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STAFF REPORT

TITLE: CDBG Award Selection Fiscal Year 2002-2003 Housing Commission Public Hearing
DEPT: Community Development
DATE: April 24, 2002
SUBMITTED BY: Brandon Goldman, Assistant Planner

Synopsis: The City of Ashland Housing Commission is charged with forwarding a recommendation to the City Council for the award of Community Development Block Grant funds for Fiscal Year 2002-2003. A total of 75% of our yearly allocation is available for the competitive award process to serve the highest priority need established in the 2000-2004 Consolidated Plan. This amounts to $168,750 available to the selected sub-recipient(s) for use in developing affordable housing. Through evaluating the proposals received the Housing Commission, and ultimately the City Council, are to determine which proposal(s) most effectively use the limited Community Development Block Grant (CDBG) funds available to address the needs of low- and moderate-income residents of Ashland.

Background: Requests for Proposals were available to the public on May 10th 2002, and stipulated that proposals were to be limited to affordable housing projects, the highest priority need identified in the 2000-2004 Consolidated Plan. The City received two such proposals.

A proposal to purchase property for the construction of 15 affordable residential rental units and a 10,000sq.ft. commercial building was submitted by Rogue Valley Community Development Corporation (RVCDC).

Ashland Community Land Trust (ACLT) also submitted a proposal to acquire property for the development of 6-10 affordable residential units.

Both proposals clearly address the highest priority need identified in Ashland's Consolidated Plan.

The Housing Commission held a study session on April 17th, 2002 to review each of the two proposals. The Commission outlined numerous issues that each applicant should be prepared to address at the Public Hearing scheduled for April 24th, 2002. In order to facilitate these clarifications, staff sent a letter to both ACLT and RVCDC and each responded in writing. These clarification letters and applicant responses are attached at the end of this report.

Staff Evaluation: To assist in the Housing Commission's evaluation of the proposals an overview of each proposal is provided and the strengths and weaknesses are identified from a Staff perspective.

Ashland Community Land Trust

The Ashland Community Land Trust (ACLT) originally proposed to use $168,750 in CDBG funds to assist in purchasing a specific property (740 Tolman Creek Rd.) for the construction of 6-8 additional residential units on the parcel. However, between the time that the RFP was submitted and the Housing Commission Study Session was held on April 17th, the subject property was sold to another buyer and is therefore no longer available for purchase.

ACLT has therefore modified their proposal to acquire individual parcels within the "East Village Subdivision". East Village is a 43-unit new development, consisting of four pods of rowhouse-type construction. The project will consist of 2, 3, and 4-bedroom units. The project is to be developed on property within the urban growth boundaries of the City of Ashland, but outside the city limits. The developer, Russ Dale, is seeking city approval to annex the property into the city limits. Annexation of residential property requires that 25% of the units are "affordable" under Ashland's affordable Housing program. Thus 10 units will be required to meet this standard.

Ashland Community Land Trust is requesting $168,750 in CDBG funds, in addition to the $120,000 awarded in FY2001-2002, to acquire ten of the parcels within the proposed subdivision to supply a total of 10 affordable housing units. In FY2001-2002 ACLT proposed the development of four residential units and they are still obligated to provide those units with the $120,000 awarded previously. Thus this modified proposal is for CDBG funds to acquire property for the development of 6 additional residential units. Pursuant to the land trust model, ACLT would purchase the land beneath the units with grants, and hold it in perpetual trust. The improvements built upon the land would be sold to qualified buyers who would lease the land beneath for a nominal fee (usually $35 a month), thereby removing the cost of the land from the transaction.

This modified proposal eliminates many of the concerns identified at the study session. Specifically, as the land will be subdivided by the current property owner, and each lot will be available for the construction of a single-family attached home (townhouse), the issues associated with lead based paint and relocation present at 740 Tolman Creek Rd are eliminated. Additionally Staff had some reservations regarding ACLT's administrative capacity in-house to manage rental housing, as their original proposal called for the creation of up to ten rental units. As the modified proposal is for home ownership units Staff is confident in ACLT's capacity to accomplish the proposal. ACLT has completed 3 similar units utilizing CDBG funds in the Chatauqua Trace Subdivision in partnership with ACCESS Inc.

