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Home My WebLink AboutResolution No. 441CITY OF MEDINA, WASHINGTON RESOLUTION NO. 441 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MEDINA, WASHINGTON, AUTHORIZING THE DULY APPOINTED ADMINISTERING AGENCY FOR ARCH TO EXECUTE ALL DOCUMENTS NECESSARY TO ENTER INTO AGREEMENTS FOR THE FUNDING OF AFFORDABLE HOUSING PROJECTS, AS RECOMMENDED BY THE ARCH EXECUTIVE BOARD, UTILIZING FUNDS FROM THE CITY'S HOUSING TRUST FUND. WHEREAS, A Regional Coalition for Housing (ARCH) was created by interlocal agreement to help coordinate the efforts of Eastside cities to provide affordable housing; and WHEREAS, the ARCH Executive Board has recommended that the City of Medina participate in the funding of certain affordable housing projects and programs hereinafter described: and WHEREAS, the ARCH Executive Board has developed a number of recommended conditions to ensure that the City's affordable housing funds are used for their intended purpose and that projects maintain their affordability over time; and WHEREAS, the City Council has approved the Amended and Restated Interlocal Agreement for ARCH; and WHEREAS, the City Council desires to use $38,066 from City funds as designated below to finance the projects recommended by the ARCH Executive Board; now, therefore, THE CITY COUNCIL OF THE CITY OF MEDINA, WASHINGTON, DOES RESOLVE AS FOLLOWS: Section 1. The City Council authorizes the duly -appointed administering agency of ARCH pursuant to the Amended and Restated Interlocal Agreement for ARCH to execute all documents and take all necessary actions to enter into Agreements on behalf of the City to fund Spring District Transit -Oriented Development, Larus Senior Housing, Aventine, Emma McRedmond Manor and Overlake Transit -Oriented Development, in a combined total amount not to exceed $38,066. Section 2. The Agreements entered into pursuant to Section 1 of this resolution shall include terms and conditions to ensure that the City's funds are used for their intended purpose and that the projects maintain affordability over time. In determining what conditions should be included in the Agreements, the duly -appointed administering agency of ARCH shall be guided by the recommendations set forth in the ARCH Executive Board's memorandum of December 28, 2023, a copy of which is attached hereto as Exhibit A. Resolution No. 441 Page 1 of 2 PASSED BY THE CITY COUNCIL OF THE CITY OF MEDINA ON THE 8T" DAY OF APRIL 2024 AND SIGNED IN AUTHENTICATION OF ITS PASSAGE THE 8T" DAY OF APRIL 2024. '::�— J#niferone, i g May r Approved as to form: 4e1� fiferobertson, City Attorney e, B t, Doezie & Ryder, P.S. Attest: Qurn&2, y. Aimee Kellerman, CIVIC, City Clerk Resolution No. 441 Page 2 of 2 ARCH A Regional Coalition for Housing ARCHCelebrating 30 years of bringing cities together to house East King County H EXHIBIT A Together Center Campus 16305 NE 87th St, Suite 119 ARCHRedmond, WA 98052 (425) 861-3677 MEMORANDUM TO: City of Bellevue Council Members City of Medina Council Members City of Bothell Council Members City of Mercer Island Council Members City of Clyde Hill Council Members City of Newcastle Council Members Town of Hunts Point Council Members City of Redmond Council Members City of Issaquah Council Members City of Sammamish Council Members City of Kenmore Council Members City of Woodinville Council Members City of Kirkland Council Members Town of Yarrow Point Council Members FROM: Carol Helland, Chair, ARCH Executive Board DATE: December 28, 2023 RE: Fall 2023 Housin Trust Fund (HTF), Recommendation This year ARCH received $12.9 million in funding requests from seven projects proposing an impressive 853 units of affordable housing. After careful deliberation, the ARCH Executive Board concurred with the recommendations of the ARCH Community Advisory Board (CAB), which provide full funding for two projects and partial funding for three projects. Consistent with recent years, the demand for funding far exceeded available resources, with $4.0 million in Trust Fund dollars included in the recommendations, plus an additional $2.1 million committed by the City of Redmond, resulting in $6.1 million in awards. Over the last three decades, the ARCH Trust Fund has supported over 6,000 units of affordable housing and shelter beds, creating housing access for thousands of families and individuals with limited incomes. This year's recommendations will support 840 more units of housing in an incredible set of projects that meet numerous priorities and needs throughout the region, including: • Preservation of existing affordable housing • New transit -oriented development for families and individuals adjacent to future light rail; • Creation of affordable commercial space for diverse businesses • Local partnerships to serve diverse populations, including low-income seniors, families and individuals exiting homelessness, persons with intellectual and developmental disabilities, veterans, and households with incomes under 50% of median income The Trust Fund also continues to bring a high return on local investment, this year leveraging local resources over 15:1, with proposed projects expected to attract roughly $383 million in other funding. ARCH MEMBERS �- BEAUX ARTS VILLAGE ♦ BELLEVUE ♦ BOTHELL ♦ CLYDE HILL ♦ HUNTS POINT ISSAQUAH ♦ KENMORE ♦ KIRKLAND ♦ MEDINA ♦ MERCER ISLAND ♦ NEWCASTLE ♦ REDMOND SAMMAMISH ♦ WOODINVILLE • YARROW POINT ♦ KING COUNTY ARCH Trust Fund Exec Board Memo December 2023 Page 12 A summary of the recommendations is shown in the table below: Project ARCH 2O23 Executive Board Applicant City Units Request Recommendation $650,000 plus $350,000 Spring District 1201h TOD previously awarded BRIDGE Bellevue 234 $650,000 (total $1M award) Larus Senior Housing TWG/Imagine Housing Kenmore 175 $3,900,000 $250,000 The Aventine Low Income Housing Institute Bellevue 66 $1,500,000 $600,000 $500,000 plus $600,000 additional Emma McRedmond Manor City of Redmond Catholic Housing Services investment Redmond 32 $2,150,000 (total $1.1M award) $2,000,000 plus $1,500,000 additional Overlake TOD City of Redmond Bellwether Housing investment Redmond 333 $3,500,000 (total $3.5M award) Totem Six-Plex Attain Housing Kirkland 6 1 $750,000 $0 Scattered Sites Alpha Supportive Living Scattered 7 $400,000 $0 $ 6,100,000 (including $4M plus $2.1M additional City of Total 853 1 $12,850,000 ! Redmond funds) This memo provides a summary