OLENE WALKER HOUSING LOAN FUND - Utah



OLENE WALKER HOUSING LOAN FUND

QUARTERLY BOARD MEETING

Housing and Community Development Division

Salt Lake City, Utah

MINUTES

Thursday, July 27, 2017

Members Present Representing

Gloria Froerer Rental Housing

Garret Bangerter Home Builder

Mike Glenn General Public

Cass Butler General Public

Kip Paul Real Estate

Jon Warner Housing Advocacy

Robert Snarr Human Services – State of Utah

Kelly Jorgensen HUD

Mark Lundgren (Called in) Manufactured Housing

Staff

Jonathan Hardy HCD

Rebecca Banner HCD

Katherine Smith HCD

Shelli Glines HCD - OWHLF

Lora Rees HCD - OWHLF

Daniel Herbert-Voss HCD - OWHLF

Jess Peterson HCD - OWHLF

Steven Fox HCD - OWHLF

Robert Kohutek HCD - OWHLF

Annette Despain HCD - OWHLF

Lori Poll HCD - OWHLF

Matthew Parker HCD – Admin North - Finance

Debi Carty DWS – Admin North - Finance

Visitors

Bryan Nalder AGO

Debbie Kurzban AGO

Jan Parke TURN Community Services

Scott Loomis Mountainlands Comm. Housing Association

Scott Niblack Cordes Development

Shirlene Stoven Applewood Estates

Paul Bradley Resident Owned Communities-USA LLC

Jeremy Runia Parley’s Partners (on behalf of HA Utah Co)

Mark Williams Neighborhood Nonprofit Housing Corp

Kim Datwyler Neighborhood Nonprofit Housing Corp

Marion Willey UNPHC

Joe Pelaez UNPHC

Marci Milligan Lotus Comm Dev Counsulting

John Montgomery RMCRC

Christine Anderson (Called in) Key CDC

Terry Goers DFH Watford

Pat Matheson MCHT

Lisa Mayundt Applewood Estates

Natasha Pfeifter RMCRC

Mike Plaizier UCNS

Jeff Phillips WRNPHC

Merridy Bagley Applewood Estates

Welcome - The Olene Walker Housing Loan Fund (OWHLF) Quarterly Board Meeting was held at 1385 South State Street – Conference Room 157 - Salt Lake City, Utah. The meeting was called to order at 9:00 am, by Gloria Froerer, Chair.

OTHER BUSINESS

Item #1 - Approval of Minutes

Quarterly Board Meeting held on April 27, 2017, 2017

Motion by Kip Paul, second by Garret Bangerter to approve the minutes as written. The motion carried unanimously.

Item #2 – FY2018 Financial Report

Matthew Parker, Accounting Office, presented the FY 2018 Budget.

Motion by Mike Glenn, second by Jon Warner to accept the FY 2018 Budget as presented. The motion carried unanimously.

ACTION ITEMS FOR STAFF

Three action items were given to Staff at the April 27, 2017 Board Meeting.

a. Update for Homeowners Insurance

b. Landlord Incentive Programs

c. Update on Affordable Housing Plan

All three items were presented to the board.

NEW BUSINESS

Item #1 – New Projects

1. Cedar City Triplex (Cedar City) – TURN Community Services

Project includes demolition of a circa-1960 3BR vacant home purchased in 2001 by TURN for its clients, but home needs extensive upgrades for three residents to return. Current configuration to make it fully accessible would be prohibitive and very difficult. TURN wishes to construct a fully accessible 3-unit triplex in place of the home with two 2BR units in one building and one 3BR unit in a second building to accommodate up to seven of TURN’s special-needs clients. Project includes payoff of existing RD mortgage of about $53,000. Zoning is presently Residential-3-16 (R-3-16), which allows low-density (3-4 unit) multifamily dwellings as an approved use. The location is excellent in that the project is located immediately south of TURN’s administrative building in Cedar City located at 295 South 200 East, the Hughes 4-plexs residential facility at 289 South 200 East is also nearby. Developer also applying for other sources of grants and donations, which may greatly reduce the need for OWHLF funds.

