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HomeMy WebLinkAbout2010/09/14-Minutes-HEDCCITY OF FORT WORTH CITY COUNCIL HOUSING AND ECONOMIC DEVELOPMENT COMMITTEE SEPTEMBER 14, 2010 Present: Committee Member Jungus Jordan, Chairman Committee Member Carter Burdette, Vice Chairman (arrived at 1:35 p.m.) Committee Member Mike Moncrief Committee Member Salvador Espino Committee Member W. B. "Zim" Zimmerman Committee Member Danny Scarth Committee Member Frank Moss Committee Member Kathleen Hicks Committee Member Joel Burns City Staff: Tom Higgins, Assistant City Manager Peter Vaky, Senior Assistant City Attorney Marty Hendrix, City Secretary Jay Chapa, Director of Housing and Economic Development Department Cynthia Garcia, Assistant Director, Housing and Economic Development Department Other City Staff in Attendance: Robert Sturns, Manager, Housing and Economic Development Department Mark Folden, Housing Program Manager, Housing and Economic Development Department Bill Verkest, Director of Transportation/Public Works Vicki Ganske, Senior Assistant City Attorney, Law Department Leann Guzman, Assistant City Attorney, Law Department With a quorum of the committee members present, Chairman Jungus Jordan called the meeting of the Housing and Economic Committee to order at 1:19 p.m., on Tuesday, September 14, 2010, in the Pre - Council Chamber of the Fort Worth Municipal Building, 1000 Throckmorton Street, Fort Worth, Texas 76102. Approval of Minutes of the August 3, 2010, Housing and Economic Development Committee (Agenda Item 2) Chairman Jordan opened the floor for a motion on the approval of the minutes. CITY OF FORT WORTH CITY COUNCIL HOUSING AND ECONOMIC DEVELOPMENT COMMITTEE September 14, 2010 Page 2 of 28 Approval of Minutes of the August 3, 2010, Housing and Economic Development Committee (cont'd) (Agenda Item 2) MOTION: Upon a motion made by Committee Member Moss and seconded by Committee Member Zimmerman, the Committee Members voted eight (8) "ayes" and zero (0) "nays ", with Vice Chairman Burdette temporarily absent, to approve the minutes of the August 3, 2010, Housing and Economic Development Committee meeting. The motion carried unanimously. Written Reports (Agenda Item 3) Chairman Jordan opened the floor for questions and /or comments on the following written reports: • Additional HOME Investment Partnerships Program Grant Funding for Race Street Lofts Project at 2817 Race Street for Affordable Housing ($550,000) • Additional Neighborhood Stabilization Program Grant Funding to Tarrant County Housing Partnership for the Beaty Street Apartments located in the 5500 block of Beaty Street for Affordable Housing ($339,500) There were no comments or questions. These reports were received as a matter of information. Chairman Jordan adjourned the called — special meeting of the Housing and Economic Development Committee into Executive Session at 1:20 p.m. in accordance with the requirements of the Texas Open Meeting Act. Executive Session (Agenda Item 4) Chairman Jordan called to order the Executive Session at 1:20 p.m. in order to discuss the following items: A. Seek the advice of its attorneys concerning the following items that are exempt from public disclosure under Article X, Section 9 of the Texas State Bar Rules, as authorized by Section 551.071 of the Texas Government Code: (i) legal issues related to any current agenda items; CITY OF FORT WORTH CITY COUNCIL HOUSING AND ECONOMIC DEVELOPMENT COMMITTEE September 14, 2010 Page 3 of 28 Executive Session (cont'd) (Agenda Item 4) B. Discuss the purchase, sale, lease or value of real property, as authorized by Section 551.072 of the Texas Government Code. Deliberation in an open meeting would have a detrimental effect on the position of the City in negotiations with a third party; and, C. Discuss or deliberate negotiations relating to any economic development negotiations, as authorized by Section 551.087 of the Texas Government Code. Chairman Jordan adjourned the Executive Session at 1:28 p.m. Chairman Jordan reconvened the called — special session of the Housing and Economic Development Committee at 1:28 p.m. Update on City Programs Funded by Federal Grant Funds from Community Development Block Grant, HOME Investment Partnerships Program, Emergency Shelter Grant, Housing for Persons with AIDS, and ARRA Weatherization Programs (Agenda Item 5) Mr. Jay Chapa, Director of the Housing and Economic Development Department, spoke before the committee on the City's programs funded by federal grant funds from Community Development Shelter Grant, Housing for Persons with AIDS and the American Recovery and Reinvestment Act (ARRA) Weatherization Programs. Mr. Chapa provided an overview of his presentation and advised that it would cover the following topics: • Change in program year for the entitlement funds • Update on federally funded program • Neighborhood Stabilization Program • ARRA Weatherization • Recommended changes to the Housing Assistance Program Mr. Chapa reviewed the change to the program year as follows: CITY OF FORT WORTH CITY COUNCIL HOUSING AND ECONOMIC DEVELOPMENT COMMITTEE September 14, 2010 Page 4 of 28 Update on City Programs Funded by Federal Grant Funds from Community Development Block Grant, HOME Investment Partnerships Program, Emergency Shelter Grant, Housing for Persons with AIDS, and ARRA Weatherization Programs (cont'd) (Agenda Item 5) • The current program year was from 6/1/2010 to 5/31/2011 • Proposed change to 10/1/2011 to 9/30/2012 (City fiscal year) • Change would create a funding gap for federally funded programs from June 1, 2011 to September 30, 2011. • Staff recommended gap financing of $762,451 for non - profit agencies receiving Community Development Block Grant (CDBG) Public Service Funds, Emergency Shelter Grants, and Housing Opportunities for Persons with AIDS Grants. Recommendation was to include funds as a one -time expenditure line item in the Housing and Economic Development Department from the General Fund Surplus in FY 2011 to 2012 budget. • City Administration costs will be absorbed in current funding Committee Member Moncrief encouraged the committee members and the City Council to support this recommendation. He pointed out that it was a one -time expenditure of those funds and he felt it was well justified. Committee Member Burns stated on that topic, he requested clarification from the City staff as to whether the City received the federal dollars for the four (4) months. Mr. Chapa indicated that the City would go without the funding for the four (4) months and indicated additional information would be forthcoming in his presentation. Mr. Chapa presented the proposed HOME and CDBG Calendar as follows: • HOME RFP • Issue Request for Proposal - October • Evaluation - November /December • Award - December /January • CDBG Public Service RFP • Issue Request for Proposal - March 2011 • Agency Presentations - April 2011 CITY OF FORT WORTH CITY COUNCIL HOUSING AND ECONOMIC DEVELOPMENT COMMITTEE September 14, 2010 Page 5 of 28 Update on City Programs Funded by Federal Grant Funds from Community Development Block Grant, HOME Investment Partnerships Program, Emergency Shelter Grant, Housing for Persons with AIDS, and ARRA Weatherization Programs (cont'd) (Agenda Item 5) • CDC Recommendation —May 2011 • City Council Housing and Economic