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Date
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March 8,
2010
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Agenda
Item No. 29 Roll
Call No. 10-
Communication No. 10-128 Submitted by:
Larry Hulse, Director Community Development Department |
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AGENDA
HEADING:
Resolution
of support for five (5) applications to the Iowa Finance Authority requesting
low income housing tax credits (LIHTC) for the rehabilitation of existing Low
Income Housing units and new construction of Low Income Housing units.
SYNOPSIS:
The
Iowa Finance Authority (IFA) has reinstituted awarding points for City Council
approval of a LIHTC project. By Roll
Call 08-2162 on December 8, 2008, the City Council approved criteria for review
and support of LIHTC applications. The full text of the City Council’s adopted
criteria is included on Page 4 and 5 of the Communication.
FISCAL
IMPACT: NONE
Amount: N/A
Funding Source: N/A
ADDITIONAL
INFORMATION:
The
deadline for applications for 2010 Low Income Housing Tax Credits is March 15,
2010. From staff’s knowledge of the Low
Income Housing Tax Credit Market, credits are selling for around 65 cents and
it is extremely hard to market the credits to an investor.
Income
Limits for 60% of Area Median Gross Income
1 person household - $28,560
2 person household - $32,640
3 person household - $36,720
4 person household - $40,250
Southridge Apartments 1264 Cummins Road
Developer –Dominium
Development & Acquisition, LLC Principals
David Brierton, Armand Brachman, Paul Sween and Jack Safar, 2355 Polaris Lane
North, Suite 100, Plymouth MN 55447. Dominion
was formed in 1999 and is one of the largest apartment development and
management companies in the Midwest. They
own over 17,000 apartment units in 16 states.
Project – Rehabilitation
of 60 units of existing low income rental housing
Number
of Units
–60 Total Units. All units are 2
bedrooms
Area
Median Gross Income (AMGI) to be served – 60 units at 60% AMGI
Commitment
to Affordability – 15 years
Management
Company
– Dominium Management Services, LLC Jon R. Segner, CEO Dominion University has an in-house
“university” in which 25 classes are taught in the Schools of Management,
Marketing and Maintenance. Every
employee receives training for competency for their job and career
advancement. In addition, Dominium’s
intranet provides site staff with immediate access to all policies, procedures
and forms.
Tax
Abatement
- Dominium will not apply for tax abatement from the City of Des Moines. Because LIHTC projects are assessed on income
rather than replacement value, Dominium does not anticipate that the
improvements will increase the value of the property for property tax
purposes.
Enterprise
Zone Tax Credit Value -
NA
Enterprise
Zone Sales Tax Rebate- NA
Funding
Request
– None
Neighborhood
Review
- The South Park Neighborhood Association sent a letter of support for the
improvement project and rehabilitation in June of 2009 and has renewed that
support in an e-mail to Dominium and staff.
The Association has requested
that Dominium as the management company, work with the Neighborhood Based
Service Delivery Program and coordinate with Des Moines Police on the Multi
Family Crime Free Housing Program.
Lancaster
Place Apartments 2201 E. Park Avenue
Developer
–Dominium Development & Acquisition, LLC
Principals David Brierton, Jack Safar, Armand Brachman, and Paul Sween, 2355
Polaris Lane North, Suite 100, Plymouth MN 55447. Dominion was formed in 1999 and is one of the
largest apartment development and management companies in the Midwest.
Project –
Rehabilitation of 72 units of existing low income rental housing
Number
of Units
–72 Total Units. All units are 2
bedrooms
Area
Median Gross Income (AMGI) to be served – 72 units at 60% AMGI
Commitment
to Affordability – 15 years
Management
Company
– Dominium Management Services, LLC Jon
R. Segner Dominion University is a
in-house “university in which 25 classes are taught in the Schools of
Management, Marketing and Maintenance.
Every employee receives training for competency for their job and career
advancement. In addition, Dominium’s
intranet provides site staff with immediate access to all policies, procedures
and forms.
Tax
Abatement
- Dominium will not apply for tax abatement from the City of Des Moines. Because LIHTC projects are assessed on income
rather than replacement value, Dominium does not anticipate that the
improvements will increase the value of the property for property tax
purposes.
Enterprise
Zone Tax Credit Value -
NA
Enterprise
Zone Sales Tax Rebate-
NA
Funding
Request
– None
Neighborhood
Review
- Lancaster Place Apartments is not
located within a recognized neighborhood boundary.
Sargent Park Apartments, 3600 E. Douglas
Developer
–Dominium Development & Acquisition, LLC
Principals David Brierton, Armand Brachman, Paul Sween, and Jack Safar,
2355 Polaris Lane North, Suite 100, Plymouth MN 55447. Dominion was formed in 1999 and is one of the
largest apartment development and management companies in the Midwest. They own over 17,000 apartment units in 16
states.
