HomeMy WebLinkAboutORDINANCE 5913113 West Mountain Street
Fayetteville, AR 72701
(479) 575-8323
Ordinance: 5913
File Number: 2016-0439
PARTNERS FOR BETTER HOUSING, INC. AGREEMENT:
AN ORDINANCE TO WAIVE COMPETITIVE BIDDING AND TO APPROVE THE CONTRACTUAL
AGREEMENT ATTACHED TO THE ENGINEERING DEPARTMENT'S AGENDA MEMO IN THE
FORM OF A COST SHARE AGREEMENT WITH PARTNERS FOR BETTER HOUSING, INC. IN THE
AMOUNT OF UP TO ONE MILLION DOLLARS ($1,000,000.00) PURSUANT TO RESOLUTION NO.
117-13.
WHEREAS, the Fayetteville City Council passed Resolution No. 117-13 which was approved and signed
by Mayor Jordan on May 21, 2013; and
WHEREAS, Resolution No. 117-13 expressed the City Council's "intent to invest up to One Million
Dollars ($1,000,000.00) to cost share the construction of city infrastructure within the Houses at Willow
Bend development with the nonprofit development corporation if proper safeguards, assurances and
guarantees are in place..."; and
WHEREAS, Partners for Better Housing, Inc. has submitted its booklet "The Homes At Willow Bend, A
Traditional Neighborhood Housing Development" to the City Council to detail its plans for this
development; and
WHEREAS, Partners for Better Housing, Inc. has signed the Contractual Agreement (which incorporates
its booklet as an exhibit) and requests the City Council to approve this Contractual Agreement; and
WHEREAS, the City intends to pay for some construction costs for city infrastructure after it is fully
constructed and has been accepted by the City; and
WHEREAS, Partners for Better Housing, Inc. has promised to use all the savings it will receive from the
City's cost share payment for city infrastructure to fund low income "soft second" mortgages to help lower
income citizens to purchase homes in Willow Bend.
Page 1 Printed on 1015116
Ordinance: 5913
File Number: 2016-0439
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
FAYETTEVILLE, ARKANSAS:
Section 1. That the City Council of the City of Fayetteville, Arkansas hereby determines that the facts stated
above create an extraordinary situation in which normal competitive bidding is not feasible or practical
and therefore waives competitive bidding and, in reliance upon all statements, promises, commitments and
examples within The Homes At Willow Bend booklet and the Contractual Agreement, approves the
Contractual Agreement and authorizes Mayor Jordan to sign said Agreement.
PASSED and APPROVED on 10/4/2016
Attest:
Sondra E. Smith, City Clerk ii
L•� ti C,1 i Y
;FAYETTEVff LSE::zi1
'r} 7�01����� ."N
11lii 11H
Page 2 Printed on 1015116
City of Fayetteville, Arkansas 113 West Mountain Street
Fayetteville, AR 72701
(479) 575-8323
Text File
File Number: 2016-0439
Agenda Date: 10/4/2016 Version: 1 Status: Passed
In Control: City Council Meeting File Type: Ordinance
Agenda Number: C. 9
PARTNERS FOR BETTER HOUSING, INC. AGREEMENT:
AN ORDINANCE TO WAIVE COMPETITIVE BIDDING AND TO APPROVE THE
CONTRACTUAL AGREEMENT ATTACHED TO THE ENGINEERING DEPARTMENT'S
AGENDA MEMO IN THE FORM OF A COST SHARE AGREEMENT WITH PARTNERS FOR
BETTER HOUSING, INC. IN THE AMOUNT OF UP TO ONE MILLION DOLLARS
($1,000,000.00) PURSUANT TO RESOLUTION NO. 117-13
WHEREAS, the Fayetteville City Council passed Resolution No. 117-13 which was approved and
signed by Mayor Jordan on May 21, 2013; and
WHEREAS, Resolution No. 117-13 expressed the City Council's "intent to invest up to One Million
Dollars ($1,000,000.00) to cost share the construction of city infrastructure within the Houses at Willow
Bend development with the nonprofit development corporation if proper safeguards, assurances and
guarantees are in place..."; and
WHEREAS, Partners for Better Housing, Inc. has submitted its booklet "The Homes At Willow Bend, A
Traditional Neighborhood Housing Development" to the City Council to detail its plans for this
development; and
WHEREAS, Partners for Better Housing, Inc. has signed the Contractual Agreement (which
incorporates its booklet as an exhibit) and requests the City Council to approve this Contractual
Agreement; and
WHEREAS, the City intends to pay for some construction costs for city infrastructure after it is fully
constructed and has been accepted by the City; and
WHEREAS, Partners for Better Housing, Inc. has promised to use all the savings it will receive from
the City's cost share payment for city infrastructure to fund low income "soft second" mortgages to help
lower income citizens to purchase homes in Willow Bend.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF
FAYETTEVILLE, ARKANSAS:
Section 1. That the City Council of the City of Fayetteville, Arkansas hereby determines that the facts
stated above create an extraordinary situation in which normal competitive bidding is not feasible or
practical and therefore waives competitive bidding and, in reliance upon all statements, promises,
City of Fayetteville, Arkansas Page 1 Printed on 101512016
File Number: 2016-0439
commitments and examples within The Homes At Willow Bend booklet and the Contractual Agreement,
approves the Contractual Agreement and authorizes Mayor Jordan to sign said Agreement.
City of Fayetteville, Arkansas Page 2 Printed on 101512016
Chris Brown
Submitted By
City of Fayetteville Staff Review Form
2016-0439
Legistar File ID
10/4/2016
City Council Meeting Date - Agenda Item Only
N/A for Non -Agenda Item
9/16/2016 Engineering /
Development Services Department
Submitted Date Division / Department
Action Recommendation:
Staff recommends entering into a cost -share agreement with the Partners for Better Housing for One Million
Dollars ($1,000,000) for the construction public infrastructure for the Homes at Willow Bend. $500,000 is currently
budgeted and $500,000 is scheduled for inclusion in the 2017 CIP.
2100.410.5500-5809.00
Account Number
15001.1
Project Number
Budgeted Item? Yes
Does item have a cost? Yes
Budget Adjustment Attached? No
Previous Ordinance or Resolution # 117-13
Original Contract Number:
Comments:
Budget Impact:
Transportation
Fund
Willow Bend Development Cost Share
Current Budget
Funds Obligated
Current Balance
Item Cost
Budget Adjustment
Remaining Budget
Project Title
$ 500,000.00
$ 1,000,000.00
Approval Date:
E
V20140710
CITY OF
Tay%
A —Ile
RKANSAS
MEETING OF OCTOBER 4, 2016
TO: Mayor and City Council
CITY COUNCIL AGENDA MEMO
THRU: Don Marr, Chief of Staff
Jeremy Pate, Development Service Director
CC: Peter Nierengarten, Sustainability Director
FROM: Chris Brown, City Engineer
DATE: September 16, 2016
SUBJECT: Cost Share Agreement for the Homes at Willow Bend
RECOMMENDATION:
Staff recommends entering into a cost -share agreement with the Partners for Better Housing for
up to One Million Dollars ($1,000,000) for the construction of public infrastructure for the Homes
at Willow Bend subdivision.
BACKGROUND:
The Homes at Willow Bend is a 9 acre infill mixed -income Traditional Neighborhood
Development in the Walker Park Neighborhood in south Fayetteville that aims to create a
replicable model of sustainable and attainable housing. The Homes at Willow Bend is a project
of the Partners for Better Housing, a 501(c)(3) organization, with a goal of providing
homeownership opportunities for Fayetteville Citizens making less than 100% of area median
income.
The conceptual design development for the Homes at Willow Bend was supported by a 2010
Home Depot Foundation/SCI Pilot Cities Grant that was managed by the City of Fayetteville and
the National Center for Appropriate Technology. Design development for the project was
completed in 2013 and on May 21st, 2013 the City Council passed a resolution expressing intent
to invest up to One Million Dollars ($1,000,000) to cost share the construction of city
infrastructure within the project.
Throughout the project stakeholders have stressed the inclusion of all elements of sustainability,
not only environmental, but economic and social elements as well. Willow Bend's infill location
is surrounded by the existing traditional street grid near downtown Fayetteville. The
neighborhood lacks quality affordable housing and was selected by stakeholders for its walkable
location and associated transportation affordability, with its close proximity to major employers,
retail centers, and the City's multi -use trail system. In addition, the existing tree canopy and
storm water features on the site have provided an idyllic setting for demonstrating the
integration of both ecology and placemaking principles into one. The master plan was informed
by the City's form based zoning code and cottage court ordinance which together encourage a
Mailing Address:
113 W. Mountain Street www,fayetteville-ar.gov
Fayetteville, AR 72701
mix of unit types and higher densities. The project is also being used to demonstrate many of
the low impact development (LID) techniques in the City's new Drainage Criterial Manual.
Fayetteville's adopted City Plan 2030 contains six overarching goals:
1) We will make appropriate infill and revitalization our highest priorities.
2) We will discourage suburban sprawl.
3) We will make traditional town form the standard.
4) We will grow a livable transportation network.
5) We will assemble an enduring green network.
6) We will create attainable housing opportunities.
The Homes at Willow Bend project aligns very closely with four of these goals due to its location
within the long-standing Walker Park Neighborhood and by virtue of the objective to provide
homeownership opportunities for Fayetteville citizens making less than 100% of the median
income.
DISCUSSION:
The proposed contractual agreement provides for a payment to Partners for Better Housing in
the amount of up to $1,000,000 for documented City infrastructure expenses on the project, to
include streets, drainage, water and sewer lines and appurtenances. This payment will be
made upon completion of all infrastructure by Partners for Better Housing, and upon acceptance
of the work by the City.
The Homes at Willow Bend will utilize the City of Fayetteville's $1 Million investment to support
construction of the project's estimated $1.6 Million of public infrastructure within the public rights
of way within the Willow Bend site. The City's contribution to the public infrastructure will allow
the Partners for Better Housing to deliver a third of the 76 homes to buyers with household
incomes at 50 — 80% of area median income and a third of the homes to buyers at 81 — 100% of
area median income. The remaining homes.will be sold to market rate buyers without any
income stipulations. Partners for Better Housing will utilize a combination of a soft second
mortgage program, down payer assistance programs, low interest mortgage loan programs and
a lease/purchase program to meet affordability goals.
BUDGET/STAFF IMPACT:
$500,000 has been budgeted in the 2016 Transportation Fund and $500,000 is in the 2017 CIP
to support this project. Reimbursement for this project is expected in 2017.
Attachments:
Contractural Agreement
Exhibit A - Project Booklet: The Homes at Willow Bend, A Traditional Neighborhood
Development
Partners for Better Housing — Board Resolution
Letter: The Homes at Willow Bend — Sales Price of the homes
Resolution 117-13 (May 21, 2013) — Resolution of Intent to invest $1 M in Willow Bend
CONTRACTUAL AGREEMENT
This Contractual Agreement is made and entered into this day of
September, 2016, by and between the City of Fayetteville, Arkansas and Partners for
Better Housing, a 501 (c)(3) Arkansas non-profit corporation.
Whereas, Partners for Better Housing, Inc. was incorporated and organized as an
Arkansas Non Profit Corporation on May 1, 2006; and
Whereas, Partners for Better Housing, Inc. has a Board of Directors and is
managed by its Executive Director, Michael Ward, who submitted the 21 page booklet
entitled "The Homes At Willow Bend" (attached) to describe their development and its
financing and solicit the City's potential cost share for public infrastructure in the amount
of up to One Million Dollars ($1,000,000.00); and
Whereas, Partners for Better Housing, Inc. will build approximately 76 homes on
the subject site, with a minimum of two thirds of these homes to be sold to households at
50% to 100% of the Area Median Income with soft second mortgages in the total amount
of the cost share paid by the City of Fayetteville to facilitate the affordability of these
homes; and
Whereas, Partners for Better Housing, Inc. has engaged in substantial community
outreach in designing the project, called The Homes at Willow Bend; and
Whereas, it will benefit the City of Fayetteville and its citizens to quickly increase
opportunities for affordable and workforce home ownership within the Walker Park
Neighborhood consistent with the City of Fayetteville's Comprehensive Plan policies.
NOW, THEREFORE, the City of Fayetteville and Partners for Better Housing,
Inc. agree as follows:
1. In consideration of the promises and commitments made by Partners for Better
Housing, Incorporated in paragraph 2 of this contract and its representations within its
booklet "The Homes At Willow Bend, A Traditional Neighborhood Housing Development"
presented to and relied upon by the City of Fayetteville and attached as Exhibit A to this
contract, the City of Fayetteville hereby agrees and promises that upon Partners for
Better Housing, Inc.'s successful construction of public infrastructure (streets, water
mains, sewer mains, drainage facilities, etc.) and their acceptance by the City of
Fayetteville, the City will pay its cost share portion of those documented expenses for
public infrastructure up to a maximum of One Million Dollars ($1,000,000.00).
2. Partners for Better Housing, Inc. in consideration of the City's payment of the up
to One Million Dollar ($1,000,000.00) cost share, agrees and promises as follows:
A. Partners for Better Housing, Inc. will provide the necessary and normal
engineering, construction, project management, inspection, and testing as
necessary for a complete installation of the water mains and fire hydrants,
sanitary sewer mains, storm drain facilities, roadway subgrades, paved
sections, curbs, gutters, sidewalks (which may be installed after house
construction per the Unified Development Code), striping, and signage
consistent with the Preliminary and Final Plat approved by the City of
Fayetteville. Partners for Better Housing, Inc. is not entitled to any cost
share payments for expenses related to infrastructure construction or
improvements until that infrastructure has been fully inspected, approved
and accepted by the City of Fayetteville.
B. Partners for Better Housing, Inc. will provide all copies of the invoices from
its Consultants, Engineers, Architects and Contractors and a complete lien
waiver executed by its Contractor and any subcontractors related to public
infrastructure construction prior to acceptance by the City of all
improvements in the public right of way.
C. Within three years of receiving the City of Fayetteville's cost share payment
for city infrastructure within the Willow Bend development, Partners for
Better Housing, Inc. commits and promises to make its best, good faith
effort to ensure that at least fifty (50) of the houses will have been purchased
or occupied pursuant to lease to purchase option by qualified
buyers/lessees (household earning 100% or less of the Area Median Income
at the time of purchase as shown on page 12 of the Booklet).
D. Partners for Better Housing, Inc. agrees that each of these qualified home
buyers will receive the Partners for Better Housing, Inc.'s "soft second
mortgage" to assist their purchase as detailed in The Homes At Willou? Bend
Booklet at least until the amount of funds equal to the City's cost share
payment have been utilized for such soft second mortgages.
E. Partners for Better Housing, Inc. commits and promises to make their best,
good faith efforts to assist all eligible purchasers to obtain all possible
benefits provided by the Arkansas Development Finance Authority
including its Down Payment Assistance, Move Up loan, Low interest loan,
HOME assistance funds and credit counseling programs as referred to in
its Booklet.
OA
F. Partners for Better Housing, Inc. promises to faithfully analyze potential
home buyers' applications to ensure their eligibility for a soft second
mortgage and provide such assistance ONLY to properly qualified
potential buyers.
