DEPARTMENT: Center City Development & Operations Department
DEPARTMENT HEAD: John Jacks
COUNCIL DISTRICTS IMPACTED: District 2
SUBJECT: Economic Development Agreement for Wheatley Infill
SUMMARY:
This Ordinance approves a Chapter 380 Economic Development Forgivable Loan Agreement for up to $240,000 to Terramark Urban Homes for construction of 24 affordable single-family homes to be sold to households earning at or below 120% of Area Median Income (AMI) and an investment of $3,000,000 in real and personal property improvements. The homes will be located in the Wheatley Infill on Arthur, Hays, Lamar, Gabriel, Burnet, and Poinsettia streets in Council District 2. Funding in the amount of $240,000 is available in the Inner City Incentive Fund FY 2019 Adopted Budget.
BACKGROUND INFORMATION:
The City is engaged in revitalizing and supporting economic development activities to reactivate the near East Side of San Antonio as well as address the need for workforce and affordable housing citywide. The City continues to encourage and incentivize residential and commercial development, specifically in the EastPoint area where the City and partner organizations have increased investments in public infrastructure and other improvements.
As part of U.S. Department of Housing and Urban Development’s (HUD) Choice Neighborhood Initiative, the San Antonio Housing Authority (SAHA) acquired a series of vacant lots on the East Side with the intention of collaborating with private sector partners to develop affordable homes near East Meadows, the mixed-income redevelopment of the former Wheatley Courts public housing complex. SAHA issued a Request for Proposals in 2018, seeking developer interest in offering affordable for-sale housing on these lots. On February 4, 2019, the SAHA Board awarded the project to Terramark Urban Homes. As part of the agreement, 12 homes within the Wheatley infill development must be completed by November 2019.
ISSUE:
This project by Terramark Urban Homes will be completed in three phases and include more than 24 for-sale single-family homes reserved for households earning at or below 120% of the Area Median Income (AMI) for the San Antonio-New Braunfels Metropolitan Area; however, Terramark has targeted its home pricing to provide homeownership opportunities for households earning approximately 80% of AMI (homes to be priced in the $130,000-$150,000 range). The total project cost for the three phases of the development is approximately $3,000,000. To assist the project in meeting the affordability goals, staff is recommending City fee waivers in the amount $42,000.00 and a forgivable loan in the amount of $240,000.00.
Terramark Urban Homes commenced construction on the first phase in May 2019 and will complete the project by June 2021. Due to HUD program requirements, the first 12 homes are to be completed by November 2019.
ALTERNATIVES:
The City Council may elect to deny the request for development loan assistance. Doing so may negatively impact Terramark Urban Homes’ ability to meet the program requirements to complete construction of the homes reserved for households earning at or below 120% of AMI.
FISCAL IMPACT:
This Ordinance approves a Chapter 380 Economic Development Forgivable Loan Agreement for up to $240,000 to Terramark Urban Homes for construction of 24 affordable single-family homes to be sold to households earning at or below 120% of Area Median Income (AMI) and investment of $3,000,000 in real and personal property improvements. The homes will be located in the Wheatley Infill on Arthur, Hays, Lamar, Gabriel, Burnet, and Poinsettia streets in Council District 2. Funding in the amount of $240,000 is available in the Inner City Incentive Fund FY 2019 Adopted Budget.
RECOMMENDATION:
Staff recommends approval of the Chapter 380 Economic Development Loan Agreement with Terramark Urban Homes for up to $240,000.00 for the construction of 24 affordable single-family homes located on Arthur, Hays, Lamar, Gabriel, Burnet, and Poinsettia streets in Council District 2. The recommendation to approve the Chapter 380 Economic Development Loan is in alignment with the Mayor’s Housing Policy Task Force report that illustrated the need for ownership housing for households between 60% to 120% AMI.