ACTION REQUESTED:
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Communication from the City Manager and the Community Development Director with a Request to approve the grant award of $121,626.00 from the City’s HUD HOME funds to LISC for the rehabilitation of One (1), Affordable, Single-Family, Owner-Occupied Home at 2408 N. Delaware St. as part of the Attorney General/Peoria LISC Initiative in the EAST BLUFF (DISTRICT 3).
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BACKGROUND: The City is a team member of the Partners for a Better East Bluff. This partnership was created as a result of the $3 million dollar grant award from the Illinois Attorney General Office (AG) to Peoria’s Local Initiatives Support Corporation (LISC) from the National Foreclosure Settlement funds.
Through the partnership, the City is able to provide various resources and assistance to accomplish neighborhood revitalization in the East Bluff, specifically in the East Village Growth Cell (EVGC) TIF. To date, the City has provided the following support to the Partners for a Better East Bluff initiative:
- Sold City owned, vacant land to Access Peoria, LLC for the development of new construction, rental duplexes. (Council Item # 14-432)
- Provided a HOME fund grant in the amount of $408,827 to Access Peoria, LLC for the development of new construction, rental duplexes. (Council Item # 14-434)
- Committed $75,000 in City Capital Funds for a down payment assistance program for the for sale units to be developed under the Initiative. (City Capital Budget Years 2014 and 2015)
- Through a subgrantee agreement with LISC that provided $170,000 in funding, demolished 14 properties in the EVGC TIF. A total of 20 properties will need to be demolished per the subgrantee agreement and the City will use local/CDBG funds for the remaining demolitions. (Council Item # 14-431)
- Encouraged other City partners to develop in the EVGC TIF to support the Initiative. The City awarded $300,000 to Habitat for Humanity (a Community Housing Development Organization - CHDO) to build 3 new construction, single family homes in the EVGC TIF. (Council Item # 15-150 and 15-151)
While there are many activities identified by LISC to be completed by the Partners for a Better East Bluff, two major objectives are the primary focus: 1) new construction of 16 units / 8 duplexes for low-income rental housing and 2) development of 14 homebuyer units (mix of new construction and rehab) to be sold to households earning up to 150% of Area Median Income (AMI).
The development of the new construction rental units is complete and the tenant leasing process is nearly complete with 2 units remaining to lease. These units are owned by Access Peoria, LLC with the East Bluff Neighborhood Housing Services (EBNHS) as the property manager.
The development of the 14 for sale units has had a slower start. Although the grant award announcement was made in July 2013, the release of grant agreements and funds from the AG office to LISC was provided in late 2014. Additionally, upon review of the proposed development strategy for the units, LISC’s national office determined that the team partner identified as the potential developer did not have the experience necessary to complete the project. Therefore, a substitute developer was needed for the homebuyer units. The AG office would not allow any additional partners to be added once the grant agreement was executed. As such, Peoria LISC was reassigned as the developer for the Initiative.
Although Peoria LISC is the developer of the homebuyer units under the Initiative, they are partnering with Peoria Citizens Committee for Economic Opportunity, Inc (PCCEO) as a development manager. Peoria LISC reviewed the projected development budget previously submitted and discovered a significant budget deficit, approximately $896,000. The AG office will not allow LISC to reduce the number of units to be developed under the executed agreement. Therefore, other resources needed to be identified to close the budget gap and begin the project. Under the AG agreement with LISC, the project must be completed on or before September 2017.
On January 12, 2016, Council approved (Council Item # 16-005) a multifaceted approach for the City to secure financial resources for the Attorney General / Peoria LISC Initiative in the East Bluff. This action included the reallocation of CDBG funds for public infrastructure projects identified in the City’s 2016 Capital Budget. The capital funds made available by this reallocation have been reserved as a financial resource for the initiative. Another facet of the January 12, 2016, action (Council Item # 16-005) was the reallocation of 2012 HOME Funds from the Down Payment Assistance Program to the Focus Housing Leverage Program to be used as another financial resource for the initiative. This reallocation required a substantial amendment to the City’s 2012 HUD Annual Action Plan to incorporate the Focus Housing Leverage Program activities. This amendment was approved by City Council on March 8, 2016 (Council Item # 16-075). The amendment has been executed and the Focus Housing Leverage funds are available for commitment to a specific affordable housing development.
Council action on January 12, 2016 (Council Item # 16-005) prepared the way for funding to be secured for the Attorney General/Peoria LISC Initiative in the East Bluff and the present communication acts as a request for the first formal award of that funding (In the form of HUD HOME Funds) to LISC. The HUD HOME funds will go toward the rehabilitation one affordable, single-family, owner-occupied home at 2408 N. Delaware St. for sale to a low-income homebuyer. The specific funds will be drawn from HOME recapture and program income with the remainder to be drawn from the 2012 and 2014 HOME Focus Housing Leverage Program funds.
City staff will continue to work with LISC and City Council in order to award further funding, including Focus Housing Leverage Funds from subsequent program years as well as the City’s capital funds referenced above, in support of the Attorney General / Peoria LISC Initiative in the East Bluff as referenced in CC# 16-005.
FINANCIAL IMPACT: The City’s HUD HOME program income, recapture and 2012 and 2014 Focus Housing Leverage Program funds, in the amount of $121,626.00, will be awarded to LISC in support of the Attorney General / Peoria LISC Initiative in the East Bluff.
NEIGHBORHOOD CONCERNS: Since the AG grant award announcement in 2013, the Partners for a Better East Bluff have actively engaged residents and community leaders in the planning and development of activities. Residents have been supportive of the Partners’ plans and proposed development.
IMPACT IF APPROVED: One (1) new, affordable, single-family, owner-occupied home will be rehabilitated using HUD HOME Funds. The development of 14 for sale units as part of the Attorney General / Peoria LISC Initiative in the East Bluff will begin with this project.
IMPACT IF DENIED: One (1) new, affordable, single-family, owner-occupied home will not be rehabilitated using HUD HOME FUNDS, the Attorney General / Peoria LISC Initiative in the East Bluff will be further delayed and a new project will need to be developed in order to expend the Focus Housing Leverage Program funds.
ALTERNATIVES: None identified at this time.
EEO CERTIFICATION NUMBER: Not applicable
WHICH OF THE GOALS IDENTIFIED IN THE COUNCIL’S 2014 - 2029 STRATEGIC PLAN DOES THIS RECOMMENDATION ADVANCE?
1. Attractive Neighborhoods with Character: Safe and Livable
2. Grow Peoria: Businesses, Jobs, and Population
3. Not applicable.
WHICH CRITICAL SUCCESS FACTOR(S) FROM THE COMPREHENSIVE PLAN DOES THIS RECOMMENDATION IMPLEMENT?
1. Reinvest in neighborhoods.
2. Grow employers and jobs.
3. Not applicable.
DEPARTMENT: Community Development