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Home My WebLink AboutAgendaPacketMerged_PowerpointIncluded_SKHHP_ExecutiveBoard_2023_11_17SKHHP Executive Board November 17, 2023, 1:00 – 3:00 PM Virtual Meeting Video conference: https://us06web.zoom.us/j/99857398028?pwd=eXFiMmJpQm1abDZmMmRQbHNOYS8ydz09 OR by phone: 253-205-0468 Meeting ID: 998 5739 8028 Password: 085570 I. CALL TO ORDER a. b. STAFF WORK GROUP MEMBERS II. PUBLIC COMMENT III. APPROVAL OF OCTOBER 20, 2023 MINUTES (ATTACHED) 1:08 Executive Board meeting minutes 1:09 1:10 AFFORDABLE HOUSING Presenters: Andrew Calkins, VP of Policy and Intergovernmental Affairs; Tim Walter, Senior VP of Development and Asset Management; Robin Walls, President & CEO Purpose: King County Housing Authority (KCHA) leadership will present on how the organization finances acquisition and preservation in addition to the current constraints and opportunities in South King County. Background: The SKHHP Executive Board has identified developing affordable housing preservation strategies as a top priority. This presentation is a follow-up to the September 15 introductory presentation by KCHA. KCHA is one of the region’s experts on maintaining long-term affordability and permanently preserving affordable housing through acquisition and rehabilitation. 1:40 ALLOCATIONS Purpose: Executive Board recommendation for 2023 SKHHP Housing Capital Fund allocations. Background: The application for the 2023 funding round for the SKHHP Housing Capital Fund opened in July with applications due on September 15. The Advisory Board began discussion at their October and November meetings and recommends funding four projects totaling $5,645,918. Motion is to approve/amend funding recommendation as presented and forward recommendation to member City Councils for approval Purpose: Presentation of the third quarter budget and progress report for Executive Board review. Background: Staff provides quarterly budget and progress reports consistent with the SKHHP Interlocal Agreement. The quarterly progress reports are meant to serve as an accountability and progress update as well as a tool for Board members to update their member Councils and other interested parties. Staff presentation followed by Board discussion provides opportunity for feedback prior to finalization and distribution to member jurisdictions. For review, discussion, and Board feedback only, no action is proposed 2:40 • Chair/Vice Chair nominations • December SKHHP meeting • 2024 meeting schedule • Tukwila Council President’s last SKHHP meeting 2:50 • 3:00 SKHHP Executive Meeting October 20, 2023 MINUTES I. CALL TO ORDER Vice-Chair Dana Ralph called the meeting to order at 1:01 PM. a. ROLL CALL/ESTABLISHMENT OF QUORUM Executive Board members present: Colleen Brandt-Schluter, City of Burien; Traci Buxton, City of Des Moines; Dana Ralph, City of Kent; Hannah Bahnmiller (alternate), City of Renton; Sunaree Marshall, King County; Sean Kelly, City of Maple Valley; Cynthia Delostrinos Johnson, City of Tukwila. Others present: Claire Goodwin, SKHHP; Patience Malaba, SKHHP Advisory Board; Laural Humphrey, City of Tukwila; Merina Hanson, City of Kent; Dafne Hernandez, City of Covington; Matt Torpey, City of Maple Valley; Nicole Nordholm, City of Des Moines; McCaela Daffern, King County; Nicholas Matz, City of Normandy Park. II. PUBLIC COMMENT No member of the public requested time to address the Executive Board. III. APPROVAL OF SEPTEMBER 15, 2023 MINUTES Traci Buxton moved to approve the September 15, 2023 minutes as presented, seconded by Sunaree Marshall. Motion passed (7-0) IV. BOARD BUSINESS a. Housing Capital Fund Project Application Review Claire Goodwin congratulated the Executive Board on the tireless efforts to bring SKHHP to its second annual Housing Capital Fund. The City of Kent and Covington played a substantial role in working to add their pooled HB 1590 funds, which quadrupled the amount of funds available compared to last year. On October 5, the SKHHP Advisory Board reviewed the applications submitted for the Housing Capital Fund. SKHHP staff developed an evaluation form, and each member of the Advisory Board was asked to evaluate the projects based on the adopted SKHHP guidelines. At the November 2 meeting, the SKHHP Advisory Board will vote on a funding recommendation for the Executive Board to consider adopting at the November 17 meeting. In preparation for the November meeting, a summary of each application will be presented, and time will be provided to ask questions about each project. Claire Goodwin highlighted the variety of the applications, with significant geographic representation across the region. Projects were also a mix of large-scale and smaller-scale projects and included homeownership, rental, and preservation opportunities. The total amount being requested is $8,656,000, with $5,898,000 available. Available funds mix SHB 1406 and HB 1590, with different eligibility requirements. Only three projects would be eligible for HB 1590 funds, but all six would be eligible for SHB 1406 funds. (See October 20, 2023 Agenda Packet for the complete Project Summary Memorandum.) The South Building (building one of two) of Pandion at Star Lake is a multifamily rental, mixed- use project comprising 168 affordable housing units for households earning between 30% and 60% of Kent's area median income (AMI). The project is adjacent to the Kent/Star Lake Link light rail station. This transit-oriented development (TOD) project will combine studio, one, two, and three-bedroom units. The project will include ground floor commercial space consisting of an early learning center for low-income children and other non-profit tenants. The developer purchased the property in December 2022. The project is a seven-story building with six stories of affordable housing over one story of commercial space, plus basement-level parking. Pandion at Star Lake is a partnership between TWG Development and Vision House. Vision House provides onsite supportive services for the 4% Low Income Housing Tax Credit (LIHTC) households for households in 140 units. In collaboration with the City of Kent, an additional service provider will be selected to serve residents of the 9% LIHTC households comprising 28 units. The request is for $2,856,000 as a deferred, contingent, forgivable loan. Traci Buxton asked if the funds would be used for operations or other expenses and if there was a set time by which SKHHP funds needed to be used. Claire Goodwin responded that the funds would be used for construction and that there is no current policy determining when funds must be used. SKHHP funds projects through reimbursement, so funds are distributed when an invoice is submitted to SKHHP by the developer to reimburse the construction costs. SKHHP retains the funds until reimbursement is requested. Eric Zimmerman asked if SKHHP staff has an internal evaluation process such as a "theory of change" or other parameters around cost per beneficiary. Claire Goodwin responded that projects were evaluated by the guidelines and criteria adopted by the Executive Board, and this is an annual process. Skyway Affordable Housing and Early Learning Center is a multifamily rental project in Unincorporated King County. The project will provide 55 total units, including 12 studios, 19 one-bedroom, 13 two-bedroom, and 11 three-bedroom units of affordable housing for households earning between 30%-50% area median income (AMI) with a 75% set-aside (42 units) for households transitioning out of homelessness with onsite case management. An early learning center will be located on the ground floor of the building, featuring four classrooms to accommodate up to 80 children, a parent resource room, and offices. Additional amenities include a community room, case manager offices, and a roof deck for resident use. The request is for $2,800,000 as a deferred, contingent, forgivable loan. Dana Ralph asked for confirmation that there were 1.5 case management staff to support fifty- five households and asked if that was enough support or standard. Colleen Brandt-Schluter said that ratio was consistent with other LIHI projects, including the Tiny Village model, but wondered whether the staff support was 24 hours and seven days a week. Claire Goodwin responded that she would need to check with the project sponsor. The Kent Multicultural Village is a 199-unit multifamily rental project in Kent adjacent to the future Kent Des Moines Link light rail station opening in 2026. The project will support households earning 30% AMI to 80% AMI with a 20% set-aside (39 units) for households with an intellectual and/or developmental disability (I/DD) with onsite supportive services. The project includes studios, 1-bedrooms, 2-bedrooms, and three-bedroom units. The site comprises eight stories and will consist of a community center, a family resource center, and a licensed early learning facility with six classrooms to accommodate 96 infants and children, focusing on serving children with I/DD. The project is a partnership between Mercy Housing NW and Open Doors for Multicultural Families, who will support the I/DD households and relocate their headquarters to the property. The project will be located on surplus land from Sound Transit. The request is for $1,000,000 in the form of a deferred, contingent, forgivable loan. Eric Zimmerman raised concerns about the cost per unit but acknowledged that there were essential supportive service elements included in the price point. Traci Buxton continued by acknowledging the public spaces, such as the community plaza, which, if included in the per unit cost, would appear to be higher than the actual unit cost. Claire Goodwin confirmed that the residential and nonresidential expenses were included in the per-unit costs and offered to provide numbers that do not have the nonresidential spaces. Traci Buxton asked if there was an agreement that the plaza would be open to the public. Dana Ralph mentioned that the site drawing was flexible, and the city is continuing to discuss what the final site will look like. Currently, the community center has its back facing the light rail station, which raises some concerns at the city level, which are being discussed. The site picture should be considered very high level at this time. Sunaree Marshall echoed a desire to separate per-unit costs from the nonresidential space. One challenge of the cost per unit metric is that it can hide the benefit of larger unit sizes. A 3 bedroom would have a higher per unit cost than a studio, but the benefit to the community is very different. Burien Cooperative Village is a 27-unit cottage homeownership project in Burien. The cottages will include three studios, eleven one-bedroom, and thirteen two-bedroom units ranging in size from 320 square feet to 650 square feet, including two ADA-accessible units. The cottages will be affordable for households