ACLT again proposes to work in collaboration with ACCESS Inc to accomplish the development proposed.

ACLT/ACCESS - Eastview Subdivision Proposal

strengths

• ACCESS, Inc. is a partner, demonstrated capacity in non-profit, affordable housing development throughout Rogue Valley and in Ashland
• Meets one of highest priorities in Consolidated Plan - provision of affordable housing for ownership
• 100% of land acquisition costs would be secured as is CDBG funds
• Land is Available and ACLT has been approached by the developer to provide the affordable units required.
• Homes developed will remain affordable in perpetuity
• preliminary development assessment is complete, local planning process is underway

weaknesses

• The proposal is to make homes available to homeowners at 80% of median income and below (note --although this would typically be viewed as a "strength", the assignment of weakness is in comparison to RVCDC's proposal to provide housing to households at 60% of median income)

Rogue Valley Community Development Corporation

The Rogue Valley Community Development Corporation (RVCDC) proposal is to use $168,750 in CDBG funds to assist in purchasing a property (Lower Pines Trailer Park, 391E10DB tax lot 8700) for the construction of 15 rental units and a 10,000sq.ft. commercial space on the parcel. The property is .58 acres in size and currently contains eight occupied trailers. The proposal also states that it is RVCDC's intention to seek additional CDBG funding in Fiscal Year 2003-2004 to develop an additional 15 rental units for a total of 30 affordable housing units to individuals and families with incomes equal to or less than 60% of area median income. The present zoning of the property is C-1, which allows for up to 30 residential units per acre provided that a minimum of 65% of the ground floor is commercial. The proposal meets the base residential density and commercial use for the C-1 zone as proposed.

Of concern on this site is the displacement and relocation of the existing residents as required by the federal Uniform Relocation Act (URA). As the redevelopment of the site will necessitate the removal of the existing trailers, all residents may be eligible for relocation benefits under the URA. To this end the RVCDC includes a relocation budget of $40,000 in CDBG funds to cover these relocation costs. The remaining $128,750 requested is to be used toward the land acquisition cost. The applicant has proposed to utilize the services of a consultant specializing in relocation to assist in this aspect of the proposal. Although this proposal is beneficial in that the relocation benefits provided to the displaced residents will provide them with needed funds, Staff feels that the $5000 per residential unit identified is inadequate given the cost of comprable rentals. The relocation standards require that displaced residents be eligible for relocation benefits including but not limited to moving costs and replacement housing assistance. The replacement housing is to be "comparable" and the difference in rent and utilities is to be provided for 42-60 months.

To provide an example: If a resident occupying an existing 2-bedroom unit (trailer) is paying $300 per month for rent + utilities, and if a comparable two-bedroom rental unit in Ashland rents for $600 per month + $50 in utilities, the difference of $350 (the difference between the existing base rent [$300] and the actual rent of the replacement home [$650]) is multiplied by 42 months for a rental assistance benefit of approximately $14,700 per displaced household.

Although this example is intended to illustrate how relocation rental assistance under URA is calculated, it also serves to demonstrate that the $5000 per unit identified in RVCDC's proposal may be inadequate to meet the provisions of the Uniform Relocation Act as the cost of comparable housing within Ashland is considerably higher than the existing housing costs of the occupants of the Lower pines Trailer Park.

The subject site formally contained a gas station and as such the application stated that the underground gas tank was removed in the late 1980s, and received DEQ clearance. Another concern relating to the environmental review requirements involves the impact of Ashland Street on the proposed residential units. The applicant is aware that noise attenuation measures (additional building requirements such as increased insulation, reduction of windows and doors on the south side of the building, etc) may be required because of the sites adjacency to this high volume four lane arterial street. Some of these measures may be counter the the Detail Site Review Standards for development along Ashland Street. As no site-plan or building elevation has been provided, staff can not evaluate how the proposed project complies with Ashland's local land use ordinance.

