NYCHA PACT Partners 2020 Projects

NYCHA PACT Partners 2020 Projects

NYCHA 2.0 Permanent Affordability Commitment Together (PACT) Unfunded Units & Rental Assistance Demonstration (RAD) Properties in

Manhattan and Brooklyn

Event Pre-Qualified Partners Notified of Projects Pre-Submission Conference Initial Expression of Interest Ranking Due Solicitation Lottery Results Announced Site Visits Questions Due Responses to Questions Posted Proposal Submission Deadline

Date September 6, 2019 September 10, 2019 September 17, 2019 September 20, 2019 October 7-11, 2019 October 11, 2019 October 18, 2019 October 25, 2019

Bill de Blasio Mayor

Vicki Been Deputy Mayor for Housing and Economic Development

NEW YORK CITY HOUSING AUTHORITY 250 Broadway, New York, NY 10007

Gregory Russ Chair & Chief Executive Officer

Vito Mustaciuolo General Manager

Prepared by: REAL ESTATE DEVELOPMENT DEPARTMENT 250 Broadway, 3rd Floor New York, NY 10007

Time

10:00 AM 10:00 AM 2:00 PM 9:00 AM 2:00 PM 2:00 PM 2:00 PM

TABLE OF CONTENTS

I.

INTRODUCTION ......................................................................................................................................3

II. PROJECT LABOR AND EMPLOYMENT PROVISIONS .......................................................15

III. OWNERSHIP AND CONTROL.........................................................................................................17

IV. PROJECT FINANCING AND FEES.................................................................................................17

V. OTHER PROVISIONS...........................................................................................................................21

VI. RESPONSIBILITIES OF THE SELECTED APPLICANTS .....................................................22

VII. APPLICANT SELECTION CRITERIA AND PROCESS ..........................................................30

VIII. SUBMISSION REQUIREMENTS .....................................................................................................34

IX. CONDITIONS, TERMS, AND LIMITATIONS ............................................................................38

X. CONFLICTS OF INTEREST ...............................................................................................................41

XI. CONFIDENTIALITY .............................................................................................................................42

XII. INVESTIGATIONS AND TERMINATION...................................................................................42

XIII. NEW YORK LAW ..................................................................................................................................43

XIV. DISCLAIMER...........................................................................................................................................44

EXHIBITS LIST

Exhibit A: 2019 RAD Physical Condition Assessments (rPCAs) Exhibit B: Property Profiles Exhibit C: Unit Mix Exhibit D: RAD Contract Rents Exhibit E: Reasonable Rent Exhibit F: Underwriting Standards and Rental Pro Forma Template Exhibit G: Outstanding Balances Exhibit H: NYCHA Regulatory Agreement Exhibit I: RAD Use Agreement Exhibit J: Declaration of Restrictive Covenants and Use Agreement - Section 18 Units and Developments Exhibit K: Declaration of Restrictive Covenants and Use Agreement - Unfunded Developments Exhibit L: Insurance Requirements Guide Exhibit M: Resident Rights in the RAD Notice Exhibit N: NYC RAD Roundtable Guiding Principles Exhibit O: NYCHA Grievance Procedures Exhibit P: RAD Resident Lease Exhibit Q: PACT LLC II Resident Leases Exhibit R: Existing Providers Exhibit S: Sample Existing Service Contract Exhibit T: Applicant Forms Exhibit U: Section 3 Hiring Plan Exhibit V: Scope of Work Template

2

I. INTRODUCTION

A. NYCHA 2.0 ? Permanent Affordability Commitment Together ("PACT")

In December 2018, the Mayor's Office and the New York City Housing Authority ("NYCHA" or the "Authority") released NYCHA 2.0, a comprehensive plan to preserve public housing. This 10year plan is expected to bring $24 billion in vital repairs to New York City's aging public housing and ensure residents have the safe, decent, and affordable homes they deserve.