earning an average of 50% AMI, at most 60% AMI. Ownership will be through a Limited Equity Cooperative (LEC). A LEC is a homeownership model in which residents purchase a share in a development (rather than an individual unit) and commit to resell their share at a price determined by a formula to maintain affordability over the long term. The project is designed to be climate-adaptive with water catchments, organic gardens, and energy-efficient buildings with renewable energy capacity. The project will include 12 duplex units, three stand-alone units, a common building, a playground, and onsite landscaping of native and edible plants. The project was accepted into the City of Burien's Affordable Housing Demonstration Program by the Burien City Council on March 27, 2023. The land was purchased in 2023 by ecoTHRIVE using funds from the Land Acquisition Program administered by the Washington State Housing Finance Commission (WSHFC). The request is for $1,000,000 in the form of a grant. Traci Buxton asked what the FHLB Des Moines Grant was and if it was the City of Des Moines funds. Claire Goodwin responded that it was not. It was the Federal Home Loan Bank of Des Moines. Traci Buxton added that homeownership opportunities are a priority for SKHHP and the stability it creates in the community. Dana Ralph seconded the support for homeownership and its importance in building generational wealth and opportunity. Victorian Place II is a multifamily, preservation 20-unit rental project in Des Moines. Since 1996, the non-profit Multi-Service Center has owned the two adjacent buildings that comprise the project, which includes five units for households earning up to 35% AMI, ten units for households up to 40% AMI, and five units for households up to 50% AMI. The 20 three- bedroom/two-bath affordable rental units are in active use. The request is for $500,000 in the form of a grant. Colleen Brandt-Schluter asked what would happen with the residents living in the building during the rehabilitation. Claire Goodwin responded that the renovations could be completed without displacing the current residents. Sunaree Marshall validated the challenge that preservation projects have when competing against new development. Current funding opportunities are not structured to prioritize preservation, which is a unique opportunity for SKHHP to support. There are hidden challenges and costs that can come up during preservation compared to new development. Dana Ralph seconded the support for preservation and the opportunity to consider the project. The White River Apartments is a multifamily, preservation 24-unit rental project in Auburn. The building was constructed in 1978, and the non-profit Multi-Service Center took over ownership in 2000. The project consists of two-bedroom/one-bathroom units in active use, which include three units serving households earning up to 30% AMI, sixteen units at 45% AMI, and five units at 80% AMI. The 80% AMI units are currently occupied by households earning less than 60%, and those units would shift to income-restricted up to 60% AMI if funds are awarded. The project would not displace current residents. The request is for $500,000 in the form of a grant. Hannah Bahnmiller asked if MSC could do both preservation projects if SKHHP funded both. Claire Goodwin said she would reach out and confirm with the developer. Traci Buxton asked about the property tax expectations on the residents for any of the six projects being considered. Claire Goodwin responded that some of the projects would receive the Low-Income Housing Tax Credit (LIHTC), and others were operated by 501c3s and would have tax-exempt status. ecoTHRIVE is a newer model, and SKHHP staff will need to check with the developer. Claire Goodwin confirmed she would send all pending questions to the developers and provide them by email to the Executive and Advisory Board members. The Advisory Board will meet on November 2 to develop a funding recommendation for the Executive Board to consider on November 17. Colleen Brandt-Schluter asked if the City of Kent has prioritized one of the two projects located in Kent. Dana Ralph responded that the city has not since they both serve different populations that need support. b. Adjusted Revenue Available for 2023 Housing Capital Fund Claire Goodwin reviewed a memo prepared for the Executive Board regarding adjusting the revenue available for the 2023 Housing Capital Fund. There was a miscommunication between SKHHP and a member jurisdiction on the amount that would be contributed to the 2023 SKHHP Housing Capital Fund. This error was not identified until after the funding guidelines were adopted and posted publicly. The announced amount was $1,060,000, and the corrected amount is $928,812 available. An option was discussed, which would request the jurisdiction put forward an amount of their projected HB 1406 funds for next year, bringing it closer to the announced amount. This would mean there would be slightly less SHB 1406 funds pooled in 2024. Traci Buxton responded that with several projects not ready to receive funding this year, any amount put forward is a projected amount. Since the funds would not be requested until 2024, would it be possible to use funds pooled in 2024 by SKHHP to cover the difference. Claire Goodwin mentioned concerns about the challenges in accounting with this approach. Eric Zimmerman supported taking no action since none of the applicants depend solely on SKHHP funds. Being honest about the issue should resolve any concerns of the applicants. Sunaree Marshell added that the City of Seattle did a pre-commitment process similar to Traci Buxton's suggestion. She agreed that it was likely more complicated than this situation warranted. There was consensus to be honest and transparent with the applicants about actual funding amounts available and proceed as with the actual amounts available in 2023. c. Legislative Priorities Dana Ralph briefly touched on the history of the development of the SKHHP Legislative Priorities flyer. While SKHHP members share much in common, it can be challenging to agree on the wide range of housing topics discussed during the legislative session. This led to the SKHHP Legislative Priorities One-Pager, which reviews who SKHHP is and focuses on the need for increased funding for affordable housing in our region. Claire Goodwin reviewed the changes made to the one-page flyer based on feedback from the Executive Board. Brian Davis had sent written feedback stating that the City of Federal Way’s housing needs are 2 to 1 in favor of market-rate housing, which does not align with the statement regarding a growing affordable housing crisis in South King County. Additionally, he believes funding for only some aspects of affordable housing is what SKHHP is looking for. The bullet points are good, but the background statements should be changed. Claire Goodwin had responded with the hope to discuss these items more at this meeting and a reminder that this was the third time the one-pager had been brought to the board for feedback. Brian Davis also wrote that under the "our communities" section, it appears to have not been adequately sourced from the PSRC report. Additionally, the study in the linked document doesn't separate South King County except in rent. Finally, the reference in the last two bullet points appears broken. Claire Goodwin responded that the links would be fixed and that data points specific to South King County are hard to come by, and no one is currently collecting information specific to our subregion. The limitation of data was included in the HUD Pro- Housing Grant and would support funding data analysis specific to our subregion. Dana Ralph responded that she wasn’t inclined to recraft the one-pager, but Brian Davis raised a good point. The Seattle Times recently featured an article discussing housing needs, which shows South King County providing housing for the 30-80% range but lacking in housing for 0- 30% and market-rate housing. The Light Rail Project in West Hill will likely feature no market- rate housing in the surrounding area. Patience Malaba added that she thought it was important to acknowledge the growing affordability crisis in our region. South King County has seen some of the most significant rent increases in our area. The need is greater than ever, and the tools must be scaled to address it. Traci Buxton suggested changing "legislative priorities" to "legislative priority," and a way to incorporate Brian Davis’s suggestion would be removing the words "all aspects" from the priority. Dana Ralph highlighted an Associate of Washington Cities (AWC) legislative tour. Senator Marko Liias is working on another Transit Oriented Development (TOD) Bill. She wanted to highlight the need for more understanding at the state level of what the current housing stock of South King County is. It will be more imperative than ever to share the story of South King County in Olympia and how the legislation will play out in our region compared to other parts of the county. V. UPDATES/ANNOUNCEMENTS Claire Goodwin reminded the Executive Board of the request to include the SKHHP legislative priority in the legislative agenda for their jurisdiction. An email was provided, which includes sample language to help unify the message across our region to increase funding for affordable housing. Claire Goodwin updated the Executive Board that she has presented twice at the City of SeaTac, and on November 28, 2023, the city will take action to consider formally joining SKHHP. The Executive Board must adopt a resolution at the beginning of 2024 to accept SeaTac as an official SKHHP member. Claire Goodwin provided an update on the HUD Pro Housing Grant. King County's application has been released to the public, and the application has received lots of letters of support. So far, there are six letters of support; jurisdictions still willing to submit a letter of support must do so by noon on October 26, 2023. Claire Goodwin will be working to schedule end of year one-on-one check-ins with each of the SKHHP Executive Board members. Claire Goodwin asked if the Executive Board was still interested in learning about Tax Increment Financing (TIF). There is an opportunity to bring in a consultant, possibly for a fee, to provide a detailed overview and training on TIF. Traci Buxton expressed strong interest and asked if other elected officials from the region could be invited. Dana Ralph was also interested in learning more about the topic. Patience Malaba invited the SKHHP Executive Board to “An Afternoon with Richard & Leah Rothstein" on November 2, 2023, at Seattle University from 2 p.m. to 4 p.m. They will discuss the book "Just Action" which is a follow-up to their 2017 book "The Color of Law." VI. ADJOURN Dana Ralph adjourned the meeting at 2:41 PM. Page 1 of 26 Memorandum South King Housing and Homelessness