Craig Attorney at Law Fla Bar No 115444 Board Certified, City, County, Local Government Law PO Box 2917 105 Lewis Street Suite 102 Fort Walton Beach FL 32549 850) 243 -6969 Fax: ( 850) 244 -8929 www.tonicraig. info Marital & Family Law Local Government Law CONFIDENTIALITY NOTICE: This email is intended only for the use of the addressee. If you received this email in error, please notify me immediately, delete the email from your computer and do not copy or disclose it to anyone else. If you are not an existing client of Toni L. Craig, Attorney at Law, do not construe anything in this email as legal advice or to make you a client. Do not disclose anything to me in any reply that you expect to be kept confidential. If you are a client, you should keep the contents of this email confidential to preserve the attorney -client or work product privilege. 3/ 18/ 2010 - 2-  CITY OF FORT WALTON BEACH MEMORANDUM To: Robert T. Mearns, City Manager From: Timothy Bolduc, CBO, Building Official Through: Michael D. Beedie, P. E., Engineering & Utility Services Director Date: March 18, 2010 Sound Side Affordable Housing Subject: Consideration of Funding for the Development 1. BACKGROUND: 1. 1 The Sound Side Affordable Housing development consists of the following background: 1. 1. 1 The scope of the development is to redevelop Germany Terrace, which lies along Carson Drive SE and Third Street SE, from a 50 -unit public housing project to a 200 -unit affordable housing development owned and operated by an entity of the Fort Walton Beach Housing Authority FWBHA). 1. 1. 2 The development was originally slated for funding via tax credits with the Federal Home Mortgage Corporation, or Freddie Mac. However, the 2008 financial crisis resulted in the elimination of the tax credit funding option and began a pursuit of a conventional mortgage approach. 1. 1. 3 Through the conventional mortgage approach, the U.S. Department of Housing and Urban Development ( HUD) would insure up to 90% of the mortgage amount, which leaves a funding shortage. The total estimated cost of the project is $ 23, 500, 000. 1. 1. 3. 1 The proposed mortgage amount is $ 16, 265, 000. 1. 1. 3. 2 The required development costs required in cash are $ 2, 035, 000, which includes Working Capital, Operating Deficit, a Housing Consultant, Furnishings, and Contingencies. 1. 1. 3. 3 The proposed in -kind match from the FWBHA is $ 2, 700, 000, which includes the land value and the developer fees. The land value includes the City park land that was transferred to the FWBHA. 3-  1. 1. 3. 4 The proposed in -kind match from the City is $ 2, 500, 000, which includes Site Demolition, Site Improvements ( Infrastructure), Site Restoration, Pre -Closing Costs, and Bond Fees. 1. 2 The City received approval from HUD at a meeting on October 26, 2009, to provide in -kind services as described below for the installation of the infrastructure to serve the project in lieu of a cash contribution to assist with closing the funding gap ". 1. 2. 1 The option to provide in -kind services for the demolition and installation of the infrastructure allows the City to utilize City personnel and resources to provide a greater value to the project with less of a cash investment, therefore resulting in a better return on the City' s investment. 1. 3 The property is located within CRA Subzone 3 and is targeted in the CRA Plan to propose a prototype for redevelopment of the Germany Terrace Housing Authority development ". This project meets the goals and objectives of the CRA Plan for the following: 1. 3. 1 A goal of the CRA is to " provide a wide range of quality housing opportunities and choices for people of all income levels ". 1. 3. 2 An objective of the CRA is to " utilize Community Redevelopment Agency ( CRA) funding in a way that maximizes leveraging of other public and private funds for provision of attainable housing units throughout the CRA area, including rehabilitation of existing structures along side well -designed, new infill construction that preserves the character and values of each neighborhood ". 1. 3. 3 Page; 6. 9, Section 6. 3. 4 of the CRA Plan, titled Attainable Housing Program, details plans to establish an " Attainable Housing Partnership Program" for the purpose of preserving, improving, and increasing the stock of attainable housing for moderate income home ownership and rental opportunities. The program would be funded by an annual set aside of Tax Increment Funds. 1. 4 As part of the HUD process, an updated market study and Phase I Environmental Assessment was required. City Council and the CRA Board approved a budget amendment of $ 5, 250. 00 to fund the updates of both reports in November 2009. 1. 5 Both the Market Study and Phase I Environmental Assessment were completed in draft form in January 2010 and finalized soon after. The Market Study states that the project is feasible in the current market conditions for the following reasons: 1. 5. 1 The Cover Letter states, " Based on our market analysis, there is market support for the subject as an affordable rental community ". 1. 5. 2 Subject Site Description - " The subject is located in a neighborhood that supports residential and residential support uses. A multi- family land use is compatible for this area. The subject site' s central location, access, 4-  topography, and availability of utilities, are considered to be suitable for development of a property such as the subject ". 1. 5. 3 Okaloosa County Area Analysis - " Due to changes implemented by the Base Realignment and Closure Act, Okaloosa County is expected to receive an additional 12, 000 service personnel and dependents by 2011 and approximately 35, 000 total direct and indirect jobs by 2014. Needs in this area include construction of additional workforce housing to meet the demands of inbound personnel and affiliated workers ". 1. 5. 4 Fort Walton Beach Neighborhood Analysis - " The defined neighborhood is experiencing population growth, despite the recent economic recession. Population expanded by a rate of 7. 0% from 2000 to 2009, while total households increased by 9. 2% over the same period. As the area expands, there will be an increasing need to housing. An expanding population and stable economic atmosphere anchored by the presence of Eglin AFB will have a positive impact on the rental housing market ". 1. 5. 5 Market Supply and Demand Analysis - " The supply and demand analysis indicates market support for the subject as an income -restricted and market -rate project ". 2. DISCUSSION: 2. 1 On March 16, 2010, the Fort Walton Beach Housing Authority executed a consulting contract with HomeCorp to manage the financing and construction of the Sound Side Affordable Housing development. 2.2 HomeCorp has reviewed the updated Market Study and has determined the extent of the City' s involvement in the completion of the development. The costs below will be incurred over a 12- to 18 -month period beginning with the approval of the funding and will be scheduled in disbursements throughout the construction phase of the development. 2. 2. 1 The projected demolition costs, which will be contracted out by the City, are estimated at $ 200, 000. 2. 2. 2 The projected