ACTION REQUESTED:
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Communication from the City Manager and Director of Community Development with a Request to APPROVE a GRANT Award, in the Amount of $100,000.00, from the City's Housing and Urban Development Home Fund, to PEORIA OPPORTUNITIES FOUNDATION, for Construction of Thirty (30) New, Affordable Units, in the EAST BLUFF Neighborhood (Council District 3).
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BACKGROUND: The City of Peoria is considered an entitlement jurisdiction by the US Department of Housing and Urban Development (HUD) and receives an annual allocation of funding through the HOME Investment Partnership Program.
HOME funding must be used for the preservation or creation of affordable housing in Peoria.
The program often functions as a gap financing tool for developments leveraging private or other public resources.
On August 13, 2019, the City council approved funding for the new construction of 30 units in the East Bluff with $560,000 in HOME funds to Peoria Opportunities Foundation (POF). The approximately $12 million project leverages substantial resources from the Illinois Housing Development Authority (IHDA) and the federal Department of Housing and Urban Development (HUD) to create 30 units of affordable housing.
The project closed in April 2020 and began construction shortly thereafter. Once the project commenced, significant cost overruns occurred due to unforeseen sewer and sanitary repairs needed to ensure the quality of housing for residents. The COVID-19 pandemic has also caused demand impacts on the construction market and substantial material cost increases. Prior to coming to the City for additional funding, POF reduced other expenses where possible, utilized all the contingency available in the project, and sought additional resources from other funders including $345,000 from the Illinois Housing Development Authority.
The attachment includes a detailed explanation of the cost overruns from Peoria Opportunities Foundation.
POF has a proven track record ...
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