Subject:
Title
Payment request related to the Lealman Community Redevelopment Area Home Investment Program contract with Habitat for Humanity.
Recommended Action:
Approval and execution by the County Administrator of the payment request related to the Lealman Community Redevelopment Area (CRA) Home Investment Program (HIP) contract. This grant program is included on the Fiscal Year 2024 Lealman Work Plan approved by the Board of County Commissioners sitting as the Community Redevelopment Agency (Agency) during their regular meeting on September 19, 2023. A copy of the Work Plan is attached to this item.
• The HIP allows for the construction of single-family homes for residents earning less than 120% of Area Median Income. Habitat for Humanity can receive up to $55,000.00 in subsidy through various fees described in the Agreement for each new single-family home built to offset land acquisition and hard construction costs.
• The Property was purchased by Habitat, located at 6434 29th Street North, entitling them to a $25,000.00 Land Acquisition Fee and a $15,000.00 Hard Construction Cost Fee. The property has been identified on the map in the funding packet to show it lies within the CRA boundaries.
• The total payment request for the property is $40,000.00, with payment coming from the Countywide portion of the TIF.
• Habitat purchased the property per Exhibit D of the Services Agreement. Per the terms of the Services Agreement, Habitat is eligible to receive the applicable fee(s) once the homes are constructed and the homeowners close on the homes. The Agency approved the Agreement on March 8, 2022, with a total value of $1,500,000.00 over three years, with a $500,000.00 annual cap each year.
• Funding for this payment request is included in the current-year budget of the Lealman CRA in the Lealman CRA Trust Fund.
• The original terms of the contract prior to the first amendment approved by the County Commission at the July 30, 2024 meeting are applicable to this request.
Strategic Plan:
Ensure Public Health Safety and Welfare
2.2 Be a facilitator, convener, and purchaser of services for those in need.
Foster Continual Economic Growth and Vitality
4.2 Invest in communities that need the most
Deliver First Class Services to the Public and Our Customers
5.3 Ensure effective and efficient delivery of county services and support
Summary:
The HIP is intended to support infill housing in the CRA to encourage new construction reinvestment in existing neighborhoods and promote homeownership. The term of Habitat’s contract is 3 years with a maximum funding level of $500,000 per year for a total not to exceed of $1.5 million over the duration of the contract. Habitat will be incentivized to construct new, affordable single-family homes through three different fees: a Hard Construction Cost Fee (HCCF) of $ 15,000 to off-set hard construction costs associated with each single-family home developed, a Lien Land Acquisition Fee (LLAF) of up to $40,000.00 or the appraised value, whichever is less, to off-set land acquisition costs of properties identified that are heavily liened and significantly blighted, abandoned or vacant, and a Land Acquisition Fee (LAF) of up to $25,000.00 or the appraised value, whichever is less, to off-set land acquisition costs for non-liened properties located within the CRA. Habitat will be conveyed five county owned parcels that were included in the Letter of Interest process. For these five properties Habitat will only be eligible for the HCCF. For parcels acquired through its own means Habitat will be eligible for the HCCF and the LLAF or the LAF, depending on the lien status of the property acquired. Habitat would be able to access up to $1,500,000.00 over the three-year term of this Agreement and staff forecasts this funding would result in approximately 35 new single-family homes sold to residents earning less than 120% of AMI depending on the number of liened and non-liened parcels redeveloped.
Background/Explanation:
This grant program is included on the FY24 Lealman Work Plan, approved by the Board of County Commissioners sitting as the Community Redevelopment Agency during their regular meeting on September 19, 2023. The County entered into a 3-year agreement on July 21, 2022 after issuing a letter of Interest and a contract was awarded to Habitat for Humanity for the construction of affordable housing within the Lealman Community Redevelopment Area (CRA). The County Commission approved a first amendment to the agreement after nearly 2 years into the 3-year agreement to increase the Land Acquisition Fee from $25,000 to $40,000, increase the Hard construction Cost Fee from $15,000 to $20,000, increase the total of incentives per property from $55,000 to $60,000, remove the annual limitation of $500,000 per year, thereby applying the 3-year funding limitation of $1,500,000 for the life of 3-year term, and add a 24-month option to renew. The first amendment to the agreement was effective July 30, 2024, after this funding request was submitted to the County.
Fiscal Impact:
Funding for this payment request of $40,000 is included in the current-year budget of the Lealman CRA in the Lealman CRA Trust Fund.
Delegated Authority:
Authority for the County Administrator to sign these Grant Agreements is granted via the Agency’s approval of the FY24 Lealman Work Plan.
Staff Member Responsible:
Felix D. Nunez, CRA Coordinator, Lealman Community
Partners:
Lealman CRA Advisory Committee
Lealman residents, businesses, stakeholders, and community partners