of the applications, the Executive Board recommendations and rationales, and proposed contract conditions for the five proposals recommended for funding at this time. Also enclosed is an economic summary of the projects recommended for funding. Attachments: 1. Proposed Funding Sources 2. Project Economic Summaries Note that bolded text in proposed conditions shows unique conditions in otherwise standard text. 2 ARCH Trust Fund Exec Board Memo December 2023 Page 13 1. BRIDGE Housing — Spring District TOD 2023 Funding Request: $650,000 (Contingent Loan) 234 Affordable Units 2022 Executive Board Recommendation: $350,0000 (Contingent loan) 2023 Executive Board Recommendation: $650,0000 (Contingent loan) Total Award: $1,000,000 (Contingent loan) Proiect Summary: The proposed project includes two buildings as part of a larger Master Development on Sound Transit and City of Bellevue owned surplus property in the Spring District. BRIDGE proposes to develop Building 2 (7-story) and Building 6 (6-story) for a total of 234 units and 83 parking spaces (0.35 stalls per unit). Both buildings will be built with Type III construction over Type I concrete construction. The proposed unit mix consists of 86 studios, 75 one -bedroom units, 25 two -bedroom units, and 48 three -bedroom units. In October 2020, Sound Transit (ST) selected a development team led by BRIDGE to master plan and develop a 6.88-acre Sound Transit -owned site in the Spring District of Bellevue, Washington. Essex Residential Trust was the market -rate residential partner and Touchstone was the office partner. Although BRIDGE was successful in securing funding from Amazon, City of Bellevue, A Regional Coalition for Housing (ARCH), and King County for the affordable housing project, the market -rate projects were highly distressed coinciding with a global pandemic, unprecedented construction cost inflation, and a fundamental change in office demand. In December 2022, Essex exited the partnership citing increasing construction and financing costs. On June 2023, after extensive negotiations with Sound Transit and the City of Bellevue, Touchstone and BRIDGE agreed to dissolve the partnership and each developer will independently entitle, finance, and develop their own projects. On August 2023, BRIDGE submitted a revised pre -application to the City of Bellevue. As an independent project with no market -rate involvement, BRIDGE can develop on an accelerated timeline. Should funding be fully committed by public sources during this funding round, BRIDGE can commence construction by November 2024. BRIDGE applied to HTF for capital funding in the fall of 2022 and was recommended to receive $350,000 and reapply in 2023 for additional capital funding. BRIDGE's request in this application is for an additional $650,000 in capital for a total request of $1,000,000. The Committee is proposing to fund the full amount of the 2023 funding request. Funding.. Rationale: The Executive Board recommends funding with conditions listed below for the following reasons: • Funding this year's request for additional capital demonstrates continued commitment from ARCH to this priority project that has nearly secured all other sources of leverage. • The project advances key objectives in the City of Bellevue Affordable Housing Strategy, providing a large amount of low and moderate -income affordable housing units in a strategic location close to jobs and transportation. ARCH Trust Fund Exec Board Memo December 2023 Page 14 This project leverages significant investments from public and private funding sources, including King County TOD funds which are specifically set aside for the Bel -Red corridor and Amazon housing equity funds structured as a grant and a below market loan product. • The project takes advantage of surplus public property provided at no cost by Sound Transit and the City and helps deliver additional City goals for development of retail and office. Proposed Conditions (will supersede conditions from previous award) Standard Conditions: Refer to list of standard conditions found at end of this memo. Special Conditions: 1. The funding commitment shall continue for twelve (12) months from the date of Council approval and shall expire thereafter if all conditions are not satisfied. An extension may be requested to ARCH staff no later than sixty (60) days prior to the expiration date. At that time, the applicant will provide a status report on progress to date and expected schedule for start of construction and project completion. ARCH staff will consider a 12-month extension only based on documented, meaningful progress in bringing the project to readiness or completion. At a minimum, the applicant must demonstrate that all capital funding has been secured or is likely to be secured within a reasonable timeframe. 2. Funds shall be used by the Agency towards soft costs and construction. Funds may not be used for any other purpose unless ARCH staff has been given written authorization for the alternate use. Spending of construction contingency must be approved in advance by ARCH. If after the completion of the project there are budget line items with unexpended balances, ARCH and other public funders shall approve adjustments to the project capital sources, including potential reductions in public fund loan balances. ARCH funds not expended prior to permanent loan conversion will be de -obligated. 3. Funds will be in the form of a deferred, contingent loan. Loan terms will account for various factors, including loan terms from other fund sources and available cash flow. Agency shall provide final operating proforma and cashflow waterfall for ARCH staff review. Final loan terms shall be determined prior to release of funds and must be approved by ARCH Staff. It is anticipated that loan payments will be based on a set repayment schedule and begin after repayment of the Amazon loan on or before year 20 and deferred developer fee with 1% interest. The terms will also include a provision for the Agency to defer payment if certain conditions are met (e.g., low cash flow due to unexpected costs). Any requested deferment of loan payment is subject to approval by ARCH staff, and any deferred payment would be repaid from future cash flow or at the end of the amortization period. 