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Date
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January 25,
2010
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Agenda
Item No. 25 Roll
Call No. 10-
Communication No. 10-025 Submitted by:
Larry Hulse, Director Community
Development |
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AGENDA
HEADING:
Resolutions regarding support for two Low-Income Housing Tax Credit (LIHTC) applications.
SYNOPSIS:
The
two applications requesting support for LIHTC are:
1. Rehabilitation of Des Moines Street Village
Apartments, located at 1415 Des Moines Street, and Stewart Park Apartments, located
at 1401 Capitol Avenue. The project will
request Enterprise Zone state tax credits as an additional layer of financing
and tax abatement for the Local Contributing Effort.
2. Rehabilitation of Elmcrest
Apartments, 423 & 433 E Philip Street, and 420 E McKinley Ave. The project will request no additional City
financing other than tax abatement.
The Iowa Finance
Authority (IFA) asks local governments if they support the project, have a
preference for one project over others or if they oppose the project. City Council can support any of the LIHTC
projects without providing a financing commitment or can choose to not support
a project.
FISCAL
IMPACT: NONE
Amount: N/A
Funding Source: N/A
ADDITIONAL
INFORMATION:
Applications for 2010 LIHTC are due beginning January 15 and ending March 15, 2010.
Des
Moines Street Village and Stewart Square Apartments–
Developer – East Des Moines Refi,
LP. Ellen Higgins, Principal, CommonBond
Communities, 328 Kellogg Boulevard West, St. Paul, MN 55102.
Project
– Rehabilitation of Existing Family Housing
Number
of Units – 60 Total Units all affordable to families below 60% of median income
Area
Median Gross Income (AMGI) to be served – 60 at 60% AMGI
Commitment
to Affordability – 30 years
Management Company – CommonBond
Communities
Neighborhood
Action– Common Bond has
contacted the Capitol East Neighborhood Association and a letter of support is
being prepared. The letter of support
will be available by the City Council meeting on January 25, 2010.
Funding Request – None beyond tax
abatement. A verbal request for HOME
funds was made to staff but all HOME funds were committed by City Council at
the December 21, 2009 City Council meeting.
If additional funds become available staff will contact CommonBond,
review the project pro forma and reschedule for the City Council agenda.
Staff was contacted in December by Andrea Novak of
CommonBond Communities concerning a LIHTC application for Des Moines Street
Village and Stewart Square Apartments.
The Des Moines Street Village Apartments and Stewart Square Park Apartments
provide 60 two- and three-bedroom units.
All of the units are affordable to residents earning 60% of the AMGI.
Stewart Park Apartments was constructed in
1992. The facility has 18 two-bedroom
units ranging in size from 760 to 805 square feet and rent for $650.
Des Moines Street Village was converted to housing
in 1994 and was a part of the Capitol East Neighborhood Plan. It provides 36 two- and three-bedroom
apartments and 6 three-bedroom townhomes.
The two-bedrooms range in size from 768 to 864 square feet and rent for
$612. The three-bedroom apartments range
in size from 945 to 1,048 square feet and rent for $700 and the three-bedroom
townhomes are 1,120 square feet and rent for $795.
Proposed Rehabilitation Work
The project rehabilitation scope includes new
appliances, interior finishes and updates to the project exterior, including
roof replacement. CommonBond is
anticipating a rehabilitation budget of $30,000 to $50,000 per unit. Sustainable measures to be installed include
the use of environmentally-friendly building materials, water conserving
toilets and fixtures, energy saving fluorescent lights and appliances and an
efficient hot water system.
Tenants will not be displaced during the
rehabilitation.
CommonBond Communities
CommonBond Communities has managed the two
properties since 2007 and acquired the properties’ General Partner Interest in
2009. The non-profit company is
headquartered at 328 Kellogg Boulevard West, St. Paul, Minnesota 55102. City
staff is working with Amanda Novak, a Senior Project Manager at the
company. The General Partner of
CommonBond for LIHTC purposes is called East Des Moines Refi, LP, at the same
St. Paul address.
CommonBond has become the largest non-profit
provider of affordable housing in the Upper Midwest, located in 45 cities in
Minnesota, Wisconsin and Iowa. The
company has net assets over $89 million and manage or own 4,900 apartments and
townhomes. Before moving into the Des
Moines market, representatives from CommonBond met with staff from the Office
of Economic Development and Community Development Departments on the City’s
housing needs.