The City Land Use Ordinance encourages mixed use developments within commercial zones, however the use of CDBG funds on a project will require uses on the site (acquired with CDBG funds) also meet the national objectives. Upon consultation with HUD subsequent to the study session, the commercial component could clearly be deemed eligible provided that it included "job creation" opportunities for low-moderate income individuals. Although the RVCDC proposal does not indicate at this time that this is proposed, it could provide one viable solution to meet the federal requirements for use of CDBG funds. Additionally it may be possible to effectively separate the commercial component from the federal requirements entirely by clearly demonstrating that the portion of CDBG funds contributed to land acquisition directly corresponds to the percentage of the improvement costs that are directly attributable to an eligible use. Meaning, if CDBG funds account for 30% of the purchase price of the property, and the development of eligible uses (in this case affordable housing) accounts for 30% or more of the development costs, the remaining uses (commercial) can be free of CDBG requirements.

This can be found in the definitions part of the CDBG regulations at 24 CFR

570.200(b)(1):

(1) Facilities containing both eligible and ineligible uses. A public facility otherwise eligible for assistance under the CDBG program may be provided with CDBG funds even if it is part of a multiple use building containing ineligible uses, if:

(i) The facility which is otherwise eligible and proposed for assistance will occupy a designated and discrete area within the larger facility; and

(ii) The recipient can determine the costs attributable to the facility proposed for assistance as separate and distinct from the overall costs of the multiple-use building and/or facility.

Of particular concern with the RVCDC proposal is the timeliness in which the proposed project is to be completed. Federal regulations limit the City's maximum CDBG carryover to 1.5 the annual grant. As a result, the project must be completed and the funds used in the twelve-month period. While using funds in a "timely" manner as defined by HUD is always a challenge, it becomes imperative with high cost projects. For this reason, it is especially important for the grant recipient to demonstrate that the organization has the capacity to complete the project as proposed. To date no conclusive demonstration has been made to staff by RVCDC that the proposed project can be developed on the site selected, or that the subject property is available for sale.

RVCDC - Ashland St. Property

strengths

• Meets one of highest priorities in Consolidated Plan - provision of affordable housing for rental
• Relocates 8 households of trailer park and would provide relocation assistance to the displaced households.
• The rental assistance and relocation benefits provided would not be required were a private developer to develop the site without the use of federal assistance (CDBG funds).
• Relocation component is substantial and will likely tax City Staff's administrative capacity (HUD concern)
• Provides a mixed-use development along a major thoroughfare (Ashland St.) and therefore provides housing in close proximity to commercial services.
• 15 units provided to households making less than 60% of median income.
• Proposes a bike program to provide transportation assistants to residents of the affordable housing units
• Rental units developed will remain affordable for a minimum of 60yrs with a deed restriction on the property.

weaknesses

• 21.5% of the land acquisition cost is from CDBG funds ($128,750), have not demonstrated remainder of purchase price has been secured?
• Is relocation in Ashland realistic/possible given incomes/current rents of trailer park residents? (see example provided above)
• preliminary development assessment is not complete, complex development process at local level, constraints (not enough parking - possible need of 50 off-street spaces)
• all 1 bedroom units, will accommodate families/more than 1 person?
• Administrative capacity issues, the large scale proposal is substantially larger than any endeavor RVCDC has completed to date.
• $150,000 in private donations identified in proposal yet not secured to date.
• Meeting national objective w/commercial space?
• Separation of uses undetermined.

Staff Recommendations:

Upon evaluating both proposals Staff's recommendation is to provide the full CDBG award ($168,750) to the Ashland Community Land Trust for the acquisition of property to develop 6 residential units. The consolidation of last years $120,000 award and the $168,750 requested this year will provide ACLT with the ability to purchase a total of 10 parcels for the development of a total 10 affordable residential units for home-ownership (4 units are required as part of last years CDBG award). The ACLT proposal is relatively straight forward and staff is confident that ACLT, in conjunction with Access Inc., has the ability to complete the project in a timely manner.