G. Partners for Better Housing, Inc. promises to ensure provisions are included
in every soft second mortgage to ensure ownership is not conveyed to a
non -eligible entity nor leased or rented during the period of the soft
mortgage without full repayment of the existing amount due on such
mortgage. This payment shall be used by Partners for Better Housing, Inc.
to exclusively fund other soft -second mortgages within Willow Bend,
H. Partners for Better Housing, Inc. promises to present to the Fayetteville City
Council annual updates on the progress of the Homes at Willow Bend
development during the first City Council Agenda Session in April of each
year (and at any other time if specifically requested by the City Council)
until the development is complete and all soft second mortgages have been
paid.
3. Partners for Better Housing, Inc. agrees that the City of Fayetteville has no
contractual obligations to the Consultants, Architect, Engineer, Contractor or any
subcontractors associated with this development, nor may any of these parties be
considered third party beneficiaries of this contractual agreement.
4. The City of Fayetteville is intending to invest up to One Million Dollars
($1,000;000.00) in order to quickly spur the construction and sale to qualified buyers of 76
homes with at least one third to be purchased by households earning less than 80% of the
Average Median Income for Fayetteville ($37,568.00 for a household of two) and another
third to be purchased by households earning less than the Average Median Income for
Fayetteville ($46,960.00 for a household of two) as explained on page 12 of the Booklet.
The final third can be sold at market rate with no soft second mortgage assistance.
5. The investment by the City and its taxpayers of up to One Million Dollars to cost
share public infrastructure is partially supported by the anticipated increased real
property tax millage that the 76 new houses will provide to the City by these new
taxpayers. Additionally, providing affordable or attainable work force housing in
Fayetteville will help workers live and shop in Fayetteville which should increase sales
tax revenue and HMR tax revenue.
3
IN AGREEMENT WITH ALL THE TERMS AND CONDITIONS ABOVE, WE
SIGN BELOW:
ATTEST:
t
OWAU
PARTNERS FOR BETTER HOUSING, INC.
I
By:
Date: / LAa.�/�-`� t (�'-- -
Sandra Smith, City Clerk `,,%Xef'�
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EXHIBIT
A-
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THE HOMES AT WILLOW BEND
0 "10
T-wo
17-44A0
A Traditional Neighborhood Housing Development
Fayetteville, Arkansas
Partners
for
Better
Housing
25 July 2016
Dear Mayor Jordan and City Council Members,
We are grateful for your consideration of a cost -share agreement with Partners for Better Hous-
ing, a 501(c)(3) organization, for the development of the Homes at Willow Bend, a proposed
mixed -income Traditional Neighborhood Development in the Walker Park neighborhood of Fay-
etteville. Willow Bend has been in the works for many years, and the project is finally coming to
fruition. With the immense help of our consultants, we have put together a robust plan for devel-
oping 76 single-family homes on a 9-acre infill site that we believe will become a successful and
cherished community for decades to come.
We ask that you take the time to review the Willow Bend package. The package provides an
overview of design and intent of the neighborhood, including specific information about Sources
and Uses, house typology, and details regarding the affordability programs for qualified low- and
mid -income families that Partners for Better Housing will implement, including soft -second mort-
gages, down payment assistance, and a lease -to -purchase option.
Willow Bend will set a new benchmark for building quality communities throughout Northwest
Arkansas. The City of Fayetteville's approval of the cost -share agreement for Willow Bend demon-
strates the City's commitment to building great neighborhoods, ensuring quality housing for all
demographics, and continuing to make Fayetteville a wonderful place to live.
Sincerely,
Ike{/" • r---
Michael Ward
Executive Director
Partners for Better Housing
Willow Bend, an attainable housing infill site located in Fayetteville, Arkansas, is en-
visioned as a neighborhood that will focus on sense of place and the human expe-
rience. This focus will facilitate the creation of a neighborhood that will be loved by
its inhabitants for generations to come, contributing to all aspects of sustainability
through prolonged existence and a distinct community identity.
The primary developer of the Homes at Willow Bend is Partners for Better Housing
(PfBH), a private 501(c)(3) organization that was founded to provide quality, attain-
able housing in Fayetteville, Arkansas. PfBH sees the Homes at Willow Bend as an
opportunity to create a replicable model of sustainable and attainable housing for
Northwest Arkansas.
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CONTEXT & SITE PLAN
Context Map
Fayettekville
Public Library
Downtown Square
Walker Park
r Willow Bend Site
Multi»Use Trail
Connections
I'
Industrial
Park
'Technology & Research Center
5 Minute Wa`Rcing Distance
101merJe€ffr3A.
• lilern�ntary, r' JI .
,Walker 1 "
Park 1
I
.4
•i f �rtrn r.,, _
\♦ ' ' + g Proposed New
so A, Trail Cannection
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artcnasma,w�iuu
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3
SOURCES & USES
Homes at Willow Bend, LLC
12-Aug-16
Project Scope: Design, Entitlement,and Site Development to Produce 76 Finished Lots
Total Project Cost
Sources of Funds
$2,947,900
Equity
Housing Authority Grant $150,000
Home Depot Foundation Grant $137,500
Equity Investment; Dr. Hershey Garner $500,000
$787,500 subtotal
HOME Funds* $0
City of Fayetteville Cost Share Reimbursement'" 51,000,000
Subtotal:$1,787,500
Senior Debt
Loan amount prior to City reimbursement: $1,360,000 46,1% Loan to Cost (LTC)
Development Loan (with of $1,000,000 assignment of City relmbursemer $2,360,000 80.1% Loan to Cast (LTC)
Use of Funds
Project Costs
Paid with equityro be paid with loan
Land Purchases
$416,000
$416,000
Design, Entitlement, and Engineering
$327,500
$247,000.00
$80,500
Park Fees (-In lieu of land dedication)
$72,000
$72,000
Site Development and Infrastructure
$1,650,000
$1,650,000
Interest Carry
5212,400
$212,400
G$A
$30,000
$15,000
$15,000
Project Management
$170,000
$110,000.00
$60,000
Contingency
$70,U00
$70=
Subtotal:
$2,947,900
5788,000
$2,159,900
Loan vs Equity check
$2,160,400
Appraised Lot Value
Valuation assumption; Discounted Lot Value
77 lots
$1,360,000 Loan amount
$17,662.34 loan amount per lot
$20,779.22 value per lot needed
for 85% payoff = 65 lots
$23,549.78 value per lot needed
for 75% payoff = 57 lots
$27,172.83 value per lot needed
for 65% payoff = 50 lots
*Applying for $900,000In HOME funds to be applied to Infrastructure
$200,100 Residual/Contingency
$27,500
$22,368.42 Assumes 4 yearabsorption period - discounted value
$1,700,000 Total Discounted Value
BOY. LTV $1,360,000
'" City Relmbursment upon completion of improvements in public rights of way and acceptace for dedication.
(assigned to the construction lender).
4
PRODUCT MIX & VALUATION
Rate per
Number
House Type
SF
Sale Prkge
of
Tote) SF
Totat
Revenue
Buildings
Buildings
The Joplin
$ 15000
816
$
122,400
10
8,160
$
1,224,000
2BR 1 BA
The Lincoln
$ 14500
1,064
$
154,280
14
14,896
$
2,159,920
2BR 2BA (1 story)
The Siloam
$ 145,00
1,192
$
172,840
10
11,920
$
1,728,400
2BR 2BA
The Spring
$ 145.00
1,308
$
1.89,660
10
13,080
$
1,8961600
3BR 1 BA
The Lincoln
$ 14500
1,383
$
200,535
12
15,696
$
2,406,420
313R 2BA (2 story)
The Gentry
$ 145.00
1,568
$
227,360
11
17,248
$
2,500,960
3BR 2BA
The Farmington
$ 14500
1,596
$
231,420
10
15,960
$
2,314,200
4BR 2BA
77
96,960
$
14,230,500
5
ENGINEERS COST ESTIMATES
Community By Design
100 West Center Street, Suite 300
Fayetteville, Arkansas 72701
Phone: (479) - 790 - 6775
SITE WORK
Schedule 1 - 072016
Engineers Opinion of Probable Cost
Esllmale based on Willow Bend Construction Plans Dated 051616
This estimate only includes the items in the proposed ROW or Items associated with work in proposed ROW
Fayetteville, Arkansas
Quantity Unit Unit Cast Total
1
2
3
4
5
B
7
8
9
Clearing aria Gronbrrt8 _
4 inch --Top Sail Remove andSlo_*i_Ie (4 51 Actes)
UndIBSSitfed Excavation - Cut to FRi
Unclassified Excavation - Cul to Fill (Tiellchrry Spoils) _
tlnclas5irted Fxcavahon -Cld to Fill (Undaiclil Bottom Suorade)
Conipac"I Ffert rinrslde -- -- —
ToWil Nlrubed Areas (2 84 Acres)
Buck Excavalmri _
Slone Wall
M 1
Acre
S7.34D 00
$22.827,40
Z173
C Y
$6 80
$14,776.40
5,344
C Y
$8,20
$13.820 80
3 341
C.Y
$11 75
$39,256.75
1.000
CA
$11 15
$11,150,00
5.831
C Y
$18 40
$102.290.40
1,510
C Y
$20 00
$30,200 00
l
C.Y
$350 00
$350 00
0
L .
12Mto
Site ri -lotal 1
EROSION CONTROI
10
11
12
13ConcfeleWashout
14
15
16
Sul Feria or Composl Wanlo
Tree Prnlechun Fence
Erosion Control SiMm (Roca Check Dam, Intel Pfoieclimi)
$eedam slra+a
Slope Slabfliaauoo N1131tinq
Conslruclion Emraricii J'B"Slona)
1.002
L F
$3 00
$3,006.
5.367
LF
$4 05
$21,13535
I
Lump Sum
$27 215 00
$27,215,00
I
Lump Sum
$2.440,00
S2,44000
123,666
S F
$0 10
$12.366.60
1
S.F
3110
$1 10
2
Lump Suin
$3.835.00
$1.610.U0
r+nloa 00001 131Jo•10191 S 4.4350r
STREETS
17
18
19
20
21
22
3 inch - AsphRlf Surface Course. Type 3_
8 inch - Crush Stone Base CourseC , USS 1
i3 ilich - 0046ld CelaolR Concrete
2 inch Crush Sion Base Course. Class 1
Standard Curb
F'avomi. Tesling
6,103
S Y
$17 35
$105,887,05
6.103
S Y
S11 00
S67.133 00
0
S.Y
$54 S5
$0 00
6
S-Y
$6 00
$0,00
4.578
LF-
$11 75
$81-2%w
1
Lump Sum
$4.30 00
$4.345 00
trW"nd parkin n11-tntal 2 .6,'l4 5ti
DRAINAGE
?31
24
25
26
21
28
29
30
31
32
14x23 inch Elliot, ral • Class 4 Reinlorced Concrele Pipe
18 inch - Class 3 Reinlorced Concrete Pipe
24 inch. Class 3 ReinkrrCed CancrrloFipe
29x45 inch'ElltnOcal • Class 3 Rninorced Cancrefe Plpe
2.905 inch Elliptical - Class 4 Reinlorced Concrete Pipe
d inch Class 3 Reinforced Conctda Pipo
3n0' Raintorced Concrele Box Cohan
14x23 Inch - Reinforced Concrete Flared End Section
24 inch - Reinlorced Concrete Flared End Section
HEudwal l For 29x45 elliplical or 3Ox72 box
64
1 F
72,00
$4,608 00
104
1. F
547,00
$4,888 00
0
L F
$66 00
$0,00
0
L F
S120 00
$0 OD
105
L F
$141 00
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33 6 foot Diameter - Junction Box with Frame and Lid
34 5 loot Diameter - Type B Intel Box with Frame and Grate
35 4 loot Diameter - Type A Intel Box with Frame, Grate, and Curb Box
36 4 foot G[ameler - type C Inlet Box with Frame and Grate
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58
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TOTAL INFRASTRUCTURE Oftsite $1,675.642.65
AFFORDABLE HOMEOWNERSHIP & SOFT -SECOND MORTGAGE PROGRAM
Program Description
The Willow Bend Soft Second Mortgage is an income -qualified mortgage program
modeled on the programs operated by NeighborWorks Community Development
Corporations and the Fannie Mae Community Seconds mortgage program.
Partners for Better Housing (PfBH), a 501(c) (3) non-profit housing developer will
offer second mortgages to income qualified home buyers to reduce their monthly
mortgage payment to 30% of their household's gross income. These mortgages are
considered "soft" because the mortgage does not accrue interest, require monthly
payments of principal or interest, and are incrementally forgiven over a 12-year
period if the buyer continues to occupy the home.
The use of soft second mortgages allows all the homes at Willow Bend to post sales
with the local Multiple Listing Service and the County Recorder's Office at the
market price while income -qualified home buyers are able to receive a limited
subsidy with the soft second mortgage without distorting the sale price for future
appraisals prepared for market rate purchases.
The program is available to home buyers making less than 101% of the Washington
County Area Median Income, adjusted by household size.
The Willow Bend Soft Second Mortgage will be used in conjunction with Down
Payment Assistance and low interest loan programs provided by the Arkansas
Development Finance Authority (ADFA)
Income qualified home buyers are required to complete the ADFA 8 hour
homebuyer-training course which covers budgeting tools, insurance, avoiding
foreclosure, private mortgage insurance, and refinancing. Credit Counseling of
Arkansas is the local provider of the ADFA course.
Income qualified homebuyers using the Willow Bend Soft Second Mortgage Program
will execute an agreement to offer to resell their home to PfBH at appraised value,
prior to selling to other parties, should they decide to sell. PfBH will be required to
respond to a homeowner's written notice of intent to sell their home within 45 days.
This repurchase agreement will provide an opportunity for PfBH to sell the home to
another income -qualified buyer, maintaining long-term affordability in the South
Fayetteville neighborhood.
Affordability Targets
The City of Fayetteville's Cost Share Agreement reimbursing $1,000,000 in
improvements within the public rights of way within the Willow Bend site creates
enough value in the project's finished building lots to allow PfBH to provide the soft
second mortgages needed to deliver a third of the projects 76 homes to income
qualified buyers with household incomes at 50-80% of Area Median Income (AMI)
and a third of the homes to income qualified buyers with household incomes at 81 -
100% of AMI. The remaining third of the homes will be sold to market rate buyers
with household incomes of greater than 100% of AM I.
The table below shows how soft second mortgage funds could be applied across the
range of income qualified buyers to deliver the project's Affordability Targets:
Target Loan Distribution / Household Income
Second
Mortgage
Amount
Total
10 Soft Second Mortgages / Buyers at 50-60% of AMI,
15 Soft Second Mortgages / Buyers at 61-80% of AMI,
$50,000
$500,000
$20,000
$300,000
25 Soft Second Mortgages Buyers at 81-100% of AM[.
$10,000
$250,000
50 Income Qualified Soft Second Mortgages
1 $1,050,000
During the construction and sale of the homes at Willow Bend, PfBH will provide the
City of Fayetteville with annual reports on the project's progress in the issue of soft
second mortgages and the income levels of the buyers compared with the
Affordability Targets.
Layering the Willow Bend Soft Second Mortgage with ADFA Programs
ADFA currently provides several down payment assistance program and low
interest mortgage loan programs. When these programs are be used in conjunction
with the Willow Bend Soft Second Mortgage, the income qualified home buyer has
the equivalent of a down payment exceeding the minimum 20% required to
eliminate the requirement Private Mortgage Insurance in an FHA or VA mortgage.
