HomeMy WebLinkAboutItem 14 HOME Application - Springfield ApartmentsAGENDA ITEM SUMMARY
Meeting Date:
Meeting Type:
Staff Contact/Dept.:
Staff Phone No:
Estimated Time:
2/6/2023
Regular Meeting
Erin Fifield/DPW
726-2302
05 Minutes
SPRINGFIELD Council Goals: Encourage Economic
CITY COUNCIL Development and
Revitalization through
Community Partnerships
ITEM TITLE: HOME APPLICATION — SPRINGFIELD APARTMENTS
ACTION
Make a motion to approve/not approve the use of federal HOME funds for
REQUESTED:
Cornerstone Community Housing's proposal for construction of 39 new homes and
common area at 1875 16' Street in Springfield.
ISSUE
The Eugene -Springfield HOME Consortium's 2022 Housing Request for Proposals
STATEMENT:
(RFP) received one application for affordable housing development in Springfield.
This application was reviewed by an Evaluation Committee which recommended
the proposal for allocation. Springfield City Council is being asked for its approval
of the project moving forward. The Intergovernmental HOME Consortium
Governing Board will make the final decisions for use of HOME funds based on
the decisions of the Evaluation Committee and Springfield City Council.
ATTACHMENTS:
1. HOME PROJECT PROPOSAL
DISCUSSION/
Springfield has $2,124,176 in HOME funds available to allocate toward a new
FINANCIAL
affordable housing development. Through the 2022 HOME RFP, the Consortium
IMPACT:
received one proposal for a project in Springfield. This proposal was from
Cornerstone Community Housing (Cornerstone), a local certified Community
Housing Development Organization (CHDO) under the HOME regulations.
Cornerstone currently owns the property and proposes to build one 2 -story building
with elevators, a central courtyard, and covered walkways. The development
includes 10 studios, 23 one -bedrooms and 6 two-bedroom units. The development
would serve 8 households earning no more than 50% of area median income (AMI)
and 31 households earning no more than 60% of AMI. Cornerstone proposes to
serve seniors and people with disabilities, a growing segment of Springfield's
population.
Cornerstone is requesting $2,054,013 in HOME funds for the $12 million project.
If approved, this award would allocate nearly the remainder of HOME funds
available. With a future HOME award expected in FY2024, and program income,
staff estimate $3-400,000 in HOME funds will be available for Springfield projects
as part of the 2023 HOME RFP.
MEMORANDUM City of Springfield
Date: 2/6/2023
To: Nancy Newton, City Manager COUNCIL
From: Erin Fifield, Community Development Analyst BRIEFING
Jeff Paschall, Community Development Division
Director
Subject: HOME APPLICATION — SPRINGFIELD MEMORANDUM
APARTMENTS
ISSUE: The Eugene -Springfield HOME Consortium's 2022 Housing Request for Proposals
(RFP) received one application for affordable housing development in Springfield. This
application was reviewed by an Evaluation Committee which recommended the proposal for
allocation. Springfield City Council is being asked for its approval of the project moving
forward. The Intergovernmental HOME Consortium Governing Board will make the final
decisions for use of HOME funds based on the decisions of the Evaluation Committee and
Springfield City Council.
COUNCIL GOALS/
MANDATE:
Encourage Economic Development and Revitalization through Community Partnerships
BACKGROUND:
The HOME Investment Partnership (HOME) Program is a federal program administered by the
U.S. Department of Housing and Urban Development (HUD) to expand affordable housing
opportunities for low-income persons. Since 1992, the cities of Eugene and Springfield have
received the federal HOME funding allocation as a unified HOME Consortium, with a targeted
percentage of funds to be awarded to each jurisdiction.
Eugene receives the HOME funds from HUD on behalf of the HOME Consortium and is
responsible for the oversight and administration of HOME funds in the entire Consortium area.
Each year, the Eugene -Springfield HOME Consortium receives approximately $1.3 million to put
toward affordable housing acquisition and development, of which 24% is dedicated, per HUD,
for projects in Springfield.
Under the HOME Consortium Intergovernmental Agreement, the RFP applications are first
reviewed by an Evaluation Committee. The committee scores each proposal and makes a
recommendation as to whether each project is suitable for funding. The proposals in each
jurisdiction also go to each City Council for their recommendation. Final funding decisions and
project prioritization are made by the HOME Consortium Governing Board, which considers the
recommendations from both the Evaluation Committee and the City Councils.
2022 HOME REQUEST FOR PROPOSALS
As in years past, there are additional prior year funds available for allocation. For Springfield,
$2,124,176 in HOME funds is currently available to be allocated.
Through this Request for Proposals, the HOME Consortium received one proposal from
Cornerstone Community Housing for new development in Springfield, and one proposal from
Homes for Good for new development in Eugene. Because Springfield and Eugene each receive
Attachment 1 Page 1 of 4
an allocation of HOME funds, developments proposed in different cities do not compete against
each other for HOME funding.
