HomeMy WebLinkAboutItem 09 Fiscal Year 2007-2008 One-Year Action Plan of the Eugene-Springfield Consolidated Plan for Housing and Community Development (City of Springfield Section)
AGENDA ITEM SUMMARY Meeting Date: May 7,2007
Meeting Type: Public Hearing
Department: DeVeIOpmf1~services
Staff Contact: Kevin Ko [t
S P R I N G FIE L D Staff Phone No: 726-2302
C I T Y C 0 U N C I L Estimated Time: 15 minutes
ITEM TITLE: FISCAL YEAR 2007-2008 ONE-YEAR ACTION PLAN OF THE EUGENE-SPRINGFIELD
CONSOLIDATED PLAN FOR HOUSING AND COMMUNITY DEVELOPMENT (CITY OF
SPRINGFIELD SECTION)
ACTION
REQUESTED:
1. Conduct a Public Hearing to receive testimony regarding the City of Springfield section
of the FY2007-2008 One-Year Action Plan (includes testimony on Wynant's Project)
2. Approve/not approve CDBG funding for Wynant's Family Nutrition.
3. Approve/not approve the Springfield section of the FY2007-2008 One-Year Action Plan.
ISSUE
STATEMENT:
In May of 2005, the Cities of Eugene and Springfield submitted to HUD a five-year
Consolidated Plan for Housing and Community Development, effective July 1, 2005 and
expiring June 30, 2010. One-Year Action Plans must be submitted to HUD prior to the
beginning of each fiscal year as amendments to the five-year Consolidated Plan, and are
designed to indicate how communities intend to fulfill the priorities established in the
Consolidated Plan. At a meeting on April 16, 2007, Council directed staff to provide more
information regarding a CDBG proposal for Wynant's Family Nutrition. This packet contains
the requested information and a staff recommendation for funding.
ATTACHMENT: 1. FY2007-2008 One-Year Action Plan (City of Springfield section)
2. Wynant's Family Nutrition, memo dated 5/2/2007 with project information
3. Draft Criteria for Funding CDBG Projects, memo dated 5/1/07
DISCUSSION/
FINANCIAL
IMPACT:
The City of Springfield receives Community Development Block Grant (CDBG) funds as an
entitlement community and HOME Investment Partnerships Program (HOME) funds as a
participant in a HOME consortium agreement with the City of Eugene. CDBG funds are
awarded to communities who carry out community development activities directed towards
neighborhood revitalization, economic development, and the provision of improved
community facilities and services. HOME funding is a housing block grant program
allocated to communities to be used for housing rehabilitation, new construction, acquisition
and tenant based rental assistance activities. A public hearing was held on April 16, 2007 to
hear testimony on seven applications for CDBG or HOME funding. Council approved
funding for six of the seven projects. A funding decision on the Wynant's family Nutrition
project was postponed until May 7, 2007. Council directed staff to present additional
information about the Wynant's project, and possible funding strategies for this project. The
Council also directed staff to present possible criteria for considering future funding
applications by private for-profit businesses. Staff will be presenting the requested
information at this public hearing, and will make a funding recommendation for the Wynant's
project. Also presented for future consideration is a memorandum discussing possible
criteria for awarding CDBG funds to private for-profit businesses.
The FY2007-2008 One Year Action Plan includes the CDBG and HOME funding allocations
for projects and activities and must be approved by both the City of Springfield and City of
Eugene prior to submission to HUD. The City of Springfield section of the document (less
final fund allocations) was available for a thirty-day review and comment period ending May
7,2007. As of April 30th, no written comments have been received. Oral testimony may be
provided at a public hearing before the Council on May 7,2007. The City of Eugene section
of the Plan is being adopted separately by the Eugene City Council. The combined Eugene-
Springfield One-Year Action Plan is due to HUD on May 15, 2007.
City of Springfield
One-Year Action Plan for FY07/08
Summary of the One-Year Action Plan Process
Reauirement
The Consolidated Plan is a requirement of the 1990 National Affordable Housing Act and the
Community Development Plan. The Consolidated Plan is required of entitlement communities
that receive funds under U.S. Department of Housing and Urban Development (HUD) housing
and service programs related to the needs of low- and moderate-income persons, including the
Community Development Block Grant (CDBG) program, the HOME Investment Partnerships
Program (HOME), the Emergency Shelter Grant (ESG), and Housing Opportunities for Persons
with AIDS (HOPWA). The One-Year Action Plan for CDBG and HOME is to be submitted
annually as updates and implementation strategies of the Consolidated Plan. ESG and HOPWA
programs, which are not entitlement programs, are not included in this document.
Timeline
The One-Year Action Plan must be submitted to HUD 45 days prior to the beginning of the
entitlement fiscal year. A citizen participation plan element of the Consolidated Plan requires
that interested parties have a 30-day opportunity to review and comment on the funding
proposals and that at least one public hearing be held. Information received from the public
hearing and during the comment period is to be attached to the document in summary form
when submitted to HUD. This One-Year Action Plan combines information and strategies for the
City of Eugene and the City of Springfield, under HUD rules that require consortiums of cities to
create consolidated documents for the purpose of CDBG and HOME funding.
The content of the One-Year Action Plan is mandated by rules and regulations formulated by
HUD. The submission of this One-Year Action Plan is the second annual action plan to the
Eugene-Springfield Consolidated Plan 2005.
City of Sprinafield Process
The Springfield Community Development Advisory Committee (CDAC) held a public hearing on
March 22, 2007 to review seven CDBG and HOME proposals. There were 19 citizens in
attendance. The CDAC heard testimony from 13 people who spoke in support of the proposed
projects. After hearing testimony, the CDAC deliberated for approximately one hour before
formalizing a recommendation for funding. Recommendations for funding were forwarded to the
Springfield City Council.
The Springfield City Council met on April 16, 2007 and held a public hearing on the CDBG and
HOME funding recommendations for FY07/08. 16 citizens attended the public hearing and
thirteen testified in support of the CDAC's recommendations. The Council considered testimony
and discussed the individual projects and community goals. The Council removed the funding
request for the Wynant's Family Nutrition project and voted 6-0 to approve the recommended
funding allocations for the remaining two CDBG projects and four HOME projects. The Council
also voted 6-0 to approve a one-year extension of the CDBG set-aside for downtown
redevelopment. The Council asked CDBG/HOME Staff to provide additional information on the
Wynant project at the May 7th meeting and indicated a decision on funding would be made at
that time.
Attachment 1, page 1
WebsitelWhere to Obtain Copies of the Plan
The Eugene-Springfield Consolidated Plan 2005 and the current One-Year Action Plan are
available on the Internet at:
http://www.ci.springfield.or.us/dsd/housing/housing.forms.htm
Copies of the Eugene-Springfield Consolidated Plan 2005 and the current One-Year Action Plan
are also available at the following locations:
City of Eugene
Planning and Development Dept.
99 W. 10th Ave.
Eugene, OR 97401
City of Springfield
Development Services Dept.
225 5th St.
Springfield, OR 97477
Attachment 1, page 2
City of Springfield
One-Year Action Plan for FY07/08
Community Development Block Grant Program
Description
The City of Springfield receives an annual allocation of Community Development Block Grant
(CDBG) funds from the U.S. Department of Housing and Urban Development (HUD). The City
of Springfield's fiscal year 2007/2008 (FY07/08) CDBG allocation is $628,101.
The Community Development Advisory Committee (CDAC) was established by the City of
Springfield to make recommendations concerning program policy and project selection to the
City Council. Springfield allocates CDBG funds annually through a competitive Request for
Proposals (RFP) process. One of the funding criteria for project selection is the efficient use of
the CDBG dollars. This is demonstrated in a proposal by the amount of additional resources
leveraged by the CDBG commitment. Although this funding criteria is weighed against other
funding criteria, it has been a significant factor in bringing much needed resources into the
community. The CDAC also determined that projects nearing completion should receive
additional consideration for funding, as these projects have the potential of providing immediate
benefit to the community.
It is anticipated that the FY07/08 CDBG allocation will leverage other resources that will include
but are not limited to the following: Springfield General Fund, other Federal resources, State
funds, Lane County Road Tax funds, local assessments for public improvements, private
donations, in-kind contributions, and contributions provided by the applicant agency.
Activities Benefitina Low- and Moderate-Income Persons
Generally, Springfield's CDBG-funded programs and projects are provided to low-income
residents living within the city limits of Springfield. Individuals participating in a CDBG-funded
program are required to meet HUD Income Guidelines. In order to meet the CDBG National
Objective of Benefit to Low and Moderate-Income Persons, CDBG-funded projects must either
serve a specific low-income area or target population or projects must have a service area that is
primarily low-income. Funded programs and projects undergo periodic staff monitoring to
ensure compliance with CDBG regulations.
