Olene walker housing loan fund quarterly board meeting



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OLENE WALKER HOUSING LOAN FUND

QUARTERLY BOARD MEETING

Housing and Community Development Division

Salt Lake City, Utah

MINUTES

Thursday, January 26, 2017

Members Present Representing

Gloria Froerer Rental Housing

Garret Bangerter Home Builder

Mark Lundgren Manufactured Housing

Mike Glenn General Public

Tee Tyler Local Government

Dan Adams Mortgage Lender

Mike Akerlow Local Government

Cass Butler General Public

Jon Warner Housing Advocacy

Kelly Jorgensen HUD

Robert Snarr Human Services – State of Utah
Staff

Katherine Smith HCD

Shelli Glines HCD

Lora Rees HCD

Daniel Herbert-Voss HCD

Jess Peterson HCD

Steven Fox HCD

Robert Kohutek HCD

Annette Despain HCD

Lori Poll HCD

Elias Wise HCD

Matthew Parker HCD

Debi Carty DWS – Admin North

Mike Green AGO

Bryan Nalder AGO

Susan Stevenson AGO


Visitors

Rhett Potter PAAG, Inc

Ty Reese PAAG, Inc

Jamie Ramboz PAAG, Inc

Robert Hunter PAAG, Inc

Janice Kimball HACSL

Troy Hart HACSL

Steve Graham Ibis Investments

Doug Henderson Enterprise/Valencia

David Blake GIV Group/HiGrade Apts

Peter Corroon Corroon Company, LLC

Brandy Farmer Centro Civico Mexicano Apts

Clarence Rockwell NN-Navajo Utah Commission

Stephanie Holly NN-Navajo Utah Commission

Kristen Mitchell Youth Futures

Tammy Clark GBR Capital/Oquirrh Flats Apts

David Bevan Parleys Partners / Paladin Resources/ Artesian Springs Apts

Joe Torman Parleys Partners

Jeremy Runia Parleys Partners

Hooper Knowlton Parleys Partners

John Montgomery RMERC

Jeff Niels Wasatch

J.D. Neilson Wasatch

Mike Plazier UCNS

Gordon Walker Public
Welcome - The Olene Walker Housing Loan Fund (OWHLF) Quarterly Board Meeting was held at 1385 South State Street – Conference Room 157 - Salt Lake City, Utah. The meeting was called to order at 9:00 am, by Gloria Froerer, Chair.
OTHER BUSINESS
Approval of Minutes

Quarterly Board Meeting held on October 26, 2016

Electronic Board Meeting held on November 3, 2016
Motion by Mike Glenn, second by Garret Bangerter to approve the minutes as written with the corrections of:
Quarterly Board Meeting held on October 26, 2016, page 7, after staff’s recommendation, the motion was not printed. It should have been:
Motion by Dan Adams and second by Kip Paul to accept staff’s recommendation. The motion carried unanimously. The minutes have been corrected.
Electronic Board Meeting held on November 3, 2016, page 3. Mike Glenn stated that the new subsidy limits by AMI were incorrect. As Daniel Herbert-Voss went over the loan subsidy limits, he found it to be correct. So no changes were needed to be corrected.
Item #1 – Other Business


  1. Review of the Financial Report – When review the financial report, there was discussion on the OWHLF subsidy limits. Prior to the November 3, 2016, electronic board meeting that changed the limits, OWHLF staff used only the HUD 234-Condominium limits along with the AMI-based subsidy limits originally approved by the OWHLF board in 2005. All of today’s application were submitted prior to November 3, 2016, when the subsidy limits were changed to the lesser of the AMI-based subsidy limits or an approved per-LI-unit amount based on one of four project types (new construction, acquisition/rehabilitation, rehabilitation-only, or acquisition-only) calculated as a five-year running average and to be updated each year.


