Consideration and Approval of Ordinance 2013-07 authorizing the trade of City-Owned Property:  If approved, Ordinance 2013-07 will authorize the trade of city-owned land.  Parcel number 104-01-007, which is located at the Southwest corner of Elden Street and Butler Avenue, will be combined with the parcel to the South of it for development purposes.  The City will receive an improved parcel for the community land trust program from the six unit subdivision created through the trade.   

Approving the ordinance and authorizing the exchange would:

• generate one permanently affordable unit with no financial contribution in the exchange
• make possible private residential investment in Southside, a designated target neighborhood
• remove City maintenance responsibilities for the landscaping and snow removal on the parcel
• generate additional tax producing privately held parcels

Subsidiary Decision Points: 
Council considered a request for preliminary plat for Elden Townhomes and approved it, with an effective date consistent with adoption of this Ordinance. 

The trade exchanges a parcel with limited alternative uses and limited value for a parcel in an improved subdivision with a townhome on it.  There is no cash as part of the exchange and no costs other than potential recording fees and title update costs. The use of the City's Incentive Policy for Affordable Housing has also been requested for the development. The exchange will eliminate City responsibilities for items such as irrigation, landscaping and snow removal on the existing parcel, thus reducing ongoing City costs, and replace it with a lot that will generate a $30 per month ground lease fee and be taxed based on the restricted resale value of the townhome. Maintenance will become the responsibility of the new homeowner. Additionally, the exchange provides the opportunity for the development of five market rate townhomes which will generate tax revenue that would not exist otherwise.

5. Retain, expand, and diversify economic base

City Council provided direction to use existing and underutilized City owned land to provide permanently affordable housing without the use of City financial resources whenever possible.

• Approve Ordinance 2013-07
• Not approve Ordinance 2013-07 and retain the parcel in the current use as greenspace
• Not approve Ordinance 2013-07 and offer the parcel to the general public through an acceptable procurement process

City Council requested staff work with underutilized existing parcels of City owned land to generate affordable housing and provide other benefits with minimal financial resources.  Staff performed a limited inventory of City owned land and has identified a small number of parcels with viability. The developer, Southside Development, LLC approached Housing staff regarding a parcel that had been identified and offered the exchange.  The parcel is on the south side of Butler in the Southside Neighborhood.  It is currently acting as landscaped greenspace along the Butler corridor and given its irregular configuration, limited size and unfavorable location, possesses, in isolation, an extremely limited potential for development.  The parcel was received in 1961 due to non-payment on an improvement district lien.  Negotiations were positive and the developer is currently in the submittal process for the subdivision.  

The land exchange:

• makes private redevelopment investment in the Southside Neighborhood possible 
• generates one permanently affordable home providing ownership opportunities to a qualified low-income household (80% of Area Median Income - currently $49,700 for a household of four)
• reduces City maintenance costs by eliminating a parcel currently requiring landscaping, irrigation and snow removal
• generates taxable units through the creation of both traditional market rate and affordable ownership housing
• utilizes a parcel with limited alternative value
• is allowed under the Arizona Revised Statutes
• requires nominal City financial resources in the exchange to generate the benefit

Increases revenue and reduces costs for the City while generating affordable housing through:

• revenue received through the construction, sale and taxation of six new ownership units
• ongoing receipt of the $30 per month ground lease fee for the land trust unit
• elimination of ongoing costs for the City maintenance requirements for the existing parcel
• the permanently affordable unit will be a part of the City's inventory and will become more affordable in relationship to the market over time

This land exchange will:

• make private investment in Southside, a target neighborhood, possible
• provide a permanently affordable unit to a low/moderate income homebuyer
• provide jobs for the construction industry
• generate revenue for the City
• reduce ongoing expenses
• increase the inventory of permanently affordable homes in the Land Trust Program

Inform

The Community Housing Policy Task Force recommended the use of City land to support the development of permanently affordable housing.

Council direction in 2009 was to use City owned land to provide affordable housing without a City financial contribution whenever possible.

The developer approached City staff about the use of the parcel.

Not approve Ordinance 2013-07 and retain the parcel as greenspace - this would prevent the market home development as well as the affordable housing.

Not approve Ordinance 2013-07 and offer the parcel to the public through a procurement process - this would significantly delay, and potentially prevent, the development as well as possibly preventing the City from receiving the same value of the exchange.  It would have the potential to identify an advantageous alternative.

05/07/13 - APPROVED - SLS