It is recommended that the City Council:

1. Authorize substantial amendment to the City's  2016-2017 Action Plan;

2. Authorize the City Manager or his designee to substitute funding years in order to meet United States Department of Housing and Urban Development commitment, disbursement and expenditure deadlines;

3. Authorize the change in use and expenditure of $1,100,000.00 in prior year's HOME Investment Partnerships Program grant funds to the Riverside Senior Investments, LP in the form of a subordinate loan for the development of the Sphinx at Sierra Vista Senior Villas to be Located at 2942 South Riverside Drive;

4. Authorize the City Manager or his designee to execute a contract with Riverside Senior Investments, LP for a term of three years beginning on the date of execution of the contract;  

5. Authorize the City Manager or his designee to extend the contract for two one-year extensions if Riverside Senior Investments, LP requests an extension and such extension is necessary for completion of the development;

6. Authorize the City Manager, or his designee, to amend the contract if necessary to achieve project goals provided that the amendment is within the scope of the project and in compliance with City policies and applicable laws and regulations governing the use of federal grant funds; and

7.  Authorize the use of the basic incentives provided under the City's Neighborhood Empowerment Zone Tax Abatement Policy and Basic Incentives, such as permit and fee waivers, approved for the development of the Sphinx at Sierra Vista Senior Villas as HOME Match for the City's HOME Investment Partnerships Program grant funds.  

Sphinx Development Corporation proposes to build a 272 unit affordable housing development for seniors over the age of 55 with incomes at or below 60 per cent of Area Median Income.  Fourteen of the units will be Permanent Supportive Housing units.  The project will include a club house, business center, conference room, business lounge, fitness center, game room, and swimming pool.  On September 27, 2016, the Board of Directors of the Fort Worth Housing Finance Corporation (HFC) agreed to participate with Sphinx Development Corporation to form Riverside Senior Investments, LP (the Partnership) that will construct, own and manage the Sphinx at Sierra Vista Senior Villas. The HFC will be the sole member of Riverside Senior Development GP, LLC, the general partner and own the land on which the development will be sited which will be leased to the Partnership.  The Partnership submitted an application to the Texas Department of Housing and Community Affairs (TDHCA) for 2017 Non-Competitive (4%) Housing Tax Credits (4% HTC) for a portion the costs of the development, and applied to Tarrant County Housing Finance Corporation for multifamily bonds.  TDHCA approved 4% HTC for the development on July 27, 2017.  

HOME Contract and Loan:
Staff recommends a change in use and expenditure of $1,100,000.00 of the City's HOME Investment Partnerships Program (HOME) grant funds in the form of a subordinate loan to the Partnership to be used for acquisition and construction costs of the development. The HOME funds may be used for any HOME-eligible costs for the development as provided in the contract.

Staff recommends the following contract and loan terms:

1. Contract term of three years commencing on the date of execution with two one-year extensions;

2. Loan term to commence on date of execution of the loan documents and terminate at the end of the 20 year Affordability Period defined in the contract.  

3.  Interest rate of 1 percent during construction period until project stabilization.  Interest rate  or 1% or Applicable Federal Rate, whichever is less, shall accrue beginning at project stabilization.  Equal payments of principal and accrued interest based on a 35 year amortization schedule shall commence 12 months after project stabilization and continue to the end of the Affordability period at which time all unpaid principal and accrued interest shall be due.  

4.  HOME loan to be subordinate only to construction/permanent financing.

5. Payment of the HOME funds and performance of the HOME requirements to be secured by a deed of trust. and

6. Designate HOME-assisted units according to the HOME Regulations with a 20 year Affordability Period.  

The expenditure of HOME funds is conditioned upon the following:  

1. Satisfactory completion of an environmental review, pursuant to 24 CFR Part 58;

2. Authorization to use grant funds from HUD;

3. Equity, construction and permanent financing for the development acceptable to the City;

4. Certificate of bond reservation by the Texas Bond Review Board; and

5. Closing on equity and all other financing for the development.

The federal regulations governing the City's annual grant from the United States Department of Housing and Urban Development (HUD) require the City match a certain percentage of the HOME funds drawn from its HOME Treasury Account each program year (Match). The City's Match obligation must be satisfied annually from non−federal sources used for qualified housing projects, such as donated materials, cash donations, in−kind contributions and sweat equity. The Sphinx at Sierra Vista Senior Villas development is located in the Rolling Hills Neighborhood Empowerment  Zone (NEZ ) and has been certified for basic incentives. Staff recommends that the City use the value of the basic incentives given to this development as Match for its HOME grant. The basic incentives for this development accomplish the public purpose of assisting in the creation of quality, accessible, affordable housing for low to moderate income households and also aid the City in meeting its neighborhood revitalization goals.

The development  will benefit low and very low income City citizens  by providing them with quality, accessible, affordable housing.  A public comment period on the change in use of these HOME funds was held from August 21, 2017 to September 19, 2017. Any comments will be maintained by the Neighborhood Services Department, in accordance with federal regulations.

The development is located in COUNCIL DISTRICT 8.