View Agenda Item

7.F.

City Council Meeting - FINAL

Meeting Date:: 09/17/2019
Co-Submitter:: Charity Lee
From:: Sarah Darr, Housing Director

Information

TITLE:

Consideration and Approval of Amendment One to Purchase Agreement: Between the City of Flagstaff and Brinshore Development LLC, an amendment to clarify the total compensation provided by the purchaser to the seller with no change to the payment terms or the total amount.

STAFF RECOMMENDED ACTION:

Approve Amendment One to the Purchase Agreement.

Executive Summary:

Brinshore has requested an amendment to the Purchase Agreement to clarify the compensation provided to the seller. There is no change to the payment terms or the total amount.

On March 6, 2018, City Council approved a purchase agreement with Brinshore Development LLC (Brinshore) for three City-owned parcels of land on which Brinshore is responsible for the construction of a minimum of 74 units of permanently affordable housing with an Average Median Income (AMI) of at or below 48%.

In 2018 Brinshore was successful in obtaining an award of Low Income Housing Tax Credits (LIHTC) from the Arizona Department of Housing (ADOH) and is in the processes of finalizing documents.

City staff is still working through the details of Amendment One with Brinshore. The proposed amendment will be attached prior to the final agenda going out to Council.

Financial Impact:

There is no fiscal impact to the City of Flagstaff. The total compensation provided by Brinshore is the same and on the same payment schedule as the unamended Purchase Agreement.

Policy Impact:

Approval of Amendment One to the Purchase Agreement furthers Council's identified affordable housing goals.

Connection to Council Goal, Regional Plan and/or Team Flagstaff Strategic Plan:

Council Goal:
Support the development and increase the inventory of public and private affordable housing for renters and home-owners throughout the community.

Has There Been Previous Council Decision on This:

May 23, 2017 – City Council Work Session
June 27, 2017 – City Council Work Session
July 7, 2017 – City Council approved the Housing Section's Request for Proposals for the development of three City-owned parcels for multi-family affordable housing.
September 12, 2017 – City Council provided direction to staff to pursue a Concept Zoning Map Amendment on two of the three City-owned parcels for the purpose of developing multi-family affordable housing.
December 19, 2017 – First reading of Ordinance 2018-06 Authorizing Staff to Sell or Lease City Property for Affordable Housing.
January 2, 2018 – City Council approved final reading of Ordinance 2018-06 and both zoning map amendment requests with conditions.
March 6, 2018 – City Council approved a Purchase Agreement to sell the three parcels to Brinshore Development.
May 7, 2019 – City Council approved the three site plan submittals.

Background and History:

On July 7, 2017, Council gave staff direction to move forward with a Request for Proposals (RFP) for the Development of the City Properties "Scattered Sites". On August 14, 2017, Purchasing posted the RFP solicitation #2018-02 for Scattered Sites Affordable Housing on the PlanetBids website and published an advertisement in the Arizona Daily Sun on August 20 and 27, 2017. On September 26, 2017, staff received three proposals in response to the RFP. A six-member selection committee independently reviewed and evaluated the proposals in accordance with the evaluative criteria established in the RFP. The evaluation committee consisted of four city staff members and two outside members. Based on the numerical evaluation of the proposals, Brinshore Development LLC was the highest scoring proposer.

On January 2, 2018, the City Council of Flagstaff, Arizona passed and adopted Ordinance Number 2018-06 authorizing the sale or lease of City Property for Affordable Housing, the "Scattered Sites". Approval of the Purchase and Sales Contract will give the developer site control and allow the submission of an application to the Arizona Department of Housing for Low Income Housing Tax Credits (LIHTC) which, if awarded, will allow the development of Affordable Housing units on the three sites.

Council approved the concept rezoning of two of the three parcels (3100 N. West Street and 1700 E. Sixth Avenue) on January 2, 2018, from Public Facility to Medium Density Residential. Brinshore conducted neighborhood outreach before preparing the final site plans that were presented to Council and approved on May 7, 2019.

Key Considerations:

Brinshore was successful in obtaining an award of Low Income Housing Tax Credits (LIHTC) in 2018 to fulfill the development component of the Purchase Contract. This amendment is one of the final steps prior to Brinshore closing on the land and beginning construction. The LIHTC deadline for the units to be completed is the end of December 2020.

Community Benefits and Considerations:

Proceeds and interest from the sale of the properties will be utilized for future affordable housing efforts.

Community Involvement:

Increase affordable the number of rental housing units in Flagstaff.

Expanded Options and Alternatives:

In addition to the dates provided in the "Has There Been Previous Council Decision on This:" section in this document, there were neighborhood meetings held by City Staff in 2017 and by Brinshore in 2018.