Activities for the Prevention or Elimination of Slum and Bliahted Conditions
Another national objective of the CDBG program is the prevention or elimination of slums and
blighted conditions in neighborhoods and communities, either by designating a specific area or
by addressing conditions on a spot basis. Beginning in the fall of 2003, the City of Springfield
began an inventory of structures in the downtown corridor to determine if the area would meet
the CDBG qualifications as a Blighted Area. A total of 116 structures were inventoried and a
visual inspection was made of the exterior of each structure. 68 structures were determined to
have conditions of decay and deterioration. At a public hearing on December 1, 2003, the City
Council approved amendments to the 2000 Eugene-Springfield Consolidated Plan to designate
a Springfield Downtown Redevelopment Area, in compliance with CDBG regulations. The
Downtown Redevelopment Area has boundaries of Mill Street (west boundary), South A Street
(south boundary), 10th Street (east boundary) and B Street (north boundary), excluding the
residential areas on the south side of B Street between 8th and 10th Streets, and on the north side
of A Street between 9th and 10th Streets. The amendments to the Consolidated Plan also
included provisions for reserving a portion of the City's annual CDBG allocation for projects that
Attachment 1, page 3
specifically address the problems of blight in the Downtown Redevelopment Area. The
amendments were sent to HUD for review and approval. The City received approval of the
amendments from HUD on February 12, 2004.
At a public hearing conducted on April 16, 2007, the City Council approved FY07 -08 CDBG
funding for two projects, none of which qualifiesfor funding~n<:ier the Area Slums and Blight
national objective. The City Council decided to ?W[~fLa~I)Y the funding of a third CDBG
application at the May th, 2007 Public Hearing. An allocation table and summaries of each
approved project can be found at the end of this section. Funding for grant administration and
planning, public services and housing programs was also approved by the Council.
Anti-Povertv and Homeless Housina Continuum of Care Service System
The City of Springfield works with its partners in local government, the City of Eugene and Lane
County, in a collaborative effort to address anti-poverty and homeless issues. The
intergovernmental Human Services Commission (HSC), composed of elected officials and
appointed members from these jurisdictions, allocates funding to address these issues. The
HSC is developing a work program that encompasses the following areas:
1. Crisis Access & Stabilization Service System.
2. Short-Term Basic Needs Services.
3. Transitional Housing Services.
4. Permanent Supportive Housing Services.
The Continuum of Care approach provides for multi-point access to services and linkages
among settings and services providers. Not all at-risk or homeless families and individuals will
need access to all four components. The HSC will receive an allocation of $94,215 in CDBG
funds from the City of Springfield, which is equivalent to 15% of the City's FY07/08 allocation.
.
To further incorporate the Continuum of Care philosophy into its delivery of services,
Springfield's Housing Programs has expanded the array of services being provided to very low
and low-income persons. The five programs being administered by the housing programs staff
address homeless prevention and housing assistance, repair to dwellings owned by low and
very low-income households and homeownership through the SHOP. These programs are
described more fully in the following narratives (the SHOP narrative will be found in the HOME
program section).
The City of Springfield also partnered with the City of Eugene, Lane County and local non-profit
service providers to create Project Homeless Connect. Springfield provided staff and funding
and was represented on the steering committee of this highly successful pilot project. The event
was attended by over 1,000 homeless in our community. This project will continue on an annual
or semi-annual basis.
City of Sprinafield COBG Funded Housina Proarams
· The City of Springfield successfully implemented the CHORE program in FY99/00, and
continues to provide this assistance to Springfield residents. This program is designed to
provide assistance to very low-income, primarily elderly homeowners in Springfield to provide
basic lawn care services and exterior home maintenance. The City plans to continue the
CHORE program and is using approximately $5,000 of CDBG program income, if available,
(not to exceed the 15% cap for public services) to provide services to homeowners who are
unable to perform these services on their own. The program allows up to $250 annually to
an eligible household for these activities.
Attachment 1, page 4
. The City of Springfield will continue to provide assistance to qualified low-income
homeowners through its Emergency Minor Home Repair Program and the Springfield Home
Improvement Program (SHIP). These programs are funded from CDBG program income
generated through SHIP loan repayments (when available) and an allocation from the new
CDBG grant. The City will allocate $160,000 from its new CDBG grant for this purpose.
. Emergency assistance to very low-income renters is available through Springfield's
Emergency Rental Assistance Program (ERAP). This program provides single episode
assistance to qualified renters. Strict household and property eligibility requirements help to
protect this program against abuse or misuse. Funds are very limited and are available on a
first-come, first-served basis.
Coordination
Coordination efforts between public assisted housing providers and private and government
health, and mental health and service agencies is an extremely important activity. It is important,
particularly now, when a number of housing providers are including within their programs,
service components for the residents of their housing projects. Staff also works closely with
other resource providers; coordinating efforts with the Springfield Utility Board for energy
assistance and weatherization, the Lane County Senior and Disabled Services, and the United
Way.
The Housing Policy Board (HPB) is an intergovernmental body formed by representatives from
Eugene, Springfield, Lane County, and the Housing and Community Service Agency (HACSA) to
develop countywide housing priorities. The HPB's mission is "...to increase the availability of
decent, affordable housing for low- and very low-income families and individuals in Lane County."
The HPB meets on a monthly basis. The meetings are regularly attended by HAC SA, the HSC,
Eugene and Springfield staff, non-profit providers, and developers. The agenda topics and
information shared at the meetings allows for a formal method of communication to occur on a
regular basis. The housing and service groups have established coordination and integration of
the total housing delivery system (capital needs and service needs).
Fair HousinaPlan (CDBG and HOME Proarams)
The City of Springfield crafted a Fair Housing Plan in 1998 as part of its FY98/99 One- Year
Action Plan. The Fair Housing Plan was revised and updated in 2005 for inclusion in the
Eugene-Springfield Consolidated Plan 2005. A summary of strategies to address impediments
to fair housing opportunities, responsible agencies and a timetable of activities is included as
part of Springfield's Fair Housing Plan. The following are some of the strategies and programs
that the City of Springfield is using to affirmatively further fair housing:
Identify areas of the Sprinafield Development Code that may unintentionally restrict.
inhibit or otherwise impede the development of affordable housina - A primary goal of
the federal Fair Housing Act and its amendments is to provide housing choice for everyone.
Everyone should be able to live where they choose, if they can find housing in the area of
their preference that they can afford. This strategy seeks to address impediments to housing
choice and affordability that may be contained in the Development Code. Staff from the
Planning Division is reviewing the Development Code for consistency and clarity, and is
making plan revisions where conflicting language exists. A clear and consistent code will
Attachment 1, page 5
assist developers in creating and submitting complete and accurate plans and documents for
review, with the goals being less time and money spent by architects and engineers on
revisions and re-submittals and shorter review/approval times by City staff. This will result in
lower project costs and lower prices to homebuyers and renters. Staff is also reviewing
sections of the Development Code that, because of requirements or restrictions, may
inadvertently limit the range and diversity of housing developed in Springfield.
. Residential Lands - The City of Springfield has initiated a Residential Lands Study with the
purpose of analyzing the city's future housing needs and land supply to meet those needs.
The study evaluates the projected housing needs of various age and income populations for
a 20-year planning horizon. The need will be expressed in housing types and price points as
well as in acres needed to build new housing.
The study will guide the city's planning policies as they address Statewide Planning Goal
10-Housing. Goal 10 requires cities to adopt policies that encourage the availability of
adequate numbers of "needed housing units" at price ranges and rent levels which are
commensurate with the financial capabilities of Oregon households and allow for flexibility of
housing location, type and density.
. Needed housing includes housing types determined to meet the need shown for housing at
particular price ranges and rent levels. These housing types include but are not limited to
attached and detached single family housing, multi-family and manufactured homes.
Needed housing also includes government-assisted housing. By keeping abreast of housing
needs, the City of Springfield can better ensure the availability of housing opportunities for all
of its citizens.
· Fair Housina Hotline - Our contract for a fair housing consultant and operator of a 24-hour
fair housing hotline is a key component in Springfield's ongoing commitment to affirmatively
further fair housing. The fair housing consultant provides is a valuable resource to people
who feel that their rights to housing in Springfield have been violated. The consultant is also
a valuable resource for property managers and landlords whether or not they are the focus of
fair housing complaints. The fair housing consultant is able to educate and train them in the
current state of fair housing law, answer questions they may have regarding their
enforcement and eviction practices, and mediate tenant landlord disputes. By providing
timely and accurate information to tenants, landlords, and property managers, the consultant
is able to assist in the resolution of many housing related complaints, before they escalate.
The City of Springfield's AI states under "Rental Practices" that the lack of fair housing
training being provided to rental managers and landlords may contribute to the higher
incidents of complaints in the rental market (relative to the ownership market). Our contract
with the fair housing consultant addresses this impediment, and supports Springfield's
certification to affirmatively further fair housing. The City of Springfield is contracting with the
Fair Housing Council of Oregon to provide these services for FY07-08.
· Emeraencv Rental Assistance - In response to requests and queries from area housing
providers, the City of Springfield designed and implemented the Emergency Rental
Assistance Program (ERAP) in 2003. The providers identified a need for one-time
assistance to help households who are facing eviction for non-payment of rent, due to
extraordinary or catastrophic circumstances. The program will pay 60% of the past-due rent
(up to $400). Strict programmatic requirements help to ensure that assistance is provided
where the need is greatest, and where the probability of long-term benefit is evident. By
curing evictions and helping people remain in their homes, this activity supports the City of
Springfield's certification to affirmatively further fair housing.
