Staff recommends approval of the Construction Agreement and Final Work List between the City of Billings and Majestic Homes for the placement of one (1) new single-family modular home on City-owned property located at 930 Steffanich Drive in Billings Heights.
 

The City of Billings purchased this HUD-foreclosed property in March 2019 as part of the City’s Foreclosure Acquisition / Rehabilitation Program. Under this program, Community Development Block Grant (CDBG) funds are used to acquire and redevelop foreclosed properties that might otherwise become sources of abandonment and blight within our community. When purchased, the property included a single-family home, slab on grade, roughly 900 square feet, with a single attached garage, a covered car port, a small accessory building in the backyard, and two sheds. Following a series of professional inspections, it was determined it was not feasible to rehabilitate the property. A Request for Quotes for the demolition of all structures was issued/advertised, the Demolition Contract was subsequently awarded, and the structures were demolished in early 2020. 

Following the demolition, two Requests for Proposals (RFPs) and one Invitation for Bids (IFB) to develop affordable housing on the parcel were advertised as follows:
  Based on the fact that no responses were received to any of the above solicitations, the City's Purchasing Agent approved staff's request to seek direct proposals for developing the property. Staff contacted and met with all the local modular home dealers to seek direct proposals. Staff also met with HomeFront staff to seek a direct proposal. The results of these efforts generated the following results:
 

Proposer	Compliance with Request	Proposal Amount
Majestic Homes	Complete Proposal; Arrived Before Deadline	$249,890 (with specifics)
HomeFront & Partners	Incomplete Proposal; Arrived After Deadline	$900,000-$1,100,000 (no specifics)

The Proposal Review Committee, consisting of the Planning Division Manager, Deputy Building Official, a City Utility Engineer and Tam Rodier, CD Program Coordinator; reviewed the two proposals. The Committee reviewed the Majestic Homes proposal which included a new modular single-family home, garage, and site work (driveway, walkways, etc.) and landscaping. The proposal provided details as to the housing unit design, foundation and site work, and costs of the elements of the project. The proposal stated the project could be delivered by the required deadline of June 2023.

The Committee determined it was not appropriate to consider the HomeFront proposal because it was submitted after the deadline and it lacked details that might make HomeFront’s multi-unit, 3D printed home project unfeasible due to site constraints, unknown costs and the time frame specified of a complete project no later than June 2023. The HomeFront proposal is for up to 4 units of housing on the property arranged in two, duplex attached unit arrangements. The proposal would require a private street to be built into the lot to increase the property frontage to add more than one unit per the zoning requirements. The narrow lot is 66 feet wide and the minimum lot frontage per unit is 50 feet. Adding a private road for access would add the additional frontage required for 3 more homes - 150 feet - and also could provide proper access and a turnaround for emergency vehicles. The proposal did not provide a breakdown of the expected costs, only noted an anticipated cost range of $900,000 to $1,100,000, and lacked any project details as to the ability of the design to meet site development requirements. The proposal also only stated one unit would be completed by the June 2023 delivery schedule stated in the proposal requirements, with an unknown time frame for the additional units.

City Council may:

• Approve the proposal award to Majestic Homes, or
• Not approve the proposal award to Majestic Homes, reject all proposals, and provide additional direction to staff.

Available CDBG funding allocated to the City of Billings from the U.S. Department of Housing & Urban Development (HUD) has been and will be utilized for this project per the project cost summary table below.
 

Property Purchase	$109,350
Asbestos Abatement	$5,443
Demolition	$21,130
Total Costs To Date	$135,923
Proposed Modular Home	$249,890
*Estimated Total Investment	$385,813

It is very important for City Council to understand that this recommended project proposal for a single modular housing unit may all be budgeted and funded with CDBG funding through the City of Billings program. Total funding for the HomeFront proposal is not known at this time and could significantly affect completion of this project before June 2023 and affect a HUD timeliness deadline in April 2023 of expenditure of CDBG funds per the Billings Program. These unknowns were of serious concern to City staff and are part of the reason (aside from missing the proposal deadline and having incomplete documentation) as stated in the Background section of this memo that staff did not consider the HomeFront proposal.