Council Communication

Review of Lithia Parking Lot Affordable Housing Proposals
Meeting Date:	August 30, 2005		Primary Staff Contact:	Brandon Goldman, 552-2076
Department:	Community Development		Email:	goldmanb@ashland.or.us
Contributing Departments:	none		Secondary Staff Contact:	Bill Molnar, 552-2042
Approval:	Gino Grimaldi		Email:	bill@ashland.or.us
Estimate Time:	2hrs

Statement: The City Council is to evaluate the development proposals received in response to the Request for Proposals for affordable housing at the site of the Lithia Way Parking Lot, and determine whether the proposals received have merit, and if so make an award selection in favor of the proposal that best meets the objectives as outlined in the RFP.

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Background: At the August 3, 2005 Council Study Session regarding the development proposals for the Lithia Way parking lot, Staff presented a brief overview of all four proposals received in response to the Lithia Lot RFP. The Council heard presentations from three of the four respondents to the Lithia Lot RFP, and the recommendations from the Housing Commission and Staff were presented. At the conclusion of presentations the City Council decided to hold a special meeting to examine the proposals and make a determination, ask questions of applicants, staff, and a representative of the housing commission.

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Related City Policies: Related City Policies are provided in the Council Communication on this subject dated August 3, 2005

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Items for Consideration: The Housing Commission deliberated on many aspects of the proposals received, as well as on the intended use of the property envisioned by the RFP. This "issues list" includes items forwarded by applicants, Housing Commissioners, and Legal and Planning Department Staff, that were considered by the Housing Commission throughout the evaluation process to date. These issues are elaborated upon within the Housing Commission Memos dated 3-30-05 and 5-25-05, and within the minutes from the Housing Commission meetings. Request for Proposals 000 Negotiation 00 - determined to be inappropriate by the Legal Department Flexibility in Proposals Specifically regarding the inclusion of commercial (mixed Use) proposals Application of ranking criteria Potential for Re-issuance of the RFP Downtown Plan Development could Influence desired Use Affordable Units Unit number Unit Size Preference - large or small households - consistency with State HOME Program Income Levels targeted Unit Rents - consistency with State HOME Program Period of Affordability Proposed Maintenance - reserves / income stream necessary to maintain the housing for the full period of affordability Management - agency/entity experience with affordable rental housing Parking Number of Spaces Parking layout and visibility - access management - Ground floor definition - streetscape implications           Underground vs surface level Alternative parking options within specific proposals (Housing Authority and Kendrick Enterprise) Mixed Use Commercial Ground Floor - Financial benefits balance           Benefits to affordability of units           Benefits to private developer - Downtown Compatibility           Use of C1-D zoned property           Historic and architectural consistency - Livability of housing above a commercial use Financing Funding Sources -Grants; State HOME Program, Tax Credits (LIHTC)           Timeliness of Applications for State Consolidated Funding Cycle           Competitiveness of applications seeking state/federal funding - Private Financing - Public/Private Partnership City Recapture Provisions - Long term ownership City contributions for: - public parking maintenance - elevator maintenance - common utilities - Taxes Property Value Best use of the property - Consistency with the existing 1988 Downtown Plan - Potential outcomes of the current Downtown Plan Development process - Impacts on Will Dodge Way traffic and pedestrian orientation Appraisal of Property or Air-rights to determine value Income Stream Potential Value, non-monetary, of Public Parking Downtown Value, non-monetary, of Affordable Housing Downtown