Attachment 1, page 6
. Sprinafield Homeownership Proaram - The City of Springfield continues to administer the
very successful Springfield Homeownership Program (SHOP). The SHOP provides
downpayment assistance for low-and very low-income households. SHOP brochures and
posters have been printed in both English and Spanish language versions. The cities of
Eugene and Springfield combine efforts to provide ongoing lender and realtor training. In
addition Springfield staff avail themselves regularly to agencies and organizations to provide
SHOP training to their employees, associates and clients.
In FY95/96 the SHOP assistance was increased to $4,000 with a requirement that the buyer
contribute $1,500 of their own funds towards the purchase of the home. At that time the
average home purchased using the SHOP sold for $64,700. In July of 2005 Housing
Programs staff gained approval to increase the SHOP assistance to $6,000. The average
sales price for a HOME purchased using the SHOP was $123,000, a 90% increase in price
from the homes purchased in 1995.
In just six months only eight homes were purchased using the SHOP with an average
purchase price of $158,000. Not only has the price range of affordable homes increased
nearly 30% but 2/3 fewer SHOP loans were processed in that period of time than in past
years.
In counseling with the Home Ownership Center of Lane County City staff has confirmed
three very important issues facing first time home buyers in our area that have influenced our
decision to request an increase in the funding:
Springfield staff continues to work to build relationships with lenders and realtors to increase
outreach to the Hispanic population. Housing staff participated in an all Spanish speaking
homeownership event in November of 2006. In 2006 and the first three months of 2007 21 %
of the SHOP loans have been to assist minority households in becoming first time
homebuyers. This activity addresses the specific areas of "Sales Practices" and "Lender
Practices" in Springfield's AI, and supports the City of Springfield's certification to
affirmatively further fair housing.
· Lanauaae as an Impediment to Fair Housina - All of the current housing staff for the City
of Springfield have participated voluntarily in a Beginning Spanish class offered to City
employees. One staff member took two semesters of college level Spanish and is called on
to assist with Spanish speaking citizens that visit City Hall. In addition, all of the various
housing program brochures have been printed in Spanish, and our Fair Housing Consultant
is fluent in Spanish. As mentioned earlier, the City also sponsors the "The ABCs of
Homebuying" classes in Spanish. We will continue to develop our outreach capabilities as a
means of providing fair housing opportunities. Asan additional resource, the Fair Housing
Council of Oregon provides all of their hotline, information, outreach and enforcement
services in Spanish and in English.
· Housina Outreach- Housing Programs Staff routinely participates in many community
outreach events to inform low and moderate-income persons of the opportunities that are
available to them through the City's housing programs. Beginning this funding year the City
has been fortunate enough to work closely with the Neighborhood Economic Development
Corporation (NEDCO) in their role as the Homeownership Center of Lane County. They
provide a comprehensive array of services that together help families achieve their goal of
homeownership. The services include providing information on first time homebuyer
Attachment 1, page 7
programs, providing homeownership education and counseling through the Threshold
Homeownership Education and Counseling Program and the ABC's of Homebuying class,
working with lenders and real state professionals who have a mission to help first time
homebuyers. Through the Regional Housing Center staff has had numerous opportunities to
participate in Mortgage Broker/Lender and Realtor training as well as the Oregon Real
Estate Symposium. In July of 2006 the City was the host site for the Homeownership Center
of Lane County's Hispanic Homeownership and Financial Fair.
. 2007 Proiect Homeless Connect for Lane Countv- The City of Springfield was an active
supporter and participant in the first Project Homeless Connect for Lane County. Held at the
Lane Convention Center, the event drew over 1000 homeless and at-risk persons and
provided food, medical, housing and other services. Springfield plans to continue to be
involved with this event in the future. A link to the final Report for the 2007 Project Homeless
Connect for Lane County can be found on the Housing and Community Development
website at:
http://www.ci.springfield.or.us/dsd/Housing/housing.home.htm
Reduction of Lead-Based Paint Hazard (CDBG and HOME Proarams)
. Backaround - The health risks to young children posed by lead-based paint in residential
dwellings remains an important issue. Progress in research and technology during the past
25 years has improved the understanding of how children are poisoned and our knowledge
of how to better protect them, yet lead-based paint risks to children is still a significant
problem nationally. In an effort to address this problem, HUD published its Final Rule to Title
X of the 1992 Housing and Community Development Act in September 1999. This rule,
referred to as the Lead Safe Housing Regulation, requires certain prescribed actions by HUD
grantees to identify, stabilize, or remove lead-based paint hazards in housing receiving HUD
assistance. The scope of activities required by HUD is largely dependent upon the type of
housing affected and the amount of Federal assistance provided, with rehabilitation activities
using in excess of $25,000 of HUD funds requiring the highest level of treatment. Initially, all
HUD grantees were required to be in compliance with the rule by September 2000. Because
of the insufficient numbers of qualified lead hazard contractors, an extension for compliance
was given until April 2001. The rule only affects residential structures built before 1978.
Currently, there is no plan for HUD or another section of the Federal government to provide
funding to jurisdictions to help pay for the cost of implementing the lead-based paint
regulations.
· City Administered Housina Rehabilitation Proarams - It is estimated that, in the cities of
Eugene and Springfield, approximately 55,000 units of housing were built prior to 1978, and
may contain lead-based paint. This represents 70% of all housing units in the metropolitan
area. Since the vast majority of the homes assisted through each City's homeowner
rehabilitation programs (including emergency minor home repair) are in this age category, it
is clear that dealing with the issue of lead-based paint will have a significant impact on these
programs. Many facets of each jurisdiction's housing programs will be affected:
· Costs associated with lead paint testing and treatment will increase the total costs of
many small projects, meaning either an increased budget or a reduction in the number of
units assisted.
· Temporary relocation of residents while treatment/abatement activities are taking place
Attachment 1, page 8
will add to the project cost, and make higher demands on the assigned staff.
. Contractors who can provide the services required for paint stabilization and/or
abatement will need to be identified. Contractors who currently participate in city housing
programs will need to be made aware of the new requirements.
. City Administered Homeownership Proarams - The homeownership downpayment
assistance programs currently being administered by each City will also be affected by the
Lead Safe Housing Regulation, though not to the extent of the rehabilitation programs.
Compliance with the new requirements will mean visually identifying deteriorated paint and
stabilizing the affected areas using safe work practices. The unit must then be cleared by a
certified lead-based paint inspector. It will be incumbent on the seller and listing realtor to
take the necessary steps to present a "clean" unit upon initial inspection to avoid costs and
delays associated with testing, stabilization, and clearance activities. Sellers and buyers
may also choose to forego using down payment assistance, if compliance with the lead-
based paint rule is perceived as being to burdensome.
· Non-Profit Housina Rehabilitation Proiects - Acquisition and rehabilitation activities of
older structures undertaken by area non-profit housing providers receiving HUD funds will
also be affected. Since these projects often require HUD subsidies exceeding $25,000 per
unit, the cost of treating lead-based paint may add significantly to the overall cost of the
project. Additional funds may be required to offset the increase in cost, with the probable
result of fewer units being rehabilitated. Key staff of non-profits will need to be trained on the
lead-based paint rules, specifically project design, and administration and oversight.
Ultimate responsibility for project compliance will fall on the local jurisdiction that provided the
HUD funding to the project.
Other Activities to be Undertaken
Purchase of Distressed. Undervalued or Beneficial Properties - Occasionally, the City of
Springfield is made aware of an opportunity to purchase property that is distressed or
undervalued, or whose location and features are such that its acquisition by the City may be
beneficial to the community. In the past, the City could not use CDBG and/or HOME funds to
assist with the acquisition of such properties because that activity was not included in the current
Consolidated Plan. When an opportunity presented itself, the City would, a) pass the
opportunity to acquire the property on to area non-profit housing providers, b) allow the market to
determine the property's disposition, or c) in the case of distressed properties, let the property
lapse into foreclosure. With the rapid increase of land values in Springfield, the City may want to
consider acquiring such properties with HOME or CDBG funds, and make them available in the
future for purchase and/or development of an eligible project that would benefit the Springfield
community. Examples of how this provision could be used:
· Purchase of residential properties prior to foreclosure to be made available for affordable
homeownership housing.
· Purchase of vacant land for future use as affordable housing or neighborhood
development.
· Purchase of distressed downtown properties for redevelopment.
· Purchase of properties in Glenwood for redevelopment.
Approval by the City Council will be required prior to acquiring any properties. Due to the
scarcity of available CDBG and HOME funds, it is anticipated that this provision will be used very
sparingly. However, inclusion of this provision in the Five-year Consolidated Plan is necessary
Attachment 1, page 9
in order for the City to consider acquisition with CDBG or HOME funds as an option.
Downtown Redevelopment Area - With the designation of the Springfield Downtown
Redevelopment Area in 2004, the City of Springfield took a major step toward reversing the
decades of disinvestment and decay that has plagued the city's central business area. The City
Council has committed CDBG funds for three consecutive fiscal years to assist with capital
improvement and redevelopment projects in the downtown core. Projects will need to meet the
CDBG criteria for area "slum and blight" activities. FY07-08 is the third and final year of the
original three-year set-aside. Upon the recommendation of the Community Development
Advisory Committee, the Springfield City Council approved an extension the downtown CDBG
set-aside through FY08-09.