4. The net developer fee shall be established at the time of finalizing the Contract Budget and will follow the ARCH Net Developer Fee Schedule. Net developer fee is defined as that portion of the developer fee paid out of capital funding sources and does not include the deferred portion which is paid out of cash flow from operations after being placed in service. S. A covenant is recorded ensuring affordability for at least 55 years, with size and affordability distribution per the following table, and approximately 40 units reserved for persons with ARCH Trust Fund Exec Board Memo December 2023 Rage 15 disabilities. Changes may be considered based on reasonable justification as approved by ARCH staff (such as changes to accommodate income averaging across the project or adjusting the number of and unit type for manager units). Affordability Studio 1 BR 2 BR 3 BR Total Units 30% �2 4 ]5 1 50% 24 19 I F7 14 64 60% 60 52 16 32 160 Total Low -Income Units 86 75 24 47 232 CAUs / Managers 0=0F1 22 Total Units 86 75 25 48 234 6. Agency must submit for ARCH staff approval a management and services plan which includes coordination of services with outside providers for special populations and a statement of resident transportation options. 7. Agency shall submit applications to other potential sources of funding, at a minimum including to the State Housing Trust Fund for any available I/DD or other State funding that the project is eligible for. S. On a monthly basis, Agency shall provide ARCH with updates on the following: a. Status of management and services plan including service partnerships and development on formal MOUs and operating agreements. b. Status update on negotiations with development partners. c. Status update on other financing and financing partnerships negotiations. d. Status update on entitlement and permitting progress. 9. Agency shall complete and submit the following deliverables by the dates indicated. Agency may request an extension of individual deadlines, and such extensions shall be considered based on reasonable justification and Agency's continuing efforts to make substantial progress toward each milestone.: a. January 31, 2024 — Revised term sheet for property acquisition and development approved by Sound Transit b. January 31, 2024 — Draft Management and Services Plan c. May 31, 2024 — Final operating or other agreement with services provider(s) d. June 30, 2024 — Final Purchase and Sale Agreement. e. Prior to closing- Provide a draft Affirmative Marketing Plan f. 6 months prior to anticipate C of O- Provide a final Affirmative Marketing Plan ARCH Trust Fund Exec Board Memo December 2023 Rage 16 2. TWG and Imaigine Housing — Larus Senior Housing Funding Request: $3,900,000 (Contingent Loan) 175 Affordable Units (including 1 manager unit) Executive Board Recommendation: $250,000 (Contingent Loan) Proiect Summary: The proposed Larus Senior Apartments is a transit -oriented senior housing development to be developed by TWG Housing in partnership with Imagine Housing. The development team elected to proceed with the same model for Larus as their previous partnership, Ardea at Totem Lake, by serving seniors and inviting Imagine Housing to be the non-profit development partner and service provider. The project will consist of 175 units of affordable housing with a mix of studios and 1-bedroom units with affordability levels at 40%AMI, 50% AMI, and 60% AMI. Located within % mile from the Kenmore Park & Ride and future Sound Transit BRT station, the project will aim to take advantage of future transportation options for its residents. In addition to its close proximity to the Kenmore transit hub, Larus Senior Apartments benefits from local groceries, shopping, and services within % mile walking distance. Funding Rationale: The Executive Board recommends funding with conditions listed below for the following reasons: • The project is strategically located near a future transit facility and close to amenities and services. • The project advances the City's affordable housing priorities by providing much needed low- income housing for seniors in the area. • This project leverages significant investments from public and private funding sources, including King County TOD funds and Amazon Housing Equity funds. • The project is taking advantage of the Washington State Housing Finance Commission's Land Acquisition Program, which is a long-term, patient capital program. As such the project will be able to take the time needed to assembling full financing for the development. Proposed Conditions: Standard Conditions: Refer to list of standard conditions found at end of this memo. Special Conditions: The funding commitment shall continue for thirty-six (36) months from the date of Council approval and shall expire thereafter if all conditions are not satisfied. An extension may be requested to ARCH staff no later than sixty (60) days prior to the expiration date. At that time, the applicant will provide a status report on progress to date and expected schedule for start of construction and project completion. ARCH staff will consider a 12-month extension only based on documented, meaningful progress in bringing the project to readiness or completion. At a minimum, the applicant must ARCH Trust Fund Exec Board Memo December 2023 Page 17 demonstrate that all capital funding has been secured or is likely to be secured within a reasonable timeframe. 2. Funds shall be used by the Agency towards acquisition, construction, soft costs, financing, capitalized reserves, and other development costs. Funds may not be used for any other purpose unless ARCH staff has given written authorization for the alternate use. Spending of construction contingency must be approved in advance by ARCH. If after the completion of the project there are budget line items with unexpended balances, ARCH and other public funders shall approve adjustments to the project capital sources, including potential reductions in public fund loan balances. 3. Funds will be in the form of a deferred, contingent loan. Loan terms will account for various factors, including loan terms from other fund sources and available cash flow. Final loan terms shall be determined prior to release of funds and must be approved by ARCH Staff. It is anticipated that loan payments will be based on a set repayment schedule and begin after repayment of deferred developer fee with 1% interest. The terms will also include a provision for the Agency to defer payments if certain conditions are met (e.g., low cash flow due to unexpected costs). Any requested deferment of loan payment is subject to approval by ARCH Staff, and any deferred payment would be repaid from future cash flow or at the end of the amortization period. 