Subject:
Title
Payment requests related to the Lealman Community Redevelopment Area Home Investment Program services agreement with Habitat for Humanity.
Recommended Action:
Approval and execution by the County Administrator of the three (3) payment requests related to the Lealman Community Redevelopment Area (CRA) Home Investment Program (HIP) services agreement. The HIP program is included in the fiscal Year 2025 Lealman Work Plan and Lealman CRA Trust Fund Budget, which the Agency approved during their regular meeting on September 19, 2024. A copy of the Work Plan is attached to this item.
- The HIP enables the construction of single-family homes for residents earning less than 120% of the Area Median Income. Habitat for Humanity can receive up to $60,000.00 in subsidy through various fees described in the Agreement for each new single-family home built to offset land acquisition and hard construction costs.
- Three (3) properties were purchased by Habitat. The properties, located at 2417 52nd Avenue N, 6265 30th Way N, and 6297 30th Way N, entitles them to a $20,000.00 Hard Construction Cost Fee and a $40,000.00 Land Acquisition Cost Fee for a total of $60,000 per each property.
- The total payment request for these properties is $180,000.00, funded by the Countywide portion of the Tax Increment Financing (TIF).
- 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 purchase of the homes.
- Funding for this agreement is $180,000 and is included in the current year, FY25 Operating Budget, for Lealman CRA in the Lealman Community Redevelopment Agency Trust Fund. A total of $710,000 was confirmed by the Office of Management and Budget (OMB) in the FY25 Budget for this Program in fund 1087 and program 7147. Approval of this grant is not anticipated to require additional budgetary or spending adjustments.
Strategic Priorities:
Prosperity and Opportunity
3.1 Increase the availability of attainable housing
Summary:
The HIP is designed to support infill housing within the CRA boundaries, encouraging new construction and reinvestment in existing neighborhoods and promoting affordable homeownership. The service agreement incentivizes Habitat to construct new, affordable single-family homes through three different subsidies: a Hard Construction Cost Fee (HCCF) of $20,000.00 to off-set hard construction costs, a Land Acquisition Fee (LAF) of up to $40,000.00 or the appraised value, whichever is less, and a Lien Land Acquisition Fee (LLAF) of $15,000 or the value of the lien, whichever is less. In no case shall the maximum incentive exceed $60,000.00 for each property acquired by the developer.
Background/Explanation:
The County entered into a 3-year agreement on July 21, 2022 after issuing a letter of Interest to create the HIP and a contract was awarded to Habitat for Humanity for the construction of affordable housing within the Lealman Community Redevelopment Area (CRA). The Agency approved a first amendment to the agreement 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, resulting in an increase in total subsidies 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. The second amendment extended the contract by an additional 24-months effective June 20, 2025 and adds $1,000,000 to the contract.
Fiscal Impact:
Funding for this payment request of $180,000 is included in the current-year budget of the Lealman CRA in the Lealman CRA Trust Fund.
Funding for this agreement is included in the current year, FY25 Operating Budget, for Lealman CRA in the Lealman Community Redevelopment Agency Trust Fund. A total of $710,000 was confirmed by the Office of Management and Budget (OMB) in the FY25 Budget for this Program in fund 1087 and program 7147. Approval of this grant is not anticipated to require additional budgetary or spending adjustments.
Delegated Authority:
Authority for the County Administrator to approve these payment requests is granted through Resolution No. 19-10 and through the Agency’s approval of the FY25 Lealman Work Plan and CRA Budget.
Staff Member Responsible:
Felix D. Nunez, CRA Coordinator, Lealman Community
Partners:
Lealman CRA Advisory Committee
Lealman residents, businesses, stakeholders, and community partners