ASHLAND HOUSING COMMISSION
SPECIAL MEETING
MINUTES
SEPTEMBER 10, 2003

CALL TO ORDER
Chair Andy Dungan called the meeting to order at 4:05 p.m. Other Commissioners present were Joan Legg, Chris Oswald, Matt Small, Kim Blackwolf, Jonathan Uto, and Cate Hartzell. Kim Miller arrived at 4:20 p.m. Staff present were John McLaughlin, Brandon Goldman, and Sue Yates.

ANNOUNCEMENTS
Dungan said he evaluated the time he has been spending on the Commission and has decided that if he is going to continue on the Commission he needs to quit doing so much. He will be not be doing any subcommittee work. Legg has agreed to act as Liaison to the Housing Coalition. (Add Housing Coalition item to next agenda.) Someone needs to take Dungan's place on the Education Committee.

Dungan wanted the Commission to be aware that Gary Collord, Housing Specialist stated that is 90 percent probability that he will be gone by the end of the year. No one knows what that means, but he wanted the Commissioners to be aware of it.

PROCESS AND COMMISSION'S POSITION FOR REALLOCATING CDBG FUNDS TO PURCHASE LARGE SITE FOR AN
AFFORDABLE HOUSING PROJECT
Goldman provided the Commission with a memo discussing the CDBG program update. Staff is providing three strategies for the Commission to discuss regarding re-programming of past funds carryover. The carryover funds are outlined in the table included in Goldman's memo. There could possibly be a fourth strategy. Strategy 1 would keep everything as it is, sending out an RFP for 2004 to spend $190,000. Strategy 2, ACLT keeps its portion, sending out an RFP for the remainder of carryover plus the $190,000 for 2004. Strategy 3 would be to pool the unexpended funds and re-program all of it for a cumulative total of $797,000. Strategy 4 would be to combine the 2001and 2002 backlog related to RVCDC and give the $120,000 to ACLT and then reprogram the carryover through the RFP process.

Goldman said we are talking about producing a new Action Plan for the 2004 calendar year. As part of the process, we are looking at revising past Action Plans and indicate where we are now going to be putting those funds.

Dungan said our Consolidated Plan does not have built in timelines for spending the funds. That is what has prompted Staff to make a specific request that the funds be recaptured and reprogrammed. HUD has a sanctions policy that we cannot accumulate more than one and one-half times the yearly allocation in carryover. We are beyond that at this point. If the funds are not spent quickly, we could potentially lose future allocations.

Goldman said today the Commission needs to make a recommendation to the Council as they will be reviewing this on September 16, 2003 and directing Staff on how to proceed. The Commission needs to look at the projects that are currently outstanding and determine what level of confidence the Commission has that those projects will be carried out.

Blackwolf asked what happens if we are found to be untimely? Goldman said unless we spend $200,000 by November 1, 2003, we will be found untimely. They give us a year to become timely. If, during the year, we do not become timely, on November 1, 2004, HUD will see how much money we have accumulated and they will withhold allocations in 2005, 2006, etc.

Dungan noted that we are in a unique situation with HUD allocations currently and this is a one-time deal. Goldman said we changed our calendar year to give us six months breathing room.

Uto asked if by putting out an RFP for the full total of $400,000, would this be the largest amount we would ever get? Goldman affirmed.

UPDATE BY RON DEMELE - Rogue Valley Community Development Corporation (RVCDC)
Demele said he was under the impression they had until November to put a project together. He referred to his letter of May 22nd in which he informed the City they'd like to make a change with their proposal. They no longer felt the tax credit project they envisioned would work. They couldn't put three sites together. They requested the two rounds of funding support for RVCDC be consolidated into one site - Faith and Siskiyou. The property is one-half acre. They've done a feasibility study for the site. It does not require rezoning, it has a bus stop in front of it, and it has access to Bellview School, and can accommodate the appropriate number of units. They have been negotiating with the owner, helping him find tax strategies so he can sell. The property is selling for $355,000. They have not had a full appraisal. They have signed the option that closes the deal in November of this year. If they get a successful environmental review and pre-application and approval from the City, it is pretty likely they will meet the requirement of getting the funds. The funding for home ownership will be the Self-Help Program in partnership with USDA Rural Development. They plan to do eight units - two story townhomes. They could be ready for families to move in by March or April of 2004.

Demele said in the event this project does not happen, they have talked to Ashland Community Church and have a letter of intent to buy their property on Clay Street.

