ACTION REQUESTED:
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Communication from the City Manager and the Community Development Director with a Request to APPROVE the Grant Award, in the Amount of $204,384.00, from the City’s HUD HOME FUNDS to WALLICK-HENDY DEVELOPMENT COMPANY, LLC for the Rehabilitation of PIERSON HILLS located at 1720 NORTH GREAT OAK ROAD. (Parcel ID # 1806101004) (Council District 2)
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BACKGROUND:
The City of Peoria is considered an entitlement jurisdiction by the US Department of Housing and Urban Development (HUD). As such, funds from the Federal government, through HUD are allocated to Peoria on an annual basis. The City of Peoria receives three (3) grants - Community Development Block Grant (CDBG), HOME Investment Partnership Program and the Emergency Solutions Grant (ESG).
The HOME Investment Partnership Program grant is used to create and preserve affordable housing for low-income individuals in the community. The program often functions as a gap financing tool for developments leveraging private or other public resources. Wallick-Hendy made formal application to the City on March 6, 2017 requesting an allocation of gap financing for Parkwood Commons, a $16,000,000 redevelopment of Pierson Hills. Parkwood Commons is leveraging substantial resources from the Illinois Housing Development Authority (IHDA) and the federal Department of Housing and Urban Development (HUD) to preserve 100 units of affordable housing. Parkwood Commons is finalizing funding for HUD’s Mark up to Market program which is meant to preserve affordable housing units at risk of falling out of the affordable market. As part of this program, Parkwood Commons will become a more sustainable and robust development while ensuring that these 100 units stay on the affordable market through the execution of a new 20-year Section 8 Housing Assistance Program contract.
As such, it is important to ensure the success of developments that bolster the City’s affordable housing market and leverage resources that might otherwise be utilized outside of Peoria. Supporting such projects is consistent with the Consolidated Planning purposes of providing decent housing and a suitable living environment principally for persons with low and moderate incomes.
This request was initially included in the Special Use amendment approved on December 13, 2016 (Council Item # 16-404). However, because of the timing of other financing for the project and HOME application requirements, the formal funding request has not been made until now.
Wallick-Hendy Development Company has a proven track record of success with HOME-funded projects. In 2014 the City of Peoria awarded $225,000 in HOME funds for the redevelopment of Schlarman House at 707 NE Madison Ave securing the quality and affordability of 75 units for seniors with low-incomes. This project was successfully executed and performs in compliance with City and HUD standards as is determined on yearly monitoring visits from Community Development staff.
These funds will be awarded from 2016 and 2017 HUD HOME grant allocations. The City has not yet received its 2017 grant allocation from HUD and this funding award is contingent upon the 2017 allocation. Any contract resulting from this award will reflect this contingency. The project is also subject to HUD environmental review and underwriting review requirements.
FINANCIAL IMPACT: A total of $204,384 in HUD HOME funds ($154,384 from 2016 allocation; $50,000 contingent on 2017 allocation) would be awarded to Wallick-Hendy for the Parkwood Commons development. City administration will execute a subgrantee agreement with Parkwood Commons, L.P., an Ohio limited partnership. WAM Parkwood Commons, LLC, an Ohio limited liability corporation, will be its General Partner. Wallick Asset Management LLC, an Ohio limited liability corporation, will be the Sole Member of WAM Parkwood Commons, LLC
NEIGHBORHOOD CONCERNS: Neighborhood members expressed concerns primarily regarding crime. Developer met with Police Department and Community Development staff as well as presenting at a neighborhood meeting to explain the details of the project and respond to questions. Developer has committed to crime-mitigation features suggested by PD such as enhanced lighting and cameras.
IMPACT IF APPROVED: The City will support a development that will preserve and rehabilitate 100 units of Affordable Housing using HUD HOME funds.
IMPACT IF DENIED: A development preserving and rehabilitating 100 units of Affordable Housing will not be supported with the City’s HUD HOME funds and Wallick-Hendy will have to seek new sources of capital to fill financing gaps potentially jeopardizing other funding sources and/or causing project delays.
ALTERNATIVES: None identified at this time.
EEO CERTIFICATION NUMBER: Pending
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