Approve Waiver of Certain Development Fees Estimated at $383,000.00 for the Mistletoe Station Apartments Located at 1916 Mistletoe Boulevard and Authorize the Use of Fee Waivers as HOME Match (COUNCIL DISTRICT 9)

It is recommended that the City Council:

1. Approve the waiver of certain development fees that are estimated at $383,000.00 for Mistletoe Station Apartments located at 1916 Mistletoe Boulevard;

2. Find that the waiver of such fees serves to carry out the public purpose of providing quality, accessible, affordable housing for low and moderate income households, and that adequate controls are in place to carry out such public purpose; and

3. Authorize the use of the fee waivers approved for the development of the Mistletoe Station Apartments as HOME Match for the City's HOME Investment Partnerships Program grant funds.

On February 21, 2017, City Council approved Resolution No. 4752-02-2017 supporting the application of Mistletoe Station, LLC (Mistletoe Station) to the Texas Department of Housing and Community Affairs (TDHCA) for 2017 Competitive (9%) Housing Tax Credits for the development of the Mistletoe Station Apartments, a new 100-unit mixed income multifamily complex located at 1916 Mistletoe Boulevard in the City's Near Southside Medical District (M&C G-18952).

On July 27, 2017, the development received an award of tax credits from TDHCA. The Southside/Medical District Tax Increment Financing (TIF) district also agreed to provide $2,600,000.00 funding for a portion of the cost of repairing antiquated storm water infrastructure and other public improvements that will benefit other development in the area as well as the adjacent Mistletoe Heights neighborhood. On November 7, 2017, the Fort Worth Housing Finance Corporation (FWHFC) agreed to make Mistletoe Station a $750,000.00 subordinate loan for the development which will help alleviate in part the financing gap for the completion of onsite and offsite infrastructure improvements.

The public infrastructure improvements to be addressed include: storm water, sanitary sewer, water lines, sidewalks and streets-for a total estimated cost of $2,951,211.00.  These improvements will help to mitigate any run off or flooding issues as well as improve aging infrastructure.  Additionally, the improvements will be a benefit to the surrounding area as it will provide greater and updated capacity for adjoining parcels that are difficult to develop and that may otherwise be cost prohibitive.  

The development's location presents a unique challenge in that a portion of it is located within the boundaries of the Magnolia Village Neighborhood Empowerment Zone (Magnolia Village NEZ) but a portion is outside the boundaries of the Magnolia Village NEZ (see attached map). The fee waivers requested in this M&C are all fees that would be waived under the Neighborhood Empowerment Zone Basic Incentive Policy if the entire project were located within the boundaries of the Magnolia Village NEZ.

Fee Waivers:
Staff recommends that the City waive fees estimated at $383,000.00 which would be eligible for waiver under the Neighborhood Empowerment Zone Basic Incentive Policy. This waiver will assist the development by closing the remaining gap in funding for necessary site and infrastructure improvements. The fees that would otherwise be charged by the City are the following:

(a) all building permit related fees (including Plans Review, Inspections and Re-inspection Fees);
(b) Plat/Replat Application Fees;
(c) Board of Adjustment Application Fees;
(d) Demolition Fees;
(e) Structure Moving Fees;
(f) Zoning Application Fees;
(g) Street/Alley and Utility Easement Vacation Application Fees;
(h) Consent/Encroachment Agreement Application Fees;
(i) Urban Forestry Application Fees;
(j) Sign Permit Fees;
(k) Community Facilities Agreement (CFA) Application Fees; and
(l) Water and Sewer Impact Fees.

Park fees are not waived and shall be fully payable.

Adequate controls will be in place to ensure the benefit to the public of providing quality, accessible affordable housing to low and moderate income City citizens through the FWHFC's Loan Agreement with Mistletoe Station and Deed of Trust to be filed of record on the development's property for its loan, as well as the Land Use Restriction Agreement to be filed against the property by TDHCA which secures the requirements of the tax credit award.

HOME Match:
The federal regulations governing the City's annual grant of HOME funds from the United States Department of Housing and Urban Development (HUD) require the City to 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. Staff recommends that the City use the value of the fee waivers and the dedication of the FWHFC Loan and TIF funding, pending their respective Board's approval, to be used as Match. The City will be required to monitor a dedicated number of rental units to verify they meet HOME requirements. The incentives for this development accomplish the public purpose of the creation of quality, accessible, affordable housing, including Permanent Supportive Housing, in an area that lacks available housing for the current workforce.

This development will pay property taxes and not be tax exempt.

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

This development is located in COUNCIL DISTRICT 9.