Oswald said her initial response is that any project is going to take a long time. She doesn't think we have anything to gain by throwing out RVCDC funds and asking for a new proposal. At this point, she wants units on the ground and to get the money spent so we can keep future money coming.

Dungan spoke to the other side of the case. RVCDC had proposed 15 units for the Lower Pines and ten to 11 for Faith. They had two proposals to build 25 units. They are now down to a total of eight units. Is this the most effective way to use this money? Maybe it's not and if we pool all this money, we will have something much greater and will have potential for many more units on the ground.

Goldman said Staff has concerns that the Lower Pines was selected through a competitive process for an award in lieu of an ACLT project. The reprogramming by RVCDC of these fund to the Faith and Siskiyou site has precluded a competition for these funds.

Dungan asked if it would be difficult for the City at this point in time to shepherd a project along with money pooled? McLaughlin said it would be difficult.

Demele said the message he is hearing most strongly from the City is "Get the money spent." They could come in with another tax credit project but they would be waiting until next October to see if they had an approved project. Would the City rather see a big project that is higher risk?

Miller asked what percentage of the Self-Help Program requires sweat equity. Demele said the buyers have to do 60 percent (30 hours a week). Miller asked if he has a price on the church property should the Faith/Siskiyou project not work? Demele said it is a lesser price than Faith and Siskiyou with the same number of units. There would have to be a rezone of the church property and many other planning issues that would need to be resolved. It is feasible, but a longer process. Miller asked if the source of the Self-Help has been confirmed. Demele said yes, through Rural Development. Demele said the concept is that no one moves in until all homes are done.

Hartzell wondered if the maximum density for the Faith/Siskiyou property was eight units.Demele said that before they would exercise the option, they would go through the pre-application. It looks like ten is the feasibility. Large families are those with the greatest need right now. Hartzell believes the City is in a position to say we want to maximize the density.

Small asked Demele if the purchase is a done deal due to the owner's tax situation. Demele said it is a done deal. Their exercise to buy the property in November is predicated on the City approving some things.

Goldman said RVCDC needs an environmental review and it is unit specific. The review includes a noise analysis, soil study, etc. Once it is completed it is noticed for 30 days with an opportunity for public comment. Following, is the 30-day release of funds notification period. He doubts we would be able to complete it by November 1st.

Legg feels Demele has come forward in good faith and she doesn't see why we don't go ahead with it. RVCDC is a local group and it behooves us to see where we can encourage this approach.

Goldman noted that the 2003 allocation of $198,000 for the Faith/Siskiyou property was based on a commitment from RVCDC that they could produce ten to 11 apartment units. That is a little different than what they are proposing today. What they are proposing today is no longer going to be a tax credit project.

UPDATE BY ACLT - Merry Hart, ACLT Board member and Jennifer Henderson, President of ACLT
The potential $120,000 they have for Hersey Street is at HUD's mercy at this point due to a possible conflict of interest. Whether or not that can all be resolved in a timely enough manner to be able to purchase the homes from RVCDC depends on HUD's response to the conflict of interest.

Goldman noted that environmental review has been completed on that site. They are looking for a final approval from HUD on the modification of the Action Plan before an arm's length agreement is executed between ACLT and RVCDC. They are asking HUD for a tentative opinion about whether there is a conflict of interest. HUD said they would only respond to a formal request for an exception. The City Attorney is putting together a response. HUD said it would take one to two weeks to respond.

Hartzell asked the optimal timeline after all the issues are resolved. Hart said that the houses should be completed in November, they should have three educated buyers, approved and qualified. Rural Development may or may not be involved. Henderson said they will know more tomorrow. They feel that everything will be done by March, 2004.

Hartzell asked Demele if his project could guarantee affordability. Goldman said the CDBG contract includes provisions for requiring affordability for 20 (?) years. Demele will talk to his board but their current policy is that they have a 20 year deed restriction.

STAFF'S RECOMMENDATION
Goldman said in light of what has been heard today, Staff would recommend Strategy 4 that the Commission could recommend that RVCDC pool the 2002 Lower Pines money with their existing funds for the acquisition of the Faith and Siskiyou site. Staff would exclude the Clay Street church site as a back-up. Part of the reason we are here today is because RVCDC has been looking at alternative sites instead of proceeding wholeheartedly with the Faith and Siskiyou site. Part of Strategy 4 would also be that all the other accumulated funds (remainder) would get aggregated into a new RFP in addition to the $190,000.

