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HomeMy Public PortalAboutAffordable Housing Trust -- 2022-03-03 Minutes7-1 Brewster Housing Trust March 3, 2022 5:00pm Virtual Meeting Housing Trust Members Present: Donna Kalinick, Tim Hackert, Madalyn Hillis -Dineen, Maggie Spade -Aguilar, Ned Chatelain, Paul Ruchinskas, Vanessa Greene Others Present: Jill Scalise -Housing Coordinator, Robert Tobias -Finance Committee liaison, Peter Lombardi -Town Administrator, Julie Creamer (POAH), Dave Quinn (HAC), Lynne Sweet (LDS Consulting), Laura Shufelt (MHP) Absent: 1. Call to Order: Chair Hackert called the meeting to order at S:OOpm, read the required notice for virtual meetings, and declared a quorum. 2. Citizen's Forum: There were no public comments. 3. Review, Discussion and Possible vote on POAH & HAC proposal for Millstone Community Housing (Recusal of members with potential conflicts of interest) Chair Hackert asked Paul Ruchinskas, Maggie Spade -Aguilar and Vanessa Greene to recuse themselves. They will rejoin after the Millstone Housing agenda items are complete. Chair Hackert explained that last month he asked for a revised drawing showing the ridgeline. He has since realized that the yellow line in their map proposal indicated the ridgeline so an update was not needed. Chair Hackert read an email from Glenn Casey asking if the soonest possible the project could start is February 2024. Chair Hackert said the timeline that is in the proposal is the best estimate and could change based on how items progress; it could shift earlier or later. • Proforma Review — Lynne Sweet, LDS Consulting: Mr. Lombardi introduced Lynne Sweet from LDS Consulting who was hired to provide analysis of the financial proforma. Her findings and comments are included in the packet as well as the follow up questions and responses from POAH & HAC. Ms. Sweet explained the alphabet soup of affordable housing finance. The income from an affordable housing is limited because the rents are limited by the federal government annually and include a utility allowance which is different than market rate. The first item LDS reviewed was the proposed rents and they are in line with what is required. The next item was the operating expenses. They reviewed those for a 15 year time frame which includes management fees, utilities, debt payments and they hoped to see some cash flow. They then looked at the development costs which include both hard costs of construction and soft costs of development fees, legal and permitting fees, architectural fees and insurance. All of these numbers equal total development costs (TDC) which is a metric that is very important to the state funding sources. The funding sources include hard debt -mortgage and soft debt -grants that are not necessarily repayable if the affordability stays intact. The other component of financing is equity in the form of tax credits. Because there are affordable units, you cannot carry a lot of debt so the subsidy is made via low income tax credits (LITC). These are considered equity and equate to $250,000 per unit. Tax credits are scarce resources in Massachusetts, so the State set forth criteria and benchmarks to receive them. LDS focused on if the proposal meets those benchmarks. The State will look at the total development costs proposed of 22 million which equates to a little under $500K per unit. This is about what the State will consider in the current market. With COVID and the rise in construction costs, the inability to get materials and increase in interest rates, a lot of pressure has been put on the cost of affordable housing. The proposer's team does meet the experience criteria in terms of getting funding for past projects. LDS asked a series of questions of the proposers, including if there was any ability to repay the Trust for local funding put into the project. LDS was a little concerned about the unit sizes which are a slightly below the state guidelines but the proposers have proven with other projects that these efficient unit sizes can be funded. In terms of the Area Median Income (AMI), there are units at 60% and some at 80%, should some of the 80% units be 60% units because 80% units get less funding, 100K per unit versus 250K per unit. POAH responded to that concern in writing that tax credits are at 95 cents on the dollar. Ms. Sweet was concerned about the timing and the number of projects that the proposers have in the pipeline. POAH/HAC feels that they can manage this. Ms. Sweet noted that this was a good time to apply as the State has extra funding due to ARPA. Ms. Sweet asked for a 15 year proforma so it could be determined if there will be any money left over. In this case, there is very little. POAH and HAC are both non -profits and this is what they do. They may get a developer fee down the road but they are willing to forego that in the beginning in order to make the project work. LITC go for 10 years and they have a 5 year look back period. Sometimes there is a refinance