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TO: Mayor Richard C. Irvin
FROM: David Dibo, Executive Director of Mayor's Office of Economic Development
DATE: January 11, 2022
SUBJECT:
A Resolution Authorizing the Execution of Two Development Agreements that Allows for the Conveyance of the Todd School (100 Oak Avenue) and the Lincoln School (631 South Lake Street) to Visionary Ventures NFP Corporation and Sets Forth Other Terms Regarding Redevelopment of These Shuttered Schools with Affordable Housing and a Public Health Facility; Approval of $2,900,000 of Federally Funded Home Investment Partnerships Funds (HOME) and $600,000 of Community Block Grant (CBDG) Funds to Support These Projects.
PURPOSE:
After taking title to both schools, subject to an IGA with School District 129 that was previously authorized in December of 2020 (Resolution #2020-326), the City is seeking to donate these schools to Visionary Ventures for the purpose of facilitating the construction of 47 new affordable units and a new public healthcare facility or another social service agency, charitable organization, health related facility or similar use not operated for pecuniary profit (as approved by City Ordinance O21-060) (“Healthcare Facility”); for the exclusive use of residents of the District with school-age children.
BACKGROUND:
Visionary Ventures NFP Corporation is a nonprofit organization whose mission is to bring affordable housing, economic development and services to Native Americans and other underserved populations and communities. The company is led by Shelly Tucciatelli, a longtime industry professional with over twenty years of experience in management, training, administration and development of affordable housing and community development.
Supporting partners are Cordogan Clark, the Aurora based architectural, engineering, interiors, planning and construction firm and MR Consulting Services, whose majority principal is Michael Poulakidas; the company provides asset management, marketing, contracting and construction management services for its own and third-party projects.
The federal HOME Investment Partnerships Program (HOME) provides grants to states and localities that communities use, often in partnership with local for-profit and non-profit groups, to fund a wide range of activities including building, buying, and/or rehabilitating affordable housing for rental units, homeownership, or providing direct rental assistance to low-income households. HOME is the largest federal block grant to state and local governments designed exclusively to create affordable housing for low-income households. HOME funds are awarded annually as formula grants to participating jurisdictions including Aurora and surrounding counties. The program’s flexibility allows states and local governments to use HOME funds for grants, direct loans, loan guarantees, and other activities.
The federal Community Development Block Grant (CDBG) Program supports community development activities to build stronger and more resilient communities. To support community development, activities must meet the priority needs identified in the City of Aurora’s 2020-2024 Consolidated Plan. Eligible activities may address needs such as infrastructure, economic development projects, public facilities installation, community centers, housing rehabilitation, public services, clearance/acquisition, microenterprise assistance, code enforcement, and homeowner assistance.
|
Proposed New or Amended HOME Activity |
Recommended Re/Allocation Amount |
Program Year Funding Source |
|
HOME-2021-02 - Conveyance of the Todd School (100 Oak Avenue) and the Lincoln School (631 South Lake Street) Affordable Housing Component |
$2,900,000 |
City of Aurora HOME Investment Partnerships Program annual entitlement allocation: 2016 - $170,806.24 2017 - $441,641.30 2018 - $637,970.05 2019 - $584,817.00 2020 - $603,966.85 2021 - $460,798.56 |
|
CDBG-2021-13 - Conveyance of the Todd School (100 Oak Avenue) and the Lincoln School (631 South Lake Street) Public Health Facility Component |
$600,000 |
CDBG funds coming from the following activities that have been closed out and recaptured: $412,000 - Project - CDBG-2018-14 & CDBG-2020-08 - Small Business Assistance Program - Projects Complete / Unexpended Funds $188,000 - Project - CDBG-2020-CV-03 - Subsistence Program - Project Complete / Unexpended Funds |
|
Estimated Allocation / Reallocation Total |
$3,500,000 |
In 2019, in compliance with HUD requirements, the City undertook a detailed Consolidated Plan for the timeframe January 1st, 2020 through December 31st, 2024. This plan together with the Annual Action Plan and the Consolidated Annual performance and Evaluation Report (CAPER) forms the goals, implementation and measurement criteria that guides the City in evaluating proposals such as Visionary Ventures’ plan for the construction of affordable housing at 100 Oak Avenue and 631 South Lake Street. The plan, among other things underscores a continuing need for attractive thoughtful designed, and low maintenance affordable housing. This is confirmed in a report issued by the developer's consultant Valerie S. Kretchmer Associates (VSKA) that indicates strong demand for affordable or workforce housing in this submarket.
