ACTION REQUESTED:
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Communication from the City Manager with a Request to Approve the Allocation of $100,000.00 of CDBG ECONOMIC DEVELOPMENT FUNDS to PEORIA SLF LP, LLC at the SE Corner of RB GARRETT AVE & RICHARD PRYOR PLACE (Tax ID# 18-09-110-028) (Council District 1).
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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, federal funds are allocated to Peoria on an annual basis through HUD. The City of Peoria receives three grants - Community Development Block Grant (CDBG), HOME Investment Partnership Program and the Emergency Solutions Grant (ESG).
On September 10, 2013, City Council approved the allocation of $250,000 of CDBG funds to an Economic Development Program. Additionally, on October 14, 2014, City Council approved the additional allocation of $163,860 of CDBG funds for a total of $413,860 to the Economic Development Program. On January, 27, 2015, City Council approved the Economic Development Program guidelines. The CDBG economic development program is focused on creating jobs for low-income individuals. For each full-time equivalent (FTE) job created, the applicant is eligible to receive $35,000 of assistance.
On November 25, 2015, City Council approved the special use for the facility at the property located at the SE corner of RB Garrett & Richard Pryor Place. Vermillion Development was the representative for the special use request. As a part of the development, Vermillion was required to create a limited liability corporation (LLC). The newly created Peoria SLF LC, LLC assumed the developer role for the project. Peoria SLF LC, LLC holds the deed to the property and will be the employer for the jobs to be created.
Peoria SLF LP, LLC will build a 105 unit supportive living facility, named Gateway at River City. The building will consist of 62 studio units, 38 one-bedroom units and five two-bedroom units. Supportive services are paid through Medicaid reimbursement for income-qualified residents and from resident assets for non-income qualified residents. The newly constructed facility will provide three meals daily in a common dining room, shared activity and recreation areas, and limited nursing services. Other amenities include a fitness room, therapy center, laundry room and a movie theatre. The building will be designed to maximize energy efficiency and promote a healthy indoor environment.
The total project cost for the development is approximately $21 million. This facility will create 53 employment positions (32 full-time and 21 part-time), resulting in 40 FTE positions, with pay ranging from $9.58/hour to annual salaries over $70,000. During the design phase of the project, the developer encountered unexpected costs to relocate underground telecommunications infrastructure. This increased the project cost by approximately $600,000. The developer asked the City to help address this funding gap.
CDBG regulations require 51% of the jobs will be held by, or made available to, low- or moderate-income individuals. The location of the proposed facility is in a Census tract with a poverty rate over 30%. Due to the high percent of poverty in the Census tract, CDBG regulations presume that all employment positions will be made available to low- or moderate-income individuals. Per the program regulations, the jobs must be retained for at least 2 years.
FINANCIAL IMPACT: A total of $100,000 of CDBG Economic Development Program funds (project 13ED00) would be allocated to Peoria SLF LP, LLC for the Gateway at River City development.
NEIGHBORHOOD CONCERNS: The facility obtained a proper special use on November 25, 2014 with no neighborhood objection.
IMPACT IF APPROVED: A total of $100,000 of CDBG Economic Development funds would be awarded to Peoria SLF LP, LLC for the Gateway at River City development. City administration will execute a subgrantee agreement with Peoria SLF LC, LLC. Project construction is anticipated to begin in summer 2015.
IMPACT IF DENIED: A total of $100,000 of CDBG Economic Development funds would not be awarded to Peoria SLF LP, LLC for the Gateway at River City development.
ALTERNATIVES: None.
EEO CERTIFICATION NUMBER: Application submitted, approval is pending.
WHICH OF THE GOALS IDENTIFIED IN THE COUNCIL'S 2014 - 2029 STRATEGIC PLAN DOES THIS RECOMMENDATION ADVANCE?
1. Grow Peoria: Businesses, Jobs, and Population
WHICH CRITICAL SUCCESS FACTOR(S) FROM THE COMPREHENSIVE PLAN DOES THIS RECOMMENDATION IMPLEMENT?
1. Grow employers and jobs.
DEPARTMENT: City Manager's Office