at the 15 year period, sometimes local money can be repaid at that point. There is not in this proposal due to operating costs increasing higher than income and interest rates being higher. The last item from LDS was a caution about the funding rounds and the timing factors and being funding round ready for pre -application, although the State has a priority for Cape Cod Housing. Ms. Sweet said the proforma is realistic and solid and she is happy to answer questions. • Response by POAH & HAC: Ms. Creamer stated that Lynne summed it up well. They are excited about this opportunity. When they respond to an RFP, they take all their experience and put it to use. Funding is complicated but they have a lot of experience in this area and POAH likes to partner with HAC and with Towns. Mr. Quinn stated that HAC has worked on a number of projects with POAH. Their experience is key to success on these proposals. Ned Chatelain asked if ARPA funding will change how quickly funding is available or its' effect on LITC. Ms. Sweet said that it will help with the soft sources of debt with an expanded mini round in September for projects that were close in the January funding. She has heard that they may open the mini round to new projects. Ms. Kalinick commented that the RFP specified that the Trust wanted some of the units to go up to 80% of the AMI and they responded to that in their proposal. We are lucky that there is now State funding for 80% of the AMI at 100K. Ms. Kalinick asked about the developer fee and the deferral and if the fee is paid over time as the money 2 becomes available. Ms. Sweet said the 15 year proforma shows a payment of $28K in year one through year 9. Sometimes they get a little at closing but the developer is last in line. Ms. Kalinick asked if that fee is shared between POAH and HAC. Ms. Sweet said this is typically a calculation and subsequent negotiation amongst the parties. Ms. Kalinick said she was surprised at the amount of local funding being carried of $300K which equates to a little over $18K per unit which is lower than what they have seen in past CPC requests. For Brewster Woods, they received $550K for 30 units and on top of that was the 1.68 million MassWorks grant which equated to about $75K per unit. Ms. Kalinick was a little concerned about the overall construction costs with the current markets and conditions. Ms. Creamer said she appreciates all the soft funding they receive but there were more infrastructure costs with Brewster Woods due to site conditions. This is part of the reason the proposal is more of a cluster development with lower infrastructure costs. Also, there are units at 80% of the AMI which bring in more rents. POAH appreciates that the Town of Brewster has been a good partner. Ms. Sweet noted that the source of funding for 80% AMI is very new and they don't know how long it will be around. Also, the State does look for local funding when considering funding applications. Mr. Tobias said he is concerned about two items, the inflation rate and replacement reserves. Ms. Sweet said there is standard reserve amount at 3%. The debt that they are getting is a longer term debt so they have the potential to lock in a lower rate for longer. Ms. Creamer said that for years, they have thought hard about their impact on the environment, and they build very energy efficient projects which assist with rising utility costs. They recognize that replacement reserves are important. There are many times when they get grants to improve energy performance or to beautify a project. They have many partners that are willing to donate to improve a property. They also have buying power because of the number of units that they have. They are true long term owners. Ms. Sweet said that they have a lot of properties on the Cape so they have both shared staff on the Cape and buying power. Ms. Hillis -Dineen had a comment but her audio was not functioning. She put it in the chat. She stated that this is an important project and needed. She had concerns about inflation but Mr. Tobias addressed those. Mr. Hackert stated that we all have concerns about inflation and this will be an interesting project that we will all have to monitor. Ms. Kalinick said that she wanted to go back to Ms. Sweet's comment under item 4 about recouping local funds. While she appreciates the comments, the Town has not in the past asked for repayment of local funds. Ms. Kalinick did want to address item D which is that the units be affordable in perpetuity based on the Town's donation of the land and possible local funding. Ms. Sweet said that she understands that they intend for the units to be affordable in perpetuity but there may be some finessing of the language in the permitting. Ms. Sweet said in looking at the 15 year proforma, there is very little money in year 9 for repayment of local funds. MS. Creamer said she understands that this was discussed in regards to Brewster Woods. The underwriter requires some assurance that if the