HomeMy WebLinkAbout10410RESOLUTION NO. 10410
A RESOLUTION APPROVING A PILOT PROGRAM FOR NEIGHBORHOOD REVITALIZATION
WITHIN TARGETED NEIGHBORHOODS, ALLOWING FOR LAND AND PROPERTY
ACQUISITION IN FURTHERANCE OF THE CITY OF PUEBLO'S 2005 -2009 CONSOLIDATED
PLAN AND THE ADOPTED NEIGHBORHOOD PLANS, AND AUTHORIZING THE PRESIDENT
OF THE CITY COUNCIL TO EXECUTE SAME
WHEREAS, the City recognizes the value of neighborhood revitalization to bring about a
needed change in Pueblo neighborhoods; and
WHEREAS, a pilot program of neighborhood revitalization sponsored by the City will
become an invaluable tool for revitalizing neighborhoods within the City;
BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that:
SECTION 1.
The Neighborhood Revitalization Pilot Program, ( "Pilot "), a copy of which is attached
hereto, is hereby approved. The Department of Housing and Citizen Services is hereby authorized
and empowered to take all actions required or necessary to implement the Program in accordance
with its requirements.
INTRODUCED June 13, 2005
BY Michael Occhiato
Councilperson
APPROVED:
PREStDENT 9F CITY C IL
ATTESTED BY:
CITY CLERIC
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ii A60. 7 4
Background Paper for Proposed
RESOLUTION
AGENDA ITEM # I
DATE: June 13, 2005
DEPARTMENT: HOUSING AND CITIZEN SERVICES / ADA RIVERA CLARK
TITLE
A RESOLUTION APPROVING A PILOT PROGRAM FOR NEIGHBORHOOD
REVITALIZATION WITHIN TARGETED NEIGHBORHOODS, ALLOWING FOR
LAND AND PROPERTY ACQUISITION IN FURTHERANCE OF THE CITY OF
PUEBLO'S 2005 -2009 CONSOLIDATED PLAN AND THE ADOPTED
NEIGHBORHOOD PLANS, AND AUTHORIZING THE PRESIDENT OF THE
CITY COUNCIL TO EXECUTE SAME
ISSUE
The approval of a resolution authorizing and empowering the Department of
Housing and Citizen Services to purchase improved and unimproved parcels for
inclusion in the Neighborhood Revitalization Pilot Program (hereinafter referred
to as the Pilot), as per the guidelines established for the Pilot.
RECOMMENDATION
Approval of the Resolution
BACKGROUND
The Department administers the Vacant Lot Recycle Program, approved under
Res. 7584. This Program has been very successful, to date it has converted
over 90 city owned lots into single - family dwellings. The city's inventory of
vacant lots has greatly diminished and we do not foresee a change in the near
future.
The continuing decline and disinvestments in the older neighborhoods suggests
that a different approach to rebuilding neighborhoods is warranted. The targeted
communities identified in the Pilot program do have a surplus of vacant lots that
are considered a blight on the community. There are also improved parcels of
land that have homes in need of major rehabilitation /remodeling, or that have
been boarded -up and are also considered a blight on the neighborhood.
This Pilot would provide the Department the authority to purchase both improved
and unimproved properties for the purposes of eliminating slum /blight conditions
in the targeted neighborhoods. The properties will be improved in partnership
with for - profit and not - for - profit developers in an effort to leverage funding
sources. Improved properties are to be sold to low -to- moderate income
homebuyers. The maximum subsidy per unit will not exceed $40,000. The
investment will be secured by a deed of trust as required by federal regulations.
FINANCIAL IMPACT
The City has appropriated funds in prior years for infill and new construction from
the HOME federal grants. Funds are available in the 251 Fund. The amount of
funds available for the above activities is $529,000.
NEIGHBORHOOD REVITALIZATION PILOT PROGRAM
The City of Pueblo recognizes the fundamental necessity of partnering in problem -
solving in order to achieve much greater success in its neighborhood revitalization
efforts. Too frequently, when residents are unhappy with the state of their residential
environments, they have generally pursued three options: pack up and move to a more
satisfactory environment; change the unsatisfactory condition; or begrudgingly accept
these conditions. Changing the unsatisfactory condition is difficult for any individual
resident or property owner to accomplish. The continuing decline and disinvestment in
older neighborhoods suggests that a different approach to rebuilding neighborhoods is
warranted. We also recognize that, to address the needs of our declining neighborhoods,
it is appropriate for the City to act as a catalyst to spur private reinvestment. In this role
the City will work to bring together resources and assemble partnerships to address the
needs of the targeted neighborhoods, especially in the areas of housing and elimination of
spot slum/blight. This pilot Neighborhood Revitalization Program (hereinafter referred
to as "the Pilot" has been established to begin to develop such an approach to
revitalization.
Pilot Program Description - The Pilot authorizes the City's Department of Housing and
Citizen Services to acquire, hold and develop properties in the targeted neighborhoods.