Development Committee — June 7, 2011 • City Council Approval July 27 or August 2 • Action Plan —submitted by August 16, 2011 Committee Member Burns requested clarification as to whether the City of Fort Worth was unique in this process of changing the fiscal year to match the City's and whether other cities have had to do the same thing. Mr. Chapa explained that entitlement cities have the flexibility to set the fiscal year period of time to receive their funds. Mr. Chapa indicated that when the program was originally started, the associated time of the year was beginning on June 1. He added that Fort Worth was not unique as other cities had also elected to have the time period changed to match their fiscal years. Mr. Chapa reiterated that this recommendation to change the fiscal year was coming forward in order to provide for clean -up of some issues and align the City's accounting system with the federal system. Committee Member Burns indicated that he was fully supportive of changing the year and fully supportive of the plan; however, he wished that there was a way that the federal government would continue to fund those programs through the four (4) months where there would be a gap. He added he wished that there would be a way to do so. Mr. Chapa indicated that it was not allowed to occur by statute. Chairman Jordan explained that it was basically an accounting procedure where the City was closing the gap and aligning the accounting periods. Mr. Chapa indicated that was correct. Council Member Espino indicated that he supported the recommendation from the City staff. He stated it was the issue about being transparent and having the fiscal years match up. He stated that in the past some of the City Council Members have expressed frustration with CITY OF FORT WORTH CITY COUNCIL HOUSING AND ECONOMIC DEVELOPMENT COMMITTEE September 14, 2010 Page 6 of 28 Update on City Programs Funded by Federal Grant Funds from Community Development Block Grant, HOME Investment Partnerships Program, Emergency Shelter Grant, Housing for Persons with AIDS, and ARRA Weatherization Programs (cont'd) (Agenda Item 5) where the housing dollars were being spent; there were some timing issues, and also calendaring issues. He stated that now the City staff would know during a period of 12 months how the housing dollars were being allocated. He pointed out that every year the City staff came before the City Council with a consolidated plan and it would now line up with the City's budget. He added that he felt it was a very good recommendation. Chairman Jordan pointed out that it would not affect a gap in service, thus this was the reason the City was providing the bridge. Mr. Chapa indicated that was correct. Mr. Chapa continued his presentation with a completion of the review of the calendar information as follows: • CDBG Public Service RFP • Issue Request for Proposal — March 2011 • Agency Presentations — April 2011 • CDC Recommendation — May 2011 • City Council Housing and Economic Development Committee — June 7, 2011 • City Council Approval July 27 or August 2 • Action Plan — submitted by August 16, 2011 Mr. Chapa reviewed the CDBG /IDIS Clean -up as follows: • City currently has 365 open activities from 1995 to present • 174 activities associated with activities prior to 2007 • Majority of the open activities were due to the following issues: • Connected to projects still awaiting completion (i.e., Evans - Rosedale) • Were part of Model Block programs still pending • Were part of HUD findings from monitoring (i.e., Mercado) • Lack documentation or were ineligible to draw down federal grant funds to close project CITY OF FORT WORTH CITY COUNCIL HOUSING AND ECONOMIC DEVELOPMENT COMMITTEE September 14, 2010 Page 7 of 28 Update on City Programs Funded by Federal Grant Funds from Community Development Block Grant, HOME Investment Partnerships Program, Emergency Shelter Grant, Housing for Persons with AIDS, and ARRA Weatherization Programs (cont'd) o Were current active projects (Agenda Item 5) Mr. Chapa reviewed the payback update and recommendation as follows: • A total of $1,525,667 paid back to date • Ineligible costs on pending activities not able to draw from federal funds currently estimated at over $1.7 million (currently in City's accounting system as receivables) • Recommend closing activities in HUD system and "writing off' amount through M & C appropriating unreserved funds • This action will close over 200 pending activities • General Fund balance reduced by amount of receivables removed from accounting system Mr. Chapa reviewed certain outstanding issues. • Mercado Project • Pay back to line of credit total of $1,749,940 • Payment due November 2010 • Proposal was to make payment for Housing Trust Fund (HTF) General • Fund dollars including loan payment received from Heritage Park Vista Project • Unknown liabilities from future HUD monitoring of past years where documentation was not available or procedures not followed • Additional open older activities pending completion/reconciliation Committee Member Moncrief requested a clarification as to whether the Mercado project would finally be closed. Mr. Chapa indicated that was correct. There was further discussion on the fact that the City has had that project open since 2005. CITY OF FORT WORTH CITY COUNCIL HOUSING AND ECONOMIC DEVELOPMENT COMMITTEE September 14, 2010 Page 8 of 28 Update on City Programs Funded by Federal Grant Funds from Community Development Block Grant, HOME Investment Partnerships Program, Emergency Shelter Grant, Housing for Persons with AIDS, and ARRA Weatherization Programs (cont'd) (Agenda Item 5) Chairman Jordan explained what the City was doing was going back to the year 1995 and closing out the aged accounts and bringing accountability up -to -date. He pointed out that this would assist with the City's CAFR and closing out items going forward. He added that he felt it was commendable from the standpoint of accountability and cleaning the books up and going forward. Committee Member Hicks interjected that she did not want to pre -empt Mr. Chapa's presentation and that Chairman Jordan was right; however, the issue was how the City could use the street reconstruction funds in CDBG eligible areas and this would help throughout the City and in some of the Central City neighborhoods. She reiterated that it was very good. Mr. Chapa reminded the committee that he had done a presentation in January regarding the CDBG and federal funding priorities and streets were the number one priority. Mr. Chapa pointed out that he wanted to make sure that was still the priority to the Council, thus Mr. Chapa presented the City staff's recommendation/next steps as follows: • Mayor and Council (M & C) Communication for consideration to utilize General Fund balance to clear receivables from Grant Funds not eligible to be drawn down • M & C authorizing use of the Housing Trust Fund as payment source for Mercado Project reimbursement to the line of credit • Utilize funds for street reconstruction projects in CDBG eligible areas Mr. Chapa reviewed the federally funded programs as follows: • Housing Assistance Program • Neighborhood Stabilization Program • ARRA Weatherization Mr. Chapa reviewed the Neighborhood Stabilization Program (NSP) • City received 56,307,433 in NSP funds CITY OF FORT