Summary of Other Resources
The following is a list of Federal and non- federal public and private funding sources which can
reasonably be expected to be available for project development:
· Oregon Housing Trust Fund. Administered by the State of Oregon. Eligible activities
include acquisition, construction and rehabilitation, and pre-development costs associated
with low- and moderate-income housing development. The full amount of Oregon Trust
Funds invested into the project is eligible as HOME match.
Attachment 1, page 10
. Oregon Affordable Housing Tax Credit Program. Formerly called the Oregon Lender's
Tax Credit Program; administered by the State of Oregon; provides below-market interest
rates for low- and moderate-income housing projects. Maximum interest rate reduction is
4% below market, for a maximum term of twenty years. HOME match is calculated by
applying the present discounted cash value to the total yield forgone by the lender.
. Economic Development Initiative (EDI) Special Projects Grants. The City of Springfield
has been successful in the past in securing EDI grants for downtown redevelopment. EDI
grants are project-specific awards by HUD to support and stimulate economic development.
The Wildish Community Theater was the most recent recipient of an EDI-Special Projects
grant from HUD.
· Low-Income Housing Tax Credits (L1HTC). This is a federal program that can provide
large infusions of capital to affordable housing projects.' Tax credits are awarded to a project
over a 10 year period. These tax credits are then sold or "syndicated" to private businesses
or organizations at less than face value to offset their tax liability. The Royal Building project
is the most recent recipient of an L1HTC award.
· Section 108 Loan Program. Springfield continues to review the possibility of applying to
HUD for a Section 108 loan to help with the development of CDBG eligible projects,
including projects which address issues of blight in the downtown section of the city.
Approval to move ahead with an application for Section 108 funding must be by Council
action and requires public notification and an opportunity for comment. If approval is
received, the City will be eligible to apply for up to five times its annual CDBG allocation.
Section 108 funds are treated as CDBG funds, and projects are subject to the same national
objectives and eligibility requirements. The City is currently in the process of identifying
potential capital projects in downtown and in Glenwood that could benefit from Section 108
funding.
· Local Permit and Fee Waivers. The City of Springfield, has in the past, allocated funds for
the assumption of building permits, plan check fees, and system development charges for
non-profit sponsored low- and moderate-income housing projects. The full amount of this
contribution is eligible as HOME match. Due to recent budget constraints, this program is'
currently on hold and is expected to resume at a later date.
· Volunteer Labor. Area non-profit housing developers have been successful in utilizing
volunteer labor in their developments. The Lane Community College Construction
Technologies Department has contributed student labor for all phases of housing
development. Architects, attorneys, and other professionals have also contributed their
services to non-profit housing developments inSpringfield. Volunteer labor is eligible as
HOME match and is ~alculated at a flat rate of $10.00 per hour.
· State Loan Guarantee Program. Although this is not a "true source" of funds, this program
serves to enhance a loan by providing a warranty as security for up to 25% of the loan value.
Used as a tool by housing developers, it can allow lenders to increase their loan amount,
and/or decrease the interest rate of the loan at little or no additional risk to the lender. Not
eligible for HOME match.
· Property Tax Exemptions. Exemptions from City property taxes have been allowed for
qualified non-profit housing developers on a project-by-project basis to low- and moderate-
Attachment 1, page 11
income housing developments. Generally based on the benefits provided to the community
and the duration of the low- and moderate-income housing commitment, property tax
exemptions are eligible as HOME match. The amount of match credit is calculated as the
current discounted cash value of the tax exemption.
. Vertical Housing Development Zone Tax Exemption. In October 2004, the City of
Springfield received a Vertical Housing Development Zone (VHDZ) designation from the
State of Oregon. The VHDZ program allows partial property tax exemption for qualified new
housing that is built over street level commercial space. An eligible project can receive 20%
of tax exemption per floor of housing up to a total of 80%. This program can provide
valuable incentives to develop new housing in Springfield's downtown corridor, which in turn
will help support commercial growth and revitalization activities.
. Private Contributions. Cash and materials have been contributed in the past by private
businesses, corporations, and foundations to assist in the development of low-income
housing in Springfield. It is expected that future contributions from private sources will
continue to provide needed assistance. Private contributions are eligible as HOME match.
A chart of the CDBG activities approved by the Springfield City Council on May 7,2007 can be
found on page (page number to be determined). A summary of Springfield's CDBG-funded
projects can be found on pages (page numbers to be determined). Activities were approved for
funding at a public hearing before the Springfield City Council.
Attachment 1, page 12
City of Springfield
FY07/08 COBG Funding Allocations
Funding Amounts:
New Grant Funds
Previous Years
TOTAL AVAILABLE
$628,101
o
$628,101
Applicant Project Amount
New Prevo
Funds Years
Relief Nursery Construction of Relief Nursery Facility on $97,400 0
South 42nd street
Lane Shelter Construction of wheelchair ramp and $15,000 0
Care/Shankel Safe Haven installation of security/privacy screening
Construction of retail facility in the
Wynant's Family Nutrition Downtown area resulting in low-mod job $90,000
Center creation
City Housing Programs $160,000 0
\
Human Services Commission $94,215 0
Grant Administration $125,620 0
Unallocated funds 45,866
GRAND TOTAL $628,101
Attachment 1, page 13
City of Springfield
Summary of FY07/08 COBG Proposals and Approved Funding Amounts
1.
Project:
Location:
Developer:
Amount:
Total Proj. Cost:
Wynant's Family Nutrition
722 South A Street, Springfield
Joan HaydnlTamara K. Daily, Owners
$ 90,000
$675,000
The owners of Wynant's Family Nutrition are requesting $90,000 for the renovation and
expansion of an existing building on property located at 722 South A Street. The property was
purchased by the owners in December of 2006. The owners plan to relocate and grow their retail
business, which is currently located at 1859 Pioneer Parkway East.
The Wynant's Family Nutrition Center will be open for business seven days a week. The
business hours will extend to 8:00 or 9:00 in the evening. The business owners expect the
business to bring 500 people to the downtown each day. The business plans to expand their
stock to include locally grown organic products. Additionally the business will produce 5-10 new
jobs in the area including cashiers, clerks, stockers and maintenance staff.
The Wynant business has been operating and growing in Springfield since 1981.
The project qualifies under the CDBG national objective of creating jobs to benefit low and
moderate income persons.
2.
Project:
Location:
Developer:
Amount:
Total Proj. Cost:
Relief Nursery Springfield Expansion'
South 42nd Street, Springfield (Tax Map #18020522)
Relief Nursery
$97,400
$2,532,000
Relief Nursery is requesting $97,400 for Phase I of the four year plan for the construction of the
Springfield Relief Nursery. .
The project has received funding of $300,000 from the Meyer Memorial Trust, $40,000 from the
Great Rotary Duck Race, and the Board of Directors is prepared to launch a Capital Campaign
(a similar campaign for the Eugene site resulted in a fully funded project).
The property that the Relief Nursery is considering for this project is located at 870 South 42nd
Street. The property is currently owned by the City of Springfield, and was originally part of a
1981 land purchase using CDBG funds. Purchase of the property by the Relief Nursery has
been approved by the City Council and the Relief Nursery is in the process of negotiating a final
sale with the City. Proceeds from the sale will be COBG program income, and has been
earmarked by Council action for future downtown activities.
The Relief Nursery's mission is to prevent child abuse and neglect, and to work with parents and
children to create strong, nurturing families and healthy home environments in which children
may thrive. The Relief Nursery has a 30 year history and currently serves more than 1,000
Attachment 1, page 14
children and their families annually. Up to 50% of these families have a documented history of
child abuse or neglect; after one year with the Relief Nursery that number drops to 5%.
The Relief Nursery partners several agencies throughout the state. Extensive community
involvement and collaboration have been two important keys to our continued success with the
families involved.
For the proposed project the Relief Nursery has engaged in detailed planning discussions with
Mayor Leiken, The Springfield City Council, School Superintendent Nancy Golden and Head
Start of Lane County.
3.
Project:
Location:
Developer:
Amount:
Total Proj. Cost:
Shankle Safe Haven Facility
1545 South Brooklyn Ave (Glenwood)
Lane Shelter Care
$15,000
$15,000
Lane Shelter Care is requesting an allocation of $15,000 to assist with the addition of a
wheelchair access ramp on the back porch and privacy fencing around the facility.
In the past Lane Shelter Care has received a CDBG allocation of $5,024 for the replacement of
the HVAC system, $8,891 for replacement of heating units and air systems and $3,539 to
expand the residential area of at the Shankle Facility.
If the application is successful Lane Shelter Care will be able to provide a safer, more accessible
environment for the chronically homeless individuals they serve.
Shankle Safe Haven provides shelter and services to special needs homeless adults. The
program opened in 1997 and provides up to two years of transitional housing for up to 12
individuals who have been chronically homeless and are diagnosed with a severe, persistent
mental illness in its residential wing. In the other half of the building, daily activities, meals,
laundry and showers are available for a larger pool of clients (up to 40). A day activity center for
residents promotes success at independent living, increased skill level and income, and greater
self-determination.
