ACTION REQUESTED:
Title
Communication from the City Manager and the Community Development Director with a Request to RESCIND Item 16-241 and APPROVE a Grant Award of $278,000.00 from the City’s HUD HOME FUNDS to PCCEO for the Rehabilitation of Three (3), Affordable, Single-Family, Homes in the EAST BLUFF as part of the Attorney General/Peoria LISC Initiative in the East Bluff. (Council 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 (henceforth the 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 $50,000 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 in HOME funds 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 complete. 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 homebuyer units is currently underway with 2 newly constructed single-family homes completed in November. As a partner in the Initiative, the City has made funding available for the development of the homebuyer units.
On January 12, 2016, Council approved (Council Item # 16-005) a multifaceted approach for the City to secure financial resources for the Initiative. 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 (CC# 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 this communication acts as a request for the formal award of that funding (In the form of HUD HOME Funds) to PCCEO. The HUD HOME funds will go toward the rehabilitation of three affordable, single-family, homeowner homes in the East Bluff for sale to a low-income homebuyer. These funds will be drawn from HOME recapture, program income, and the 2012, 2014, and 2015 HOME Focus Housing Leverage Program funds. The first unit to be rehabbed is a single-family property at 2408 N. Delaware. PCCEO has site control and an accepted bid for the rehabilitation. The remaining two East Bluff properties to be developed will be selected by PCCEO in collaboration with City staff. All three properties will be sold to low-income homebuyers in conformity with HUD’s standards for affordable housing.
If approved this action will replace Council Item # 16-241 (approved on July 12, 2016) which approved the award of the initial $121,626 of this $278,000 in HOME funds to LISC. This initial award was made with the intention that LISC would issue these funds, in combination with AG grant funds, to PCCEO for development. Upon consultation with the HUD Field Office in Chicago, City Staff have been advised to contract directly with PCCEO for the development in order to maintain consistency with HUD HOME Program regulations. Though the award was approved by Council, the City had not entered into contract with LISC for these funds. Upon Council, approval of this item the City will enter into contract with PCCEO for the total amount of $278,000.
FINANCIAL IMPACT: The City’s HUD HOME program income, recapture and 2012, 2014,and 2015 Focus Housing Leverage Program funds, in the amount of $278,000, will be awarded to PCCEO 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: Three (3) affordable, single-family, homeowner homes 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: Three (3), affordable, single-family, homeowner homes 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: 00740-170930
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.
2. Reduce crime.
DEPARTMENT: Community Development