Goldman said the accessibility funds have not been spent due mostly to administrative burdens. Maria Harris said the Davis-Bacon requirements add about 35 percent to a project.

The Commission felt that if by January 31, 2004, RVCDC hasn't closed on the property, the money will revert back.

Hartzell said that this allocation was originally for apartments and is now for townhomes. Demele is bringing in a significantly smaller project. She would ask that they maximize the density on the property and discuss with the board about long-term affordability to compensate for not getting apartments. Goldman said the property could have up to no more than 11 units.

Dungan moved to adopt Staff's Strategy 4 with the funds to revert on January 31, 2004 with a minimum of eight units. The Commission would recommend the longest term affordability they can get. Blackwolf seconded the motion and it was approved unanimously.

BIG BOX ORDINANCE
McLaughlin said they are taking the Big Box ordinance back to the Council with what the Council has asked for. McLaughlin said the Council's motion was that the floor area that would be residential would be included in the total square footage of the building. They have also asked that the visible parking areas be included in the square footage. The Council is concerned they could get a very, very large building in the downtown. Staff will be taking back what the Council has asked for along with the ramifications of those changes.

Mac asked: "What is the Housing Commission's concerns in terms of housing downtown? What would they like to see?"

Blackwolf would like to see buildings like Copeland able to have housing on top of the commercial property. If we are going to put more affordable housing on the ground, we have to go up.

Dungan believes that if everything we do doesn't address affordable housing, then we aren't serious about it. This is too important with too great a potential to not include housing in the ordinance. It's either out or up. There is not enough vacant land in the City to have another choice.

Blackwolf does not understand why housing has been taken out of the Big Box. McLaughlin said it works with small-scale buildings. The problem is the sites that are larger. Once you deck a parking lot, it becomes a floor that is counted as the area of the building. When buildings get larger, exempting housing allows them get even larger.

Oswald wondered how likely it would be that housing built in the downtown would be affordable anyway. McLaughlin said if a developer can see an incentive to build affordable housing, it can happen. It is very common in larger urban areas. He recently toured the Safeway in downtown Portland that had two levels of parking underground, market on the main floor with purchase condos and a tower on top with rentals and affordable housing on top too. It can happen, but it requires subsidies.

Hartzell is concerned about including affordable housing in the Big Box because it could mean a relaxing of the standards through the conditional use permit (CUP) process. She would hope that the Commission can do the thinking to integrate affordable housing into what Council is going to consider in a way that is not going to hit one value against another and come out with good housing at the end of it.

McLaughlin said there has been a request to delay adoption of the downtown portion of the Big Box ordinance. Russ Dale and Evan Archerd have an option on the Copeland property. They are looking at options for redevelopment of the entire block, including the City's parking lot. They are proposing a weeklong charette process to look at the entire area with regard to options for development, positives and negatives of different approaches, different housing types, commercial needs, etc. Rather than saying "this is what we don't want," what if we use a process to look at what we want to see.

McLaughlin said part of the Commission's recommendation can be to ask for additional review because it is key to affordable housing. The Council will have to make their decision.

Oswald suggested recommending to the Council that we go ahead with a Big Box ordinance with the stipulation that the Housing Commission wants/demands that we discuss in the very near future conditional uses and make very specific stipulations about affordable housing levels and when the standards would be relaxed for Big Box.

Dungan's only reluctance is that the minute the ordinance passes, the amount of energy required to change it will go up hugely. McLaughlin said if the Council's direction is to adopt the ordinance, but they want to continue the process and make improvements to the ordinance, it will stay an active item. Oswald feels in a bit of a hurry to do something about large-scale development because she doesn't want a big box in the downtown.

McLaughlin understands the Housing Commission definitely wants to have involvement to provide opportunities for affordable housing whether or not the ordinance is adopted or amended.

Oswald moved to recommend that the Council pass the Big Box Ordinance as written. The Housing Commission has requested the Council add a second motion requesting that Staff come back to the Housing Commission and/or Council within three to six months with a range of potential changes to the Big Box Ordinance that would accomplish the creation of incentives for affordable housing downtown. If they decide not to vote on the Big Box Ordinance, the Housing Commission would like it worked on now.

Legg seconded the motion and it was unanimously approved.

NOW X2 - The Council has deferred this until the second meeting in October.

ADJOURNMENT - The meeting was adjourned at 6:05 p.m.

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