Attachment 1, page 15
City of Springfield
One-Year Action Plan for FY07/08
HOME Investment Partnerships Program
Description
HOME Investment Partnerships Program (HOME) funds are received from the U.S. Department
of Housing and Urban Development (HUD) and administered by the Eugene-Springfield
Consortium for the metropolitan area. The primary purpose of the HOME program is to expand
the supply of decent, safe, sanitary, and affordable housing, with primary attention to rental
housing, for low- and moderate-income families. HOME funds can be used for new construction
or rehabilitation of housing projects which will be affordable to low- and moderate-income
households, for the acquisition of eligible properties by for-profit and non-profit developers, for
tenant-based rental assistance programs, and for first-time homebuyer programs. HOME funds
can be provided to the project as a grant or as a loan, and the loan can be set up in various
ways; low- or no interest, amortized, deferred or forgiven according to the needs of the project.
Springfield's Fiscal Year 2006/2007 (FY06/07) allocation of HOME funds is $438,642 and a
special allocation of $8,160 in American Dream Downpayment Incentive (ADDI) funding to
enhance the downpayment assistance program. In addition, $200,000 in program income is
also available, for a grand total of $646,802.
The HOME Agreement is a document entered into by the City of Springfield and the recipient of
HOME funds. The Agreement fixes the amount of the allocation, determines the terms of
repayment, defines the performance and monitoring parameters of the project, and certifies
acceptance and compliance with all applicable Federal, State, and local regulations.
Attachments to the HOME Agreement include a statement of work, HOME affordability
requirements, recipient's certification of governmental assistance, a Declaration of Restrictive
Covenants and the HOME Allocation Agreement, which determines the allocation of proceeds
from the sale of a HOME-assisted project, should the sale occur prior to the expiration of the
mandatory compliance period.
A Community Housing Development Organization (CHDO) is a special designation given to non-
profit housing developers that meet certain specific requirements pertaining to the formation and
stated purpose of the non-profit. A CHDO must have among its purposes the provision of
decent housing that is affordable to low- and moderate-income persons. In addition, a CHDO
must have representation of low-income community residents on its governing board and must
have a defined geographic service area. The complete definition can be found in 24 CFR ~92.2.
A minimum of 15% of the HOME funds must be reserved for use by CHDOs.
The Community Development Advisory Committee (CDAC) was established by the City of
Springfield to make recommendations concerning program policy and project selection to the
City Council. The goals of the committee are:
1. To allocate HOME funds in a manner which will serve to expand and preserve the
supply of decent, safe and affordable housing for low- and moderate-income
residents of Springfield.
2. To ensure the long term viability of Springfield's Housing Programs through the
efficient use, and return of investment of HOME funds. It is the City's preference
to award HOME funds as a loan, with interest rates and repayment provisions
Attachment 1, page 16
matched closely with the needs of each individual project.
Other Resources
The following is a list of non-federal public and private funding sources which can reasonably be
expected to be available for project development:
· Oregon Housing Trust Fund. Administered by the State of Oregon. Eligible activities
include acquisition, construction and rehabilitation, and pre-development costs associated
with low- and moderate-income housing development. The full amount of Oregon Trust
Funds invested into the project is eligible as HOME match.
· Oregon Affordable Housing Tax Credit Program. Formerly called the Oregon Lender's
Tax Credit Program; administered by the State of Oregon; provides below-market interest
rates for low- and moderate-income housing projects. Maximum interest rate reduction is
4% below market, for a maximum term of twenty years. HOME match is calculated by
applying the present discounted cash value to the total yield forgone by the lender.
· Local Permit and Fee Waivers. The City of Springfield, has in the past, allocated funds for
the assumption of building permits, plan check fees, and system development charges for
non-profit sponsored low- and moderate-income housing projects. The full amount of this
contribution is eligible as HOME match. Due to recent budget constraints, this program is
currently on hold and is expected to resume at a later date.
· Volunteer Labor. Area non-profit housing developers have been successful in utilizing
volunteer labor in their developments. The Lane Community College Construction
Technologies Department has contributed student labor for all phases of housing
development. Architects, attorneys, and other professionals have also contributed their
services to non-profit housing developments in Springfield. Volunteer labor is eligible as
HOME match and is calculated at a flat rate of $10.00 per hour.
· State Loan Guarantee Program. Although this is not a "true source" of funds, this program
serves to enhance a loan by providing a warranty as security for up to 25% of the loan value.
Used as a tool by housing developers, it can allow lenders to increase their loan amount,
and/or decrease the interest rate of the loan at little or no additional risk to the lender. Not
eligible for HOME match.
· Property Tax Exemptions. Exemptions from City property taxes have been allowed for
qualified non-profit housing developers on a project-by-project basis to low- and moderate-
income housing developments. Generally based on the benefits provided to the community
and the duration of the low- and moderate-income housing commitment, property tax
exemptions are eligible as HOME match. The amount of match credit is calculated as the
current discounted cash value of the tax exemption. .
· Vertical Housing Development Zone Tax Exemption. In October 2004, the City of
Springfield received a Vertical Housing Development Zone (VHDZ) designation from the
State of Oregon. The VHDZ program allows partial property tax exemption for qualified new
housing that is built over street level commercial space. An eligible project can receive 20%
of tax exemption per floor of housing up to a total of 80%. This program can provide
valuable incentives to develop new housing in Springfield's downtown corridor, which in turn
Attachment 1, page 17
will help support commercial growth and revitalization activities. .
. Private Contributions. Cash and materials have been contributed in the past by private
businesses, corporations, and foundations to assist in the development of low-income
housing in Springfield. It is expected that future contributions from private sources will
continue to provide needed assistance. Private contributions are eligible as HOME match.
Leveraaina Federal Funds
The City of Springfield allocates HOME funds through a competitive Request for Proposal (RFP)
process. The current housing and supportive services needs of the city are outlined in the RFP
packet. Housing activities are categorized and prioritized by community need and fund
allotments are made by category. Also outlined in the packet are the City's criteria for ranking
projects. One criterion is efficiency of use of Federal funds, which can be demonstrated by
documenting the status and maximizing the amount of other funding sources. Thus, the most
competitive projects will have maximized the funds leveraged by Federal dollars. The City has
not had to impose any threshold percentages for leveraged or matched funds; the RFP process
has been self-regulating in this respect. The City of Springfield tracks HOME matching
contributions on a continual basis to ensure compliance with applicable HOME program
regulations, which requires a minimum 25% matching contribution.
· Low-Income Housing Tax Credits (L1HTC). This is a federal program that can provide
large infusions of capital to affordable housing projects. Tax credits are awarded to a project
over a 10 year period. These tax credits are then sold or "syndicated" to private businesses
or organizations at less than face value to offset their tax liability. The Royal Building project
is the most recent recipient of an L1HTC award.
The Springfield HOME Agreement contains a Subsidy Layering Certification which identifies all
sources of project funding, and if additional Federal funds are being utilized or applied for
requires notification to the City be given by the HOME recipient. This allows the City to monitor
all current and future sources of funds, and to evaluate the project's need for HOME funds. The
City will conduct an additional review of subsidy layering at the time that the HOME agreement is
put in to place. The City will only contribute HOME funds to projects in the amount that is
necessary to provide affordable housing.
Activities to be Undertaken
Purchase of Distressed. Undervalued or Beneficial Properties - With the rapid increase of
land values in Springfield, the City may want to consider acquiring such properties with HOME or
CDBG funds, and make them available in the future for purchase and/or development of an
eligible project that would benefit the Springfield community. Inclusion of this provision in the
five-year Consolidated Plan is necessary in order for the City to consider acquisition with CDBG
or HOME funds as an option. (See "Activities to be Undertaken" in the Springfield CDBG Section
for an expanded narrative)
A chart of Springfield's HOME activities approved by the Springfield City Council follows on page
(page numbers to be determined). Springfield's HOME projects are summarized on pages
(page numbers to be determined). Two HOME projects, grant administration, CHDO operating
support and housing program allocations were approved for funding at a Public Hearing before
the Springfield City Council on April 17, 2006 and are included in this One-Year Action Plan.
Attachment 1, page 18
Geoaraphic Distribution
A project must be located within the Springfield city limits in order to be eligible for assistance
through the City's housing programs. The City has developed a Springfield Community Housing
Plan to identify areas of need within the city and to develop assistance programs that target
these needs. Need is generally based upon income levels, public safety issues, and physical
deterioration. The rationale behind such targeted assistance is to provide decent housing and a
suitable living environment principally for low- and moderate-income persons. Such assistance
may take the form of any activity described in this Plan. These areas will be limited in size to
generally not larger than a census block group. Though assistance will not be limited to the
targeted areas, it is anticipated that more comprehensive efforts will be directed at the targeted
areas.
With the designation of the Downtown Redevelopment Area, the Springfield City Council and
. local business leaders have made redevelopment of the core downtown area a priority. Creating
a place where people work and live is vital to maintaining a thriving downtown. The City has an
opportunity to invest HOME funds in the development of a midrise apartment building in the
heart of downtown. The building will provide commercial space on the ground floor and 33
affordable one bedroom rental units on floors 2-5. The project is being developed by St. Vincent
de Paul. The HOME and CDBG funds invested in the project will leverage nearly 5 million
dollars in other funding.
