Consider Waiver of the Refund of Development and Impact Fee Policy of the Neighborhood Empowerment Zone Tax Abatement Policy and Basic Incentives for the Sphinx at Sierra Vista Senior Villas to be Located at 2942 South Riverside Drive in the Rolling Hills Neighborhood Empowerment Zone to Allow Escrow of Eligible Development Fees and Refund Upon Completion of the Project (COUNCIL DISTRICT 8)

It is recommended that the City Council consider a waiver of the Refund of Development and Impact Fee Policy of the Neighborhood Empowerment Zone Tax Abatement Policy and Basic Incentives for the Sphinx at Sierra Vista Senior Villas to be located at 2942 South Riverside Drive in the Rolling Hills Neighborhood Empowerment Zone to allow escrow of eligible development fees and refund upon completion of the project.

Riverside Senior Investments, LP (Partnership) applied to the Texas Department of Housing and Community Affairs (TDHCA) for 2016 Non-Competitive (4 %) Housing Tax Credits in order to finance a portion of the costs of developing the Sphinx at Sierra Vista Senior Villas. The development will have approximately 272 units for tenants over the age of 55 with incomes at or below 60 percent of Area Median Income. Fourteen of the units will be Permanent Supportive Housing units. The Fort Worth Housing Finance Corporation will participate in the ownership of the development. The City Council adopted a Resolution of No Objection to the proposed development on October 18, 2016 (Resolution No. 4691 10-2016 and Mayor and Council Communication (M&C G-18859).

The Partnership applied for and received a NEZ certification for the Sphinx at Sierra Vista Villas project. The Partnership is requesting a waiver of the "Refund of Development and Impact Fee Policy", Attachment A, to the Neighborhood Empowerment Zone Tax Abatement Policy and Basic Incentives (NEZ Policy) to allow all NEZ eligible development fees to be escrowed then refunded at the completion of the project. This waiver is necessary because the City's NEZ Policy has no mechanism which allows development fees to be paid or escrowed by an applicant on a certified project like this one. However, the fees must be paid then refunded in order to comply with TDHCA requirements for this project. The City's NEZ Policy only allows an applicant to escrow fees while awaiting certification of a project. Once a project is certified, fees are waived, not escrowed.

The waiver of eligible development fees allowed by the NEZ Policy is needed because the financing structure for the development was approved by TDHCA staff on the assumption that a City forgivable "soft loan" would pay for the approximately $550,000.00 of development/application fees. TDHCA approved the Partnership's application for tax credits on July 27, 2017. Staff has consulted with TDHCA and allowing the Partnership to escrow then be refunded the NEZ eligible fees meets TDHCA's feasibility standards and maximizes the developer's tax credit allocation. Only fees allowed by the NEZ policy that are escrowed will be refunded.

Staff recommends the authorization of a waiver of the Refund of Development and Impact Fee Policy of the NEZ policy to allow the Partnership to escrow then be refunded approximately $550,000.00 of development fees for the Sphinx at Sierra Vista Senior Villas to ensure the viability of the development which will allow it to remain eligible for the maximum allocation of tax credits from TDHCA. Fees not subject to the NEZ Policy will not be waived.

The development is located in COUNCIL DISTRICT 8.

This M&C does not request approval of a contract with a business entity.