4. The net developer fee shall be established at the time of finalizing the Contract Budget and will follow the ARCH Net Developer Fee Schedule. Net developer fee is defined as that portion of the developer fee paid out of capital funding sources and does not include the deferred portion which is paid out of cash flow from operations after being placed in service. 5. A covenant is recorded ensuring affordability for seniors for at least 55 years, with size and affordability distribution per the following table. Changes may be considered based on reasonable justification as approved by ARCH staff (such as changes to accommodate income averaging across the project). 6. The final loan amount shall be up to $250,000, subject to approval by ARCH staff based on a documented funding gap. ARCH reserves the right to reduce its total loan amount based on changes to the project sources and uses, and unit mix. Agency shall provide ARCH with quarterly updates on status of MOUs with partners and other funding sources. ARCH Trust Fund Exec Board Memo December 2023 Page 18 8. Agency shall provide a sustainability plan which details eco-friendly materials, transportation options and partnerships which would benefit the project's eco-sustainability, such as EV stations. 3. LIHI — The Aventine Funding Request: $1,500,00 (Contingent Loan) 66 Affordable Units Executive Board Recommendation: $600,000 (Contingent Loan) Project Summai v: The Aventine is an existing 5-story, 68-unit apartment community with 69 underground parking spaces located in downtown Bellevue. Currently over half the residents are low-income (below 80% AMI). LIHI is proposing to purchase the Aventine to preserve and make all the housing units affordable for households at 30%, 50% and 80% of area median income. The project intends to house low wage workers, disabled households, and households exiting homelessness. A total of 10 units will be set aside for households with members that have physical disabilities. The building is ADA accessible and additional units will be made accessible if needed. LIHI is proposing 22 of the 66 units be for households exiting homelessness (33% of the total units in the property), including families and veterans exiting homelessness. The current owners, who previously obtained funding through Microsoft's affordable housing initiative and maintained a set -aside of units at 80% AMI, put the property on the market for sale in 2023 and five for -profit developers submitted bids to convert it to market rate housing, losing the existing affordable units. Fortunately, LIHI was selected as the buyer and has signed a PSA with the seller. Funding from the City of Bellevue and ARCH will allow for the long-term preservation of affordable housing in downtown Bellevue and avoid the displacement of the existing residents. LIHI's planned acquisition and rehabilitation includes the conversion of two rental units into a case manager's offices to provide on -site service to residents leaving 66 affordable rental units. Additionally, minor refreshing of the building interiors will be completed. Funding Rationale: The Executive Board recommends funding with conditions listed below for the following reasons: • The application proposes housing that meets the City of Bellevue's priorities for its Housing Stability Program Funding; providing housing for households earning below 30% of median income, addressing and prevent homelessness and housing instability, and focusing on underserved, vulnerable residents in Bellevue (e.g., homeless families with children and other eligible populations). The property provides 22 units for households exiting homelessness, including both two - bedroom units for families. Further, the proposed project will have 10 units set -aside for veterans and an additional 10 for people with physical disabilities. ARCH Trust Fund Exec Board Memo December 2023 Page 19 • Funding an acquisition brings affordable units online and into the Bellevue portfolio much more quickly than funding new construction. Conservatively, the Aventine will bring affordable units online 18-24 months sooner than a similar new construction. • The acquisition of the property will mitigate displacement of existing renters who are living in units previously advertised as affordable, workforce units. Proposed Conditions: Standard Conditions: Refer to list of standard conditions found at end of this memo. Special Conditions: 1. The funding commitment shall continue for twelve (12) months from the date of Council approval and shall expire thereafter if all conditions are not satisfied. An extension may be requested from ARCH staff no later than sixty (60) days prior to the expiration date. At that time, the applicant will provide a status report on progress to date and expected schedule for start of construction and project completion. ARCH staff will consider a 12-month extension based on documented, meaningful progress in bringing the project to readiness or completion. At a minimum, the applicant must demonstrate that all capital funding has been secured or is likely to be secured within a reasonable timeframe. Funds shall be used by the Agency towards acquisition, construction, soft costs, financing, capitalized reserves and other development costs. Funds may not be used for any other purpose unless ARCH staff has given written authorization for the alternate use. Spending of furnishings, fixtures, and equipment, rehab, remediation and construction contingency must be approved in advance by ARCH. If after the completion of the project there are budget line items with unexpended balances, ARCH and other public funders shall approve adjustments to the project capital sources, including potential reductions in public fund loan balances. Funds not expended at the end of the construction period will be de -obligated. 