An important strategy outlined in the NYCHA 2.0 plan is to leverage programs of the U.S. Department of Housing and Urban Development ("HUD") to preserve existing public housing stock via NYCHA's preservation initiative called "PACT" ? Permanent Affordability Commitment Together. Under PACT, NYCHA seeks to identify resources and opportunities to make major improvements to its public housing developments while preserving long-term affordability and maintaining strong resident rights in line with public housing protections. NYCHA 2.0 established the PACT goal to convert at least 62,000 public housing units to Section 8 by the end of 2028, thus addressing roughly $12.8 billion of the Authority's capital needs.

PACT calls for the preservation and rehabilitation of public housing developments using multiple methods of subsidy conversion to Section 8 conversion mechanisms: (i) HUD's Rental Assistance Demonstration ("RAD"), (ii) disposition under Section 18 of the U.S. Housing Act of 1937, as amended, ("Section 18"), and (iii) retention outside of the public housing program pursuant to 2 CFR Part 200 ("Part 200") that is being used to initiate a flow of subsidy to NYCHA's "Unfunded Units" (also known as "LLC II" and "City & State Developments"). To date, NYCHA has leveraged these HUD tools to convert approximately 5,168 units across 21 developments.

PACT is a partnership between the Authority, NYCHA residents, development partners, and community and housing advocates intended to preserve NYCHA's affordable housing stock and achieve the following goals:

1. Financially stabilize the developments and establish new financing options for criticallyneeded repairs and on-going operations by adding units to a Section 8 voucher platform;

2. Address the 20-year capital needs of developments in dire need of repairs; 3. Increase property management capacity; and 4. Improve access to social services and community amenities for NYCHA residents.

Below is more detailed information about each conversion mechanism under PACT.

Rental Assistance Demonstration (RAD) RAD is an innovative HUD tool to preserve public housing and address capital needs. Under RAD, public housing authorities like NYCHA convert the funding source that supports a development from public housing subsidy (Section 9) to Section 8 subsidy that enables NYCHA and its development partners to leverage private debt and equity to complete repairs. Ongoing federal funding levels remain the same. More information about RAD is available at

3

Section 18 and Tenant Protection Vouchers (TPVs) NYCHA uses the Section 18 disposition process to apply for Tenant Protection Vouchers ("TPVs") that are a higher-value Section 8 funding stream relative to RAD. The TPV funding is then project-based at the converting developments. This additional federal subsidy enables NYCHA and its development partners to leverage more private debt and equity, which are needed to fund repairs in many of NYCHA's highest-need developments (i.e., those that meet the federal cost obsolescence criteria). More information about Section 18 is available at .

Part 200 Conversion NYCHA's Unfunded Units currently consist of a portfolio of six (6) public housing developments that receive no direct funding. The developments were built and originally funded by New York City and New York State. In 1995, with decreasing City and State funding available, the City & State Developments were added to NYCHA's Annual Contributions Contract ("ACC") with HUD, allowing them to share in the HUD funding that NYCHA receives for its federal public housing developments that were built with HUD funds. However, the City & State Developments remain ineligible for inclusion in HUD's public housing operating and capital fund formulas, and thus do not receive any direct funding from HUD. Because these properties are not included in the HUD subsidy formulas, they are not eligible to participate in RAD.

To address the lack of dedicated funding for the City & State Developments, HUD permitted NYCHA in 2008 pursuant to a Voluntary Conversion Plan ("VCP") to convert up to 8,400 units to the Section 8 voucher program. In March 2010, HUD approved a mixed-finance transaction, consistent with the VCP, that was designed to partially address operating deficits in the portfolio of federalized developments. The transaction placed the 21 developments into two (2) new limited liability corporation ("LLC") owner entities referred to as LLC I (with 13 developments) and LLC II (with 8 developments, two of which [Baychester and Murphy] have already converted to Section 8 under Part 200). The 2010 mixed-finance transaction added 11,743 units in LLC I properties to the public housing subsidy formulas. However, all units in the LLC II remained ineligible to be included in the formula for public housing subsidies.