Project – Rehabilitation
of 96 units of existing low income rental housing
Number
of Units
–96 Total Units. 12 are 1-bedroom, 72
are 2-bedroom, and 12 are 3-bedroom
Area
Median Gross Income (AMGI) to be served – 96 units at 60% AMGI
Commitment
to Affordability – 15 years
Management
Company
– Dominium Management Services, LLC Jon R. Segner Dominium has a ten-year history of
Management with Sargent Park Apartments.
Dominion University is an in-house “university in which 25 classes are
taught in the Schools of Management, Marketing and Maintenance. Every employee receives training for
competency for their job and career advancement. In addition, Dominium’s intranet provides
site staff with immediate access to all policies, procedures and forms.
Tax
Abatement
- Dominium will not apply for tax abatement from the City of Des Moines. Because LIHTC projects are assessed on income
rather than replacement value, Dominium does not anticipate that the
improvements will increase the value of the property for property tax purposes.
Enterprise
Zone Tax Credit Value -
NA
Enterprise
Zone Sales Tax Rebate-
NA
Funding
Request
– None
Neighborhood
Review
- Lancaster Place Apartments are not
located within a recognized neighborhood boundary.
Fenway Manor Apartments, 1640 Hull Avenue
Developer
–Dominium Development & Acquisition, LLC
Principals David Brierton, Armand Brachman, Paul Sween, and Jack Safar,
2355 Polaris Lane North, Suite 100, Plymouth MN 55447. Dominion was formed in 1999 and is one of the
largest apartment development and management companies in the Midwest. They own over 17,000 apartment units in 16
states.
Project –
Rehabilitation of 120 units of existing low income rental housing
Number
of Units
–120 Total Units. 5 are 1-bedroom, 100
are 2-bedroom, and 15 are 3-bedroom
Area
Median Gross Income (AMGI) to be served – 120 units at 60% AMGI
Commitment
to Affordability – 15 years
Management
Company
– Dominium Management Services, LLC Jon R. Segner Dominium has a ten-year history of
Management with Fenway Manor Apartments.
Dominion University is a in-house “university in which 25 classes are
taught in the Schools of Management, Marketing and Maintenance. Every employee receives training for
competency for their job and career advancement. In addition, Dominium’s intranet provides
site staff with immediate access to all policies, procedures and forms.
Tax
Abatement
- Dominium will not apply for tax abatement from the City of Des Moines. Because LIHTC projects are assessed on income
rather than replacement value, Dominium does not anticipate that the
improvements will increase the value of the property for property tax
purposes.
Enterprise
Zone Tax Credit Value -
NA
Enterprise
Zone Sales Tax Rebate-
NA
Funding
Request
– None
Neighborhood
Review
- Fenway Manor Received a letter of
support from the Highland Park Community Action Association. They asked for the property manager to
participate in the Des Moines Crime-Free Multifamily Housing Program. They also expressed a concern about the
location of the playground due its proximity to parking areas and
driveways. They would hope it could be
moved to a safe location, hopefully toward the back of the property.
Staff
Recommendation for Four Dominium Projects:
The
developer proposes to provide approximately $25,000 a unit in rehabilitation
for each of the projects. The scope
includes: new hardi-plank siding, re-roof with 30 year dimensional shingles,
new windows, improve the parking lot, redo the common areas including new
carpet, paint & energy-efficient light fixtures, replace boilers with high
efficiency units, new kitchen cabinets and countertops, new Energy Star
Appliances. These are substantial
improvements which should make a difference to the families living in the units
and to the neighborhood appeal.
ML King Brickstone Phase II– Between 18th
and 19th Street, north of freeway, south of Atkins
Developer
–MLK Brickstone II, L.P. Jack Hatch and Ryan Galloway, 1312 Locust Street, Des
Moines, IA 50309
Project
– New Construction
Number
of Units – 34 Total Units, 34 Affordable Units (Phase I has 18 affordable
units)
Area
Median Gross Income to be served (AMGI) – 34 at 60% AMGI,
Commitment
to Affordability – 30 years
Management
Company –Perennial Properties, 696 18th Street, Des Moines, IA, Sonja
Roberts, President
Neighborhood
Action– No neighborhood
organization
Funding
Request – None for Phase II (Phase I received $250,000 of HOME funds)
Enterprise
Zone Tax Credit Value - The project is
located within an Enterprise Tax Credit zone and the developer estimates the
value of the credit to be $45,000.
Tax
Abatement – The project is located within a ten-year tax abatement area.
