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6.B. - Page 2 of 113
<br />To date, the City has committed over $4.7 million to the project:
<br />• Land acquisition —$232,385 from Community Development Block Grant (CDBG) funds
<br />• Predevelopment costs — $360,000 from Housing Impact Fees
<br />• Construction - $1,425,000 from Housing In -Lieu Fees
<br />• Construction - $898,503 from the HOME Investment Partnerships Program (HOME)
<br />• Construction - $1,601,497 from Housing Impact and In -lieu Fees (pending)
<br />• Disposition costs - $200,000 from CDBG
<br />Total - $4,717,385
<br />ANALYSIS
<br />In May 2015, the City Council committed $1.425 million in housing in -lieu fees (from the One Marina
<br />Development) to the Habitat project in the form of a grant. In February 2019, Habitat for Humanity
<br />requested an additional $2.5 million in funding to cover construction cost increases. The City Council made
<br />a soft commitment of $2.5 million from affordable housing impact fees, as the City did not have sufficient
<br />funds available to make a firm funding commitment. The City had anticipated receiving affordable housing
<br />impact fees from another development project (Strada - 1548 Maple Street) however payment of those
<br />fees has been significantly delayed. Therefore, on June 8, 2020, the City Council allocated $898,503 in
<br />HOME funding to replace a portion of the City's existing $2.5 million soft funding commitment. The HOME
<br />funding agreement will be brought to the City Council for approval at a later date. Since June 2020, the
<br />City has received affordable housing impact fees from smaller projects (e.g. 217 Vera Ave) and now has
<br />sufficient funding from in -lieu ($25,000) and impact ($1,576,497) fees to commit the remaining
<br />$1,601,497 of its $2.5 million funding commitment.
<br />In light of the COVID-19 pandemic, staff also reevaluated the City's housing funding sources to maximize
<br />the City's response to COVID-19 and, in particular, meet the needs of low-income residents impacted by
<br />the pandemic. In FY 2019-20, the City Council committed $360,000 from Community Development Block
<br />Grant (CDBG) funds, in the form of a grant, to the project for predevelopment costs. However, after
<br />evaluating the project further, staff determined predevelopment costs were not a good use of CDBG funds
<br />as they created several administrative and reporting challenges. On June 8, 2020, the City Council
<br />approved using $360,000 in affordable housing impact fees within the Affordable Housing Fund instead
<br />the $360,000 grant from CDBG. The $360,000 in CDBG funding that was made available by the City
<br />Council's action is being used to support the City's COVID-19 emergency assistance program.
<br />Staff proposes to use the $360,000 from affordable housing impact fees for predevelopment costs with
<br />the $1,450,000 from housing in -lieu fees and $1,576,497 from housing impact fees for construction costs
<br />for an affordable housing grant agreement totaling $3,386,497 (see Table 1). The proposed City Council
<br />action is to formalize this commitment through an affordable housing grant agreement that includes the
<br />following deal terms:
<br />• 55 -year affordability restriction
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<br />City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcitV.org
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