NYCHA is using 2 CFR Part 200 to retain the remaining public housing units in the LLC II developments outside the public housing program and convert them to Section 8 units. Such units will be added to the existing Section 8 PBV Housing Assistance Payment ("HAP") Contracts. This conversion to Section 8 assistance will stabilize the properties by placing them on a more secure and solid financial footing, facilitate the raising of capital to rehabilitate the properties, streamline property management, and continue or enhance social services provision, thus ensuring the developments' continued use as long-term affordable housing with no displacement of existing residents as a result of the conversion.

Because of the prior conversions under the VCP, in addition to public housing units, the LLC II developments also contain units that are project-based under existing HAP Contracts and units that have households receiving a tenant-based voucher. As noted, the LLC II developments were also part of a previous mixed-finance transaction that will be unwound and terminated prior to construction closing.

4

B. Request for Expressions of Interest Overview

In April 2019, NYCHA released RFQ #68292 for Large-Scale Partners and RFQ #68293 for Small-Scale Partners (the "RFQs") to identify Developer, Property Manager, General Contractor, and Social Service Provider entities (as such terms are defined in the RFQs) to partner with NYCHA in converting and rehabbing NYCHA public housing units through the PACT program ("Pre-Qualified Partners"). The RFQs included thresholds for each type of entity to delineate the Pre-Qualified Partners into Small-Scale Partners and Large-Scale Partners based on their relevant experience. In August 2019, NYCHA published a list of Pre-Qualified Large- and Small-Scale Partners ("Pre-Qualified Partner List") based on entities' responses to the RFQs. A link to the published Pre-Qualified Partner List can be found on NYCHA's PACT website . The Pre-Qualification RFQs will be rereleased in the first quarter of 2020 to allow existing Pre-Qualified Partners to update their information and for new Applicants to submit their Pre-Qualification Applications. Upon each annual re-release of the RFQs, existing Pre-Qualified Partners will be required to send relevant updates related to their existing capacity or any relevant new experience.

NYCHA is seeking proposals ("Proposals," each a "Proposal") in response to this Request for Expressions of Interest (inclusive of all appendices attached hereto, this "RFEI") from applicants consisting of a Project Team of Pre-Qualified Partners ("Applicants") for financing, tenant-inplace rehabilitation, property management, and social services delivery to facilitate the conversion of five (5) distinct "Projects" consisting of a total of eight (8) public housing developments (each development a "Property," and collectively, the "Properties") from the public housing program under Section 9 of the U.S. Housing Act of 1937, as amended (the "Act") to a voucher platform under Section 8 of the Act pursuant to RAD, Section 18, and Part 200. Each Project consists of one or more Properties and each Project may utilize one or more conversion mechanisms.

As indicated in the RFQs, Applicants will be selected for Projects based on their ability to undertake the required capital, operations, and social service work at the Properties. Pre-Qualified Partners are responsible for forming a Project Team consisting of other Pre-Qualified Partners ("Project Team") and submitting a Proposal as an Applicant to obtain financing for the transaction, complete the required tenant-in-place rehabilitation, manage the Properties, and deliver social services to residents in compliance with this RFEI and each Project's applicable financing requirements. Following a competitive review of the Competitive Selection Criteria as described in Section VII, Applicants will be selected to commence negotiations with NYCHA ("Selected Applicants").

To address NYCHA's high and unique capital needs at its public housing campuses, NYCHA reserves the right to change any part of a Project and Project Team as deemed appropriate. Therefore, NYCHA can cancel solicitations, remove members of a Project Team, and add new members to a Project Team from the Pre-Qualified Partner List. NYCHA and the New York City Housing Development Corporation ("HDC") will identify an appropriate Social Service Provider from the Pre-Qualified Partner List to be added to each Selected Applicants' Project Team. Applicants therefore should not include a Social Service Provider in their Project Team but must abide by the Underwriting Guidelines in terms of budgeting for the provision of Social Services.

5

 ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download