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Home My WebLink About3390 RESOLUTION NO. 3 3 9._0 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF AUBURN, WASHINGTON, AUTHORIZING THE MAYOR AND CITY CLERK TO APPROVE AND SUBMIT AN APFLICATION IN THE AMOUNT OF $1,237;OD0 (ONE MILLION TWO HUNDRED THIRTY-SEVEN THOUSAND DOLLARS) FOR SECTION 108 FUNDS FROM THE DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT FOR THE PURPOSE OF OBTAINING SECTION 108 _ _ LOAN GUARANTEE FUNDS FOR THE PURCHASE OF 14000 SQUARE FEET OF COMMERCIAL SPACE LOCATED IN THE SOUND TRANSIT _ _ _ PARKING GARAGE TO PROVIDE EMPLOYMENT OPPORTUNITIES FOR LOW INCOME PEOPLE AND TO ASSIST IN THE REVITALIZATION OF THE _ _ _ ` COMMUNITY'S DOWNTOWN CORE. WHEREAS, the City of Auburn is desirous of creating employment for persons of low income; and. WHEREAS, the City of Auburn is interested in the implementation of efforts to effect economic and physical revitalization of its downtown core; and WHEREAS, the City of Auburn is interested in promoting the efficient use of resources through encouraging the use of mass transit by its citizens; and WHEREAS, the project as described is thought to be consistent with the laws, ordinances and polices of the City; and WHEREAS, the City Council of the City of Auburn on September 17, 2001 approved the submitta.l of an application for Section 108 Loan Guarantee - funds and direeted staff to submit to the Department of Housing and Urban Development the proposal to use Ssction 108 Loan Guarantee funds for the acquisition and improvement of 14,000 square feet of commercial space, Resolution 3390 September 25, 2001 Page 1 NOW THEREFORE, THE CITY COUNCIL OF THE CITY DF AUBURN, WASHINGTON, IN A REGULAR MEETING DULY ASSEMBLED, HEREWITH RESOLVE THAT: , Section 1.. The City Council of the City of Auburn hereby approves the application for Section 108 Loan Guarantee Funds and directs that Gity of Auburn submit the attached Section 108 Loan Guarantee Application to the Department of Housing and Urban Development in the amount of$1,237,000, which is attached hereto as Exhibit "A" and incorporated herein by this reference, for the purpose of acquiring and improving 14,000 square feef of commercial space located in the Sound Transit Parking Garage located within the City of Auburn to provide employment opportunities for low income people and to assist in the revitalization of the community's downtown core. . Section 2. The Mayor is hereby authorized to implement such administrative procedures as may be necessary to carry out the directives of this legislation. .�' ADOPTED this�day of October, 2001; CITY OF AUBURN `�� Ic7o CHARLES A. BOOTH Mayor Resolution 3390 September 25, 2001 Page 2 ATTEST: � ��'� � � I �� Dan Ile E. Daskam City Clerk APPROVED AS TO FORM: - Michael J. Reynolds City Afitorney Resolution 3390 September 25,2001 Page 3 S'E�'TION l0� L0A1� GIJARANT'EE I'I�OGI�A11� �4I'I'LIC�47'ION FOle1Vd _ Cl7'�'OF�4 U�Ud�tIV EC'01V01VdIC'DEV�LOPI�ENT PItOJEC7' 9. Project Description Describe your project. Provide sufficient detail for a clear understanding. What 'is the purpose of the project? The purpose of the project is to provide employ.ment opportunities for low income people while simultaneously assisting in the revitalization of the community's downtown core through the acquisition of 14,000 square feet of commercial spa.ce in the parking garage of a commuter rail transit station. The commercial space will provide goods to commuters, encourage transit oriented development, promote the use of mass transit, and establish the viability of new commercial ventures in the City's downtown core while offering new employment opportunities in the downtown for Auburn's significant low income population. The City will retain a leasing agent to attract tenants and a property manager responsible for overseeing individual tenant improvements. The commuter rail station is expected to serve a minimum of 500 commuters each weekday at full operation. Ridership has increased steadily since the opening of fhe station in mid September of 2000. The station currently serves 300 commuters a day and serves a greater number of riders than the Tacoma station. The number of riders is currently constrained by the limited amount of parking available. There w'ill also be special trains established for Seattle SeaHawk Football games and Seattle Mariner Baseball games. Trains for Seattle Mariner games have sold out their capacity. As consumers have been attracted to large regional malls, retail activity in the City's downtown core has declined steadily over time. One new commercial building has been const:rucfed in #he downtown in the last 30 years. The Resolution 3390' Exhibit "A" Page 1_ - -- _ _' 2 commuter rail station and bus hub in downtown Auburn will bring a minimum of additional 500 people to the downtown finrice each day. The region's unfamiliarity with commuter rail, combined with the perception of downtown Auburn as a site with minimal economic viability, has precluded new retail development in the downtown core, even with the transit station. The City believes that substantial opportunity for retail, office a.nd residential development exists in the vicinity of the transit station and that this potential can be extended to other parts of the downtown. In the absence of private sector initiative, it is essential that the City demonstrate local government's willingness to reinvest in downtown Auburn and p�oVe that new commercial development in the downtown will be successful. Who will own the land? Sound Transit, a public agency, will own the land while the City of Auburn will have a master lease of 99 years for the commercial portion of the structure. Who will