Partners TO: SKHHP Executive Board DATE: November 9, 2023 RE: Advisory Board Funding Recommendation - 2023 SKHHP Housing Capital Fund OVERVIEW The SKHHP Advisory Board has completed the review of the six applications submitted to SKHHP’s 2023 Housing Capital Fund. The Advisory Board recommends funding for four projects totaling $5,645,918. Of this total, the Advisory Board recommends using $675,918 of the total $928,812 sourced from SHB 1406 revenue contributions for one preservation project; and $4,970,000 sourced from HB 1590 revenue contributions for three new construction projects. This recommendation leaves a balance of $252,894 in the Housing Capital Fund in SHB 1406 funds and $485 in HB 1590 funds that will roll-over into the next funding round. A summary of the applications received, the Advisory Board recommendation and funding rationale, and the conditions for funding are included in this memo. Applicant Location # of Units Project type HB 1590 Eligibility SHB 1406 Eligibility Amount requested Recommended Funding Housing Construction Construction Construction Service Moines Rental Construction Service Rental TOTAL $8,656,000 $5,645,918 TOTAL: SHB 1406 $675,918 TOTAL: HB 1590 $4,970,000 Page 2 of 26 BACKGROUND The SKHHP Advisory Board met on October 5, 2023 and November 2, 2023 to review each project application and develop a funding recommendation for the SKHHP Executive Board’s consideration. Project sponsors were available for questions during the October 5 meeting. The Advisory Board began the evaluation of each project based on the established criteria and funding priorities adopted in the 2023 Housing Capital Fund Guidelines. Due to limited SKHHP staff capacity to manage a large number of contracts each year, the request was made to limit the number of projects that are included in the recommendation to no more than four. In preparing the initial discussion of the Advisory Board’s recommendation, two potential conflicts of interest were disclosed by the Advisory Board. Two members of the Advisory Board work at organizations that discussed opportunities to collaborate on ecoTHRIVE’s Limited Equity Cooperative products. Those conversations were fact-finding meetings, and no formal agreement was signed between the parties. PROCESS ATTACHMENTS 1. Proposed funding sources for recommeded projects 2. Economic summaires for recommeded projects Advisory Board recommendation (November 2, 2023) Executive Board finalizes recommednation (November 17, 2023 Member Councils approve funding recommendation (January-March 2024) Page 3 of 26 1. Mercy Housing NW - Kent Multicultural Village Funding request: $1,000,000 Advisory Board recommendation: $1,000,000 (forgivable loan) Address: 23446 Pacific Highway South, Kent, WA 98032 PROJECT SUMMARY Kent Multicultural Village is a 199-unit multifamily rental project in Kent adjacent to the future Kent Des Moines Link light rail station. The light rail station is scheduled to open in 2026. The project will support households earning 30% AMI to 80% AMI with a 20% set-aside (39 units) for households with an intellectual and/or developmental disability (I/DD). The I/DD units will benefit from on-site supportive services. A 30% set-aside (61 units) will be for families with children. The project includes studios, 1- bedrooms, 2-bedrooms, and three-bedroom units. The site is comprised of eight stories and will include a community center, a family resource center, and a licensed early learning facility with six classrooms to accommodate 96 infants and children with a focus on serving children with I/DD. The project was awarded the RFP by Sound Transit to be located on surplus land, but the terms of development are forthcoming and the final project may be slightly different than described. The project is a partnership between Mercy Housing NW and Open Doors for Multicultural Families, who will provide support to the I/DD households and will relocate their headquarters to the property. Open Doors for Multicultural Families will also operate the Community Center which will include space for recreational activities and community-focused programming. Open Doors for Multicultural Families is a non-profit organization dedicated to meeting the needs of persons of color living with I/DD, especially immigrants and refugees. Regarding ADA accessibility, the project incorporates added accessibility components into the 38 I/DD units above what is required in addition to several accessible van parking spaces. Of the 199 units, 40 units will serve households up to 30% AMI; 44 units at 50% AMI; 100 units at 60% AMI; and 15 units at 80% AMI. 39 units of households with an I/DD up to 60% AMI is eligible for SKHHP funds sourced from HB 1590. SKHHP funds are requested for new building construction. PROJECT SCHEDULE Site Control 3/2024 – to be coordinated in Sound Transit negotiations Building Permits Issued 4/2025 Begin Construction 6/2025 Begin Lease Up 2/2027 Certificate of Occupancy Issued 6/2027 First LIHTC Year Start 6/2027 100% Lease Up 2/2028 Page 4 of 26 FUNDING RATIONALE The Advisory Board supports the intent of this application for the following reasons: • The project has a 20% set-aside for households with an I/DD. • The project serves a diverse range of incomes from 30% AMI to 80% AMI. • The project proposal is thorough, well planned, and has funding commitments already established. • The project is located adjacent to the future Kent Des Moines Link light rail station and has convenient access to transit, schools, medical clinics, grocery stores, and services. • The project strongly aligns with SKHHP Housing Capital Fund adopted priorities including: being a transit-oriented development (TOD) project, collaboration with local community-based organizations, addressing the needs of populations most disproportionately impacted by housing costs, advancing economic opportunity due to its proximity to the future Link light rail station and other amenities, advancing geographic equity of the Housing Capital Fund, and the leverage of private and public investment. • Mercy Housing NW is a well-established nonprofit developer in the region. • A third-party construction report found the proposed budget to be appropriate. PROPOSED CONDITIONS Standard Conditions 1. Contractor shall provide SKHHP with development and operating budgets based upon actual funding commitments for approval by SKHHP staff. Contractor must notify SKHHP staff immediately if it is unable to adhere to these budgets, and must submit new budget(s) to SKHHP staff for approval. SKHHP staff shall not unreasonably withhold its approval of these budget(s), so long as they do not materially or adversely change the Project. This shall be a continuing obligation of the Contractor. Contractor’s failure to adhere to budgets (either original or new/amended) may result in SKHHP’s withdrawal of its funding commitment. Contractor must prepare and submit final budgets to SKHHP at the time it starts project construction and at the project’s completion. 2. Contractor shall submit to SKHHP evidence of funding commitments from all proposed public and private funding sources. If Contractor cannot secure an identified commitment within an application’s time frame, Contractor shall immediately notify SKHHP staff and describe its anticipated actions and time frame for securing alternative funding. 3. Contractor shall use SKHHP provided funds toward specific project costs as included in the funding agreement and consistent with RCW 82.14.530. Contractor may not use SKHHP funds for any other purpose unless SKHHP staff authorizes such alternate use in writing. If budget line items with unexpended balances exist after completion of the project, SKHHP and other public funders shall approve adjustments to the project capital sources (including potential reductions in public fund loan balances). Page 5 of 26 4. Contractor shall evaluate and consider maximizing sustainability features for the Project (such as an efficient building envelope and heat pumps) and shall propose a plan to maximize the Project’s sustainability. 5. If Contractor uses federal funds toward the Project, it must meet applicable federal guidelines, including but not limited to: contractor solicitation; bidding and selection; wage rates; and federal laws and regulations. 6. Contractor shall maintain documentation of any necessary land use approvals, permits, and licenses required by the jurisdiction in which the project is located. 7. Quarterly Status Reports. Contractor is required to provide SKHHP with quarterly status reports for projects funded through SKHHP’s Housing Capital Fund during the project’s development stage (from the time funds are awarded until the project’s completion and occupancy). These quarterly reports must include at a minimum the status of funds expended and progress to date. SKHHP will rely on these quarterly reports to determine whether Contractor is making satisfactory progress on the project. Contractor shall submit a final budget to SKHHP upon project completion. If applicable, Contractor shall submit initial tenant information as required by SKHHP. 8. SKHHP will inspect the project site at least once during the project’s construction. 9. Ongoing Monitoring. After occupancy, Contractor will submit annual reports to SKHHP summarizing the number of project beneficiaries, housing expenses for the target population, and the proportion of those beneficiaries that are low- and/or moderate- income and that meet other eligibility criteria established in the Contract. In addition, for projects with loan payments, Contractor must annually report financial information to SKHHP that it will use to assess contingent loan payments and project health. These annual reports will be required for the full duration of affordability. SKHHP will also periodically evaluate all projects for long term sustainability. 10. For rental projects, Contractor shall maintain the project in good and habitable condition for the duration of its affordability term. 11. SKHHP shall reimburse the Contractor for satisfactory completion of the requirements specified in the Contract and upon Contractor’s submission to SKHHP of invoices and supporting documentation of eligible expenses. 12. A covenant is recorded ensuring affordability for at least 50 years, with unit size, number of units, and affordability distribution established prior to executing Contract. Special Conditions 1. SKHHP will provide project funds to the Contractor in the form of a deferred, contingent, forgivable loan. Loan terms will account for various factors, including loan terms from other fund sources and available cash flow. Final loan terms shall be determined prior to release of funds and must be approved by SKHHP staff. The loan will be secured by a deed of trust recorded against the development property to ensure that Contractor maintains the project’s affordability and target population. Contractor Page 6 of 26 shall not be required to repay the loan so long as it maintains these project requirements. 