HomeMy WebLinkAboutInformation Update.201906101
AGENDA
INFORMATION UPDATE
June 10, 2019
4:00 PM,
I.INFORMATION UPDATE
I.A.Summary of City of Aspen Public Private Partnership with Aspen Housing Partners
and Low Income Housing Tax Credit Financing
I.B.QAspen: streamlined request & complaint management system
I.C.Update to Affordable Housing Fee-in-Lieu Calculation
I.D.Housing Information Management System (HIMS) Vendor Selection Update
None needed - informational only
I.E.Uphill Economy Initiative Progress Report
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MEMORANDUM
TO: Mayor and City Council
FROM: Chris Everson, Affordable Housing Development Project Manager
THRU: Sara Ott & Scott Miller, City Manager’s Office
DATE OF MEMO: May 31, 2019
MEETING DATE: June 10, 2019
RE: Information only: Summary of City of Aspen Public Private
Partnership with Aspen Housing Partners and Low Income Housing
Tax Credit Financing
REQUEST OF COUNCIL: Information requested May 20, 2019: Explanation of City of Aspen
Public Private Partnership with Aspen Housing Partners and Low Income Housing Tax Credit
financing for 45 rental units at 488 Castle Creek Road, 802 West Main Street and 517 Park Circle.
PREVIOUS COUNCIL ACTION: Approval of master development agreement and loan
agreements with Aspen Housing Partners and approval of housing projects at 488 Castle Creek,
802 W Main Street and 517 Park Circle.
DISCUSSION: The Low Income Housing Tax Credit (LIHTC) program of the Federal
Government of the United States of America was created under the Tax Reform Act of 1986 and
creates incentives for the utilization of private equity in the development of affordable housing for
low-income Americans. The LIHTC program accounts for around 90% of all affordable rental
housing created in the United States today and has been used in the past in Aspen for such projects
as Aspen Country Inn, Truscott II and Maroon Creek Apartments.
Low Income Housing Tax Credits provide funding for low income housing development by
allowing developers of low income housing to obtain federal tax credits based on a percentage of
development costs. Development capital is raised through the syndicated sale of these tax credits
to groups of investors. These investor groups are the end users of the tax credits. The investors pay
out housing development capital (of presumably lesser value to them) in return for gaining tax
offset benefits (of presumably greater value to them).
Developers must apply for tax credits through a state agency and can win a competitive allocation
of tax credits. The developer must then complete the project, certify its cost, and rent-up the project
to low income tenants. Simultaneously, an investor or group of investors is found who will make
a capital contribution to the project in exchange for the tax credits over a ten-year period. As part
of the tax code, the investors bear the financial burden if properties are not successful, thus LIHTC
project compliance requirements are rigorous, resulting in a foreclosure rate of less than 0.1%, far
less than that of comparable market-rate properties. It is important to note that much of the capital
raised from the tax credits does not come to the project until after the project becomes occupied.
To further illustrate how the big picture of Low Income Housing Tax Credits generally work,
here's a link to an animated presentation: https://www.youtube.com/watch?v=XxwpoLztx70
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The City of Aspen is not the end user of the tax credits, nor is the City of Aspen a syndicator of
the sale of the tax credits. The City of Aspen instead uses the capital raised from the LIHTC
investors to offset affordable housing development costs. Thus, the City of Aspen can simply look
at the housing which is produced and the investments which the City has to make in order make
that happen. To illustrate the public private partnership between the City of Aspen and Aspen
Housing Partners, the following has been highly simplified:
• Aspen Housing Partners (AHP), who applied for the tax credits and is developing the
housing, is made up of Colony Partners, Inc. and SCG Development Partners, LLC.
• SCG Development Partners, LLC has a related company, Stratford Capital Group, who is
responsible for syndicating the tax credits and finding investor groups who provide
development capital in return for the tax credits.
• The City of Aspen’s housing project receives the capital produced by the syndicated sale
of the tax credits and must comply with program requirements. Aspen City Council
approved agreements to facilitate these transactions in Ordinances 31, 32 and 33 of 2018.