ADFA also provides the ADFA MoveUp loan program for buyers with incomes
greater than 80% of AMI or buyers who are not first time homeowners with an
interest rate of 3.25%, Income limits for the ADFA Move Up loan program are
$100,000 for households of 1 to 2 persons, $130,000 for households of 3 or more.
ADFA also provides down payment assistance of up to $6,000 for buyers above 80%
of AMI as a soft second mortgage at 4% interest, repaid over 10 years.
All of ADFA's first mortgage programs limit the purchase price for the home to a
maximum of $250,000. Seven of the eight homes planned for the Willow Bend
project are priced below that limit. The ADFA first mortgage programs require a
minimum FICO score of 660 and a maximum Debt to Income Ratio (DTI) of 45%.
The example below shows a layering of $10,000 from the ADFA ADDI down
payment assistance program which a is a soft second mortgage forgiven over 5
years without monthly payment, with $25,000 in HOME assistance funds for 50-
60% AMI homebuyers, and a PfBH soft second mortgage of $25,000.
The first mortgage is the ADFA Advantage Bond Fund loan for first time homebuyers
or veterans•with FHA 203(b) underwriting and 2.5% interest. ADFA defines first
time homebuyers as households that have not owned a home within the last three
years.
The use of the layered programs makes monthly payment for mortgage principal &
interest, property taxes, and insurance (PITI) for each of the example houses
affordable to a household with income at 50% of AMI. The layered ADDI down
payment assistance, HOME grant, and the PfBH Soft Second brings the down
payment for a 50% AMI buyer above the minimum 20% that will allow the
homebuyer to qualify for the mortgage without Private Mortgage Insurance (PMI).
Household Size
1
2
3
Annual Income @ 60% of AMI
$20,545
$23,480
$26,415
Max. Monthly Payment @
30% of Gross Income
$514
$587
$660
Example Home Sales Price ADFA HOME* PfBH
ADDI Soft
2nd
2 Bedroom/1 Bath 861 SF $133,455 $10K $25K $25K
2 Bedroom/2 Bath 90 SSF $139,500 $1 OK $25K $25K
2 Bedroom/2 Bath 1064 SF $159,600 $1 OK $25K $25K
" PfBH is applying to ADFA for HOME funds with local CHDO;
Community Development Corporation of Bentonville/Bella Vista
Loan Interest PITI
Amount Rate Monthly
Payment
$73,455 2.5% $512
$79,500 2.5% $543
$99,600 2.5% $643
10
Mortgage Application Process
The chart below shows how a prospective homebuyer starts the process by
completing the Partners for Better Housing Pre -Qualification form. If the
homebuyer's credit score is above 660 and debt to income ratio is below 45%, then
their households gross income (adjusted for household size) determines which of
the layered ADFA programs can be used. If the homebuyer's household income is
below 101% of the Area Median Income they can apply for a BfBH Soft Second
Mortgage to bring their annual mortgage payments within 30% of their gross
income.
PfBH Mortgage Application Process
Complete. PfBH Pre -Qualification Form
• Annual HouseholdGross Income?
• Household size?
A
Credit Score?
Debt To Income (DTI) Ratio?
FICO Score less than 660. FICO Score greater than 660.
D"TI greater than 45%. DTI less than 45%.
Develop a Credit
Recovery Plan with
Credit Counseling of
Arkansas.
ADFA 8 hour
Pre -Purchase
Homebuyer Class.
Apply for the
Willow Bend Lease
Purchase Program.
I
Repair credit and/or
reduce debt while
leasing home.
Gross annual household
income less than 101% of
Area Median Income
(AMI), adjusted for
household size.
ADFA 8 hour
Pre -Purchase
Homebuyer Class.
Loan Application to
Preferred ADFA First
Mortgage Lender.
Apply for Willow Bend
Soft Second Mortgage
(subject to ADFA
Downpayment Assistance
and lender's approval of
1st mortgage).
Approval of ADFA
Downpayment Assistance
and lender's 1 st mortgage.
l
Gross annual household
income greater than
101 % of Area Median
Income (AMI), adjusted
for household size
ADFA 8 hour
Pre -Purchase
Homebuyer Class
Loan Application to
Preferred ADFA First
Mortgage Lender.
1
Approval of ADFA
Downpayment Assistance
and lender's 1 st mortgage,
11
Mortgage Applications and Underwriting
PfBH's preferred mortgage lender (an ADFA Approved Lender) will process
applications for ADFA first and second mortgage loans. Prospective homebuyers
applying for a PfBH soft second mortgage will submit a pre -qualification form listing
household income and the number of persons in the household for review by the
PfBH finance committee. Approval of a PfBH soft second mortgage is subject to the
applicant receiving approval by PfBH's preferred first mortgage lender, which must
be an ADFA participating lender.
HouseholdF
%AMI 60% AM]
size
70%AMI
80%AMI
90%AMI
100%AMI
Low Income
Moderate Income
1
$20,545
$24,654
$28,763
$32,872
$36,981
$41,090
_
2
$23,480
$28,176
$32,872
$37,568
$42,264
$46,960
3
$26,415
$31,698
$36,981
$42,264
$47,547
$52,830
4
$29,350
$35,220
$41,090
$46,960
$52,830
$58,700
The table below shows the loan programs and forms of down payment assistance
available from ADFA and the PfBH Soft Second Mortgage across the range of
qualifying household income levels:
50-60%
61-00%
81-100%
101%
Program
AM[
AMI
AMI
AMI and
✓
✓
above
ADFA ADDI Down Payment
Assistance $10K in a soft 2nd
forgivable over 5 years.
ADFA HOME Funds Grant $25K
✓
ADFA Home Assist Down Payment
✓
✓
Assistance Loan @ 4% interest over
10 years
ADFA FHA 203(b) 30 year fixed rate
✓
✓
mortgage @2.5% interest. (Available
for first time homebuyers or
veterans
✓
ADFA FHA 203(b) 30 year fixed rate
✓
mortgage @ 3.25% interest. For
repeat homeowners and higher
income households. *
_
P61IA Soft Second Mortgage final
✓
✓
✓
layer to bring mortgage payments to
a maximum of 30% of annual gross
income. For affordable home buyers
*Limited to $62,342 for household or 1 or 2, $71,693 for households of 3 or 4.
12
PfBH Lease/Purchase Program
Prospective homebuyers with an insufficient credit score or too much debt for their
income cannot qualify for the ADFA first mortgage. By completing the ADFA 8 hour
Pre -Purchase Homebuyer Class and developing a Credit Recover Plan with the staff
of Credit Counseling of Arkansas, homebuyers with credit issues can apply for
PfBH's Lease/Purchase Program.
Lease term is limited to 2 years, during which the tenant/prospective homebuyer is
expected to close on the sale of the home after raising their F1C0 score to at least
660 or reducing their DTI ratio to 45% or less. Lease payments are set at 30% of the
tenant's gross household income.
A tenant seeking a one-year extension of the original two year lease/purchase
agreement will need to demonstrate that they can qualify for mortgage to purchase
the home within the next 12 months by submitting a current credit repair plan
developed with Credit Counseling of Arkansas staff no less than three months prior
to the end of the two year lease term,
13
PfBH Pre -Qualification Form
By submitting this application, you are authorizing Partners for Better Housing to
run a credit report and verify employment and assets for the purposes of pre -
qualifying for a soft second mortgage loan.
Date:
Monthly Income
Submitting income from alimony, child support, or separate maintenance income is
optional if you do not want to use that income for qualification purposes.
Base Income:
Bonuses: _
Commissions:
Other Income:
Total
Assets
Checking Account Balance
Savings Account Balance
Retirement Accounts
Mutual Funds or Securities
_
Estimated Home Equity
Other
'total
First Name:
Middle Name:
Last Name:
Email Address:
Mobile Phone:
Work Phone:
Marital Status:
Are you a US Citizen?
Date of Birth:
Social Security Number:
Number of people in Household:
14
14 Steps to Home Ownership at Willow Bend
1. Pre -qualification - This is an informal determination of the maximum
amount you are eligible to borrow and which loan programs or forms of
down payment assistance for which you maybe eligible. (Pre -qualification is
not a guarantee of a loan).
2. Pre -approval - Pre -approval is similar to a pre -qualification, but with the
pre -approval, the first mortgage lender reviews your income, credit history,
debt. All of those are verified to determine what type of loan product and
amount of loan we can approve you for. Obtaining a pre -approval gives you
the advantage of knowing what home you can afford to purchase.
3. Select Your Home - Now you now what you can afford to pay for a home,
select your home from those available in the Willow Bend neighborhood. If
the home you want to purchase is not available from completed inventory or
homes currently under construction, establish a schedule for the delivery of
your home in the next release of homes for construction.
4. Purchase Contract - Once you have selected your home, have your
Realtor® draft your Purchase and Sale Agreement with clearly stated terms
for submission to the seller. Include your pre -approval.
5. Loan Application - Once you have an executed purchase contract, you need
to start the process of securing the financing. If you didn't do the pre -
approval, you now need to start your loan application.
6. Documents - All conforming loan applications require supporting
documentation. This list typically includes two years' tax returns, pay stubs,
account statements to verify the source of the down payment and funds to
close the loans as well as cash reserves. Again, if you got pre -approved, you
have already completed this step of the process.
7. Appraisal - The first mortgage lender will require that the property be
appraised. The Appraisal is ordered to make sure there is no discrepancy
between market value and the price you are paying. While this can happen
on occasion, it is rare.
8. Title Search - A title company will assign an escrow officer and their team to
begin their process. During this, a search for liens against the property will
be conducted. Occasionally, liens will be placed against a property to make
sure that payments of outstanding debts are paid before a title can be
transferred to a new owner.
15
9. Loan Processing - The first mortgage lender's loan processing team will
review and package all relevant information related to your loan to be sent to
their underwriter, This will include any explanations or supplemental
documentation. You will either hear from the loan processor assigned to
your loan or your loan officer if the lender finds that additional
documentation is needed.
10.Underwriting - The lender's underwriter will review your file as presented
by your loan officer. The underwriter will make the final determination on
whether or not your loan is approved. All lenders are looking for borrowers
that will keep their mortgage payments current. We are also looking to
finance properties that will maintain their value in the event of a foreclosure
and the underwriter determines both these.
11.Mortgage Insurance - All conforming loans (Conventional and FHA) will
require that some form of Private Mortgage insurance (PMI) is in place for all
loans that are below a 20% down payment or 20% in owners' equity. Be
sure to talk to your loan officer about this and which products require the
insurance for the life of the loan and how much such coverage will cost.
12.Loan Approval - Predominantly, when a borrower has a good credit score
and a good debt -to -income ratio, the loan will be approved. However, there
are cases in which a borrower will need to put forward additional funds to
improve a debt -to -income ratio, or cover the discrepancy in value based on
an appraisal.
13.Insurance - Lenders require that you have the property insured against fire
and a number of other hazards depending on the environmental conditions
of your geographic area.
14.Closing - You are looking at the finish line and are ready to collect your new
keys. Below are the typical closing steps.
Signing - You will sit down with the escrow officer and have a lot of
documents explained to you as well as put your signature on them. Feel free
to ask questions when something isn't clear. We don't want you to be
confused about what you are signing. You will sign the real estate documents
as well as your loan documents in one sitting.
Funding - Funds will be delivered to the title company either by check or
wire as well as whichever form you brought your cash portion in.
Close of Escrow - The title company will file the appropriate forms with the
county to transfer title to your new property.
16
Recording — After the above step is completed and confirmed, the title
company will authorize for escrow to draft a check to the setter.
- Tinie to Move -- You have the keys to the new property and it's time to move.
17
PROPOSED HOUSE PLANS
The Joplin The Spring
One Story Cottage: Bid sq ft, Two Bed- One Story House: 1,308 s4 ft, Three Bed.
room, One Bath room, One Bath
18
The Siloam The Farmington
One and Half Story House: 1,192 sq ft, Two Two Story House: 1,596 sq ft, Four Bed -
Bedroom, Two Bath (could be scaled to room, Two Bath
cottage size 1,100 sq ft
lei
.y
PSI
A A
A'lTQ
c4 _
-)two, x
9Va�h7
19
The Lincoln
One and Half Story House: 1,596 sq ft,
Three Bedroom, Two Bath, Study (1,383
sq ft without study, could be scaled to cot-
tage size 1,100 sq ft)
31tl4ML'hfgyP+an.
The Leslie
One and Half Story House: 1,336 sq ft, Two
Bedroom, Two Bath (Optional Third Bed-
room 1,518 sq ft)
lrkw Fh., -
O ir"l F1.1 n" S.W*M
20
PARTNERS FOR BETTER HOUSING
Contact
Michael Ward - Executive Director, PfBH
michael@escalagroup.org
479-790-6303
Board Members of Partners for Better Housing
Keaton Smith (President) — Iberia Bank
Joe Tucker (Vice President) — T&T Green Insulation Innovations
Richard Russell (Treasurer) — Bank of Fayetteville
Sterling Hamilton — CBRE
Morgan Hooker — Colliers International
Gary Kahanak — Home Energy Rx
Casey Kleinhenz — CDC of Bentonville/Bella Vista
Zara Niederman — Niederman Enterprises
Robert Sharp — Robert Sharp Architect
Aubrey Shepherd — Conservationist
Allison Thurmond Quinlan — Flintlock Architecture and Landscape Architecture
Consultants
John Anderson—AndersonlKim
Brian Teague — Community by Design
Partners
for
Better
Housing
21
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for i-3.C"orl, I foll,'.11,gr oard of reviewed ffic prope.scd cost -
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Million Dolags ( 1,00").-OW), fo [)c ichribursed upon compwl:on ind ciry's acupmnce of plkhc
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Mssm 2nd A&PROVED dos jVh day of Septumber 2016
�Kv, onitzi, 'w
!it, '' Jj i Win DW a 1 IV
Partners
for
Better
Housing
30 August 2016
Peter Nierengarten
Sustainability and Resilience Director
City of Fayetteville
125 W. Mountain St
Fayetteville, AR 72701
RE: The Homes at Willow Bend — Sale price of homes
Dear Mr. Nierengarten,
Thank you for the opportunity to address recent concerns expressed about the estimated sale price
of homes in the Willow Bend development, a mixed -income traditional neighborhood development
in South Fayetteville.
Of the nearly 80 homes we plan to build, approximately one-third are reserved for homebuyers
making 50%-80%0 of Area Median Income. The variety of home sizes means lower income buyers
will have options to buy houses at prices ranging from less than $100,000 up to $200,000 through
the homebuyer assistance programs that Partners for Better Housing will administer. New
construction houses in other subdivisions start at approximately $140,000, of which there are fewer
than a dozen, all located at the edges of town.
Willow Bend stands out from other developments because:
1) The neighborhood is designed for community; it is a place for neighbors to get to know one
another.
2) The homes are designed and built to last. They will be cherished for many generations to come.
3) The location allows residents to live in new, high quality homes close to public transit, Walker
Park, and the multi -use trails as well as near jobs at the Commerce Park, the University of Arkansas,
and Downtown.
4) Willow Bend provides homes at an affordable price in a master -planned neighborhood that will
increase the value of the surrounding properties.
5) Our homeowner assistance programs will insulate lower income buyers from rising real estate
costs. Willow Bend will remain affordable without compromising residents' quality of life.