2. Funds will be in the form of a deferred, contingent loan. Loan terms will account for various factors, including loan terms from other fund sources and available cash flow. Final loan terms shall be determined prior to release of funds and must be approved by ARCH Staff. It is anticipated that loan payments will be based on a set repayment schedule and begin after repayment of deferred developer fee with 1% interest. The terms will also include a provision for the Agency to defer payments if certain conditions are met (e.g., low cash flow due to unexpected costs). Any requested deferment of loan payment is subject to approval by ARCH Staff, and any deferred payment would be repaid from future cash flow or at the end of the amortization period. 3. The net developer fee shall be established at the time of finalizing the Contract Budget and will follow the ARCH Net Developer Fee Schedule. Net developer fee is defined as that portion of the developer fee paid out of capital funding sources and does not include the deferred portion which is paid out of cash flow from operations after being placed in service. 9 ARCH Trust Fund Exec Board Memo December 2023 Page 110 4. A covenant is recorded ensuring affordability for at least 55 years, with size and affordability distribution per the following table, including approximately 22 units for households exiting homelessness. Changes may be considered based on reasonable justification as approved by ARCH staff (such as changes to accommodate income averaging across the project). Studio FIB R 2 BR gg ��'Affordability]❑ l 30% �5 F5 F2 12 5O 10 10 F—I20 60% 15 41F 19 80% 9�6 ]0 15 Total 39 25 F2 66 S. Agency must submit for ARCH staff approval a management, affirmative marketing, and services plans. 6. On a monthly basis, Agency shall provide ARCH with updates on the following: a. Status of management and services plan including service partnerships and development on formal MOUs and operating agreements. b. Status update on other financing and financing partnerships negotiations. c. Agency will provide a Capital Needs Assessment (CNA) for staff review and approval. 4. Catholic Housing Services (CHS) — Emma McRedmond Manor Funding Request: Executive Board Recommendation: Additional City Investment via ARCH Housing Trust Fund: Total Award: $2,150,000 (Contingent Loan) 32 Affordable Units (including 1 manager unit) $500,000 (Contingent Loan) $600,000 (Contingent Loan) $1,100,000 (Contingent Loan) Project Summary: Emma McRedmond Manor is an existing three-story senior housing project with 32 apartments located in downtown Redmond. Built in 1988, the building is nearly 35 years old and has yet to be substantially rehabilitated, other than re -cladding and window replacement performed in 2010. CHS is proposing a substantial renovation to improve the building's energy efficiency and extend the remaining useful life of the structure by approximately 20 years. The scope of work consists of upgrades to the building exterior, building systems (plumbing and mechanical), common areas, units, and landscaping/site work. In addition, the project will convert one manager's unit to an affordable unit, resulting in 32 1BR units affordable at 50% AMI, of which 31 will receive Section 8 Project -Based Rental Assistance through July 2032. The proposal includes financing under the HUD 221 program (Mortgage Insurance for Rental or 10 ARCH Trust Fund Exec Board Memo December 2023 Page 111 Cooperative Housing). The program provides insurance on mortgages that support new construction or substantial rehabilitation of multifamily rental or cooperative housing for moderate -income families, elderly households, and disabled households. Funding Rationale: The Executive Board recommends funding with conditions listed below for the following reasons: • The project preserves much -needed housing for low-income seniors and persons with disabilities in a very desirable, amenity -rich area of East King County. • The project preserves valuable ongoing HUD support in the form of grant funding for the Resident Services Coordinator and Section 8 Project -Based Rental Assistance. • The project is permit ready and has a HUD Section 221(d)(4) loan already committed, with additional funds leveraged from King County. • The City of Redmond has indicated its willingness to allocate $600,000 in funding that will help close the project's funding gap. Proposed Conditions: Standard Conditions: Refer to list of standard conditions found at end of this memo. Special Conditions: 1. The funding commitment shall continue fortwelve (12) months from the date of Council approval and shall expire thereafter if all conditions are not satisfied. An extension may be requested from ARCH staff no later than sixty (60) days prior to the expiration date. At that time, the applicant will provide a status report on progress to date and expected schedule for start of construction and project completion. ARCH staff will consider a 12-month extension based on documented, meaningful progress in bringing the project to readiness or completion. At a minimum, the applicant must demonstrate that all capital funding has been secured or is likely to be secured within a reasonable timeframe. 2. Funds will be in the form of a deferred, contingent loan. Loan terms will account for various factors, including loan terms from other fund sources and available cash flow. Final loan terms shall be determined prior to release of funds and must be approved by ARCH Staff. It is anticipated that loan payments will be based on a set repayment schedule and begin after repayment of deferred developer fee with 1% interest. The terms will also include a provision for the Agency to defer payments if certain conditions are met (e.g., low cash flow due to unexpected costs). Any requested deferment of loan payment is subject to approval by ARCH Staff, and any deferred payment would be repaid from future cash flow or at the end of the amortization period. 3. Funds shall be used by the Agency towards acquisition, construction, soft costs, financing, capitalized reserves, and other development costs. Funds may not be used for any other purpose unless ARCH staff provides written authorization for the alternate use. Spending of furnishings, fixtures, and equipment, rehab, remediation, and construction contingency must be approved in advance by ARCH. If - after the completion of the project - there are budget line 11 ARCH Trust Fund Exec Board Memo December 2023 Page 112 items with unexpended balances, ARCH and other public funders shall approve adjustments to the project capital sources, including potential reductions in public fund loan balances. Funds not expended at the end of the construction period will be de -obligated. 