Loading...
HomeMy WebLinkAboutExhibit DAtkinsRealis atkinsrealis.com Mrs. Marie "Maggie" Gouin Director Office of Management and Budget Miami Riverside Center 444 SW 2nd Avenue, 5th Floor Miami, FL 33130 Reference: Project Analysis — City of Miami — ARPA (SLFRF) Recommendation for application of ARPA (SLFRF) funds Project Name: Land Acquisition - Casa Valentina District 2 Proposed ARPA Funds Amount: $2,000,000 Proposed Activity for use of Funds: Loan/ Beneficiary Mrs. Gouin, October 30, 2024 We are sending the recommendation for the use of ARPA (SLFRF) funds for the referenced project. On June 5, 2024, Dragonfly Investments proposed taking over and restructuring the Casa Valentina sites at 3121 & 3173 Mundy St. The developer intends to assume the ARPA loan in the amount of $2M. After Casa Valentina Inc. previously incurred acquisition costs, closing costs, and legal fees in the amount of $1,056,833, the remaining available ARPA balance is $943,167. Dragonfly Investments will develop four (4) three -bedroom, 2-bathroom. 1,320 sq. ft. units on each of the sites (8 total units). The developments will provide affordable rental housing targeting low-income individuals at or below 80% of the area median income. The units will be manufactured modular homes assembled using steel structures. Based on the information and documentation provided by the City's Office of Management and Budget and the Department of Housing and Community Development, the project Land Acquisition - Casa Valentina is eligible for the use of ARPA (SLFRF) funds under the Department of Treasury Final Rule, Expenditure Category: 2.15 — Negative Economic Impacts: Assistance to Households: Long-term Housing Security: Affordable Housing contingent upon additional considerations and requirements being met. Under the SLFRF program, funds must be used for costs incurred on or after March 3, 2021. Further, funds must be obligated by December 31, 2024, and expended by December 31, 2026. This time period, during which recipients can expend SLFRF funds, is the "period of Page 1 of 2 AtkinsRealis performance". For considerations and requirements details go to the Project Analysis, here attached. The ARPA (SLFRF) funds, amounting to $943,167, will be allocated for hard construction costs. The eight city units must be rented to individuals at or below 80% of AMI. This is a deferred loan with no debt service payments required, and the property must retain the required affordability structure for a period of 30 years. Please review and contact us with any questions you may have. Jamelyn Austin Trucks, CFM, PMP, CGM ARPA Consultant, Subject Matter Expert Senior Project Manager, Land Planning Lead Enclosures as noted. Page 2 of 2 Project Analysis — City of Miami — ARPA (SLFRF) District 2 Project Title Land Acquisition (Casa Valentina) Project No. (e-Builder) N/A Total Project Cost $2,000,000 Proposed ARPA Funding $2,000,000 Project Type • Loan Project Status • In Progress Project Estimated Completion TBD Agreement Type Loan Agreement— Forgivable Loan Eligible Use Support the COVID-19 public health and economic response by addressing COVID-19 and its impact on public health as well as addressing economic harms to households, small businesses, nonprofits, impacted industries, and the public sector. Project Expenditure Category 2.15: Negative Economic Impacts — Long -Term Housing Security: Affordable Housing Project Justification (short- SOW) On June 5, 2024, Dragonfly Investments proposed taking over and restructuring the Casa Valentina sites at 3121 & 3173 Mundy St. The developer intends to assume the ARPA loan in the amount of $2M. After Casa Valentina Inc. previously incurred acquisition costs, closing costs, and legal fees in the amount of $1,056,833, the remaining available ARPA balance is $943,167. Dragonfly Investments will develop four (4) three -bedroom, 2- bathroom. 1,320 sq. ft. units on each of the sites (8 total units). The developments will provide affordable rental housing targeting low-income individuals at or below 80% of the area median income. The units will be manufactured modular homes assembled using steel structures. The funds will be used for hard construction costs. The eight city units must be rented to individuals at or below 80% of AMI. This is a deferred loan with no debt service payments required, and the property must retain the required affordability structure for a period of 30 years. Eligible (Y/N) Yes, Project is considered eligible under Department of Treasury Final Rule, contingent upon the below additional considerations and requirements being met. Additional Information needed Provide loan forgiveness term end date. Next Steps AtkinsRealis to review executed MOU, report expenses and monitor expenses under new borrower QC Completed (Name/Date) Jamelyn Austin Trucks 10/30/2024 Additional Considerations/Program Requirements: • Under the SLFRF program, funds must be used for costs incurred on or after March 3, 2021. Further, funds must be