Without the cost -share agreement from the City, the project cannot move forward. Because Partners
for Better Housing is a non-profit entity, profits from the sale of homes will be funneled back into
our reserves for continued assistance to homebuyers.
We are grateful for your consideration of the cost -share agreement for Willow Bend. Funding the
neighborhood demonstrates the City of Fayetteville's commitment to sustainability and attainable
housing. If there are any additional concerns, I would be happy to discuss the project in more detail.
Sincerely,
Michael Ward
Executive Director, Partners for Better Housing
michael@escalagroup. org
479-790-6303
RESOLUTION NO. 117-13
A RESOLUTION TO EXPRESS THE CITY COUNCIL'S INTENT TO INVEST
ABOUT ONE MILLION DOLLARS TO COST SHARE THE
CONSTRUCTION OF CITY INFRASTRUCTURE WITHIN THE HOUSES AT
WILLOW BEND DEVELOPMENT WITH PROPER ASSURANCES THAT
AFFORDABLE, OWNER OCCUPIED HOUSING WILL BE CONSTRUCTED
AND PRESERVED IN THIS NEW NEIGHBORHOOD
WHEREAS, the City Council has long supported the goal of fostering affordable and
attainable housing for our citizens and included this goal in Fayetteville's 2020, 2025 and 2030
Long Range plans; and
WHEREAS, the City Council can invest its funds to build its own infrastructure such as
streets, sidewalks, water and sewer mains, and drainage structures and does so in established
neighborhoods every year, but normally requires a subdivision developer to build all this
infrastructure within a new development and dedicate it to the City of Fayetteville before the
City assumes maintenance responsibilities for it; and
WHEREAS, in order to make the housing within the Houses at Willow Bend
development built by a nonprofit corporation more affordable and attainable for moderate
income citizens of Fayetteville, the City Council intends to invest up to One Million Dollars
($1,000,000.00) as a cost share with the nonprofit developer to build city infrastructure if proper
assurances and guarantees are in place to ensure such City investment will all inure to the benefit
of the initial single family or duplex, owner occupied home buyers who must agree to restrictions
upon the resale and use of their homes and duplexes to ensure that, after any resale of the home
or duplex, the new owners/residents shall receive and retain the benefits of the City investment.
NOW, THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF FAYETTEVILLE, ARKANSAS:
Section 1: That the City Council of the City of Fayetteville, Arkansas hereby expresses
its intent to invest up to One Million Dollars ($1,000,000.00) to cost share the construction of
city infrastructure within the Houses at Willow Bend development with the nonprofit
development corporation if proper safeguards, assurances and guarantees are in place to ensure
that:
(1) the benefits of this City investment will go only to the individual home and
duplex buyers who shall occupy the purchased homes or at least one side of the duplex;
(2) any profit such home and duplex buyers could receive when such houses or
duplexes are resold in the future shall be limited so that the actual residents of Willow Bend will
continue to enjoy the City investment for affordable and attainable housing; and
Page 2
Resolution No. 117-13
(3) the requirement of owner occupied status for such housing shall be maintained for
the number of years set by the City Council when the agreement for the investment is made with
the nonprofit corporation.
Section 2 : That the City Council of the City of Fayetteville, Arkansas hereby requests
that the City Administration work with the City Attorney's Office to negotiate an agreement with
the nonprofit corporation to achieve the goals set forth in this Resolution and then present such
agreement to the City Council which could then authorize the One Million Dollar
($1,000,000.00) investment of City funds for this project.
PASSED and APPROVED this 21 st day of May 2013.
APPROVED:
ATTEST:
By.
LISA BRANSON, Deputy City PgkiIIII
fa�Rl`,qI�rf*>
,�4ti�►�w
+�• jib
t
Peter Nierengarten
Submitted By
City of Fayetteville Staff Review Form
City Council Agenda Items
and
Contracts, Leases or Agreements
5/21 /2013
City Council Meeting Date
Agenda Items Only
Division
Sustainability and Strategic Planning
Department
Action Required;
,pprove a resolution of intent to cost share wish the Houses at Willow Bend Project in the amount of $1.000,000 for
ie construction of public infrastructure (steels, sidewalks, storm drainage, etc.) within and/or adjacent to the project,
_ _N/A_ _
Cost of this request
N/A
Account Number
N/A _
Project Number
Budgeted Item l.J
i
atart?r I Dir clor
City AttDfney
N/A
Category / Project Budget
NIA
Funds Used to Dale
N/A
Remaining Balance
Budget Adjustment Attached
N/A
Program Category / Project Name
N/A
Program / Project Category Name
NIA
Fund Name
Previous Ordinance or Resolution #
Dale
Original Contract Date:
Original Contract Number.
Date
+ A.. .Q,, 5' :5 "2013
Finance and Internal Services Director Date
A ZK
Crlief of S If Date
�f
Mayor ate
Comments.
Revised January 15, 2009
THE CITY OF FAYETTEVILLE, ARKANSAS
DEPARTMENT CORRESPONDENCE
aT�ILIIC
AS
www.accL-ssfayette,ville.org
CITY COUNCIL AGENDA MEMO
'To: Mayor Lioneld Jordan and City Council
Thru: Don Marr, Chief of Staff ��++pp
Jeresny Pate, [kv�clopment Services DirectorAF
CPirss Bi-own, City Engineer C1$
From: Peter Nierengarten, Sustainability & Strategic Planning Director P ^/
Date: May 2, 2013
Subject: Resolution of Intent for the Houses at Willow Bend
PURPOSE
The purpose of this resolution is to express intent to cost share with the Houses at Willow Bend Project in the
amount of $1,000,000 for the construction of public infrastructure (steets, sidewalks, storm drainage, etc.)
within and/or adjacent to the project. The City of Fayetteville's contribution to the public infrastructure would
help lower the purchase price of the homes in an effort to better achieve the goal of providing home ownership
opportunities for Fayetteville citizens making less than 80% of the median income. The City of Fayetteville's
contribution to the public infrastructure would be subject to the project developers funding the remainder of the
infrastructure construction cost, ensuring that Willow Bend be an owner occupied neighborhood and
incorporating affordable resale of the homes into property deeds.
BACKGROUND
The Houses at Willow Bend is a 9.75 acre infill housing project in the Walker Park Neighborhood in south
Fayetteville that aims to create a replicable model of sustainable and attainable housing. The project goal is to
construct between 65 — 84 homes that will provide citizens making less than 80% of the median income the
opportunity to become homeowners. The Houses at Willow Bend project has been developed through a
partnership with the Fayetteville Housing Authority, the Fayetteville Partners for Better Housing, the City of
Fayetteville, the National Center for Appropriate Technology, Community Resources Group, the Sustainable
Cities Institute and the Home Depot Foundation.
Throughout the project, stakeholders have stressed the inclusion of all elements of sustainability, not only
environmental, but economic and social elements as well. The master plan's infill location is surrounded by the
existing traditional street grid near downtown Fayetteville. The neighborhood lacks quality affordable housing
and was selected by stakeholders for its walkable location and associated transportation affordability, with its
close proximity to major employers, retail centers, and the City's multi -use trail system. In addition, the
existing tree canopy and storm water features on the site have provided an idyllic setting for demonstrating the
integration of both ecology and placemaking principles into one. The master plan was informed by a recently
adopted form based zoning code and parallel cottage court ordinance which together encourage a mix of unit
THE CITY OF FAYETTEVILLE, ARKANSAS
types and higher densities. The plan is also being used as a pilot project to facilitate the development of a
proposed low -impact technical manual,
The City of Fayetteville's adopted City Plan 2030 contains six overarching goals. Two of these goals include:
1) We will make appropriate infill and revitalization our highest priorities.
2) We will create attainable housing opportunities.
The Houses at Willow Bend Project aligns very closely with both of these goals due to its location within the
long-standing Walker Park Neighborhood and by virtue of the goal to provide homeownership opportunities for
Fayetteville citizens making less than 80% of the median income.
RECOMMENDATION
The Street Committee recommended forwarding this resolution of intent to City Council at their April 30, 2013
meeting.
BUDGETIMPACT
Public infrastructure costs for the project are estimated to be $1,997,000. Of that amount $1,366,500 is
estimated for public infrastructure such as streets, sidewalks and storm drainage. A contribution of $1,000,000
towards the street, sidewalk and storm drainage infrastructure costs represents approximately a 75% cost share
and would lower the purchase price of a home by approximately $12,000. This reduced purchase price will
allow greater access to these homes by families making less than 80% of the area median income.
The cost share would be in the form of a reimbursement to the project developer after the public infrastructure
has been constructed and accepted by the City. The actual fund that the $1,000,000 cost share will come from
will be identified at a later date.
RESOLUTION NO.
A RESOLUTION TO EXPRESS THE CITY COUNCIL'S INTENT TO INVEST
ABOUT ONE MILLION DOLLARS TO COST SHARE THE
CONSTRUCTION OF CITY INFRASTRUCTURE WITHIN THE HOUSES AT
WILLOW BEND DEVELOPMENT WITH PROPER ASSURANCES THAT
AFFORDABLE, OWNER OCCUPIED HOUSING WILL BE CONSTRUCTED
AND PRESERVED IN THIS NEW NEIGHBORHOOD
WHEREAS, the City Council has long supported the goal of fostering affordable
and attainable housing for our citizens and included this goal in Fayetteville's 2020,
2025 and 2030 Long Range plans; and
WHEREAS, the City Council can invest its funds to build its own infrastructure
such as streets, sidewalks, water and sewer mains, and drainage structures and does so in
established neighborhoods every year, but normally requires a subdivision developer to
build all this infrastructure within a new development and dedicate it to the City of
Fayetteville before the City assumes maintenance responsibilities for it; and
WHEREAS, in order to make the housing within the Houses at Willow Bend
development built by a nonprofit corporation more affordable and attainable for moderate
income citizens of Fayetteville, the City Council intends to invest up to One Million
Dollars ($1,000,000.00) as a cost share with the nonprofit developer to build city
infrastructure if proper assurances and guarantees are in place to ensure such City
investment will all inure to the benefit of the initial single family or duplex, owner
occupied home buyers who must agree to restrictions upon the resale and use of their
homes and duplexes to ensure that, after any resale of the home or duplex, the new
owners/residents shall receive and retain the benefits of the City investment.
NOW, THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF FAYETTEVILLE, ARKANSAS:
Section 1: That the City Council of the City of Fayetteville, Arkansas hereby expresses
its intent to invest up to One Million Dollars ($1,000,000.00) to cost share the construction of
city infrastructure within the Houses at Willow Bend development with the nonprofit
development corporation if proper safeguards, assurances and guarantees are in place to ensure
that:
(1) the benefits of this City investment will go only to the individual home and
duplex buyers who shall occupy the purchased homes or at least one side of the duplex;
(2) any profit such home and duplex buyers could receive when such houses or
duplexes are resold in the future shall be limited so that the actual residents of Willow Bend will
continue to enjoy the City investment for affordable and attainable housing; and
(3) the requirement of owner occupied status for such housing shall be maintained for
the number of years set by the City Council when the agreement for the investment is made with
the nonprofit corporation.
Section : That the City Council of the City of Fayetteville; Arkansas hereby requests
that the City Administration work with the City Attorney's Office to negotiate an agreement with
the nonprofit corporation to achieve the goals set forth in this Resolution and then present such
agreement to the City Council which could then authorize the One Million Dollar
($1,000,000.00) investment of City funds for this project.
PASSED and APPROVED this 21st day of May 2013.
APPROVED:
By: By:
LIONELD JORDAN, Mayor
ATTEST:
SONDRA E. SMITH, City Clerk/Treasurer
Partners for Better Housing is a non-profit corporation created in 2007 for the specific purpose of constructing housing
affordable to those Individuals and families making 50-80% of the Area Median Income (AMI.) In order to accomplish this,
the Partners board purchased in 2009 acreage in South Fayetteville In the Walker Park Neighborhood. This decision was due
in large part to the need for housing identified in the excellent Walker Park Neighborhood Plan adopted by the City Council In
early 2008. The city in 2010 was successful in securing a grant from the Home Depot Foundation The grant request to Home
Depot identified the creation of affordable housing as a high city priority and included our property as a key focus within the
grant request.
The "Houses at Willow Bend" project is 9.8 acres in area and includes 78 dwelling units. The design of the Houses at Willow
Bend neighborhood was funded by the Home Depot Sustainable Cities grant to the City of Fayetteville. The design of the
project is complete and cost estimates have been done based upon recent bids from local contractors. The infrastructure
costs for the project are estimated to be $1,997,482. Of that amount, $1,366,500 is for public infrastructure, such as streets,
sidewalks, and stormwater drainage. The remaining $630,982 Is for water and sewer lines and private Infrastructure, such as
parking courts, grading, stormwater detention, franchise utilities, and retaining walls. This part of Fayetteville has not seen
much public investment in the recent past and could benefit from upgraded infrastructure. We are preparing to submit
drawings and reports to the City of Fayetteville requesting preliminary and final plat approval from the Planning Commission
and the City Council.
It is important to remember that any time public monies are spent on infrastructure, it creates a benefit for the adjacent
property owners. Partners for Better Housing feels that spending public monies for public infrastructure adjacent to the
Willow Bend property would be an effective, Immediate, and appropriate way for the City of Fayetteville to meet its goal as
stated In City Plan 2030:
"We will create opportunities for attainable housing."
This is also an excellent opportunity to meet another of our major goals:
"We will make appropriate infill and revitalization our highest priorities."
The Partners for Better Housing board, at the suggestion of city staff, is asking the city council to assist in increasing the
affordability of the housing by investing in the street portion of the project cost. The following three examples demonstrate
how this assistance dramatically increases the affordability to low and moderate -income individuals and families:
i
With no City Cost Share: Sale Price of $104,290
Affordable to a household with $27,657
annual income
With 75% City Cost Share: Sale Price of $92,202
Affordable to a household with $25,207
annual income
With 100% City Cost Share: Sale Price of $88,173
Affordable to a household with $24,390
annual income
Page 1
JIf
LU
$136,660
Affordable to a household with $35,498 annual income
75% $124,572
Affordable to a household with $33,048 annual income
100% $120,542
Affordable to a household with 32,230 annual income
$48,887
Affordable to a household with $40,495 annual income
75% $133,120
Affordable to a household with $37,300 annual income
100% $127,864
Affordable to a household with $36,235 annual income
Page 2
Ar
The principles of the Houses at Willow
Bend came out of the Walker Park
Neighborhood Plan. Housing
affordability is based upon mortgage
expense, transportation cost, and
energy costs to heat and cool the
houses.
The Houses at Willow Bend Is
designed to serve the needs of Low
Income households as defined by
HUD and as implemented by the
Community Services Division's
Community Development Block Grant
a. rF Program.
,Po+„{ ry&
The household income ranges area as follows: Area Median Income (AMI), Fiscal Year 2013:
One Person
Two Person
Three Person
Four Person
Five Person
50%ofAMI $19,850
522,700
$25,500
$28,350
$30,650
80%ofAMl $31,750
$36,300
W,850
$45,350
$49,000
Return on Investment:
Any time that an expenditure of public monies is contemplated, Return on Investment must be considered. In addition to the
intangible benefits of adding to Fayetteville's housing stock of stable dignified energy efficient housing, there is the
transportation benefit of locating housing on the multi -use trail network and close to major employment opportunities such
as the University of Arkansas Campus, the Square, and the Industrial Park, Transportation dollars would be spent in a way
that reduces the need for cross town travel, rather than encouraging it.
