Special City Council Meeting
May 31, 2022
<.ULp,z •··.· ., - ~,-_~ .-·-'.: - FRESNO CITY COUNCIL l.r_,. . : i . ·, i!U" Information Packet
ITEM(S)
File ID 22-900, Item 1.
***RESOLUTION - Supporting the Housing Authority of the City of Fresno's development and construction of affordable housing at 1101 N. Parkway Drive and expressing the City's intent to contribute to the Project an additional amount not to exceed $2,500,000 (Subject to Mayor's Veto)
Contents of Supplement(3.):
Staff Report
Exhibit A- Resolution
Exhibit 8- Site Plan and Elevations
ltem(s)
Supplemental Information:
Any agenda related public documents received and distributed to a majority of the City Council after the Agenda Packet is printed are included in Supplemental Packets.
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2600 Fresno Street
Fresno, CA 93721City of Fresno www.fresno.gov
Staff Report
File #: ID 22-900 Agenda Date: 5/31/2022 Agenda #: 1.
REPORT TO THE CITY COUNCIL
FROM: JENNIFER CLARK, Director
Planning and Development Department
BY: PHIL SKEI, Assistant Director
Planning and Development Department
SUBJECT
***RESOLUTION - Supporting the Housing Authority of the City of Fresno’s development and construction of affordable housing at 1101 N. Parkway Drive and expressing the City’s intent to contribute to the Project an additional amount not to exceed $2,500,000. (Subject to Mayor’s Veto)
RECOMMENDATION
Staff recommends the City Council adopt a resolution to contribute an additional $2.5 million to the Sun Lodge project which consists of the rehabilitation of the former Days Inn Motel and the introduction of new construction to the site, to create a 64-unit affordable housing development in west central Fresno.
EXECUTIVE SUMMARY
Fresno Housing Authority purchased and rehabilitated Sun Lodge as part of the City’s collective Homekey efforts along Parkway Drive in District 3. Since opening, Sun Lodge has been serving those in need at this 98-unit property. Recently, Fresno Housing Authority applied to the City’s 2021 -
2022 Notice of Funding Availability (NOFA) for the development of permanent affordable housing at this site. The application included a mixture of 64 studio, one-, two-, and three-bedroom units as well as major renovations and new construction. This application for $2.7 million is pending as part of the HOME program.
Fresno Housing Authority was not initially awarded tax credits, fortunately Sun Lodge was placed on the waitlist, and ultimately received tax credits of $19.3 million. The delay in receiving the award, combined with staggering increases in construction bids within the last few weeks, have forced Fresno Housing Authority to value engineer the proposed construction, and seek additional leveraged financial support from the City. In order to keep the tax credits, Fresno Housing Authority is expected to close escrow by June 3, 2022. The loss of the proposed Sun Lodge permanent affordable housing units would be detrimental during Fresno’s housing crisis, and also significantly jeopardize Fresno Housing Authority’s ability to receive tax credits in the future. Due to these factors, staff is recommending the City approve funding an additional $2.5 million from a source to be determined, which could include American Rescue Plan Act, HOME-American Rescue Plan (HOME-ARP), or another source.
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File #: ID 22-900 Agenda Date: 5/31/2022 Agenda #: 1.
BACKGROUND
On June 18, 2021, the Housing and Community Development Division released a 2021-2022 NOFA for HOME, CHDO, and PLHA funding for the development of affordable housing. In response to the NOFA, the City received 11 applications, of which five were initially selected for recommendation to receive HOME or PLHA Program funds. One of the recommended projects selected for funding was the Fresno Housing Authority’s Sun Lodge permanent affordable housing development.
On June 24, 2021, City Council adopted Resolution Number 2021-183 to contribute up to $3 million for Sun Lodge, which is being honored by the City Council’s consideration of a proposed $2,700,000 HOME Agreement on May 31, 2022.