WORTH CITY COUNCIL HOUSING AND ECONOMIC DEVELOPMENT COMMITTEE September 14, 2010 Page 9 of 28 Update on City Programs Funded by Federal Grant Funds from Community Development Block Grant, HOME Investment Partnerships Program, Emergency Shelter Grant, Housing for Persons with AIDS, and ARRA Weatherization Programs (cont'd) (Agenda Item 5) o -min 25% of $1,576,858.25 must benefit households earning less than 50% of Area Median Income (AMI) • November 11, 2008 — City Council approved using the funds for the NSP Down Payment Assistant Program o $25,000 down payment assistance o Targeted zip codes • Funds must be committed by September 20, 2010, or returned to HUD • June 2010 — City Council approved adding multi - family as an approved use of NSP funds Mr. Chapa reviewed a chart showing the Neighborhood Stabilization Program — Down Payment Assistance Program/Beaty Project Low Income No. of Households Available Households Earning Funds Spent Committed Total Assisted Below 120% $4,091,680 $3,050,000 $475,000 $3,525,000 141 AMI Below 50% $224,755 $200,000 $25,000 $225,000 9 AMI Beaty Street $1,360,255 $1,360,255 $1,360,255 64 Additional $339,500 of NSP Funds were proposed to be committed to the Beaty Street Project. Committee Member Espino requested a clarification on the location and description of this project. Mr. Chapa explained that the project was located north of Lancaster on Beaty Street, which was on the edge of Council Districts 8 and 5. He stated it was 72 units being remodeled down to 64 units. Mr. Chapa explained that it was multi - properties that were purchased together when the purchaser went into foreclosure. CITY OF FORT WORTH CITY COUNCIL HOUSING AND ECONOMIC DEVELOPMENT COMMITTEE September 14, 2010 Page 10 of 28 Update on City Programs Funded by Federal Grant Funds from Community Development Block Grant, HOME Investment Partnerships Program, Emergency Shelter Grant, Housing for Persons with AIDS, and ARRA Weatherization Programs (cont'd) (Agenda Item 5) Mr. Chapa reviewed the ARRA Weatherization Program: • $12,895,458 awarded for the Weatherization Program • Must spend by August 31, 2011 • Project to complete approximately 1500 units — 15% single family • 457 multi - family and 111 single - family units completed to date • Must complete approximately 100 units per month to meet spending and unit completion goals • Of the 100 — can complete 15 single family per month o More complex, time to complete, outside contractors restraints Mr. Chapa advised that the ARRA Weatherization Program for single families was that the City currently had 234 single family units on the waiting list. He added to complete the list would take 15 months. Mr. Chapa stated that the recommendation was: • Stop taking applications on October 1, 2010 • Through September 30, 2010, tell applicants that they would be placed on waiting list and repairs may be completed depending on whether the funds were available • If applicant was qualified for other weatherization funding, application could be transferred to those programs Council Member Moss requested clarification as to whether the funds that the City had received could be expended before the cut -off period. He also requested information on the total amount of funding that would be associated with the 234 single- family units on the waiting list. Mr. Chapa explained that the maximum amount of funding that could be spent on each unit was $6,400.00 and each unit's cost could be different. He further clarified that work would also continue on the multi - family units. Mr. Chapa reiterated that the 234 units were single - family units. He added that they had just completed 457 units and they had about 1,000 to go on CITY OF FORT WORTH CITY COUNCIL HOUSING AND ECONOMIC DEVELOPMENT COMMITTEE September 14, 2010 Page 11 of 28 Update on City Programs Funded by Federal Grant Funds from Community Development Block Grant, HOME Investment Partnerships Program, Emergency Shelter Grant, Housing for Persons with AIDS, and ARRA Weatherization Programs (cont'd) (Agenda Item 5) the list. Mr. Chapa explained that they were doing about 1,500 total units. He explained that the only way to be able to spend the dollars was to do 85% of the units as multi - family units. He added that this was the way the program was set up. Committee Member Scarth requested clarification on the criteria for the multi - family project to meet the program standards, in other words how do they qualify. Mr. Chapa stated that 51% of the residents of the apartment unit had to meet the income qualifications. Committee Member Scarth indicated that was a lot of work to put together the information. Mr. Chapa stated that the City staff received a request from the apartment owners and then the City staff had to work with the apartment managers to get the income information and verification and all of this information had to be obtained before the work could begin on the complex, just in case the units could not qualify based upon the income levels of the occupants. In further discussion, Chairman Jordan clarified with Mr. Chapa that the 234 single - family units were prequalified. Mr. Chapa indicated that they were prequalified. Mr. Chapa continued his presentation with a review of the proposed changes to the Housing Assistance Program (HAP). He reviewed the following information: • Currently the program provided for closing cost and down payment assistance to first -time homebuyers at or below 80% of AMI • $1,128,394 HOME funds FY 2009/2010 ■ Assisted 117 households • $900,000 HOME funds FY 2010/2011 • $14,999 maximum in target areas; $8,500 in non - target areas • Target areas included: • Model Blocks • Federal Target Areas • Neighborhood Empowerment Zones • Designated Building Areas CITY OF FORT WORTH CITY COUNCIL HOUSING AND ECONOMIC DEVELOPMENT COMMITTEE September 14, 2010 Page 12 of 28 Update on City Programs Funded by Federal Grant Funds from Community Development Block Grant, HOME Investment Partnerships Program, Emergency Shelter Grant, Housing for Persons with AIDS, and ARRA Weatherization Programs (cont'd) ■ Special Project Areas (Agenda Item 5) Mr. Chapa presented the recommended revisions to the HAP Program as follows: • City goal — Disbursing of affordable housing ■ Recommendation: • Expand $14,999 assistance city -wide • Eliminate concentration of affordable housing in targeted areas only • Current policy requires a minimum of 20% of an applicant's income for a mortgage payment • Applicants who receive additional assistance and fall below the 20% minimum were declined • Recommendation • Change policy eliminating the minimum requirement • Add requirement allowing up to $14,999 based on sales price and need Chairman Jordan opened the floor for comments and /or questions. Committee Member Moncrief pointed out that the City Council had talked about for a long time "quality, affordable and accessible housing" which he noticed was missing in the presentation provided. He stated he felt the City Council and City staff had taken some very significant actions regarding the housing issue and being able to address the concentration of folks in need of this product. He added that what he felt the City was saying to developers who wanted to come into the City and put up a multi - family facility was that it had to contain a portion that was a