obligated by December 31, 2024, and expended by December 31, 2026. This time period, during which recipients can expend SLFRF funds, is the "period of performance." • ARPA funds can be used to provide additional funding for projects in progress prior to 3/3/2021, however only activities initiated AFTER 3/3/2021 are eligible for ARPA funds. • Ensure that the City of Miami Procurement Process or the Sub -Recipient Procurement Process meets Office of Management and Budget procurement standards set forth in 2 CFR 200.316- 320. • Expenditure Category 2.15: Negative Economic Impacts — Long -Term Housing Security: Affordable Housing — Requires the following additional reporting: o Recipients must identify the amount of total funds that area allocated to evidence - based interventions. o Recipients must report on whether projects are primarily serving disproportionately impacted communities. • Project Demographic Distribution (applicable to Public Health and Negative Economic Impact ECs: EC 1.1-2.37)— Collection to begin April 2022 Recognizing the disproportionate public health and negative economic impacts of the pandemic on many households, communities, and other entities, recipients must report whether certain types of projects are targeted to impacted and disproportionately impacted communities. Recipients will be asked to respond to the following: o What Impacted and/or Disproportionally Impacted population does this project primarily serve? Please select the population primarily served. o If this project primarily serves more than one Impacted and/or Disproportionately Impacted population, please select up to two additional populations served Recipients will select from the following options: Assistance to Households Impacted o Low- or -moderate income households or populations o Households that experienced unemployment o Households that experienced increased food or housing insecurity o Households that qualify for certain federal programs o For services to address lost instructional time in K-12 schools: any students that lost access to in -person instruction for a significant period of time o Other households or populations that experienced a negative economic impact of the pandemic other than those listed above (please specify) Disproportionately Impacted o Low-income households and populations o Households and populations residing in Qualified Census Tracts o Households that qualify for certain federal programs o Households receiving services provided by Tribal governments o Households residing in the U.S. territories or receiving services from these governments o For services to address educational disparities, Title I eligible schools o Other households or populations that experienced a disproportionate negative economic impact of the pandemic other than those listed above (please specify) • Public Health and Negative Economic Impact (EC 1.1-3.5) - Collection to begin in April 2022 • Brief description of structure and objectives of assistance program(s), including public health or negative economic impact experienced • Brief description of how a recipient's response is related and reasonably and proportional to a public health or negative economic impact of COVID-19. • Use of Evidence (for relevant ECs)—Collection began April 2022 • The dollar amount of the total project spending that is allocated towards evidence - based interventions • Whether a program evaluation of the project is being conducted • Household Assistance (EC 2.2, Long -Term Housing Security (EC 2.15-2.16) and Housing Support (EC 2.17-2.18): o Number of households receiving eviction prevention services (including legal representation) o Number of affordable housing units preserved or developed. • Negative Economic Impacts (EC 2): As relevant, describe how funds are being used to respond to negative economic impacts of the COVID-19 public health emergency, including services to households (such as affordable housing, job training, and childcare), small businesses, nonprofits, and impacted industries. Responding to Public Health and Economic Impacts of COVID-19 To assess eligible uses of funds in this category, recipients should (1) identify a COVID-19 public health or economic impact on an individual or class (i.e., a group) and (2) design a program that responds to that impact. Responses should be related and reasonably proportional to the harm identified and reasonably designed to benefit those impacted. The final rule recognizes that the pandemic caused broad -based impacts that affected many communities, households, and small businesses across the country; for example, many workers faced unemployment and many small businesses saw declines in revenue. The final rule describes these as "impacted" households, communities, small businesses, and nonprofits. At the same time, the pandemic caused disproportionate impacts, or more severe impacts, in certain communities. For example, low-income and underserved communities have faced more severe health and