HomeMy WebLinkAbout4539
RESOLUTION NO. 4539
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF AUBURN,
WASHINGTON, AUTHORIZING THE MAYOR TO SUBMIT AN
APPLICATION TO THE U.S DEPARTMENT OF HOUSING AND URBAN
DEVELOPMENT FOR A SECTION 108 LOAN TO ASSIST IN THE
FUNDING OF THE NEW COMMUNITY CENTER AT THE LES GOVE
PARK CAMPUS
WHEREAS, the City has prepared a financial strategy for funding the
construction of a community center facility at Les Gove Park campus which includes the
opportunity to secure a loan from the U.S. Department of Housing and Urban
Development (HUD); and
WHEREAS, the City is eligible to obtain a HUD Section 108 loan of up to
$2,033,715 of which the loan may be repaid using the City's annual allocation of
Community Development Block Grant (C DBG) funds; and
WHEREAS, the planning and preparation of a HUD loan application and use of
the CDBG funds for repayment of the loan is being done concurrently and consistently
with the updating of the City's Human Service Comprehensive Plan; and
WHEREAS, the City has prepared a draft HUD loan application which has been
made available for citizen review and comment (Exhibit A); and .
WHEREAS, the City has prepared the necessary plans and met the compliance
requirements as set forth by HUD; and
WHEREAS, the City has conducted two public hearings as required by HUD for
the purpose of obtaining views of citizens on community development and housing
needs and responding to proposals and questions;
Resolution No. 4539
October 29, 2009
Page 1
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF AUBURN,
WASHINGTON, HEREBY RESOLVES AS FOLLOWS:
Section 1: Purpose. The Mayor or his designee is authorized to apply to
HUD for a Section 108 loan in an amount not to exceed $2,033,715 for use in the
funding the new Community Center at the Les Gove Park campus.
Section 2. Implementation. The Mayor of the City of Auburn is hereby
authorized to implement such administrative procedures as may be necessary to carry
out the directives of this Resolution.
Section 3. Effective Date. This Resolution shall take effect and be in full
force upon passage and signatures hereon.
DATED and SIGNED THIS ~(!J~ DAY OF DZ~G~ 2009.
CITY OF AUBURN
<
PETER B. LE
MAYOR
ATTEST:
Danielle E. Daskam, City Clerk
APPROVED AS TO FORM:
aniel B. Heid, City Attorney
Resolution No. 4539 ~
October 29, 2009
Page 2
EXHIBIT "A"
CITY OF
y~
WASHINGTON
DRAFT
HUD SECTION 108 LOAN GUARANTEE PROGRAM
APPLICATION
PROJECT NAME: AUBURN COMMUNITY CENTER
AT LES GOVE PARK CAMPUS
APPLICANT NAME: CITY OF AUBURN, WASHINGTON
DRAFT PUBLIC REVIEW AND COMMENT PERIOD:
OCTOBER 14, 2009 - NOVEMBER 13, 2009
Drnjt HUD Section 108 Lonn Guarantee Progrnnr Application jor Communiry Center
Applicant: City ojAuburn, Waskington
1. LOAN REQUEST
The City of Auburn, Washington (the "City"), is requesting $2,033,720 in Section 108 Loan
Guarantee (B-94-UC-06-0505) funds from the U.S. Department of Housing and Urban
Development (HUD) to provide financing for the development of a 20,100 square foot
Community Center facility and parking lot within the Les Gove Park complex. Approximately
3,875 square feet of the facility will be utilized for the City's Park Department administrative
space. The City intends to execute a New Market Tax Credit (NMTC) financing structure that
will result in the assignment of the Section 108 loan proceeds to the NMTC investment fund.
The City will repay the requested Section 108 Loan with proceeds from the City's annual
allocation of Community Development Block Grant (CDBG) entitlement funds. The loan will be
structured to use interim financing for up to one yeaz. Within a year, permanent finaucing will be
obtained through HUD's public offering of notes and the loan will amortize over a twenty (20)
year term.
IL PROJECT BACKGROUND AND DESCRIPTION
The new Community Center to be funded by the HUD guarantee loan will be one of a series of
improvements to the Les Gove Park campus. Concurrent with this project, the City will also
fund and construct a new activity center/gymnasium on the campus. Auburn has a population
base of over 67,000 but is without a dedicated gathering space for community activities/events.
As a result, this project ranks as a high priority for the community. According to the 2005
Auburn Pazks, Recreation and Open Space Plan, the City should have one community center
available per 40,000 residents. The addition oF a new Community Center will fill a major
community need and result in accomplishing significant capital program objectives.
The new Community Center will serve the entire Auburn community and be operate on a year-
round to serve the publia The Center would be used for educational, cultural, social activities
' 1
and large non-programmed community meeting spaces. The City envisions the focus on the use
of the facility for various health, fitness and wellness programs; multi-generational and multi-
cultural events; special events; evening family programs; art, crafr and music; community
education and specialty classes; expanded youth and pre-school programs; and related activities.
The City may also provide facility space to the King County Housing Authoriry to meet their
needs in serving a low income housing rental project that is being developed adjacent to the Les
Gove Park campus.