On December 10, 2021, the Fresno Housing Authority received a tax credit award representing $19,376,224 in tax credit equity. Since receiving notice of this tax credit award, Fresno Housing Authority has received updated construction bids. Due to the impacts of the supply chain bottleneck and rising material costs resulting from inflation rates unparalleled in the past 41 years, the updated bids have created a funding gap estimated to be over $7 million. Fresno Housing Authority continues to value engineer the project, and received infill fee waivers, reducing this gap to nearly $5 million.
In order to close this gap, the Fresno Housing Authority Board of Commissioners is considering the commitment of an additional $5 million toward Sun Lodge during a special meeting on May 31, 2022.
Of that $5 million, the City is proposing a contribution of up to $2.5 million payable to Fresno Housing Authority within 120 days of the close of escrow. If approved by both the Fresno Housing Authority Board, and City Council, the revenue sources listed below would ensure the Sun Lodge project moves forward.
The Sun Lodge project cost is estimated at $36,283,431, this includes the original acquisition and rehabilitation of the 98 motel units completed prior to operating Sun Lodge. It also includes unanticipated infrastructure expenses both on and off-site to address water and drainage issues.
Revenue sources are identified below:
Tax Credit Equity $19,376,224
State of California Homekey Program $4,790,000
Homekey Soft Cost $1,068,779
Fresno Housing Authority $2,000,000
Fresno Housing Authority (pending) $2,500,000
Fresno Housing Authority (deferred developer fees) $1,100,000 City of Fresno (infill fee waivers) $280,078
City of Fresno (proposed - up to ) $2,500,000
City of Fresno (proposed HOME) $2,700,000
$36,315,081
The cost per square foot for the residential units is estimated at $389 ($24,268,000 / 62,257sq. ft.) for the renovation and new construction. The per square foot cost was derived from the total project cost less the costs for specialized professional services, reserves as a condition financing, application fees, costs associated with submitting applications for funding, on and offsite City of Fresno Page 2 of 3 Printed on 5/27/2022
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File #: ID 22-900 Agenda Date: 5/31/2022 Agenda #: 1.
improvements, and similar soft costs.
The approximate completion date of the Sun Lodge project is October 2023. Once completed, Sun Lodge will assist the City of Fresno with its affordable housing goals and objectives as outlined in the Housing Element of the 2035 General Plan and 2020-2024 Consolidated Plan. The proposed conversion of the Days Inn Motel into the Sun Lodge Apartments also represents the first conversion of a motel shelter into permanent affordable housing - a critical step toward delivering on commitments to the Jane Addams neighborhood as well as achieving priorities of the One Fresno Housing Strategy.
ENVIRONMENTAL FINDINGS
On June 25, 2021, the City of Fresno adopted a finding that the proposed project is categorically exempt from the requirements of California Environmental Quality Act (CEQA) pursuant to Class 32/Section 15332 (Infill) of State CEQA Guidelines. None of the exceptions to the exemptions set forth in section 15300.2 have occurred. The project has not changed and as such no further assessment under CEQA is required at this time.
Additionally, pursuant to the National Environmental Policy Act (NEPA) guidelines, a review of the project activities resulted in a Finding of No Significant Impact. The Housing Authority of the City of Fresno received authorization to use grant funds from the U.S. Department of Housing and Urban Development under Part 58 on September 17, 2021.
FISCAL IMPACT
The proposed $2.5 million for Sun Lodge would need to be appropriated to the Planning and Development Department as part of its fiscal year 2023 Budget.
Attachments:
Exhibit A - Resolution
Exhibit B - Site Plan and Elevations
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EXHIBIT “A”
Resolution
- - ---RESOLUTION NO.