quality, affordable, accessible product. He added that he felt the City's current program flew in the face of what they were trying to do. He stated that the Council wanted to provide people a choice of where they wanted to live in the City and emphasized that they could afford to live in the City. He added that he felt it made a lot of sense to accept the recommendations. CITY OF FORT WORTH CITY COUNCIL HOUSING AND ECONOMIC DEVELOPMENT COMMITTEE September 14, 2010 Page 13 of 28 Update on City Programs Funded by Federal Grant Funds from Community Development Block Grant, HOME Investment Partnerships Program, Emergency Shelter Grant, Housing for Persons with AIDS, and ARRA Weatherization Programs (cont'd) (Agenda Item 5) Committee Member Espino indicated that the only concern that he had with all of the down payment and closing costs assistance, was how the City would actually ensure that the people could afford the mortgage payment. He stated that he understood that there were guidelines on how much of a person's income was supposed to go towards the mortgage payment. He requested that Mr. Chapa elaborate a little bit more on this issue. He added that he agreed with Committee Member Moncrief that dispersing the people made sense and he agreed with having all of the flexibility but he questioned again how the City would make sure that the people receiving this assistance could afford their mortgages. Mr. Chapa indicated that the City staff typically used what the banks used. He spoke about the 40% maximum that was on the income side which included the insurance, taxes, utilities, etc. He spoke about the City's current policy and the reason that changes were necessary. Committee Member Espino indicated that he supported the changes and the comments made by Committee Member Moncrief. Mr. Chapa concluded his presented with a review of the recommendations as follows: • Change the Program year • Recommend funds for the four (4) months come from the General Fund Surplus • Approve use of HTF and Fund Balance to clean -up old IDIS /Accounting of projects • Approve additional funds to Beaty • Approve changes to the Housing Assistance Program This concluded the presentation and discussion on this agenda item. CITY OF FORT WORTH CITY COUNCIL HOUSING AND ECONOMIC DEVELOPMENT COMMITTEE September 14, 2010 Page 14 of 28 Presentation of Potential Funding Using a Loan from the Aviation Endowment Fund for TIF Financed Improvements of N. Riverside Drive from Golden Triangle Boulevard to Heritage Trace Parkway (Agenda Item 6) Mr. Jay Chapa, Director, Housing and Economic Development Department, spoke before the committee on the North Riverside Drive construction project and the potential funding using a loan from the Aviation Endowment Fund. He advised that earlier in the day the Council's Infrastructure and Transportation Committee met and heard a presentation on a recommendation for the creation of a policy associated with utilizing the Aviation Fund's mineral lease revenues for a loan. He pointed out that the project he was getting ready to review was being proposed with the use of that policy and the use of those funds. Mr. Chapa advised of the project background as follows: • Increased development along North Riverside Drive and North Tarrant Parkway has increased traffic congestion • Safety concerns as two (2) schools on North Riverside Drive opened in August, 2010 • Tax Increment Financing District 7 (North Tarrant Parkway TIF) Board of Directors approved funding for improvements to North Riverside Drive between Heritage Trace and Dalton Street associated with development of new Kroger Marketplace • Additional improvements along North Riverside Drive were a community priority Mr. Chapa showed and reviewed a map of the TIF 7 boundary and also showed the location of the two (2) new Keller Independent School District (KISD) schools that opened in August of 2010. Mr. Chapa then showed an aerial photograph of the location for the Kroger Store improvements. He also presented a map of the location of the North Riverside improvements from Heritage Trace to Dalton Street. Mr. Chapa showed photographs of the condition of the roadway at the present time, showing the patched conditions and two -lane roadway with bar ditches on either side of the roadway. Mr. Chapa continued his presentation by explaining the proposed roadway project as follows: CITY OF FORT WORTH CITY COUNCIL HOUSING AND ECONOMIC DEVELOPMENT COMMITTEE September 14, 2010 Page 15 of 28 Presentation of Potential Funding Using a Loan from the Aviation Endowment Fund for TIF Financed Improvements of N. Riverside Drive from Golden Triangle Boulevard to Heritage Trace Parkway (cont'd) (Agenda Item 6) • Improve North Riverside Drive to four (4) lanes from Golden Triangle to Heritage Trace Parkway • Construct four (4) lanes of North Riverside Drive from Golden Triangle to just south of Prestige Road • Construct east two (2) lanes of North Riverside Drive adjacent to the newly constructed schools south to Crawford Farms Drive • Construct four (4) lanes of North Riverside Drive from Crawford Farms Drive to Heritage Trace Parkway • Utilize an inter -fund loan from the Aviation mineral lease revenue to provide construction funding Mr. Chapa showed another map of the subject roadway with identified markings of the areas of the roadway that would be four (4) lanes, two (2) lanes and four (4) lanes, with the estimated cost at $10.4 million and with the notation that the City would enter into a Community Facilities Agreement with KISD for the east two lanes with sidewalks to the Crawford Farms Subdivision. Mr. Chapa advised of the aspects of the proposed financing as follows: • Impact fees to pay for design of improvements • Estimated $10.4 million in Aviation mineral lease revenue to pay for improvements in the form of a loan (loan to be approved late 2011 /early 2012) • TIF 7 (North Tarrant Parkway TIF) would provide the source of funds for reimbursement of the loan with interest as delineated in the Aviation Mineral Lease revenues policy (currently 4.26 %) • Current estimate was that TIF would pay off loan, with interest, in eight (8) years. Mr. Chapa provided a slide showing an example amortization schedule for the construction costs, plus loan interest, the payment amounts and the remaining balance for years one (1) through eight (8). Mr. Chapa stated that the City staff s recommendation was: CITY OF FORT WORTH CITY COUNCIL HOUSING AND ECONOMIC DEVELOPMENT COMMITTEE September 14, 2010 Page 16 of 28 Presentation of Potential Funding Using a Loan from the Aviation Endowment Fund for TIF Financed Improvements of N. Riverside Drive from Golden Triangle Boulevard to Heritage Trace Parkway (cont'd) (Agenda Item 6) • The committee allow moving forward with the North Riverside project utilizing a set aside of Aviation mineral lease revenues as a construction loan • The committee recommending to the TIF 7 (North Tarrant Parkway TIF) Board approval of a development agreement with the City to provide loan payback from TIF revenues, with interest • If TIF Board approves the project, then Council would approve: • Mayor and Council Communication (M & C) utilizing impact fee revenues to begin design • M & C utilizing Aviation Mineral Lease Revenues for construction of proposed improvements Chairman Jordan