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Home My WebLink About(0074) M&C 21-0810City of Fort Worth, Texas Mayor and Council Communication DATE: 10/19/21 M&C FILE NUMBER: M&C 21-0810 LOG NAME: 17ARPA ALLOCATIONS EVANS & ROSEDALE REDEVELOPMENT SUBJECT (CD 8) Approve Allocation of Funds from the American Rescue Plan Act in the amount of $4,245,533.42 for the Evans and Rosedale Redevelopment and Affordable Housing Project; Authorize Purchase at Fair Market Value of Thirty Fort Worth Housing Finance Corporation Properties and Five Fort Worth Local Development Corporation Properties and Execution of Necessary Agreements Therefor; and Authorize Sale to Hoque Global, LLC of the Thirty -Five Acquired Properties and Another City Owned Property in Exchange for Nominal Monetary Consideration and the Grant of Deeds of Trust to Ensure Certain Use for Affordable Housing and Execution of Necessary Agreements RECOMMENDATION: It is recommended that the City Council: 1. Approve the allocation of up to $4,245,533.42 from the American Rescue Plan Act, Subtitle M (Coronavirus State and Local Fiscal Recovery Funds) for the Evans and Rosedale Redevelopment and Affordable Housing Project (Project) to pay the fair market value of thirty-six properties being acquired and contributed to the Project, consisting of thirty Fort Worth Housing Finance Corporation (FWHFC) properties ($3,595,977.13), five (5) Fort Worth Local Development Corporation (LDC) properties ($235,950.00), and one (1) City property ($112,500.00); 2. Authorize acquisition of thirty (30) properties from, and execution of all necessary agreements with, the FWHFC; 3. Authorize acquisition of five (5) properties from, and execution of all necessary agreements with, the LDC; and 4. Authorize sale of the thirty-five (35) acquired properties and another City -owned property to, and execution of all necessary agreements with, Hoque Global, LLC for nominal monetary consideration of $1.00 per property and the granting of deeds of trust covering all property to ensure the property is used for the development and continued operation of affordable housing for a period of at least fifteen (15) years from the date of issuance of the certificate of occupancy. DISCUSSION: The purpose of this Mayor and Council Communication (M&C) is to approve actions associated with the real estate transactions for the Evans and Rosedale Redevelopment and Affordable Housing Project (Project). Project Background The thirty-six properties (collectively, the Property) are located within the boundaries of the Historic Southside Neighborhood, the Evans and Rosedale Urban Village, Tax Increment Reinvestment Zone Number 4, and Census Tract 1231.001, which is a Qualified Census Tract. The Property was part of the December 2018 Request for Expressions of Interest (RFEI) in which the City of Fort Worth, the Fort Worth Housing Finance Corporation (HFC), and the Fort Worth Local Development Corporation (LDC) sought a Master Developer arrangement in and near the historic Evans & Rosedale Urban Village. Eight proposals were received through the RFEI and reviewed through an extensive staff and stakeholder evaluation process. The selection criteria established included: 1.) Vision with respect to the history of the area; 2.) Quality of design; 3.) Economic impact to the City; 4.) Qualifications and experience of the development team; 5.) Financial capacity of the team; 6.) Community engagement; 7.) Alignment with the City's comprehensive plan and strategic economic development plans. Hoque Global Properties, LLC ("Hoque") was selected as the development team that was most closely aligned with the selection criteria. After significant community engagement and feedback, staff for the HFC, the City, and the LDC recommend that Hoque be selected to redevelopment the area. Between early 2019 and September, 2021, HFC, LDC, and City staff have negotiated a term sheet with Hoque. Hoque is proposing a two -phased redevelopment that will result in a total of at least $70 million worth of investment; approximately 292 multifamily units, 20 townhomes, and 28 live - work units, with at least 20% of the total number of units being affordable; a cultural square; parks, and