2. Timeframe for funding commitment. The funding commitment continues for thirty-six (36) months from the date of Council approval and shall expire thereafter if all conditions are not satisfied. An extension may be requested to SKHHP staff no later than sixty (60) days prior to the expiration date. At that time, the Agency will provide a status report on progress to date and expected schedule for start of construction and project completion. The SKHHP Executive Board will consider a twelve-month extension only on the basis of documented, meaningful progress in bringing the project to readiness or completion. At a minimum, the Contractor will demonstrate that all capital funding has been secured or is likely to be secured within a reasonable period of time. 3. At least 39 of the housing units shall be set-aside for households with an I/DD who earn no more than 60% AMI. Use of funds and population eligibility must be in-alignment with RCW 82.14.530. 4. SKHHP funds shall be used solely for new construction, unless otherwise approved by SKHHP staff. 5. Receipt of the documentation of remediation results and Department of Ecology approval of remediation efforts shall be submitted to SKHHP prior to proceeding with construction. Page 7 of 26 2. Low Income Housing Institute (LIHI) - Skyway Affordable Housing and Early Learning Center Funding request: $2,800,000 Advisory Board recommendation: $2,800,000 (forgivable loan) Address: 12712-12724 & 12742 Renton Ave. South, Seattle, WA 98178 PROJECT SUMMARY Skyway Affordable Housing and Early Learning Center is a multifamily rental project in Unincorporated King County. The project will provide 55 total units for individuals and families, including 12 studios, 19 one-bedroom, 13 two-bedroom, and 11 three-bedroom units of affordable housing for households earning between 30%-50% area median income (AMI) with a 75% set-aside (42 units) for households transitioning out of homelessness. An early learning center will be located on the ground floor of the building, featuring four classrooms to accommodate up to 80 children, a parent resource room, and offices. The surrounding community will be prioritized in the early learning center activities. Additional amenities include a community room, case manager offices, and a roof deck for resident use. LIHI will provide on-site case management. This project has been previously awarded predevelopment and acquisition funds from King County. The project will serve individuals (25 units) and families (17 units) exiting homelessness earning 30% AMI (42 total units) and will support general population households earning up to 50% AMI (12 units). A common room will support all residents (1 unit). 42 units are eligible for SKHHP funds sourced from HB 1590 revenue. Childhaven, a nonprofit dedicated to strengthening families and preventing childhood trauma, plans to lease the early learning center and relocate their program to the site and will assist in applying for local funding for this portion of the project. The early learning center will be financed separately from the residential space, without using tax credits on the commercial space. PROJECT SCHEDULE Site Control 1/30/2023 Building Permits Issued 1/23/2025 Begin Construction 6/1/2025 Begin Lease Up 9/15/2026 Certificate of Occupancy Issued 10/15/2026 FUNDING RATIONALE The Advisory Board supports the intent of this application for the following reasons: • The project has a 75% set-aside for households transitioning out of homelessness. • The project brings quality, affordable housing to a historically underserved neighborhood. • The project will house Childhaven on-site to run an early learning center. • The project is located near schools, a library, and a future community center. Page 8 of 26 • The project strongly aligns with SKHHP Housing Capital Fund adopted priorities including: collaboration with local community-based organizations, addressing the needs of populations most disproportionately impacted by housing costs, advancing geographic equity of the Housing Capital Fund, leverage of private and public investment, and promoting racial equity by prioritizing residents with a connection to the neighborhood. • The project will prioritize residents with a connection to the neighborhood. • LIHI is an established developer in the region. • A third-party construction report found the proposed budget to be appropriate. PROPOSED CONDITIONS Standard Conditions 1. Contractor shall provide SKHHP with development and operating budgets based upon actual funding commitments for approval by SKHHP staff. Contractor must notify SKHHP staff immediately if it is unable to adhere to these budgets, and must submit new budget(s) to SKHHP staff for approval. SKHHP staff shall not unreasonably withhold its approval of these budget(s), so long as they do not materially or adversely change the Project. This shall be a continuing obligation of the Contractor. Contractor’s failure to adhere to budgets (either original or new/amended) may result in SKHHP’s withdrawal of its funding commitment. Contractor must prepare and submit final budgets to SKHHP at the time it starts project construction and at the project’s completion. 2. Contractor shall submit to SKHHP evidence of funding commitments from all proposed public and private funding sources. If Contractor cannot secure an identified commitment within an application’s time frame, Contractor shall immediately notify SKHHP staff and describe its anticipated actions and time frame for securing alternative funding. 3. Contractor shall use SKHHP provided funds toward specific project costs as included in the funding agreement and consistent with RCW 82.14.530. Contractor may not use SKHHP funds for any other purpose unless SKHHP staff authorizes such alternate use in writing. If budget line items with unexpended balances exist after completion of the project, SKHHP and other public funders shall approve adjustments to the project capital sources (including potential reductions in public fund loan balances). 4. Contractor shall evaluate and consider maximizing sustainability features for the Project (such as an efficient building envelope and heat pumps) and shall propose a plan to maximize the Project’s sustainability. 5. If Contractor uses federal funds toward the Project, it must meet applicable federal guidelines, including but not limited to: contractor solicitation; bidding and selection; wage rates; and federal laws and regulations. Page 9 of 26 6. Contractor shall maintain documentation of any necessary land use approvals, permits, and licenses required by the jurisdiction in which the project is located. 7. Quarterly Status Reports. Contractor is required to provide SKHHP with quarterly status reports for projects funded through SKHHP’s Housing Capital Fund during the project’s development stage (from the time funds are awarded until the project’s completion and occupancy). These quarterly reports must include at a minimum the status of funds expended and progress to date. SKHHP will rely on these quarterly reports to determine whether Contractor is making satisfactory progress on the project. Contractor shall submit a final budget to SKHHP upon project completion. If applicable, Contractor shall submit initial tenant information as required by SKHHP. 8. SKHHP will inspect the project site at least once during the project’s construction. 9. Ongoing Monitoring. After occupancy, Contractor will submit annual reports to SKHHP summarizing the number of project beneficiaries, housing expenses for the target population, and the proportion of those beneficiaries that are low- and/or moderate- income and that meet other eligibility criteria established in the Contract. In addition, for projects with loan payments, Contractor must annually report financial information to SKHHP that it will use to assess contingent loan payments and project health. These annual reports will be required for the full duration of affordability. SKHHP will also periodically evaluate all projects for long term sustainability. 10. For rental projects, Contractor shall maintain the project in good and habitable condition for the duration of its affordability term. 11. SKHHP shall reimburse the Contractor for satisfactory completion of the requirements specified in the Contract and upon Contractor’s submission to SKHHP of invoices and supporting documentation of eligible expenses. 12. A covenant is recorded ensuring affordability for at least 50 years, with unit size, number of units, and affordability distribution established prior to executing Contract. Special Conditions 1. SKHHP will provide project funds to the Contractor in the form of a deferred, contingent, forgivable loan. Loan terms will account for various factors, including loan terms from other fund sources and available cash flow. Final loan terms shall be determined prior to release of funds and must be approved by SKHHP staff. The loan will be secured by a deed of trust recorded against the development property to ensure that Contractor maintains the project’s affordability and target population. Contractor shall not be required to repay the loan so long as it maintains these project requirements. 2. Timeframe for funding commitment. The funding commitment continues for thirty-six (36) months from the date of Council approval and shall expire thereafter if all conditions are not satisfied. An extension may be requested to SKHHP staff no later than sixty (60) days prior to the expiration date. At that time, the Agency will provide a Page 10 of 26 status report on progress to date and expected schedule for start of construction and project completion. The SKHHP Executive Board will consider a twelve-month extension only on the basis of documented, meaningful progress in bringing the project to readiness or completion. At a minimum, the Contractor will demonstrate that all capital funding has been secured or is likely to be secured within a reasonable period of time. 3. At least 75% of the housing units shall be set-aside for households transitioning out of homelessness and be for an eligible population defined in RCW 82.14.530 and who earn no more than 60% AMI. 4. SKHHP funds shall be used solely for new construction, unless otherwise approved by SKHHP staff. 