opened the floor for questions and /or comments. Committee Member Espino expressed appreciation to Mr. Chapa and the Transportation/Public Works staff for thinking out of the box in order to get the subject road completed. He also expressed appreciation to Mayor Pro tem Danny Scarth, who was the Chairman of the TIF 7 Board. Committee Member Espino pointed out that this was an example of using the TIF dollars to provide for a much needed infrastructure. He pointed out that it was going to help with that North Tarrant Parkway corridor. He added that everyone could see that one of the great success stories in retail in Fort Worth was the Alliance Town Center, located between North Tarrant Parkway and Heritage Trace Parkway. He stated that now the City would be able to build another major thoroughfare, being North Riverside Drive, along with Golden Triangle Boulevard, which was now funded and a groundbreaking ceremony would be scheduled shortly. He stated the subdivision next to this road, Crawford Farms, really needed relief in order to get to IH35W and to get down south to the Alliance Town Center area, not to mention traveling to the two (2) new Keller ISD schools that just opened up. Committee Member Espino spoke about the meeting of the Council's Infrastructure and Transportation Committee that was briefed on an innovative way to tap into the Aviation's mineral lease revenues and that this presentation would be made to the full City Council on that policy. He pointed out a basic criteria was that the City could tap into the Aviation Department's mineral lease revenues through the use of loans, provided there was a repayment source other than through the City's General Fund, and that there was an executed interest bearing agreement CITY OF FORT WORTH CITY COUNCIL HOUSING AND ECONOMIC DEVELOPMENT COMMITTEE September 14, 2010 Page 17 of 28 Presentation of Potential Funding Using a Loan from the Aviation Endowment Fund for TIF Financed Improvements of N. Riverside Drive from Golden Triangle Boulevard to Heritage Trace Parkway (cont'd) (Agenda Item 6) and it would not delay plans for the City's airport system. He pointed out that if the committee approved the City staff's recommendation on this project, this process would simply take it to the TIF Board to begin the design of this project and then come back later to the Council to approve the M & C for construction of this roadway. He reiterated that this committee, the City Council and City staff had been thinking outside of the box to get roadway projects done because the people must have a way to move around and if they did not have ways, it would impede the City's economic development. He reiterated his expression of appreciation to various City staff members, Mr. Jay Chapa and his staff, Mr. Bill Verkest and his staff and to Danny Scarth, Chairman of the TIF 7 Board. He emphasized that this would help with economic development in that area as there were vacant lots. He added that he felt the repayment period would be a lot faster than eight (8) years. Committee Member Scarth indicated that he agreed with Committee Member Espino. He pointed out that it was a badly needed roadway as it connected people to jobs, commerce, housing, schools, etc. He advised that the other end of the project was also needed which was the bridge at Fossil Creek and eventually the tie -in to North Tarrant Parkway. Committee Member Scarth indicated that he hoped within the next five (5) years that entire project, from North Loop 820 to Golden Triangle Boulevard, would be completed. He emphasized that it was a creative way to get this project done. He also expressed appreciation for all of the hard work that had been done. Committee Member Moncrief stated that he had two (2) things to talk about. He indicated that the City Council talked about the need for east/west connectivity. He pointed out that was exactly what was being talked about here. He stated that the City was talking about creating an artery, not just another capillary, to get by with as sort of patching. He pointed out that the committee was talking about using the tools that were in the City's tool kit and doing so very effectively. He added he felt it was a great example of a cooperative effort and staff was to be commended for venturing outside the preverbal box in order to help to get this project done. Committee Member Burdette indicated that what he saw here was a question of dollars and time because of advancing the funds out of the Aviation mineral lease revenue upfront to get this project done gave the City a timely way of meeting some of the City's roadway needs. He added that he assumed when Mr. Chapa stated ....using "Aviation mineral lease revenues," that CITY OF FORT WORTH CITY COUNCIL HOUSING AND ECONOMIC DEVELOPMENT COMMITTEE September 14, 2010 Page 18 of 28 Presentation of Potential Funding Using a Loan from the Aviation Endowment Fund for TIF Financed Improvements of N. Riverside Drive from Golden Triangle Boulevard to Heritage Trace Parkway (cont'd) (Agenda Item 6) the City staff was talking about the restricted gas lease revenues. He pointed out that under FAA policy those funds could not be spent outside of aviation matters. He added that what everyone was seeing here was that those funds were not being spent but used as a loan to be repaid. He stated that his question was this, were there other funds in the Aviation mineral pocket that might be advanced for other similar projects. He asked if there were restricted funds in parks and other areas where those restricted funds might be available on a loan basis up front like this. He added that he would like this information because if that were the case, then other restricted funds could be loaded and then other projects could be completed. He added he felt it would be useful to see what other funds were available. Chairman Jordan indicated that he felt Mr. Chapa and Ms. Susan Alanis, Director of Planning and Development for the City of Fort Worth, were going to have an answer to that question. Chairman Jordan interjected that there was a presentation at the Council's Infrastructure and Transportation Committee Meeting earlier in the day, of which he was also a member. He added that there was a need for this project and the City needed to move forward because Golden Triangle Boulevard had been a major issue for some time. He commended the staff on this creative thinking. He pointed out that the City Council had made a commitment, using Aviation funds, to set aside the $20,000,000.00 for the Aviation Museum. He then asked the City staff to come back to the Council in the very near future to formalize that process for the Aviation funds to be set aside and for the creation of that endowment for the Aviation Museum so that it would not slip past everyone. Chairman Jordan added the City had made some major commitments and he added Committee Member Zimmerman might want to jump into the conversation. Chairman Jordan pointed out that Committee Member Zimmerman was doing a Herculean job in that effort. He also pointed out that there were some major commitments in the use for the $20,000,000 endowment and he reiterated he wanted to make sure that was formalized through a M & C process. He requested that issue be brought before the City Council as soon as possible. Mr. Chapa stated