ACTION REQUESTED:
Title
Communication from the City Manager and the Community Development Director with a Request to Approve the Allocation of $408,827.00 of HOME FUNDS to ACCESS PEORIA, LLC, for the Construction of Two New Duplexes Located at 713 E. LASALLE ST. (Tax ID# 18-04-232-016) and 1707 N. INDIANA AVE. (Tax ID# 18-04-231-025). (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 Local Initiatives Support Corporation (LISC) from the National Foreclosure Settlement funds.
Access Peoria, LLC was formed by Illinois Facilities Funds (IFF). IFF is team member of the Partners for a Better East Bluff and their role is for development of affordable, rental housing for low income households with disabilities. LISC will award Access Peoria $1 million of the AG funds for the development of eight (8) new construction duplexes that will provide a total of sixteen (16) rental units. Illinois Housing Development Authority (IHDA) will also provide $2,577,638 of funding for the project.
The total project costs are $3,986,465. After the funding commitment from LISC and IHDA, an additional financing gap of $408,827 existed for the project. IFF approached the City regarding the allocation of HOME funds to the project. This project aligns with the goals and objectives of the HOME grant program to create and preserve affordable housing for low-income individuals in the community. Additionally, providing HOME funds increases the City's participation in the Partners for a Better East Bluff initiative and provides overall funding leverage for the AG grant award.
The HOME investment of $408,827 will be allocated for construction hard costs. The total project budget shows new construction costs at $2,659,571; approximately $166,223 per unit (total of 16 units/8 duplexes). The HOME investment represents approximately 15% of the total construction budget. Based upon the HOME regulations for per unit subsidy amount allocated by bedroom size, the HOME investment will yield four (4) units / two (2) duplex properties. These properties/units will be designated as HOME units and will required future affordability compliance related to tenant's income and rent amounts.
The eight (8) new duplexes to be developed by Access Peoria, as well as all other AG grant funded activities, are located in the East Village Growth Cell Tax Increment Financing (TIF) District. Access Peoria will privately owned the duplexes and the project budget includes payment of property taxes at a projected assessed valuation of $80,000 - $90,000 per duplex. With this investment of construction, tax increment could be generated for the TIF which could assist with future initiatives. Additionally, this project will require payment of Federal prevailing wage to contractors. Access Peoria has agreed to pursue its best effort to meet WBE/MBE and local workforce utilization requirements through the project's construction and subcontracting.
In 2013 and 2014, the City Council budgeted HOME funds for a Focus Housing Leverage Program. This program was created to provide gap financing for initiatives that preserves or develops affordable housing while leveraging other resources. Access Peoria project location within the East Village Growth Cell TIF, the amount of other committed financing sources leveraging the total project costs and proposed use as affordable housing rental units for low-income, disabled households makes it an ideal project for the Focus Housing Leverage Program.
FINANCIAL IMPACT: A total of $408,827 ($244,664 from 13FAHL and $164,163 from 14FAHL) of HOME funds would be awarded to Access Peoria for the construction costs of eight (8) duplexes / sixteen (16) units of affordable housing rental units for low-income, disabled households as a part of the Partners for a Better East Bluff initiative. A total of four (4) units / two (2) duplex properties would be designated as HOME units as a result of the HOME fund investment.
NEIGHBORHOOD CONCERNS: Since the grant award announcement in 2013, the Partners for a Better East Bluff have actively engage residents and community leaders in the planning and development of activities funded under the AG grant. Residents have been supportive of the Partners' plans and proposed development.
IMPACT IF APPROVED: A total of $408,827 ($244,664 from 13FAHL and $164,163 from 14FAHL) of HOME funds would be awarded to Access Peoria. City administration will execute a subgrantee agreement with Access Peoria. Project construction is anticipated to begin in late 2014 with a completion date of summer 2015.
IMPACT IF DENIED: A total of $408,827 ($244,664 from 13FAHL and $164,163 from 14FAHL) of HOME funds would not be awarded to Access Peoria. Community Development staff would have to seek alternative projects for the Focus Housing Leverage Program.
ALTERNATIVES: None.
EEO CERTIFICATION NUMBER: Access Peoria, LLC.: 03309-151231
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
WHICH CRITICAL SUCCESS FACTOR(S) FROM THE COMPREHENSIVE PLAN DOES THIS RECOMMENDATION IMPLEMENT?
1. Reinvest in neighborhoods.
DEPARTMENT: Community Development