project goes into default, the lender can ask that the affordability adhere to the 3 base requirement of a 40B. Ms. Creamer said that is not in their plan to ever default and they agree that it should be affordable in perpetuity based on the Town and State's investment. Ms. Kalinick said there are a few people on the call who were involved in the negotiations around Brewster Woods and she wants to make sure it is clear that it needs to be addressed in the permit process because we had to go back in Brewster Woods to amend the comp permit. She also wants to make sure that everyone understands the complexities of what we are dealing with. Mr. Tobias asked if POAH or HAC has ever had a default; they have not. Chair Hackert asked if there would be documents that relate to the affordability. Ms. Sweet said there will be multiple documents in permitting and closing that document the affordability. Ms. Sweet also noted that in the last recession, the State provided funds to keep foreclosures from occurring. Chair Hackert asked if the affordability would be documented in the Land Lease. Ms. Sweet said it would as well as all the other required documents which are all recorded and run with the land. The RFP had the form of lease attached to it. Chair Hackert thanked Lynne for her analysis and Julie and Dave for their time this evening. • Proposal Review and Scoring Discussion: Laura Shufelt (MHP): Ms. Scalise stated that this is the beginning of the scoring. This is the first time that the Trust has discussed scoring as a group. Ms. Shufelt said we will take this one category at a time. Ms. Kalinick asked if we will each state how we scored each category and then the scores will be aggregated. That is the process. Ms. Scalise put the score card up on the screen and said she would tally the responses. Category 1: Developer Experience and Capacity: Chair Hackert-Highly Advantageous; Donna Kalinick- Highly Advantageous based on the number of properties that POAH has developed, their revenues, their commitment to passive housing standards, for HAC- their 550 units, their 4 homeless shelters and their financial stability; Ned Chatelain- Highly Advantageous; Ms. Hillis -Dineen -Highly Advantageous. Aggregate High Advantageous. Category 2: Affordability- Chair Hackert-Highly Advantageous- they met the whole criteria of 30 to 80%; Donna Kalinick- Highly Advantageous -noted that there are 8 units in the 30 to 60 % AMI, 27 units in the 50 to 60% AMI and 10 units in the 60 to 80% AMI categories; Ned Chatelain-Highly Advantageous; Ms. Hillis -Dineen -Highly Advantageous. Aggregate Highly Advantageous. Category 3: - Site Design -Chair Hackert-Highly Advantageous- he thought they did a great job meeting our RFP; Donna Kalinick- Highly Advantageous and she noted that they used smart growth principles in their design which met the RFP criteria; Ned Chatelain-Highly Advantageous; Ms. Hillis -Dineen -Highly Advantageous. Mr. Chatelain said they were good about considering the ridgeline in their site design. Aggregate Highly Advantageous. Category 4: Infrastructure and Green Design- Chair Hackert-Highly Advantageous as they met or exceeded most of the criteria; Donna Kalinick- Advantageous based on the 4 fact that she could not find the charging station and could not determine if all the utilities were underground. Ned. Chatelain noted that on page 32, it calls out the electric charging stations. Ned Chatelain-Highly Advantageous; Ms. Hillis -Dineen- Advantageous and question about solar panels. Chair Hackert stated that he thought that based on the economic conditions, they did a good job meeting the criteria. Mr. Chatelain asked if the solar panels were a concern that Ms. Kalinick had in her rating. Ms. Kalinick said no that she thought they did a good job explaining that they would make the buildings solar ready and would seek grants. She said she had not been able to find the charging stations but based on the conversation of the Trust, she would change her rating to Highly Advantageous. Ms. Hillis -Dineen confirmed that she was Highly Advantageous as well. Aggregate Highly Advantageous. Category 5: Building Design: Chair Hackert-Highly Advantageous -he was impressed with the building design; Donna Kalinick- Highly Advantageous based on the criteria. She noted that we had much debate as a Trust about the number of buildings and she is very pleased with what they proposed; Ned Chatelain-Highly Advantageous; Ms. Hillis - Dineen -Highly Advantageous. Aggregate Highly Advantageous. Category 6: Financial Feasibility: Chair Hackert-Highly Advantageous Ms. Kalinick-highly advantageous. She does not think we can hold POAH & HAC responsible for the current economic conditions but believes they have the stability to handle any volatility. Ned Chatelain -Highly Advantageous; Ms. Hillis -Dineen -Highly Advantageous. Aggregate Highly Advantageous. Category 7: References, Site Visits and Interviews- Chair Hackert-Highly Advantageous - he believes they are a good team; Donna