Minoritv Concentrations - Data from the 2000 Census shows that Springfield has three census
block groups that have moderate concentrations of minority/ethnic households. Census tract
21.01, block group 2 is located north of 1-105, south of Hayden Bridge Road, east of Pioneer
Parkway and west of 5th Street. Census tract 32.02, block group 2 is located to the west of
Pioneer Parkway and east of Kelly Butte and is more commonly referred to as the Meadow Park
neighborhood. Census tract 33, block group 6 is located north of Centennial Road, south of 1-
105, east of Pioneer Parkway and west of 10th Street. All three block groups have 15% or higher
minority households and 10% or higher Latino/Hispanic households. Please note that some of
the households may have self reported in both categories. All three of these block groups have
a high number of modestly priced apartment units and a majority of low- and moderate-income
households.
Homeless and Special Needs Activities
The City of Springfield plans to continue to provide support for homeless and special needs
activities through the utilization of the HOME program funding.
Current and past HOME projects that serve this diverse target population are:
· Housing units for transitional and very low-income individuals.
· Transitional housing for homeless families.
· Group homes for developmentally disabled persons.
· Security deposit assistance for homeless families exiting shelter.
· Service enriched rental housing for special needs individuals.
· Emergency rental assistance for very low-income households.
· Dedicated housing for low-income seniors
Attachment 1, page 19
The Consortium provides CHDO operating assistance for local non-profit agencies, two of which
serve homeless populations in Springfield through counseling, case management, and other
services.
Other Actions
In addition to the homeless and special needs activities described above, the City of Springfield
plans to allocate HOME funds to support the following activities in the coming year:
. Acquisition and Rehabilitation of existing housing stock for low-income homeownership.
. Rehabilitation of existing housing stock to be used for very low-income rental housing for
persons with disabilities.
. Downpayment assistance for low-income first-time homebuyers.
. New construction of rental housing.
In addition, a local non-profit agency also provides homeownership counseling and education to
low and moderate-income families in Springfield.
Specific HOME Proaram Reauirements
The City of Springfield currently provides assistance to homebuyers through two programs.
Each program has its own resale and recapture provisions.
· Sprinafield Homeownership Proaram (SHOP) - This program provides downpayment
assistance to low- and moderate-income first-time homebuyers. The HOME funds are
provided to the qualified buyer as a no interest deferred loan which is recorded as a lien
against the HOME-assisted property. The lien is repaid in full to the City upon the
subsequent resale of the property. There is no expiration date for the lien. Successful
completion of a homeowners hip preparation course conducted by a participating lender or an
equivalent program conducted by a participating CHDO is a prerequisite to qualifying for this
program. All low- and moderate-income persons who have resided in Springfield for one
year or longer are eligible for the SHOP program.
In addition to the assistance provided to first time homebuyers purchasing market rate
homes the Consortium has elected to provide assistance to homebuyers purchasing homes
in housing developments and/or subdivisions constructed or rehabbed specifically to provide
housing for low-income homebuyers a subsidy of double what the current SHOP allocation
is. All other terms and conditions of the SHOP will remain the same.
· Lease/Ownership Proaram - This homeownership program is operated by local non-profit
agencies. The agency assists low-income families by preparing them for homeownership
through a series of classes. In addition, a portion of their rent each month is set-aside to
assist with the eventual purchase of the home. The HOME investment that is subject to
recapture in this program is the amount of HOME assistance that enabled the homebuyer to
purchase the dwelling unit. This recaptured amount is repaid to either the HOME
Consortium Trust fund or the CHDO which developed the housing and is to be used for
housing activities benefiting low-income households in Springfield. Recapture provisions
mayor may not include language to allow the participating jurisdiction to share in the built up
equity in the project. Terms and conditions of the recapture provisions are described in the
HOME Agreeme~t for each project.
Attachment 1, page 20
Euaene-Sprinafield Consortium
Homeownership Period of Affordabilitv-HOME Recapture Provision
The required HOME period of affordability for homeownership projects is based on the amount
of HOME funds per unit: under $15,000 - five years, $15,000 to $40,000 - ten years, and over
$40,000 - fifteen years. In order to ensure affordability,either resale or recapture requirements
must be imposed.
The HOME Consortium, consisting of the Cities of Eugene and Springfield, has selected the
recapture option for all homeownership projects and programs, as described in 24CFR
S92.254(a)(5)(ii). The amount subject to recapture is based on the HOME assistance that
enabled the homebuyer to buy the dwelling. This amount is referred to as the "homebuyer
subsidy" and includes down payment assistance. It doesn't include the amount of HOME
assistance between the cost of producing the unit and its fair market value. This is referred to
as the "development subsidy". HOME recapture provisions ensure that if; (a) the housing does
not continue to be the principal residence of the family for the period of affordability, then all or a
portion of the HOME assistance be shall be recaptured.
When the HOME assistance includes the homebuyer subsidy, the Cities have chosen to
recapture the full amount of the HOME subsidy whenever the initial owner sells the house.
HOME affordability requirements will end upon recapture of the HOME subsidy. The recaptured
funds will be deposited into the consortium HOME account and will provide assistance to future
HOME projects. If the HOME assistance is only used for the development subsidy and therefore
not subject to recapture, the resale option described in 24CFR S92.254(a)(5)(i) must be used.
For many new construction projects, a substantial amount of HOME funds are granted on a
single unit. A "silent second" loan will be recorded against the property representing these
HOME funds. This will allow the mortgage amount to be affordable to a family or individual.
This amount would be repaid into the local HOME account at the time of sale by the initial
homeowner. This recapture scenario assumes appreciation in the real estate market. If the full
amount is not available, either due to market conditions or foreclosure, the cities will recapture
the net proceeds available from the sale.
SprinQfield HOME Allocation AQreement
In addition to the provisions described above, the City of Springfield includes in its HOME
Agreement with for-profit developers an Allocation Agreement that describes the sharing of
equity in a project proportional to each party's investment. This Allocation Agreement comes
into effect only if the for-profit developer sells or otherwise transfers title to the property prior to
the expiration of the HOME compliance period. All proceeds allocated to the City by this
Agreement will be deposited into the HOME Trust Account, to be used for future HOME-eligible
housing projects. The primary purpose of the Allocation Agreement is to protect the integrity of
the HOME program by guarding against the taking of excess profits or windfall from the sale of a
HOME-assisted project by a for-profit developer.
Attachment 1, page 21
Monitoring
Regulations state that the One~Year Action Plan must describe the standards and procedures
that the jurisdiction will use to monitor activities carried out in furtherance of the Plan and to
ensure that long-term compliance with requirements of the programs involved.
. HOME Proiect Monitoring - Client income certification sheets are submitted annually by
developers of HOME-funded projects and are placed in the project file. On-site monitorings
of income documentation are completed. Housing Quality Standards inspections of HOME-
assisted units are conducted on a one-, two-, and three-year cycle based on the number of
HOME units. The inspector summarizes the findings and any follow-up work required.
These inspection forms are filed in the project files.
. Consortium Monitoring - The cities of Eugene and Springfield recently entered into a
Memorandum of Understanding which states the program responsibilities of the Consortium.
Springfield participates in an annual monitoring conducted by the City of Eugene as lead
agency.
· City Single Audit - The Federal HOME program is reviewed by the City's external auditors
annually.
· Proiect Management - A project manager is assigned to each project. The project
manager reviews projects for compliance throughout the implementation of the project.
Project contracts include a scope of work, timeline, and budget as well as regulatory
requirements - use of minority business enterprises, environmental requirements, mitigation
efforts, record keeping, etc.
Attachment 1, page 22
FY 2007-08 HOME Funding Allocations
Funding Amounts:
New Grant Funds
Program Income
ADDI Funding
TOTAL AVAILABLE
$435,512
$280,000
$ 8,160
$723,672
Applicant Project Amount
New Funds Program ADDI
Income
Construction of new
homeownership unit on site
\ with existing house which
will be rehabilitated and
made available to low-
NEDCO income homebuvers 60,000 0 0
Two Affordable
Homeownership Units-
NEDCO Activities may include, land
acquisition, house moving
expenses and rehabilitation
of units donated by
Peacehealth $100,000 0
S1. Vincent de HUD-202 Project Senior 50,000 280,000
Paul Housing at the 3rd and S
Street Site
Habitat for Construction of three units 60,000
Humanity in the 1 O-unit Meyer
Subdivision on 49th and A
streets
Grant Administration $43,552 0 0
City Housing Programs $100,000 0 $8,160
CHDO OperatinQ $21,776 0 0
Unallocated Funding
$184
Subtotal $435,512 $280,000 $8,160
GRAND TOTAL $723,672
Attachment 1, page 23
City of Springfield
Summary of FY07/08 HOME Proposals and Approved Funding Amounts
1.
Project:
location:
Developer:
Amount:
Total Proj. Cost:
One House Rehab and New Construction of One Unit
505 34th Street, Springfield
Neighborhood Economic Development Corporation (NEDCO)
$60,000
$393,850
The Neighborhood Economic Development Corporation (NEDCO)is requesting $60,000 to assist
with the construction of one home for the purpose of providing affordable home ownership to first
time homebuyers.
The site on 34th street has an existing home which will be rehabilitated. The new home will be a 2
bedroom 1.5 bath house built on the property that is in the sub-dividing process. At the time of the
application NEDCO has received tentative partition approval and have submitted for their final plat.
They will be installing infrastructure and driveway this spring as part of the rehabilitation of the front
existing home and expect to begin construction of the new home in the summer. A completion date
is set for Spring of 2008.