4. The net developer fee shall be established at the time of finalizing the Contract Budget and will follow the ARCH Net Developer Fee Schedule. Net developer fee is defined as that portion of the developer fee paid out of capital funding sources and does not include the deferred portion which is paid out of cash flow from operations after being placed in service. 5. A covenant is recorded ensuring affordability for seniors for at least 55 years, with size and affordability distribution per the following table. Changes may be considered based on reasonable justification as approved by ARCH staff Affordability 1BR Total 50% 32 32 Total 32 32 Agency must submit for ARCH staff approval of management, affirmative marketing, and services plans. 7. Agency shall submit updates to ARCH regarding other potential funders, including HUD and King County. 8. Agency shall provide an updated Project Architectural and Cost Analysis Report and updated development budget, both of which are HUD approved, prior to commencement of construction. 5. Bellwether Housing — Overlake TOD Funding Request: Executive Board Recommendation: Additional City Investment via ARCH Housing Trust Fund: Total Award: $3,500,000 (Contingent Loan) 333 Affordable Units (including 3 manager units) $2,000,000 (Contingent Loan) $1,500,000 (Contingent Loan) $3,500,000 (Contingent Loan) Project Summary: Bellwether Overlake Apartments is located in the Overlake Village neighborhood of Redmond directly across from the future Overlake Village light rail station. The project will provide 333 homes for low -to moderate -income households (30-80% AM I), including set -asides and services specific to people living with physical, intellectual and developmental disabilities (IDD), and much -needed two- and three- 12 ARCH Trust Fund Exec Board Memo December 2023 Page 113 bedroom family -sized units, achieving an average of 50% AMI across the site. The project is located on Sound Transit surplus property. In collaboration with a coalition of nonprofit partners and the City of Redmond, the ground floor commercial spaces will incorporate small business incubation, non-profit organizational support, culturally informed community services, and services provided by the City of Redmond. An adjacent open space parcel will complement the ground floor uses and potentially consist of a food truck corral, food garden, cultural night markets. Programming of the adjacent open space will be provided by the community partners in the project for the benefit of the community. Services for the project residents will be provided primarily by Hopelink, a service provider who has served homeless and low-income families, children, seniors, and people with disabilities on the Eastside since 1971. In addition, SAILS Washington, a DDA-contracted service provider, will provide supported living services for the project's ten IDD residents. The project will be financed with a combination of public and private financing sources, including but not limited to 4% Low Income Housing Tax Credits, Amazon Housing Equity Fund, Evergreen Impact Housing Fund, senior private lender loan, ARCH funds, King County TOD fund, and the State Housing Trust Fund. Funding Rationale: The Executive Board recommends funding this application for the following reasons: • Funding this year's request for additional capital demonstrates continued commitment from ARCH to this priority project and will allow the project to secure other sources of leverage. • The project advances key objectives in the City of Redmond Affordable Housing Strategy, providing a large amount of low and moderate -income affordable housing units in a strategic location close to jobs and transportation. • This project leverages significant investments from public and private funding sources, including King County TOD funds which are specifically set aside for the Overlake TOD and Amazon housing equity funds structured as a grant and a below market loan product. • The project takes advantage of surplus public property provided at no cost by Sound Transit and the City and helps deliver additional City goals for development of retail and office. • The project will provide a significant number of units affordable to very low-, low- and moderate -income households, as well as IDD units, within a high -opportunity area near good jobs, various transportation options, and other public and private amenities. • The project is a priority for the City of Redmond, which has indicated a willingness to invest additional funding to move the project forward. Proposed Conditions: Standard Conditions: Refer to list of standard conditions found at end of this memo. Special Conditions: 1. The funding commitment shall continue for twenty-four (24) months from the date of Council approval and shall expire thereafter if all conditions are not satisfied. An extension may be 13 ARCH Trust Fund Exec Board Memo December 2023 Rage 114 requested from ARCH staff no later than sixty (60) days prior to the expiration date. At that time, the applicant will provide a status report on progress to date and expected schedule for start of construction and project completion. ARCH staff will consider a 12-month extension based on documented, meaningful progress in bringing the project to readiness or completion. At a minimum, the applicant must demonstrate that all capital funding has been secured or is likely to be secured within a reasonable timeframe. Funds shall be used by the Agency towards construction, soft costs, financing, capitalized reserves, and other development costs. Funds may not be used for any other purpose unless ARCH staff has given written authorization for the alternate use. Spending of furnishings, fixtures, and equipment, rehab, remediation, and construction contingency must be approved in advance by ARCH. If after the completion of the project there are budget line items with unexpended balances, ARCH and other public funders shall approve adjustments to the project capital sources, including potential reductions in public fund loan balances. If funds are not expended at the end of the construction period, will be de -obligated. 