Staff’s recommendation is to fund $127,397 instead of $273,149 from OWHLF funds as a 1.5% fully-amortizing loan over 30 years. Fund $268,030 from NHTF funds as a 0% fully-amortizing loan over 30 years. Funding contingent on all other sources as listed in application, filling remaining gap of $145,752, and construction to Energy Star/HERS standards as listed.

Motion by Cass Butler, second by Garret Bangerter to accept staff’s recommendation with the exception that the developer may return to request additional funds if necessary to fill remaining funding gap not filled by grants and/or donations. The motion carried unanimously.

2. Miner’s Village Apartments – Mountainlands Community Housing Association

Project is new construction of 64 total multifamily units – 16 1BR, 36 2BR, 12 3BR, with all units affordable at or below 60% AMI – in two four-story buildings along with a small single-story site office/clubhouse building on 1.69 acres of land to be donated to the project as part of a 219-acre planned community to be called Silver Creek Village specifically set aside for the development of affordable workforce housing. Project will be located in unincorporated Summit County (Snyderville Basin) on the southeast corner where I-80 and US-40 converge. Zoning is currently VR-3 (Village Residential 3), for which multifamily is an approved use. There are two Type A fully-accessible units planned (5%, or 4 units, required), but all ground-floor units will also be Type B fully-adaptable units. Construction will be to a minimum HERS level equivalent to Energy star 3.0 requirements.

Staff’s recommendation is to fund $475,000 as requested from OWHLF CHDO funds as a 3% fully-amortizing loan over 30 years. Funding contingent on all other sources as listed in application, and construction to Energy Star/HERS standards as listed.

Motion by Garret Bangerter , second by Kip Paul to accept staff’s recommendation. The motion carried unanimously.

3. Willow Creek Apartments – Cordes Development

Project is the acquisition/rehabilitation of three phases of a 5-phase existing elderly RD 515/LIHTC property originally built in 1988-1990 with 62 one-bedroom units in 8 buildings, with all affordable units below 50% AMI. A total of 58 units presently receive RD rental assistance. Zoning is presently RM-7 Multiple Residential District. Set-asides include 4 units for chronically mentally ill (Valley Behavioral Health/Tooele County), and 5 units for homeless (Valley Behavioral Health), with all units also for elderly 62 and older. There are 4 Type A fully-accessible units, but five additional units will be retrofitted for a total of nine Type A fully-accessible units, and two units will be equipped for residents with sensory impairments. Developer applied for $633,403in 2017 LIHTC, and was allocated $614,712 on December 15, 2016. Buildings will be remodeled with energy-efficiency equipment (16.5 SEER A/C, 95%+ furnaces), new windows, thermal/air barrier improvements, LED lighting, and improved ventilation).

Staff’s recommendation is to fund $666,000 from OWHLF funds as a 1.5% fully-amortizing loan over 30 years. Fund $344,000 from ERI funds as a 0% fully-amortizing loan over 30 years. Funding contingent on all other sources as listed in application, and construction to Energy Star/HERS standards as listed.

Motion by Garret Bangerter, second by Mike Glenn to accept staff’s recommendation. The motion carried unanimously.

4. Applewood Mobile Home Estates – Utah Resident Owned Communities

Mark Lundgren recused himself.

Project is acquisition of a senior 55+ years mobile home park in Midvale located on 7.78 acres of land that was originally constructed in 1970 with a total of 56 spaces available with 52 presently occupied. There is also a duplex with two units for rent, and some small storage units, which is included in the total revenue. Property was purchased by Ivory Homes/ICO Construction in 201l, and is currently available for sale, and residents are concerned that they will be displaced by future development of the land and possible closure of the park. Property to be purchased by two developers that are willing to sell the community to the homeowners in the form of a cooperative homeowner’s association, and the project would qualify for a first mortgage of up to $3.6 million, with OW funds and an additional grant to be obtained of $400,000 to fill the remaining funding gap. Applewood residents have attempted to obtain ownership and control of the land since 2011 when project was originally sold.