Because the APCHA program serves a broader spectrum of income levels than the LIHTC
program, it was decided early in the process that APCHA income categories 2 through 4 will be
served by the 21 units at 802 W. Main Street and 517 Park Circle combined. Only the 488 Castle
Creek project (24 units) was submitted to the Colorado Housing Finance Authority (CHFA) for
tax credit funding. This results in the following breakdown:
488 Castle Creek: 24 units, 100% LIHTC rental housing (Category 1-2, up to 60% AMI)
802 W. Main Street: 10 units, 100% APCHA rental housing (Category 2-3, 51% to 130% AMI)
517 Park Circle: 11 units, 100% APCHA rental housing (Category 2-4, 51% to 205% AMI)
Total: 45 affordable rental units
To study the LIHTC funding, we could look only at the 488 Castle Creek project and see a slice
of what's going on from the City's perspective. But since the City decided to serve a wider range
of incomes by combining these projects into one public private partnership effort, it makes some
sense for us to look at all three projects at once. Below is a simplified look at the uses and sources
of funds to create the 45 AHP rental units:
Uses of funds $ Million Sources of funds $ Million
A. Land Cost (2007-2008) $13.20 A. Cash from 150 Housing Fund (2007-2008) $13.20
B. Development Cost (2018-2020) $25.05 B. Cash from 150 Housing Fund (2018-2020) $16.19
B. Tax Credit Capital (2019-2020) $6.03
B. First Mortgages (2020) $2.83
C. Total Development Cost (2007-2020) $38.25 C. Total Development Cost (2007-2020) $38.25
A portion of the tax credit equity and the first mortgages are not received until after the projects
become occupied. The first mortgages are paid off from the projects’ operating incomes over the
term of the first mortgages. There will be three first mortgages – one for each site.
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Because of the timing, it is necessary to use interim funding during construction. This is often
facilitated by conventional private construction loans which must be paid back, plus interest, at the
completion of construction. The City has chosen to forego paying interest (about $500K) on such
construction loans by serving as the construction lender. Thus the table of sources above can be
further expressed as sources during construction and sources after occupancy, as shown below:
Sources of funds DURING CONSTRUCTION $ Million Sources of funds AFTER OCCUPANCY $ Million
A. Cash from 150 Housing Fund (2007-2008) $13.20 A. Cash from 150 Housing Fund (2007-2008) $13.20
B. City of Aspen Construction Loan (2018-2020) $25.05 B. Cash from 150 Housing Fund (2018-2020) $16.19
B. Capital from LIHTCs (2019-2020) $6.03
B. First Mortgages (2020) $2.83
C. Total Development Cost (2007-2020) $38.25 C. Total Development Cost (2007-2020) $38.25
The City’s total contribution to the project, once it has been occupied and all sources of funds have
been settled, will end up being the $13.2 million land cost plus a $16.19 million permanent
contribution or $29.39 million total. Based on the typical APCHA conversion, the 45 units will
house 86 FTEs and average to about APCHA income category 2. Thus the City’s subsidy to that
point will be about $342,000 per FTE. This amount is roughly equal to the City of Aspen’s Fee In
Lieu of Mitigation for category 2 housing.
Although this will be the City’s subsidy of the project at the time of occupancy, the facilities will
end up with relatively small remaining debt service on the first mortgages. And with conservative
estimates for rent revenues and operation and maintenance costs going forward from that point,
staff further calculates that the facilities could pay back an additional $6 million to the 150
Housing Development Fund if they are operated through 50 years. In that case, the lifecycle
subsidy of the 45 units in the three projects combined is estimated to be approximately $272,000
per FTE.
RECOMMENDED ACTION:
CITY MANAGER COMMENTS:
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INFORMATIONAL MEMORANDUM
TO:City Council
FROM:Michelle Holder, Management Analyst
THROUGH:Karen Harrington, Quality Office Director
MEETING DATE:June 10, 2019
RE:QAspen: streamlined request & complaint management system
REQUEST OF COUNCIL:This is an informational memo on a new online request and
complaint management system for the City. Starting June 11
th, the new system, called
QAspen, will be available at www.cityofaspen.com/qaspen and will be linked on the City
of Aspen website homepage under “Report a Concern.”
BACKGROUND: In February 2018, the City Manager’s Office sought proposals for a
requests and complaints management system to better manage, track, and respond to
citizen and visitor requests and complaints. The vendor QScend Technologies, Inc. was
chosen and the project officially kicked off in January 2019. Since then, the QAspen
Project Team and Steering Committee have been working with departments to fully
configure the system, train staff on how to use it, and test the system’s features.