Although both applicant proposals would clearly meet the highest priority need set forth in the Consolidated Plan, Staff feels that the complexity of the RVCDC proposal, including environmental review, relocation, and division of uses, would be difficult to administer, both by City Staff and RVCDC. Staff recommends that RVCDC continue to pursue their ultimate goal of providing up to 32 affordable residential units within Ashland, and again request CDBG funds in future years.

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ASHLAND HOUSING COMMISSION
CDBG PRESENTATIONS
MINUTES
APRIL 24, 2002

CALL TO ORDER - The meeting was called to order by Chair Nancy Richardson at 4:05 p.m. Other Commissioners present were Diana Shavey, Aaron Benjamin, Richard Seidman, and Andy Dungan. Cate Hartzell arrived at 5:00 p.m. Absent members were Larry Medinger and Joan Legg. Staff present were Brandon Goldman, Maria Harris and Sue Yates.

PUBLIC HEARING

PRESENTATION OF COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG) PROPOSALS

Conflict of Interest - Seidman said he is a member of the Ashland Community Land Trust but has no financial interest or bias. No one expressed a conflict of interest.

Staff Presentation

Goldman stated there are two applications to review: 1) Rogue Valley Community Development Corporation (RVCDC), and 2) Ashland Community Land Trust (ACLT). Each proposal does meet the highest priority need (affordable housing) established in the 2000-2004 Consolidated Plan.

The Housing Commission met in a study session on April 17th to evaluate the two proposals. It is important to note that the site on Tolman Creek Road originally identified by ACLT sold between the time the request for proposal (RFP) was issued and the first study session was held. It is Staff's understanding that the site is no longer available for development. ACLT has modified their proposal to provide six affordable housing units for home ownership on a property that is in the process of being annexed into the city. The property is proposed to be 43-unit townhomes consisting of two, three, and four bedroom units. ACLT's proposal is to acquire ten of the properties for ten affordable units. Last year, ACLT was awarded $120,000 in CDBG funds for the purchase of property to develop four affordable housing units. They are asking for funds today for an additional six units. They are requesting the full amount of CDBG funds totaling $168,750.

A Staff Report has been provided evaluating both proposals.

RVCDC's proposal is the same as reviewed by the Commission on April 17th. RVCDC has provided responses to the concerns raised at that evaluation. A significant issue was in regard to the commercial use of space. Staff has been in discussions with the regional representative from HUD. There is likely a number of scenarios in order for the commercial space to be considered eligible. One would be for the provision of job creation. They would have to identify particular uses that could occupy the 10,000 square foot space and provide job creation opportunities for low to moderate income people. Another scenario, the more likely of the two, would be for the applicant to break down in their proposal, the land price. There has to be a clear accounting that at least 30 percent of the costs are attributable only to the development of eligible uses. Goldman did not get a clear declaration from HUD confirming, but they seemed encouraging.

Another significant concern Staff has had is the relocation of the tenants at the Lower Pines on Ashland Street. Staff feels the allocation of $40,000 for relocation may not be adequate given the comparable rental costs in the City of Ashland. Staff's estimated breakdown is contained in the Staff Report. There is a considerable cost difference.

Staff has provided a breakdown of strengths and weaknesses of each application in the Staff Report.

Staff is recommending the allocation of the full CDBG amount of $168,750 to ACLT for acquisition of property to develop six residential units. The reason for this is that with the consolidation of $120,000 from last year's award in addition to $168,750 this year would enable ACLT to acquire ten parcels using 100 percent CDBG funds. Unlike RVCDC's proposal, there are no alternative yet-to-be identified funding sources that are necessary for the completion of the project. ACLT's proposal is relatively straightforward in that the parcels are vacant and would not trigger any relocation expenses or administrative duties by Staff or ACLT. Staff believes RVCDC's proposal has merit and should the Commission choose to forward a recommendation, it likely can be accomplished. However, it will likely take a significant amount of staff time devoted to environmental review, relocation, and the division of uses issue, both currently and over time. It would require monitoring of the commercial space. Goldman recommended RVCDC make future applications for funds when they are able to demonstrate now or at a future time, that they have the administrative capacity to handle the significant relocation issues and environmental review.