Staff’s recommendation is not to fund due to difficulty in ensuring program compliance and affordability restrictions.

Motion by Kip Paul, second by Cass Butler not to accept staff’s recommendation, but to fund the $1,000,000 for 30 years at 1.5% as a fully-amortizing loan, with the condition that Staff come up with a compliance plan, also, OWHLF to approve a resident income qualification and resale plan by ROC USA/UROC. When the plans are completed there will be an electronic board meeting to finalize this motion. Mike Glenn voted nay, The motion passed with a majority vote.

Mark Lundgren returned to the meeting.

Item #2 – Existing Projects – Request Changes

1. Pacific Drive Apartments – Housing Authority of Utah County

Project is new construction of 26 units – all 1BR, of which 18 are affordable – in seven 4-plex style buildings on 2,4138 acres of vacant land previously sold to HAUC by American Fork City, which is located in an existing neighborhood and is close to retail, city services, and a UTA bus stop. One of the buildings will contain two residential units, a leasing office, and a clubhouse with computer room and wellness room. Developer applied for $24,627 in 2017 Federal LIHTC from UHC on October 3, 2016, and was awarded the full amount on December 15, 2016. Project w2as awarded $377,376 of OWHLF funding on January 26, 2017 with the OW Board allowing the developer to return to a later meeting and request up to $445,000 if additional funding is necessary. Project costs (primarily HCC) have increased significantly, and HAUC has increased other sources of proposed project funding, and is also requesting an additional $67,624 remaining to fill the gap from OWHLF.

Staff’s recommendation is, as authorized by the OWHLF Board during the January 26, 2017 quarterly board meeting, to provide additional funds of $67,624 as requested for a total amount of $445,000. All other loan terms to remain as originally approved.

Motion by Garret Bangerter, second by Jon Warner to accepts staff’s recommendation. The motion carried unanimously.

2. River Park Senior Apts (Phase I and II) – Neighborhood Nonprofit Housing Corporation

Project was new construction of 40 units – 28 1BR, 12 2BR – all affordable in a single building located in southwestern Logan adjacent (east of) to the NHC administration building. For funding purposes, the project was treated as two phases/applications, which were awarded two separate allocations of 2008 Federal LIHTC, two separate OWHLF HOME-funded loans awarded as surplus cash flow loans approved on September 20, 2007 (Phase I) and December 20, 2007 (Phase II), and a developer note payable and deferred developer fee to fill the remaining gaps. Project was constructed during 2008-2009, and due to low AMIs served (36% - 46%) all outstanding debt, including the NNHC note payable, was structured on a surplus cash flow basis. Project is for elderly tenants 62 or older, but does have two units set aside for developmentally disabled individuals. Total project costs listed above reflect the final cost certifications completed at project completion and closeout in 2009.

Staff’s recommendation is to combine existing loan principal balances of HMO987 and HMO1014 and deferred-interest balances into a new 30-year fully-amortizing loan of approximately $548,747 at 1.5%. Actual loan balance determined by amount of deferred interest at time of combination.

Motion by Mike Glenn, second by Cass Butler to accept staff’s recommendation. The motion carried unanimously.

3. Avalon House/Newhouse Apts. – Western Region Nonprofit Housing Corporation

Project acquisition/rehabilitation of two historic multifamily buildings: 1) Avalon in Helper originally constructed in 1910 with 34 units (all studios), and 2) Newhouse Hotel in Price originally constructed in 1914 with 17 units (10 studio, 3 1BR, 4 2BR). Both were acquired and renovated in 2009-20110 using an allocation of LIHTC awarded to La Porte Group. Both buildings serve extremely low AMIs (25-39%), and were combined for LIHTC syndication purposes. La Porte/Ben Logue removed as limited partner by Key CDC during 2016 and replaced by Western Region Nonprofit Housing Corporation/Marion Willey. Avalon is nearly empty (only 2 of 34 units occupied), and Newhouse has only one unit vacant, both buildings have suffered from deferred maintenance with various repairs needed; buildings need a total of $52,000 estimated repairs and payment of outstanding accounts payable of $14,880. WRNHC is requesting OWHLF loan payment to be deferred to end of the LIHTC compliance period.