The City has made it a priority to balance the new market rate apartments that are being developed in the City with an increase in affordable housing options.
DISCUSSION:
Visionary Ventures is planning to deliver a mix of studio, one, two- and three-bedroom units, totaling 47 units in three buildings, and approximately 5,000 square feet for the construction of a public health facility which will provide community benefits in the form of free and subsidized care, and community based initiatives for the exclusive use of residents of the District with school-age children. The company intends to make use of federal and historic tax credits to finance this redevelopment in addition to credit allocations that have been conditionally approved by the Illinois Housing Development Authority (IDHA).
Todd School was built in 1934, located northwest of downtown Aurora and sits on 1.12 acres. The currently vacant school will be redeveloped to accommodate 11 units on two stories. Its interior still features Works Progress Administration (WPA) murals and sculptures that will be preserved.
Lincoln School was built in 1892 on the southwest side of Aurora and sits on 2.69 acres. The property will house 36 units including 14 in the existing building and 22 in a newly constructed building.
Affordability is defined by HUD in terms of the percentage of the “median family income” (MFI) within a defined geographic area; Aurora is included in the Chicagoland region to determine affordable rent and income limits.
In general about 30% of the units (17) to be delivered will be reserved for individuals or families that earn 30% of the median family income ($27,950 for a family of 4) and about 70% of the units will be rented to individuals or families that earn 60% ($55,920 for a family of 4) of the area median family income. Qualified tenants will earn in the range of $15,900-$63,000 annually.
The range of rents is from about $423 per month to $1,284 per month with the average rent being about $968 per month. The rental population will come primarily from existing Aurora residents with five units designated for tenants that come from the Statewide Referral Network (SRN). SRN units are targeted for households earning at or below thirty percent (30%) of the median income with a head of household who has a disability or illness, including, but not limited to, a physical, developmental substance abuse disorder, HIV / AIDS, or is homeless or at risk of homelessness.
A key element of the plan includes Visionary Ventures’ commitment to house a public healthcare facility to provide affordable healthcare in the area.
Terms of Funding
The City will provide $2,900,000 in HOME Investment Partnerships funding in the form of a 30-year forgivable loan for the affordable housing component of this development. Visionary Ventures will not be required to make annual payments and if all terms of the agreement are met, the loan will be forgiven in its entirety 30 years from the date of project completion. The loan will be secured by a signed development agreement, mortgage, note, and land use restriction agreement as required by the regulations of the HOME Program. The project’s Development Agreement is included.
The City will provide $600,000 in CDBG funding in the form of a 5-year forgivable loan for the public health facility component of this development, which facility will be transferred to the School District upon completion. Neither Visionary Ventures nor the School District will be required to make annual payments and if all terms of the agreement are met, the loan will be forgiven in its entirety 5 years from the date of project completion. The loan will be secured by a signed Development Agreement, mortgage, and note as required by the regulations of the CDBG Program. The project’s Development Agreement is included as attached.
The total developer request from the City is $3.5 million in gap financing to complete this development.
IMPACT STATEMENT:
The development of 47 additional affordable units and construction of a local public health facility will help the administration reach its goals of providing new or redeveloped affordable housing units in a neighborhood that offers a wide range of City services for the City's underserved population. Construction will utilize Federal funds and help the City comply with its Consolidated Plan and underscore the commitment to "One Aurora".
RECOMMENDATIONS:
Staff recommends the approval of the resolution authorizing the execution of two development agreements that allows for the conveyance of the Todd School (100 Oak Avenue) and the Lincoln School (631 South Lake Street) to Visionary Ventures and sets forth other terms regarding redevelopment of these shuttered schools for affordable housing and a public health facility; approval of $2,900,000 of Federally Funded Home Investment Partnerships Funds (HOME) and $600,000 of Community Block Grant (CBDG) Funds to support these projects.