5. LIHI shall reexamine the guest policy allowing only one guest at a time to determine if it is necessary. Page 11 of 26 3. TWG – PANDION AT STAR LAKE Funding request: $2,856,000 Advisory Board recommendation: $1,170,000 (loan) Address: 2526 S 272nd Street, Kent, WA 98059 PROJECT SUMMARY The South Building (building one of two) of Pandion at Star Lake is a multifamily rental, mixed use project consisting of 168 affordable housing units for households earning between 30% and 60% area median income (AMI) in Kent. The project is located adjacent to the Kent/Star Lake Link light rail station. This transit-oriented development (TOD) project will provide a mix of studio, one, two and three-bedroom units. The project will include ground floor commercial space consisting of an early learning center for low-income children and other non-profit tenants. The property was purchased by the developer in December 2022. The project is a seven-story building with six stories of affordable housing over one story of commercial space, plus basement level parking. Pandion at Star Lake is a combination 4% and 9% Low Income Housing Tax Credit (LIHTC) project. The project is a partnership between TWG Development and Vision House, with Vision House providing on- site supportive serves for the 4% LIHTC households (140 units). In collaboration with the City of Kent, an additional service provider will be selected to serve residents of the 9% LIHTC households (28 units). The 168 units includes 109 units for the general population, 30 units for families with children, 25 units for families with children that require permanent supportive services and who are transitioning out of homelessness or are at-risk of homelessness, and 4 units supporting households with an intellectual and/or developmental disability (I/DD) requiring supportive services. SKHHP funds are requested for new building construction. 29 units of the project are eligible for HB 1590 funds. These include the 25 units for families with children transitioning out of homelessness or are at-risk of homelessness and require permanent supportive services and the four units set-aside for I/DD households. PROJECT SCHEDULE Site Control 12/6/2022 Building Permits Issued 10/1/2025 Begin Construction 12/31/2025 Certificate of Occupancy Issued 12/31/2027 Placed in service 1/1/2028 First LIHTC Year 2028 FUNDING RATIONALE The Advisory Board supports the intent of this application for the following reasons: • The project is located adjacent to the future Kent/Star Lake Link light rail station and has convenient access to transit, schools, grocery stores, and services. Page 12 of 26 • The project strongly aligns with SKHHP Housing Capital Fund adopted priorities including: being a transit-oriented development (TOD) project, collaboration with local community-based organizations, addressing the needs of populations most disproportionately impacted by housing costs, advancing economic opportunity due to its proximity to the future Link light rail station and other amenities, advancing geographic equity of the Housing Capital Fund, and the leverage of private and public investment. • The project construction start date is anticipated by early 2026, six months later than other recommended projects. The sponsor may have more time to secure the additional funds than other projects prior to beginning construction. • The project has a strong partnership with Vision House who will provide on-site supportive services for 140 households. • A second building supporting 173 units for seniors earning 80% to 100% AMI is part of the overall project, but is not part of the application to public funders. The overall project supports mixed-income housing from 30% AMI-100% AMI. • The project sponsor has been in close communication with the City of Kent on project feasibility and zoning requirements since the property was purchased in December 2022. • The project sponsor has agreed to voluntarily meet the design standards for properties zoned as ‘Midway Transit Community,’ which is a higher degree of development than what is required under general mixed-use commercial standards for the City of Kent. • A third-party construction report found the proposed budget to be appropriate. PROPOSED CONDITIONS Standard Conditions 1. Contractor shall provide SKHHP with development and operating budgets based upon actual funding commitments for approval by SKHHP staff. Contractor must notify SKHHP staff immediately if it is unable to adhere to these budgets, and must submit new budget(s) to SKHHP staff for approval. SKHHP staff shall not unreasonably withhold its approval of these budget(s), so long as they do not materially or adversely change the Project. This shall be a continuing obligation of the Contractor. Contractor’s failure to adhere to budgets (either original or new/amended) may result in SKHHP’s withdrawal of its funding commitment. Contractor must prepare and submit final budgets to SKHHP at the time it starts project construction and at the project’s completion. 2. Contractor shall submit to SKHHP evidence of funding commitments from all proposed public and private funding sources. If Contractor cannot secure an identified commitment within an application’s time frame, Contractor shall immediately notify SKHHP staff and describe its anticipated actions and time frame for securing alternative funding. 3. Contractor shall use SKHHP provided funds toward specific project costs as included in the funding agreement and consistent with RCW 82.14.530. Contractor may not use SKHHP funds for any other purpose unless SKHHP staff authorizes such alternate use in Page 13 of 26 writing. If budget line items with unexpended balances exist after completion of the project, SKHHP and other public funders shall approve adjustments to the project capital sources (including potential reductions in public fund loan balances). 4. Contractor shall evaluate and consider maximizing sustainability features for the Project (such as an efficient building envelope and heat pumps) and shall propose a plan to maximize the Project’s sustainability. 5. If Contractor uses federal funds toward the Project, it must meet applicable federal guidelines, including but not limited to: contractor solicitation; bidding and selection; wage rates; and federal laws and regulations. 6. Contractor shall maintain documentation of any necessary land use approvals, permits, and licenses required by the jurisdiction in which the project is located. 7. Quarterly Status Reports. Contractor is required to provide SKHHP with quarterly status reports for projects funded through SKHHP’s Housing Capital Fund during the project’s development stage (from the time funds are awarded until the project’s completion and occupancy). These quarterly reports must include at a minimum the status of funds expended and progress to date. SKHHP will rely on these quarterly reports to determine whether Contractor is making satisfactory progress on the project. Contractor shall submit a final budget to SKHHP upon project completion. If applicable, Contractor shall submit initial tenant information as required by SKHHP. 8. SKHHP will inspect the project site at least once during the project’s construction. 9. Ongoing Monitoring. After occupancy, Contractor will submit annual reports to SKHHP summarizing the number of project beneficiaries, housing expenses for the target population, and the proportion of those beneficiaries that are low- and/or moderate- income and that meet other eligibility criteria established in the Contract. In addition, for projects with loan payments, Contractor must annually report financial information to SKHHP that it will use to assess contingent loan payments and project health. These annual reports will be required for the full duration of affordability. SKHHP will also periodically evaluate all projects for long term sustainability. 10. For rental projects, Contractor shall maintain the project in good and habitable condition for the duration of its affordability term. 11. SKHHP shall reimburse the Contractor for satisfactory completion of the requirements specified in the Contract and upon Contractor’s submission to SKHHP of invoices and supporting documentation of eligible expenses. 12. A covenant is recorded ensuring affordability for at least 50 years, with unit size, number of units, and affordability distribution established prior to executing Contract. Special Conditions 1. SKHHP will provide project funds to the Contractor in the form of a deferred, 1% interest, non-forgivable loan to the LIHTC partnership. The form of the funds are Page 14 of 26 subject to change, but shall be agreed upon prior to contract execution. Loan terms will account for various factors, including loan terms from other fund sources and available cash flow. Final loan terms shall be determined prior to release of funds and must be approved by SKHHP staff. The loan will be secured by a deed of trust recorded against the development property to ensure that Contractor maintains the project’s affordability and target population. 2. Timeframe for funding commitment. The funding commitment continues for thirty-six (36) months from the date of Council approval and shall expire thereafter if all conditions are not satisfied. An extension may be requested to SKHHP staff no later than sixty (60) days prior to the expiration date. At that time, the Agency will provide a status report on progress to date and expected schedule for start of construction and project completion. The SKHHP Executive Board will consider a twelve-month extension only on the basis of documented, meaningful progress in bringing the project to readiness or completion. At a minimum, the Contractor will demonstrate that all capital funding has been secured or is likely to be secured within a reasonable period of time. 3. At least 29 housing units of the total shall be for an eligible population defined in RCW 82.14.530 including households transitioning out of homelessness or are at-risk of homelessness or households with an I/DD and who also earn no more than 60% AMI. 4. SKHHP funds shall be used solely for new construction of the South Building, unless otherwise approved by SKHHP staff. Page 15 of 26 4. Multi-Service Center - Victorian Place II Funding request: $500,000 Advisory Board recommendation: $675,918 (grant) Address: 24517 26th Place South, Des Moines, WA 98198 PROJECT SUMMARY Victorian Place II is a multifamily, preservation 20-unit rental project in Des Moines. Since 1996, the nonprofit Multi-Service Center has owned the two adjacent buildings that comprise the project which includes five units for households earning up to 35% AMI, ten units for households up to 40% AMI, and five units for households up to 50% AMI. The 20 three bedroom/two bath affordable rental units are in active use and the target population is families with children. The original request was for $500,000 in the form of a grant. Initial estimates were based on a 2018 construction estimate. An updated cost estimate of the project received on October 25, 2023 totals $675,918. SKHHP funds are requested to support the rehabilitation of the two buildings including: landscape improvements, staircase repairs, installation of new railings, seal coating the parking lot, upgrading external lighting, recoating tenant decks, installation of new siding, replacing gutters and