HomeMy WebLinkAboutRes 2064 - Authorize South King Housing and Homelessness Partners to Execute All Documents for Funding of Affordable Housing Projectsty
Washington
Resolution No.
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF TUKWILA, WASHINGTON, AUTHORIZING
THE DULY -APPOINTED ADMINISTERING AGENCY
FOR SOUTH KING HOUSING AND HOMELESSNESS
PARTNERS (SKHHP) TO EXECUTE ALL
DOCUMENTS NECESSARY TO ENTER INTO
AGREEMENTS FOR THE FUNDING OF
AFFORDABLE HOUSING PROJECTS, AS
RECOMMENDED BY THE SKHHP EXECUTIVE
BOARD, UTILIZING FUNDS CONTRIBUTED BY THE
CITY OF TUKWILA TO THE SKHHP HOUSING
CAPITAL FUND.
WHEREAS, on February 21, 2019, the City of Tukwila entered into an Interlocal
Agreement to form South King Housing and Homelessness Partners (SKHHP) to help
coordinate the efforts of South King County cities to provide affordable housing; and
WHEREAS, on May 17, 2021, the City of Tukwila entered into an Interlocal
Agreement for the pu rposes of pooling sales tax receipts with SKHHP to admin ister funds
through the SKHHP Housing Capital Fund; and
WHEREAS, the SKHHP Executive Board has recommended that the City of Tukwila
participate in the funding of certain affordable housing projects and programs hereinafter
described; and
WHEREAS, the SKHHP Executive Board has developed a number of recommended
conditions to ensure the City's affordable housing funds are used for their intended
purpose and that projects maintain their affordability overtime; and
WHEREAS, pursuant to the SKHHP formation Interlocal Agreement, each legislative
body participating in funding a project or program through SKHHP's Housing Capital Fund
must authorize the application of a specific amount of the City's funds contributed to the
SKHHP Housing Capital Fund to a specific project or program; and
CC:\Legislative Development\SKHHP Allocation 1-12-23
LH:AY Review and analysis by Andy Youn Page 1 of 2
WHEREAS, the City Council desires to use $29,804.43 from funds contributed to the
SKHHP Housing Capital Fund as designated below to finance the projects recommended
by the SKHHP Executive Board;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF TUKWILA,
WASHINGTON, HEREBY RESOLVES AS FOLLOWS:
Section 1. Pursuant to the Interlocal Agreement, the City Council authorizes the
duly -appointed administering agency of SKHHP to execute all documents and take all
necessary actions to enter into agreements on behalf of the City to fund projects through
Habitat for Humanity of Seattle -King and Kittitas Counties in Burien and Mercy Housing
Northwest— Burien Family Housing, in a combined total of $29,804.43.
Section 2. The agreements entered into, pursuant to Section 1 of this resolution,
shall include terms and conditions to ensure that the City's funds are used for their
intended purpose and that the projects maintain affordability over time. In determining
what conditions should be included in the agreements, the duly -appointed administering
agency of SKHHP shall be guided by the recommendations set forth in the SKHHP
Executive Board's memorandum dated December 16, 2022, a copy of which is attached
hereto as Exhibit A.
Section 3. This resolution will take effect and be in full force immediately upon
passage and signatures.
PASSED BY THE CITY COUNCIL OF THE CITY Jr TUKWILA, WASHINGTON, at
a Special Meeting thereof this 1,‘114- day of , 2023.
ATTEST/AUTHENTICATED:
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Christy O'Flaherty, MMC
City Clerk
APPROVED AS TO FORM BY:
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nthia Delostrinos Johnson
Council President
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Filed with the City Clerk: 2.- 23
Passed by the City Council: 2. -13-7 3
Resolution Number: v2A9
Office of the City Attorney
Attachment: Exhibit A — SKHHP Executive Board memorandum dated December 16, 2022
CCALeg islative Development\SKHHP Allocation 1-12-23
LKAY Review and analysis by Andy Youn Page 2 of 2
South King Housing and Homelessness Partners
TO: City of Auburn Council Members
City of Burien Council Members
City of Des Moines Council Members
City of Federal Way Council Members
FROM:
DATE:
RE:
Memorandum
City of Kent Council Members
City of Normandy Park Council Members
City of Renton Council Members
City of Tukwila Council Members
SKHHP Executive Board
December 16, 2022
2022 SKHHP Housing Capital Fund Recommendation
OVERVIEW
The 2022 SKHHP Housing Capital Fund was the first funding round made possible by
the pooling of resources from SKHHP member jurisdictions. SKHHP received three
applications representing requests for just under $2.4 million in local funds to develop
135 units of affordable housing.