This multi-use facility will feature a spacious and welwming lobby and a large community
gathering space for up to 350 people as well as dividable space for recreational activities,
programs and classes. The Community Center will also include meeting space/classrooms,
lobby, kitchen, restrooms and storage space. Facility space will also be available for office use
and administrative areas for approximately twenty (20) full-time and seasonal Parks, Arts and
Recreation employees. ,
Draft HUD Section 108 Loan Guarantee Program Application for Community Center
Applicnnl: City ofAuburn, Washington
With the addition of the new CommuniTy Center, it is envisioned that the residents of the City
and surrounding community will realize the following benefits:
• Contribute [o community pride and foster a sense of community - create a
community gathering place for neighbors, family and friends to meet
• Offer a broad range of activities promoting social interaction, especially with new
residents of Auburn
• Provide maximum flexibility and multiple uses through design; adaptable to changing
interests
■ Provide a facility that is financially feasible, affordable for participants, and can
generate revenue to offset a portion of the operating costs
The Community Center will be situated on approximately twenty five (25) acres of property
within the Les Gove Park campus (Exhibit "A") which is currently owned and operated by the
City, of Auburn. Les Gove Park is a recreational and educational campus serving the entire
community. The cluster oF amenities in this campus includes the King County library, Parks and
Recreation Administration Building, Seniar Activity Center and White River Valley Museum.
The campus also includes the populaz Rotary Spray Park, a play structure, public art, bocce
courts, horseshoe pits and two softball fields. A half-mile paved trail encircles an attractive
bermed and treed area. The City offers a diverse population with a high concentration of low
and moderate income residents. The Les Gove neighborhood is an area with a diversity of land
uses and diversity of people. The area adjacent to the Community Center includes single-family
neighborhoods, multi-family areas, and a retail/commercial area.
The City has already invested in the design phase of the Community Center; therefore, the loan
would be used for the construction phase. The City has completed all environment reviews
(Exhibit "B") and permitting to make this essentially a"shovel ready" project. 2
III. SOURCES AND USES
The City estimates the total project cost to construct the Community Center to be approximately
$8.9 million (see Exhibit "C"). The funding sources for this project are expected to include: 1) a
loan from a qualified community development entity under U.S. Department of Treasury New
Market Tax Credits program, 2) City of Auburn reserve funds and solid waste utility fees, and 3)
HUD Section 108 loan proceeds. It is contemplated that the NMTC financing will be utilized to _
carry out the following activities: -
■ The acquisition of the Les Gove Park campus real property by a newly-created entity that
will be managed and controlled by the City of Auburn.
■ The new construction of the Community Center.
• The new construction of an adjacent Activity Center that will be leased to the Auburn
. Boys and Girls Club.
Drnft HUD Section 108 Loan Guurantee Program Application for Community Cenler
App[icant. City ofAuburn, Wasl:ington
In addition to the HUD Section 108 loan and other resources, the City will loan the HUD Section
108 loan proceeds (along with other committed capital sources) to an Investment Fund which in
turn will initiate a NMTC financing that will generate approximately $3.4 million in NMTC
subsidy.
All the other identified funding sources have previously been allocated and are available for this
capital project. Below is a summary of the funding sources to date:
Source Amount
City of Auburn - reserved REET funds or other reserves 3,300,000
Solid Waste Utility Fees 500,000
NMTC Structured Finance - Investor's Contribution 3,400,000
HUD Sec. 108 Loan (max. loan; 5 times annual CDBG payment) 2.033,715
8,865,000
V. PROJECT STRUCTURE AND PARTICIPANTS
The City and/or a newly-created ownership entity that is owned and managed by the City will be
the developer and owner of the Community Center facility. The City is also an entitlement
CDBG grantee. Consequently, the City will borrow the Section 108 loan funds through HUD
(by pledging future City CDBG funds) and use the proceeds directly to assist in the funding of
the new Community Center construction. In addition to Section 108 loan, the City will use
existing City revenues and New Mazket Tax Credits to fund the Community Center. Through the
term of the NMTC financing program, the City's property will be owned and facilities will be
constructed by the NMTC ownership entity. Upon the completion of the Community Center and
execution of a master lease agreement, the City's Parks Department will operate the Center and
administer programs, services and activities in the facility. The City may also provide space
within the Community Center for use by the King County Housing Authority.
3
VI. DEVELOPMENT SCHEDULE
Below is the estimated schedule for the development of the City of Auburn Community Center
project:
• November 2008 - environmental review completed and DNS was issued
• April 2009 - initial bids were solicited for the Community & Activity Centers, project
place on hold until additional funding secured
• April 2010 - solicit bids for the construction of the Community Center.
■ May 2010 - award bid and approve a construction contract with a general contractor for
the Community Center project after open and competitive bid process.
Drnjt HUD Section 108 Loan Guarantee Program Application jor Community Center
Applicnnt: City ojAuburn, Was/tington
• June 2010 - commence construction, site subgrade preparation, under-grounding utilities.
• July-August 2010 - pour concrete slab and install framing for the Community Center.
• Summer 2010 - City will obtain HUD Section 108 loan Funds by the end of June.