Seidman asked if RVCDC does not get the funds, will the Lower Pines residents get any relief at all for relocation. Goldman said the Universal Relocation Act could give them some relief.

Seidman wondered what would happen to the $120,00 allocated to ACLT last year if they do not get the funding this year. Goldman said ACLT is still responsible for that money.

ACLT PRESENTATION

Presenters: Mary Hart, ACLT Board Member and Krista Berry, President of ACLT. They are presenting in place of Carlus Harris, Executive Director. Hart is employed by ACCESS as their Housing Development Coordinator. She said they had made an offer for the Tolman Creek property but another offer was accepted. Thus, they are asking for the full funding for their alternate site in the proposed East Village Subdivision. Russ Dale, developer of the site, is committed to making ten of the lots available to them. Because of their success in bringing three properties online with Dale at Chautauqua Trace, they believe this project would be a wonderful opportunity for the families in Ashland. The plan would be to use last year's award to offset the land purchase toward homeownership opportunity. The goal would be to make all of the units affordable to families of 80 percent median and below with a price range of $95,000 or maybe less. The Chautauqua Trace homes sold for $89,000 about two years ago. The number of homes purchased and sales price would be dependent on the amount of subsidy they could acquire. This would be home ownership and increase the affordable housing stock in Ashland without displacing any existing low income families. They recognize their participation in this development is only available to them because of the proactive stance the City of Ashland has taken in its annexation policies and deferred system development policies. The East Village development consists of four pods of rowhouse type construction and will consist of two, three, and four bedroom units in a configuration yet to be determined. The targeted units would be scattered throughout the development, thereby preventing clustering of low income housing within a neighborhood. There is a more detailed description of the development in the packet.

Hart mentioned ACLT's capacity. Though Carlus Harris will be leaving as Executive Director soon, he will still be continuing to participate with ACLT. The RARE volunteer, Miranda, will be with them through September. Staffing needs are dependent on development load. Chautauqua was completed with no ACLT staff at all.

Hart updated the Commission on the development at 41 Garfield. A construction grant is under consideration with Oregon Housing and Community Services. It is proposed to be a five-unit rental complex set aside for 60 percent median and below. The development will be owned by ACLT but the development process will be completed by ACCESS. Hart brought an outline of the capacity and experience of the ACCESS staff.

Hart stated she is proud of the award given to ACCESS in January of 2002 for Most Outstanding Community Development Corporation in the State of Oregon for 2001.

Questions from the Commission

Dungan wondered if ACLT had talked to Russ Dale since December. Berry said they got an update recently. Bill Molnar, Senior Planner, met with Dale and the proposal should go before the Planning Commission in July and before the Council in August. Dale has met with the Division of State Lands on the site.

Dungan asked if there was a verbal agreement about the ten units. Berry said there is a written letter of intent. Hart said Dale wants ACLT to do all the affordable housing. The required number is ten. If these units are done by ACLT they will be held in perpetuity.

Dungan asked the probability of this development being approved. Goldman said the proposal has to be in conformance with the Comprehensive Plan. The application meets the base density of the area. There has been a wetlands delineation issue holding things up. Goldman has not evaluated the proposal in detail, but he is not aware of any standards that have not been met. He noted that though 25 percent of the housing has to be affordable, it is not required under our current ordinances to remain affordable.

Shavey said this could be a potential internal conflict of the Board. They have been talking for the last year about getting an ordinance in place for annexation that would require affordability in perpetuity. Goldman said the applicant is held to the standards in place.

