SUBJECT/RECOMMENDATION:
Title
Approve a local government contribution of $610,000.00 in General Fund Reserves as a funding commitment required for Blue Fort Harrison, LLC (Blue Sky Communities) to receive a basis boost under the State of Florida’s Low Income Housing Tax Credit (LIHTC) Program for an 82-unit affordable housing development project at 1219 Fort Harrison; and authorize the appropriate officials to execute documents necessary to effect closing.
Body
SUMMARY:
The LIHTC Program is governed by the U.S. Department of Treasury under Section 252 of the Tax Reform Act of 1986 and Section 42 of the Internal Revenue Code, as amended. The program provides for-profit and non-profit organizations with a dollar-for-dollar reduction in federal tax liability in exchange for the acquisition and substantial rehabilitation or new construction of low- and very low-income rental housing units. In the State of Florida, the LIHTC Program is administered by the Florida Housing Finance Corporation (FHFC).
On May 21, 2025, the City of Clearwater (City) issued a Notice of Funding Availability (NOFA) to support the minimum local match required for the FHFC’s 2025-202 Request for Applications (RFA), anticipated for release in October. The NOFA’s application period was open for 30 days and closed on June 20, 2025.
Two proposals were received in response to the NOFA. The first was submitted by Blue Sky Communities (Blue Sky) for the development of an 82-unit apartment community at 1219 Fort Harrison Avenue, known as Blue Fort Harrison. The second proposal was submitted jointly by American Residential Communities and New South Residential for an 84-unit development at 1467 Martin Luther King Jr. Avenue, referred to as Belleview Manor.
Blue Fort Harrison is a mixed-income project that includes:
• 12 units at 30% Area Median Income (“AMI”)
• 48 units at 60% AMI
• 18 units at 80% AMI
• 4 units at 120% AMI
Blue Sky also submitted a non-binding letter of intent from BayCare Health Systems expressing interest in exploring a partnership that could include rental preferences for BayCare employees. In addition, Blue Sky is collaborating with Ready for Life to house eight young adults, primarily former foster youth.
Belleview Manor is proposed as an age-restricted (55+) development with income-restricted units:
• 9 units at 40% AMI
• 75 units at 60% AMI
After close of the NOFA, a Technical Review Committee (TRC) comprised of city staff from diverse professional backgrounds was convened. The TRC met on June 23, 2025, at 2:30 P.M. to review and score the applications. The scoring matrix was based on developer qualifications, financial feasibility, anticipated neighborhood impact, and project compliance with applicable regulations such as the City’s codes and the Live Local Act.
The results of the scoring were as follows:
• Blue Fort Harrison: Average score of 90.83
• Belleview Manor: Average score of 82.5
Five of the six committee members ranked Blue Fort Harrison higher, with one member ranking Belleview Manor higher. Based on the scoring, the TRC recommends Blue Fort Harrison as the selected project for funding consideration.
The City’s $610,000.00 contribution will be in the form of an interest-free, deferred loan. While staff is recommending setting aside General Fund reserves for this purpose to ensure funding is available, the loan will likely be funded with HOME Investment Partnership Program and/or State Housing Initiatives Partnership Program funds (HOME Funds and SHIP Funds respectively). The allocation of such Home Funds and SHIP Funds has been accounted for in the City’s Annual Action Plan. Final approval of the City’s funding will be contingent upon the award of the 2025-202 Tax Credits, a subsidy layering analysis, and the approval of building permits.
APPROPRIATION CODE AND AMOUNT:
N/A
USE OF RESERVE FUNDS:
Funding for this contract will be provided by a commitment of General Fund reserves in the amount of $610,000.
STRATEGIC PRIORITY:
Objective 2.4 - Supports equitable housing programs that promote household stability and reduces the incidence of Homelessness within Clearwater.