The financial return on the investment would be as follows: If the City of Fayetteville dedicated $1,366,500 of bond monies
to public infrastructure, it would allow the construction of 78 houses at an average cost of $125,000 each for a total of
$9,750,000 in affordable housing. That is a return of seven dollars of affordable housing for every
dollar of public money spent.
The financial return would also ripple out to the school system, the county, the library, and the City of Fayetteville as follows:
Projected Property Tax Receipts, 7B houses, average value of $125,000 each: $100,425 annually, Current property tax
receipts for the property are $1,900 annually, for a net increase of $98,625 annually. Over a 25 year period, that
would provide the following property tax revenue;
Fayetteville Public Schools 1.,997156
Washington County $ 246,562
Library $ 24,656
City of Fayetteville $ 197,250
In addition, the City of Fayetteville should expect to see increases in sales tax revenue as a certain number of households
currently living the outlying areas of the region have the choice of moving into town.
Page 3
DEPARTMENTAL CORRESPONDENCE
OFFICE, OF THE
CITY ATTORNEY
TO: Mayor Jordan
City Council
.,
FROM: Kit Williams, City Attorney �_ 1
DATE: September 19, 2016
Kit WillianIs
City AIto rney
Blake Pennington
Assislont City Attorney
Patti Mulford
Pa rll l qa l
RE: Ordinance to Waive Competitive Bidding and Approve the Proposed
Contractual Agreement with Partners for Better Housing, Inc. for City's
One Million Dollar Cost Share Investment for Willow Bend
On May 21, 2013, the Fayetteville City Council passed Resolution No. 117-
13 to express its intent to invest up to One Million Dollars ($1,000,000.00) to pay
for public infrastructure in the proposed Willow Bend subdivision. Normally this
infrastructure is built and paid for by the developers and then dedicated without
compensation to the City. A major purpose of this possible cost -share was to lower
the development's costs to facilitate affordable/attainable housing for some of the
future home buyers who earned less than the Average Median Income for
Fayetteville. Interestingly, just a couple of weeks later Kiplinger's magazine listed
Fayetteville as "one of the 10 cheapest cities in the county to live in...." Northzvest
Arkansas Nezvspaper, page 3A, June 4, 2013. The newspaper further reported that
Fayetteville has the 5th lowest cost of living for cities over 50,000 in population.
"While salaries areri t big,... paychecks stretch further, thanks to the
low housing, transportation and utility costs." (emphasis added).
City staff worked with Partners for Better Housing, Inc. in 2013. Eventually,
Partners for Better Housing, Inc. hired Chico Building and Land, LLC in January
of 2014 for development and management services for the proposed Willow Bend
Development. Finally, late this summer, Partners for Better Housing, Inc.
submitted its proposal in a 16 and later a 21 page booklet to the City Council and
City Administration.
I used this proposal as well as the Resolution No. 117-13's provisions to
guide my attempt "to negotiate an agreement with the nonprofit corporation to
achieve the goals set forth in this_ Resolution and then present such Agreement to
the City Council which could then authorize the One Million Dollar ($1,000,000.00)
investment of City funds for this project." Section 2 of Resolution No. 117-13.
Legal Issues With The Current Willow Bend Proposal To Cost Share
And To Restrict Who May Purchase Houses
I believe as long as the City of Fayetteville is paying for or building its own
infrastructure (streets, sidewalks, water and sewer mains), it is on fairly solid legal
footing. Other developers being forced to pay for all these infrastructure costs
themselves by our Unified Development Code could claim they are not being
treated fairly and equally if the City refused to cost share with them in building
city infrastructure. There is some persuasive force in this Equal Protection of the
Law argument made by other residential housing developers, but I do not think it
likely that the City would actually get sued by another developer over this. If we
did get sued, I would hope that the Court would recognize and honor the City
Council's discretion in spending tax payers to help build the city's own
infrastructure.
What is somewhat more risky is the necessary requirement in the
Contractual Agreement requiring the developer to help each potential qualified
buyer earning less than Average Median Income with a "soft (forgivable over
time) second mortgage" to assist their purchase "at least until the amount of funds
equal to the City's cost share payment have been utilized for such soft second
mortgages." Contractual Agreement 2.D.
I believe we need such provision to ensure the City's One Million Dollar
investment in its infrastructure (that developers normally fully pay for on their
own) would be used pursuant to the City Council's hope to help make these homes
more affordable and attainable for lower income citizens. Without such provision,
the developer could simply be enriched with no rock hard requirement to pass this
savings on to those intended by the City Council to receive this help.
However, the City Council's intent to assist about 50 lower income families
with this up to One Million Dollar cost share does make me somewhat concerned.
Even though the money for the "soft second (forgivable) mortgages" does not
come directly from the City, but from Partners for Better Housing, Inc., who can
argue they would have this "extra" money without the City of Fayetteville's cost
K
share payment? We must always be careful to comply with the Arkansas
Constitution.
Article II § 18 Privileges and Immunities -Equality of the Arkansas
Constitution states:
"The General Assembly shall not grant to any citizen, or class of
citizens, privileges or immunities which, upon the same terms, shall
not equally belong to all citizens."
This right of all Arkansans to be treated equally by their government has
been applied to city government and their agencies, although not for the precise
issue presented the Fayetteville Partners for Better Housing, Inc.'s proposed
Contractual Agreement. See Rowe v. Housing Authority, 220 Ark. 698, 249 S.W.2d
551 (1952). The State cannot grant to municipal corporations greater powers than
the State possesses. City of Little Rock v. Raines, 411 S.W.2.d 486 (1967). Therefore,
the City must obey the State restriction not to "grant to any citizen, or class of
citizens, privileges or immunities which, upon the same terms, shall not equally
belong to all citizens."
The issue is whether this proposal to provide financial assistance for the
purchase of homes only to persons earning below a certain income level violates
the Arkansas Constitution's Privileges and Immunities -Equality section. As
currently proposed if a family's annual income is below the Average Median
Income, they would be subsidized with a "soft second mortgage", but families
earning "too much" would be prohibited from receiving such help. Is this not the
granting to the class of citizens earning below the Average Median Income the
privilege to buy a house built in Willow Bend with the assistance of a "soft second
(forgivable) mortgage" which is denied and not equally granted to another class
of citizens just because they earn more than that income level?
In the 1930's, the Legislative wanted to assist indigent or disabled veterans
and blind persons by waiving the cost for a State, County or City business license.
This waiver with tight restrictions (the veteran could not be drawing a pension
exceeding $8.00 per month) was specifically authorized by state statute. When
Fort Smith demanded payment ($25.00) for the electrical contractor license, the
veteran sued. The Arkansas Supreme Court held the law unconstitutional.
"The statute under consideration unquestionably grants to a class of
citizens privileges or immunities, which upon the same terms do not
I
equally belong to all, and is therefore violative of section 18 of article
2 of the Constitution, and is void." Edelman v. City of Fort Smith, 194
Ark. 100,105 S.W.2d 528,529 (1937).
Both the City of Springdale and City of Hot Springs have had city
ordinances found unconstitutional pursuant to Article 2, Section 18 of the Arkansas
Constitution. City of Springdale v, Chandler, 222 Ark 167, 257 S.W.2d 934 (1953)
(ordinance required two neighbors to file written protest for prosecution
amounted to "arbitrary discrimination"); Waters -Pierce Oil Co. v. Hot Springs, 85
Ark 509, 109 S.W.293 (1908) ("The fact that a discriminatory tax applies to all
persons of a given class does not render it any less obnoxious as an unjust
discrimination against a class of citizens.")
More recent cases have acknowledged that Equal Protection of the Laws
"does not require that persons be dealt with identically..." Rose v. Arkansas State
Plant Board, 213 S.W.3d 607,617 (2005). "Equal protection analysis further depends
upon the existence of some classification which impermissibly distinguishes
between citizens." City of Little Rock v. Waters, 303 Ark 363, 797 S.W.2d 426, 430
(1990).
In a case questioning the constitutionality of Housing Authorities to rent
only to "low income" persons, the Arkansas Supreme Court upheld the
constitutionality of A.C.A § 14-169-201, et seq. from this attack by quoting a Texas
Supreme Court decision:
"The legislature in the instant law under attack has made no attempt
to grant special privileges to any man or set of men, but has made a
reasonable classification of the members of the public and has
provided that such low rent dwelling accommodations shall be
available to all members of the public who presently or in the future
fall within the classification made by the legislature." Hogue v.
Housing Authority of North Little Rock, 201 Ark. 263, 144 S.W.2d 49, 53
(1940) (citation omitted).
The Arkansas Development Finance Authority administers several low
interest or otherwise favorable loans/mortgages to assist low income citizens to
purchase homes. This type of State assistance is identified by Partners for Better
Housing, Inc. as a part of their program and efforts (along with the soft second
mortgage) to help lower income families purchase houses in Willow Bend. If those
State programs are State funded rather than federally funded, then I would be
much more comfortable with the City Council's stated intention to cost share with
Partners for Better Housing, Inc. to assist lower income citizens to purchase
houses.
I have expressed my concerns about some aspects this One Million Dollar
cost share investment with its intent to assist lower income citizens to purchase
homes for over two years. I believe that the provisions negotiated in the proposed
Contractual Agreement have made this proposal as legal and constitutional as
possible. There is always a risk when a City tries a fairly novel approach to address
a problem as difficult as assisting development of affordable housing. I believe
the proposed Contractual Agreement has reduced this legal risk as much as
possible.
I take no position on the wisdom or issue of whether or not to enter into
this Agreement to assist Partners for Better Housing, Inc.
I
Be
OFFICE OF THE
(,i'i'Y A"T'Co.RNEY
DEPARTMENTAL CORRESPONDENCE
TO: Mayor Jordan
City Council
CC: Don Marr, Chief of Staff
Paul Becker, Finance Director
Jeremy Pate, Development Services Director
Peter Nierengarten, Sustainability & Resilience Director
FROM: Kit Williams, City Attorney
DATE: September 26, 2016
RE: Further Equal Protection Research and Analysis
City Investment into Willow Bend Development
Kit Williams
City Attorney
Blake Nnnington
Assistcarit Cily Attorwy
Patti Mulford
Paralegoi
Many legal issues have such unique facts and considerations that they defy
absolutely clear answers so that only educated opinions may be offered.
Sometimes even "educated attorneys" come to differing conclusions about the
meaning and interpretation of statutes or constitutional law. Please see the
Attorney General's Brief arguing Fayetteville's Uniform Civil Rights Protection
Ordinance is illegal and Fayetteville's Brief that I am drafting to explain why Judge
Martin was absolutely correct when he found our ordinance legal.
Thus, I cannot provide a black or white answer to the question of whether
the proposed Contractual Agreement for the City's payment of One Million
Dollars for its infrastructure so that this same amount of money can be used by
Partners for Better Housing, Inc. to assist low income home buyers to purchase
houses in Willow Bend is constitutional and legal.
I contacted the Arkansas Department Finance Authority and was informed
that "ADFA is self -funded State Agency, but we do administer some Federal
Programs and those funds pass through the Authority." This sounds similar to
how we pass through federal funds to our low income home owner rehabilitation
assistance. As long as this is federal funding earmarked for low income home
owners' rehabilitation needs for their homes, the Arkansas Constitution's
limitations on the use of state and local tax dollars should not apply.
The Vice President of Housing in the Arkansas Development Finance
Authority, Benjamin VanKleef, further clarified their finances.
"The majority of our funding comes from the federal government.
We do, however, have smaller accounts that are classified as state
funds. We have used state funds for the rehabilitation of homes. One
caveat is that those funds were already earmarked for affordable
housing prior to arriving at ADFA."
If the Arkansas Development Finance can use "state funds for the
rehabilitation of homes" (presumably homes owned by low income persons like
those assisted in Fayetteville with our federal Community Block Grant funds),
then our payment of our own infrastructure costs to assist lower income citizens
attain home ownership might also be constitutional. When state statutes in the
1930's authorizing blight clearing and rehabilitation of city neighborhood
programs were challenged as violative of Article 2 § 18 of the Arkansas Constitution,
the Arkansas Supreme Court held that Article 2 § 18 was not violated.
The Housing Authority of Little Rock was attempting to acquire (by
condemnation if necessary) a ten block "blighted area", redevelop this area and
then resell some lots to private persons. A landowner sued the Housing Authority
alleging a violation of "Article 2 § 18 of the Constitution of Arkansas in that such
sale or lease grants to the citizen or class of citizens, privileges which do not
equally belong to all citizens." Rowe v. Housing Authority of Little Rock, 220 Ark. 698,
249 S.W. 2d 551, 552 (1952). This allegation closely follows the language of Article
2§18:
"The General Assembly shall not grant to any citizen, or class of
citizens, privileges or immunities which, upon the same terms, shall
not equally belong to all citizens."
And yet the Arkansas Supreme Court rejected the challenge and upheld the
law and program which made the "redevelopment area available for private use
at a cost which may be less than the cost of acquiring and developing said
redevelopment area...." Id. The Arkansas Supreme Court also upheld against
attack the Housing Authority power to determine "the selection of purchasers and
lessees of said lands, and the terms and conditions for sales and leases, including
covenants and restrictions for future use of such lands...." Id.
A more recent Arkansas Supreme Court case City of Piggott v. Woodard, 261
Ark. 406, 549 S.W. 2d 278 (1977) also required an interpretation and application of
Article 2 § 18. In that case, Piggott objected to paying a retiring police officer a
retirement sum for holiday pay and sick leave. The city made the following
argument to the Supreme Court:
"It is asserted that the Legislature has singled out certain type
employees for special privileges, such privileges not being afforded
to all employees of the city."
The Arkansas Supreme Court rejected that objection, determined the state
statute requiring payment for sick leave and holiday pay was constitutional and
quoted with approval from 16A C.J.S. Constitutional Lazo § 505:
"State and municipal legislation is subject to the constitution
requirement that no state shall deny the equal protection of the law to
any person..., and it is valid (if it)... treats alike, with equality and
uniformity,... all persons similarly situated." Id. (emphasis added.)
This appears to mean that classes of persons (such as those earning below
the Average Median Income) could be treated more favorably than those persons
earning a greater income because the higher income persons are not "similarly
situated" than their more needy neighbors.
"Legislation which meets this test satisfactorily is not invalid because
it is not all -embracing but instead is limited, for example, as to
persons, subjects, objects to which the legislation is to be applied, or
evils or abuses to be remedied or corrected. Equal protection is not
Achieved through indiscriminate imposition of inequalities, but
discrimination alone, irrespective of its basis or effect, is not the test
of denial of equal protection of the laws by a statute. A discrimination
which is merely technical and in no sense substantial or unjust does
;3
not render a statute void. Also, the constitutional requirement does
not prevent a state or municipality from adjusting its legislation to
differences in situations and making a discrimination or distinction
in its legislation in respect of things that are different, provided the
discrimination or distinction has a reasonable foundation or
rational basis and is not palpably, purely, and entirely arbitrary in
the legislative sense, that is, outside of the wide discretion which the
legislative body may exercise." Id. (emphasis added).