The Department is also authorized to partner with for - profit and not - for - profit developers
to deliver the program. The targeted neighborhoods are those neighborhoods with
Neighborhood Plans that have been approved by the City Council. The properties
acquired must meet the selection criteria for revitalization and be economically feasible
for rehabilitation or new construction with subsequent resale to a low -to moderate -
income homebuyer. Properties will be identified in several ways: 1) Multiple Listing
Service (MLS); 2) identification by the local neighborhood associations; 3) Fire
Department Boarded -Up Property list; 4) properties for which the City may apply for title
upon tax certificates; 5) properties under current order for repair or demolition under the
Code for Abatement of Dangerous Buildings. Under the Pilot, the City will not displace
individuals or families or enter into agreements that do so. An appraisal by a qualified
appraiser of the City's choosing will be conducted prior to the acquisition of a property.
The presence of an appraisal does not require the City of Pueblo to make a purchase offer
equal to the appraised value, but at no time shall the offer be less than 50% nor more than
115% of the appraised value. In acquiring any property, the amount of outstanding liens
held by the City of Pueblo against the property shall be deducted from the compensation
paid to the owner.
The initial properties to be developed are as follows:
1- 608 Arroyo
2- 614 Arroyo
3- 1535 Pine St.
4- 1003 Catalpa
Pilot Geoeraphic Boundaries
The boundaries of the Pilot are the boundaries established in each of the approved
neighborhood plans for Bessemer, Hyde Park and the Eastside. Additions or deletions to
these boundaries may occur from time to time as new neighborhood plans are developed
and approved by the City Council.
Responsible Entity - The Department of Housing and Citizen Services of the City of
Pueblo (hereinafter referred to as "the Department ") shall be responsible for conducting
the Pilot in accordance with the terms and provisions of this authorizing Resolution.
Maximum Purchase Price for Improved Land — Each property will be evaluated for
reasonableness and feasibility. Purchase price for land and improvements suitable for
rehabilitation will not exceed $60,000, except that City Council may subsequently
authorize increases or decreases in this cap based upon substantial changes in market.
The purchase offer for improved land will not exceed the appraised value by more than
15 %.
Maximum Purchase Price for Unimproved Land — Each property will be evaluated for
reasonableness and feasibility. The maximum purchase price for vacant land shall not
exceed $15,000, except that City Council may subsequently authorize increases or
decreases in this cap based upon substantial changes in market. The purchase offer for
unimproved land will not exceed the appraised value by more than 15 %.
Maximum Investment Per Unit - A feasibility study will be conducted prior to the
purchase of each property. Funding for each project will be determined by the "gap" or
need demonstrated by the project budget. The gap is the difference between the cost to
construct (or rehab) the units and the amount of outside funding available (mortgage
loan). The City's portion of expenditures for the construction or rehabilitation of a
property cannot exceed the HOME allowable per unit subsidy of $87,000. In the event
that any property requires the maximum allowable subsidy a portion of the City
assistance will be recouped upon the sale of the property. The Pilot shall also apply a
maximum subsidy per property limitation of $40,000. Since properties will carry a
second lien from the City, the appraised value must be sufficient to cover the first and
second lien.
Maximum Subsidy Amount to Homebuyer — While the maximum allowable subsidy
under the HUD HOME program is $87,000 per unit, the maximum amount of subsidy
provided by the City under the Pilot for each unit will not exceed $40,000. The subsidy
may be provided as a grant or a deferred forgivable loan or a combination of each. The
loan/grant will be secured by a deed of trust. The repayment terns will vary depending
on the amount of subsidy provided and as determined by HOME and CDBG regulations.
If assistance is provided by loan, a promissory note will be executed by the borrower.
The indebtedness on the deferred forgivable loan will be forgiven 1/20` for each year
that the property was the primary residence of homeowner. The assumption of the loan
may be allowed as long as the subsequent buyer meets the HUD income guidelines at the
time of the purchase and is a first time homebuyer.
To insure affordability, this program adheres to the recapture requirements as set forth in
24 CFR 92.253(a)(5). Upon sale or transfer of the subject property by the homeowner,
the City will recoup the outstanding balance on the loan.
Eligible Homebuyers — The applicant must be a first -time homebuyer whose income
does not exceed the HUD established income guidelines for the year in which the
loan/grant is made. The applicant must have a verifiable, steady income and a reasonably
good credit history. The property must be the buyer's primary residence. The
homebuyers will be required to take pre- and post homebuyer education classes from a
qualified counseling agency.
Upon determination of eligibility for the program, applicants must also demonstrate an
ability to pay 1% of the purchase price of the property to contribute towards their down -
payment and closing fees.
Property Selection Criteria — Selected properties must meet the criteria in the HOME
regulations under 24 CFR Part 92. Furthermore, the proposed property will be evaluated
under the following community development concepts and feasibility requirements,
including but are not limited to:
- Rehabilitation of subject property can act as a catalyst for neighborhood
revitalization;
- Project is economically feasible, meaning that the development costs minus the
allowable subsidy amount does not exceed the property's market value in the
neighborhood;
- Subject property is vacant or an abandoned property, determined to constitute an
element of slum or blight by the neighborhood associations;
- Property evidences reoccurring code violations;
- Evidence of marketability.
Pilot Program Time Frame — The Pilot Program will be reviewed for effectiveness,
modification, and permanency not later than three years from the date of approval.