As a non-profit housing provider, CommonBond offers
supportive services on-site to the residents.
The services include assistance finding employment, help with homework
and help with financial stability. A
combination of volunteer and paid staff provides the services to residents free
of charge.
The Enterprise Zone designation will provide
additional state credits and a reduction on sales tax. The
site is located in a ten-year tax abatement area, however, improvements will
not result in an increase of rents, so tax abatement will be minimal.
Staff
Recommendation: On December 8, 2008, by Roll Call 08-2162, the
City Council adopted criteria for Review and Support of LIHTC
applications. This property is in
support of those criteria. City Council
should provide a letter of support for the rehabilitation of existing assisted units because CommonBond
Communities is proposing to make substantial external and energy efficient
improvements and the project is supported by the Neighborhood
Organization.
Elmcrest
Apartments
Developer
– Elmcrest Apartments, L.P., James C. Conlin, President, Conlin
Properties, 319 7th St., Suite 500, Des Moines, IA 50309 and Michael
Barnes, 5700 University Ave, West Des Moines, IA 50266.
Project
– Rehabilitation of existing market rate housing
Number
of Units – 78 Affordable Units
Area
Median Gross Income (AMGI) to be served – 78 at 60% AMGI
Commitment
to Affordability – 30 years
Management
Company – Conlin
Properties, Inc., James C. Conlin, President
Neighborhood
Action – Conlin Properties has
met with Magnolia Park Neighborhood Association and a letter of support is
being prepared. The letter of support
will be available by the City Council meeting on January 25, 2010.
Funding Request – None
Proposed Rehabilitation Work
The project will include the
acquisition and rehabilitation of a market rate property of 78 units in three
buildings. The buildings were built in
1990. The units consist of 15 one-bedroom
units and 63 two-bedroom units.
Substantial
improvements will be made to the three buildings, including: new vinyl siding; retention
of the existing brick; work on the parking lots; and full interior renovation,
including high efficiency toilets, faucets and shower heads, as well as,
efficient water heaters and heating systems.
Conlin Development
James Conlin has been developing
tax credit properties for 17 years, with 85% of those in the City of Des
Moines. Conlin Properties, Inc., the
Management Company, is headquartered in downtown Des Moines. All tax credit employees are nationally
certified in affordable property management and are located in the Des Moines
area.
Tenant services are provided
on-site and include credit and financial literacy training, counseling,
education for eventual homeownership, family counseling, rental training and
computer training. An in-house employee
does case management services at the property level. If any tenant has to be relocated, they will
be moved to other Conlin properties.
The project will use
approximately $100,000 of tax abatement over 5 years ($20,000 per year).
Staff
Recommendation: On December 8, 2008, by Roll Call
08-2162, the City Council adopted criteria for Review and Support of LIHTC
applications. This property is in
support of those criteria. City Council should
provide a letter of support for the rehabilitation of existing units because the developer is making substantial improvements
to the property and the project is supported by the Neighborhood Organization.
PREVIOUS
COUNCIL ACTION(S):
Date: December 21, 2009
Roll
Call Number: 09-2283 thru 09-2287
Action: Support and preliminary commitment of Home
Funds on Applications to Iowa Finance Authority (IFA) of Low-Income Housing Tax
Credits (LIHTC) on new construction for the following: (Council Communication No.
09-888). Moved by Hensley to adopt, and
refer to the City Manager to work with other interested parties to perform a
Market Study of Downtown housing. Motion Carried 7-0.
Date: July
27, 2009
Roll
Call Number: 09-1332
Action: Amending 2008 Program Allocations and
adopting 2009 Program Allocations for the Home Investments Partnerships Program
(HOME). (Council
Communication No. 09-499)
Moved by Hensley to adopt. Motion
Carried 7-0.
Date:
December 8, 2008
Roll
Call Number: 08-2162
Action:
Adopting criteria for City Council Review
and Support of Low-Income Housing Tax Credit (LIHTC) Applications. (Council
Communication No. 08-729) Moved by Vlassis to adopt.
Motion Carried 7-0.
BOARD/COMMISSION
ACTION(S): NONE
ANTICIPATED
ACTIONS AND FUTURE COMMITMENTS:
CommonBond properties may return to City Council if
any additional HOME or CDBG funding is not spent.
For more information on this and other agenda items,
please call the City Clerk’s Office at 515-283-4209 or visit the Clerk’s Office
on the second floor of City Hall,