Motion by Mike Glenn, second by Tee Tyler to use the pre-November 3, 2016, loan subsidy limits for all of today’s projects. The motion carried unanimously.
Item #2 – New Projects:
Cass Butler left the room at this time.


  1. The Hub of Opportunity (Phase II) – HACSL/Columbus Foundation

Phase II of 157-unit total new-construction project consisting of 57 units – 20 1BR, 20 2BR, and 17 3BR of which 40 are affordable units on land currently used as parking for the UTA Meadowbrook TRAX station in a single 5-story building constructed donut-style around a 2-level parking garage. Land to be leased from UTA to Columbus Foundation for 99 years. Zoning is presently Transit Oriented Development Overlay – Core District (mixed use), for which multifamily housing is a conditional use. UTA has submitted a CUP request on behalf of HACSL/CF to South Salt Lake on August 16, 2016, which was approved on October 6, 2016, by South SL Community Development. Set-asides include five units for developmentally disabled (Columbus Foundation), five units for homeless (The Road Home), and a total of 12-type A fully accessible units. Phase I applied for and received T-E bonds, 4% LIHTC, and $300K of OW funds, phase II applied for $1M of 2017 Federal LIHTC on October 3, 2016, and was awarded $731,120 on December 15, 2016, leaving a large equity funding gap of $3,159,024.


Staff’s recommendation is not to fund until specific information is provided by developer to reduce and/or eliminate the present funding gap of $3,159,024.
Motion by Dan Adams and second by Mike Glenn to fund $1,000,000 for 30 years at 1.5% as a fully-amortizing loan conditional on updated financing and value-engineering information to be approved by OWHLF staff and brought back for final review by the OWHLF board at the April 27, 2017, quarterly board meeting.
Cass Butler returned to the meeting.


  1. Artesian Springs Apartments, Phase II – Paladin Resources, Inc.

Project is new construction in a single five-story building containing 74 one-bedroom, 34 two-bedroom, and 10 three-bedroom units, of which 55 1BR, 27 2BR, and 2 3BR will be affordable. Project similar to Birkhill I/II in layout and appearance with building surrounding a 133-space integral parking garage. Site was vacant land purchased from Wright Engineering & Construction by Parley’s Ptrs/Paladin located just north of Birkhill I/II but within the Millcreek Township, which was transferred to the Artesian Springs LLC. Set-asides include 10 units for veterans (VA) and 5 units for homeless (The Road Home). There are nine fully accessible units (Utah Ind Living Svcs). Zoning was changed in July 2014, from M-1 (Manufacturing) to R-M (Residential-Multifamily – TOD) with a Conditional Use Permit by Millcreek Township approved. Developer applied for $1,000,000 in 2015 LIHTC, the full amount was awarded on December 11, 2014.


Staff’s recommendation is to fund $400,000 for 30 years at 3% instead of 1.5% as a fully-amortizing permanent loan to fill remaining permanent funding gap.
Motion by Tee Tyler and second by Jon Warner to accept staff’s recommendation. The motion carried unanimously.


  1. Centro Civico Mexicano Apts. – Corroon Company, LLC

Project is new construction of 61 units – 10 studio, 45 1BR, and 6 2BR, with 42 affordable and one manager’s unit – in a single five-story building with underground parking on 0.38 acres of vacant land adjacent to the Centro Civico community center to the south. Senior housing proposal is part of a larger mixed-use project which will include classroom, cultural, and civic-center spaces to eventually replace the old community center building. The UTA Greektown TRAX station is about one block away to the North, and also within two blocks of the Salt Lake City Central station. Zoning is presently G-MU (Gateway-Mixed Use) District, for which multifamily residential is a permitted use with no density limits. Set-asides includes three units for veterans (VA), two units for refugees (Catholic CS), five units for homeless (TR-H, CCS), and nine fully-accessible Type A units. Developer applied for $541,417 in 2017 Federal LIHTC on October 3, 2016, was awarded a full allotment on December 15, 2016.