How It Works
The public can access QAspen on their computers, smartphones, and other mobile
devices. They can upload photos to support their request and use the system’s mapping
technology to identify the exact location of an issue. Users can opt into email and text
notification updates or request a phone call update. Once a resident logs a request, the
QAspen system creates a ticket number and automatically routes the ticket to the
appropriate department. Staff is notified immediately when the request comes in and will
work to resolve the issue. During the process, the reporting party can track the progress
of their request and will be contacted for further questions and when the issue is resolved.
Benefits to the City
QAspen meets a previously unfulfilled need for streamlined management, tracking,
response, and reporting. Residents and visitors will have more readily available
information about the status and disposition of their request. The system enables staff to
easily view requests, add notes and updates, and follow-up with submitters. QAspen
allows staff to aggregate data and generate reports, which will help managers more easily
identify and address trends in needs, ranging from spots where potholes tend to form or
locations where people tend to idle their cars. Data from QAspen will further be used to
assess customer service in the longstanding Goals and Outcome Measures (GOM)
program, which sets response time standards for complaints.
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INFORMATION MEMORANDUM
TO:City of Aspen Mayor and Council
FROM:Jessica Garrow, Community Development Director
MEETING DATE:June 10, 2019
RE: Information Only: Update to Affordable Housing Fee-in-Lieu Calculation
Background: In response to a consultant study and extended discussion with city staff and the
development community, City Council, through Ordinance No. 37, Series of 2015,approved an
update to the Fee-in-Lieu (FIL)calculation methodology for Affordable Housing mitigation. The
new FIL went into effect in December, 2015. The ordinance also provided direction for the
calculation of future updates using a construction cost index from the Engineering News Record.
In February 2018, based on staff recommendation, Council passed a 7% increase to the 2015 FIL
calculation using the cost index as the code required. The current FIL figures in the code reflect
this increase and are as follows:
The 2015 ordinance required a full review of the
adopted FIL within five years. As part of the
discussion around the 2018 increase, Council, in
response to concerns from the development
community and affordable housing advocates that
the FIL figures do not reflect actual development
costs of housing units, gave direction to staff to
pursue a more complete update to the FIL in 2019.
$25,000 was approved in Community
Development’s 2019 budget for the completion of
this update.
Current Status: In March of 2019, Community Development issued an RFP for consultant
services in the completion of a new FIL update. This RFP requested services to analyze the
city’s current methodology and propose possible alternatives –with the outcome of new FIL
methodology and figures that more accurately account for actual housing unit development
costs. While the cost of these consultant services is below the threshold requirements for
issuing an RFP, staff believed that the issuance of an RFP would help promote the project to
vendors that have not previously worked with the city on this topic –and possibly introduce new
thinking to the FIL methodology. The deadline for response to the RFP was May 3rd, 2019.
Unfortunately, no bids were received.
In response, Community Development staff will approach local and regional consultants who
have worked with the city on past land use and development studies and policy analysis. Staff
will return to Council later in 2019 once a consultant has been contracted for the FIL analysis.
Fee-in-Lieu per FTE
Category 1 $381,383.31
Category 2 $342,599.02
Category 3 $306,549.65
Category 4 $238,687.04
Category 5 $168,289.60
Category 6 $142,114.19
Category 7 $111,438.36
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Strengthening Community Through Workforce Housing
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INFORMATIONAL MEMO
TO:Aspen City Council
FROM:Mike Kosdrosky, Executive Director
DATE:June 3, 2019
RE:Housing Information Management System (HIMS) Vendor Selection Update
PURPOSE:
This memo is an informationalupdate regarding the Housing Information Management System(HIMS)vendor
selection process.
BACKGROUND:
The City of Aspen advertised a Notice of Request for Proposal for a Salesforce implementation for APCHA’s
Housing Information Management System on March 1, 2019. The deadline for proposals was April 4. The City
received eight proposals by the deadline, six of which were considered responsive.
The HIMS Review and Selection Team (Selection Team) reviewed and scored the remaining six responsive
proposals during April and May. The Selection Team was made up of representatives from the City, County,
and APCHA, including subject matter experts from each organization. Four vendors were ultimately selected
as finalists and invited to Aspen the week of May 19 for demonstrations and meetings.
After a thorough review and selection process, including multiple meetings and reference checks, the Selection
Team agreed on selecting avendorfor APCHA’s automation project.