economic outcomes like higher rates of COVID-19 mortality and unemployment, often because pre- existing disparities exacerbated the impact of the pandemic. The final rule describes these as "disproportionately impacted" households, communities, small businesses, and nonprofits SLFRF Affordable Housing (How to Guide) Expanded Presumptive Eligibility. SLFRF permits funds to be used, among other uses, to combat the public health and negative economic impacts (PH-NEI) of the pandemic. Treasury has updated its guidance to clarify two presumptively eligible ways to use SLFRF to fund affordable housing investments under the final rule. Option 1: SLFRF funds used for affordable housing projects under the PH-NEI eligible use category are presumptively eligible if the project meets certain core requirements of the following expanded list of federal housing programs: • National Housing Trust Fund (HTF) • HOME Investment Partnerships Program (HOME) • Low -Income Housing Credit (LIHTC) • Public Housing Capital Fund • Section 202 Supportive Housing for the Elderly Program • Section 811 Supportive Housing for Persons with Disabilities Program • Project -Based Rental Assistance • Multifamily Preservation & Revitalization Program • Affordable housing projects provided by a Tribal government if they would be eligible for funding under the Indian Housing Block Grant program, the Indian Community Development Block Grant program, or the Bureau of Indian Affairs Housing Improvement Program The program requirements of these federal housing programs that must be met for presumptive eligibility have been clarified to include four core requirements: • Resident income restrictions; • The affordability period and related covenant requirements for assisted units; • Tenant protections; and • Housing quality standards. Option 2: SLFRF funds used for affordable rental housing under the PH-NEI eligible use category are presumptively eligible uses if the units funded serve households at or below 65% of AMI for a period of 20 years or greater. • A broader range of affordable housing investments may also be eligible uses of SLFRF funds under the final rule if they are related and are reasonably proportional to addressing the negative economic impacts of the pandemic and otherwise meet the final rule's requirements. Depending on the needs of the local rental market, it may be reasonably proportional to address the negative economic impacts of the pandemic by funding units (e.g., up to 80% AMI) that do not fall into the presumptively eligible categories listed above. Flexibilities and Requirements for Long -Term Loans for Affordable Housing: Treasury has concluded that the features of certain long-term loans significantly mitigate concerns about funds being deployed for purposes of recycling funds, potentially for ineligible uses, following the SLFRF program's expenditure deadline. Treasury has determined that SLFRF funds may be used to finance certain loans that support affordable housing investments. Specifically, under the PH-NEI eligible use category, recipients may use SLFRF funds to make loans to finance affordable housing projects, funding the full principal amount of the loan, if the loan and project meet the following requirements: 1. The loan has a term of not less than 20 years; 2. The affordable housing project being financed has an affordability period of not less than 20 years after the project or assisted units are available for occupancy after having received the SLFRF investment; and 3. To protect affordability, the project owners of any properties receiving SLFRF loans which also receive LIHTC financing must agree to waive their right to request a qualified contract as defined in Section 42(h)(6)(F) of the Internal Revenue Code and repay any loaned funds if the property becomes noncompliant. Loans that fund investments in affordable housing projects under the PH-NEI eligible use category which meet the above criteria will be considered to be expended at the point of disbursement to the borrower, and repayments on such loans are not subject to program income rules. Loan modifications will be permitted if the modifications do not result in repayment of all or substantially all funds to the lender prior to the end of the affordability period. To reduce administrative complexity, the start date of the 20-year affordability covenant may conform to the start date of other covenants on the same project or units that are required by another source of federal or state funding associated with the project or units. Layering SLFRF with other Funding Opportunities SLFRF may be combined with a wide range of other federal, state, local, and private resources to meet housing needs. The rest of this guide provides an overview of possible combinations and uses of resources. Recipients using SLFRF in conjunction with another federal program must comply with all related statutory and regulatory requirements and policies of both programs, including the capital expenditure requirements and the requirement that if a project is only partially funded with SLFRF, the portion of the project funded must be an eligible use under the SLFRF program. 