AgdaPkt 2005-01-24 - Laserfiche WebLink

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~.A-~ a. Income restrictions - The 58 units will be restricted to very low income households for 55 years. b. Site-specific issues - The shallow water table and the immediate adjacency to neighboring business require expensive site improvements. The cost to address these issues will be about $914,000 or $16,000 per unit. c. Subterranean parking - The project is relatively dense at 95 units per acre, which necessitates the use of subterranean parking in order to keep the project within the allowable height limit of 50 feet due to construction type limitations. The marginal cost of the subterranean parking (in addition to the site improvement costs) is $3.7 million or $63,000 per unit. While the project could be built less expensively with structured above grade parking, this would result in fewer units, which could present a problem for securing a tax credit investor and other financing sources. d. Rapidly escalating construction costs - The cost of lumber, steel, and concrete have increased dramatically during the last year. 3. Need for Site Control (DDA) to Secure E.Yllilli:l9- In order to finance the project FCH must secure a number of funding sources, which may include tax credits, 4% tax exempt financing, Proposition 46 funds, and funds from the Federal Home Loan Bank Board. In order to apply for these funds, FCH needs proof of site control, which can be demonstrated through the execution of a DDA. The DDA will also provide FCH with sufficient security to enable them to proceed with the preparation of construction drawings. The Proposition 46 funds give additional points if 50% construction drawings are submitted with the application, which is due in April. 4. Sources for Aoency Assistance-The Agency has $2,199,911 available from Housing set-aside and HOME funds to dedicate to the FCH project, which is less than the $3.16 million estimated as needed by the project. The $960,089 gap could be funded by Housing set-aside funds to be deposited in fiscal year 2005/2006, a grant from County CDBG funds which FCH and the Agency will jointly apply for, City CDBG funds from 2005-2006, or a combination of all of the above. A resolution authorizing submittal of an application for County CDBG funds is presented for consideration as part of tonight's action. Options for funding the Agency Assistance if the grant funding is not approved by the County and/or by the City's CDBG program process are discussed later in this report under "Fiscal Impact". Fiscal Impact The DDA contains the following business terms: a. The City and Agency will provide the Project with a land grant of $1.35 million to acquire the site from the Agency. A condition precedent for conveyance of the site will be the securing of all funding sources to complete the project to the satisfaction of the Agency. b. FCH will be required to apply for MHP funds in the first application cycle of 2005. DJT:cje Redev Shél'ed/2005 Staff ReportslO1-2005/FCH DDA 3