Seidman asked what ACLT will do with the $120,000 if they are not granted the additional money this year. Hart said they would go look for more property. They did not have access to the funds until less than two months ago. They have talked to several people already. Seidman wondered if they could spend the $120,000 at the East Village property and find the balance from another source. Hart said the number of units and the amount of subsidy would have to be adapted. Berry said they are continually searching for property. It is difficult to compete against people who have cash.

Hart noted that Dale hands over a finished product to ACLT for them to fill. ACLT does not have to be involved with any of the construction.

RVCDC PRESENTATION

Presenters: Ron Demele, Executive Director, RVCDC and Sharon Neilson, consultant.

Demele stated there are a number of board members present and supporters from the community. With the proposal, they will be able to help those individuals at the Lower Pines move on with their lives and relocate. Those that qualify will be potential tenants at the same site in a new building.

Demele said there is no rezoning required. In RVCDC's proposal all the zoning is in place and this is a "ready to go" project. Housing will be rentals. The Needs Assessment screams the need for more rentals. This will target 60 percent of median income. The product will not only meet the guidelines but maximizes what can be leveraged with CDBG funding. There are approximately $5 million being leveraged by this. They recommend two year funding. RVCDC is asking for this year and the fall round of funding. At the end of the two rounds, RVCDC will create 32 affordable units.

Demele stated they have the capacity as an organization. They have two full-time and two part-time staff members, their own physical tracking system, and an office where they can be reached at any time to move the project along. They have a contract with Neilson from start to finish.

Neilson said she has been doing affordable housing development for over 15 years. She works with non-profit organizations throughout the State of Oregon. She has worked at Portland Development Commission too. She has worked with non-profits on their first time projects that have been produced, functioning and doing well. She's worked in Nyssa, Hermiston and downtown Portland.

Neilson said the funding strategies presented is a scattered site project. It requires more than one site. The Lower Pines site is only one piece of the project. The purchase price of $600,000 is for two sites, not one. Neilson said the relocation costs will be to permanently displace all eight tenants. They would hire a relocation specialist to help. In the proposed funding mix, they would suggest using State Home Funding from the State Home Program. All the same requirements apply as apply to CDBG. The URA would kick in whether there is CDBG or not and environmental review as well. She said it has been known to happen that the state will partner with the local community. Job creation in the commercial space, according to Neilson, would be a delightful economic development approach to this project. However, there may be a way to separate out the commercial. This is an evolving thing that can be open to some discussion as they move forward. Neilson said this project does not require so much land that the units can be leveraged and it creates a smaller scale kind of feel. The low income housing tax credits, home funding, and the mix of funds they have identified have been used throughout the state to produce this type of housing.

Questions from Commissioners

Dungan asked the status of this property. Demele said they are ready to sign. The asking price of the property is $350,000. Neilson said they are going for predevelopment money that will be bridge financing until they can get to all of the funding scenarios and take it out at close of the construction. Rural Collaborative is interested in underwriting a bridge loan. The State of Oregon Housing Dept. provides bridge loans.

Dungan asked if the property is listed. Demele said it is not listed.

Shavey asked the unit size. Neilson said there would be half one-bedroom and half two-bedroom on each site.

Benjamin wondered if the current tenants would want to be relocated. Demele said they are working with Mediation Works. He said they have come up with three options for current tenants.

Seidman said the CDBG money will only provide $168,000 out of a $4 million project. It seems there are a lot of other funding contingencies that have to be met to make it fly. How tenuous is this funding puzzle?

Neilson said funding strategy is primarily through Oregon Housing and Community Services Dept. funding program for tax credits. That is a very competitive round of funding. She believes Ashland is going to demonstrate a very, very high need for 60 percent and below of median income housing. There hasn't been a lot of state community services spent in this community. The funding applications often want to see local support and one of the best ways is to have a local jurisdiction make an award of a local funding source.

Shavey wondered if this property is within the two census tracks. Goldman did not think so.