The Arkansas Supreme Court then held:
"(W)hen classification of subjects is made by legislation, such
classification must rest on some substantial difference between
classes created and others to which it does not apply, but where the
statute or ordinance appears to be founded upon a reasonable basis
and operates uniformly upon a class to which it applies, it cannot
be said to be arbitrary." Id. at 281. (emphasis added).
Although the City of Fayetteville is not creating the class of citizens who will
be eligible for soft second mortgages, we are recognizing that these potential home
buyers should be helped by Partners for Better Housing, Inc. The City also realizes
that they can be helped largely because the City is paying for the construction of
streets, drainage structures, sidewalks, water and sewer mains that normally
would be the responsibility and cost of Partners for Better Housing, Inc.
This infrastructure investment is probably still constitutional (even if it is
arguably linked to assisting home purchases earning somewhat less than 100% of
the Average Median Income) because that "distinction has a reasonable
foundation or rational basis and is not... outside the wide discretion which the
legislative body may exercise." Id. Partners for Better Housing, Inc. needs to
ensure that its proposed soft mortgage program "operates uniformly upon a class
to which it applies...." Id. There are provisions within the proposed Contractual
Agreement to attempt to ensure such fair and uniform treatment for eligible home
purchasers.
CONCLUSION
There is still some danger in moving forward with the City Council's stated
intention to assist Partners for Better Housing by paying up to One Million Dollars
for infrastructure that is normally the developer's sole responsibility in order to
free up the developer's resources to help lower income families become home
owners. It is always safer not to push, but stay well within, the limits of your
constitutional and statutory power. Thus, as Fayetteville City Attorney, I take the
cautious approach and cannot recommend you go forward with this contract and
payment.
One concern I have with the cases I have been able to find is that they are
many decades old with little or no recent cases to establish their doctrines are still
"good law," and will be adhered to by the 2017 Arkansas Supreme Court.
Additionally, these cases involve state statutes directly authorizing the blight
removal and rent assistance challenged unsuccessfully as unconstitutional. I am
aware of only general "police power" statutory authority to support the City
Council's intention to assist lower income citizens to buy affordable houses.
However, we do have clear authority to build or pay a contractor to build our
streets, sidewalks, water and sewer mains.
The City Council is the guardian and the custodian of the City's treasury.
The City Council is the policy maker. The City Council determines how best to
spend the taxpayer revenue, but must always remain within constitutional limits.
The risk you might take in this decision is much less than what you would have
risked if you had not rezoned the Van Ashe land to traditional commercial zones
as called for in our contract with the landowner. That could have been financially
devastating. I have warned you of several other much more dangerous risks (from
a monetary point of view), and I am grateful you have always wisely refused to
take unreasonable gambles with the taxpayer's treasury.
The risk to go forward with the proposed agreement and payment for City
infrastructure built in Willow Bend is not nearly so great. The downside if the
gamble fails is not insignificant, but is much less than most other times I have
cautioned the City Council. So more than anything, your decision is a policy
decision. Is this the right thing to do for Fayetteville? Is it still right even though
there remains some risk of litigation? That's the call; that's the decision for every
Alderman.
5
PAR,rNERS FOR BETTER HOUSING
BOARD RESOLUTION
EJSSC)IljTl()Ii!,PPROt ,"INC,'Tfll-PRO"(-)SEI) WILLOW BEND COST-Sffi,-,LRE CONTIZAC,1'
VVITfJ 7411 (11Y AMOtJNT C-T ONE MILLION DOLLARS
FOR ELIGIBLE PUBLIC lNFRASTPl-',CTRE CONTINGEN-1.' ON APPROVAI-1 OF
R.T.-..-V1SR-.)NS AND A.-,M(:)RN1EY
W(AFJ�EAS; the Parttior, for f3eact: Housing Bond of Elmuow Ins rwkwcd Me pntomd com-
dure comact wid) t1he Cm.A y of illfrastructure rcim1mme.m.-uits ir.. the amount of 011c
T N,Ifflioti I)oRan ($1,0010,000), to be imitnbumed upori complctiofi atid City's acceptarice of public
Kharnmw 0:1 dic Riglat-of-Way for the Willovv Be�od site develcipi-neat,
W-(-IERI AS, dic Pannem Or Better Hmmbg Bond of Directors ilpptovc-s the terms of the contract
cc . prov c
.;ntii-,gu.)t cm City of Filyo:tmilicattomey's ap -al of rectuc�,.,d rc-,,isiotls,
WHER-EAS, Ac Pattnum Rw Butts I lausing Board of Dkecrors approves the teens of the ummact
pmdhg rudnv by ai.tomeys at First Sccuriq- bank.o the prcb�,,ble, lends for [lie Willow 13cn-d
kmiess le bathl at Anep find nl"amkc BMW,,,' "Vitil the c0t1tr,.-1cL
WHEREAS, the Patmers for Rutter 14ousbg Bond of Directors rccogrdze-q the cdtical Tlt-,ed to have
a signed contract submitteci to the Cii:y of Fayettevillc hefore Frid-ky Septenter 16, 2016 mi meet the
dead1he Ar die October 4, 2016 City Coui.xil, uitctiiie
WHEREAS, if no other st�bstattive changes arc wqdmd, the: I)artocrs f'or Better Housing Board of
Ehmaors approves Atchael Ward, Executivc. Dircctoy of Ntt:,iers for 11-3acr flousmg, to -,-d911 the
ccmtract cm behalf of' the Board of Direcmrs.
PASSED and APPROVED this 8`11 clay of September 2016
CONTRACTUAL AGREEMENT
This Contractual Agreement is made and entered into this day of
September, 2016, by and between the City of Fayetteville, Arkansas and Partners for
Better Housing, a 501 (c)(3) Arkansas non-profit corporation.
Whereas, Partners for Better Housing, Inc. was incorporated and organized as an
Arkansas Non Profit Corporation on May 1, 2006; and
Whereas, Partners for Better Housing, Inc. has a Board of Directors and is
managed by its Executive Director, Michael Ward, who submitted the 21 page booklet
entitled "The Homes At Willow Bend" (attached) to describe their development and its
financing and solicit the City's potential cost share for public infrastructure in the amount
of up to One Million Dollars ($1,000,000.00); and
Whereas, Partners for Better Housing, Inc. will build approximately 76 homes on
the subject site, with a minimum of two thirds of these homes to be sold to households at
50% to 100% of the Area Median Income with soft second mortgages in the total amount
of the cost share paid by the City of Fayetteville to facilitate the affordability of these
homes; and
Whereas, Partners for Better Housing, Inc. has engaged in substantial community
outreach in designing the project, called The Homes at Willow Bend; and
Whereas, it will benefit the City of Fayetteville and its citizens to quickly increase
opportunities for affordable and workforce home ownership within the Walker Park
Neighborhood consistent with the City of Fayetteville's Comprehensive Plan policies.
NOW, THEREFORE, the City of Fayetteville and Partners for Better Housing,
Inc. agree as follows:
1. In consideration of the promises and commitments made by Partners for Better
Housing, Incorporated in paragraph 2 of this contract and its representations within its
booklet "The Homes At Willow Bend, A Traditional Neighborhood Housing Development"
presented to and relied upon by the City of Fayetteville and attached as Exhibit A to this
contract, the City of Fayetteville hereby agrees and promises that upon Partners for
Better Housing, Inc.'s successful construction of public infrastructure (streets, water
mains, sewer mains, drainage facilities, etc.) and their acceptance by the City of
Fayetteville, the City will pay its cost share portion of those documented expenses for
public infrastructure up to a maximum of One Million Dollars ($1,000,000.00).
1
2. Partners for Better Housing, Inc. in consideration of the City's payment of the up
to One Million Dollar ($1,000,000.00) cost share, agrees and promises as follows:
A. Partners for Better Housing, Inc. will provide the necessary and normal
engineering, construction, project management, inspection, and testing as
necessary for a complete installation of the water mains and fire hydrants,
sanitary sewer mains, storm drain facilities, roadway subgrades, paved
sections, curbs, gutters, sidewalks (which may be installed after house
construction per the Unified Development Code), striping, and signage
consistent with the Preliminary and Final Plat approved by the City of
Fayetteville. Partners for Better Housing, Inc. is not entitled to any cost
share payments for expenses related to infrastructure construction or
improvements until that infrastructure has been fully inspected, approved
and accepted by the City of Fayetteville.
B. Partners for Better Housing, Inc. will provide all copies of the invoices from
its Consultants, Engineers, Architects and Contractors and a complete lien
waiver executed by its Contractor and any subcontractors related to public
infrastructure construction prior to acceptance by the City of all
improvements in the public right of way.
C. Within three years of receiving the City of Fayetteville's cost share payment
for city infrastructure within the Willow Bend development, Partners for
Better Housing, Inc. commits and promises to make its best, good faith
effort to ensure that at least fifty (50) of the houses will have been purchased
or occupied pursuant to lease to purchase option by qualified
buyers/lessees (household earning 100% or less of the Area Median Income
at the time of purchase as shown on page 12 of the Booklet).
D. Partners for Better Housing, Inc. agrees that each of these qualified home
buyers will receive the Partners for Better Housing, Inc.'s "soft second
mortgage" to assist their purchase as detailed in The Homes At Willow Bend
Booklet at least until the amount of funds equal to the City's cost share
payment have been utilized for such soft second mortgages.
E. Partners for Better Housing, Inc. commits and promises to make their best,
good faith efforts to assist all eligible purchasers to obtain all possible
benefits provided by the Arkansas Development Finance Authority
including its Down Payment Assistance, Move Up loan, Low interest loan,
HOME assistance funds and credit counseling programs as referred to in
its Booklet.
2
F. Partners for Better Housing, Inc. promises to faithfully analyze potential
home buyers' applications to ensure their eligibility for a soft second
mortgage and provide such assistance ONLY to properly qualified
potential buyers.
G. Partners for Better Housing, Inc. promises to ensure provisions are included
in every soft second mortgage to ensure ownership is not conveyed to a
non -eligible entity nor leased or rented during the period of the soft
mortgage without full repayment of the existing amount due on such
mortgage. This payment shall be used by Partners for Better Housing, Inc.
to exclusively fund other soft -second mortgages within Willow Bend.
H. Partners for Better Housing, Inc. promises to present to the Fayetteville City
Council annual updates on the progress of the Homes at Willow Bend
development during the first City Council Agenda Session in April of each
year (and at any other time if specifically requested by the City Council)
until the development is complete and all soft second mortgages have been
paid.
3. Partners for Better Housing, Inc. agrees that the City of Fayetteville has no
contractual obligations to the Consultants, Architect, Engineer, Contractor or any
subcontractors associated with this development, nor may any of these parties be
considered third party beneficiaries of this contractual agreement.
4. The City of Fayetteville is intending to invest up to One Million Dollars
($1,000,000.00) in order to quickly spur the construction and sale to qualified buyers of 76
homes with at least one third to be purchased by households earning less than 80% of the
Average Median Income for Fayetteville ($37,568.00 for a household of two) and another
third to be purchased by households earning less than the Average Median Income for
Fayetteville ($46,960.00 for a household of two) as explained on page 12 of the Booklet.
The final third can be sold at market rate with no soft second mortgage assistance.
5. The investment by the City and its taxpayers of up to One Million Dollars to cost
share public infrastructure is partially supported by the anticipated increased real
property tax millage that the 76 new houses will provide to the City by these new
taxpayers. Additionally, providing affordable or attainable work force housing in
Fayetteville will help workers live and shop in Fayetteville which should increase sales
tax revenue and HMR tax revenue.
3
IN AGREEMENT WITH ALL THE TERMS AND CONDITIONS ABOVE, WE
SIGN BELOW:
CITY OF F YETTEVILLE PARTNERS FOR BETTER HOUSING, INC.
B: 7
Li eId orda a r
W4
Title:_4-c�+c-
ATTEST:
Date: _ ` �_ /` g5D L
Sondra Smith, City Clerk{���i�p`r
Date: 1J --d . 4 � -.'1I y 0
FAYETTEVILL ,
4
EXHIBIT
THE HOMES AT WILLOW BEND
p�.
f
A Traditional Neighborhood Housing Development
Fayetteville, Arkansas
Partners
for
Better
Housing
25 July 2016
Dear Mayor Jordan and City Council Members,
We are grateful for your consideration of a cost -share agreement with Partners for Better Hous-
ing, a 501(c)(3) organization, for the development of the Homes at Willow Bend, a proposed
mixed -income Traditional Neighborhood Development in the Walker Park neighborhood of Fay-
etteville. Willow Bend has been in the works for many years, and the project is finally coming to
fruition. With the immense help of our consultants, we have put together a robust plan for devel-
oping 76 single-family homes on a 9-acre infill site that we believe will become a successful and
cherished community for decades to come.
We ask that you take the time to review the Willow Bend package. The package provides an
overview of design and intent of the neighborhood, including specific information about Sources
and Uses, house typology, and details regarding the affordability programs for qualified low- and
mid -income families that Partners for Better Housing will implement, including soft -second mort-
gages, down payment assistance, and a lease -to -purchase option.
Willow Bend will set a new benchmark for building quality communities throughout Northwest
Arkansas. The City of Fayetteville's approval of the cost -share agreement for Willow Bend demon-
strates the City's commitment to building great neighborhoods, ensuring quality housing for all
demographics, and continuing to make Fayetteville a wonderful place to live.
Sincerely,
Michael Ward
Executive Director
Partners for Better Housing
Willow Bend, an attainable housing infill site located in Fayetteville, Arkansas, is en-
visioned as a neighborhood that will focus on sense of place and the human expe-
rience. This focus will facilitate the creation of a neighborhood that will be loved by
its inhabitants for generations to come, contributing to all aspects of sustainability
through prolonged existence and a distinct community identity.
The primary developer of the Homes at Willow Bend is Partners for Better Housing
(PfBH), a private 501(c)(3) organization that was founded to provide quality, attain-
able housing in Fayetteville, Arkansas. PfBH sees the Homes at Willow Bend as an
opportunity to create a replicable model of sustainable and attainable housing for
Northwest Arkansas.
NO
fit- �r . ly r� ,y� ��'/' �__�{ 1 - � ,i 61r � • 91Yr�
AO
' -�l
CONTEXT & SITE PLAN
Context Map
Fayetteville
PUblic Library
I
Downtown Square
Walker Park
Willow Bend'Site
Multi -Use Trail
Connections
i
Industrial
Park
Technology & Research Center
5 Minute Walldng Distance
Former Jefferson
Vementary.