other public spaces. A neighborhood meeting outlining the conceptual project design and basic economic terms was held on September 16, 2021 at Shamblee Library. The HFC and LDC met in a joint session on September 21, 2021 and approved resolutions authorizing the sale of the parcels owned by HFC and LDC to the City as -is for the fair market value price, with each corporation authorizing its General Manager to execute closing documents. Fair market value was determined using information from a broker's property opinion, which indicated the value of the area properties is $21.27/s.f. Due to market considerations, in order for the development to be financially feasible, Hoque must be able to purchase the Property at a value significantly less than fair market value. As noted in prior public presentations and addressed in more detail below, the plan is for the City to allocate $4,245,533.42 in Subtitle M funds under the American Rescue Plan Act (ARPA) to pay the fair market value of the Property that will be contributed to the Project. Approval of this M&C authorizes the purchase of the 30 properties from the HFC at a price of $3,595,977.13 and the five properties from the LDC for $235,950.00 and allocates funding to pay for the one parcel owned by the City and valued at $112,000. As authorized by Texas Local Government Code Section 272.001(g), the Property, which has a combined fair market value of $4,245,553.42, would be sold to Hoque for monetary consideration of $1 each for the purpose of developing low- to moderate -income housing; to effectuate and maintain the public purpose of affordable housing, the Property will be subject to a lien through a Deed of Trust to Secure Performance, ensuring the required affordable housing is offered at the Property for a period of at least 15 years. If the affordable housing requirements are not met, Hoque would be required to repay the full fair market value of the Property out of its own separate funds. The Property to be sold includes: Fort Worth Housing Finance Corporation Property PARCEL VALUE NO. CFW_ID ADDRESS LEGAL AREA (s.f.) DESCRIPTION ($21.27/s.f.) 924 SCHLATERS 1 125739 MISSOURI SUBDIVISION 6530.439453 138,902.45 AVE Block 1 Lot 7 916 6HILATERS 2 125098 MISSOURI SUBDIVISION 6769.264648 143,982.26 AVE Block 1 Lot 5 EVANS 3 125264 920 EVANS SOUTH 8766.886719 186,471.68 AVE ADDITION Block 1 Lot 6 EVANS 1000 EVANS SOUTH 4 126389 AVE ADDITION 5069.969727 107,838.26 Block 3 Lot 1 & 2 920 SCHLATERS 5 125304 MISSOURI SUBDIVISION 5913.998047 125,790.74 AVE Block 1 Lot 6 904 SCHLATERS 6 124251 MISSOURI SUBDIVISION 7039.71875 149,734.82 AVE Block 1 Lot 2 917SOUTH SCHLATERS 7 125104 FVVY SUBDIVISION 5146.254883 109,460.84 Block 1 Lot 12 SCHLATERS 8 124500 901 SOUTH SUBDIVISION 5148.732422 109,513.54 FWY Block 1 Lot 14 THRU 16 810 EVANS 9 126163 MISSOURI SOUTH 6047.929688 128,639.46 AVE ADDITION Block 3 Lot 12 928 SCHLATERS 10 125957 MISSOURI SUBDIVISION 7118.005859 151,399.98 AVE Block 1 Lot 8 EVANS 11 123988 900 EVANS SOUTH 8071.225586 171,674.97 AVE ADDITION Block 1 Lot 1 EVANS 12 125737 924 EVANS SOUTH 7644.488281 162,598.27 AVE ADDITION Block 1 Lot 7 EVANS 13 125946 928 EVANS SOUTH 7592.90625 161,501.12 AVE ADDITION Block 1 Lot 8 EVANS 1000 EVANS SOUTH 14 126155 AVE ADDITION 4088.458984 86,961.52 Block 3 Lot 1 & 2 EVANS 15 125045 916 EVANS SOUTH 7523.294922 160,020.48 AVE ADDITION Block 1 Lot 5 921 SOUTH SCHLATERS 16 125314 FV\rY SUBDIVISION 5135.705078 109,236.45 Block 1 Lot 11 708 E SCHLATERS 17 124006 TERRELL SUBDIVISION 2835.770508 60,316.84 AVE Block 1 Lot 1 W43' LOT 1 11 SCHLATERS 710 E SUBDIVISION 18 124006 TERRELL Block 1 Lot 1 3270.558594 69,564.78 AVE W41'E82' LOT �1 900 SCHLATERS 19 124006 MISSOURI SUBDIVISION 2659.220703 56,561.62 AVE Block 1 Lot 1 E41' LOT 1 SCHLATERS 20 124003 901 SOUTH SUBDIVISION 6964.4375 148,133.59 FWY Block 1 Lot 14 THRU 16 SCHLATERS 21 124258 901 SOUTH SUBDIVISION 5138.206055 109,289.64 FWY Block 1 Lot 14 THRU 16 EVANS F911 SOUTH F741.944336 22 124888 SOURI ADDITION 157,694.60 AVE Block 1 Lot 4 W 65'4 BILK 1 EVANS 912 EVANS SOUTH Included in 23 124888 AVE ADDITION 915 Missouri _ Block 1 E parcel 86'LOT 4 759 E SCHLATERS 24 125967 DASHWOOD SUBDIVISION 5860.902344 124,661.39 ST Block 1 Lot 9 EVANS 900 EVANS SOUTH 25 124396 AVE ADDITION 7895.463867 167,936.52 Block 1 Lot 3 E 84'3 BILK 1 908 SCHLATERS 26 124536 MISSOURI SUBDIVISION 6018.348633 128,010.28 AVE Block 1 Lot 3 913SOUTH SCHLATERS 27 124536 FWY SUBDIVISION 5135.777344 109,237.98 Block 1 Lot 13 925 SOUTH SCHLATERS 28 124917 FWY SUBDIVISION 5130.567383 109,127.17 Block 1 Lot 10 EVANS 29 125770 900 EVANS SOUTH 7132.858398 151,715.90 AVE ADDITION Block 1 Lot 2 EVANS included in SOUTH 30 124170 900 EVANS ADDITION 900 Evans - AVE Block 1 Lot 3 W parcel 67'3 BLK 1 124396 111--F--] TOTALS 169,063. 