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HomeMy WebLinkAboutItem 7 - HOME Fund./8th Ave.EUGENE CITY COUNCIL AGENDA ITEM SUMMARY Action: Approval of HOME Investment Partnerships Program Funding for West 8th Avenue Housing Project Meeting Date: March 7, 2005 Agenda Item Number: 7 Department: Planning and Development Staff Contact: LindaDawson www. ci. eugene, or. us Contact Telephone Number: 682-5071 ISSUE STATEMENT The City Council is being asked to approve grant funding for the "WestTown on 8th" housing development at the 265 West 8th Avenue landbank site in downtown Eugene, including selling a portion of the landbank site to Community Center for the Performing Arts (CCPA)/WOW Hall. BACKGROUND The City Council approved the HUD Consolidated Plan 2000 which sets priorities for use of Community Development Block Grant (CDBG) and HOME Investment Partnerships Program (HOME) funds over a five-year period. Each spring, the council approves a One-Year Action Plan for annual use of Federal CDBG and HOME funds. The plan allocates Federal funding generically to several housing development activities: affordable rental units, homeownership, and site acquisition for future low-income housing developments. Other local resources, including Eugene and EWEB systems development charge (SDC) waivers, Lane County Road Funds, and low-income housing property tax exemptions, are also available to decrease the cost of the housing. Projects are solicited through a Request for Proposals (RFP) process conducted by the intergovernmental Housing Policy Board (HPB) and forwarded to the City Council for action. Federal HOME funds, along with other local housing resources, were offered through the RFP process for development of the West 8th Avenue landbank site. The site was purchased last spring using Federal CDBG funds. West 8th Avenue Housing Landbank Site The West 8th Avenue landbank site is located adjacent to WOW Hall between Lincoln and Charnelton Streets. This landbank site was purchased in 2003 with Federal CDBG funds following a public hearing and recommendation from the HPB and action by the City Council in February 2003. The site, zoned C-2, includes four adjacent tax lots. One of the tax lots includes a vacant building that once housed a Goodwill store. The building has been vacant for over 15 years. When the council took action to purchase the site, it was informed that the empty building was not likely to be in a condition that was practical to be reused, though there was community sentiment to explore that option. The smallest of the four tax lots is directly behind the WOW Hall. The two remaining lots are currently used for surface parking. L:\CMO\2005 Council Agendas\M050307\S0503077.doc The RFP criteria for development of the site was established by the HPB Allocations Committee on June 23, 2004. The Allocations Committee was expanded by two members for this RFP, to include representation of people with particular expertise. Dan Herbert, a retired architect and professor, is also an at-large member of the Eugene Redevelopment Advisory Committee. Rob Bennett is a downtown property and business owner, the owner of a property management company, a developer of low-income housing, and an original member of the HPB. After the HPB approved the criteria, the City of Eugene issued an RFP for all four tax lots. The City sought a mixed-income, mixed-use development which maximized housing on the site that would meet both low-income housing and downtown development goals. It was a two-part process. The first part was a letter of intent due on September 10, 2004. Those who submitted letters could then submit a proposal no later than November 29, 2004. The process allowed time for any potential developers of the vacant building to contact and collaborate with a housing developer to submit a comprehensive development for the site. Four proposals were received in response to the RFP: · CCPA/WOW Hall, a non-profit corporation interested in purchasing the tax lot at the rear of the hall, referred to as "the back lot." · West 8th Avenue Development Group, a for-profit entity interested in re-using the vacant building for commercial purposes. · Metropolitan Affordable Housing Corporation (Metro), a non-profit corporation proposing 94 units of mixed-income housing and live-work spaces on the ground floor. · Public Private Partnerships (P3), a for-profit corporation proposing 100 units of affordable housing combined with commercial space. Copies of the four proposals are available for review in the Council Office. On January 11, 2005, the committee heard presentations from each applicant, asked questions, discussed the proposals, and rated the proposals relative to the RFP criteria. They voted unanimously to recommend the Metro proposal to the full HPB. Metro's proposal was ranked highest by each member and the Allocations Committee also unanimously recommended to the HPB that the City sell the "back lot" at fair market value (as required by grant regulations) to the CCPA/WOW Hall. Revenue from this sale will return as program income to the CDBG program for use towards future low-income housing site acquisitions. The CCPA is currently leasing the site from the City and the contract allows for the monthly payments to be applied towards the purchase. On February 7, 2005, the HPB heard presentations from CCPA, Metro, and the West 8th Development Group. The HPB conducted a public hearing and then closed the hearing following testimony. The public hearing was advertised, publicly noticed, and also mentioned in articles in the Register-Guard, the Eugene Weekly, a WOW Hall membership newsletter, and an e-mail newsletter sent out by Downtown Eugene Inc. The Downtown Neighborhood Association was also notified. An article was included in the City Council's e-newsletter on January 13, 2005. Concerns were voiced about the noise generated by concerts at the WOW Hall. Community members feared that placing housing units next to the hall would increase complaints to the Eugene Police and would ultimately impact the long-term viability of the WOW Hall as a music venue. The noise levels do not exceed the standards set by HUD, the source of the acquisition funding and one of the many funding sources for the