SUBJECT/RECOMMENDATION:
Title
Approve an amendment to the agreement for the sale and development of the property located at 1250 Cleveland Street and adjacent properties to Archway Partners and assigned to Archway Clearwater Gardens, LLC to approve public assistance of an amount not to exceed $3,610,000 and authorize the appropriate officials to execute same.
Body
SUMMARY:
The purpose of this item is to request approval of a second amendment to an existing development agreement between the Community Redevelopment Agency (CRA) Archway Partners and assigned to Archway Clearwater Gardens, LLC for the redevelopment of 1250 Cleveland Street and adjoining properties. For the first amendment, in accordance with Section 4.05 Project Schedule of the agreement, Archway Partners requested and was approved a one-year extension of all project deadlines. For the second amendment, Archway Partners is requesting public funds of an amount not to exceed $3,000,000 from the CRA and $610,000 from the Economic and Development Department
After receiving two Letters of Interest that aligned with the goals of the Downtown Redevelopment Plan, the Community Redevelopment Agency issued RFP/Q 43-21 for the redevelopment of its 2.35-acre site at 1250 Cleveland Street on May 26, 2021. The request called for a mixed-use or apartment development that maintained or expanded the existing community garden. The RFP was awarded to Archway Partners on August 16, 2021, because of the project’s excellent site design, developer experience, mixed income approach and rooftop garden. The proposed project is a 4-story, no less than 80-unit mixed income, affordable apartment development. The project has an urban design that fits the downtown design guidelines and will complement the new streetscape as well as provide an appropriate transition between the commercial uses on Cleveland Street and the residential area to the rear of the site. At a minimum, the amount of code required parking spaces will be provided, a rooftop garden and preservation of the existing community garden. There are one bedroom and two-bedroom units that range from 650-975 square feet of floor area. The units will be limited to between 30-80% AMI and will be income restricted for the life of the project. The building will obtain green building certification. The overall project cost is approximately $28,000,000.
Construction of the project was contingent on obtaining additional state funding. The developer failed to obtain four percent affordable housing tax credits/SAIL funding, in 2021 and may be submitting for nine percent tax credit financing as well as four percent tax credit financing in 2022 and requesting approximately $4 million in County funds through their Penny for Pinellas Program.
The 30% “basis boost” is no longer available on this site which will make future 4% tax credit applications unfeasible; however, since the Developer already applied for bonds in 2021, the basis boost is preserved as long as the bonds are closed by the end of 2023. The Developer has also obtained 20 Project-Based Vouchers (PBVs) from the Clearwater Housing Authority, which are worth approximately $2 million in funding towards the development. The project-based vouchers add additional revenue, which allows for an increase in available cash flow to support approximately $2 million of additional debt. However, if they are unsuccessful and the CRA elects not to amend the agreement, the development more than likely will cease due to the funding gap of approximately $10 million dollars. Additionally, the funding requested from the CRA and City will allow this development to move forward.
The proposed project meets the goals outlined in RFP/Q 43-21 derived from the Principles, Goals and Objectives of the 2018 Clearwater Downtown Redevelopment Plan to support redevelopment projects that are pedestrian friendly, incorporate quality urban design and provide a variety of land uses in downtown, including:
Policy 12: The City shall make use of Community Development Block Grant, HOME Investment Partnership Program, State Housing Initiatives Partnership program, and other federal, state, and county funds for Downtown infrastructure and increasing affordable housing options.
Policy 18: The design of all projects in Downtown shall incorporate pedestrian-scale elements that create and maintain an inviting pedestrian environment.
Objective 1F: Allow for a variety of residential densities and housing types to provide for a range of affordability and mix of incomes consistent with the Character Districts.
Objective 1G: Continue to utilize a variety of incentives to encourage the construction of new residential uses to location Downtown.
The $3,000,000 contribution from the CRA will be in the form of an interest-free, deferred loan. This is an excellent plan and Archway Partners is the right development team for this project. Approval of the amendment to allow public assistance of an amount not to exceed $3,000,000 is recommended.
APPROPRIATION CODE AND AMOUNT:
Funds are available and allocated in project code R2010 - County - Housing