3. Funds will be in the form of a deferred, contingent loan. Loan terms will account for various factors, including loan terms from other fund sources and available cash flow. Final loan terms shall be determined prior to release of funds and must be approved by ARCH Staff. It is anticipated that loan payments will be based on a set repayment schedule and begin after repayment of deferred developer fee with 1% interest. The terms will also include a provision for the Agency to defer a payment if certain conditions are met (e.g., low cash flow due to unexpected costs). Any requested deferment of loan payment is subject to approval by ARCH Staff, and any deferred payment would be repaid from future cash flow or at the end of the amortization period. 4. The net developer fee shall be established at the time of finalizing the Contract Budget and will follow the ARCH Net Developer Fee Schedule. Net developer fee is defined as that portion of the developer fee paid out of capital funding sources and does not include the deferred portion which is paid out of cash flow from operations after being placed in service. 7. A covenant is recorded ensuring affordability for at least 55 years, with size and affordability distribution per the following table, including approximately ten units set -aside for people with disabilities. Changes may be considered based on reasonable justification as approved by ARCH staff (such as changes to accommodate income averaging across the project). Affordability Studio 1 BR 2 BR 3 BR Total 30% 25 15 10 T5 55 50% 30 130 48 33 241 18096 �5 8 11 13 37 Total 60 153 69 51 333 5. Agency must submit for ARCH staff approval a management, affirmative marketing, and services plan. 14 ARCH Trust Fund Exec Board Memo December 2023 Page 1 15 6. On a monthly basis, Agency shall provide ARCH with updates on the following: a. Status of management and services plan including service partnerships and development on formal MOUs and operating agreements. b. Status update on other financing and financing partnerships negotiations. c. Updates on commercial leases and partnerships with commercial tenants including operating budgets and development budgets including tenant's prorate share of costs and expenses within the overall budget. 6. Attain Housing -Totem Six Plex Funding Request: $750,000 (Secured Grant) 6 Affordable Units Executive Board Recommendation: $0 Pro'ect Summa : The proposed project is the new construction of a three-story structure with six two -bedroom units of transitional housing for homeless families earning up to 30% of area median income (AMI). The property currently contains an existing four-plex building owned and managed by Attain Housing. Attain also manages the four plex on the lot next to the proposed construction site. The proposed new building will sit on what is currently a lawn between the two four plex buildings. The project represents an expansion of existing programs operated by Attain, with overall capacity growing from 8 to 14 units across the three buildings. Funding, Rationale: The Executive Board supports the concept of the Attain Housing proposal but does not recommend funding at this time. The Executive Board would welcome an application in a future round so that Attain Housing can address the issues identified below: • ARCH awarded funds for technical assistance in the previous funding round to assist with a variety of tasks. These funds have not yet been utilized and the application submitted in 2023 was unchanged from the previous year. Prior to a new application, Attain is encouraged to address the following: o Secure project management capacity, including recommended engagement of a development consultant who will assist with the financing and project management of the project through construction completion. o Further develop building design, permitting, siting and parking in conformance with zoning requirements. o Pursue and obtain funding commitments of other public funding sources and make progress on the needed capital campaign. o Further development of development budgets and operating budgets based on current construction market and industry conditions. 15 ARCH Trust Fund Exec Board Memo December 2023 Page 116 o Development of a project schedule consistent with the proposed funding and local permitting requirements. o Further evaluate the long-term strategy for funding supportive services for transitional housing. 7. Inclusion Housing — Scattered Sites Funding Request: $400,000 (Secured Grant) 7 Affordable Beds Executive Board Recommendation: $0 Project Summary: The proposed project will serve individuals with Intellectual and Developmental Disabilities (IDD) in King County where there is a large demand for Supported Living services and affordable, stable housing. The acquisition includes the purchase of a total of six homes. ARCH's funding, (in conjunction with State and other local sources) will only be used for the Alpha SLS South Branch and the Children's IHS Homes, described below. Inclusion is proposing the purchase of the other four homes utilizing other local and State sources of funding. The Alpha SLS South Branch is proposed to be a 3-bedroom home located in around the Kirkland/Redmond area that will serve three adults with developmental disabilities receiving Supported Living services from Alpha. The Children's IHS Home is proposed to be a 4-bedroom home located around the Bothell/Kenmore/Woodinville area that will serve children with developmental disabilities between the age of 11 and 20. Alpha will provide residential services through the DDA Intensive Habilitation Services program. The fourth bedroom must be used as an agency office to provide the required in -home oversight. Funding Rationale: The Executive Board supports the intent of the Inclusion Housing proposal but does not recommend funding at this time for the reasons described below: • In 2023, the ARCH Trust Fund is significantly oversubscribed and CAB was not able to meet the needs of all the requests. It is anticipated that the State will be able to provide additional funding to this project to help fill its funding gap and proceed without ARCH funding. 16 ARCH Trust Fund Exec Board Memo December 2023 Page 117 Standard Conditions: (will appIy_to all projects) 1. Agency shall provide revised development and operating budgets based upon actual funding commitments, which must be approved by ARCH staff. If the Agency is unable to adhere to the budgets, ARCH must be immediately notified and (a) new budget(s) shall be submitted by the Agency for ARCH's approval. ARCH shall not unreasonably withhold its approval to (a) revised budget(s), so long as such new budget(s) does not materially adversely change the Project. This shall be a continuing obligation of the Agency. Failure to adhere to the budgets, either original or as amended may result in withdrawal of ARCH's commitment of funds. 