NEDCO has constructed and/or rehabilitated 12 homes in Springfield in the past six years. The
five units on the Phoenix Place Subdivision will be completed in May of this year. All of these
homes are and will be occupied by low-income first time homebuyers. They are currently working
on the scattered site project in which they will purchase and rehabilitate four homes in Springfield.
2.
Project:
Location:
Developer:
Amount:
Total Proj. Cost:
land Acquisition/House Move and/or Rehabilitation of
two homes donated by Peace Health
homes are currently located on Deadmond Ferry and Baldy
View roads new location to be determined
Neighborhood Economic Development Corporation (NEDCO)
$100,000
$393,850
The Neighborhood Economic Development Corporation (NEDCO) is requesting $100,000 to assist
with the land acquisition, house move and/or rehabilitation of two homes donated by Peace Health
for the purpose of providing affordable home ownership to first time homebuyers.
NEDCO it currently looking for sites to locate the two homes. The Peace Health homes must be
moved before fall of 2007.
3.
Project:
location:
Developer:
Amount:
Total Proj. Cost:
HUD 202 Project - Senior Housing
2.28 Acre Site at 3rd and S Streets.
St. Vincent de Paul Society of Lane County Inc. (SVDP)
$330,000
$6,204,821
S1. Vincent de Paul Society of Lane County Inc. (SVDP) has requested $330,000 to assist with the
construction of the Aster Apartments a 54 units of housing for very low-income seniors. The City of
Springfield provided $330,000 in CDBG funding in 2003 for the acquisition of the land. The HUD
202 funding was secured by SVDP in November of 2006. SVDP is committed to begin construction .
. in September of 2007. The allocation of HOME funds is crucial at this point to make the project
Attachment 1, page 24
move forward. The HUD 202 award is substantial but it does not cover all of the development
costs. The HOME funds will fill the anticipated funding gap for the project.
The project will enable residents to maintain and/or achieve independent living in three primary
ways: 1) The site is located near several bus lines and is in very close proximity to grocery stores,
restaurants, drug stores, banks and hospitals, 2) the residents will have elevator access throughout
the building, all units will be designed to be visitable and some units will be fully ADA accessible
and senior friendly enhanced lighting and door levers (as opposed to knobs) will be installed
throughout the building throughout the facility, and 3) SVDP will partner with other service providers
to offer educational and recreational opportunities for English and non-English speaking senior.
4.
Project:
Location:
Developer:
Amount:
Total Prom. Cost:
Meyer Park Phase I
North A Street (west of 49th), Springfield
Habitat for Humanity
$60,000
$534,310
Habitat for Humanity is requesting $60,000 to assist with three units in the ten unit Meyer Park
subdivision located on North A Street just west of 49th street in Springfield.
Habitat has already completed several major components of Phase I including development of the
street connection and sidewalks to North A Street and service connections to all ten lots has been
installed. In addition, the construction required a bioswale for surface water/storm water collection
which has also been completed. The houses will be two story 2 to 4 bedroom units (depending
upon family size).
Habitat for Humanity serves and work in partnership with low-income individuals and families with
incomes from 30-60% of the area median. The families are selected based on need, willingness to
partner and ability to pay. Habitat currently has three qualified families waiting for the Meyer Park
homes. Two of the three families have already completed the required 200 hours of sweat equity
necessary before their house can be started. The third family is nearing the 200 hour mark and will
be complete when the third house in Phase I is set to begin construction.
Habitat partners with churches and organizations to develop sponsorships for each home. They
currently have a sponsorship agreement with First Congregational Church for the construction of
one of the Phase I homes.
Attachment 1, page 25
Table 3A: City of Springfield FY07-08 Activities
Specific
Objective
In
Specific Annual
Objectives
Source of
Funds
Performance Indicators
Year
Expected
Number
NEDCO- 34 Street # of LMI units created
Ownership Housing for homeownership
Development, to provide
affordable
homeownership
0 ortunities
DH-2.32S NEDCO- Ownership HOME . # of LMI units created 2007 2 units
Housing Development, for homeownership
to provide affordable
homeownership
op ortunities
DH-2.33S SVDP- HOD 202 Senior HOME . # of LMI units created 2007 54 units
Housing, 3rd and S for seniors
Street, to provide
affordable permanent
housing for LMI senior
households
DH-2.34S Habitat for Humanity, HOME . # of LMI units created 2007 10 units
Meyer Park Phase 1, to for homeownership (3 HOME
provide affordable assisted
homeownership units)
opportunities.
DH-2.lS Springfield Home HOME . # oflow-income 2005 40 units
Ownership Program ADD! households assisted
(SHOP), to provide 2006 40 units
affordable
homeownership 2007 25 units
opportunities
2008
2009
DH-3.1S Owner-occupied CDBG . # of households 2005 110
rehabilitation programs, HOME receiving emergency households
to preserve housing stock assistance 2006 110
. EHR . # of rehab. loans households
. SHIP . # of CHORE repairs 2007 110
. CHORE households
2008
2009
Attachment 1, page 26
Table 3A: City of Springfield FY07-08 Activities
DH-3.2S Rental Assistance CDBG . # of families assisted 2005 30.
Program, to prevent households
homelessness 2006 30
households
2007 30
households
2008
2009
SL-1.3lS Shankle SafeHaven CDBG . # of LMI persons 2007 40 persons
accessibility. receiving homeless
improvements, to expand and support services
homeless service
opportunities to LMI
persons
SL-l.32S Relief Nursery, CDBG . # of LMI persons 2007 630 persons
development of receiving childcare
Springfield facility, to and parenting services
expand services to LMI
Human Services # persons receiving
Commission, to provide shelter
services to LIM persons . # persons receiving 2006
. Food For LC food
. Relief Nursery . # persons receiving 2007
. Looking Glass counseling
. Catholic Community . # persons receiving
Services other services 2008
. SVDP Night Shelter
2009
SL-3.2S Lock Out Crime Project, CDBG . # LMI households 2005 200
to provide home security receIvmg emergency households
measures to LMI home security 2006 400
households measures households
2007 0
households
2008
2009
EO-1.3lS Wynant's Family CDBG . # ofLMljobs created 2007 5.0 FTE
Nutrition Center,
renovate facility for LMI
job creation
Attachment 1, page 27
Table 3A: City of Springfield FY07-08 Activities
EO-US Lane MicroBusiness, to CDBG
provide micro-business
assistance to LMI
persons
. # LMI persons
receiving MB
assistance
2005 25 persons
2006 15 persons
2007 Not funded
2008
2009
Attachment 1, page 28
MEMORANDUM
CITY OF SPRINGFIELD
Date:
May 2, 2007
To:
Gino Grimaldi, City Manager
From:
Bill Grile, Development Services Director
Jodi Peterson, Management Analyst II & --v..h
Kevin Ko, Housing Programs Specialist ~
Additional Information Requested for Consideration of the Wynant's
Family Nutrition Center Request for CDBG Funding
CC:
Subject:
Background .
At the April 16th City Council Meeting the Council held a Public Hearing and considered the
recommendations for funding Community Development Block Grant (CDBG) and HOME Investment
Partnership programs brought forth by the Community Development Advisory Committee. The Council
asked for more information regarding the application for funding made by Wynant's Family Nutrition
Center before making a final decision on the proposed project. Specifically, the Council asked for more
information on project costs, total project funding and options for securing and funding the CDBG
allocation. COBG staff met with City Attorney Joe Leahy and Finance Director Bob Duey to discuss the
application. With the applicant's permission, staff also contacted the commercial lender and LCOG,
both who are proposing business loans for the project.
Analysis
The Wynant family provided additional project cost and funding information. A preliminary review and
analysis of the information by staff looks positive. The total project cost is estimated at $683,000. They
purchased the site and have invested over $62,000 of their own funds in the project to date. The
CDBG request of $90,000 is 13% of the total project cost. The recipients purchased the site in
December 2006 for $340,000. The County RLlD records currently lists the real market value at
$371,307. A conservative estimate of owner's equity in the site is just under $80,000. Listed below are
project sources and uses:
Project Funding Sources Project Funding Uses
Property Acquisition Loan 299,250 Building Acquisition 340,000
Construction loan SVB 106,679 Construction of building shell 197,000
SBA-504 Loan 124,475 Construction of interior 40,000
Owner Cash Investment 62,596 Parking 10Udriveway/landscape 16,000
CDBG Fundino 90,000 Permits/engineer/SDC 20,000
Refrigeration/freezer units 70,000
TOTAL $683,000 TOTAL $683,000
The Wynants have been in business since 1981. The current owner and daughter of the Wynants has
owned the business since 1994. Staff requested and received the 2006 year-end income statement
and balance sheet for the business. Staff's analysis of these documents indicates a viable business
operating with positive cash flow. The owners say that the purchase and relocation of the business
downtown will increase their sales and their client base without significantly increasing the business
overhead. This is supported by the lenders' willingness to loan funds to purchase and develop the site
on South A Street. The owners have applied for a Small Business Administration Loan through LCOG.