Shavey asked once the applicants are selected, how will they be monitored to insure they are eligible over a given period of time. Neilson said typically a third party manager is hired who is experienced in Section 42 properties. RVCDC would be looking at hiring a manager who is also secure in home compliance. The state monitors also.

Richardson noted the preliminary development has not been approved. Are they sure they can put in that many units with parking? Demele said they talked to the church next door and they are supportive. They feel they can work out something with regard to leasing or purchasing parking areas.

Richardson asked about the lenders. Neilson said lenders that would understand this type of project are: Bank of America, U. S. Bank, Network for Oregon Affordable Housing, and Umpqua Bank.

Maria Harris, Associate Planner, mentioned that local planning approvals are required for both projects. To clarify, the 25 percent annexation criteria requires they be brought in at 100 percent of median income or less. Her understanding is that ACLT is guaranteeing it will be 80 percent or less. The local planning approval for Eastview Village has been in the works for at least six months. They have gone through a pre-application conference that is the first step in getting approval for the project. Staff believes the applicants are going to be able to meet all the criteria for approval, including the annexation criteria. It is her opinion that the risk is minimal.

Harris said while RVCDC's proposal allows for the use they are proposing, they have not gone through a pre-application process. Staff has not seen any site plans. She believes there is still some risk in gaining planning approval. It would be great if they could provide the parking with the church but they will have to be able to acquire a lease in perpetuity to provide the parking.

Harris said ACLT's project is farther along in the process and less risk to the city to fund that project compared to RVCDC's proposal.

COMMISSIONERS' DISCUSSION AND MOTION

Hartzell arrived.

Shavey said she is not happy with the idea the developer was going to build a development requiring 25 percent affordable housing and has found a way to bring $300,000 to his project through funding that he would have had to provide anyway. She likes it that RVCDC has a history of production. ACLT seems to be backed up with their development in terms of getting their projects off the ground. She is personally persuaded through the Needs Assessment of a higher need for rental housing. The City has seen the development of almost exclusive home ownership housing. She is in favor, even with the difficulties of doing a tax credit rental for the 60 percent.

Benjamin said the Housing Needs Assessment makes it very clear the city needs affordable rental units and no one has challenged that concept. The RVCDC project clearly makes that a high priority. There is a very convenient site for low income families or individuals with easy access to shopping or transportation. It also affords the city the opportunity to utilize infill.

Dungan believes this is a way to leverage a little money into a much bigger deal. RVCDC has a greater impact. He understands the project is complex. He believes RVCDC has people that are equipped to deal with it. It would leave a positive feeling with everyone in the community.

Seidman understands that ACLT could move forward more quickly in the process. RVCDC have more units, rental units, 60 percent of median income, and dealing with a high profile place. He feels the RVCDC has a better organizational capacity. It seems that ACLT is losing their leadership. He doesn't know how strong the organization is. RVCDC has a bigger staff and is working with a consultant.

Hartzell said in her view ACLT is not losing their leadership. She is on the Board and they are transitioning, not losing. She believes the prospect of putting some rental units on the ground, making a bit of a statement, being able to pull it off as a success, is positive.

Richardson believes both organizations have the capacity to carry out the project they have proposed. Her decision is based on leverage. She said there is a small amount of money in this town. Given the limited amount of funding and our Needs Assessment, she believes it is important to get as many units on the ground as fast as they can. Even if they can only do the 15 units, it is more than six. ACLT does have other projects in the city.

Goldman asked the Commission to clarify whether awarding this grant to RVCDC is for Phase I of their project. Phase II would be a different round of funding.

Shavey moved that the Housing Commission recommend to the City Council the approval of the CDBG application from RVCDC for round one only, in the amount of $168,750 for the development of 15 units on the Ashland Street site or other such site they can find if this site does not work out for the purpose of rental units to persons and households 60 percent of median income or less. Dungan seconded the motion. The motion carried unanimously. Hartzell did not vote.

ADJOURNMENT - The meeting was adjourned at 5:25 p.m.

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