Agenda Item Name:
Title
Ability Housing Dogwood Village Project
End
Presenter:
Sylvia Torres, County Attorney
Description:
The County Attorney’s Office and staff are providing the Board with an update on its involvement with Ability Housing’s Dogwood Village affordable housing development. Since the Board last considered this issue in December, the County has received correspondence from the Florida Housing Finance Corporation and Ability Housing with new information. We are seeking direction on whether the Board wants to reconsider its local funding contribution and other related issues.
Recommended Action:
Recommended Action
Hear update regarding the Ability Housing’s Dogwood Village affordable housing development and other related issues and provide direction.
Options for direction include but are not limited to the following, in part or in combination:
a. take no action;
b. re-commit and re-verify local government support contribution for Dogwood Village and notify Florida Housing Finance Corporation via a letter from the Chair, and direct the Clerk to assign general fund fund balance to secure the commitment; \
c. direct staff to investigate the potential use or purchase of parcel 16106-129-000 owned by Ability DWV II, LLC, and engage neighbors and other interested stakeholders about future use of parcel;
d. direct staff to approach Ability Housing, neighbors and other interested stakeholders about negotiating a community benefits agreement (examples available here: https://www.powerswitchaction.org/resources/community-benefits-agreements/#examples <https://www.powerswitchaction.org/resources/community-benefits-agreements/>); and/or
e. any other Board directive.
End
Prior Board Motions:
September 20, 2020: Regular Meeting/consent agenda
Match the HFA's loan funding commitment in the amount of $230,000.00 for an applicant that receives approval under the State Apartment Incentive Loan Program (SAIL); with the release of loan funding contingent on the applicant executing the appropriate loan and other documents required by the County that are consistent with applicable statutes and administrative rules governing the programs.
September 13, 2022: Regular Meeting:
Commissioner Cornell moved the following:
1. That Alachua County request via a Chair Letter that the Florida Housing Finance Corporation consider working Alachua County and Ability Housing to allow Ability Housing to relocate their proposed project or a similar project to a new location in Alachua County. (Request for a response within 30 days.)
2. All projects that will receive funding from Alachua County will be reviewed by the AHAC for recommendation. The committee will review the projects based on a minimum of the following:
a. Location adds to diversity of housing options in a given area and is not concentrating low-income housing
b. The target income levels match our Comp Plan priorities in the Comp Plan and that staff work with AHAC and the Florida Housing Coalition to develop appropriate thresholds
c. Length of affordability, with priority given to projects that preserve affordability for 30 years or more.
3. All projects will have to provide a community engagement plan and a timeline with their application for support or funding to Alachua County and show evidence of implementing this plan prior to release of funds or letters of support.
4. Request that the Housing Finance Authority provide an update to the AHAC at our regular meetings, and send a Chair Letter to the HFA requesting they also consider requiring a community engagement plan with applications.
December 13, 2022: Special Meeting: Policy Discussion:
1. That this Board re-affirms our Policy and Goals that states that while we support Affordable Housing Projects we do not support projects that further concentrate poverty within the City of Gainesville. Further we recognize that within the City of Gainesville, 85%-90% of affordable housing projects are located East of Main Street therefore, for future projects we will seek to locate these projects west of Main Street and follow our new guidelines passed at our September 13, 2022 meeting.
2. Staff continue to work with Ability Housing and the City of Gainesville and inform Ability Housing that the:
a. BOCC cannot support a local match at this particular site for the reasons stated above and for the reasons stated in our September 19th Chair Letter to Trey Price.
b. While the BOCC cannot support this affordable housing project at this location, we absolutely support this type of project at other locations within the City of Gainesville and the rest of the County that do not further concentrate systemic poverty and follow our policies passed on September 13, 2022.
c. Finally, work both the City staff and Ability Housing to come up with an Acceptable and Fair price to acquire the property recently purchased by Ability Housing on S.E. 15th Street.