Staff’s recommendation is to fund $868,457 instead of $1,000,000 for 30 years at 1.5% as a fully-amortizing loan. Funding contingent on security additional funding to fill gap, and on all other funding sources as listed in the application.
Motion by Dan Adams and second by Garret Bangerter to accept staff’s recommendation, but, if LIHTC pricing drops and other funding sources unable to fill gap, OWHLF funding to be increased to the $1,000,000 maximum as approved by OWHLF staff and brought back for final review at the April 27, 2017 Quarterly Board Meeting.

The motion carried unanimously.



  1. HiGrade Apartments / GIV Group

Project is a new construction of 100 units – 3 studio, 87 1BR, and 10 2BR units, of which 74 are affordable – in a five story building constructed on land occupied by vacant industrial buildings to be demolished. First level will contain parking, leasing office, exercise facility, and 750 sq. ft. of retail space. Project will be located within walking distance of the new WinCo store and other outlets, and is only one east of the UTA Central Pointe TRAX/Street Car hub station Zoning is presently Station Subdistrict – Downtown, for which multifamily rental with at least 51 units is a permitted use without requiring a conditional use permit. Set-asides two units for victims of domestic violence (South Valley Services), four units for maturing foster children (Utah DCFS), two units for veterans (VA), and five units for homeless (The Road Home). Developer applied for $955,500 of 2017 Federal LIHTC from UHC on October 3, 2016, and was awarded $914.774 of 2017 LIHTC on December 15, 2016, leaving an equity gap of $484,590.


Staff’s recommendation is to fund $1,000,000 for 30 years at 1.5% as requested as a fully-amortizing loan. Funding contingent on securing additional funding to fill gap, and on all other funding sources as listed in the application.
Motion by Mike Glenn and second by Mark Lundgren to accept staff’s recommendation. The motion carried unanimously.


  1. Pacific Drive – Housing Authority of Utah County

Project is new construction of 26 units – all one-bedrooms, of which 18 are affordable – in seven 4-plex style buildings on 2.4138 acres of vacant land previously sold to HAUC by American Ford City, which

Is located in an existing neighborhood and is close to retail, city services, and a UTA bus stop. One of the buildings will contain two residential units, a leasing office, and a clubhouse with computer room and wellness room. Zoning is presently R3-7,500 – High Density Residential with a maximum of 11 units per acre, with multifamily housing a permitted use. Set-asides include one unit for veterans (VA) one unit for victims of domestic violence (Center for Women and Children) four units for homeless (Mtland Continuum of Care), and all remaining units for elderly 62 years or older. A total of seven units will be Type A fully-accessible. Developer applied for $240,627 in 2017 Federal LIHTC from UHC on October 3, 2016, and was awarded the full amount on December 15, 2016.
Staff’s recommendation is to fund $377,376 instead of $445,000 for 30 years at 1.5% as a fully-amortizing loan. Funding contingent on securing additional funding to fill gap, and on all funding sources as listed in application.
Motion by Mike Glenn, second by Jon Warner to accept staff’s recommendation with the excepiont that they may come back to the Board if they need the additional money, up to $445,000 as originally requested, at the April 27, 2017. The motion carried unanimously.


  1. Oquirrh Flats Apartments – GBR Capital

Project is new construction of 96 units – 20 1BR, 39 2BR, 23 3BR, and 14 4BR, of which 67 are affordable – in a single L-shaped 4 story building on 2.414 acres of vacant land which is part of the Jordan Valley transit-oriented development area within walking distance of the UTA Jordan Valley TRAX station. The project will contain amenities such as large units, a swimming pool and hot tub, clubhouse room on the top floor with full kitchen, leasing offices, exercise room, computer room, and lounge area . Zoning is presently Transit Station Overlay District, P-C (Planned Community), for which multifamily housing is a permitted use with maximum density of 40 units per acre. Set-asides include seven units for domestic violence (South Valley Sanctuary), five units for homeless (The Road Home), and 10 Type A fully accessible units. Developer applied for $1M in 2017 Federal LIHTC from UHC on October 3, 2016, and received an allocation of $975,753 Federal LIHTC on December 15, 2016, leaving an equity funding gap of $290,934.


