Consideration and Approval of Contract: Consultant Services Agreement Between the City of Flagstaff and Nan McKay and Associates, Inc. for Rental Assistance Demonstration (RAD) Program Comprehensive Project Management and Consulting Services.
 

The City of Flagstaff is pursuing the repositioning and redevelopment of its 265-unit public housing portfolio through the U.S. Department of Housing and Urban Development’s (HUD) Rental Assistance Demonstration (RAD) program. RAD allows Public Housing Authorities (“PHAs”) to convert public housing subsidies to long-term, project-based Section 8 contracts, providing more stable funding and access to private financing while preserving long-term affordability and resident protections. The RAD process also allows PHAs to redevelop or rehabilitate units.

To obtain the specialized technical and project management support required for RAD repositioning, the City issued a Request for Proposals (RFP) in April 2025 for comprehensive project management and consulting services. Following a competitive procurement process, Nan McKay and Associates, Inc. (NMA) was selected as the most qualified respondent in late July 2025.

The proposed Consultant Services Agreement establishes a multi-year framework to provide project management, financial feasibility analysis, development partner procurement support, funding strategy coordination, and technical assistance necessary to advance the RAD repositioning and redevelopment process. Approval of this agreement will provide the specialized expertise required to guide the City through complex HUD requirements and position the public housing portfolio for long-term preservation and reinvestment.

The City Council and City of Flagstaff Housing Authority Board of Commissioners will be involved throughout the RAD process, with City Council making all final decisions.

Project Name: Consultant Services Agreement Between the City of Flagstaff and Nan McKay and Associates, Inc. for Rental Assistance Demonstration (RAD) Program Comprehensive Project Management and Consulting Services.
Cost: $376,720
Account Number Budgeted: $400,000 in account number 021-13-106-0360-4
Grant Funded: N/A
Funding Source: Housing and Community Services Fund

The Rental Assistance Demonstration (RAD) program has been discussed in concept with City Council and the Flagstaff Housing Authority Board for several years. In November 2022, Flagstaff voters approved Proposition 442, which includes approximately $5 million to redevelop City-owned housing to create additional affordable rental units. The approved budget for fiscal year 2022 has $200,000 allocated in one-time funds.

• Approve the agreement as presented.
• Approve the agreement with amendments.
• Do not approve the agreement and provide an alternate direction.

The City of Flagstaff owns and operates 265 public housing units, as well as the land on which they sit. The Department of Housing and Urban Development (HUD)-assisted units are managed by the Flagstaff Housing Authority Section and include 100 units at Siler Homes, 127 units at Brannen Homes, and 38 scattered-site units. The land underneath the properties is subject to Declarations of Trust that restrict its use to public housing purposes and prohibit mortgaging or encumbrance, among other things.

The Rental Assistance Demonstration (RAD) program, authorized by Congress in 2012 and administered by HUD, allows Public Housing Authorities (PHAs) to convert public housing to long-term, project-based Section 8 contracts. This conversion provides more predictable funding and enables the use of private financing to address maintenance, rehabilitate existing units, or support redevelopment, while maintaining affordability and resident protections. The RAD process allows PHAs to redevelop or rehabilitate units, and allows PHAs to access the equity in the land underneath the properties.

City staff issued a Request for Proposals (RFP) on April 9, 2025, to identify comprehensive project management and consulting services for the conversion of its public housing portfolio under the RAD program. Nan McKay and Associates, Inc. (NMA) was selected as the most qualified respondent in late July 2025, and contract negotiations followed.

The proposed Consulting Services Agreement contains a four-phase scope that supports RAD conversion activities, including the following:

• Provide project management and strategic advisory services;
• Support development partner procurement and selection;
• Conduct financial feasibility assessments and prepare financing recommendations;
• Provide pre-development design support;
• Assist with RAD, Low Income Housing Tax Credit (LIHTC), and related funding application processes;
• Provide pre-development design support through the initial tax credit application for the first construction project;
• Coordinate required stakeholder communication, progress reporting, and project documentation; and
• Support future tax credit phases, financial closing, construction monitoring, and re-occupancy activities.

The Consultant will be paid based on hourly rates specified in the agreement. The agreement’s not-to-exceed budget is an estimate of the  labor and associated expenses.

Approval of this agreement will provide the technical capacity needed to support the City through the RAD conversion and redevelopment process and ensure compliance with HUD program requirements.

• High Performing Governance:
  • Implement innovative local government programs, new ideas & best practices; be recognized as a model for others to follow.
• Inclusive & Engaged Community:
  • Ensure city facilities, services, & programs are accessible for all residents & representative of Flagstaff's diverse community

• Robust Resilient Economy:
  • Support & strengthen a more robust, diverse, & sustainable economy in ways that reflect community values & provides for affordable housing opportunities
• Livable Community
  • Actively support attainable & affordable housing through City projects & opportunities with developers

• 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.
• NH.3.3. Increase the availability of affordable housing for very low-income persons, through innovative and effective funding mechanisms.
• NH.5.3. Support and expand programs that prevent homelessness

• HA-1: Create housing options for households at all income levels and family sizes occupied by local residents.
• HA-3: Preserve affordable housing.

• Create 5.9: Prioritize the development of City of Flagstaff owned land designated for affordable housing and evaluate other City-owned parcels for affordable and mixed-income housing.
• Connect 3.2: Encourage neighborhoods, housing types, and building practices that increase health.