HomeMy WebLinkAbout(0055) M&C 20-0285City of Fort Worth, Texas
Mayor and Council Communication
DATE: 05/05/20 M&C FILE NUMBER: M&C 20-0285
LOG NAME: 19CDBG PI PY2019-2020
SUBJECT
Authorize Collection and Use of $511,623.60 of Community Development Block Grant Program Income and Interest Earnings, Authorize a
Substantial Amendment to the City's 2017-2018, 2018-2019, and 2019-2020 Action Plans, Authorize the Substitution of Funding Years, and Adopt
Appropriation Ordinance (ALL COUNCIL DISTRICTS)
RECOMMENDATION:
1. Authorize the collection and use of $481,623.60 of Community Development Block Grant program income resulting from prior years'
activities;
2. Authorize the use of $30,000.00 of estimated interest earnings;
3. Authorize a Substantial Amendment to the City's 2017-2018, 2018-2019, and 2019-2020 Action Plans contingent upon successful
completion of the federal public comment period;
4. Authorize the City Manager or his designee to substitute current and prior funding years in order to meet commitment, disbursement and
expenditure deadlines for use of grant funds from the United States Department of Housing and Urban Development; and
5. Adopt the attached Appropriation Ordinance for the receipt of $511,623.80 in Community Development Block Grant program income.
DISCUSSION:
On July 14, 2016, the Fort Worth Housing Finance Corporation (FWHFC) executed a contract with the City for $2.2 million of Community
Development Block Grant (CDBG) funds from the U.S. Department of Housing and Urban Development (HUD) for the purchase of 904 E.
Weatherford, commonly known as the Airporter property, for a proposed 219-unit multifamily, mixed income housing development in downtown
Fort Worth (M&C C-27212, City Secretary Contract No. 47953). A total of $2,154,302.80 of the CDBG funds were used to acquire the property
from the Fort Worth Transportation Authority, and FWHFC executed a note and deed of trust in favor of the City securing FWHFC's performance of
the regulatory requirements for the use of the CDBG funds, including the project meeting a CDBG National Objective. FWHFC made a number of
attempts to develop affordable housing on the property but no project proved to be financially feasible. Since no CDBG-eligible project was ever
developed, federal regulations required FWHFC to sell the property for fair market value since CDBG funds were used for its acquisition. The
original amount of CDBG funds used for the property acquisition had to be returned to the City along with any additional net sales proceeds which
would be CDBG program income.
On August 27, 2019, the FWHFC Board approved the sale of the property to Stonehawk Capital Partners, LLC for $2,852,000.00, the fair market
value set by a current appraisal. The sale closed on February 26, 2020. Sales proceeds after payment of closing costs were, $2,838,123.60 with
net sales proceeds of $676,191.65 after repayment to the City of $2,155,431.95 for the balance of the CDBG loan. The City returned
$2,155,431.95 of the total loan payoff amount received to the City's local account in accordance with HUD's instruction. The difference of
$1,129.15 between the amount received for the CDBG loan payoff and the lesser amount paid to the City's local account is due to the fact that the
City originally only drew the lesser amount ($2,154,302.80) from HUD at the beginning of the project. This adjustment of $1,129.15 was added to
the net sales proceeds of $676,191.65 returned to the City by FWHFC for a total amount of $677,320.80 of CDBG program income to be used by
the City for CDBG-eligible projects.
After the FWHFC Board determined that the property should be sold, the City Council on August 7, 2018 approved the use of $2,350,000.00 in
anticipated CDBG program income for several CDBG-eligible projects as part of its approval of the City's 2018-2019 Action Plan (M&C G-
19328). This program income consisted of $2.2 million from the future sale of the Airporter property and an additional estimated $150,000.00
from other CDBG-assisted projects. Some of those projects have since been dropped for various reasons. On January 29, 2019, City Council
approved the use of $1,100,000.00 of CDBG funds for American with Disabilities Act (ADA) improvements to the A.D. Marshall Public Safety &
Courts Building (Municipal Court) (M&C C-29005). A total of $800,000.00 in CDBG funds, $500,000.00 previously set aside for the Z Boaz South
Park Improvement Project (Z Boaz) and $300,000.00 set aside for the City's 2017-2018 Priority Home Repair Program (PRP), were used for the
ADA Municipal Court project. CDBG program income from the sale of the Airporter property will be used to replace the funding for the Z Boaz and
PRP projects.
Staff proposes that the $481,623.60 of CDBG program income that is being appropriated in this M&C, for a total in $2,831,623.60 in CDBG
program income, be used for the projects listed below. The balance in the amount of $1,031,623.60 will be assigned to unprogrammed funds until
eligible CDBG projects are identified.
Original appropriations through the 2018-2019 Action Plan (M&C G-19328):
Est. CDBG
Project Name Program Income
Funds
Program Income CFW: Priority Home Repair Program $150,000.00
Revised appropriations:
Program Income CFW: Accessibility Improvements:
$800.000.00
Community Centers & Other Public Facilities
Program Income Housing Channel: Lancaster Stratton
$500,000.00
Apts. Multifamily Rehabilitation
Program Income: Sheraton Drive Water/Sewer
$400,000.00
Installation for Infill Single Family Housing Development
Mrhood Services Department: Community Facility
$500,000.00
Childhood Education
TOTAL11
$2,350,000.00
2019/2020 CDBG
Project Name/Description
Program Income
Funds Received
Substitution of Funds: 2017-2018 Priority Repair Program
$150,000.00
(All Council Districts)
2018-2019 Priority Repair Program (All Council Districts)
$150.000.00
Sheraton Drive Infrastructure Improvement Project -
Water/Sewer Improvements to support infill development
$400,000.00
on Sheraton Drive (Council District 5)
Gwendolyn C. Gragg Child Development Facility
Improvement Project - Rehabilitation of a community center
$500,000.00
facility located at 2400 E. 1 st Street, which is focused on
early childhood education. (Council District 8)
2019-2020 Unprogrammed Funds
$1,131,623.60
TOTAL
$2,831,623.60
The revised appropriation recommendations have been approved by the City's Community Development Council. The use of the unprogrammed
funds will be committed through a Notice of Funding Availability put out by the Neighborhood Services Department which is underway and will be
approved in August 2020 through the City's 2020-2021 Annual Action Plan M&C.
Public comment periods will be held on any Substantial Amendment to the City's 2017-2018, 2018-2019, and 2019-2020 Action Plans once
projects have been identified. Any comments are maintained by the Neighborhood Services Department in accordance with federal regulations.
The Action Plan funding years may vary and be substituted in order to expend oldest grant funds first. The funds may be used for any CDBG-
eligible costs related to projects on behalf of low- and moderate -income residents.
These projects are located in ALL COUNCIL DISTRICTS.
A Form 1295 is not required because: This M&C does not request approval of a contract with a business entity.
FISCAL INFORMATION / CERTIFICATION:
The Director of Finance certifies that upon approval of the above recommendations, and adoption of the attached appropriation ordinance, funds
will be available in the current operating budget, as appropriated in the Grants Operating Federal Fund. Neighborhood Services will be
responsible for the collection and deposit of funds due to the City. Prior to expenditures being incurred, Neighborhood Services has the
responsibility to validate the availability of funds. This is a reimbursement grant.
Submitted for City Manager's Office by. Fernando Costa 6122
Originating Business Unit Head: Victor Turner 8187
Additional Information Contact: Chad La Roque 2661
Leticia Rodriguez 7319