A RESOLUTION OF THE COUNCIL OF THE CITY OF
FRESNO, CALIFORNIA, SUPPORTING THE HOUSING
AUTHORITY OF THE CITY OF FRESNO'S
DEVELOPMENT AND CONSTRUCTION OF
AFFORDABLE HOUSING AT 1101 N. PARKWAY DRIVE
AND EXPRESSING THE CITY'S INTENT TO
CONTRIBUTE TO THE PROJECT AN ADDITIONAL
AMOUNT NOT TO EXCEED $2,500,000
WHEREAS, Housing Authority of the City of Fresno (Developer) has received a Low-Income Housing Tax Credit (LIHTC) award to rehabilitate and introduce new construction to an existing motel property to create 64 affordable housing units, located at 1101 N. Parkway Drive in Fresno, California (Project); and WHEREAS, on June 24, 2021, City Council adopted Resolution Number 2021-183 to contribute up to $3,000,000 to the Project, which will be honored by City Council's consideration of a proposed $2,700,000 HOME Agreement; and WHEREAS, due to construction material shortages and increased labor costs, the Developer is experiencing up to a $5 million funding shortfall for the Project; and WHEREAS, on May 31, 2022, the Developer committed an additional $2,500,000 to partially close the $5 million financing gap; and
WHEREAS, the Developer's failure to close the funding gap prior to June 3, 2022, will require that the Developer return its LIHTC award and will negatively impact its ability to contribute to solving the City of Fresno's (City) affordable housing and homelessness challenges over the next two years; and
WHEREAS, the City will appropriate an additional amount not to exceed Two 1 of 3
Date Adopted:
Date Approved:
Effective Date: ~ Resolution No. City Attorney Approval :~
Million Five Hundred Thousand Dollars ($2,500,000), to close the balance of the $5 million shortfall to support the development of the Project; and WHEREAS, the City and the Developer, in compliance with the California Tax Credit Allocation Committee (TCAC) regulation 10325(f)(8), intend to enter into one or more agreements in a t otal amount not to exceed $2.5 million.
WHEREAS, the additional $2.5 million funding commitment to the Project will expire if the Project cannot not close escrow by June 6, 2022.
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Fresno as follows:
1. The Council adopts this resolution to fund the Project with an additional amount not to exceed Two Million Five Hundred Thousand Dollars ($2,500,000). This commitment is subject to the City's execution and recordation of one or more funding agreements, which shall be provided by City, consistent with the following terms and conditions:
a. The terms of affordability for the units shall be no less than 55 years b. The loan shall be a residual receipts loan
c. The loan shall have an interest of 3% annually
d. The loan shall be for a term of 55 years
e. The Project shall undergo and successfully pass underwriting f. The Developer will ensure the appropriate number of affordable units required by the funding source.
2. This resolution is subject to all applicable City rules and regulations.
3. This additional $2.5 million funding commitment to the Project shall expire 2 of 3
if the Project cannot close escrow by June 6, 2022.
4. This resolution shall be effective upon final approval. ********************************
STATE OF CALIFORNIA )
COUNTY OF FRESNO ) ss.
CITY OF FRESNO )
I, TODD STERMER, City Clerk of the City of Fresno, certify that the foregoing resolution was adopted by the Council of the City of Fresno, at a regular meeting held on the ____ day of _______ , 2022.
AYES
NOES
ABSENT
ABSTAIN :
Mayor Approval: _______________ , 2022
Mayor Approval/No Return: , 2022
Mayor Veto: , 2022
Council Override Vote: , 2022
TODD STERMER, CMC
City Clerk
BY: ----------Deputy
APPROVED AS TO FORM:
DOUGLAS T. SLOAN
City Attorney
BY: --------------Tracy N. Parvanian Date
Supervising Deputy City Attorney
3 of 3
EXHIBIT “B”
Site Plan and Elevations
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ANNE PHILLIPS
ARCHITECTURE
3032 MAGNOLIA STREET
OAKLAND CA 94608
t 510.841.7056
www. aparch. com
L I ENSED
ARCHIT
C
TON
SITHU
S
E
NIW
CT
W IN
STATE
OF
CALIFOR
A IN
(E) DRIVEWAY
BUILDING 'C'
3348 sqft.