The applications are available for Council review on the City of Eugene's website located here:
https://www.eu eg ne-or.gov/4160/Affordable-Housing-Development-Pro rgrams
Cornerstone Community Housing's Springfield ield Apartments project:
Evaluation Committee
The 2022 HOME Consortium Evaluation Committee was made up of City of Springfield
Councilor Kori Rodley, City of Eugene Councilor Emily Semple, Springfield Community
Development Advisory Committee (CDAC) member Isabelle Mathews, Catholic Community
Services' Supportive Services Manager Amy Wilson, and Dan Straub a local developer.
The Committee met on December 14th to discuss both the Eugene and Springfield proposals. The
Springfield proposal scored high in each of six categories and evaluation committee members
were enthusiastic about the proposal.
Cornerstone's Springfield Apartments evaluation summary
• Project Concept and Design
o New construction proposal
o Located at 1875 16t' St, north of Q St.
0 39 units: 10 studios, 23 one -bedrooms and 6 two-bedroom units
o All new units will be affordable for households earning less than 50 or 60% of
area median income
o Cornerstone proposes serving seniors and people with disabilities
o Development: One 2 -story building with elevators, a central courtyard, and
covered walkways
o Affordability period: 20 years due to HOME funds
• Site Feasibility
o Site is mostly vacant, with an existing single -unit home
o Property is adjacent to public transit, near a grocery store, pharmacy, commercial
centers, and a health clinic.
o Property is near other single -unit and low-rise multi -unit residential buildings.
o Cornerstone currently owns the property.
Attachment 1 Page 2 of 4
o Proposed number of units is allowed under Springfield Development Code
4.7.405 for Affordable Housing.
Targeted Population and Services
o The 2020 Eugene -Springfield Consolidated Plan identifies low-income renters,
seniors and people with disabilities as priority need populations
o Cornerstone currently has 1,900 households on their waiting list for their
affordable housing developments in Eugene/Springfield
o Cornerstone provides resident services through their "Healthy Homes" program,
focusing on food and nutrition, community building, economic stability, self-
sufficiency, and health and wellness.
Cost Benefit
o Funds requested
■ HOME funds requested: $2,054,013
■ Total Development Cost: $12,028,853
■ HOME % of total cost: 17%
■ HOME subsidy per unit: $52,667
o Cornerstone's HOME request is more than past HOME projects due to:
■ Increasing construction costs requiring increasing subsidies
■ Competitive funding at the state level
■ Pro forma includes a 20 year plan for providing residential services
o Financial plan for proposed rental income shows that operating expenses and
debt payments on the private loan, and deferred developer fee would be covered.
o Operating expenses and maintenance budgets are in line with past projects to be
able to maintain the development for the affordability period.
Financial Feasibility
o Other proposed funding sources: Funding through Oregon Housing and
Community Services (OHCS), Bank loan, Community Development Block
Grant (CDBG) funding, deferred development fee, Low Income Rental Housing
Property Tax Exemption
■ Funding through OHCS is a highly competitive process. Currently this
funding source (the Small Projects NOFA) is only offered every 2 years.
Cornerstone plans to apply this Spring.
■ Springfield previously awarded Cornerstone CDBG funds to purchase
the former School District Administrative Building at 525 Mill St. A
formal request for CDBG funding for this project on 16t' Street is
forthcoming.
o A HOME award would leverage a significant amount of funds from other
sources: HOME funds account for only 17% of total development costs. These
additional funds are necessary to make rents affordable to those making less than
50% and 60% of the AMI - typical market rate construction is affordable to
households at 120% or more of the AMI.
Organizational Experience and Performance
o Cornerstone is a certified Community Housing Development Organization
(CHDO) under the HOME program given their experience with HOME -funded
projects.
o Cornerstone has provided housing and services for households with limited
incomes for 30 years.
o Cornerstone is partnering with a well-known and experienced development
consultant, Home First Development (HFD), for this project
NEXT STEPS: Governing Board
The HOME Consortium Governing Board is composed of the Eugene and Springfield Mayors,
one Springfield City Councilor, and one Eugene City Councilor, the latter two of which are also
on the Evaluation Committee.
Attachment 1 Page 3 of 4
The Governing Board is scheduled to meet on February 14, 2023 to discuss the recommendations
from the Evaluation Committee and the respective City Councils and decide on HOME funding
awards. HOME funds are conditional on the project receiving permanent financing from other
proposed funding sources.
RECOMMENDED ACTION: Approve the use of federal HOME funds for Cornerstone
Community Housing's proposal for new construction of 39 units at 1875 16th St.
Attachment 1 Page 4 of 4