Council Options: The Council can consider the following options when reviewing the four proposals for selection of an affordable housing project to be developed on the Lithia Way parking lot: 1) Select one of the four proposals as submitted. Pros: Selected applicant can go forward with funding applications and development of the site. Provides 9-10 units toward meeting the Council Goal of developing at least 25 units of affordable housing, with construction to begin in 2006. Cons: (see "Pros" under Items 2, 3 and 4, as selection of a proposal would eliminate those potentials) 0000 2) Select one the four proposals with specific clarifications pertaining to preferred alternatives as outlined in the offerors submitted proposal. Pros: City can provide more specificity (limitations) on the selected applicant. The applicant can go forward with greater limitations on the scope of development and proceed with funding applications and development of the site. Provides 9-10 units toward meeting the Council Goal of developing at least 25 units of affordable housing, with construction to begin in 2006. Cons: (see "Pros" under Items 3 and 4, as selection of a proposal would eliminate those potentials) 0000 3) Reject all four proposals making the determination that doing such is in the best interest of the City. Pros: City can re-evaluate the future use of the property, determine the best use of the property, and incorporate considerations developed through the upcoming downtown visioning process. Cons: (see "Pros" under Items 1 and 2, as selection of this alternative would eliminate those potentials) 0000 4) Direct Staff to develop a new RFP in collaboration with the Housing Commission for re-issuance. Pros: Re-issuance of the RFP would allow the City to request a more specific project, being explicit in terms of what is requested to include: commercial / no commercial; unit size limits (minimum or maximum; income range targets; consideration of non-profit partnership in evaluation criteria; parking location recommendations; commercial contribution to housing costs; reversion to City of Ashland; Period of affordability. This would also allow the City to negotiate with respondents should such be noted in the RFP. Cons: Respondents to a new RFP would be unable to respond to the State Consolidated Funding Cycle's fall round in February, thereby postponing funding applications until August 06'. A selected project could not begin construction until 2007. 000 5) A combination of #3 and #4 above, following the completion of the Downtown Plan. Pros: Provides an opportunity to prepare a new RFP for development of the property that is more explicit, as noted under the 'Pros' for alternative 4, and reflects the results of the Downtown Plan. Cons: (see "Pros" under Items 1 and 2, as selection of this alternative would eliminate those potentials)

Recommendations: (as provided in the Council Communication date August 3, 2005) Housing Commission Recommendation: The Housing Commissioners collectively utilized the numeric ranking criteria in the RFP and the aggregate ranking placed the Housing Authority's proposal as being most responsive to the RFP and as such the preferred alternative. The Housing Authority proposal's larger unit sizes were viewed by some Commissioners as being more livable and better suited to the intended beneficiaries. Although most Commission members expressed support of commercial use on the site in addition to housing, there was limited information to quantify how such a commercial component contributed to the housing affordability. In a 5-1 vote the Housing Commission recommended the selection of the Housing Authority proposal under the stipulation that 12 public parking spaces be provided within the subsurface parking area. Staff Recommendation: Prior to Housing Commission deliberations, staff identified the Kendrick Enterprise LLC proposal as the highest ranking in our independent evaluation of the proposals. Specifically staff ranked Kendrick Enterprise highest in their Understanding of the Project approach and Vision, in large part due to the proposals consistency with the context of the commercial downtown. Staff believes the Kendrick Enterprise mixed use concept has merit in providing both housing and jobs on a small site, while increasing the amount of available public parking within a subsurface lot. Staff also ranked Kendrick highest in response to the scoring of the Firms Capacity and Resources. Staff also believes the proposed reversion of assets, including both the residential and commercial development, to the City after 40 years provides a significant public benefit in the long term. However, Staff concurs with the Housing Commission's determination that the Housing Authority's proposal would be successful in providing needed workforce housing within the downtown core if ultimately selected by the City Council. Staff's numeric scoring ranked the Housing Authority second over all, and highest under identification of Project Funding Sources due to their ability to leverage state and federal funding in addition to Section 8 vouchers for low-income residents. Should the use of public property to allow commercial activity as part of a public/private partnership be considered inappropriate by the Council, staff believes the Housing Authority's proposal is a viable alternative meeting the intended parameters of the RFP. Although the Housing Authority does not provide a reversion of the development to the City, the Housing Authority would provide a minimum period of affordability of 50 years with the desire to operate the housing as affordable in perpetuity. Should the Council determine the mixed use concept is preferable, and the public/private partnership proposed by Kendrick Enterprise is appropriate, Staff recommends selection of their proposal with the stipulation that the rents are adjusted to be consistent with the HOME program, and that the subsurface parking scenario presented in the application be a condition of selection. If the Council has concerns about current policies relating to issues such as parking and housing in the downtown area, it would be appropriate to reject all four proposals and develop a new RFP that reflects the results of the Downtown Plan.

Attachments: Click on the PDF file link below to view the following attachments:    • August 3, Study Session Minutes    • Project Comparison Chart For Previous Council Communication (Aug 3, 2005), Housing Commission Memos (3-30-05 and 5-25-05), Housing Commission Minutes, Applicant Proposals, and general correspondence refer to Council Study Session Packet for August 3 2005

2005-0830 Packet.pdf (802.5KB)

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