Staff’s original recommendation is to provide additional loan payment deferral period of three (3) years ending December 31, 2020. At that time, additional review will be performed by OWHLF staff regarding project’s financial performance and determination made for further deferral and/or loan term changes.

Staff’s revised recommendation is to provide additional loan payment deferral period of either five (5) years or to the end of the initial compliance period, whichever is earlies, in a similar manner to Utah Housing Corporation’s July 25 modification. Additional review will then be performed by OWHLF staff regarding project’s financial performance and determination made for further deferral and/or loan term change.

Motion by Kip Paul, second by Mark Lundgren not to accept staff’s recommendation but to approve as requested by the Contractor to defer loan payments to the end of the compliance period. The motion carried unanimously.

4. Elmhurst Apartments – Utah Non Profit Housing Corporation

Project acquisition/rehabilitation of historic 15-unit (7 1BR, 4 2BR, 4 3BR) multifamily building originally constructed in 1927 and renovated in 2010-2011 using a second allocation of LIHTC (first was awarded in 1993) awarded to La Porte Group. Project serves extremely low AMIs (25-36% AMI), and was combined with a second 55-unit acquisition/rehab project [McGregor Apts.] for LIHTC syndication purposes.

La Porte/Ben Logue removed as limited partner by Key CDC during 2016 and replaced by Utah Non Profit Housing Corporation/Marion Willey. McGregor building has basement drainage issues and related corrosion problems, with a total of $656,054 estimated repairs, and $220,000 in reserve funding; Elmhurst building is in reasonably good condition (OWHLF loan is only on Elmhurst property, not McGregor). Due to projects combined for LIHTC purposes, UNPHC is requesting reduction in Elmhurst OWHLF loan interest to 0% and payments deferred to end of the LIHTC compliance period (2020).

Staff’s original recommendation is to provide additional loan payment deferral period of three (3) years ending December 31, 2020. At that time, additional review will be performed by OWHLF staff regarding project’s financial performance and determination made for further deferral and/or loan term changes.

Staff’s revised recommendation is to provide additional loan payment deferral period of either five (5) years or to the end of the initial compliance period, whichever is earliest, in a similar manner to Utah Housing Corporation’s July 25 modification. Additional review will then be performed by OWHLF staff regarding project’s financial performance and determination made for further deferral and/or loan term changes.

Motion by Kip Paul, second by Garret Bangerter not to accept staff’s recommendation but to approve as requested by the Contractor to a cash flow contingent loan to the end of the compliance period. The motion carried unanimously.

5. Peter Pan Apts. – Utah Non Profit Housing Corporation

Project was the acquisition’/rehabilitation of a historic 32-unit (16 studio, 16 1BR) multifamily building originally constructed in 1926 and renovated in 2009-2010 using an allocation of LIHTC awarded to La Porte Group. Project serves extremely low AMIs (25-39% AMI), and has numerous special-needs set-asides. La Porte/Ben Logue was removed as limited partner by Key CDC during 2016 and replaced by Utah Non Profit Housing Corporation/Marion Willey. The building has basement drainage issues when outside precipitation occurs and related corrosion problems, with a total of $327,332 estimated repairs, and $25,000 in reserve funding, UNPHC is requesting reduction in Peter Pan second OWHLF loan (HPO1029) interest to 0% and all OWHLF loan payments to be deferred to end of the LIHTC compliance period (2023), while SLC loan terms to remain as originally approved.

Staff’s original recommendation is to reduce interest rate of HPO1029 to 0%, and provide additional loan payment deferral period of three (3) years ending December 31, 2020. At that time, additional review will be performed by OWHLF staff regarding project’s financial performance and determination made for further deferral and/or loan term changes.

Staff’s revised recommendation is to provide additional loan payment deferral period of either five (5) years or to the end of the initial compliance period, whichever is earliest, in a similar manner to Utah Housing Corporation’s July 25 modification. Additional review will then be performed by OWHLF staff regarding project’s financial performance and determination made for further deferral and/or loan term changes.