downspouts, replacing windows, replacing sliding glass doors, replacing unit entry doors, and replacing baseboard heating with energy-efficient heating systems. PROJECT SCHEDULE Site Control 1/1/2000 Building Permit Issued Mid-2024 Begin Rehabilitation and Renovation Mid-late 2024 End Rehabilitation and Renovation Mid-late 2025 FUNDING RATIONALE The Advisory Board supports the intent of this application for the following reasons: • There are limited funding sources available for preservation and rehabilitation. The focus for larger public funders has historically been on creating new units of affordable housing. Smaller preservation projects like this one are not as competitive against larger preservation projects competing for the same funds. • The property is in need of rehabilitation to support the health and safety of residents which are families with children. • Preservation of affordable housing is a high-priority for SKHHP. • 75% of the households earn no more than 40% AMI. • The project’s proximity to the future Kent Des Moines Link light rail station an asset (1.3 miles). • Multi-Service Center is a well-established South King County-based nonprofit that owns and operates over 650 units of affordable housing. Page 16 of 26 • Multi-Service Center’s housing programs have a history of serving BIPOC community members with 72% of clients self-identifying as BIPOC. • The project strongly aligns with SKHHP Housing Capital Fund adopted priorities including: the project sponsor’s community connection and engagement with the populations they intend to serve, advancing racial equity, addressing the needs of populations most disproportionately impacted by housing costs, advancing geographic equity of the Housing Capital Fund, and preservation. • Of the two applications submitted by the project sponsor, this project is the higher of the two priorities as the larger housing units are more difficult for families in need to access, and the current safety concerns at the project site are more immediate. PROPOSED CONDITIONS Standard Conditions 1. Contractor shall provide SKHHP with development and operating budgets based upon actual funding commitments for approval by SKHHP staff. Contractor must notify SKHHP staff immediately if it is unable to adhere to these budgets, and must submit new budget(s) to SKHHP staff for approval. SKHHP staff shall not unreasonably withhold its approval of these budget(s), so long as they do not materially or adversely change the Project. This shall be a continuing obligation of the Contractor. Contractor’s failure to adhere to budgets (either original or new/amended) may result in SKHHP’s withdrawal of its funding commitment. Contractor must prepare and submit final budgets to SKHHP at the time it starts project rehabilitation and at the project’s completion. 2. Contractor shall submit to SKHHP evidence of funding commitments from all proposed public and private funding sources. If Contractor cannot secure an identified commitment within an application’s time frame, Contractor shall immediately notify SKHHP staff and describe its anticipated actions and time frame for securing alternative funding. 3. Contractor shall use SKHHP provided funds toward specific project costs as included in the funding agreement and consistent with RCW 82.14.540. Contractor may not use SKHHP funds for any other purpose unless SKHHP staff authorizes such alternate use in writing. If budget line items with unexpended balances exist after completion of the project, SKHHP shall approve adjustments to the project capital sources (including potential reductions in public fund loan balances). 4. Contractor shall evaluate and consider maximizing sustainability features for the Project (such as an efficient building envelope and heat pumps) and shall propose a plan to maximize the Project’s sustainability. 5. If Contractor uses federal funds toward the Project, it must meet applicable federal guidelines, including but not limited to: contractor solicitation; bidding and selection; wage rates; and federal laws and regulations. Page 17 of 26 6. Contractor shall maintain documentation of any necessary land use approvals, permits, and licenses required by the jurisdiction in which the project is located. 7. Quarterly Status Reports. Contractor is required to provide SKHHP with quarterly status reports for projects funded through SKHHP’s Housing Capital Fund during the project’s development stage (from the time funds are awarded until the project’s completion). These quarterly reports must include at a minimum the status of funds expended and progress to date. SKHHP will rely on these quarterly reports to determine whether Contractor is making satisfactory progress on the project. Contractor shall submit a final budget to SKHHP upon project completion. If applicable, Contractor shall submit initial tenant information as required by SKHHP. 8. SKHHP will inspect the project site at least once during the project’s rehabilitation. 9. Ongoing Monitoring. After occupancy, Contractor will submit annual reports to SKHHP summarizing the number of project beneficiaries, housing expenses for the target population, and the proportion of those beneficiaries that are low- and/or moderate- income and that meet other eligibility criteria established in the Contract. In addition, for projects with loan payments, Contractor must annually report financial information to SKHHP that it will use to assess contingent loan payments and project health. These annual reports will be required for the full duration of affordability. SKHHP will also periodically evaluate all projects for long term sustainability. 10. For rental projects, Contractor shall maintain the project in good and habitable condition for the duration of its affordability term. 11. SKHHP shall reimburse the Contractor for satisfactory completion of the requirements specified in the Contract and upon Contractor’s submission to SKHHP of invoices and supporting documentation of eligible expenses. 12. A covenant is recorded ensuring affordability for at least 50 years, with unit size, number of units, and affordability distribution established prior to executing Contract. Special Conditions 1. SKHHP will provide project funds to the Contractor in the form of a secured grant with no repayment. Final Contract terms shall be determined prior to release of funds and must be approved by SKHHP staff. The grant will be secured by a deed of trust recorded against the property to ensure that Contractor maintains the project’s affordability and target population. Contractor shall not be required to repay the grant so long as it maintains these project requirements. 2. Timeframe for funding commitment. The funding commitment continues for thirty-six (36) months from the date of Council approval and shall expire thereafter if all conditions are not satisfied. An extension may be requested to SKHHP staff no later than sixty (60) days prior to the expiration date. At that time, the Agency will provide a status report on progress to date and expected schedule for start of construction and project completion. The SKHHP Executive Board will consider a twelve-month extension Page 18 of 26 only on the basis of documented, meaningful progress in bringing the project to readiness or completion. At a minimum, the Contractor will demonstrate that all capital funding has been secured or is likely to be secured within a reasonable period of time. 3. SKHHP funds shall be used solely for the rehabilitation of the property to include, but not be limited to, the following, unless otherwise approved by SKHHP staff: a. landscape improvements b. staircase repairs c. installation of new railings d. seal coating the parking lot e. upgrading external lighting f. recoating tenant decks g. installation of new siding h. applying exterior paint i. replacing gutters and downspouts j. replacing windows k. replacing sliding glass doors l. replacing unit entry doors m. replacing baseboard heating with energy-efficient heating systems 4. SKHHP and Contractor shall agree to the specifics on what will be funded prior to executing a contract to ensure eligibility of expenses in alignment with RCW 82.14.540 and to mitigate cost-overruns. 5. Five housing units shall serve households earning up to 35% AMI, ten units for households up to 40% AMI, and five units for households up to 50% AMI for the duration of the term of affordability. 6. Should cost overruns occur that require funds above SKHHP’s contribution, sponsor will work towards filling the funding need through their capital budget process or seeking funds through other sources. Page 19 of 26 5. ecoTHRIVE - Burien Cooperative Village Funding request: $1,000,000 Advisory Board recommendation: $0 Address: 12230 Military Road South, Burien, WA 98168 PROJECT SUMMARY Burien Cooperative Village is a 27-unit cottage homeownership project in Burien. The cottages will include three studios, eleven one-bedroom, and thirteen two-bedroom units ranging in size from 320 square feet to 650 square feet, including two ADA accessible units. The cottages will be affordable to purchase for households earning an average of 50% AMI, not to exceed 60% AMI. Ownership will be through a Limited Equity Cooperative (LEC). An LEC is a homeownership model in which residents purchase a share in a development (rather than an individual unit) and commit to resell their share at a price determined by formula in order to maintain affordability over the long term. The project is designed to be climate adaptive with water catchments, organic gardens, and energy efficient buildings, with renewable energy capacity. The project will include 12 duplex units, three stand-alone units, a common building, a playground, and onsite landscaping of native and edible plants. The project was accepted into the City of Burien’s Affordable Housing Demonstration Program by the Burien City Council on March 27, 2023. The land was purchased in 2023 by ecoTHRIVE using a loan from the Land Acquisition Program administered by the Washington State Housing Finance Commission (WSHFC). The request is in the form of a grant to support the construction of new buildings and to cover permit and development fees. PROJECT SCHEDULE Land Acquisition 2/14/2023 Building Permits Issued 2/15/2024 Construction Begins 4/1/2024 Certificate of Occupancy 7/1/2025 Last Building Placed in Service 12/11/2025 FUNDING RATIONALE The Advisory Board recommends forgoing the funding request this round for the following reasons: • Though this is the second time the project sponsor has applied to SKHHP for this project, and this year’s application was much stronger than last years, the proposal was missing key detailed budgetary information and demonstrated that the project may not be ready to proceed using SKHHP funds at this time. While homeownership is a high priority for SKHHP, this project does not appear ready to move forward currently. • A major funding source of the project relies on the timely adoption of the federal budget. Page 20 of 26 • Several detailed budget items were missing from the proposal, making it difficult to determine feasibility of the budgetary proposal. Items not included in the application include: o Detailed construction cost estimate.  