That we send another letter to Trey Price that restates our previous objections to this project at this particular site as stated by Chair Wheeler on September 19th and further states that specific justification of why the County would like to move this project is because both the City and the County are trying to disperse affordable housing equitably throughout the City to change decades of systemic and intentional concentrations of poverty. Therefore, to proceed with this project at this location would violate both the City and the County’s policies and goals to equitably disperse Affordable Housing in Gainesville. Further states that while this site is not acceptable for this type of project, there are other potential sites that require additional time to either secure or vet that would absolutely be supported by the BOCC. While we are withdrawing our local support for this particular site, we would not withdraw our support for this type of Affordable Housing Project that is located in an Area of Gainesville that properly disperses Affordable Housing in our Community (i.e. Anywhere west of Main Street). Please provide both Ability Housing and Alachua County additional time from the deadlines stated in paragraph 9 of Ability Housing’s December 9, 2022 letter.
Fiscal Consideration:
Fiscal Consideration
Unknown at this time
End
Strategic Guide:
Strategic Guide
N/A
End
Background:
The Florida Housing Finance Corporation (“Florida Housing”) administers certain state-wide affordable housing programs, including the State Apartment Incentive Loan Program (SAIL) which provides low-interest loans on a competitive basis for affordable housing projects.
On September 20, 2020, the Board of County Commissioners (“BoCC”) considered participation in the SAIL program, on its consent agenda (item titled: “Alachua County Housing Finance Authority (HFA) State Apartment Incentive Loan (SAIL) Local Government Areas of Opportunity Funding Request.” {Attach 1: Agenda Item 20-0764}). The agenda item was prompted by a memorandum from the Alachua County Housing Finance Authority requesting that the BoCC consider participating in the Local Government Areas of Opportunity Funding by providing a low-interest loan commitment which would make a development eligible for certain funding. {Attach 2: Housing Finance Authority Memorandum}. The following recommended action was approved by the BCC on September 20, 2020:
Match the HFA's loan funding commitment in the amount of $230,000.00 for an applicant that receives approval under the State Apartment Incentive Loan Program (SAIL); with the release of loan funding contingent on the applicant executing the appropriate loan and other documents required by the County that are consistent with applicable statutes and administrative rules governing the programs.
The total local loan funding available to an eligible SAIL project was $460,000 ($230,000 from the BCC and $230,000 from the Alachua County Housing Finance Authority).
Following the BoCC’s commitment, the Alachua County Housing Finance Authority issued a public Notice of Fund Availability & Request for Applications (“NOFA”) for SAIL projects supported by local government loans up to $460,000. These projects would be multi-family developments seeking housing credits pursuant to the Florida Housing’s Request for Applications 2021-201. Ability Housing submitted an application to the Alachua County Housing Authority in response to the NOFA for the proposed Dogwood Village project. According to its application, Dogwood Village would be a garden style apartment community with 96 units proposed for a target income of 60% AMI and 33% AMI (10 units at 33% AMI) {See Attach 5: Presentation}. In 2022 numbers (expected to increase), Ability Housing reports to the County that the annual income limits for these 96 units would ranges from $19,000 (or $9.13/hr.) for a one-person household, to $49,000 (or $23.56/hr.) for a four-person household, see Attachment 12. It would be located at the corner of SE 8th Ave and SE 15th Street in Gainesville, Florida. The Alachua County Housing Finance Authority approve the application at a public meeting.
In August 2021, Ability DWV I, LLC and Ability Housing, Inc. submitted an application to Florida Housing RFA 2021-201 for the proposed Dogwood Village project. Along with Ability Housing’s application was a Local Government Verification of Contribution signed by the BCC Chair for the amount of $460,000 {Attach 3: Local Contribution Loan Form}. The Florida Housing considered Dogwood Village in the competitive RFA process and scored it based upon factors, including local government contribution. The Florida Housing awarded funding to Ability Housing for the proposed Dogwood Village project.
On September 13, 2022, the BoCC met to discuss the Dogwood Village project and to hear concerns for neighbors to the development. Ability Housing presented an overview of the project at that meeting. {Attach 5: Dogwood Village 9/13/22 Presentation}. The BoCC directed that a Chair letter be sent to the Florida Housing asking for it to consider relocation of the project. Following the meeting, a letter was sent to the Florida Housing {Attach 7: BCC Letter to FHFC, 9.19.22}. The Florida Housing responded to the Chair letter requesting relocation of the project on November 28, 2022 {Attach 8: FHFC Letter to BCC, 11.28.22}. The Florida Housing indicated a change for a proposed development would not be allowed due to competitive nature of the RFA. However, the Executive Director also ended the letter stating that while Florida Housing “may not approve such a request, but to meaningful consider a waiver of the Rule, providing more specific information will be helpful for our analysis.” Continued efforts were then made to consider alternate locations.
