AGENDA MEMORANDUM

Meeting Date:           November 22, 2010

 

From:                          Ken Thomas, Director of Economic Development & Housing                     

 

Subject:                      Status of Magnolia Townhomes (formerly Kristen Court) Project

 

 

Staff Recommendation:

Staff requests any action and suggestions from the Mayor and City Commissioners.

 

Analysis:

At the time of the City’s acquisition of  the Kristen Court apartment complex, there were fifty-nine (59) affordable apartment units divided among nineteen (19) buildings, including one (1) duplex, one (1) sixplex and seventeen (17) triplexes.  After an exhaustive exercise undertaken by the Kristen Court Taskforce, the taskforce recommended the City proceed with implementing one of the following options:

 

The City agreed to renovate the existing units and sell as fee simple townhomes.  Soon thereafter, staff determined that this approach was not the most optimal for providing affordable homes or ensuring a high potential for selling the units.  From the onset the Kristen Court Taskforce believed that the existing site footprint was too small and would provide a problem in terms of marketing the homes. 

 

Shortly thereafter, a unanimous decision was made to demolish the entire complex and build fifty-six new housing units.  At the time of acquisition, the City had promised to provide affordable housing units to those who were being displaced and for those who desired to purchase their own home.  The City fulfilled the displacement of those individuals who wanted to live elsewhere.  But there is still a need remaining to provide affordable homeownership units. 

 

City Staff was successful in obtaining grant funding for the Magnolia Townhomes Project in the amount of $1,679,000.  The grant funds obtained were divided among the following sources:

·         CDBG                   $  750,000

·         FHLBA                  $  500,000

·         SHIP                      $  429,000

·         Total                     $1,679,000

 

The grant funds from each entity required the City fulfill certain obligations to utilize the funding such as start and build (vertical) the infrastructure and housing units according to when the grant was awarded. 

 

Federal Home Loan Bank (FHLBA):  All funds must be committed and constructed started in eighteen (18) months (October 2010).  Based on the status of the project, FHLBA has rejected the funding and suggested that we reapply in the next 2011 grant cycle for new applications.  

 

Lake County SHIP Funds:  All funds must be expended and affordable homebuyers occupying units by June 2011.  Based on the status of the project, Lake County suggested the City return all SHIP funds or submit another project that could provide 15 occupied housing units before June 2011.

 

Community Development Block Grant (CDBG): Funds must be expended and eligible homebuyers occupying units by August 2011. Based on the status of the project and timeframe to complete all infrastructure improvements and occupy housing units, it appears we will not meet our August 2011 milestone.  Therefore, we have three options for CDBG funds:

 

Options:

1.         Release the obligated grant funds and submit a letter to the Department of Community Affairs (DCA) requesting the file be closed

2.   Apply for an extension to utilize the funds for existing project; or

3.   Reapply for during the next grant cycle (May 2011) for the same project.  

 

If the Commission declines to move forward with the planned project, the existing construction fence which is in need of replacement may be either be removed or replaced with a wrought-iron fence, the cost of which is estimated at $80,000 to $125,000.

 

Submission Date and Time:    11/23/2010 8:58 AM____

 

Department: ______________________

Prepared by:  ______________________                     

Attachments:         Yes____   No ______

Advertised:   ____Not Required ______                     

Dates:   __________________________                     

Attorney Review :       Yes___  No ____

                                                

_________________________________           

Revised 6/10/04

 

Reviewed by: Dept. Head ________

 

Finance  Dept. __________________                                     

                              

Deputy C.M. ___________________                                                                         

Submitted by:

City Manager ___________________

 

Account No. _________________

 

Project No. ___________________

 

WF No. ______________________

 

Budget  ______________________

 

Available _____________________