Kalinick- she thinks that we should check references. She can attest to her experience with them at Brewster Woods, but she thinks we should check with other towns that have gone through full development. She has been to a number of their sites but does not know if other Trust members have. Ned Chatelain said it is good policy to check references, but we have a lot of personal experience with POAH and HAC; he is familiar with Melpet Farms as well. He does not want to defer action for another month. He wonders if we can approve, contingent on references. Ms. Kalinick asked Mr. Lombardi to weigh in on this discussion. Mr. Lombardi said he would be the one to check references and Trust members would do the site visits. He does think it is right and appropriate to check at least 2 references. The scoring needs to reflect the information that you have available to you. The Trust would be going to the Select Board in April to make a recommendation and start the next process. He recommends that we do the reference checks and site visits first. Chair Hackert said that we should check at least 2 towns references and Trust member can do site visits in the meantime. Chair Hackert asked about the timing of the recommendation to the Select Board and that we prepare what needs to go to the Select Board in the meantime. Ms. Kalinick said that it is on our agenda tonight to discuss what will go with the recommendation to the Select Board. She does want to recognize the timing sensitivity in order for the proposers to get into the winter 2023 5 funding round. She thinks the Trust should schedule another meeting in March to report on the reference checks, site visits and make the final recommendation to go to the Board. Mr. Lombardi said Ned will be speaking to the Board at their 3/14 meeting about what they want to see. If the Trust could meet before April 4th and finalize a recommendation, it can be brought to the Board at the April 4th meeting. Chair Hackert said could we meet the week of March 211t. Ms. Scalise said the Housing Partnership is not meeting on their regular schedule, so the 17th is available. Ms. Kalinick said the 24th of March is open if members are available. Chair Hackert said the plan is to have Peter check references from Bourne and Dennis; Trust members can make site visits. Chair Hackert visited a POAH project in Claremont, NH and he was impressed. We will meet on the 24th to finalize a recommendation to bring to the Board on April 4th. The Trust thanked Ms. Shufelt for her support and work. Ms. Shufelt recommended that Mr. Chatelain have an idea of what the Trust may want to provide to the Select Board prior to talking to them. Chair Hackert asked for any public comment. There were no hands raised. Ms. Kalinick said that for the Select Board, she thinks they should see the presentation that was provided to us as a good overview. 4. Housing Production Plan Update: Mr. Ruchinskas, Ms. Greene and Ms. Spade -Aguilar rejoined the meeting. Mr. Lombardi left. Ms. Scalise gave an update. The current Housing Production Plan (HPP) has really been our guidebook for the housing program and will expire in June. One of the strategies that we implemented was forming a Housing Trust and the Trust has been working on many of the strategies in the HPP. Barrett Planning has been hired to assist with the HPP update. The first step is a needs assessment which will include small group interviews and a survey. Barrett will also compile data from the Town and from the Community Survey data. A timeline of HPP update steps was included in the packet. There will be a draft plan, a community forum and two entities to approve the plan before it is submitted to the State which are the Select Board and Planning Board. The timing of this update is really important based on the current housing conditions and the update of the Local Comprehensive Plan. 5. Housing Coordinator Update, including Preservation of SHI homes and Community Preservation (CPC) extension request: Ms. Scalise said that Brewster has been awarded a regional Community Development Block Grant of 1.3 million dollars for Housing Rehabilitation and Child Care vouchers. Brewster will be the lead community for this grant. Ms. Kalinick noted that it is important to have support services in the town housing program. There are many costs of living increases right now. Childcare vouchers assist people to work and Housing Rehab funds help maintain the housing stock and help people stay in their homes. Chair Hackert asked how much of the funds of the current period have been spent. Ms. Scalise said that we do not have an exact amount but there are still childcare voucher funds and there have been 7 homes in Brewster who have received the rehab funds. There have been challenges with the supply chain. Ms. Scalise said that any residents up to 80% of the AMI are eligible and should contact her if they have questions. Chair Hackert asked if we need to do better outreach. Ms. Scalise said as soon