After careful deliberation, the SKHHP Executive Board concurred with the
recommendations of the SKHHP Advisory Board, and is recommending funding
$1,393,308 for two projects.
These recommendations advance projects that meet urgent local priorities, including
mixed income workforce housing, permanent supportive housing, and affordable
homeownership. As rents and home sale prices continue to rise in our region, so does
the need for affordable housing. Your investment in the SKHHP Housing Capital,
leveraged with millions of dollars from other sources, will provide this much needed
housing to hundreds of underserved members of our community.
The following is a description of the applications received, the Executive Board
recommendation and rationale, and proposed contract conditions for the proposals
recommended for funding at this time. Also enclosed is the proposed funding sources
and an economic summary of the projects recommended for funding.
ATTACHMENTS:
1. Proposed funding sources
2. Project economic summaries
Page 1 of 11
1. HABITAT FOR HUMANITY SEATTLE -KING AND KITTITAS COUNTIES
Funding request:
Advisory Board recommendation:
PROJECT SUMMARY
$300,000 (secured grant)
$300,000 (secured grant)
See attached proposed funding sources for
distribution of City funds
Habitat for Humanity is requesting grant funds in the amount of $300,000 for a
homeownership project located in Burien. The proposed project is phase I of II of a new
development that will result in 40 affordable condominiums. Phase I consists of the
construction of 20 three bedroom townhomes, 1.5 bath houses for households earning
up to 50% of area median income (AMI).
The project proposal is to provide permanent affordability through a land trust
administered by Habitat and sold with an individual ground lease that allows Habitat the
right of first option to purchase the home upon resale with a set 1.5% appreciation
calculation in the lease agreement.
As part of Habitat's homeownership model, homebuyers are required to put in 250
hours of sweat equity. The project also requires a Condominium Owners Association
(COA) comprised of residents. The COA will address property issues and guidelines
established in the land lease. Through the COA, reserves are established for the repair
and maintenance of the buildings and to address ongoing landscape and maintenance.
The reserve fund will be managed by the COA and funded through a monthly fee that is
part of the overall housing costs and included in the 33% housing to household income
ratio provided to homebuyers.
FUNDING RATIONALE
The Executive Board supports the intent of this application for the following reasons:
• The project was approved for participation in the City of Burien affordable
housing demonstration program.
• The project strongly aligns with SKHHP Housing Capital Fund priorities including:
providing homeownership opportunities, collaboration with local community-
based organizations, direct experience and connection to populations they are
proposing to serve, and advancing racial equity.
• The project schedule indicates construction to begin in 2022 and certificate of
occupancies issued in 2024.
• The site has convenient access to transit, shopping, and services.
• The project provides significant financial leverage of other sources.
Page 2 of 11
PROPOSED CONDITIONS
Standard conditions (apply to all projects)
1. The Agency shall provide revised development and operating budgets based upon
actual funding commitments, which must be approved by SKHHP staff. If the
Agency is unable to adhere to the budgets, SKHHP staff must be immediately
notified and new budget(s) shall be submitted by the Agency for SKHHP staff
approval. SKHHP staff shall not unreasonably withhold its approval to revised
budget(s), so long as such new budget(s) do not materially adversely change the
Project. This shall be a continuing obligation of the Agency. Failure to adhere to the
budgets, either original or as amended may result in withdrawal of SKHHP's
commitment of funds.