1. Flexible funding for new construction and substantial rehabilitation of affordable housing SLFRF may help fill gaps and expedite the construction or rehabilitation of thousands of affordable housing projects around the nation that face funding gaps, in many cases due to the impacts of COVID-19 and the resulting economic challenges on materials and labor costs. Recipients also could use these funds to support "shovel ready" projects that have received other funding approvals from federal, state, local government, or private sources. Examples include: • LIHTC projects: SLFRF may fill funding gaps to projects that received an allocation of 9 or 4 percent LIHTC, for new construction or preservation of affordable rental housing. • Federal Housing Administration (FHA) multifamily mortgage insurance: HUD's Office of Multifamily Housing insures new construction and substantial rehabilitation loans for the construction or substantial rehabilitation of rental or cooperative housing under section 221(d)(4) of the National Housing Act. These loans are often not sufficient to cover the entire cost of these transactions, and SLFRF could provide necessary additional financing to make the projects financially viable. The 221(d)(4) program includes key goals and requirements related to federal wage rates and environmental reviews. • HOME and HTF: The HOME program, through which funds are provided to state and local governments designated as Participating Jurisdictions (Pis), and HTF, which provides formula funds to states, may be used for acquisition, rehabilitation, and new construction of affordable homeownership or rental housing. Recipients may align SLFRF with these HUD programs to meet affordable housing production and repair goals. • HOME -ARP: The American Rescue Plan provided funding to Pis to assist qualifying populations. SLFRF may be layered with HOME -ARP to acquire, rehabilitate, or newly construct rental housing for eligible populations. • Project -Based Vouchers (PBVs): Recipients may partner with their local Public Housing Authorities (PHAs), which may be able to award PBVs to support construction or rehabilitation of units pursuant to section 8(o)(13) of the U.S. Housing Act of 1937. • Recapitalization of Public Housing through HUD's Rental Assistance Demonstration (RAD): Many PHAs are undertaking substantial rehabilitation of public housing or repositioning public housing and adding new homes under RAD. SLFRF may fill gaps in these RAD transactions or may be used as a flexible source to support Faircloth-to-RAD housing transactions, which allow PHAs to add new affordable housing. • Community Development Block Grants (CDBG) and Section 108 Loan Guarantee Program: SLFRF may be combined with CDBG funding that states, metropolitan cities, and urban counties receive annually to support rehabilitation, conversion, or reconstruction projects. Recipients may align SLFRF with CDBG or Section 108 Loan Guarantee Program financing to make eligible affordable housing investments. • Rural Housing: SLFRF funds may be combined with loans under USDA's Section 515 Multifamily Housing Direct Loan Program to construct affordable multifamily rental housing for households with very low, low or moderate incomes in eligible rural areas. Funds may also be provided to develop affordable rental housing in rural areas for any project benefitting from a loan guarantee under USDA's Section 538 Multifamily Housing Loan Guaranteed Program. • Workforce Housing: SLFRF funds may be used to preserve affordable workforce housing units. Funds may be used in the capital stack of any project that is partially financed by a loan purchased by Fannie Mae under its Sponsor -Dedicated Workforce Housing Program or Sponsor -Initiated Affordability Program, or purchased by Freddie Mac under its Workforce Housing Preservation Program. • Choice Neighborhoods Program: The Choice Neighborhoods (CN) Program provides funding to cities, public housing authorities and tribes to redevelopment severely distressed HUD public housing and other HUD -assisted housing projects which are located in low-income neighborhoods. SLFRF funds could supplement a Choice Neighborhood Implementation Grant to replace severely distressed public housing and provide housing that decreases the concentration of very -low income families. • Supportive Housing: SLFRF funds could support projects receiving capital advances to finance the development of supportive housing for very low-income elderly persons under HUD's Section 202 program. SLFRF funds could also support projects receiving capital advances to finance supportive rental housing for persons with disabilities or provide project rental assistance under HUD's Section 811 programs. Predevelopment Recipients may use SLFRF to help fund pre -project development