Staff
Recommendation
A
letter of city support should be sent to IFA for this project because the
developer has assembled and proposed to redevelop an infill parcel in the
central part of the City. Phase I of the
project received Low Income Housing Tax Credits in 2009 and will begin
construction in March. The schedule
states it will be completed by the end of the year. The developer has completed several
successful projects in the city and goes above and beyond to ensure the design
of the property is complementary to the neighborhood. The project is 100% assisted but will bring
quality development to the site and has strong physical connections to the
neighborhood.
Criteria
and Process for Review and Support of LIHTC applications
Adopted
by Roll Call 08-2162 on December 8, 2008
Review Process:
Before City Council reviews the projects, the developer should attend a pre-application
meeting with City staff to ensure that the zoning and physical infrastructure
is adequate for the development. A
general neighborhood meeting should be held with a recognized neighborhood
organization with adequate information to allow the neighborhood to make
comments on the project’s ability to address design, management services and
amenities prior to City Council action.
·
Only support
projects that contain 100% assisted units, if they are located near market rate
rental or owner-occupied housing to avoid concentration of assisted units. Within census tract 51 (downtown) support
projects where there is existing or potential for market rental or
owner-occupied housing within a two block radius of the projects to avoid
isolation of assisted housing projects.
·
Support
projects that meet the housing needs identified in the City’s Consolidated
Plan, including rental units for families below 50% of median income and three
bedroom or larger units.
·
Support
projects that develop on an infill parcel with connectivity into a neighborhood
including a link to schools. Infill is
defined as a Brownfield site, a location that includes demolition of a non historic
dilapidated building, property that has previously been developed, or centrally
located site available for development because of infrastructure improvements. Projects on a commercial corridor should
develop links to neighborhoods or pedestrian areas to gain City Council
support.
·
Support
projects for which City Council has entered into development agreements or has
authorized staff to begin negotiation including sale of land or commitment of
funding. Council should support all projects
to which it may support through land contribution, Tax Increment Fund dollars,
or federal allocation dollars.
·
Support projects
that certified by LEEDS (Leadership in Energy and Environmental Design) or other
resource sustainable program and/or utilize energy saving technology such as
geothermal heating and cooling.
·
For
rehabilitation of existing assisted or market units, support projects that make
substantial external and energy efficient improvements including the use of
brick on the outside, conformance with the city’s landscape standards and energy
efficient heating and cooling systems.
In 1994, the City Council amended the City’s
Comprehensive Plan to institute guidelines for reviewing LIHTC or any other
programs that provide new construction funding for rental housing designed for
persons under 80% of median income. The
overall goal is that affordable housing be spread equally through the community
and not concentrated in any one area of the city. The comprehensive plan also includes the following
criteria to evaluate proposals:
·
The
development’s design should be sensitive to and compatible with the character
of the surround neighborhood;
·
The management
services must be adequate and responsive to the needs of low income tenants.
·
Appropriate amenities,
including storage facilities for toys and other large items, are provided, and
·
A recognized
neighborhood organization has been given the opportunity to comment on the
project’s design, management services, and amenities.
PREVIOUS
COUNCIL ACTION(S):
Date: October 26, 2009
Roll
Call Number: 09-1929
Action: HOME
contract documents with MLK Brickstone, L.P. for $250,000 loan for new
construction of 18 units of low-income rental housing at 1045 19th
Street. (Council
Communication No. 09-738) Moved
by Vlassis to adopt. Motion Carried 7-0.
Date: July 13, 2009
Roll
Call Number: 09-1227 and 09-1228
Action: Application to the Iowa Finance Authority
requesting Low Income Housing Tax Credits for the rehabilitation of existing
low-income housing for the following: (Council Communication No.
09-482)
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(A) 1264 Cummins Road (Southridge Apartments)
– 60 units. Moved by Hensley to
adopt. Motion Carried 7-0. |
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(B) 2201 E Park Avenue (Lancaster Place
Apartments) – 72 units. 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.
Date: October 27, 2008
Roll
Call Number: 08-1908
Action:
Support
MLK Brickstone, LLC for new construction of
54 units of housing between 19th and 18th Streets, Atkins
and the Freeway. Moved by Kiernan to
adopt. Motion Carried 7-0.
ANTICIPATED
ACTIONS AND FUTURE COMMITMENTS:
None, unless additional financial assistance is
requested from the City of Des Moines
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, 400 Robert D. Ray Drive. Council agendas are available to the public
at the City Clerk’s Office on Thursday afternoon preceding Monday’s Council
meeting. Citizens can also request to receive meeting notices and agendas by
email by calling the Clerk’s Office or sending their request via email to cityclerk@dmgov.org.