2. The Agency shall submit evidence of funding commitments from all proposed public
and private funding sources. In the event commitment of funds identified in the
application cannot be secured in the time frame identified in the application, the
Agency shall immediately notify SKHHP staff, and describe the actions it will
undertake to secure alternative funding and the timing of those actions subject to
SKHHP staff review and approval.
3. Funds shall be used by Agency toward specific project costs as included in funding
agreement and consistent with RCW 82.14.540. Funds may not be used for any
other purpose unless SKHHP staff has given written authorization for the alternate
use. If after the completion of the project there are budget line items with
unexpended balances, SKHHP and other public funders shall approve adjustments
to the project capital sources, including potential reductions in public fund loan
balances.
4. Agency shall evaluate and consider the maximization of sustainability features such
as in efficient building envelope, heat pumps and propose a plan for the
maximization of sustainability.
5. In the event federal funds are used, and to the extent applicable, federal guidelines
must be met, including but not limited to: contractor solicitation, bidding and
selection; wage rates; and federal laws and regulations.
6. The Agency shall maintain documentation of any necessary land use approvals,
permits, and licenses required by the jurisdiction in which the project is located.
7. The Agency shall submit monitoring quarterly reports through completion of the
project, and annually thereafter, and shall submit a final budget upon project
completion. If applicable, Agency shall submit initial tenant information as required
by SKHHP.
8. Agency shall maintain the project in good and habitable condition for the duration of
period of affordability.
Page 3 of 11
Special conditions
1. Funds will be in the form of a secured grant with no repayment, so long as
affordability and target population are maintained.
2. A covenant is recorded ensuring affordability for at least 50 years, with size and
affordability distribution per the following table. Limited changes to the matrix may
be considered based on reasonable justification as approved by SKHHP staff.
Affordability
3 bedroom
Total
60%
20
20
Total
20
20
Page 4 of 11
2. MERCY HOUSING NORTHWEST — BURIEN FAMILY HOUSING
Funding request:
Executive Board recommendation:
PROJECT SUMMARY
$1,093,308
$1,093,308 (forgivable loan)
See attached proposed funding sources for
distribution of City funds
Mercy Housing Northwest is requesting funds in the amount of $1,093,308 for an 89 unit
multifamily mixed income affordable rental housing development in Burien. The project
proposal is to provide a mix of 1- 2- and 3 -bedroom apartments, for households with
mixed incomes from 0-30%, 30-50%, and up to 60% of area median income, and set
asides for households with a disability and homeless households.
The proposed project is a partnership with Mary's Place. Mary's Place and Mercy
Housing Northwest entered into a memorandum of understanding indicating Mary's
Place's intent to subdivide the property and donate an approximate 2 acre portion to
Mercy Housing Northwest for the proposed multifamily development.
FUNDING RATIONALE
The Executive Board supports the intent of this application for the following reasons:
• The project aligns with Burien's Comprehensive Plan land use designation and
has two routes for zoning approval — an applicant pursued site specific rezone or
a City initiated area wide rezone as part of the Ambaum Corridor plan, both are
currently underway.
• The project strongly aligns with SKHHP Housing Capital Fund priorities including:
collaboration with local community-based organizations, direct experience and
connection to populations they are proposing to serve, meeting the needs of
those and available to those most disproportionately impacted by housing costs,
advancing racial equity.
• The project has the opportunity to deliver mixed income housing on a significant
scale in a location with access to transit and other amenities.
• The project is part of a partnership with Mary's Place which will create significant
shelter and services.
• The project includes over half (54%) of the houses to be family -sized 2 and 3
bedroom units.
• The project serves special needs population through a set aside for households
with a disability and formerly homeless households.
• The site has convenient access to transit, shopping, and services.
Page 5 of 11
• The project is expected to provide significant financial leverage of other sources.