ATTACHMENTS:
Fox Valley Apartments - Overview
Fox Valley Apartments Site and Market Study (Kretchmer Associates)
ES-05 Executive Summary - 24 CFR 91.200(c), 91.220(b) - Aurora Consolidated Plan
Downtown Aurora Housing Study
City Council Housing Review
Legistar 20-0862 SD129 IGA
R2020-326 SD #129 IGA
Aurora - HOME Agreement
Aurora - CDBG Agreement
cc: Finance Committee
CITY OF AURORA, ILLINOIS
RESOLUTION NO. _________
DATE OF PASSAGE ________________
title
A Resolution Authorizing the Execution of Two Development Agreements that Allows for the Conveyance of the Todd School (100 Oak Avenue) and the Lincoln School (631 South Lake Street) to Visionary Ventures NFP Corporation and Sets Forth Other Terms Regarding Redevelopment of These Shuttered Schools for Affordable Housing and a Public Health Facility; Approval of $2,900,000 of Federally Funded Home Investment Partnerships Funds (HOME) and $600,000 of Community Block Grant (CBDG) Funds to Support These Projects.
body
WHEREAS, the City of Aurora has a population of more than 25,000 persons and is, therefore, a home rule unit under subsection (a) of Section 6 of Article VII of the Illinois Constitution of 1970; and
WHEREAS, subject to said Section, a home rule unit may exercise any power and perform any function pertaining to its government and affairs for the protection of the public health, safety, morals, and welfare; and
WHEREASthe City has the authority to make all contracts and do all other acts in relation to the property and concerns of the City; and
WHEREAS, the United States government has appropriated funds to create affordable housing for low-income households under the Cranston-Gonzalez National Affordable Housing Act (Public Law 101-625, enacted November 28, 1990), as amended (“HOME”), to be administered through the United States Department of Housing and Urban Development (“HUD”); and
WHEREAS, the City applied to HUD for said HOME funds to be used for the creation of affordable housing for low-income households within the City; and
WHEREAS, HUD then granted to the City certain HOME funds, Catalog of Federal Domestic Assistance Number (CFDA)14.239, Grant Numbers M-16-MC-17-0221, and M-17-MC-17-0221, M-18-MC-17-0221, M-19-MC-17-0221. M-20-MC-17-0221 and M21-MC-17-0221 which the City has committed to use to further the availability of affordable rental housing for low-income households within the City; and
WHEREAS, the District transferred all rights, title and interest in two (2) properties known as the Todd School (100 Oak Avenue) and the Lincoln School (631 South Lake Street) to the City pursuant to the “Intergovernmental Cooperation Agreement Between the City of Aurora, Illinois And West Aurora School District 129, Kane County, Illinois” (“IGA”) which was approved and authorized by the City on December 22, 2020 in Resolution 20-326, a copy of the IGA is attached hereto and made a part hereof as Exhibit A; and
WHEREAS, the IGA requires that the District be made a party to the development agreements for Todd School and Lincoln School and creates certain obligations and rights relative to the parties thereto; and
WHEREAS, the City desires to further the purposes of HOME by facilitating the acquisition, development, and rehabilitation of the two (2) former District properties into affordable rental housing for low income residents in accordance with the terms of the attached HOME Development Agreement (“HOME Project,” as further defined in Section II.A.3. therein), by loaning certain HOME funds to Developer to assist in the residential acquisition and development of a mix of studio, one (1), two (2), and three (3) bedroom units at the HOME Project’s real property locations commonly known as 100 Oak Avenue (individually, the “Todd School”) and 631 South Lake Street, Aurora, Illinois 60506 (individually, the “Lincoln School”), together the Todd School and the Lincoln School are the “Property,” as legally described and depicted in Exhibit B (“HOME Project Area”) of the attached HOME Development Agreement; and
WHEREAS, the City has previously approved various zoning and other approvals relating to the HOME Project and HOME Project Area, including a Conditional Use Planned Development pursuant to Ordinances 021-059 and 021-060 and Final Plan for the Property pursuant to Resolutions R21-293 and R21-295. Ordinance 021-059, Ordinance 021-060, Resolution R21-293 and Resolution R21-295 along with all attachments and exhibits thereto are incorporated by reference into the HOME Development Agreement, and