• Fall 2010 - exterior of Community Center expected to be completed.
• Winter 2010 - begin interior wark on Community Center.
■ Summer 2011 - anticipated completion of construction w/ grand opening in August 2011.
Vll. REPAYMENT SCHEDULE
Below is the City of Auburn's proposed repayment schedule for the $2,033,715 million Section
] 08 loan request based on a twenty (20) yeaz loan term. For the repayment schedule below, the
City assumed an interest rate of 3.23% (as of October 6, 2009) based on the cunent 10-year U.S.
Treasury rate, plus seventy-five (75) basis points. The average annual loan repayment made by
the City will be approximately $150,000.
Year Interest Principal P&I Princioal Balance
2010 40,674 0 40,674 2,033,715
2011 81,349 70,000 151,349 1,963,715
2012 78,549 70,000 148,549 1,893,715
2013 75,749 70,000 145,749 1,823,715
2014 72,949 80,000 152,949 1,743,715
2015 69,749 80,000 149,749 1,663,715
2016 66,549 80,000 146,549 1,583,715
2017 63,349 90,000 153,349 1,493,715
4
2018 59,749 90,000 149,749 1,403,715
2019 56,149 90,000 146,149 1,313,715
2020 52,549 100,000 152,549 1,213,715
2021 48,549 100,000 148,549 1,113, 715
2022 44,549 110,000 154,549 1,003,715
2023 40,149 110,000 150,149 893,715
2034 35,749 120,000 155,749 773,715
2025 30,949 120,000 150,949 653,715
2026 26,149 120,000 146,149 533,715
2027 21,349 130,000 151,349 403,715
2028 16,149 130,000 146,149 273,715
2029 19,949 135,000 154,949 138,715
2030 5 549 138,715 144.264 0
1,006,454 2,033,715 3,040,169
Drajt HUD Section 108 Lonn Gunrnn(ee Program Applicntion jor Community Center
Applicnnt: City ofAuburn, Wnshington
VII. COLLATERAL
The City of Auburn intends to execute a NMTC structured financing which will result in the
assignment of the HUD Section 108 loan to the NMTC investment fund. As a result of this tax
credit initiative, the City will pledge to the repayment of the HUD loan the City's future CDBG
entitlement funds and provide to HUD other security/collateral as determined to be necessary
and appropriate.
The City is anticipating generating limited program income from the Center; however, the City
may execute a partnership agreement with the King County Housing Authority in providing use
of the Community Center's facilities for Housing Authority services and programs. If such an
agreement is executed, it could result in some financial contributions being made to the City by
the Housing Authority.
IX. CITIZEN PARTICIPATION REQUIREMENTS AND PROJECT ELIGIBILITY
Citizen Participation
Prior to the submission of this application, the City published a notice in two newspapers of
general circulation to provide the public with an opportunity to comment on the Section 108 loan
application to assist with the development of the Auburn Community Center Project. In addition
to the notice, a community meeting was scheduled for October 19, 2009, in the City Council
Chambers at Aubum City Hall to consider the use of the annual allocation of Community
Development Block Grant funds to pay principal and' interest payments for the HUD Section 108
loan. A second public hearing is scheduled to occur on November 2, 2009.
Eli ibili
5
Construction of the City of Aubum's Community Center project is eligible under 24 CFR (Code
of Federal Regulations) Section 570.703(1), which states "Acquisition, construction,
reconstruction, rehabilitation or historic preservation, or installation of public facilities...."
Through the development of the proposed Community Center facility, an impoRant contribution
to the City's economic development plan is the creation of construction jobs within the region.
In line with the goals of the American Recovery and Reinvestment Act which is to stimulate the
economy through the creation of jobs, this Section 108 loan funds will finance this "shovel
ready" project resulting in the creation of numerous construction-related jobs over a twelve (12)
month period. These wnstruction jobs will pay the higher of Federal or State prevailing wages,
thereby increasing pay scales for many local residents and contributing to the local economy.
National Obiective The Project meets the National Objective of Activities Benefiting Low-
and Moderate-Income Persons under 24 CFR Section 570.208(a)(1)(i), which requires a service
area containing at least fifty-one percent (51%) low and moderate income persons. Based on the
identified service area which consists of the City's entire population base, 55.5% of the City of
Draft HUD Sectinn 108 Lonn Gunrantee Program Application for Community Center
Applican[: City ofAuburn, Washington
Auburds population is comprised of low and moderate-income persons according to the
statistical data provided by HUD.
X. LOCAL CONTACTS
Please contact the following with any questions or comments on the City of Auburn's HUD
Section 108 loan application:
• Contact Name: Michael R. Wilson
• Contact Address: City of Auburn, 25 W. Main Street, Auburn, WA 98001
• Phone/Fax: (253) 931-3006 / (253) 804-3116
• E-mail address: mwilson@auburnwa.gov
■ Contact Name: Michael Hursh
■ Contact Address: City of Auburn, 25 W. Main Street, Auburn, WA 98001
• Phone/Fax: (253) 804-5029 / (253) 804-3116
• E-mail address: mhursh@auburnwa.gov
6