Staff’s recommendation is to fund $1,000,000 for 30 years at 2% instead of 1.5% as a fully-amortizing loan. Funding contingent on all other funding sources as listed in application.
Motion by Garret Bangerter and second by Cass Butler to accept staff’s recommendation. The motion carried unanimously.


  1. NUC Chapter Homes 2017 – Navajo Utah Commission

Project is new construction of seven 3BR housing units of approximately 1,040 sq ft each to be built on Navajo Nation Reservation leaseholder lots in southern San Juan County. NUC proposes to award one grant of $38,000 to each of seven local chapters, along with another $35,000 of funds per house from the Navajo Revitalization Fund grant of $245,000 awarded December 13, 2016. Units will be identical to those previously constructed under the prior NUC contract (#13-1775), and will also be constructed in accordance with Navajo Housing Service specifications. Chapter housing policies will give preference to elderly, handicapped, single-parent, and/or low-income households not to exceed 30% AMI. While NUC will work with the local chapters to select qualified candidates, OWHLF staff will make final approvals on all candidates selected by NUC for the homes.


Staff’s recommendation is to fund $292,600 as a grant, with $38,000 to be awarded to one each of seven Chapter applicants as approved by OWHLF staff ($266,000 total for construction), and $26,600 for NUC administrative costs. Funding contingent on funding from Utah Navajo Revitalization Fund.
Motion by Garret Bangerter and second by Jon Warner to accept staff’s recommendation. The motion carried unanimously.


  1. The Arcadia Apartments – Wasatch Residential Group

Project is new construction of 211 units – 65 1BR, 100 2BR, and 46 3BR, all affordable – in a single five-story building constructed around a central four-story parking structure on 4.25 acres of vacant land located just north of the 9000 South I-15 interchange in Sandy. The UTA Sandy Expo TRAX station is about one mile to the east, this project is intended as workforce housing within walking distance of numerous Sandy employers (Larry Miller Ford/Lincoln. Numerous restaurants and retail, Standard Plumbing, etc.) Zoning is presently Regional Commercial district, for which multifamily housing is an allowed use with a conditional use permit, Sandy City Comm Dev Dept issued a conditional use permit on July 22, 2016, with the site approved for up to 225 units. Project received an allocation of tax-exempt bonds and 4% LIHTC at the October 12, 2016 PAB meeting.


Staff’s recommendation is to fund $1,000,000 for 35 years at 3.00% as requested as a fully-amortizing loan. Funding contingent on all other funding sources listed in application.
Motion by Mark Lundgren and second by Mike Akerlow to accept staff’s recommendation. The motion carried unanimously.


  1. Youth Futures Shelter – Youth Futures, Incorporated

Project is the acquisition/rehabilitation of an existing former single-family home originally constructed in 1954, and converted to a five-bed youth shelter home in 2014-2015. Facility intended to provide temporary housing and drop-in services to youth 12-17 regardless of their personal circumstances (homeless, runaway, etc.). Youth Futures is a 501(c)(3) nonprofit corporation founded in August 2011 intended to provide shelter, support, resources and guidance to homeless/runaway youth. Facility has a capacity of five beds and provides hot meals, counseling services, case management, and outreach to help homeless/runaway youth get their lives back on track and become eventually reunited with their families. Zoning is presently R-3EC – Multiple-Family residential Zone (East Central), for which a temporary shelter is a permitted use. Clients pay no rent – all housing and other costs are supported by grants and private contributions.


