Broward County Commission Regular Meeting
Director's Name: Leonard Vialpando
Department: Resilient Environment Division: Housing Finance Division
Information
Requested Action
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MOTION TO APPROVE Local Government Area of Opportunity (“LGAO”) designation funding and gap financing to Garden Place Ltd., or its affiliate (“Boulevard Gardens”) for a senior affordable housing development (approximately 92 affordable units) located within the Broward Municipal Services District (“BMSD”) as follows: 1) Local Government Contribution for the LGAO designation in the amount of $640,000, and 2) gap financing in the amount of $2,360,000; authorizing the County Administrator to execute all agreements related to the project, subject to the foregoing monetary limits and approval as to legal sufficiency by the Office of the County Attorney; and authorizing the County Administrator to take the necessary administrative and budgetary actions. (Commission District 8)
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Why Action is Necessary
Board action is required to approve agreements with outside agencies and to create a new capital project above $25,000.
What Action Accomplishes
Allows the County Administrator to execute agreements for financing the Boulevard Gardens senior affordable housing development in the BMSD totaling $3,000,000 (for approximately 92 affordable units).
Goal Related Icon(s)
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Previous Action Taken
None.
Summary Explanation/Background
THE RESILIENT ENVIRONMENT DEPARTMENT AND THE HOUSING FINANCE DIVISION RECOMMEND APPROVAL OF THE ABOVE MOTION.
This item supports the Board’s Value of “ensuring residents have an affordable place to live by offering sustainable, compatible, innovative, accessible, affordable housing options for all income levels, including integrated, permanent supportive housing and zoning that helps residents build equity."
Boulevard Gardens seeks to construct a senior affordable housing development with approximately 92 affordable units within the BMSD (Exhibit 1). To that end, Boulevard Gardens has assembled and is under contract to purchase 1.71 acres of land in the BMSD generally located north of Northwest 1st Street between Northwest 27th Avenue and Northwest 27th Terrace, as depicted in Exhibit 2.
It is anticipated that no less than 80% of the units will serve households with at least one individual who is 55 years of age or older. Preliminary plans propose 92 total affordable units. The final number of affordable units shall be determined after issuance of all development approvals and may change by approximately 10% either upwards or downwards. Approximately 90% of the affordable units shall be set aside for one or more natural persons or a family (Household) whose total annual adjusted gross household income (Income) does not exceed 60% of the median annual adjusted gross income for Broward County (Broward County AMI). Approximately 10% of the affordable units shall be set aside for Households whose Income does not exceed 33% of the Broward County AMI. Community amenities are anticipated to include a leasing area with on-site staff, clubroom, mail room, computer room, common area laundry room, and a fitness center. The development shall meet National Green Building Certification Standards. Resident programs will include computer and financial management training.
This land assemblage creates a unique opportunity for a multi-family residential development in the BMSD (Exhibit 3). Affordable units are severely needed to serve the senior demographic of the BMSD community, and residents have expressed the need for a viable option for aging residents who would like to remain in the community but are unable to continue to maintain their homes.
To help fund the project, Boulevard Gardens will submit an application to Florida Housing Finance Corporation (“FHFC”) for competitive 9% Low Income Housing Tax Credits (“LIHTC”) in the 2024-202 Request for Applications (RFA) funding cycle. The application deadline for this RFA is July 18, 2024.
For reasons further detailed below, staff recommends a conditional loan commitment to the Boulevard Gardens project for $640,000 in LGAO Local Government Contribution and for $2,360,000 in gap financing, totaling $3,000,000, contingent upon an award of 9% LIHTC from FHFC. There are sufficient funds in the Affordable Housing Trust Fund (“AHTF”) to allocate a total of $3,000,000 toward the Boulevard Gardens project if it meets the contingency of being selected for the LIHTC award.
FHFC RFA applications are eligible for maximum points for Local Government Contributions if they demonstrate a minimum $100,000 in Local Government contributions. Further, applications that meet the FHFC RFA LGAO designation requirements have priority ranking over applications without such commitment. To qualify for the LGAO designation, FHFC RFA applications must demonstrate a high level of local government interest in the project via an increased Local Government contribution. The minimum required Local Government contribution for an application to qualify for the FHFC RFA LGAO designation is $640,000. A local government may only contribute to one application that qualifies for the LGAO designation. FHFC’s RFA 2024-202 has an established goal to fund one application with a LGAO designation in Broward County. In order to significantly increase the likelihood of being selected for funding, Boulevard Gardens seeks to qualify for the LGAO designation under FHFC RFA 2024-202.
Because the project is in the BMSD, the applicant must rely solely on Broward County as the local government to contribute funding for the project. On June 4, 2024, the Board approved the use of Housing Finance Authority funds for one LGAO project within the BMSD for $640,000 with preference for an elderly housing development. The Boulevard Gardens project meets these criteria.
Gap financing is also needed to enable the development of the project. The rationale for additional gap funding is based on the following:
• Per FHFC RFA 2024-202, developments that serve elderly households must provide at least 50% 1 bedroom / 1 bathroom units, resulting in lower overall rents and lower first mortgage permanent financing. This requirement does not apply to developments that serve families.
• To meet the needs of the community, all units will be set aside for households whose income does not exceed 60% of the Broward County AMI. This will result in lower projected rents than developments serving Households whose income is 80% or more of the Broward County AMI. It should be noted that the project also includes a commitment to set aside 10% of the total affordable units for households whose Income does not exceed 33% of the Broward County AMI.
• The small size of the subject property (1.71 acres) results in higher development costs, given the six-story construction and complex site drainage system planned for the development.
• Continued high construction costs and relatively high interest rates, together with lower tax credit pricing and high property insurance costs contribute to the significant need for local government assistance.
• Boulevard Gardens has committed to keeping the development for a minimum of 99 years, while the standard affordable housing commitment for gap financing is 50 years.
After Board approval, the loan agreement(s) and other related loan documents will be drafted for the Boulevard Gardens project and will be executed by the County simultaneously with the closing of the financing for the project. The terms of the loan agreements will include a 0% interest rate loan with a term of 30 years, and the loan becomes payable on the maturity date, or upon sale, change of title, or refinancing, whichever occurs first, subject to the provisions of the loan agreement.
Staff recommends conditionally funding the Boulevard Gardens project for approximately 92 senior affordable housing units from the AHTF for a total allocation of $3,000,000 (consisting of $640,000 in LGAO Local Government Contribution and $2,360,000 in gap financing), contingent upon the project obtaining an award of 9% LIHTC from FHFC and to give staff the discretion to extend the award for the subsequent FHFC funding cycle, if necessary.
Source of Additional Information
Ralph Stone, Director, Housing Finance Division (954) 357-5320.
Fiscal Impact
Fiscal Impact/Cost Summary
The agenda item proposes to utilize $3,000,000 from the AHTF for new construction of a senior multi-family affordable housing rental unit development in the BMSD.