Motion by Kip Paul, second by Mike Glenn not to accept staff’s recommendation but approve as requested by the Contractor to a cash flow contingent loan to the end of the compliance period. The motion carried unanimously.

6. Piccardy Apartments – Utah Non Profit Housing Corporation

Project was the acquisition/rehabilitation of an historic 40-unit (22 studio, 18 1BR) multifamily building originally constructed in 1923 and renovated in 2009-2010 using an allocation of LIHTC awarded to La Porte Group. Project serves extremely low AMIs (25-36% AMI), and has numerous special-needs set-asides. La Porte/Ben Logue was removed as limited partner by Key BDC during 2016 and replaced by Utah Non Profit Housing Corporation/Marion Willey. The building has basement drainage issues from the foundation, driveway and parking lot repairs needed, and missing solar panels/parts, with a total of $144,623 estimated repairs, and $25,000 in reserve funding. UNPHC is requesting reduction in both OWHLF loan’s interest rates to 0% and all OWHLF loan payments to be deferred to end of the LIHTC compliance period (2023), while SLC loan terms to remain as originally approved. HPO1011 is already a surplus cash flow loan.

Staff’s original recommendation is to reduce interest rate of both HOP1011 and HOP1029 to 0%, and provide additional loan payment deferral period of three (3) years ending December 31, 2020. At that time, additional review will be performed by OWHLF staff regarding project’s financial performance and determination made for further deferral and/or loan term changes.

Staff’s revised recommendation is to provide additional loan payment deferral period of either five (5) years or the end of the initial compliance period, whichever is earliest, in a similar manner to Utah Housing Corporation’s July 25 modification. Additional review will then be performed by OWHLF staff regarding project’s financial performance and determination made for further deferral and/or loan term changes.

Motion by Kip Paul, second by Mark Lundgren not to accept staff’s recommendation but to approve as requested by the Contractor to a cash flow contingent loan to the end of the compliance period. The motion carried unanimously.

7. Stratford Apartments – Utah Non Profit Housing Corporation

Project was the acquisition/rehabilitation of an historic 46-unit (all studio) multifamily building originally constructed in 1909 and renovated in 2006-2007 using an allocation of LIHT awarded to La Porte Group. Ground floor is commercial space and condominiumized as a separate project, so no revenue is shown here from space rental. Project serves extremely low AMIs (25-36% AMI), and has numerous special-needs set-asides. La Porte/Ben Logue was removed as limited partner by Key CDC during 2016 and replaced by Utah Non Profit Housing Corporation/Marion Willey. The building has basement drainage issues from the foundation walls, and missing solar panel/parts, with a total of $202,612 estimated repairs, and $30,000 in reserve funding. HNPHC is requesting reduction in both OWHLF loan’s interest rates to 0% and all OWHLF loan payments to be deferred to end of the LIHTC compliance period (2021), while SLC loan terms to remain as originally approved.

Staff’s original recommendation is to reduce interest rate of HMO825 to 0%, and provide additional loan payment deferral period of three (3) years ending December 31, 2020. At that time, additional review will be performed by OWHLF staff regarding project’s financial performance and determination made for further deferral and/or loan term changes.

Staff’s revised recommendation is to provide additional loan payment deferral period of either five (5) years or the end of the initial compliance period, whichever is earliest, in a similar manner to Utah Housing Corporation’s July 25 modification. Additional review will then be performed by OWHLF staff regarding project’s financial performance and determination made for further deferral and/or loan term changes.

Motion by Garret Bangerter, second by Jon Warner not to accept staff’s recommendation but to approve as requested by the Contractor to a cash flow contingent loan to the end of the compliance period. The motion carried unanimously.

The next Olene Walker Housing Loan Fund Quarterly Board Meeting will be held October 26, 2017.

ADJOURN: The meeting was adjourned at 1:30 pm with a motion by Garret Bangerter

Submitted by:

Lora Rees

Olene Walker Housing Loan Fund

Housing and Community Development

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