[Council Communication]  [Attachments]

Council Communication

Title:	Status Report on The Grove
Dept:	Administration
Date:	December 16, 2003
Submitted By:	Ann Seltzer, Management Analyst
Approved By: ...........................	Gino Grimaldi, City Administrator

Synopsis:	At one time the City toyed with the idea of relocating Senior Services to The Grove or perhaps using the facility for other City functions. Since that time, there has been a strong voice from the community that the Grove should continue as a venue for under served youth services. As such, staff has focused on options that would retain the use of the Grove for under served youth services. Many groups in the community have asked to use The Grove for various activities, which do not meet HUD requirements. Staff contacted HUD to ask if 75% of the building could be freed for general use and the remaining 25% restricted to activities that meet HUD requirements. Unfortunately the answer was no. Consequently, the building is not being used except for very limited use of the recording studio. In addition, staff also asked what is required to purchase the CDBG portion of the building from HUD. The City's contact at HUD did not feel a formal appraisal was necessary to establish the fair market value of the property, under Community Development Block Grant Entitlement Program Regulations, 24 CFR 570.505. Per voluntary acquisition regulations, grantees can use an objective person(s) with the knowledge of the local real estate market to make the determination of fair market of a building constructed on publicly owned land.
Recommendation:	Staff asks Council to accept the following recommendations and direct staff to proceed. #1  Appoint an Ad Hoc Committee to identify the needs of under served youth in the community, identify a list of providers, identify a range of options for responding to those needs, and bring the options and a recommendation back to Council in January. The Committee should include Jan Janssen, Youth Diversion Officer, representatives of the youth community and others in the community that are in touch with under served youth. Suggested timeline: • December 2003, appoint ad hoc committee • Late January 2004, hear options and recommendations from committee • Mid February 2004, begin process to solicit group to conduct programs and services Pros: • This approach ensures that programs and services Cons: • None #2  Buy out the 25% HUD investment (original investment was $250,000) in the Grove to remove the HUD requirements thereby allowing greater flexibility of programs and services provided in the Grove and eliminate staff time to track and report to HUD on demographics collected. Suggested timeline: • December 2003, obtain fair market value of the Grove. • January 2004, present results to Council and review options on buying out the investment. • February 2004, reimburse CDBG line of credit Pro: Eliminating HUD restrictions frees the building for uses by other organizations that benefit the community such as CERT. • Allows the agency providing youth services to conduct non low- to moderate-income activities in the building such as holding fundraisers or dances      open to the entire community with proceeds to benefit the programs. • Eliminates administrative burden of monitoring and reporting to HUD on the demographics of the people using the programs and services. Con: • None Funding Mechanism Options 1) Use a portion of the proceeds from the sale of the Strawberry Lane property to buy the HUD investment in the Grove. That amount increases the HUD "line of credit" in the City's accumulated carryover. It could then be re-allocated to another eligible activity such as an affordable housing project. Budget law permits the city to borrow temporarily from another fund if the full amount will be repaid in the upcoming fiscal year. This would allow the HUD investment to be paid without waiting for the sale of the property. NOTE: In the event that a project is not identified to use the HUD carryover funds before November 2004, the City could potentially exceed the 1.5 times the annual allocation carryover cap and be subject to HUD sanctions of withholding future year CDBG allocations. In addition, the funds used to pay the HUD investment would be encumbered and could only be used for HUD programs. 2) Borrow the funds from a non-restricted fund for a capital loan. Budget law allows for an Interfund Loan for capital projects to be re-paid over a five-year period. A revenue stream for repayment would have to be identified. (It is unclear at this point as to whether the buyout of the HUD investment could qualify as a capital project.) Either option would require a supplemental budget.
Fiscal Impact:	Unknown.
Background:	In October Mayor DeBoer, Councilor Hartzell and staff met with representatives of the community including the Ashland School District, Youth Focus, YMCA and Community Works to discuss the Grove, the agenda and notes of that informal gathering are attached. A handout of basic guidelines is given to people who express and interest in using the Grove to help them determine if they meet the HUD requirement.
Attachments:	Notes from Grove meeting. City handout with basic HUD requirements. Memo from Cate Hartzell. These attachments are available in PDF format. To view the document on your computer, please click on the link below. The Adobe reader program will open in a new browser window.  Please use the browser's "Zoom" feature to adjust the size of the text for comfortable reading.

Grove_Attachments.pdf (741.6KB)

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