that he believed that was going to occur in the next month or two. Ms. Susan Alanis, Director of Planning and Development, spoke before the Committee and indicated that Kent Penney, Director of the City's Aviation Department, had already prepared a resolution to establish the Aviation Museum Endowment and the FAA was reviewing it at this time. She CITY OF FORT WORTH CITY COUNCIL HOUSING AND ECONOMIC DEVELOPMENT COMMITTEE September 14, 2010 Page 19 of 28 Presentation of Potential Funding Using a Loan from the Aviation Endowment Fund for TIF Financed Improvements of N. Riverside Drive from Golden Triangle Boulevard to Heritage Trace Parkway (cont'd) (Agenda Item 6) added that once it had been blessed, it would appear again before the City Council. Ms. Alanis stated that she had also shared with the Infrastructure and Transportation Committee today a financial management policy statement containing a codification of what had been discussed, which was the loan process from the Aviation Loan Endowment Fund. Ms. Alanis responded to Committee Member Burdette's questions and stated that there was approximately $20,000,000 in the Aviation Endowment Fund. She pointed out that the City Council had already previously approved a loan for the Harley Avenue /Crestline Road construction improvement project in the amount of $1.7 million. She added that the City staff had identified other projects for other advanced funding opportunities, like this one, that would have a unique funding source. She stated that she felt all of the endowment dollars might be candidates for arrangements like this, particularly when it was a good or better investment than the City could put the dollars in anyway. She pointed out the City would accomplish the same thing at the end of the day. She stated that the only caution that she would have would be the City staff's recommendation that this only be done on occasions where there were non - general fund repayment sources and that there were truly other opportunities rather than binding future Councils and their general fund budgets. Chairman Jordan added that he felt the policy that the City staff would come back with should address whether the City would be loaning principle dollars or loaning interest dollars. Ms. Alanis indicated that they would be loaning principle loan dollars; however, they were certainly tracking the interest earned on those loans like they would any other investment so that there were dollars available for other types of projects, i.e., for the operation of the Aviation Museum, as was discussed earlier, or for capital projects for the Aviation system. Chairman Jordan reiterated that be specified in the policy. Committee Member Burdette stated that his point was not to take money out of these restricted funds and thereby divert them from some other project. He clarified that he was talking about the timing of it. He pointed out that the City could spend those funds today and have them repaid back in time for some of the other projects. He felt that the City staff needed to look into that rather than those funds being allowed to sit idle for a period of time, when they could be used in that way. Mr. Chapa interjected that was the basis of that recommendation. CITY OF FORT WORTH CITY COUNCIL HOUSING AND ECONOMIC DEVELOPMENT COMMITTEE September 14, 2010 Page 20 of 28 Presentation of Potential Funding Using a Loan from the Aviation Endowment Fund for TIF Financed Improvements of N. Riverside Drive from Golden Triangle Boulevard to Heritage Trace Parkway (cont'd) (Agenda Item 6) Chairman Jordan indicated that it should be formalized. This completed the presentation and discussion on this agenda item. Consideration of $555,000 of HOME Investment Partnerships Program Grant Funding for Prince Hall Gardens Apartments Program at 1800 East Roberts Street for Affordable Housing (Agenda Item 7) Mr. Mark Folden, Housing Program Manager, Housing and Economic Development Department, spoke before the committee on the HOME Investment Partnerships Program Grant funding in the amount of $555,000.00 for the renovation of the Prince Hall Gardens Apartments Program at 1800 East Roberts Street for affordable housing. Mr. Folden outlined information on the The Itex Group, who was the manager of the Prince Hall Gardens, as follows: • Formed in 2003, based in Beaumont, Texas • The Itex's multi - family portfolio had grown to over 2300 units in Texas • The Itex Group was experienced with HUD financed and subsidized properties • The Itex Group had been managing the Prince Hall Gardens since March of 2010, and had made some improvements already Mr. Folden reviewed the project description as follows: • Affordable rental development • Rehab of 100 units and all associated facilities • S 11 million total investment o New community center o New parking and lighting o New roof D Energy Star fixtures CITY OF FORT WORTH CITY COUNCIL HOUSING AND ECONOMIC DEVELOPMENT COMMITTEE September 14, 2010 Page 21 of 28 Consideration of $555,000 of HOME Investment Partnerships Program Grant Funding for Prince Hall Gardens Apartments Program at 1800 East Roberts Street for Affordable Housing (cont'd) (Agenda Item 7) o Rehab of apartment units • TDHCA tax credits: $7,677,840.00 • Have option agreement to purchase contingent on finalization of tax credit transaction Mr. Folden reviewed the project summary as follows: Acquisition $1,650,000 Site Work $899,999 Direct Construction Costs $4,395,501 Contractor Gen Reqs, O &P $739,780 Contingency $529,497 Soft Construction Costs $603,500 Developer Fee $1,347,611 Financing Costs $597,752 Reserves $331,254 Total: $11,094,894 Mr. Folden presented a location map of the subject property, located adjacent to the City's Cobb Park. Mr. Folden presented another map showing an aerial of the apartment buildings. Mr. Folden also provided photographs of the exteriors of the apartment buildings, along with pictures of the landscaping and parking lot. Mr. Folden spoke about the building of a community building. He provided an artist's rendering of that building. Mr. Folden reviewed the developer's request as follows: • Loan of HOME Investment Partnership funds ($555,000) secured by a recorded Deed of Trust on the real property • The loan would be for the construction period • All units would be affordable as required, to receive tax credits o Six (6) units would be designated as HOME assisted units Mr. Folden reviewed the City staff's recommendation and next steps as follows: CITY OF FORT WORTH CITY COUNCIL HOUSING AND ECONOMIC DEVELOPMENT COMMITTEE September 14, 2010 Page 22 of 28 Consideration of $555,000 of HOME Investment Partnerships Program Grant Funding for Prince Hall Gardens Apartments Program at 1800 East Roberts Street for Affordable Housing (cont'd) (Agenda Item 7) • Finalize Community meetings o Currently endorsed by current residents and area church • Public comment period ends on October 4, 2010 • Public hearing and M & C to Council for consideration on October 5, 2010 Chairman Jordan opened the floor for questions and /or comments. Committee Member Hicks advised that this area had been problematic for the City of Fort Worth as well as for Council District 8. She pointed out that several years ago the federal government had to take over and go in and clean out this area. She stated that this