PARKING
(120 TOTAL)
BUILDING 'A'
5428 sqft.
ADJACENT BUILDING
DOG PARK (N.I.C.)
PARKING
(120 TOTAL) BUILDING 'B'
5428 sqft.
(E) ACCESSIBLE
PARKING, TYP
BUILDING 'D'
TO BE REMOVED
4,073 sqft.
ADJACENT BUILDING
No. C-32556
Ren. 03.31.2023
(E) STREET POLE
LIGHT
FIRE HYDRANT
(E) SIGN
(E) ELECTRICAL (E) GAS METER (E) DOMESTIC (E) WATER
METER WATER BACKFLOW METER IN VAULT
PREVENTOR
SUN LODGE
1101 N PARKWAY DR.
FRESNO, CA 93728
2021.04.27 PLANNING SET
2021.05.19 PLANNING RE-SUBMITTAL
2021.06.25 TCAC SET
FIELD VERIFICATION:
Contractor to verify all dimensions and
site conditions and inform Anne Phillips
Architecture of all dimension errors,
omissions or conflicts prior to any work
beginning. Do not scale these drawings.
EXISTING
SITE PLAN
AE1.01
DATE:
DRAWN BY: AV
CHECKED BY:
JOB:
04-27-21
MK
20-09
.~----------------------------------, ___ __,1.,-
!~II' 1!'].;,
4, 'f '
101
◊
ANNE PHILLIPS
ARCHITECTURE
3032 MAGNOLIA STREET
OAKLAND CA 94608
t 510.841.7056
www. aparch. com
CITY MAX HT. LIMIT
+ 40'-0"
T.O. PARAPET
+ 35'-2"
No. C-32556
Ren. 03.31.2023
L ICENSED
ARCHITECT
NI W
UHTIS
NOTSNIW
STATE
OF
CALIFORNIA
F.F. 2ND FLR
+ 10'-4"
F.F. 1ST FLR
± 0'-0"
F.F. 3RD FLR
+ 20'-8"
F.F. 2ND FLR
+ 10'-4"
F.F. 3RD FLR
+ 20'-8"
T.O. PARAPET
+ 35'-2"
CITY MAX HT. LIMIT
+ 40'-0"
EXTERIOR ELEVATIONS - BLDG D - NORTH
1/8" = 1'-0"
F.F. 1ST FLR
± 0'-0"
EXTERIOR ELEVATIONS - BLDG D - SOUTH
1/8" = 1'-0"
CITY MAX HT. LIMIT CITY MAX HT. LIMIT
+ 40'-0" + 40'-0"
T.O. PARAPET T.O. PARAPET
+ 35'-2" + 35'-2"
F.F. 3RD FLR F.F. 3RD FLR
+ 20'-8" + 20'-8"
F.F. 2ND FLR F.F. 2ND FLR
+ 10'-4" + 10'-4"
F.F. 1ST FLR F.F. 1ST FLR
± 0'-0" ± 0'-0"
EXTERIOR ELEVATIONS - BLDG D - EAST EXTERIOR ELEVATIONS - BLDG C - WEST 1/8" = 1'-0" 4 1/8" = 1'-0"
2 4
1 3
KEY PLAN
A
D
B
SUN LODGE
1101 N PARKWAY DR.
FRESNO, CA 93728
2021.04.27 PLANNING SET
2021.05.19 PLANNING RE-SUBMITTAL
2021.06.25 TCAC SET
FIELD VERIFICATION:
Contractor to verify all dimensions and
site conditions and inform Anne Phillips
Architecture of all dimension errors,
omissions or conflicts prior to any work
beginning. Do not scale these drawings.
JOB:
PROPOSED
ELEVATIONS
BLDG D
A3.03
DATE: 04-27-21
MK
20-09
DRAWN BY: AV
CHECKED BY:
C