Walker �y
Park
r _
ca
• ' � �,,
a Proposed New
Trail Connection
_o
M9
r=
7
3
SOURCES & USES
Homes at Willow Bend, LLC
12-Aug-16
Project Scope: Design, Entitlement,and Site Development to Produce 76 Finished Lots
Total Project Cost $2,947,900
Sources of Funds
Equity
Housing Authority Grant
Home Depot Foundation Grant
Equity Investment; Dr. Hershey Garner
HOME Funds*
City of Fayetteville Cost Share Reimbursement**
Subtotal:
Senior Debt
Loan amount prior to City reimbursement:
Development Loan (with of $1,000,000 assignment of City reimbursemer
Use of Funds
$150,000
$137,500
$500,000
$787,500 subtotal
$0
$1,000,000
$1,787,500
$1,360,000 46.1% Loan to Cost (LTC)
$2,360,000 80.1% Loan to Cost (LTC)
Project Costs
Paid with equityro be paid with loan
Land Purchases
$416,000
$416,000
Design, Entitlement, and Engineering
$327,500
$247,000.00
$80,500
Park Fees (-in lieu of land dedication)
$72,000
$72,000
Site Development and Infrastructure
$1,650,000
$1,650,000
Interest Carry
$212,400
$212,400
G&A
$30,000
$15,000
$15,000
Project Management
$170,000
$110,000.00
$60,000
Contingency
$70,000
$70,000
Subtotal:
$2,947,900
$788,000
$2,159,900
Loan vs Equity check
$2,160,400
Appraised Lot Value
Valuation assumption: Discounted Lot Value
77 lots
$1,360,000 Loan amount
$17,662.34 loan amount per lot
$20,779.22 value per lot needed
for 85% payoff = 65 lots
$23,549.78 value per lot needed
for 75% payoff = 57 lots
$27,172.83 value per lot needed
for 65% payoff = 50 lots
$200,100 Residual/Contingency
$27,500
$22,368.42 Assumes 4 year absorption period - discounted value
$1,700,000 Total Discounted Value
80% LTV $1,360,000
*Applying for $900,000 in HOME funds to be applied to infrastructure
** City Reimbursment upon completion of improvements in public rights of way and acceptace for dedication.
(assigned to the construction lender).
4
PRODUCT MIX & VALUATION
Rate per
Number
House Type
SF
SF
Sale Price
of
Total SF
Total
Revenue
Buildings
The Joplin
$ 150.00
816
$
122,400
10
8,160
$
1,224,000
2BR 1 BA
The Lincoln
$ 145.00
1,064
$
154,280
14
14,896
$
2,159,920
2BR 213A (1 story)
The Siloam
$ 145.00
1,192
$
172,840
10
11,920
$
1,728,400
2BR 2BA
The Spring
$ 145.00
1,308
$
189,660
10
13,080
$
1,896,600
3BR 1 BA
The Lincoln
$ 145.00
1,383
$
200,535
12
15,696
$
2,406,420
313R 213A (2 story)
The Gentry
$ 145.00
1,568
$
227,360
11
17,248
$
2,500,960
3BR 26A
The Farmington
$ 145.00
1,596
$
231,420
10
15,960
$
2,314,200
4BR 2BA
77
96,960
$
14,230,500
ENGINEER'S COST ESTIMATES
Community By Design
100 West Center Street, Suite 300
Fayetteville, Arkansas 72701
Phone: (479) - 790 a 6775
SITE WORK
Schedule 1 - 072016
Engineers Opinion of Probable Cost
Estimate based on Willow Bend Construction Plans Dated 051616
This estimate only includes the items in the proposed ROW or items associated with work in proposed ROW
Fayetteville, Arkansas
Quantity Unit Unit Cost Total
1
Clearing and Grubbing
3 11
Acre
$7,340.00
$22,827.40
2
4 inch -Tap Soil Remove and Stockpile (4.51 Acres)
2.173
C.Y
$6.80
$14,776,40
3
Unclassified Excavation - Cut to Fill
5.344
C.Y
$8.20
$43,820.80
4
Unclassified Excavation - Cut to Fill (Trenching Spoils)
3,341
C Y.
$11.75
$39,256-75
5
Unclassified Excavation - Cut to Fill (Undercut Bottom Subgrade)
1,000
C Y.
$11.75
$11.750.00
6
Compacted Red Hillside
5,831
C.Y
$1840
$107,290,40
7
Topsail Distrubed Areas (2.84 Acres)
1,510
C.Y.
$20.00
$30,200,00
8
Rock Excavation
1
C.Y
$350.00
$350 00
lone Wall
0
L.F.
$312.uu
tlwor . iota $270,2 11 75
EROSION CONTROI
10
• ill Fence or Compost Wattle
1,002
LF
$100
$3,006 00
11
Tree Protection Fence
5,367
L. F.
$4.05
$21,736 35
12
Erosion Control System (Rock Check Dam, Inlet Protection)
1
Lump Sum
$27,215
00
$27,215.00
13
Concrete Washout
1
Lump Sum
$2.440.00
$2,440.00
14
:Seed and Straw
123,666
1
S.F.
S.F.
$0.10
$1.10
$12,366 60
$1.10
15
:Slope Stabilization Nailing
Construction Entrance ("B"Stone)
16
2
Lump Sum
$3.835.00
$7.670 00
Erosion Corival 51 -total $74.435 05
STREETS
17
;3 inch - Asphalt Surface Course, Type 3
6.103
S,Y.
$1 Z35
$105,887 05
18
IB inch - Crush Stone Base Course, Class 7
6,103
S Y.
$11.00
$67,133 00
1915
inch - Portland Cement Concrete
0
S.Y.
$54,55
$0 00
20
2 inch - Crush Stone Base Course, Class 7
0
S.Y.
$6.00
$0 00
21
Standard Curb
4.578
LF.
$17.75
$81,259 50
22
Pavement Testing
1
Lump Sum
$4,345,00
$4.345 00
treeisParking Sub -Iwt $258.624.55
DRAINAGE
23
1423 inch Elliptical - Class 4 Reinforced Concrete Pipe
64
L.F.
$72.00
$4.608 00
24
18 inch - Class 3 Reinforced Concrete Pipe
104
LF.
$47 00
S4.888.00
25
24 inch -Class 3 Reinforced Concrete Pipe
0
L.F.
$66.00
$0 00
26
29x45 inch Elliptical Class 3 Reinforced Concrete Pipe
0
L F.
$120 00
_
SO-00
27
29x45 inch Elliptical Class 4 Reinforced Concrete Pie
105
LF.
$141.00
$14,805 00
28
48 inch - Class 3 Reinlorced Concrete Pipe
20
L F.
$182 00
$3.640 00
29
30"x72" Reinforced Concrete Box Culvert
197
L F.
$353.00
$69.541 00
30
1423 inch - Reinforced Concrete Flared End Section
4
EACH
$1,015.00
$4,060 DO
31
24 inch - Reinforced Concrete Flared End Section
0
EACH
$685.00
$0.00
32
Headwall For 29x45 elliptical or 30x72 box
4
EACH
$4.790.00
$19.160 00
Tdi
33
6 fool Diameter- Junction Box with Frame and Lid
I
EACH
$5.845,00
$5,845.00
34
6 foot Diameter - Type B Inlet Box with Frame and Grate
0
EACH
$6,065.00
$0.00
35
4 foot Diameter - Type A Inlet Box with Frame, Grate, and Curb Box
9
EACH
$6,805.00
$61.245.00
36
4 foot Diameter - Type C Inlet Box with Frame and Grate
1
EACH
$5,705.00
$5,705.00
37
Neeneah Frame and Grate 3506 A2
1
EACH
$5.885 00
S5,885 00
38
4 loot - Sidewalk Underdrain
12
EACH
$1,835 00
$22,020 00
39
NDS Catch Basin and Atrium Grate with 3" schedule 40 pipe
0
EACH
$650-00
$0 00
40
41
Bioretention area
Infiltration basin with 12" CPP pipe
3856
S F.
$31.75
$122,428.00
9
EACH
$6,205,00
$55.845.00
+ha.na eSvb-lolai U99.575,00
WATER
42
Tap 6" CIP Washington Ave - 6x6x8 Tap Sleeve, Valve, Pavement Repair
2
EACH
$5,485.00
$10,970-00
43
iB inch - PVC Water Line C-900, Class 200
2,476
LF.
$47.30
$117,114.80
44
,2 inch - PVC Waler Line Schedule 40
183
L F.
$51 00
$9.333.00
45
8 inch - Gate Valve
16
EACH
$1.680.00
$26,880A0
46
2 inch - Gate Valve
8
EACH
$820.00
$6,560,00
47
(Fire Hydrant Assembly
5
EACH
$5,615 00
$28,075.00
48
IDuctile Iron Fittings
1
Lump Sum
$24,435.00
$24,435.00
49
New Service and Double Meter Box on Proposed Line
18
EACH
$1,545.00
$27,810.00
50
New Service and Single Meter Box on Proposed Line
16 inch - Steel Encasement Pipe
Testing
25
EACH
$1,350.00
$33,750.00
51
119
L F
$95.70
$11,388.30
52
1
EACH
$2,34100
$2,340.00
—
ale; Sub-[ o1a; — 5 ,t
SANITARY SEWER
53
Connection to Existing Sanitary Sewer
D
Lump Sum
$1,516-00
$0.00
54
8" PVC Sewer Line SDR-26
1,678
L. F.
$70.30
$117.963.40
55
1 D" PVC Sewer Line SDR-26
188
L.F.
$74.60
$14,024.80
56
41oot Diameter - Sanitary Sewer Manhole 0-7 fool depth
17
EACH
$2,485 00
$42,245,00
57
4 inch Sanilary Sewer Service (Average Length = 20 lee[)
54
EACH
$1,495 00
$80,730 00
58
16 inch - Steel Encasement Pipe
77
L.F.
$99 00
$7,623 00
59
Testing
1
Lump Sum
$31,600.00
$31,600 00
Unitary, ewerSOD-total 94,1Q6.eu
FRANCHISE UTILITIES
60
Concrete Pad for Electric Transformer
0 EACH
$1.145 00
$0.00
61
Utility Conduit Trench
487 LF,
$73 00
$35,551.00
Miscellaneous Sub -total 5.5 ,
LANDSCAPING
62
Mitigalion Trees (2" Caliper)
24
EACH
$330 00
S7,920 00
63
Street Trees (2° Caliper)
0
EACH
$330 00
$0 00
64
Detention Trees (2" Caliper)
0
EACH
S360 00
$0 00
65
Detention Large Shrub (3 Gal)
0
EACH
$38.50
$0 00
66
Detention Small Shrub (1 Gal)
0
EACH
$20-00
$0 00
67
Sod
1
S.y
$3,00
$3 00
Landsca an Sub -fatal $7.923,00
CONTRACTORS BONDS AND INSURANCE
68
Payment and Performance Bond
1
EACH $18,160.00
$18,160.00
69
Maintenance Bond
1
I EACH $18,160.00
$18,160.00
Bonds and Insurance uD-roial $36.320.00
TOTAL INFRASTRUCTURE Onsite $1,675,642.65
0
AFFORDABLE HOMEOWNERSHIP & SOFT -SECOND MORTGAGE PROGRAM
Program Description
The Willow Bend Soft Second Mortgage is an income -qualified mortgage program
modeled on the programs operated by NeighborWorks Community Development
Corporations and the Fannie Mae Community Seconds mortgage program.
Partners for Better Housing (PfBH), a 501(c) (3) non-profit housing developer will
offer second mortgages to income qualified home buyers to reduce their monthly
mortgage payment to 30% of their household's gross income. These mortgages are
considered "soft" because the mortgage does not accrue interest, require monthly
payments of principal or interest, and are incrementally forgiven over a 12-year
period if the buyer continues to occupy the home.
The use of soft second mortgages allows all the homes at Willow Bend to post sales
with the local Multiple Listing Service and the County Recorder's Office at the
market price while income -qualified home buyers are able to receive a limited
subsidy with the soft second mortgage without distorting the sale price for future
appraisals prepared for market rate purchases.
The program is available to home buyers making less than 101% of the Washington
County Area Median Income, adjusted by household size.
The Willow Bend Soft Second Mortgage will be used in conjunction with Down
Payment Assistance and low interest loan programs provided by the Arkansas
Development Finance Authority (ADFA)
Income qualified home buyers are required to complete the ADFA 8 hour
homebuyer-training course which covers budgeting tools, insurance, avoiding
foreclosure, private mortgage insurance, and refinancing. Credit Counseling of
Arkansas is the local provider of the ADFA course.
Income qualified homebuyers using the Willow Bend Soft Second Mortgage Program
will execute an agreement to offer to resell their home to PfBH at appraised value,
prior to selling to other parties, should they decide to sell. PfBH will be required to
respond to a homeowner's written notice of intent to sell their home within 45 days.
This repurchase agreement will provide an opportunity for PfBH to sell the home to
another income -qualified buyer, maintaining long-term affordability in the South
Fayetteville neighborhood.
Affordability Targets
The City of Fayetteville's Cost Share Agreement reimbursing $1,000,000 in
improvements within the public rights of way within the Willow Bend site creates
enough value in the project's finished building lots to allow PfBH to provide the soft
second mortgages needed to deliver a third of the projects 76 homes to income
qualified buyers with household incomes at 50-80% of Area Median Income (AMI)
and a third of the homes to income qualified buyers with household incomes at 81 -
100% of AMI. The remaining third of the homes will be sold to market rate buyers
with household incomes of greater than 100% of AMI.
The table below shows how soft second mortgage funds could be applied across the
range of income qualified buyers to deliver the project's Affordability Targets:
Target Loan Distribution / Household Income
Second
Mortgage
Amount
Total
10 Soft Second Mortgages Buyers at 50-60% of AMI.
$50,000
$500,000
15 Soft Second Mortgages / Buyers at 61-80% of AMI.
$20,000
$300,000
25 Soft Second Mortgages Buyers at 81-100% of AMI.
$10,000
$250,000
50 Income Qualified Soft Second Mortgages
$1,050,000
During the construction and sale of the homes at Willow Bend, PfBH will provide the
City of Fayetteville with annual reports on the project's progress in the issue of soft
second mortgages and the income levels of the buyers compared with the
Affordability Targets.
Layering the Willow Bend Soft Second Mortgage with ADFA Programs
ADFA currently provides several down payment assistance program and low
interest mortgage loan programs. When these programs are be used in conjunction
with the Willow Bend Soft Second Mortgage, the income qualified home buyer has
the equivalent of a down payment exceeding the minimum 20% required to
eliminate the requirement Private Mortgage Insurance in an FHA or VA mortgage.
ADFA also provides the ADFA MoveUp loan program for buyers with incomes
greater than 80% of AMI or buyers who are not first time homeowners with an
interest rate of 3.25%. Income limits for the ADFA Move Up loan program are
$100,000 for households of 1 to 2 persons, $130,000 for households of 3 or more.
ADFA also provides down payment assistance of up to $6,000 for buyers above 80%
of AMI as a soft second mortgage at 4% interest, repaid over 10 years.
All of ADFA's first mortgage programs limit the purchase price for the home to a
maximum of $250,000. Seven of the eight homes planned for the Willow Bend
project are priced below that limit. The ADFA first mortgage programs require a
minimum FICO score of 660 and a maximum Debt to Income Ratio (DTI) of 45%.
The example below shows a layering of $10,000 from the ADFA ADDI down
payment assistance program which a is a soft second mortgage forgiven over 5
years without monthly payment, with $25,000 in HOME assistance funds for 50-
60% AMI homebuyers, and a PfBH soft second mortgage of $25,000.
The first mortgage is the ADFA Advantage Bond Fund loan for first time homebuyers
or veterans with FHA 203(b) underwriting and 2.5% interest. ADFA defines first
time homebuyers as households that have not owned a home within the last three
years.
The use of the layered programs makes monthly payment for mortgage principal &
interest, property taxes, and insurance (PITI) for each of the example houses
affordable to a household with income at 50% of AMI. The layered ADDI down
payment assistance, HOME grant, and the PfBH Soft Second brings the down
payment for a 50% AMI buyer above the minimum 20% that will allow the
homebuyer to qualify for the mortgage without Private Mortgage Insurance (PMI).