WHEREAS, the City has applied for and received non-Research and Development Community Development Block Grant funds, Catalog of Federal Domestic Assistance Number 14.218, Grant Numbers B-18-MC-17-0002, B19-MC-17-0002, and B20-MC-17-0002 (“CDBG”), from the United States Department of Housing and Urban Development (“HUD”), as provided by the Housing and Community Development Act of 1974, as amended (P.L. 93-383) (“Act”) and with a Federal Award Date which shall be incorporated by an Addendum to this Agreement and is attached hereto as Exhibit D;
and
WHEREAS, the City has considered and approved the application of the Developer for the Todd School (100 Oak Avenue) development project (“CDBG Project”) and hereby agrees to distribute to the Developer a portion of the total CDBG funds allotted to the City by HUD for the CDBG Project on the terms and conditions set forth in the CDBG Development Agreement attached hereto and made a part hereof, with the portion distributed to the Developer upon the conditions provided therein. The CDBG Development Agreement does not obligate the City to provide the Developer with any City funds which were not obtained from HUD pursuant to the Act; and
WHEREAS, the City and the Developer enter into the CDBG Agreement pursuant to their respective powers to enter into such agreements, as those powers are defined in the Illinois Constitution and applicable statutes; and
WHEREAS, the Mayor or such City employee designated in writing by the Mayor, acting on behalf of the City, is authorized to execute any contracts, extensions, amendments, or other documents relating to the terms contained herein so long as any such documents are consistent with the scope of service contained herein and in accordance with HUD statutes, regulations, guidelines or any other applicable provisions; and
WHEREAS, in consideration of the Developer’s performance of the CDBG Project, the
City shall distribute to the Developer, as the Developer’s portion of the total grant
received by the City from HUD, the maximum amount of Six Hundred Thousand and
00/100 ($600,000.00) (“Grant Funds”). In the event the City, for reasons beyond its
control, does not receive the actual grant money or receives a lesser amount than requested from HUD, the City shall not be obligated to provide the Grant Funds, or any money, to the Developer or may reduce the amount of the Grant Funds as the City in its
sole judgment deems necessary; and
WHEREAS, the CDBG Project consists of the acquisition and development of a public
healthcare facility, for the exclusive use of residents of the District with school-age
children, at the CDBG Project’s real property location commonly known as 100 Oak Avenue (“CDBG Property”), as legally described and depicted in Exhibit E (“CDBG Project Area”) attached to the CDBG Agreement; and
WHEREAS, the CDBG Project shall be identified as the “Visionary Ventures NFP Corporation - Todd School (100 Oak Avenue) Development Project,” which shall be used by the Developer on all payment requests and progress reports; and
WHEREAS, the District transferred all rights, title and interest in Todd School
(100 Oak Avenue) to the City pursuant to the “Intergovernmental Cooperation
Agreement Between the City of Aurora, Illinois And West Aurora School District 129,
Kane County, Illinois” (“IGA”) which was approved and authorized by the City on
December 22, 2020 in Resolution 20-326, a copy of the IGA is attached hereto and
made a part hereof as Exhibit F. The IGA requires that the District be made a party to
the CDBG Agreement and creates certain obligations and rights of the parties with respect to the properties subject to the CDBG Agreement; and
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Aurora, Illinois, as follows: That the Mayor and Clerk, or their designees, are authorized to execute on behalf of the City the two (2) attached Development Agreements that Allow for the Conveyance of the Todd School (100 Oak Avenue) and the Lincoln School (631 South Lake Street) to Visionary Ventures NFP Corporation and Sets Forth Other Terms Regarding Redevelopment of These Shuttered Schools for Affordable Housing and a Public Health Facility, with such changes thereto as are approved by the Mayor; That the release and use of $2,900,000 of Federally Funded Home Investment Partnerships Funds (HOME) and $600,000 of Community Block Grant (CBDG) Funds to Support These Projects is hereby approved.