In the meantime, Ability Housing purchased by the parcel for the Dogwood Village development, on or about October 27, 2022 {Attach 4: Map of Properties} (please see parcel no.16107-150-000). Ability also purchased a second parcel to the south identified as parcel no. 16106-129-00 {See Attach. 4}.
On December 9, 2022, Ability Housing sent the BoCC Chair a letter regarding a requested relocation of the Dogwood Village development explaining that, from its perspective, “none of the identified [relocation] sites are viable”. {Attach 9: Ability Letter to BCC 12.9.22}.
The BoCC discussed the development again during its public policy meeting on December 13, 2022, which included hearing from the public and from Ability Housing’s representative. The BoCC, in a 3-2 vote, determined that it would not support the local match previously agreed to for Dogwood Village (see motion above).
Following the meeting, the Chair sent a letter to Florida Housing informing it of the BoCC’s December 13, 2022, motion {Attach 10: BCC Letter to FHFC 12.15.22} . An additional letter was sent from the County Manager to Ability Housing regarding the BoCC’s motion {Attach 11: County Letter to Ability 12.15.22}. In response to the BoCC’s December 13 action and resulting letters, the County received correspondence from Ability Housing on December 28, 2022. This letter raises concerns of liability and damages of which Ability Housing was seeking the County to “make Ability Housing whole”. A non-exhaustive list of potential liability and damages claimed by Ability Housing:
o Purchase both parcels from Ability Housing: $1,813,287;
o Reimburse all costs associated with property acquisition and predevelopment work, including overhead: $670,906;
o Carrying costs: not quantifiable at this time;
o Reimburse lost earned revenue: $2,717,241; and
o Replace financing for a 96-unit affordable housing development: ~$10,000,000.
Also, included with Ability Housing’s December 28th letter to the BoCC was a letter that Ability Housing received from the Florida Housing {Attach 12: Correspondence from Ability, 12.28.22} & {Attach 13: FHFC letter to Ability, 12.28.22}. The Florida Housing stated that a result of the BoCC withdrawing local support:
o Florida Housing will not permit relocation of Dogwood Village and will not approve extensions of program deadlines for the project.
o Ability Housing must return the SAIL award by January 27, 2023. If it does not return the funding, Florida Housing staff will request that its request that its Board of Directors “deobligate the award” for Dogwood Village at its January 27th meeting. Deobligation would prohibit Ability Housing from participating in future competitive funding opportunities.
o Regardless of whether Ability Housing meets the January 27th deadline, “Alachua County will remain on the list of local governments with a lower funding preference” for future RFA projects for the next two years.
Ability Housing’s December 28th letter encourages the BoCC to make a different decision about its local support funding. This agenda item is being brought to consider new information that the County has received since the BoCC’s last meeting on December 13, 2022 and to permit a reconsideration of that decision, if the Board is interested. The new information for consideration is, as follows.
o Florida Housing will not allow any extensions of Ability Housing’s obligations.
o Florida Housing will not permit the project to relocate.
o Ability Housing intends to sue the County for its damages as a result of its withdrawing local support and has estimated its damages to be more than $15,000,000.
o The County will remain on Florida Housing’s “list of local governments with lower funding preference for the LGAO (local government area of opportunity) designation in future RFAs for the next two years.”
Depending on the nature of Ability Housing’s threatened lawsuit against the County, defense costs could be within a range of $100,000 (if handled by in-house attorneys) or $500,000 (if handled by contract attorneys). Liability would likely require a court to find a contractual relationship between the County and Ability Housing and that the relationship was breached. Assessing damages at this point, especially prior to a lawsuit being filed, would be purely speculative. Ability Housing has an obligation to mitigate their damages, but were liability found, damages could be expected to be in 7 figures. Litigation should be expected to last 2-3 years.