If approved, the SBA loan will replace the purchase loan for the downtown property and provide the
final gap financing for the project. Steve Dignam of LCOG submitted the following information:
I am working with the owners of Wynant's to help them take advantage of a loan through the
US Small Business Administration. These SBA loans are designed to help stimulate economic
development and job creation. This project would appear to generate a sufficient number of
jobs to meet initial qualifications. In addition, the SBA makes every effort to assist women-
owned businesses such as this one. We do not yet hcWe a loan approval as we are still waiting
Attachment 2, page 1
for several critical details regarding project costs and sources of equity funding. It is my
understanding that Wynant's has applied to the City of Springfield for grant financing for a
portion of this project. We consider the Wynant's project to be an important economic and
community development project and feel that it has an excellent chance for loan approval. A
grant from the City of Springfield would be leveraged at least 500% by federal SBA dollars plus
financing from a private sector bank. Please let me know if I can be of any further assistance.
Stephen J. Dignam
Lane Council Of Governments
The Wynants indicate that the project will be completed with or without the COBG funding. However, if
the project receives the COBG funding they will be able to create more jobs thus, will be able to stay
open until 8:00 or 9:00 PM as planned, complete the project by September of 2007, and make
beautification improvements to the landscape and exterior. The Wynants have indicated that without
the COBG funds project completion will be delayed several months, and it is unlikely that the above
mentioned project plans will take place.
This project qualifies under the COBG National Objective of Low and Moderate Income Benefit - job
creation. The regulations require that businesses create one full time equivalent job for every $35,000
in COBG funding received, the regulations further state that the jobs created must be jobs that could be
held by low and moderate income individuals and that 51 % of the jobs will be held by or made available
to low and moderate income individuals. In addition, this project provides business expansion in the
downtown core, revitalization of a vacant building, up to 500 new customers visiting the downtown each
day, and provides opportunities for those that live and work downtown to shop there.
The COBG contract between the City and the recipient contains a variety of safeguards to protect the
City's investment. Recipient performance is defined in the contract and more specifically in the
statement of work. The City can set the duration of public benefit (compliance period), enforce
conformity with all state and local codes, and require standards of maintenance of the premises and
design. If the recipient fails to comply with or terminates the contract the City may recapture all or a
portion of the funds allocated. In addition, the City can attach Restrictive Covenants limiting the future
use of the property (for example. - future use of the property is designated commercial excluding
businesses that cater to adult entertainment).
The COBG funds are generally grants. Performance is ensured through very specific language in the
agreement. In the case of the Wynant's project the contract would contain the following restrictions
(Wynant's would be the AGENCY):
For properties with more than $25.000 CDBG assistance for acquisition or
improvements: If the property in which the CDBG funds are invested is sold,
transferred, or otherwise disposed of for any reason by AGENCY within ten (10) years
from the date of PROJECT completion, AGENCY shall reimburse CITY the amount of
the current fair market value of the property, less any portion of the value attributable to
expenditures of non-CDBG funds for acquisition of, and improvements to, the
property. This provision may be waived at the sole discretion of CITY if the proposed
change of ownership continues to provide the Public Benefit described in Paragraph 2,
and meets a CDBG National Objective, and if the proposed change of ownership is
approved by the Springfield Community Development Advisory Committee and
Springfield City Council. (24 CFR ~570.505(b))
The City may also condition its acceptance and execution of the COBG agreement on one or more pre-
contract requirements. For instance, the City may require verified funding commitments from all
sources, or a satisfactory staff review of the applicant's business plan before loan documents are
executed. The City has used this strategy in the past as another way to safeguard its COBG and
HOME funds, and it is a common lending industry practice. Long-term community benefit of the COBG
funds is the primary criteria used by HUO when evaluating project funding by each participating
jurisdiction. This project qualifies for two of the three COBG National Objectives (Low-Mod Benefit and
Elimination of Slum and Blight). At the end of the compliance period the Community benefit will have
been demonstrated. In addition, the recipient is taking a risk that the vision of growth and vitality that
Attachment 2, page 2
Springfield has for downtown revitalization will continue. Staff favors greater consideration being given
to those partners willing to take an early risk on the downtown versus those that come after.
Option 1
If the Council wishes to move forward with support for the Wynant's project immediately, it could do so
by granting conditional approval of the specific project subject to the City Manager's review of the
business plan and related financial documents. Such review is not yet completed.
Option 2
If the Council wishes to defer action on the Wynant's project, it could do so by designating the funds for
downtown job creation activity, to be considered at a public process along with other applications that
may be submitted in response to a future Request for Proposals.
Types of Fund Award and Repayment
At the point the Council wishes to move forward with the award of funds, these funds could be awarded
as grants or loans. Either could be structured in a number of ways including a no interest or low interest
loan, or partial loan/grant combinations. Repayment of the loan can also be structured in different
ways. The loan terms and repayment requirements of the CDBG funds should reflect the potential
short and long-term community benefit of the project. With this in mind, staff has prepared five options
for Council consideration:
A. Outright Grant to the project.
B. A deferred payment loan due and payable at the time of sale, change of use, transfer of title. A
successful model used with the City's Substantial Home Rehabilitation Loan. The Loan can be
secured with a mortgage and note, does not inhibit the ability of the project recipient to obtain
other financing, is easily enforceable and allows for recapture of the full amount of funding.
C. A deferred payment loan forgiven after the established period of compliance. This is another
successful model used for many of the City's affordable housing loans. This option is similar to
option one but relieves the recipient of the CDBG obligation when the established period of
public benefit has been satisfied.
D. A deferred payment loan forgiven incrementally for each year of compliance up to an
established percentage with a balloon payment or incremental payments for the remaining
balance thereafter. This option, along with options one and two, recognizes that although
businesses benefit from the CDBG funds they also contribute to the community and provide
public benefit, in some cases at a cost to the business in complying with federal regulations not
otherwise required to operate their business.
E. Combination of loan grant and interest rates as deemed reasonable by the Council.
As mentioned earlier, the use of CDBG funds comes with federally mandated requirements and
restrictions. The City may impose additional terms, covenants, restrictions and performance
requirements to further protect its resources. All of these terms, restrictions and requirements usually
impose additional costs to the project, either during development or during the compliance period, and
may result in diminishing the true value of the CDBG funds.
Recommendation
Staff recommends conditional approval of the Wynant's project as described in Option 1, and "Cn
above, which would include a lien on the property and a restrictive covenant prohibiting the use of the
property for adult entertainment on site as described above.
[Staff recognizes that a policy framework is needed to help guide these decisions in the future, and will
be bringing this item to Council for discussion at a future work session.]
Attachment 2, page 3
MEMORANDUM
Date: May 1, 2007
CITY OF SPRINGFIELD
To:
Gino Grimaldi, City Manager
From:
Bill Grile, Development Services Directo~
Jodi Peterson, management Analyst II U \j
Draft Criteria for Funding CDBG Projects in the Downtown Revitalization Area
and/or Funding For-Profit Applicants
Subject:
ISSUE: At the April 16th City Council Meeting the Council held a Public Hearing and considered the
recommendations for funding Community Development Block Grant (CDBG) and HOME Investment
Partnership programs brought forth by the Community Development Advisory Committee. The meeting
included discussion about setting criteria for allocating funds to downtown redevelopment projects and
for-profit applicants requesting funding. Staff was directed to begin working on possible criteria for
Council review. .
BACKGROUND: At the April 9th Council Work Session staff presented information and ideas about
downtown revitalization. The Council instructed staff to proceed with the process for an Urban Renewal
District and the development of other plans for downtown. Since that meeting, staff received a CDBG
application for funding a for-profit business downtown. The Council had concerns about not having
criteria for funding projects.
DISCUSSION: In considering the Council's desire for a set of criteria to use in evaluating certain funding
requests for CDBG grants, staff crafted the following draft criteria for review and discussion at some
future time:
Formula for FundinQ. Developers willing to make an early commitment to downtown redevelopment
essentially accept a greater risk than those coming later with development proposals, but the earlier ones
set the stage for future development that will follow. Recognizing this, it seems reasonable to embrace a
sliding-scale formula approach that rewards earlier development proposals with greater public subsidy
than those that begin later. The following is just an example: Up to 25% of total Project Cost in years 1-3
of the Downtown Redevelopment, 20% in years 4-5, 15% in years 6-7 and so on.
Proiect Viability. Viability at its core means "capacity to survive." The central question is this: "Can this
project survive and thrive?" This may be determined by evaluating such things as (1) the number of
years the business has operated, (2) how many years the business has operated, (3) its history of
success, (4) financial soundness, etc.
Public Benefit. Indicators of public benefit would includes such things as: (1) infrastructure
improvements, (2) increased visits and/or activity downtown, (3) the extent to which the business would
compliment the downtown plan, (4) whether the business would enhance community pride and improve
quality of life, (5) the extent to which there is demonstrated participation from cooperating community
partners, (6) support the City Council's goals, etc.
Shovel Readv. Can the project begin within the funding year? Indicators might be: (1) site control, (2)
whether project development plans are complete, (3) whether other funding is committed for the project,
(4) whether a project timeline is established and realistic, etc.
Does the Proiect meet more than one CDBG National Obiective? The three CDBG National Objectives
are Low and Moderate Income Benefit, Elimination of Slum and Blight (non-LMI Benefit) and Urgent
Need. If the proposed project meets more than one national objective it may provide flexibility in
allocating the limited downtown set aside funds.
Staff will continue to work on possible criteria and will return to the Council in a Work Session in a few
months to seek further feedback about this matter.
Attachment 3