activities, which could include site work and land acquisition, that precede housing development or rehabilitation of affordable housing. • Land acquisition: Recipients may use SLFRF to acquire land for future development or within existing land acquisition programs for purposes of affordable housing investments, including those funded with CDBG or Section 108 Loan Guarantee Program funds. • Predevelopment and site work: SLFRF may be used for predevelopment activity and site work to lay the ground for affordable housing development. Recipients planning to layer SLFRF with HOME for new construction should review HUD environmental review and planning requirements. Opportunities to Use Limited Funds Even if a recipient only has a small amount of funds remaining unobligated, there are a variety of eligible housing related uses that do not require significant capital investment. These include: • Subgrants to an organization for eligible uses under the CDBG program; • Funding pre -development activities to enable future housing projects; • Providing bill credits to homeowners to offset rising utility or insurance costs; • Conducting home energy audits to support weatherization improvements of affordable housing; • Establishing a Community Land Trust; or • Forgiving fines and fees that would otherwise result in eviction or foreclosure. FAQ 4.8. May recipients fund a project with both ARPA funds and other sources of funding (e.g., blending, braiding, or other pairing funding sources), including in conjunction with financing provided through a debt issuance? Generally, yes, provided that the costs are eligible costs under each source program and are compliant with all related statutory and regulatory requirements and policies, as applicable, including restrictions on use of funds (e.g., Buy America Preference (see FAQs #6.18, #6.19), National Environmental Policy Act (see FAQ #6.3)). The recipient must comply with applicable reporting requirements for all sources of funds supporting the SLFRF project. The recipient may source funding for a project in multiple ways, including but not limited to the following: • Using funds available under the revenue loss eligible use category for non-federal match (see FAQ #4.6) • Pooling funds for a joint project with another SLFRF recipient (see FAQ#4.7) • Transferring funds to a subrecipient to finance a project that also uses other sources of funding • Blending or braiding SLFRF funds with other sources of government funding, including debt issuance, to pursue a project Localities may also transfer their funds to the state through section 603(c)(4) of the Social Security Act, which would decrease the locality's award and increase the state award amounts. Note that using a recipient blending and braiding funds in conjunction with other sources of funding is distinct from using funds for non-federal match. In the case of non-federal match, the recipient would be using SLFRF funds to satisfy cost -sharing or matching requirements in order to qualify for another source of federal funding, while blending and braiding refers to using multiple sources of funding for complementary purposes. If the entirety of a project is funded with SLFRF funds, then the entire project must be an eligible use. The use of funds is subject to the deadline of obligating funds no later than December 31, 2024, and expending funds no later than December 31, 2026, except for Surface Transportation projects and Title I projects that have an expenditure deadline of September 30, 2026. If a project is partially funded with SLFRF funds, then the relevant portion must be an eligible use of SLFRF funds and the SLFRF funds must be obligated by December 31, 2024, and expended by December 31, 2026, except for Surface Transportation projects and Title I projects that have an expenditure deadline of September 30, 2026. In either case, recipients must be able to, at a minimum, determine and report to Treasury on the amount of SLFRF funds obligated and expended and when such funds were obligated and expended. SLFRF funds may not be used to fund the entirety of a project that is partially, although not entirely, an eligible use under the 2022 final rule. However, SLFRF funds may be used for a smaller component project that does constitute an eligible use, while other funds are used for the remaining portions of the larger planned project that do not constitute an eligible use. In this case, the "project" for SLFRF purposes under this program would be only the eligible use component of the larger project. For example, a recipient government may use SLFRF funds to subsidize the production of affordable housing units as a response to the pandemic and its negative economic impacts and use other funds to build other parts of a larger development that contains these affordable units. 