Staff’s recommendation is to fund $138,685 instead of $287,195 for 30 years at 0% as a fully amortizing loan contingent on applicant obtaining other financing to fill remaining gap.
Mike Glenn motion and Dan Adams second not to accept staff’s recommendation but to table this project, obtain personal disclosure of original property purchase and determine how to best handle transaction to secure OWHLF interest. Either come back to the April 27, 2017, Board Meeting or do an electronic meeting. The motion carried unanimously.


  1. PAAG Royal Hotel Replacement – Problems Anonymous Action Group, Inc.

Project is the acquisition of existing market-rate housing units – 18 1BR, 3 2BR, and 1 3BR – to become all affordable units for current residents of the Royal Hotel. Property will accommodate up to 25 total residents as configured, with units with more than one bedroom being shared with one person per bedroom. Property to be purchased consists of a former single-family 3BR home built in 1913, along with three other 1-story garden-apartment-style buildings containing 1- and 2-BR units constructed between 1958 and 1967. Rents are already low (between $210 - $800), and PAAG would keep rents at approximately the same level at the Royal Hotel residents are currently paying. Property is well-maintained an in good condition, and presently does not require any rehabilitation. Present owner has property listed for sale with an asking rate of $1.2 million; PAAG has placed $14,000 in earnest funds down on the property, which will expire at the end of April 2017.


Staff’s recommendation is to table request until applicant has signed purchase offer for the Royal Hotel, including a current appraisal and proposal to pay off existing Royal Hotel OWHLF loan. Relocation plan will also be required for current residents of property to be purchased.
Motion by Cass Butler and second by Mark Lundgren, to table request for 30 days – revise proposed financing and discuss with OWHLF staff – schedule electronic board meeting to finalize OWHLF funding. The motion carried unanimously.
Item #3 – Existing Projects



  1. Iron Horse Park Apartments – Oak Financial Services

This project is a 94-unit affordable housing project east of downtown Park city at 1612 Lower Iron Horse Loop originally constructed in 1996 as a low-income housing tax credit (LIHTC) project with all three bedroom units. The project was built as a partnership between Oak Financial Services and Valley Behavioral Services (then Valley Mental Health) to help provide affordable housing for working families. The OWHLF Board approved $664,991 in funds on December 9, 1994 as a 15-year 5% fully-amortizing loan that was executed on November 8, 1995 using state match funds. The loan had reduced payments for the first 5 years, with the difference to accrue and compound at 5% and be due at the end of the 15th year. The loan was modified on February 26, 1996 to postpone the first payment due date, and again on December 10,1996 to change the interest rate to 6%. Presently the loan is due in full on February 1, 2017.


As of December 1, 2016, the balance due on the loan is $444,626.33. William Miller of Oak Financial has requested that the loan be extended and re-amortized over 10-15 years as the only debt on the property.
Staff’s recommendation is to extend existing OWHLF loan for five additional years at current rate of 6% as a fully-amortizing loan to be paid in full in five years.
Dan Adams motion and second by Garret Bangerter not to accept Staff’s recommendation but to extend OWHLF loan out 15 years at 3% as a fully-amortizing loan, to be paid in full in 15 years. Ensure deed restriction is placed on property so it will remain as affordable for the 15 years loan period. The motion carried unanimously.


  1. Valencia Apartments – Enterprise/EAM Associates

Project is 122 units – 2 studio, 118 1BR, and 2 2BR, with all affordable – in two three-story buildings constructed in 1927 along with a single-family home on the east side of the property (used as a management office), all of which was acquired/rehabilitated by La Porte in 2003 with Federal LIHTC and