PROJECT UPDATE:
On May 29 the HIMS Selection Team chose a vendor to implement the HIMS for APCHA; however, as of today,
this vendor has not been officially notified. The City and APCHA plan to issue a public notice the week of June
2nd announcing the name of the vendor and our intentions to negotiate a contract with them to design and
implement the HIMS project.
APCHA’s goal is to negotiate a contract during the month of June and take it to City Council for review and
approval sometime in July. The HIMS project start date is now estimated to be August 1, 2019. The project
timeline is approximatelya year.
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INFORMATION MEMORANDUM
TO:City of Aspen Mayor and Council
FROM:Phillip Supino, Principal Long-Range Planner
THRU:Jessica Garrow, Community Development Director
MEETING DATE:June 10, 2019
RE: Information Only: Uphill Economy Initiative Progress Report
Background: In 2018, Council made the implementation of elements of the Uphill Economic Development
Plan a Top Ten Goal. To achieve that goal, Council directed staff to undertake two projects: host the
second Aspen Ascent Uphill Symposium and create an Uphill Recreation Plan (Rec. Plan). The staff Best
Year Yet team tasked with achieving the Uphill Top Ten Goal, which included Jessica Garrow, Nancy Leslie,
Scott Miller, Mitch Osur, and Phillip Supino, developed the content for and planned the three-day Aspen
Ascent symposium, which was held March 31st to April 2nd in Aspen. A report on the success of the
symposium, its relationship to the Uphill Economy Initiative, and next steps will be presented to Council
at a work session late this fall.
Concurrently, the Community Development staff received Council approval in Spring 2018 for a $75,000
contract for planning services with SE Group to assist in the development of the Rec. Plan. The Rec. Plan
was a priority implementation step in the Uphill Economic Development plan, which was adopted in 2017.
The project was partially funded by a state Department of Local Affairs economic development grant. It
was designed to inventory existing conditions of an array of recreation amenities in the upper Roaring
Fork Valley, from trailheads and trails to environmental conservation and backcountry huts. Based on
that analysis, the plan recommends partnership-based actions to ensure that outdoor recreation around
Aspen provides a sustainable, attractive product for local and tourist uphill recreationists while also
ensuring conservation remains at the forefront.
Beginning in October 2018, SE Group and staff formed a public advisory group of 17 technical stakeholders
to guide the planning process. The stakeholders represent important valley partners and public advocates
in the conservation, recreation, business, government, and land management fields. The planning process
was based on input from those stakeholders and the results of technical GIS-based analysis by the
consultant team. In recognition of the community’s shared values of environmental protection and
passion for outdoor recreation, the innovative plan places recreation opportunities on equal footing with
conservation principles. Because most of the amenities and infrastructure analyzed in the plan are owned
and managed by entities other than the City, the plan relies heavily on partnerships and collaboration as
the basis for future actions. Staff is completing the plan development process with the support of the
technical stakeholders who guided its development.
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Current Status: Staff expects the plan to be completed when the contract with SE Group expires at the
end of June 2019. Beginning with the Future Forest Roundtable on June 6th, staff will present the plan to
stakeholder boards and other groups including City Open Space and Trails (June 20th), the Board of County
Commissioners (July 9th), and Pitkin County Open Space and Trails (July 11
th). The presentations will be
informative and advisory, describing the planning process and highlighting opportunities for partnership
to each entity outlined in the plan. Those entities interested in supporting or endorsing the plan are able
to do so. As the plan focuses on principles and projects of specific interest to the City and its Uphill
initiative goals, and given its purpose as a technical, advisory document, the endorsements or formal
adoptions from these boards and commissions is not essential to the utility of the plan.
Staff will present the final plan to Council in work session in the context of the larger Uphill Economy
project and Top Ten Goal completion. Staff will seek Council direction on next steps and potential
implementation items from the Rec. Plan. As the Rec. Plan is advisoryand subordinate tothe larger Uphill
Economy Plan, further public input not anticipated at this time. Additionally, future implementation of
the policies and recommendations in the plan would require public processes in their own right. Should
Council direct staff to pursue implementation of recommendations or policies in the Rec. Plan, additional
public input will be included in those processes.
Community Development staff is working with the City Manger’s office to schedule a work session date
for late summer or early fall to present to Council the completion of the 2018-2019 BYY Uphill Goal. The
work session will provide Council will a complete overview of Uphill initiative work to date, assessments
of successes and future opportunities, and options for how to proceed in the context of Council’s
Community Development work program objectives.
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