13.D.
City Council Meeting - FINAL
- Meeting Date:
- 03/06/2018
- From:
- Charity Lee, Real Estate Manager
Information
TITLE:
Approval of the Purchase Agreement: Between the City of Flagstaff and Brinshore Development LLC, authorizing the sale of City Property for Affordable Housing.
STAFF RECOMMENDED ACTION:
Approve the Purchase Agreement or suggest modifications to the agreement for approval.
Executive Summary:
Brinshore Development LLC intends to construct a minimum of 74 units of permanent Affordable Housing with an Average Median Income (AMI) of at or below 48%, including an estimated 8 studio units, 33 one-bedroom units, 12 two-bedroom units, 24 three-bedroom units. The configuration of units is subject to change until final site plan approval.
Under the Purchase Agreement, Brinshore will have 36 months after the Opening of Escrow to obtain an award of tax credits and may receive an additional (1) year extension upon approval of the City Manager. A revised version of the purchase agreement is attached.
The units will be constructed on three City parcels:
1. 3100 N. West Street, Flagstaff Arizona 86004, Assessor parcel number 109-02-001P.
2. 303 S. Lone Tree Road, Flagstaff Arizona 86001, Assessor parcel number 104-19-117.
3. 1700 E. Sixth Avenue, Flagstaff Arizona 86004, Assessor parcel number 109-11-151C.
Under the Purchase Agreement, Brinshore will have 36 months after the Opening of Escrow to obtain an award of tax credits and may receive an additional (1) year extension upon approval of the City Manager. A revised version of the purchase agreement is attached.
The units will be constructed on three City parcels:
1. 3100 N. West Street, Flagstaff Arizona 86004, Assessor parcel number 109-02-001P.
2. 303 S. Lone Tree Road, Flagstaff Arizona 86001, Assessor parcel number 104-19-117.
3. 1700 E. Sixth Avenue, Flagstaff Arizona 86004, Assessor parcel number 109-11-151C.
Financial Impact:
The City will receive $2,020,000 for the property. $500,000 will be due at close of escrow and the remaining balance of $1,520,000 will be due at year 40, with annual, 3% interest-only (simple) payments due on June 30 every year, subject to available cash flow.
Policy Impact:
Approval of the Purchase Agreement furthers Council's identified affordable housing goals.
Connection to Council Goal, Regional Plan and/or Team Flagstaff Strategic Plan:
Affordable Housing- Support 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 – Special Council Meeting
December 19, 2017 - First reading of Ordinance 2018-06 Authorizing Staff to Sell or Lease City Property for Affordable Housing.
January 2, 2018- Final reading of Ordinance 2018-06
June 27, 2017 - City Council Work Session
July 7, 2017 – Special Council Meeting
December 19, 2017 - First reading of Ordinance 2018-06 Authorizing Staff to Sell or Lease City Property for Affordable Housing.
January 2, 2018- Final reading of Ordinance 2018-06
Options and Alternatives:
1. Approve the Purchase Agreement as drafted.
2. Suggest amendments to the contract prior to approval.
3. Do not approve the Purchase Agreement.
2. Suggest amendments to the contract prior to approval.
3. Do not approve the Purchase Agreement.
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.
It is important to note that the sale of the identified properties is separate from the development process.
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 will be conducting neighborhood outreach before preparing final site plans to be presented to Council for approval. Submission of the LIHTC application does not require concept plan approval, thus there is sufficient time for neighborhood meetings to take place and feedback to be incorporated into the final site plans.
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.
It is important to note that the sale of the identified properties is separate from the development process.
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 will be conducting neighborhood outreach before preparing final site plans to be presented to Council for approval. Submission of the LIHTC application does not require concept plan approval, thus there is sufficient time for neighborhood meetings to take place and feedback to be incorporated into the final site plans.
Key Considerations:
Approving the Purchase Agreement will allow Brinshore Development LLC to submit an application to the Arizona Department of Housing for the LIHTC Program to achieve Council's goal of Affordable Housing.
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:
May 23, 2017 – City Council Work Session
June 27, 2017 - City Council Work Session
July 7, 2017 – Special Council Meeting
June 27, 2017 - City Council Work Session
July 7, 2017 – Special Council Meeting