PROPOSED CONDITIONS
Standard conditions (apply to all projects)
1. The Agency shall provide revised development and operating budgets based upon
actual funding commitments, which must be approved by SKHHP staff. If the
Agency is unable to adhere to the budgets, SKHHP staff must be immediately
notified and new budget(s) shall be submitted by the Agency for SKHHP staff
approval. SKHHP staff shall not unreasonably withhold its approval to revised
budget(s), so long as such new budget(s) do not materially adversely change the
Project. This shall be a continuing obligation of the Agency. Failure to adhere to the
budgets, either original or as amended may result in withdrawal of SKHHP's
commitment of funds.
2. The Agency shall submit evidence of funding commitments from all proposed public
and private funding sources. In the event commitment of funds identified in the
application cannot be secured in the time frame identified in the application, the
Agency shall immediately notify SKHHP, and describe the actions it will undertake to
secure alternative funding and the timing of those actions subject to SKHHP staff
review and approval.
3. Funds shall be used by Agency toward specific project costs as included in funding
agreement and consistent with RCW 82.14.540. Funds may not be used for any
other purpose unless SKHHP staff has given written authorization for the alternate
use. If after the completion of the project there are budget line items with
unexpended balances, SKHHP and other public funders shall approve adjustments
to the project capital sources, including potential reductions in public fund loan
balances.
4. Agency shall evaluate and consider the maximization of sustainability features such
as in efficient building envelope, heat pumps and propose a plan for the
maximization of sustainability.
5. In the event federal funds are used, and to the extent applicable, federal guidelines
must be met, including but not limited to: contractor solicitation, bidding and
selection; wage rates; and federal laws and regulations.
6. The Agency shall maintain documentation of any necessary land use approvals and
permits required by the jurisdiction in which the project is located.
7. The Agency shall submit monitoring quarterly reports through completion of the
project, and annually thereafter, and shall submit a final budget upon project
completion. If applicable, Agency shall submit initial tenant information as required
by SKHHP.
Page 6 of 11
8. Agency shall maintain the project in good and habitable condition for the duration of
period of affordability.
SPECIAL CONDITIONS
1. Funds will be in the form of a deferred, contingent, forgivable loan. Loan terms
will account for various factors, including loan terms from other fund sources and
available cash flow. Final loan terms shall be determined prior to release of funds
and must be approved by SKHHP Staff.
2. A covenant is recorded ensuring affordability for at least 50 years, with size and
affordability distribution per the following table. Limited changes to the matrix may
be considered based on reasonable justification as approved by SKHHP staff. If the
project is unsuccessful in securing Housing Choice Vouchers, the project may
shift an allocation of units set aside at 30% AMI to either 50% or 60% AMI.
Affordability
Total
30%
35
30-50%
28
60%
26
Total
89
3. The net developer fee shall be established at the time of finalizing the Contract
Budget. Net developer fee is defined as that portion of the developer fee paid out of
capital funding sources and does not include the deferred portion which is paid out
of cash flow from operations after being placed in service.
4. SKHHP staff shall review and approve the services budget and services plan for
consistency with application.
5. Timeframe for funding commitment. The funding commitment continues for thirty-
six (36) months from the date of Council approval and shall expire thereafter if all
conditions are not satisfied. An extension may be requested to SKHHP staff no later
than sixty (60) days prior to the expiration date. At that time, the Agency will provide
a status report on progress to date and expected schedule for start of construction
and project completion. The SKHHP Executive Board will consider a twelve-month
extension only on the basis of documented, meaningful progress in bringing the
project to readiness or completion. At a minimum, the Agency will demonstrate that
all capital funding has been secured or is likely to be secured within a reasonable
period of time.
6. The project will contain a 20% set aside for households with a disability, and 40%
set aside for homeless households, unless otherwise approved by SKHHP staff.
Page 7 of 11
3. ECOTHRIVE — BURIEN
Funding request: $700,000 - $1,000,000
Executive Board recommendation: $0
PROJECT SUMMARY OVERVIEW
EcoThrive is requesting grant funds in the amount of $700,000 - $1,000,000 for a
homeownership project located in Burien. The project proposal is to provide permanent
affordability through a limited -equity cooperative formed by homeowners as well as a
community land trust that holds the land in trust. The proposed project is the new
construction of 26 houses ranging in size from 350 square feet to 650 square feet for
households earning between 30 and 50% of area median income (AMI).