Hard cost estimate or detailed breakdown of the General Conditions. Typically, this cost includes equipment rentals, supervision and labor costs, street use fees and ongoing safety equipment costs.  The hard cost budget from the application for the site work is $2,300,000 and the third-party construction consultant cannot confirm if this cost is reasonable and appropriate without further cost breakdown. If this cost includes earthwork, utilities, and exterior improvements, then the cost at $138.00 per gross building square foot is much higher than other “apartment” projects at $36.00 per gross building square foot. o Other development costs such as pre-development / bridge financing interest, construction loan interest and fees, real estate tax, carrying costs at lease up, General Contractor fee and overhead (these last two items may be included in the total hard cost of $5 million, but is usually about 10% of construction costs). The developer fee at $150,000 is considerably low which is used to pay the project sponsor’s staff. o Budget for an ALTA survey and a boundary topographic survey, which would eventually be needed. • The cost per gross building square foot is about 25% above average compared to recent and similar cottage home construction projects, according to a third-party construction report. • The project was competing against preservation projects – also a SKHHP priority – for the limited amount of funding available this year sourced from SHB 1406 ($928,000). Page 21 of 26 6. Multi-Service Center - White River Apartments Funding request: $500,000 Advisory Board recommendation: $0 Address: 1301 31st St SE, Auburn, WA 98002 PROJECT SUMMARY The White River Apartments is a multifamily, preservation 24-unit rental project in Auburn. The building was constructed in 1978, and the nonprofit Multi-Service Center took over ownership in 2000. The project consists of two bedroom/one bathroom units in active use which includes three units serving households earning up to 30% AMI, sixteen units at 45% AMI, and five units at 80% AMI. The 80% AMI units are currently occupied by households earning less than 60% and those units would shift to income restricted up to 60% AMI if funds are awarded. The project would not displace current residents. SKHHP funds are requested to support the rehabilitation of the 24 units including: installation of new washers and dryers, modernization of plumbing systems, replacement of shower surrounds, siding replacement, refurbishment of cabinetry, replacement of entry doors, incorporation of screen doors, replacement of gutters and downspouts, renewal of walkway railings, and refinishing of the parking lot through seal coating. PROJECT SCHEDULE Site Control 1/1/1996 Building Permit Issued Mid-2024 Begin Rehabilitation and Renovation Mid-late 2024 End Rehabilitation and Renovation Mid-late 2025 FUNDING RATIONALE The Advisory Board recommends forgoing the funding request this round for the following reasons: • As a preservation project, this proposal aligns with the priorities of SKHHP, but limited eligible funding was available this round and of the two proposals submitted by the project sponsor to SKHHP this year, the higher priority project identified by the project sponsor was recommended for full funding. Page 22 of 26 ATTACHMENT 1: Proposed Funding Sources for Recommended Projects HB 1590 Allocations by Jurisdiction Jurisdiction 2. LIHI-Skyway Unallocated Covington $ 88,126 $ 246,752 $ 103,107 $ 438,028 $ 43 Kent $ 911,874 $ 2,553,248 $ 1,066,893 $ 4,532,457 $ 442 SHB 1406 Allocations by Jurisdiction Jurisdiction Victorian Place Contributed in Carry-Over from 2022 Unallocated Auburn $ 119,648 $ 152,865 $ 11,548 $ 44,766 Burien $ 54,894 $ 69,897 $ 5,535 $ 20,539 Des Moines $ 26,314 $ 34,301 $ 1,858 $ 9,845 Federal Way $ 103,885 $ 133,558 $ 9,196 $ 38,869 Kent $ 163,845 $ 212,655 $ 12,493 $ 61,302 Normandy Park $ 5,167 $ 6,992 $ 108 $ 1,933 Renton $ 188,772 $ 246,643 $ 12,758 $ 70,629 Tukwila $ 13,393 $ 17,233 $ 1,171 $ 5,011 Page 23 of 26 ATTACHMENT 2: Economic Summaries of Recommended Projects Project: Mercy Housing NW – Kent Multicultural Village Proposed Funding Sources by Amounts and Status Funding source Proposed Amount Status TOTAL Proposed Use of Funds and Total Residential Cost Per Unit Proposed use Amount Per Unit TOTAL TOTAL NON-RESIDENTIAL TOTAL RESIDENTIAL (Includes common areas) Residential Cost Per Square Foot Item Amount Residential Cost Per Unit Based on Unit Size Unit Size Number of Units Unit Square Footage Cost per Unit Page 24 of 26 Project: LIHI – Skyway Affordable Housing and Early Learning Center Proposed Funding Sources by Amounts and Status Funding source Proposed Amount Status TOTAL Proposed Use of Funds and Total Residential Cost Per Unit Proposed use Amount Cost per Unit TOTAL TOTAL NON-RESIDENTIAL TOTAL RESIDENTIAL (Includes common areas) Residential Cost Per Square Foot Item Amount Residential Cost Per Unit Based on Unit Size Unit Size Number of Units Unit Square Footage Cost per Unit Page 25 of 26 Project: TWG – Pandion at Star Lake Proposed Funding Sources by Amounts and Status Funding source Proposed Amount Status TOTAL Proposed Use of Funds and Total Residential Cost Per Unit Proposed use Amount Per Unit TOTAL TOTAL NON-RESIDENTIAL TOTAL RESIDENTIAL (Includes common areas) Residential Cost Per Square Foot Item Amount Residential Cost Per Unit Based on Unit Size Unit Size Number of Units Unit Square Footage Cost per Unit Page 26 of 26 Project: Multi-Service Center - Victorian Place II Proposed Funding Sources by Amounts and Status Funding source Proposed Amount Status TOTAL Proposed Use of Funds and Total Residential Cost Per Unit Proposed use Amount Per Unit TOTAL Auburn | Burien | Covington | Des Moines | Federal Way | Kent | Maple Valley | Normandy Park | Renton | Tukwila | King County SOUTH KING HOUSING AND HOMELESSNESS PARTNERS 2023 Quarter 3 Progress Report (July-September). Quarter 3 was a time of action, regional shared vision, and advancing the goals of the South King Housing and Homelessness Partners (SKHHP) Housing Capital Fund to fund the creation and preservation of affordable housing in South King County. Two member cities took action to pool a new funding source for the Housing Capital Fund, 2023 Housing Capital Fund guidelines and priorities were adopted by the Executive Board, and the second annual funding round resulted in six applications competing for $5.9 million. GOAL 1. Implement SKHHP Interlocal Agreement. Long-Term Funding Strategy for Housing Capital Fund – Facilitated discussion with SKHHP Executive Board on priorities for building on the early success of the Housing Capital Fund. Advisory Board – Continued recruitment to increase membership on the SKHHP Advisory Board through targeted outreach. Corresponded with 40 interested applicants. New Member Possibility – Invited to present at a Council Committee of the City of SeaTac on the possibility of becoming SKHHP’s newest member. A follow-up presentation occurred in October to the full City Council. Final action by the City is anticipated in late-November. GOAL 2. Build long-term sustainability for SKHHP Housing Capital Fund. New Sources of Revenue – Two member cities pooled a portion of revenues collected under HB 1590 to fund affordable housing through the SKHHP Housing Capital Fund. Interlocal Agreements were developed and adopted in October. 2023 Housing Capital Fund Funding Round – The SKHHP Executive Board adopted updated guidelines and funding priorities for the 2023 funding round. Eight pre-application meetings were held plus two inquiry meetings with potential applicants. Six applications for funding were received totaling $8.7 million in requests with only $5.9 million available. Contract Documents – Developed contract documents and funding agreements for SKHHP’s first funded project from 2022. Execution of agreements anticipated in November. GOAL 3. Work with partner jurisdictions to enhance and develop policies that protect existing affordable housing and accelerate access. Preservation Strategies – Developed three surveys on subregional housing preservation and administered to the Executive Board, Advisory Board, and South King County planners. GOAL 4. Represent South King County and its affordable housing needs at all relevant decision tables and foster collaboration between partners. Stakeholder Collaboration – Met with Congressman Adam Smith to advocate for South King County’s affordable housing needs. Collaborated with King County and ARCH on a joint application for HUD’s Pathways to Removing Obstacles to Housing grant. GOAL 5. Further strengthen regional stakeholders’ understanding of the spectrum of affordable housing options and the range of related needs. Executive Board Briefings – Coordinated an update from the King County Regional Homelessness Authority, a presentation on homeownership and the community land trust model from Homestead Community Land Trust, and a presentation on acquisition and rehabilitation by the King County Housing Authority. WHO WE ARE Formed in 2019 by an Interlocal Agreement, we are a collaboration between 10 South King County cities and King County united under the common goal to ensure the availability of housing for all income levels of residents in South King County. We achieve this through a focus on the production and preservation of affordable housing, partnership with public and private organizations, pooling and sharing resources, and advancing housing policies. PURPOSE Create a coordinated, comprehensive, and equitable approach to increasing housing stability, reducing homelessness, and producing and preserving quality affordable housing in South King County. CONTACT Claire Vanessa Goodwin Executive Manager Website: http://skhhp.org Phone: (253) 931-3042 Email: info@skhhp.org 2 South King Housing and Homelessness Partners REVENUES OPERATING ACTUAL HOUSING CAPITAL FUND CONTRIBUTIONS 2023 COMMERCE GRANT Auburn $ 34,385 $ 152,865 $ 6,556 Burien 19,838 69,897 6,556 Covington 9,919 -- Federal Way 44,965 133,558 - King County additional contribution 30,035 -- INTEREST EARNINGS Total $ 376,734 $ 874,145 $ 32,780 EXPENDITURES SKHHP Cost Reimbursement 254,553 - Administration Fee 25,050 - Total 279,603 - 296,916 1,448,075 129,911 874,145 426,827 2,322,220 SKHHP Cost Reimbursement Detail EXPENDITURES Wages 151,785 Interfund Allocations 23,022 Total 279,603 2024 SKHHP Executive Board Meeting Schedule Third Friday of the month 1:00 pm – 3:00 pm Date January 19 February 16 March 15 (in person) April 19 May 17 June 21 (in person) July 