01$3,595,977.13 Local Development Corporation Property NO. ADDRESS PARCELLEGAL AREA (s.f.) VALUE DESCRIPTION ($21.27/s.f.) MC ANULTY & NESBITT SUB 901 EVANS EVANS BLOCK 2 1 AVE LOT 1 4799.548828 102,086.40 2 901 EVANS AVE MC ANULTY & NESBITT SUB EVANS BLOCK 2 LOT 2 5191.926758 110,432.28 MC ANULTY & NESBITT SUB 909 EVANS EVANS BLOCK 2 3 AVE LOT 30 4727.975586 100,564.04 1009 KRAUSE, A EVANS SUBDIVISION 4 AVE BLOCK 4 LOT 2F 4915.320313 104,548.86 1013 KRAUSE, A EVANS SUBDIVISION 5 AVE BLOCK 4 LOT 2E 5615.641602 119,444.70 LIE7= TOTALS 25,250.41 sf $537,076.29 City of Fort Worth Property PARCELLEGAL AREA NO. ADDRESS DESCRIPTION (s.f.) VALUE KRAUSE,A 1005 EVANS SUBDIVISION BLOCK 4 1 AVE LOT 1 E 7,500 $112,500 All properties are located in COUNCIL DISTRICT 8. Allocation of ARPA Subtitle M Funding Responding to the negative economic impacts of the coronoavirus pandemic is a specifically identified use of ARPA dollars under Section 603(c) (1)(A) of Title VI of the Social Security Act (added by ARPA). Treasury Department guidance specifically notes that these Fiscal Recovery Funds can be deployed for a broad range of uses to address "the disproportionate ... economic impacts of the crisis on the hardest -hit communities, populations, and households" and to provide services and additional investments in Qualified Census Tracts, such as the one in which the Project is located. Therefore, it has been determined that paying for the Property so that can be contributed to the Project below cost is an eligible use of funds as a response to negative economic impact and an investment in housing and neighborhoods in a Qualified Census Tract. The following chart reflects the current status for allocation of the City's ARPA funding under Subtitle M and incorporates each ARPA M&C on the October 19, 2021 Council Agenda: Status Amount M&C's Total CFW ARPA $173,745,090.00 21-0445 Subtitle M Funding Allocations $6,000,000.00 25ARPA-VFW-TDG Approved To -Date Pending Allocation $1,000,000.00 13ARPA-ADMINISTRATION Pending Allocation $10,100,000.00 19ARPAALLOCATIONS TO HOUSING AND HUMAN SERVICES PROJECTS Pending Allocation $300,000.00 25ARPA-WRMC MURAL PLAQUES Pending Allocation $2,400,000.00 17ARPA ALLOCATIONS UNTHSC TECHSTARS Pending Allocation $3,000,000.00 17ARPA ALLOCATION CDFI FRIENDLY AMERICA Pending Allocation $4,245,533.42 17ARPA ALLOCATIONS EVANS & ROSEDALE REDEVELOPMENT (This M&C) Remaining $146,699,556.58 Unallocated Balance The Evans -Rosedale Project was also determined to be a qualified priority by City Management for ARPA funding as approved by the City Council in M&C 21-0445 on June 22, 2021. ARPA funds must be committed by the end of 2024 and spent by the end of 2026. The Property purchase should be completed by March 2022. Approval of this M&C will allocate $4,245,533.42 for FY2022 in the American Rescue Plan Act project in the Grants Operating Federal Fund budget. Necessary reporting and documentation requirements will be followed to ensure the City can comply with all reporting requirements of the ARPA legislation. FISCAL INFORMATION / CERTIFICATION: The Director of Finance certifies that upon approval of the above recommendations, funds are available in the current operating budget, as appropriated, of the Grants Operating Federal Fund. The Economic Development Department shall be responsible for ensuring that only expenditures allowable under the American Recovery Plan Act are charged to this funding source. Submitted for City Manager's Office by: Fernando Costa 6122 Jay Chapa 5804 Originating Business Unit Head: Robert Sturns 2663 Victor Turner 8187 Additional Information Contact: Amy Connolly 7556 Expedited