The property currently consists of a single family residential house that is uninhabitable.
The property is currently zoned single family residential that allows for 6 dwelling units
per acre. EcoThrive has submitted an application for the City of Burien's affordable
housing demonstration program that would allow for a greater density of housing than is
currently allowed on the property. Estimated approval for the affordable housing
demonstration program is March of 2023.
FUNDING RATIONALE
The Executive Board supports the concept of the EcoThrive housing proposal but does
not recommend funding at this time. The Executive Board would welcome an
application in the next funding round. This would provide an opportunity for EcoThrive to
address the issues identified below:
• Further develop the plan for operational support of the limited equity cooperative
and other supportive services.
• Further develop and identify the plan for qualifying households for home loans.
• Sweat equity at 10 hours per month in perpetuity may be a significant challenge
for some households.
• Obtain approval for City of Burien Affordable Housing Demonstration Program or
pursuit of other land use changes that support the development proposal.
• Include development cost estimate that helps establish soundness of
development budget.
• Further development of building design, parking, and conformance with zoning
requirements.
• Further develop plan for engaging, connecting, and working with households
proposing to serve.
Page 8 of 11
Jurisdiction
Auburn
Burien
Des Moines
Federal Way
Kent
Normandy
Park
Renton
Tukwila
Total
ATTACHMENT 1: Proposed Funding Sources
Total contributed to
Habitat for
SKHHP Housing
Humanity - Burien
Capital Fund
Mercy Housing
Northwest -
Burien Family
Housing
$230,532.27
$110,495.25
$39,091.99
$183,573.11
$249,387.81
$2,161.58
$254,678.90
$23,387.09
$1,093,308
$305,338
$146,350
$51,777
$243,141
$330,312
$2,863
$337,320
$30,976
$1,448,077
$63,257.27
$30,319.52
$10,726.71
$50,371.84
$68,431.17
$593.13
$69,883.02
$6,417.34
$300,000
Unallocates:1
$11,548.46
$5,535.23
$1,958.30
$9,196.05
$12,493.02
$108.28
$12,758.08
$1,171.57
$54,769
Page 9 of 11
Applicant:
Project Name:
Location:
Project Description:
Financing Sources:
ATTACHMENT 2: Project Economic Summaries
Habitat for Humanity Seattle -King and Kittitas Counties
Burien
515 & 511 S. 136th Street, Burien, WA 98168
New development of 20 homeownership condominium units
funding s'ource;. ;
Proposed Amount r '
Status,
SKHHP
$300,000
Applied
Housing Trust Fund
$1,125,000
Committed
King County HOME
$1,547,282
Committed
Fund for Humanity (developer)
$4,860,994
CHIP
$568,500
Committed
Development costs
Development Budget:
Proposed `use
Amour t
Per Unit
Land acquisition
$1,020,000
$51,000
Soft costs
$414,250
$20,713
Development costs
$6,734,026
$336,701
Other development costs
$233,500
$11,675
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Page 10 of 11
Applicant: Mercy Housing Northwest
Project Name: Burien Family Housing
Location: 12845 Ambaum Blvd SW, Burien, WA 98146
Project Description: New development of 89 unit mixed -income rental housing
Financing Sources:
Funding ource
;
Proposed Amount ;;,
Status"
SKHHP
Per
Land acquisition (donation)
$1,093,308
Applied
Land donation
$1,750,000
$19,663
Soft costs
$1,750,000
Committed
Bank loan
$5,974,879
$10,390,926
Construction costs
4% LIHTC equity
$16,523,298
$36,540,135
To apply in 2024
Deferred developer fee
$2,018,987
State Housing Trust Fund
$35,517
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King County
$4,900,000
Applied
Mercy loan fund (developer)
$750,000
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Proposed use ,
Amount ;
Per
Land acquisition (donation)
$1,750,000
$19,663
Soft costs
$5,974,879
$67,134
Construction costs
$36,540,135
$410,563
Other development costs
$3,161,000
$35,517
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Page 11 of 11