19 August 16 September 20 (in person) October 18 November 15 December 20 (in person) King County Housing Authority Preservation Strategies –The Financing South King Housing and Homelessness Partners November 17, 2023 Continuing a Discussion on Preservation Background on KCHA The Financing Investments in South King County Opportunities & Challenges September Today  Update on Investments in South King County Preservation Strategies Investments in South King County Of KCHA’s 6,000 units in South King County, well over half have been acquired through acquisition- preservation strategies. BUILDING THROUGH PRESERVATION ACQUISITION FOCUS AREAS •Transit-oriented development (TOD) areas •Larger housing communities, near amenities •Naturally occurring affordable housing Salish Place , Des Moines Financing an acquisition Preservation Strategies Existing Affordable Housing Existing Privately- Owned Housing Preserve federal subsidies Ensure long-term affordability of already regulated affordable housing that could be at risk of losing affordability Examples: Expiring Project-Based Section 8, USDA, or Low-Income Housing Tax Credit properties Preserve relative affordability & prevent community displacement associated with rising rents & asset repositioning Decouple rents from market pressures Grow affordability overtime Plan to invest in capital needs Rising Acquisition Costs Per unit costs in multifamily sales in the Seattle metro area $296,466 $114,060 $472,189 $162,514 $225,358 $86,636 $0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 202220212020201920182017201620152014201320122011 3 Star Seattle Metro 4-5 Star Seattle Metro United States Tax Exempt Bonds (PHAs) Traditional Financing Sources Private Purchaser Affordability @ 60% AMI Prioritized for affordability at between 30% & 60% AMI Traditional Bank Loan Low-Income Housing Tax Credits State Housing Trust Fund Federal Resources (National HTF, HUD Section 202 and Section 811) Housing Authority & Non -Profit Purchasers Traditional Bank Loan (Fannie Mae, Freddie Mac, FHA) Investor Equity Local Sources Owner Equity Financing Example ( L i k e S a l i s h P l a c e ) Property Per Unit Market Income $2,611,000 $1,600/mo $2,000/mo Expenses $1,224,000 $9,000 $9,000 Net Operating Income (NOI)$1,387,000 $10,200 $2,040,000 Less Replacement Reserves $108,800 $800 $40,800 ($300/u) NOI to Finance Debt $1,278,200 $1,999,200 Cap rate on $37 million purchase 3.5%5.4% Property Pro Forma at Purchase 136 Units, Des Moines Average Rents 1 Bedroom:$1,250 2 Bedroom:$1,550 3 Bedroom:$1,690 For purpose of illustration: Purchase Price:$37,000,000 NOI of $1,278,000 Permanent Financing Financing Example ( L i k e S a l i s h P l a c e ) For purpose of illustration: Average Rents 1 Bedroom:$1,250 2 Bedroom:$1,550 3 Bedroom:$1,690 6%-35yr 5% -35yr 4%-35yr NOI $1,278,000 $1,278,000 $1,278,000 Debt $20,273,954 $22,905,255 $26,108,084 Gap $16,726,046 $14,094,745 $10,891,916 Annual Payment to Finance Gap $1,153,660 $860,790 $583,560 KCHA’s Strategies to Address Gap Obtain additional funding from local partners (e.g. TOD Bonds) to the extent funding requirements align with existing rents Amazon’s Housing Equity Fund (2021) and Microsoft (2019 ) Strategize financing to balance risk and cost to minimize gap Maintain AA Municipal Credit Rating from S&P In addition, credit enhancement in partnership with King County for up to $200 million in financing Pool multiple properties together with varying levels of financing needs and net operating income KCHA ultimately financed the remainder of the gap through low-cost financing from Microsoft and by pooling the property’s outstanding debt needs with other properties. Riverstone Acquisition Purchase Price $70,963,200 NOI of $3,324,960 Standard Debt -$49,331,892 30 year, 4% KC TOD Loan -$10,000,000 50 year, 1% interest only Percent Financed 84% Gap:$11,631,308 Financing $11.6 million with similar terms would equate to $55,530 per month or $666,356 million per year. Without the TOD, this would have required an additional annual payment of $1.1 million. Average Rents Studio:$1,075 1 Bedroom:$1,275 2 Bedroom:$1,465 3 Bedroom:$1,885 For purpose of illustration: $1,490 $1,250 $1,868 $1,350 $1,200 $1,300 $1,400 $1,500 $1,600 $1,700 $1,800 $1,900 $2,000 202320222021202020192018201720162015 Villages 2BR/1BA Rent Burien, Tukwila, SeaTac 2BRs (CoStar) Villages at South Station Tukwila 191 affordable workforce housing units Bond Financed $1,490 two bedroom rent Affordability Level: 60% of AMI $378 / month difference between market rent Takeaways Rising costs: More subsidy will be needed in the future for actions not taken today (property acquisitions only become more expensive) Leveraging debt:There are implications for growing affordability overtime vs. enacting deeper affordability requirements today Gap financing needs for acquisitions are significant: Consider regional and statewide funding mechanisms that help underwrite this work Acquisition and preservation of housing is cost -effective and a needed part of our regional affordable housing strategy Discussion 2023 SKHHP Housing Capital Fund Recommended Allocations Claire V. Goodwin, SKHHP Executive Manager November 17, 2023 SKHHP Executive Board Goals for Today REVIEW ADVISORY BOARD’S RECOMMENDATION FINAL SUMMARY REVIEW AND DISCUSSION ADOPT FUNDING RECOMMENDATION 2 Housing Capital Fund Timeline July - September 2023 •Project sponsors request pre-application meetings and submit applications Oct 2023 •Advisory Board and Executive Board reviews projects Nov 2023 •Advisory Board makes a recommendation •Executive Board finalizes recommendation Jan-March 2024 •SKHHP Member Councils approve recommendation 3 Items the Advisory Board Considered 4 •Along with funding recommendation, included funding rational and any special conditions (grant vs loan; approximate number of units with affordability; population set-asides; time limit on when funds must be spent) •For projects seeking other public funding, SKHHP signal a prioritized green light •Project readiness •Alignment with SKHHP priorities •Preservation as a high priority in South King County •Staff capacity limited 3-4 projects •No requirement to spend all funds New Information 5 •Third party construction reports ordered on new construction proposals •Cost per residential unit and cost per unit by size •MSC’s Victorian Place II submitted updated cost estimate of work from $500k to $675,918 •Revised total excludes contingency funding •Standard contingency for rehabilitation: 15% •Total with 15% contingency: $777,306 Conflict of Interest •One Advisory Board member had a conflict of interest •Employed by a project applicant (MSC) •This member abstained from the vote and evaluations •Two Advisory Board members disclosed potential conflicts of interest •Employed by organizations that discussed opportunities to collaborate on ecoTHRIVE’s Limited Equity Cooperative model •These members voted and participated in deliberations •The disclosures happened before the vote was taken •The conflicting transactions were unrelated to the matter voted on 6 7 Mercy Housing NW - Kent Multicultural Village 8 Funding Recommendation - Kent Multicultural Village 9 •Funding Requested: $1,000,000 •Advisory Board Recommendation: $1,000,000 •Funding Rational: •20% set-aside for I/DD households •Diverse range of incomes served (30% AMI-80% AMI) •Thorough, well-planned proposal •Strong alignment with SKHHP priorities: TOD, collaboration, economic opportunity, geographic equity, leverage of private and public funds •Special Conditions: •Deferred, contingent, forgivable loan •Funding commitment lasts 36 months •Documentation of remediation results submitted LIHI- Skyway Affordable Housing & Early Learning Center 10 Funding Recommendation – Skyway Affordable Housing and Early Learning Center 11 •Funding Requested: $2,800,000 •Advisory Board Recommendation: $2,800,000 •Funding Rational: •Brings affordable, quality housing to historically disenfranchised neighborhoods •Childhaven onsite •Strong alignment with SKHHP priorities: collaboration, addressing needs of priority populations, geographic equity, racial equity, and leverage of private and public funds •Special Conditions: •Deferred, contingent, forgivable loan •Funding commitment lasts 36 months •LIHI shall re-examine guest policy allowing only one guest at a time to determine if it is neccessary TWG - Pandion at Star Lake 12 Funding Recommendation – Pandion at Star Lake 13 •Funding Requested: $2,856,000 •Advisory Board Recommendation: $1,170,000 •Funding Rational: •Convenient access to transit, schools, grocery stores •Strong alignment with SKHHP priorities: TOD, collaboration, addressing needs of priority populations, economic opportunity, geographic equity, and leverage of private and public funds •Special Conditions: •Deferred, 1% interest, non-forgivable loan •Funding commitment lasts 36 months •Eligible uses in-alignment with RCW 82.14.530 Multi-Service Center - Victorian Place II 14 Funding Recommendation – Victorian Place II 15 •Funding Requested: $500,000 •Advisory Board Recommendation: $675,918 •Staff Recommendation (based on new information received): $777,306 •Funding Rational: •Limited funding sources available for rehabilitation and preservation •Property is need of rehab to support health and safety of families with children •Maintaining deep affordability •Project sponsor reported this project as higher priority of two applications submitted •Strong alignment with SKHHP priorities: preservation, community connection, racial equity, addressing needs of priority populations, geographic equity, and leverage of private and public funds •Special Conditions: •Secured grant with no repayment •Funding commitment lasts 36 months •Funding solely for the rehabilitation of property with specific itemization •Should cost overruns occur, sponsor will seek funds outside of SKHHP ecoTHRIVE- Burien Cooperative Village 16 Funding Recommendation – Burien Cooperative Village 17 •Funding Requested: $1,000,000 •Advisory Board Recommendation: $0 •Funding Rational: •Missing key detailed budgetary information •Level of readiness •Previously funded projects in Burien •Major funding source relies on adoption of federal budget •Competing against preservation projects for limited SHB 1406 funds ($928k) Multi-Service Center - White River Apartments 18 Funding Recommendation – White River Apartments 19 •Funding Requested: $500,000 •Advisory Board Recommendation: $0 •Funding Rational: •Limited funding available this year in eligible sources ($928k) •Victorian Place II was the higher priority for the project sponsor due to the level of need of the other property and the units being reserved for families with children Proposed Funding Sources for Recommended Projects – HB 1590 20 Proposed Funding Sources for Recommended Projects – SHB 1406 21 Questions Claire V. Goodwin, SKHHP Executive Manager cvgoodwin@skhhp.org