Title
A Resolution Of The City Commission Of The City Of Hollywood, Florida, Committing To Provide Local Government Areas Of Opportunity Funding In The Amount Of $640,000.00 In The Form Of A Loan To Support An Application To The Florida Housing Finance Corporation In Response To Its Request for Applications For 9% Housing Tax Credits For The Development Of A Mixed-Income Housing Project In the City To Include A Minimum Of 100 New Affordable Housing Units Designated For Those Earning An Average Of 60% Of the Area Median Income, And Authorizing The Appropriate City Officials To Execute All Documents Necessary To Effectuate This Resolution.
Strategic Plan Focus
Economic Vitality
Body
Staff Recommends: Approval of Resolution.
Explanation:
The Florida Housing Finance Corporation has issued a Request for Applications (RFA 2021-202) that will award housing tax credits to at least two developments in Broward County that have demonstrated local government support through the commitment of Local Government Areas of Opportunity (LGAO) Funding in the amount of $640,000 to be provided as either a loan or a grant. Two development groups, Pinnacle Communities, LLC (Pinnacle) and Housing Trust Group, LLC (HTG), have approached the City requesting this support. The RFA specifies that local governments can only provide this support to a single project within their jurisdiction. The two requests for LGAO funding are detailed below as Option A and Option B.
Option A: Pinnacle is requesting the City’s support for the construction of a mixed-use, mixed-income housing development, consisting of approximately 100 affordable residential units for those earning an average of 60% of the area median income (AMI) along with approximately 2,000 square feet of commercial office space on a 1.67 acre site located on Johnson Street between N. 61st Avenue and State Road 7 immediately adjacent to its planned Pinnacle 441 project site. This project would be Pinnacle 441, Phase II. The first phase of the project is currently in the development review process and Pinnacle is planning for construction to begin in the first quarter of 2022. Phase I is a mixed-use, development consisting of 113 affordable residential units and approximately 6,000 square feet of commercial retail space along with a public plaza area on the southwest corner of State Road 7 and Johnson Street that was awarded housing tax credits during the previous Florida Housing Finance Corporation funding cycle. Pinnacle, through an affiliate, has control of the Phase II site via a purchase and sale agreement. In July of 2019, the City Commission committed to provide $1,000,000 through a combination of loans, grants, and waivers of fees to allow Pinnacle 441 (Phase I) to achieve funding from Broward County Housing Finance. Pinnacle is asking the City to allocate $640,000 of that $1,000,000 commitment as LGAO Funding in the form of a loan to the Phase II project to help this development achieve housing tax credits from Florida Housing Finance Corporation.
Option B: Housing Trust Group is requesting the City’s support for the construction of a mixed-income housing development consisting of approximately 120 units to be located on approximately 2.14 acres of land at 1101 Hillcrest Drive. 110 units would be affordable to those earning an average of 60% of AMI, while 10 units would be market rate. The proposed development, Hillcrest Village, is adjacent to the new Parkview at Hillcrest residential community. HTG has control of the site via a purchase and sale agreement and is asking the City to provide $640,000 in LGAO funding in the form of a loan to the project to help this development achieve housing tax credits from Florida Housing Finance Corporation.
There is a need for quality affordable housing throughout the City of Hollywood and both proposed projects would help to address that need.
Fiscal Impact:
The commitment of LGAO funding in the form of a loan by the City to either project would be contingent upon the award of 9% tax credits by Florida Housing to the selected project in this funding cycle and will expire if funding from Florida Housing is not obtained by June 30, 2022. The loan would be backed by a second mortgage on the selected project.
Option A: The City previously committed $1,000,000 in grants, loans and/or fee waivers to the Pinnacle 441 Phase I project. Pinnacle is requesting to reallocate $640,000 of the original commitment of $1,000,000 for the Phase II project. The requested loan would be for a term of up to 18 years with 0% interest.
Option B: HTG proposes a 15-year loan from the City in the amount of $640,000 with an annual interest rate of 3% (contingent on availability of cash flow and debt service coverage on senior debt).
In both instances, the City would negotiate a loan agreement to finalize the terms and conditions subject to the approval of the tax credits. Funding for the loan will derive from one or more of the following available sources: ILA, CDBG, HOME or SHIP, and will be budgeted in the appropriate fiscal year subject to approval and adoption by the City Commission.
Recommended for inclusion on the agenda by:
Raelin Storey, Director of Communications, Marketing and Economic Development
Shiv Newaldass, Director of Development Services
Gus Zambrano, Assistant City Manager for Sustainable Development