own the improvements? The City of Auburn will own the improvements. What type of business(s) will be assisted? Reta'il businesses that employ low income people and focus on providing goods to commuter rail users and people shopping, working or living in the downtown. Current interested parties include a day,care, a "wrap shopn selling sandwiches to commuters, dry cleaners and purveyors of coffee products and pastries. Z. Sources and Uses Indicate how the financial sources (including the Section 108 loan) will relate to the project costs (uses). For example: Show each financing source and its related dollar amount; - Be sure to include the debt and/or equity the owners or developers will be putting into the project; Section 108 Loan Acquisition: $746,253 Purchase $700,000 Closing Costs $ 28,000 Loan Fee(est) $ 12,253 � Appraisal $ 6,000 Construction: $490,000 Cify Acquisition: $331,000 � Resolut�ion 3390 � �xhibit "A" Page 2 '� 3 Show how the sources will be allocated to the principal project cost components. Section 108 Acquisition (Building cost): $700,000 Tenant Improvements: $490,000 Acquisition - Closing Costs: $ 28,000 108 Loan Funding Fee; $ 12,253 Appraisal $ 6,000 City . Acquisition - Parking: $331,000 Project_Str.ucture_and Participang.s Describe the principal parties in your deal and how funds will flow to the project. ` Who will be the principal developer? ➢ Sound Transit Who will be#he developers' contractor? ➢ PCL Inc. Leasing agency? ➢ Northwest Corporate Real Estate Who will provide the equity? ➢ City of Aubum Who will provide the permanent financing? ➢ Se�tion 108 Who will own the assets upon completion? ➢ City of Auburn/Sound Transit Resolution 3390 � �xhibit "A" Page 3 4 Indicate the type of entity that will act as the borrower of the Section 108 loan funds and undertake the project. The City of Auburn, a municipal corporation chartered under the State of Washington. 4. f�epavment Schedule Indicate your preferred repayment schedule: Show the amount of principal, in a minimum increment of $1,000, to be repaid annually. Note that the maximum allowable term is 20 years. Year 1 I Year 2 � Year 3 � Year 4 �_ Year 5 _ �_ Year 6 � Year 7 � Year S � Year 9 � Year 10 � $0 $0 $3;000 $13,000 - $27;000 $30,000 $38,000 $46,000 $50,000 $52,000 Year11 Year 12 Year 13 Year14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 $59,000 $72,000 $73,000 $79,000 $84,000 $96;000 $110,000 $125,000 $137,000 $148,000 I 5. Collateral Apart from fhe underlying pledge of the CDBG entitlement, the Section 108 program requires that each loan be collateralized. Describe the collateral for the Section 108 loan; and, if applicable, the proposed collateral for other project debt. ➢ City of Auburn Community Development Block G�ant Funds ➢ 14,000 square feet of commercial space ➢ A letter ofi credit upon the City of Aubum (a guarantee by the City to use its general fund to repay the loan). 6. Projec�Implementation . Indicate the estimated project schedule, and at what point Section 108 f nancing will need to be in place. ➢ November, 2001 Resolution 3390 �xhibit "�-" � Page 4 5 7 Eliaible Activigv � - Indicate how the activity(s) you will be undertaking is eligible under #he Section 108 Loan Guarantee Program, 570.703 Eligible activities. ➢ Guaranteed loan funds may be used for the following activities, provided such activities meet the requirements of Sec. 5�70.200. However, guaranteed loan funds may not be used to reimburse the CDBG program account or line of credit for costs incurred by the public entify or designated public agency and paid with CDBG grant funds or program income. (a) Acquisition of improved or unimproved real property in fee or by Iong- ' term lease, including acquisition for economic development purposes. (b) Rehabilitation of real property owned or acquired by the public entity or its designated public agency. The City will acquire 14,000 square feet of commercial space and rehabilitate , such property to create space suitable for the establishment of retail enterprises ' _ and accompanying employment. 8. NationalObjective Each eligible activity must meet a nationa/ objective. Indicate how your activity will meet a national objective. (1) benefit low and moderate=income families, 9. Public �enefit Standards If your proposed project will be an eligible special economic development activity (as set forth at 24 CFR 570.703(I)(1) or (2)), it must provide a certain level of public benefit. For example, if it is a job creation or retention activity, it must create or retain a proportionate number of jobs for the dollar amount of CDBG assistance. If the project serves a low and moderate-income _ community, the amount borrowed must result in a proportionate level l�esolution 3390 i �xhibit "�;" Page 5 6 of bene�t to low- and moderate-income persons living within the service area. Therefore, if applicable, indicate the following: The total amount of CDBG funds (e.g., Section 108 funds, ED1, BEDI, and any other CDBG-related funds) to be used in the project: 108 Funds $1,237,000; The total number of permanent full-time equivalent jobs to be created or retained as a result of the project; 36; The total number of low- and moderate-income persons living within the project's service area: 20,769 City of Auburn, 1,200 downtown 10. Whom Nlav I�1/e Contact In order for a CPD Representa.tive to contact you directly, please provide the following: The name and title of contact person: AI Hi'cks, Economic Development Manager A street mailing address (No PO Boxes please.) 25 West Main Auburn, WA 98001 ' A telephone number and fax number Phone: 253 931 3002 Fax: 253 931 3053 An e-mail address ahicks _ci.auburn.wa.us Resolution 3390 Exhibit "A" Page 6 '