as we receive our official award, we will begin outreach. Mr. Tobias asked if the reporting component will be the Town's responsibility. Ms. Kalinick said that as the lead community we have both fiduciary and reporting responsibilities which the Finance team discussed before agreeing to be the lead community. Ms. Kalinick said the first step is to issue an RFP for a grant administrator who will assist with the reporting. Ms. Kalinick said there have been a lot of programs in place during COVID but with these programs ending, she believes we will see more need for CDBG and rental assistance funds. Ms. Scalise said she appreciates the support of the Select Board and the town in becoming the lead community and we will get more oversight from that. There is a January update is in the packet. The CPC did approve the request for an extension of the Trust funds of $100,000. In terms of the SHI units, the results of the home inspection for Sean Circle were provided to DHCD. For Yankee Drive, the Town is moving forward through the courts for the tax taking. Ms. Kalinick commended Ms. Scalise for her efforts in the work on the SHI units as it is very complex. Mr. Ruchinskas asked if there is any timeline for Yankee Drive. Ms. Scalise said it would be in 4 to 6 weeks and she and Donna met with legal counsel about next steps. Mr. Ruchinskas asked about the expiration of the SHI preservation CPC funds. It expires in June 2022 and will need to go to CPC for an extension. Ms. Scalise noted that we did hear back from DHCD on the Serenity Local Action Unit application, and we are moving forward with the hopes of a lottery in the next few months. Brewster Woods will have a lottery in late spring or early summer. She gets calls every day from people looking for rental housing. 6. Cape Cod Sea Camps Planning Committees Update and possible vote on Liaison to the Bay Parcel Committee: Mr. Chatelain said they are thrilled to have appointed the committees officially. We are working on times for meetings etc. with meetings starting in April. We have engaged Reed Hilderbrand to help us write the Scope of Work for the RFP to choose a consultant. We did a site visit with them and staff recently. Ms. Kalinick said that we have a voting member on the Pond parcel, Paul Ruchinskas. We need to appoint a liaison to the Bay parcel. Ms. Kalinick is the administrative lead for the Pond parcel, Peter Lombardi for the Bay. The potential meeting schedule would be 11 and 3rd Tuesdays at 4pm for the Bay and 1St and 3rd Wednesdays at 4pm for the Pond parcel. The Liaison is not required to attend every meeting, but it will be important for the Trust to keep their eyes on what it is happening with the Bay parcel. We are lucky that Mr. Chatelain is on the Bay committee. At this point, the Trust has to appoint a liaison to the Bay. Donna, Ned and Paul all already have a role. Ms. Spade -Aguilar said she is not sure she has the time for the commitment. Mr. Chatelain offered to meet with any members who are interested. Ms. Greene said she can do it if there is a need, and she thinks that time will work. Ms. Kalinick said she thinks initially the meetings will be twice a month. She also thinks that this could be an appointment for a time frame then someone else could take over since it is a liaison position, and she understands that all Trust members wear multiple hats. Ms. Greene will discuss it with Mr. Chatelain. The Trust will take this item back up at their March 24th meeting. 7. For Your Information: Ms. Kalinick said that Town meeting will be on Saturday May 14th at 10am, outside at the Stony Brook field with a rain date of Sunday May 15th at fpm. Ms. Scalise noted that there are offerings in the packet for trainings through MHP as well as the results of the new homeowner survey from the Commission. Mr. Chatelain said that yesterday there were no homes for sale in the Town of Brewster under 1 million dollars which reinforces the importance of the work the Trust is doing. 8. Any other business not anticipated: None 9. Approval of Minutes from February 3, 2022: Ned Chatelain moved the minutes of February 3, 2022, with minor technical comments from Chair Hackert and Mr. Ruchinskas noted the next meeting date was incorrect in the minutes, Madalyn Hillis - Dineen second. A roll call vote was taken. Tim Hackert-Yes, Donna Kalinick-Yes, Maggie Spade -Aguilar- Yes, Madalyn Hillis -Dineen -Yes, Paul Ruchinskas-Yes, Ned Chatelain-Yes, Vanessa Greene -Yes. 10. Next Meeting: March 24, 2022, at 5:00pm virtual. 11. Adjournment: Ned Chatelain moved adjournment at 6:45pm, Maggie Spade -Aguilar second. A roll call vote was taken. Tim Hackert-Yes, Donna Kalinick-Yes, Maggie Spade- Aguilar- Yes, Madalyn Hillis -Dineen -Yes, Paul Ruchinskas-Yes, Ned Chatelain-Yes, Vanessa Greene -Yes. Respectfully Submitted, Donna J. Kalinick Assistant Town Administrator Housing Trust public packet: nitp.,Ij records.brewster- ma. ov weblink 0 edoc 170365 03.03.2022%20BAHT%20PACKET. df Approved April 7, 2022