Household Size
Annual Income @ 50% of AMI
Max. Monthly Payment @
30% of Gross Income
1
$20,545
$514
2
$23,480
$587
3
$26,415
$660
Example Home
Sales Price ADFA HOME*
ADDI
PfBH
Soft
2nd
Loan
Amount
Interest
Rate
PITI
Monthly
I Payment
2 Bedroom/1 Bath 861 SF
$133,455
$10K $25K
I $25K
$73,455
2.5%
l $512
2 Bedroom/2 Bath 900 SF
$139,500 $10K $25K
$25K
$79,500
2.5%
$543
2 Bedroom/2 Bath 1064 SF
$159,600 $10K "$25K
y $25K
$99,600
2.5%
$643
" PfBH is applying to ADFA for HOME funds with local CHDO;
Community Development Corporation of Bentonville/Bella Vista.
M
10
Mortgage Application Process
The chart below shows how a prospective homebuyer starts the process by
completing the Partners for Better Housing Pre -Qualification form. If the
homebuyer's credit score is above 660 and debt to income ratio is below 45%, then
their households gross income (adjusted for household size) determines which of
the layered ADFA programs can be used. If the homebuyer's household income is
below 101% of the Area Median Income they can apply for a BfBH Soft Second
Mortgage to bring their annual mortgage payments within 30% of their gross
income.
PfBH Mortgage Application Process
FICO Score less than 660.
DTI greater than 45%.
Develop a Credit
Recovery Plan with
Credit Counseling of
Arkansas.
ADFA 8 hour
Pre -Purchase
Homebuyer Class.
1
Apply for the
Willow Bend Lease
Purchase Program.
1
Repair credit and/or
reduce debt while
leasing home.
Complete PfBH Pre -Qualification Form
• Annual HouseholdGross Income?
• Household size?
Credit Score?
Debt To Income (DTI) Ratio?
FICO Score greater than 660.
DTI less than 45%.
Gross annual household
income less than 101% of
Area Median Income
(AMI), adjusted for
household size.
ADFA 8 hour
Pre -Purchase
Homebuyer Class.
Loan Application to
Preferred ADFA First
Mortgage Lender.
l
Apply for Willow Bend
Soft Second Mortgage
(subject to ADFA
Downpayment Assistance
and lender's approval of
1 st mortgage).
1
Approval of ADFA
Downpayment Assistance
and lender's 1st mortgage.
i
Gross annual household
income greater than
101 % of Area Median
Income (AMI), adjusted
for household size
ADFA 8 hour
Pre -Purchase
Homebuyer Class.
Loan Application to
Preferred ADFA First
Mortgage Lender.
Approval of ADFA
Downpayment Assistance
and lender's 1st mortgage.
11
Mortgage Applications and Underwriting
PfBH's preferred mortgage lender (an ADFA Approved Lender) will process
applications for ADFA first and second mortgage loans. Prospective homebuyers
applying for a PfBH soft second mortgage will submit a pre -qualification form listing
household income and the number of persons in the household for review by the
PfBH finance committee. Approval of a PfBH soft second mortgage is subject to the
applicant receiving approval by PfBH's preferred first mortgage lender, which must
be an ADFA participating lender.
Household
size
50% AMI
60% AMI
70% AMI
80% AMI
90% AMI
100% AMI
Low Income
Moderate Income
1
$20,545
$24,654
$28,763
$32,872
$36,981
$41,090
2
$23,480
$28,176
$32,872
$37,568
$42,264
$46,960
3
$26,415
$31,698
$36,981
$42,264
$47,547
$52,830
4
$29,350
$35,220
$41,090
$46,960
$52,830
$58,700
The table below shows the loan programs and forms of down payment assistance
available from ADFA and the PfBH Soft Second Mortgage across the range of
qualifying household income levels:
Program
50-60%
61-80%
81-100%
101%
AMI
AMI
AMI
AMI and
above
ADFA ADDI Down Payment
✓
✓
Assistance $10K in a soft 2nd
for ivable over 5 years.
ADFA HOME Funds Grant $25K
✓
ADFA Home Assist Down Payment
✓
✓
Assistance Loan @ 4% interest over
10 years
ADFA FHA 203 (b) 30 year fixed rate
✓
✓
mortgage @2.5% interest. (Available
for first time homebuyers or
veterans)
ADFA FHA 203(b) 30 year fixed rate
✓
✓
mortgage @ 3.25% interest. For
repeat homeowners and higher
income households. *
PfBHA Soft Second Mortgage final
✓
✓
✓
layer to bring mortgage payments to
a maximum of 30% of annual gross
income. For affordable home buyers
*Limited to $62,342 for household or 1 or 2, $71,693 for households of 3 or 4.
12
PfBH Lease/Purchase Program
Prospective homebuyers with an insufficient credit score or too much debt for their
income cannot qualify for the ADFA first mortgage. By completing the ADFA 8 hour
Pre -Purchase Homebuyer Class and developing a Credit Recover Plan with the staff
of Credit Counseling of Arkansas, homebuyers with credit issues can apply for
PfBH's Lease/Purchase Program.
Lease term is limited to 2 years, during which the tenant/prospective homebuyer is
expected to close on the sale of the home after raising their FICO score to at least
660 or reducing their DTI ratio to 45% or less. Lease payments are set at 30% of the
tenant's gross household income.
A tenant seeking a one-year extension of the original two year lease/purchase
agreement will need to demonstrate that they can qualify for mortgage to purchase
the home within the next 12 months by submitting a current credit repair plan
developed with Credit Counseling of Arkansas staff no less than three months prior
to the end of the two year lease term.
13
PfBH Pre -Qualification Form
By submitting this application, you are authorizing Partners for Better Housing to
run a credit report and verify employment and assets for the purposes of pre -
qualifying for a soft second mortgage loan.
Date:
Monthly Income
Submitting income from alimony, child support, or separate maintenance income is
optional if you do not want to use that income for qualification purposes.
Base Income:
Bonuses:
Commissions:
Other Income:
Total
Assets
Checking Account Balance
Savings Account Balance
Retirement Accounts
Mutual Funds or Securities
Estimated Home Equity
Other
Total
First Name:
Middle Name:
Last Name:
Email Address:
Mobile Phone:
Work Phone:
Marital Status:
Are you a US Citizen?
Date of Birth:
Social Security Number:
Number of people in Household:
14
14 Steps to Home Ownership at Willow Bend
1. Pre -qualification - This is an informal determination of the maximum
amount you are eligible to borrow and which loan programs or forms of
down payment assistance for which you may be eligible. (Pre -qualification is
not a guarantee of a loan).
2. Pre -approval - Pre -approval is similar to a pre -qualification, but with the
pre -approval, the first mortgage lender reviews your income, credit history,
debt. All of those are verified to determine what type of loan product and
amount of loan we can approve you for. Obtaining a pre -approval gives you
the advantage of knowing what home you can afford to purchase.
3. Select Your Home - Now you now what you can afford to pay for a home,
select your home from those available in the Willow Bend neighborhood. If
the home you want to purchase is not available from completed inventory or
homes currently under construction, establish a schedule for the delivery of
your home in the next release of homes for construction.
4. Purchase Contract - Once you have selected your home, have your
Realtor® draft your Purchase and Sale Agreement with clearly stated terms
for submission to the seller. Include your pre -approval.
S. Loan Application - Once you have an executed purchase contract, you need
to start the process of securing the financing. If you didn't do the pre -
approval, you now need to start your loan application.
6. Documents - All conforming loan applications require supporting
documentation. This list typically includes two years' tax returns, pay stubs,
account statements to verify the source of the down payment and funds to
close the loans as well as cash reserves. Again, if you got pre -approved, you
have already completed this step of the process.
7. Appraisal - The first mortgage lender will require that the property be
appraised. The Appraisal is ordered to make sure there is no discrepancy
between market value and the price you are paying. While this can happen
on occasion, it is rare.
8. Title Search -A title company will assign an escrow officer and their team to
begin their process. During this, a search for liens against the property will
be conducted. Occasionally, liens will be placed against a property to make
sure that payments of outstanding debts are paid before a title can be
transferred to a new owner.
9. Loan Processing - The first mortgage lender's loan processing team will
review and package all relevant information related to your loan to be sent to
their underwriter. This will include any explanations or supplemental
documentation. You will either hear from the loan processor assigned to
your loan or your loan officer if the lender finds that additional
documentation is needed.
10.Underwriting - The lender's underwriter will review your file as presented
by your loan officer. The underwriter will make the final determination on
whether or not your loan is approved. All lenders are looking for borrowers
that will keep their mortgage payments current. We are also looking to
finance properties that will maintain their value in the event of a foreclosure
and the underwriter determines both these.
11.Mortgage Insurance - All conforming loans (Conventional and FHA) will
require that some form of Private Mortgage insurance (PMI) is in place for all
loans that are below a 20% down payment or 20% in owners' equity. Be
sure to talk to your loan officer about this and which products require the
insurance for the life of the loan and how much such coverage will cost.
12.Loan Approval - Predominantly, when a borrower has a good credit score
and a good debt -to -income ratio, the loan will be approved. However, there
are cases in which a borrower will need to put forward additional funds to
improve a debt -to -income ratio, or cover the discrepancy in value based on
an appraisal.
13.Insurance - Lenders require that you have the property insured against fire
and a number of other hazards depending on the environmental conditions
of your geographic area.
14. Closing - You are looking at the finish line and are ready to collect your new
keys. Below are the typical closing steps.
- Signing - You will sit down with the escrow officer and have a lot of
documents explained to you as well as put your signature on them. Feel free
to ask questions when something isn't clear. We don't want you to be
confused about what you are signing. You will sign the real estate documents
as well as your loan documents in one sitting.
- Funding - Funds will be delivered to the title company either by check or
wire as well as whichever form you brought your cash portion in.
- Close of Escrow - The title company will file the appropriate forms with the
county to transfer title to your new property.
16
- Recording - After the above step is completed and confirmed, the title
company will authorize for escrow to draft a check to the seller.
- Time to Move - You have the keys to the new property and it's time to move.
17
W
PROPOSED HOUSE PLANS
The Joplin
One Story Cottage: 816 sq ft, Two Bed-
room, One Bath
The Spring
One Story House: 1,308 sq ft, Three Bed-
room, One Bath
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18
The Siloam The Farmington
One and Half Story House: 1,192 sq ft, Two Two Story House: 1,596 sq ft, Four Bed -
Bedroom, Two Bath (could be scaled to room, Two Bath
cottage size 1,100 sq ft
4PQ�1 - Rc`.xr t.i-r.13'•d .
gt DEDROOM
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19
The Lincoln
One and Half Story House: 1,596 sq ft,
Three Bedroom, Two Bath, Study (1,383
sq ft without study, could be scaled to cot-
tage size 1,100 sq ft)
t
GFMu fWAM
The Leslie
One and Half Story House: 1,336 sq ft, Two
Bedroom, Two Bath (Optional Third Bed-
room 1,518 sq ft)
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A
PARTNERS FOR BETTER HOUSING
Contact
Michael Ward - Executive Director, PfBH
michael@escalagroup.org
479-790-6303
Board Members of Partners for Better Housing
Keaton Smith (President) — Iberia Bank
Joe Tucker (Vice President) — T&T Green Insulation Innovations
Richard Russell (Treasurer) — Bank of Fayetteville
Sterling Hamilton — CBRE
Morgan Hooker — Colliers International
Gary Kahanak — Home Energy Rx
Casey Kleinhenz — CDC of Bentonville/Bella Vista
Zara Niederman — Niederman Enterprises
Robert Sharp — Robert Sharp Architect
Aubrey Shepherd — Conservationist
Allison Thurmond Quinlan — Flintlock Architecture and Landscape Architecture
Consultants
John Anderson —Anderson lKim
Brian Teague — Community by Design
Partners
for
Better
Housing
21
=. 0, z.h .�, t' ;.: O') rt';: Wizetn. v a..t. �.,.f�'I
AFFIDAVIT OF PUBLICATION
I Karen Caler, do solemnly swear that I am the Legal Clerk of the
Northwest Arkansas Democrat -Gazette, printed and published in
Washington County and Benton County, Arkansas, and of bona fide
circulation, that from my own personal knowledge and reference
to the files of said publication, the advertisement of -
CITY OF FAYETTEVILLE
Ord. 5913
Was inserted in the Regular Edition on:
October 13, 2016
Publication Charges $ 144.30
Kare Caler
Subscribed and sworn to before me
This -day of ()Cj—, 2016.
Notary Public)
My Commission Expires:
!I CAThi°( WILES
Arkansas • demon County
N1o��ry Public 1? 971 P II I.
"J Cv,'fi(illa .' i Fib 20 024
�f
**NOTE**
Please do not pay from Affidavit. RECEIVED
Invoice will be sent.
OCi 2 � 2016
CCjTY CLERK'S OFVFICE
Ordinance: 5913
File Number: 2016-0439
PARTNERS FOR BETTER HOUSING,
INC. AGREEMENT:
AN ORDINANCE TO WAIVE
COMPETITIVE BIDDING AND TO
APPROVE THE CONTRACTUAL
AGREEMENT ATTACHED TO THE
ENGINEERING DEPARTMENT'S
AGENDA MEMO IN THE FORM OF A
COST SHARE AGREEMENT WITH
PARTNERS FOR BETTER HOUSING,
INC. IN THE AMOUNT OF UP TO
ONE MILLION DOLLARS
($1,000,000.00) PURSUANT TO
RESOLUTION NO. 117-13.
WHEREAS, the Fayetteville City Council
passed Resolution No. 117-13 which was
approved and signed by Mayor Jordan on
May 21, 2013; and
WHEREAS, Resolution No. 117-13
expressed the City Council's "intent to
invest up to One Million Dollars
($I,000,000.00) to cost share the
construction of city infrastructure within
the Houses at Willow Bend development
with the nonprofit development
corporation if proper safeguards,
assurances and guarantees are in
place..."; and
WHEREAS, Partners for Better Housing,
Inc. has submitted its booklet "The
Homes At Willow Bend, A Traditional
Neighborhood Housing Development" to
the City Council to detail its plans for this
development; and
WHEREAS, Partners for Better Housing,
Inc. has signed the Contractual
Agreement (which incorporates its
booklet as an exhibit) and requests the
City Council to approve this Contractual
Agreement; and
WHEREAS, the City intends to pay for
some construction costs for city
infrastructure after it is fully constructed
and has been accepted by the City; and
WHEREAS, Partners for Better Housing,
Inc. has promised to use all the savings it
will receive from the City's cost share
payment for city infrastructure to fund
low income "soft second" mortgages to
help lower income citizens to purchase
homes in Willow Bend.
NOW, THEREFORE, BE IT
ORDAINED BY THE CITY COUNCIL
OF THE CITY OF FAYETTEVILLE,
ARKANSAS:
Section 1. That the City Council of the
City of Fayetteville, Arkansas hereby
determines that the facts stated above
create an extraordinary situation in which
normal competitive bidding is not feasible
or practical and therefore waives
competitive bidding and, in reliance upon
all statements, promises, commitments
and examples within The Homes At
Willow Bend booklet and the Contractual
Agreement, approves the Contractual
Agreement and authorizes Mayor Jordan
to sign said Agreement.
PASSED and APPROVED on 10/4/2016
Approved:
Lioneld Jordan, Mayor
Attest:
Sondra E. Smith, City Clerk Treasurer
73886801 Oct. 13.2016