13.D.
City Council Meeting - FINAL
- Meeting Date:
- 02/15/2022
- Co-Submitter:
- Justyna Costa
- From:
- Bryce Doty, Real Estate Manager
Information
TITLE:
Consideration and Approval of Contract: Agreement for Option to Lease City-owned real estate located at 1700 East Sixth Avenue for the purpose of developing permanently affordable housing.
STAFF RECOMMENDED ACTION:
Approve the lease option agreement with Housing Solutions of Northern Arizona.
Executive Summary:
This option to lease City-owned real estate located at 1700 East Sixth Avenue (Assessor Parcel Number 109-11-151D), in the area of Colanthe Ave and N Izabel St, provides Housing Solutions of Northern Arizona with an option to lease the property on the condition of receiving funding for a permanently affordable housing project. It is important to note that this parcel of land does not include The Basin / BMX Track park immediately adjacent to the south. Should Housing Solutions of Northern Arizona receive funding for the project, this option obligates the City to lease the property for a term not less than 99 years. With successful funding, Housing Solutions of Northern Arizona intends to construct eleven (11) three-bedroom apartments on the property. The existing community gardens on the site will be relocated and incorporated within the adjacent parcel. Securing site control for funding applications is a critical component to the successful grant funding of projects. Entering into this lease option with Housing Solutions of Northern Arizona will provide the best opportunity to make this project a reality.
Financial Impact:
In consideration of the option, Housing Solutions of Northern Arizona will pay the City $30 each year the agreement is in place. Should the option result in a lease, the City will lease the land for $100 per year for the life of the lease.
Policy Impact:
As stated in the 10-Year Housing Plan, which was approved at the January 27, 2022, Housing Commission and is scheduled for Council consideration and approval on February 15, 2022, the lack of affordable housing is a community problem that has collective consequences that negatively impact Flagstaff. The consequences of failing to create, preserve, and provide access to affordable housing in Flagstaff is linked to lasting negative effects on our neighborhoods, health, children, environment, and jobs. This project would utilize City-owned property to construct 11 3-bedroom apartment units, contributing to the overall goal of the housing plan to reduce the current affordable need in our community by half over the next ten years through unit creation or subsidization for at least 6,000 low-to-moderate Flagstaff residents.
Connection to PBB Priorities/Objectives, Carbon Neutrality Plan & Regional Plan:
Priority Based Budget Key Community Priorities and Objectives
Livable Community:
- Support the development of attainable and accessible housing
- NH.1. Foster and maintain healthy and diverse urban, suburban, and rural neighborhoods in the Flagstaff region.
- Policy NH.1.1. Preserve and enhance existing neighborhoods.
- NH.3. Make available a variety of housing types at different price points,to provide housing opportunity for all economic sectors.
- Policy NH.3.1. Provide a variety of housing types throughout the City and region, including purchase and rental options, to expand the choices available to meet the financial and lifestyle needs of our diverse population..
- Policy NH.3.3. Increase the availability of affordable housing for very low-income persons, through innovative and effective funding mechanisms.
- Policy NH.3.5. Encourage and incentivize affordable housing.
- LU.4. Balance housing and employment land uses with the preservation and protection of our unique natural and cultural setting.
- LU.13. Increase the variety of housing options and expand opportunities for employment and neighborhood shopping within all suburban neighborhoods.
Has There Been Previous Council Decision on This:
There have been several Council decisions regarding this property, as detailed in the background/history. None regarding the current lease option to Housing Solutions of Northern Arizona.
Background and History:
On July 7, 2017, the City Council approved the Housing Section's Request for Proposals for the development of three City owned parcels for multi-family affordable housing, including this parcel. On September 12, 2017, the City Council provided direction to staff to pursue a Concept Zoning Map Amendment on the parcel to rezone from Public Facility zone to Medium Density Residential zone for the purpose of developing multi-family affordable housing.
On January 2, 2018 City Council approved the zoning map amendment request with conditions. As the most successful respondent to the request for proposals, on March 6, 2018, City Council approved a purchase agreement with Brinshore Development to purchase City-owned property at 1700 East Sixth Avenue to develop permanently affordable housing, among other sites.
City staff required that, as a part of the developer's Site Plan application, a neighborhood meeting be held. The developer held neighborhood meetings for the site on November 15, 2018.
City staff also required that the IDS approved Site Plan application be approved by the City Council for the site. These measures allowed the community an opportunity to review the proposed building design, exterior building elevations, parking layout, outdoor lighting, and site landscaping prior to approval, as these elements are not required to be part of the concept rezoning process. The Purchase Agreement also required Council to approve the site plan.
City Council approved the site plan for the property on May 7, 2019.
Brinshore was unable to meet construction deadlines for Low Income Housing Tax Credits awarded. As a result, the sale did not proceed as to this property. Brinshore has since donated all development plans associated to the site to Housing Solutions of Northern Arizona. Housing Solutions of Northern Arizona intends to utilize these existing plans to develop the City-owned property for affordable housing as intended. However, this effort is reliant on grant funding. This option to lease provides evidence of site control to grant funding agencies, improving the competitiveness of the project.
On January 2, 2018 City Council approved the zoning map amendment request with conditions. As the most successful respondent to the request for proposals, on March 6, 2018, City Council approved a purchase agreement with Brinshore Development to purchase City-owned property at 1700 East Sixth Avenue to develop permanently affordable housing, among other sites.
City staff required that, as a part of the developer's Site Plan application, a neighborhood meeting be held. The developer held neighborhood meetings for the site on November 15, 2018.
City staff also required that the IDS approved Site Plan application be approved by the City Council for the site. These measures allowed the community an opportunity to review the proposed building design, exterior building elevations, parking layout, outdoor lighting, and site landscaping prior to approval, as these elements are not required to be part of the concept rezoning process. The Purchase Agreement also required Council to approve the site plan.
City Council approved the site plan for the property on May 7, 2019.
Brinshore was unable to meet construction deadlines for Low Income Housing Tax Credits awarded. As a result, the sale did not proceed as to this property. Brinshore has since donated all development plans associated to the site to Housing Solutions of Northern Arizona. Housing Solutions of Northern Arizona intends to utilize these existing plans to develop the City-owned property for affordable housing as intended. However, this effort is reliant on grant funding. This option to lease provides evidence of site control to grant funding agencies, improving the competitiveness of the project.
Expanded Options and Alternatives:
Neighborhood meetings were conducted on October 23, 2017, to discuss the rezoning requests with the public. Public hearings before the Planning and Zoning Commission and the City Council were conducted in conjunction with the rezoning request. As a condition of the rezoning, the developer held another neighborhood meeting on November 15, 2018.