Housing & Career Services Department Finance Committee Nehemiah Court HUD Repayment William Huang March 14, 2016

Housing & Career Services Department Troubled Projects List Heritage Square (stalled) Boadway Apartments (stalled) Desiderio (stalled) Nehemiah Court (struggling)

Housing & Career Services Department Heritage Square 1 st RFP failed 2 nd RFP developer was not able to perform – cancelled ENA Significant trust issues Restarted the project by first rebuilding trust Issued successful 3 rd RFP for very low income senior housing 4 attempts needed to secure 9% tax credits Project fully funded and under construction 3

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Housing & Career Services Department Boadway Apartments Relocated historic apartment from Fuller to City-owned parking lot to privately owned-land Land owner unable to complete project City funds nonprofit to acquire the site permanent supportive housing for homeless families Historic apartment demolished State recaptures RDA funds Project fully funded and under construction 5

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Housing & Career Services Department Desiderio HUD refused to approve City’s RFP selected project due to lack of required homeless housing benefit HUD enthusiastically accepts the conversion of Centennial Place into permanent supportive housing as an off-site alternative for Desiderio Site conveyed to City after very slow and complicated disposition process Homebuyers have been selected Project is under construction 9

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Housing & Career Services Department Nehemiah Court 6 unit project for 12 special needs individuals New Revelation Baptist Church  Local faith-based organization  Property Owner A Community of Friends (ACOF)  Nonprofit Special Needs Affordable Housing Developer 11

Housing & Career Services Department Nehemiah Court Project Challenges  Partners had learn to work together  Small lot with existing vacant apartment building  Site surrounded by mature oak street trees  Special needs housing (service funding, rental gap funding and community space)  Structured parking  Rapidly increasing construction cost environment (e.g., lumber, concrete, steel)  Highly competitive funding environment  Project too small for tax credits 12

Housing & Career Services Department Funding Plan 1.Supportive Housing Program Capital (Pasadena/HUD) 2.Supportive Housing Program Operations (Pasadena/HUD) 3.HOME (Pasadena/HUD) 4.Mental Health Services Act (LA County) 5.City of Industry Program (LA County) 6.Board of Supervisors (LA County) 7.Multi-Family Housing Program (State) 13

Housing & Career Services Department Timeline 2007SHP & HOME funds committed 2010MHSA, BOS & COI funds committed 2011MHP funding application denied HUD withdraws SHP commitment City & HUD discuss repayment 2012City Council terminates DLA City returns $247,117 SHP to HUD 2016HUD informs City how to repay funds 14

Housing & Career Services Department HUD Repayment $112,883 of the $778,148 in SHP funds committed the project was expended and must be repaid with non-federal funds (Inclusionary) $447,889 of the $762,668 in HOME funds committed to the project was expended, but HUD has agreed to allow the funding to be restored into Pasadena’s HOME account with non-federal funds (Inclusionary) rather than to be repaid to HUD 15

Housing & Career Services Department Local Housing Funds Local housing funds are often used as early higher-risk monies that leverage other funding sources  County and State Public Funds  Tax Credits  Bonds  Commercial Loans Without local funds projects could not get off the ground All real estate development has some risk 16

Housing & Career Services Department Nehemiah Court Expended funds used for architectural services, environmental review, relocation consultant, legal, project management, preparation of funding applications, etc. The partnership was not in default of their loan agreement New Revelation Baptist Church went without rental income for the duration of the project ACOF was successful in securing multiple funding sources and project entitlements 17