2. Agency shall submit evidence of funding commitments from all proposed sources. In the event commitment of funds identified in the application cannot be secured in the timeframe identified in the application, the Agency shall immediately notify ARCH, and describe the actions it will undertake to secure alternative funding and the timing of those actions subject to ARCH review and approval. 3. In the event federal funds are used, and to the extent applicable, federal guidelines must be met, including but not limited to the following: contractor solicitation, bidding, and selection; wage rates; and Endangered Species Act (ESA) requirements. CDBG funds may not be used to refinance acquisition costs. 4. Agency shall maintain documentation of any necessary land use approvals and permits required by the city in which the project is located. 5. Agency shall submit quarterly monitoring reports through completion of the project, and annually thereafter, and shall submit a final budget upon project completion. If applicable, Agency shall submit initial tenant information as required by ARCH. 6. Agency shall maintain the project in good and habitable condition for the duration of the period of affordability. Changes to the unit and affordability mix can are subject to change with Staff approval. 7. ARCH, through its Administrative Agency, may negotiate, approve, execute, and record amendments or releases of any ARCH loan documents as may be needed for the project; provided the project still provides the anticipated affordable housing and there is sufficient collateral to secure the members' financial investment, all as determined by ARCH staff. 17 N w tJ 0 LL OJ 0 Q. 0 L a c a� E s u �a Q a O O O O O O O O O O O O O O O O O p a, O O O O O O O O O O O O O o O 0 0 p 13 N OO OO O O N M tD N N N tD Ln O O O O O M v '� rn Ln r-, of r, N c,4 Ln- o0 a o0 O O O O O C M N N N Cr �"� Owl �M-I rMi coo.1 Lm Ln M N C LL-i N rt0 t0 u G7 OG O O O O O O O O O O O O O O O O O O 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 O O 0 I- Q1 d1 u1 Ln N tD M tD tD ri oo N O O O H 01 N O-, 00 N O N E to -:: O O O O Y 00 n .- I N ri O ri N r" tD tD coo O O LM LM to 9 W �� O O O O O O O O O O O O O O'O O p p 'a 0 M 0 p 0 0 0 0 0 0 0 0 0 0 0 0 0 0 p0 = fV r� r-I r-I 00 M N ri 00 Ln r-I O O p E E L. 00 r, ri � N n C, lD N C r-I e-I `� O O O O '♦D m ri ri Ln to rpl W � ri u 2 0 0 0 0 0 0 0 0 0 0 0 0 0 O' O O Q 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 O g 4J (01 m M M to M 00 M m M O O ' D Y"z M ri M O M O Cl ri ' O O O O N I� 01 14 N r"I t0 t0 LO 0� 9 Q 0 O 0 O 0 O O O 0 O 0 0 O O 0 O 0 O 0 0 O O 0 O 0 O 0 0 o 0 O O o O N r-I -zt tD r-I mltD tD O N N It N to O O O m j M i-1 00 00 Ln Ln Ln 3 00 L � Ln N N N m J +, v O O O O O O O O O O O O O O O O O O O O O O O O O I O O O O O 008 co ri I, to M 00 tD M r-I M v i N 00 T O O O p M ill ri -4 O N N 00 01 Ln N N to O Ln M p b O .L rl Q. V) N � L t a� c.Q=Q+a Cu = O N — 2 a t13 i CU Ln C m a d C p H O c m� o 0 :� 3 LL 0 a N 4+ � GJ 0) OJ "6 E 0 O V '� N 3 CO m U 2 Y X Z w ii 3: >m- J CC N d Q Applicant: Project Name: Location: Protect Description: Attachment 2: Project Economic Summaries BRIDGE Housing Spring District TOD 1601 120th Avenue NE, Bellevue, WA New construction of Buildings 2 and 6, which consist of 235 permanently affordable units at 30%-60% AMI. Project Sources Amount Status Low Income Housing Tax Credits (4%) $62,318,118 Proposed Amazon Housing Equity Fund - Loan $22,100,000 Committed Amazon Housing Equity Fund - Grant $3,750,000 Committed City of Bellevue $6,500,000 Proposed ARCH $1,000,000 Proposed King County TOD $10,000,000 Proposed State Dept. of Commerce HTF $8,000,000 Proposed BRIDGE General Partner Equity $6,792,535 Committed Deferred Developer Fee $1,750,000 Committed Perm Loan $16,215,207 Proposed Total Sources $138,425,860 Project Uses Amount Per Unit Per SF Acquisition Costs $70,000 $298 $0.31 Construction $97,012,064 $412,817 $432.68 Soft Costs $18,806,285 $80,027 $83.88 Pre -Development / Bridge Financing $26,958 $115 $0.12 Construction Financing $11,223,605 $47,760 $50.06 Permanent Financing $805,615 $3,428 $3.59 Capitalized Reserves $1,053,598 $4,483 $4.70 Other Development Costs $9,267,735 $39,437 $41.34 Bond Related Costs $160,000 $681 $0.71 Total Uses $138,425,860 $589,046 1 $617.39 19 Applicant: Proiect Name: Location: Proiect Description: TWG and Imagine Housing Larus Senior Housing 7520 NE Bothell Way, Kenmore, WA 175 units of affordable housing for seniors (62+) at 40%, 50% and 60% AMI Project Sources Amount Status ARCH $3,900,000 Proposed King County TOD $4,980,000 Proposed Amazon Housing Equity Fund $15,200,000 Proposed Deferred Developer Fee $3,829,635 Proposed Federal Energy Equity $153,000 Proposed Low Income Housing Tax Credits (4%) $21,872,953 Proposed Perm Loan $16,350,000 Proposed City/CHIP 550,000 1 Proposed Total Sources $66,835,588 Project Uses Amount Per Unit Per SF Acquisition Costs: $4,506,827 $25,753 $35.47 Construction: $46,583,103 $266,189 $366.60 Soft Costs: $8,980,017 $51,314 $70.67 Pre -Development / Bridge Financing $539,128 $3,081 $4.24 Construction Financing $3,335,814 $19,062 $26.25 Permanent Financing $375,379 $2,145 $2.95 Capitalized Reserves $765,750 $4,376 $6.03 Other Development Costs $1,366,444 $7,808 $10.75 Bond Related Costs $383,126 $2,189 $3.02 Total Uses $66,835,588 $381,918 $525.98 20 Applicant: Project Name: Location: Project Description: Low Income Housing Institute (LIHI) The Aventine 211 112th Ave NE, Bellevue WA Renovation and acquisition of an existing 5-story, 68-unit apartment community for the preservation of housing for households at 30%, 50% and 80% AM I Project Sources Amount Status City of Bellevue $8,500,000 Proposed ARCH $1,500,000 Proposed State HTF $5,000,000 Proposed King County $5,000,000 Proposed WSHFC 501(C)3 $13,000,000 Proposed Total Sources $33,000,000 Project Uses Amount Per Bed Per SF Acquisition Costs $29,300,000 $430,882 $751.09 Construction $1,220,400 $17,947 $31.28 Soft Costs $915,800 $13,468 $23.48 Pre -Development / Bridge Financing $750,000 $11,029 $19.23 Permanent Financing $150,000 $2,206 $3.85 Capitalized Reserves $273,800 $4,026 $7.02 Other Development Costs $390,000 $5,735 $10.00 Total Uses $33,000,000 $485,294 1 $845.94 21