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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'� Jig ♦` . " ".:' fig Y aF FAYE EVILLF-; did, Fii T O ; ��� EXHIBIT A- ] 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. �t ,"7�''� may. • _ _ • �.ry� ,. a may. . . , 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 ononw�ivam - artcnasma,w�iuu elnsmer120Rowwrccrs}ncEoi r.'` Ire Lj -51 r_Ir �� ill � 1�1',}r'— :� i �i r1�_.-., `^'• I �ILJ rY �V ;I i T-7 ! I1II 1 rlj i1 'I, •_ - �' i}}}I5.11651r1':Itiry7Xitl ifLiiiiv:Aljr, � � Irl 1• r�I. 1. f 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 $14.805 00 20 L F $182 00 $3.640 00 191 L F. $353 00 $677100 4 EACH S1 015 00 $4.060 00 0 MA $685 00 $0 00 4 1 EAT, H &4, 790 00 1 $19.160 00 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 37 Neen& FramCarld Grate 350E A2 00 00 4lcl9% Calch Basin and Alr[um Grate wipe 3' stlladul4 49 pipe D EACh ;650.00 iorelenuonarea 3A5ti SF i3175 s172,4 illraliou basin with 12' CPP pipe 9 EACH �G 205 00 WATER 42 43 44 45 462 47 48 49 50 51 52lestino i8p 6CAP W35nirietan Ava - GcIQkB lap3liom, Valve, eaveineirl Hepair t3lneh- PVC. Walat IkwC,-911[) CIaxS2{34� 2 inch - PVC Wafer Line Schedule 40 _ 6 inch Gale Valve inch -Gate Valve Fire I lydranl 1swiilbly Ducllla Iron Fittings New Servlc£ and DOUNa Mole[ BOA on Pir1105ed I Inc Now SuNre Unit shiole Meter Hox un Prflpusod Llnv 16 inch - Steel Encasement hoe 2 EACH $5.485 00 $10,970 00 Z.aT F $4730 $117.114.80 193 L F $51 00 $9,333.00 1G EACH $1 68006 $26.880,00 8 TACH $620.00 $6.560-00 5 EACH $5.615 00 $28 075 00 I Lump Sum $24,435 00 $24.435 00 I EACH S1,545 00 $27,810 00 25 FAC}i S1.350 00 $33,150 00 111 1. F $05 70 $1 1,368 30 1 EACH :2.34001) L.11111000 WBtC+Suhlel�l ;'48.b 610 SANITARY SEWER 53 54 55 51 57 59 59 Connochort to Exishnq Sanitary Sewer 6' PC Sr wer Line Wit-2f1 10' I'VI:Serrer Line SDFl•26 4 loon Ui , li i • Sanimiy Sower Manhole 0.7loot detl(A 4 arch SSa„+la[y Sewer Service (AMAge Length = 20 feet) 16 n+[n -$I"I in[a.=.fins ri"hr rr3,Arg 0 Lump `ium $i 51600 $0 00 LLB l F $70 30 $111.963 40 188 L F $74 60 $14.024,80 17 EACH $2,485 00 $42,245 00 54 EACH S1.49S 00 S80,731) 00 77 1 F SU 00 $7,62300 1 Lump Sum $31,600 00 $31,600 00 an[tary oewea antl-lmi FRANCHISE UTILITIES 60 61 corr fele No for Electric lran91fxn1el 0 111i1ily Conduit Trench _ 487 LAW+.r;l , On 0 00 L F >(3 00 a35,551 00 N1lscellaneous Sub-lolal $35 �51 X; LANDSCAPING 62 63 64 65 66 67 Miligalmn frees t2 Caliper) slre¢t Trees (2 d;allper) Geram,on Frees (2 0ar113er1 L} eniton Large Shrub (3 Gal) Oolenlron Smad Shrub (1 Gall 511U 24 TAM S330'00 $7,920 00 0 EACH S330 00 $0 00 0 EACH $360 00 $0 00 (1 EACH $38 50 sa 00 0 EACH $'r :90 $0 00 S Y 53 00 $3 d0 Lalirl5' ri11 tirin•IOrSI � 3 f1 CONTRACTORS BONDS AND INSURANCE 58 69 ,Payment and Performance Bond Maintenance Bond 1 EACH $18.160 00 $1 H 16100 FAC-H $18,160 u0 S18,160.00 IIOpdSaM Insmmnce Sl[I 401ill : s1;,3{0 00 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 PARTNERS FOR UE'rl'Elt HOUSING I30AIU) RII,SOIXTION ON, I ,tESDLUAOIN ATT*UIV INGA 111-, 11W 'C , Vnjjj7jHjcjjj L)vP;jYijj-jl:!Vj1jE:rq A1N-J01-;NT(')rf)NF 01,11054 lit; IJAWS WR 11031HIX, fli)Bil(, WVRAommurt 10N Ar,inmv,\i. u,., REQUEqUI 1tVV0()N5 A1a1-a \TT0W%1',Y B for i-3.C"orl, I foll,'.11,gr oard of reviewed ffic prope.scd cost - We cmm met Woh IN I COY & Foyrtuxiuc for inGlausturc, rell I 11)ureenxuvs in the Amoum of()ux: Million Dolags ( 1,00").-OW), fo [)c ichribursed upon compwl:on ind ciry's acupmnce of plkhc il,t; Rigi-It (tj'-VVaLy C,r jhc 4tAU04nd ow dmckywnt, W[ [EKLAS. the P-.rums W Bmwr Hmminy 11mm of Dirc,:(ors ,Ipprovi:s tile Ecrrnz; of the ctln[rAcc CA i5yowymc asurnees apynK of requemd mvitions. WEREAS, Ac 14mis An BOWN&V Qmd ofDivanors apuroven the icans of the cantract Polding 1(.view h� muo"Wys at lqm Scwuq bank, Ac prcWhic lende, tl:c %X"i111)v' BITI(I developirloW, ull'.ess we bmws mmuns find gust9l3 0c bqws VAN be comma NWHERRAN, Lhe 10i=ZCI-s rr Bcttci,' I WHng Ism M 41Hmnas m"Imms Me ahbd nud m love , ,d ,,,a Wmpyd W, &e (ly I j%yocvd& hd6m odday Sqmmbcr 10 2016 to awe( At: JmAhe W Ow ( KiAwr , 2010 Q WHO: awcmq NVI fERI 'AS, if m Whur ;KINW&C &W s an,,, rc(p,,jvctj, Q Bout Haab% Bond ot- DAVCV10 opplovc� of pxvw" in lkmr ummui, to mpl It: cowra-t oo bcholf 4)4 thc Bo-ard of Dircctc).m 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 4 �IIEW U'•I I iY-Yid-T il-Y•��fd YT.P .v•Y- io ' IIFWpI :'f � � Y •r r •yilll{uliplll '_e��ylll u � Win.. I 1 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 11'-t0• • rtL16G' 6AM Y.— ��Sr •Mln: I {A wtrof w aw uow pNN1 1.,- rl PDRC l n Fnat Floor Plan E) cM ft w.Pun 8ocursimo.Ra. 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) �l7WOON -e . 11 Smaard Fiox Pin JAII m III OPTICNM PORGI _ y R22 4'-f FF ..IN �R�1 ROOM ;i PORgI 6'-15•, �f'.r• T� H00 P[w np+k IMSSL r O Ucrr4 FVff �iaee9edraam 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