three OWHLF loans of $226,000 (HOME), $86,000 (state LIH PI), and $140,000 (state LIH). Property is located east of downtown Ogden. The project has always struggled with cash flow and high vacancy issues since its completion; along with maintenance neglect and fairly high vacancy, the project’s debt needs restructuring to ensure future cash flow and complete needed rehab/repairs. RMCRC is proposing to refinance the balance of the existing UCRC first mortgage over the remaining 15-year term, and the new owner, Enterprise, proposes to restructure and increase the outstanding OWHLF loan. Together about $1.3M of new funding for repairs/rehab ($10,500/unit) will be provided by this proposal, and $122K to replenish the project’s reserves for replacement fund.
Staff’s recommendation is to fund an additional $690,000 as requested and refinance balances of WHP525 and WHO588, combining the three as a new fully-amortizing 30-loan of up to $823,717 at 1.5%, with payments to begin February 1, 2018. All HMO517 loan terms to remain as originally approved.
Motion by Mike Glenn and second by Jon Warner to accept Staff’s recommendation. The motion carried unanimously.


  1. Borden Lofts – Alliance Capital, LLC

Project is the acquisition and adaptive reuse of the former Borden Milk plant in Logan originally constructed in 1914 into 51 total units – Four studios, 32 1BR, and 15 2BR units, of which 45 are affordable. Project is aimed at young college graduates, with 6 units designed to accommodate home-based businesses, and is located only five blocks from Logan’s central business district and other nearby amenities such as trails and community recreation centers. Project design will include open floor plans, nine-foot ceilings, balcony or patio, and a central social center. The project design has received conditional approval and meets the current zoning requirements for the Mixed-Use (ML) zoning district for up to 57 total units. Solar photovoltaic panels are also proposed. Project was awarded $5.6M in T-E bonds at October 12, 2016 PAB meeting, and is eligible for $267,801 in 4% LIHTC. Project was awarded $125K OWHLF 30-year term with a 15-year deferral at the October 27, 2016 OWHLF board meeting, subject to further review by OWHLF staff and final approval by OWHLF board.

Staff’s recommendation is to issue approved funding of $125,000 as a deferred/amortizing loan at 3% - the loan will be deferred for the first 15 years, with simple interest to accumulate but not compound. Loan will convert to fully-amortizing with monthly payments for the last 15 years.
Motion by Cass Butler and second by Garret Bangerter not to accept staff’s recommendation, the project was cancelled. The motion carried unanimously.


  1. The Hub of Opportunity (Phase I) – Columbus/HACSL

Phase I of 157-unit total new-construction project consists of 99 units – 71 1BR, 26 2BR, 2 3BR – of which 89 are affordable (64 1BR, 23 2BR, 2 3BR) on land currently used as parking for the UTA Meadowbrook TRAX station in a single five-story building constructed donut-style around a two-level parking garage and outdoor plaza on top of the parking garage. Land to be leased from UTA to Columbus Foundation, Inc. for 99 years. The first floor will contain retail and office space, common-area amenity space, and nine residential units. Amenities will include a tot lot, workout facility, computer room, garden area, community room with full kitchen and barbecue areas. Zoning is presently Transit Oriented Development Overlay – Core District (MJ), for which multi-family housing is a conditional use, approved on October 6, 2016. Project was awarded $14M in T-E bonds October 12, 2016 PAB meeting, and is eligible for $797,205 in 4% LIHTC. Project was awarded a $3000K OWHLF 30-year term with a 15-year deferral at the October 27, 2016 OWHLF Board Meeting, subject to further review by OWHLF staff and final approval by OWHLF Board.


Staff’s recommendation is to issue approved funding of $300,000 as a deferred/amortizing loan at 3% - the loan will be deferred for the first 15 years, with simple interest to accumulate but not compound. Loan will convert to fully-amortizing with monthly payments for the last 15 years.
Motion by Mark Lundgren and second by Mike Glenn to accept staff’s recommendation, and use 360 month amortization with a 180- call with balloon payment due at the end of 390 years. The motion carried unanimously.
The next Olene Walker Housing Loan Fund Quarterly Board Meeting will be held April 27, 2017.
Adjourn: 2:00 pm.

Submitted by:

Lora Rees

Olene Walker Housing Loan Fund



Housing and Community Development





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