4.9. May funds be used to make loans or other extensions of credit ("loans") to support an eligible use? Yes. SLFRF funds may be used to make loans, provided that the loan supports an activity that is an eligible use of funds. The cost of the loan must be tracked and reported in accordance with the points set out below. For example, a recipient may, consistent with the requirements of the 2021 interim final rule and 2022 final rule, use funds to finance the construction of affordable housing or a necessary investment in water, sewer, or broadband infrastructure. For the eligible use categories outlined in the 2022 final rule, funds may be used to cover "costs incurred" beginning on March 3, 2021, and such funds must be obligated by December 31, 2024. For the eligible use categories outlined in the 2023 interim final rule, funds may be used to cover "costs incurred" beginning on December 29, 2022, and must be obligated by December 31, 2024. Accordingly, recipients must be able to determine the amount of funds used to make a loan. • Contributions to Revolving Loan Funds. A recipient may contribute SLFRF funds to a revolving loan fund if the loaned SLFRF funds are restricted to financing eligible uses under the public health emergency/negative economic impacts, premium pay, necessary water, sewer and broadband infrastructure categories (or under the government services category if the contribution to the revolving loan fund is made using SLFRF funds), and Title I projects eligible use categories. The amount contributed using SLFRF funds must be limited to the projected cost of loans made over the life of the revolving loan fund, following the approach described above for loans with maturities longer than December 31, 2026 (or September 30, 2026, for Title I projects). • Loans funded with SLFRF funds under the revenue loss eligible use category. Notwithstanding the above, if a recipient uses SLFRF funds under the revenue loss eligible use category to fund a loan, whether or not the maturity of the loan is after December 31, 2026, the loaned funds may be considered to be expended at the point of disbursement to the borrower, and repayments on such loans are not subject to program income rules. Similarly, any contribution of revenue loss funds to a revolving loan fund may also follow the approach of loans funded under the revenue loss eligible use category. • Loans to fund investments in affordable housing projects. Notwithstanding the above requirements for loans with maturities beyond December 31, 2026, Treasury has determined that SLFRF funds may be used to finance certain loans that finance affordable housing investments, as it is typical for state and local governments to finance such investments through loans and because the features of these loans significantly mitigate concerns about funds being deployed for purposes of recycling funds, potentially for ineligible uses, following the SLFRF program's expenditure deadline. Specifically, under the "public health and negative economic impacts" eligible use category, recipients may use SLFRF funds to make loans to finance affordable housing projects, funding the full principal amount of the loan, if the loan and project meet the following requirements: • The loan has a term of not less than 20 years; • The affordable housing project being financed has an affordability period of not less than 20 years after the project or assisted units are available for occupancy after having received the SLFRF investment; and • For loans to finance projects expected to be eligible for the low-income housing credit (LIHTC) under section 42 of the Internal Revenue Code of 1986 (the Code), • the project owner must agree, as a condition for accepting such a loan, to waive any right to request a qualified contract (as defined in section 42(h)(6)(F) of the Code); and • the project owner must agree to repay any loaned funds to the entity that originated the loan at the time the project becomes non -compliant, including if such project ceases to satisfy the requirements to be a qualified low-income housing project (as defined in section 42(g) of the Code) or a qualified residential rental project (as defined in section 142(d) of the Code), or if such project fails to comply with any of the requirements of the extended low-income housing commitment that are described in section 42(h)(6)(B)(i)-(iv) of the Code. Loans that fund investments in affordable housing projects under the public health and negative economic impacts eligible use category and meet the above criteria may be considered to be expended at the point of disbursement to the borrower, and repayments on such loans are not subject to program income rules. Loan modifications are permitted if the modifications do not result in repayment of all or substantially all funds to the lender prior to the end of the affordability period. To reduce administrative complexity, the start date of the 20-year affordability covenant may conform to the start date of other covenants on the same project or units that are required by another source of federal or state funding associated with the project or units.