construction. Because the site was purchased with Federal funds, an environmental L:\CMO\2005 Council Agendas\M050307\S0503077.doc review was completed prior to acquisition. As part of that process, a noise study was conducted using the HUD preferred calculation method. It used the whole site as the development footprint. The calculation method is primarily based on traffic and road noise. The study resulted in a decibel level of 71.4, below the 75 decibel level determined "Unacceptable" by HUD. Once the Metro proposal was recommended by the Allocations Committee, the calculations were reevaluated based on the proposed design plan. The resulting decibel level was 68.2. HUD regulations allow for a secondary method for noise analysis when a unique source is present, such as a music hall. This measurement method was conducted over a 24-hour period on February 16, 2005. The final results are not available yet, but the field measurements were within a reasonable range. Metro has worked with an acoustical engineer and the CCPA to address the potential noise issues throughout the design process. The Metro proposal includes several sound mitigation measures, including up to $50,000 for improvements to the WOW hall itself and sound baffling materials on the west side of the housing development. Since the WOW Hall is a historic structure, Metro and the CCPA will coordinate with State Historic Preservation Office on the appropriate improvements. In order to provide more time for discussion, HPB scheduled a follow up meeting for February 21, 2005, to complete their deliberation and finalize a recommendation for the Eugene City Council. The full intergovernmental HPB voted unanimously to recommend funding the Metro WestTown on 8th proposal. This recommendation to fund WestTown on 8th followed substantial review and discussion. WestTown on 8th is a $13.375 million proposal for a structure stair-stepped back from West 8th Avenue, sensitive to the context of the Historic WOW Hall, and that provides southern exposure to the courtyard and living units placed on the alley. Metro proposes innovative live-work units along West 8th Avenue on the ground floor. Of the 94 total housing units, Metro proposes 70 housing units targeted to tenants between 41% and 57% of area median income, 16 renting at market rate, and eight units as live-work units. The design concept features private balconies and patios, a community room, a landscaped courtyard, and 75 parking spaces. Metro did extensive consultation with the WOW Hall on potential noise attenuation and received support from many of the surrounding businesses and neighbors. The required environmental review will ensure that both noise and historic impacts are appropriately addressed. Metro has requested the following resources: Landbank Site $ 620,000 Federal HOME grant 1,025,000 Eugene SDC waivers 210,000 EWEB SDC waivers 58,000 Lane County Road Funds 275,000 An application for a low-income housing property tax exemption will be submitted to City Council separately, and potentially an application for a Multi-Unit Housing Tax Exemption (MUPTE) will be received for the market rate housing. Metro will be seeking financial assistance through the State of Oregon for Federal Low-Income Housing Tax Credits and the Oregon Lenders Tax Credit program. Metro has been in operation since 1992. It currently operates five affordable housing communities in Eugene and Springfield. A sixth development is scheduled to be completed in May. These properties provide housing and resident services to over 240 households. L:\CMO\2005 Council Agendas\M050307\S0503077.doc The Board's of Directors of both CCPA/WOW Hall and Metro have taken positions in support of each other's proposal and have developed a working relationship and agreements. The Board of the CCPA voted unanimously to endorse Metro's plan based on the commitments made in Metro's proposal to the City and commitments made to the Wow Hall Board. At the request of both CCPA and Metro, staff proposes that additional language be added to the contracts for the West 8th landbank site in order to ensure that 1) Metro is sensitive to the WOW Hall's concerns related to sound attenuation, 2) the WOW Hall works with Metro to address sound attenuation, and 3) that Metro follows through on its offer to pave and stripe the "back lot." Depending on the approval of tax credit funding, Metro may begin construction of WestTown on 8th as early as this year. RELATED CITY POLICIES Sites such as the West 8th Avenue site offered through the City Landbank Program for low-income housing continue to be one of the most effective tools to encourage the construction of low-income housing units. Development of this site helps to achieve Growth Management Policies related to "sustainable community growth and change" by providing dense low-income housing in the downtown. Additional downtown housing is a goal of the Downtown Plan and the Vision for a Greater Downtown. The creation of low-income housing, a City Council goal for over ten years, is included in the Growth Management Policies and the HUD Consolidated Plan 2000. COUNCIL OPTIONS The council may approve or decline to approve the HPB recommendations. CITY MANAGER'S RECOMMENDATION The City Manager recommends the council approve funding the Metro WestTown on 8th project, including the sale of the back lot (of the West 8th site) to the CCPA/WOW Hall as recommended by the intergovernmental HPB. SUGGESTED MOTION Move to approve the use of HOME funds for the WestTown on 8th project and the sale of the tax lot to WOW Hall as recommended by the HPB and described in this briefing statement. ATTACHMENTS A. List of Allocations Subcommittee Members and Housing Policy Board Members FOR MORE INFORMATION Staff Contact: Linda Dawson Telephone: 541-682-5071 Staff E-Mail: linda.1, dawson~ci, eugene, or.us L:\CMO\2005 Council Agendas\M050307\S0503077.doc ATTACHMENT A Eugene Allocations Subcommittee Members Lea Allen Rob Bennett Norton Cabell, chair Connie Hedberg Dan Herbert John Vanlandingham John Wagner Jim Welsh Housing Policy Board Members Lea Allen Norton Cabell Roxie Cuellar Bob Doppelt Bobby Green Gary Pape Dave Ralston John Vanlandingham John Wagner L:\CMO\2005 Council Agendas\M050307\S0503077.doc