rehabilitation was really significant. She stated that the City had been trying to get economic development into this area and the stopping point for the Riverside area has been this location. She reiterated that this area has been an emphasis for problems. She pointed out when the funding was approved through the TDAC in July of this year, then more formally last week when the City representatives were down there, was really significant. She added she went with the developer on Thursday to meet with a number of different groups through the United Communities and they were delighted that this was going to finally happen. She pointed out that it was a very problematic area for the City's Police Department and they had done an amazing job in the area. She added that if this project got completed, it would be a very significant project. She pointed out that some of the apartments were not even useable and the City would not want anyone living in them. She added that she heard that the developer was talking about spending $60,000 per unit. She pointed out that she wished that the citizens could see what this developer had done in the Beaumont area and in Orange, Texas. She advised in Orange, Texas, they got hit by a number of hurricanes and in the Houston area in the third ward. She reiterated the excellent job they had done. Committee Member Hicks indicated that the HUD Department had requested this developer look into this property in Fort Worth because it had been so problematic for the City of Fort Worth. She advised that the developer had never worked in the North Texas area; however, they were asked to consider this project. She requested support for this project. She pointed out that a lot of the crime that had been present in Cobb Park was a result of bleeding over from these apartment complexes. She pointed out that she thought that they would start this project by the end of the year. CITY OF FORT WORTH CITY COUNCIL HOUSING AND ECONOMIC DEVELOPMENT COMMITTEE September 14, 2010 Page 23 of 28 Consideration of $555,000 of HOME Investment Partnerships Program Grant Funding for Prince Hall Gardens Apartments Program at 1800 East Roberts Street for Affordable Housing (cont'd) (Agenda Item 7) Committee Member Scarth indicated that he agreed with everything that Committee Member Hicks stated. He added he felt it would be tremendous for the area. He stated that he was not intimate with the proposed developer and he was not familiar with how their financials were supposed to work; however, he was skeptical when he saw a project that has 100 units and it was going to cost $11 million to rehab. He pointed out that this was $110,000.00 per unit. He added that he had been told that a builder could build an apartment complex anywhere in the City of Fort Worth for $65,000.00 per unit, brand new. He stated that he did not know how they were going to make this work from a financial standpoint for a low -to- moderate income range. He questioned whether this company's cash flows had been looked at or at their plan for how they were going to proceed with this project. He also asked how the $7,000,000 that they were going to receive from the tax bonds would help to make this project work. Committee Member Scarth indicated that he felt the City should be very careful that someone was not taking advantage of the system. Committee Member Scarth indicated that he was not casting aspersions on this project; however, he felt on the face of it, the average developer would look at this project and drop their jaw at the cost of $110,000.00 per unit. Mr. Chapa indicated that the project was only debt financed at a cost of $3,000,000.00. He added that the $6.7 million in tax credits that was part of the project was all the equity that went into the entire project. He pointed out that this project already had a HUD loan on it and was classified as a distressed project so that it did not really compete with all of the other projects. He pointed out that there was a small group of distressed projects across the state that competed for the tax credits, so that it was a higher dollar amount. Mr. Chapa reiterated that this developer was asked by HUD to come into this project and this was one of the reasons that it was awarded this level of tax credits. He pointed out that they were not financing $11,000,000.00. Committee Member Scarth interjected that generally the statement would be that this was going to be an $11,000,000 investment and how were they getting this project to pay back that amount that was invested in the project. Mr. Chapa explained that the tax credit buyer, which was a corporate group, bought the tax credits and those dollars go into the project as equity. He reiterated that there was no pay back on that amount. CITY OF FORT WORTH CITY COUNCIL HOUSING AND ECONOMIC DEVELOPMENT COMMITTEE September 14, 2010 Page 24 of 28 Consideration of $555,000 of HOME Investment Partnerships Program Grant Funding for Prince Hall Gardens Apartments Program at 1800 East Roberts Street for Affordable Housing (cont'd) (Agenda Item 7) Committee Member Hicks requested that an Informal Report be prepared to show what the developer had done because they had rehabilitated properties that were even worse than the subject property and even larger properties in the Beaumont area. She indicated that she felt this would be good for the committee members to see. Committee Member Zimmerman indicated that what he felt Committee Member Scarth was saying was that this company may be a very sound company; but right now the financial side of this project did not seem to be adding up correctly. He suggested that the committee get more of the accounting for this project and to show everyone how this balanced out. Mr. Chapa indicated that the City staff does a whole subsidy analysis on each of these projects as required by HUD when putting the federal dollars into it. Mr. Chapa indicated that perhaps his answer to the question was not stated correctly. He stated that the return on the $7.6 million was not by the developer, it was by the corporate group. He stated that they buy the $7.6 million allocation for about $7 million and their return was the $600,000 spread. He stated that they then take the tax credits and spread them out over the 15 -year period. He added the "return was there and the developer on the apartment complex was not looking for a return. He pointed out that was not their money and was not their investment. He pointed out that the money came from the private investor of the tax credits and that was how they got their return. He stated that the developer was only looking for the return on the $4 million figure. Committee Member Scarth indicated that he felt someone had the opportunity to make a lot of money on this deal, if that much money was going to be spent on this property. He added he just wanted to make sure that the City was not facilitating the improper use of these dollars some place. He reiterated that he did not understand why it took $110,000 to rehab per apartment unit. He requested again to see how the money was allocated and who was getting what. Mr. Chapa indicated that the City staff could provide this breakout of associated costs. Chairman Jordan suggested to the City staff that prior to their bringing the M & C to the City Council in October