ACTION ITEM
SPONSOR: Teniade Broughton, Chairperson
SUBJECT:
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Local Government Area of Opportunity funding for 9% Housing Tax Credit Application
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RECOMMENDATION:
recommendation
That the Community Redevelopment Agency (CRA) authorize funding in the amount of $460,000 to support a Local Government Area of Opportunity application for Kupfrian Manor for Florida Housing Finance Corporation’s RFA 2022-201 Housing Credit Financing for Affordable Housing Developments located in Medium and Small Counties. Further, that the CRA authorize the Mayor to sign the Local Government Verification of Contribution Loan form as required by Florida Housing Finance Corporation.
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SUMMARY:
A priority recommendation made to the City in 2020 as part of the Final Report presented by the City’s Affordable Housing Task Force was for the City to support tax credit development applications. The Task Force was convened to provide support and create objectives related to the City’s goal of 500 Homes in 5 years. The Westside CRA Plan outlines an objective for multi-family residential under “Residential Preservation and Enhancement,” to “provide infill development opportunities and affordable housing where appropriate,” by considering “implementing incentives for affordable housing…” as an action strategy. Support of an affordable multi-family rental development also supports multiple Housing goals as outlined in the City’s current Comprehensive Plan.
A potential location for affordable multi-family housing is the Baptist Hospital site. The City Council supported Baptist’s Redevelopment Vision Plan as presented earlier this year, approving Resolution 2022-057 concerning redevelopment of the site. Baptist Hospital recently solicited proposals from developers for site redevelopment, specifically seeking affordable housing developers to support the City’s desired goals for affordable housing. Baptist Hospital has selected a proposal received from the Paces Preservation Partners, LLC (Paces), a partnership between The Paces Foundation, Inc. and Soho Housing Partners, LLC, to develop a 102-unit senior multi-family development at the southeast corner of H and Avery Streets, to be named Kupfrian Manor. The development site is located in the Westside CRA.
In order to obtain financing for Kupfrian Manor, Paces is seeking a 9% Low Income Housing Tax Credit (LIHTC) allocation made available by Florida Housing Finance Corporation (FHFC) under RFA 2022-201-Housing Credit Financing for Affordable Housing Developments Located in Medium and Small Counties. FHFC has set certain funding goals for this RFA, to include three Local Government Area of Opportunity applications. The Local Government Area of Opportunity (LGAO) preference requires a local government to select one development for support and provide a minimum funding amount based on County size. The minimum funding commitment under this year’s RFA for a development located in Escambia County is $460,000.
CRA support of this request for this funding will give this development proposal a higher chance of receiving a LIHTC allocation from FHFC. Because of the competitive nature of the FHFC RFA process, there is no guarantee that funding will be received from the State. Applications are due December 28, 2022, with FHFC Board approval of development applications estimated in January 2023. Should Kupfrian Manor be selected for award by the State, an agreement will come back to the CRA for approval to formally obligate funds and outline developer commitments. This rental development will comply with all CRA urban design overlay district requirements and City planning and zoning requirements. Properties awarded LIHTC funding are routinely monitored by FHFC for set asides, rents, and other property conditions as outlined in the RFA.
Kupfrian Manor will consist of 51-1 bedroom/1 bath units and 51-2 bedroom/2 bath units to be located over a one-story commercial space. Paces is committing to unit affordability for 50 years. All of the units will be targeted to households at or below 80% area median income (AMI) to meet both IRS and FHFC requirements. 16 units will be set aside for residents at or below 30% AMI; 64 units at or below 60% AMI; and 22 units at or below 80% AMI (for reference, the current maximum annual income limits for a one-person household at 30% AMI may not exceed $16,250; 60% AMI may not exceed $32,520; and 80% AMI may not exceed $43,300). Additionally, 8 of the 30% AMI units will be set aside for special needs households. Based on unit set asides, the one-bedroom rents are expected to range from $342-$1068/month and two-bedroom rents are expected to range from $406-$1276/month. The following programs will be available to Kupfrian Manor residents at no additional cost: 24 Hour Support to assist residents in handling urgent issues, adult literacy, daily activities, and computer training.
PRIOR ACTION:
N/A
FUNDING:
Budget: $ 460,000.00
Actual: $ 460,000.00
FINANCIAL IMPACT:
The $460,000.00 contribution will be funded from the Westside CRA Tax Increment Financing (TIF) property acquisition and development allocation. No funds will be provided to the developer unless the proposed development is awarded funding from FHFC under RFA 2022-201.
The statewide housing tax credit application process through FHFC is extremely competitive, so there is no guarantee of this project being funded by the state. Should this project be awarded a 9% tax credit, there may be a separate request to reallocate funding to ensure that other Westside CRA projects that may occur in FY23 are not impacted.
LEGAL REVIEW ONLY BY CITY ATTORNEY: Yes
12/2/2022
STAFF CONTACT:
David Forte, Deputy City Administrator - Community Development
Sherry Morris, Development Services Director
Victoria D’Angelo, CRA Assistant Manager
Marcie Whitaker, Housing Department Director
ATTACHMENTS:
1) Local Government Verification of Contribution-Loan Form
2) Proposed Site Map-Kupfrian Manor
PRESENTATION: Yes end