that they provide a paper explaining the reason it was $1 10,000 per apartment unit. CITY OF FORT WORTH CITY COUNCIL HOUSING AND ECONOMIC DEVELOPMENT COMMITTEE September 14, 2010 Page 25 of 28 Consideration of $555,000 of HOME Investment Partnerships Program Grant Funding for Prince Hall Gardens Apartments Program at 1800 East Roberts Street for Affordable Housing (cont'd) (Agenda Item 7) Committee Member Espino indicated that he understood the concerns that had been raised by the other members. He added that he felt the City needed to do something about Prince Hall Apartments. He stated that one of the challenges that the City had with quality, affordable, accessible housing was sort of like mass transit. He stated that the public policies that were encouraged by both the local, state and federal levels were to provide subsidies. He stated that obviously the state and federal governments look to the local governments to find the good quality developers and Committee Member Hicks and Mr. Chapa indicated this group had tremendous success in doing this type of project. He stated that he was comfortable with moving forward; however, he did understand the concerns that had been stated and he looked forward to receiving that information. He reiterated that he was comfortable with moving forward. Committee Member Hicks reminded Mayor Moncrief that he had met with these folks quite a while ago. She pointed out that she believed that one of the gentlemen was a former senator that had worked with Mayor Moncrief when he was in the Texas State Legislature. Committee Member Moncrief spoke about the individual, Carl Parker, being a former colleague and a respected former member of the Texas Senate, who was also an attorney and quality business person from South Texas. He added that Mr. Parker had the reputation for going above and beyond when doing a project. Chairman Jordan indicated that he felt it was time for a report card on all of the quality, affordable, accessible housing projects that had been done in the City and what type of finances were being done, what the average costs were, what the medians were, and where they were located and put some type of standard together. He pointed out that each one needed to stand on its own merits. He added he felt the City should have a ballpark standard that was adhered to. Mr. Chapa indicated that the City staff was producing a report for the entire department containing all of their projects that had been completed within the last 18 months. Chairman Jordan indicated that he was hearing a consensus from the committee members to move forward on this project. CITY OF FORT WORTH CITY COUNCIL HOUSING AND ECONOMIC DEVELOPMENT COMMITTEE September 14, 2010 Page 26 of 28 Consideration of $555,000 of HOME Investment Partnerships Program Grant Funding for Prince Hall Gardens Apartments Program at 1800 East Roberts Street for Affordable Housing (cont'd) (Agenda Item 7) In further discussion, Chairman Jordan emphasized again the use of the wording, "quality, affordable, accessible housing ". Committee Member Burdette interjected that he would like to add something to the report. He stated that he understood that the subject project was originally a HUD project, which was subsidized at some point by taxpayer money. He pointed out that today, the committee was finding out that it had failed and now the City was trying to revitalize it with more tax money. He added he would like some statement about the history of this project, what amount of money was put into the project and if anyone had any ideas about the reason it was not successful and what happened to it. He added that he felt it was important to have that information, due to the fact that if something was done wrong in the earlier history of this particular project then that might be a lesson for how the City might do a better project in the future. Mr. Chapa interjected that it was a HUD financed project. He added he did not believe that it had HUD subsidies. He added he felt it was a HUD loan. Committee Member Burdette responded that when he stated that it was subsidized, he meant that there were federal funds that assisted with the construction of it. He reiterated that he felt it would be good information to know why this project was not successful so that mistake was not made again in the future. Committee Member Moss indicated that one of the major problems with this project was that it was Section 8 and HUD would not allow the owner to increase the rents so the rents on that particular property were far below the rental rates of all of the other rental units around it. He stated that it did not generate sufficient funds to have a sufficient cash flow. Committee Member Burdette indicated that this type of information was what he was interested in hearing about in order to have a better understanding of the project. Chairman Jordan advised the City staff to move forward with this project to the City Council with an M & C. He added that for future reference, the City might avoid some discussions if they had additional information. He added he did not think the committee CITY OF FORT WORTH CITY COUNCIL HOUSING AND ECONOMIC DEVELOPMENT COMMITTEE September 14, 2010 Page 27 of 28 Consideration of $555,000 of HOME Investment Partnerships Program Grant Funding for Prince Hall Gardens Apartments Program at 1800 East Roberts Street for Affordable Housing (cont'd) (Agenda Item 7) members were asking to become real estate experts; however, they did want to know what the benchmarks were to look for in the future. This concluded the presentation and discussion on this agenda item. Request for Future Agenda Items (Agenda Item 8) There were no requests for future agenda items. Date of Next Regular Meeting — October 5, 2010 (Agenda Item 9) Chairman Jordan advised that the next regular meeting of the Housing and Economic Development Committee would be held on Tuesday, October 5, 2010. Assistant City Manager Tom Higgins pointed out that the meeting date of October 5, 2010, would be a morning meeting of the City Council due to the National Night Out Events scheduled for that evening. He pointed out that the committee had several options to consider: not meet on October 5; have their items placed on the Pre - Council Meeting agenda or meet following the October 5 morning City Council meeting. Chairman Jordan recommended using the Pre - Council Meeting agenda for any economic development issues that needed to come forward. Assistant City Manager Higgins also pointed out that their regular meeting on Tuesday, November 2, 2010, had been cancelled due to the fact it was the national /state /county Election Day. In further deliberation, Chairman Jordan suggested that the committee meet after the regular Council Meeting on October 5, 2010, if necessary. Adiourn (Agenda Item 10 With no further presentations or discussions, Chairman Jordan adjourned the regular meeting of the Housing and Economic Development Committee at 2:31 p.m., on Tuesday, September 14, 2010. These minutes approved by the Housing and Economic Development Committee on the 7t1i day of December, 2010. CITY OF FORT WORTH CITY COUNCIL HOUSING AND ECONOMIC DEVELOPMENT COMMITTEE September 14, 2010 Page 28 of 28 APPROVED: +Jgusrdan(,:: in-nan CT Minutes Prepared by and Attest: Marty Hendrix, Aty Secretary