PUBLIC MEETING NOTICE

Housing and Neighborhoods Subcommittee, November 24, 2009, Item 2

CITY OF PHOENIX

CITY COUNCIL HOUSING & NEIGHBORHOODS SUBCOMMITTEE

Summary Minutes

October 14, 2009

Phoenix City Hall

200 West Washington Street, 12^th Floor

Subcommittee Room

Phoenix, AZ 85003

City Council Members Present

Chairman Michael Nowakowski, Chair

Vice Mayor Tom Simplot

Councilman William Gates

Others Present

Doug Divelbiss

Elaine McLean

Reid Butler

Alice Hart

Roger Brevcourt

Tony Bradley

Greta Rogers

Staff Present

Rick Naimark

Penny Parrella

Leila Gamiz

Kim Dorney

Dee Wheeler-Cronin

John Workley

Rebecca Velarde

Jerome Miller

Kate Krietor

Erynn Crowley

Kweilin Pipkin

Martha Draper

Jennifer Hayes

Barbara Bellamy

Bruce Nelson

Patrick Ravenstein

Rich Cristo

Tammy Perkins

Jill Buschbacher

Michelle Pierson

Pam Lindley

AB Smith

Mark Escobedo

Tracy Reber

Aaron Avila

Denise Archibald

Albert Santana

Jennifer Emerson

Edith Baltierrez

Maria Hyatt

Ed Zuercher

1. Call to Order

Chairman Nowakowski called the meeting to order at 10:05 a.m. with Vice Mayor Simplot and Councilman Gates present. Councilman Johnson joined the meeting at 10:16 a.m.

2. Review and Approval of the September 9, 2009 Housing and Neighborhoods Subcommittee Meeting minutes

Vice Mayor Simplot motioned to approve the minutes from the September 9, 2009 Housing and Neighborhoods Subcommittee Meeting. Councilman Gates seconded the motion, which passed 3:0.

3. Approval of 2010-15 Consolidated Plan Process and 2010-2011 Community Development Block Grant Request for Proposals Priorities

Vice Mayor Simplot motioned to approve agenda item 3. Councilman Gates seconded the motion, which passed 3:0

4. Impediments to Fair Housing Analysis Update

5. Section 8 High Performer Designation

Items 4 and 5 were for information only.

6. 2010 Census Phoenix Paper Data Capture Center

Rick Naimark, Deputy City Manager, introduced Don Maxwell, Community Economic Development Director. Mr. Maxwell introduced the item and stated Jill Buschbacher, Community Economic Development Program Manager, worked with Vangent Inc. over the past year to select a location for the 2010 Census Phoenix Paper Data Capture Center (PPDCC). He added the center will be located at 4427 West Buckeye Road and will employ 3,500 staff and process 40 percent of the Census questionnaires. Mr. Maxwell then introduced Doug Divelbiss from Vangent Inc. to present an overview of the center.

Mr. Divelbiss provided a PowerPoint presentation outlining the process and preparation for the Paper Data Capture/Call Center. He stated employment would peak from January to February 2010 and downsize in March, ending employment July 31, 2010. Mr. Divelbiss indicated the Buckeye Road location would process everything west of the Mississippi River. He added the grand opening would take place on November 18, 2009. Mr. Divelbiss also mentioned an additional 350 positions would be filled at the Metro Phoenix North location Call Center where inbound and outbound calls would be handled for the 2010 Census.

Mr. Divelbiss informed the Subcommittee the PPDCC will receive mail and prepare documents in a process similar to the post office. He stated the center’s responsibilities included the warehousing, processing, administration, and destruction of questionnaire forms.

Mr. Divelbiss added Vangent’s contract required 30 percent of its total revenue would be set aside for small businesses. Mr. Divelbiss also explained the hiring criteria for the PPDCC, as well as employee benefits and wages. Mr. Divelbiss noted the hiring process in the past had included a diverse workforce with a good proportion of minorities and women.

Mr. Maxwell added the City was conducting extensive promotion for these job opportunities through One Stop; candidate recruitment space; Maricopa County Workforce Connection; and the Arizona Department of Economic Security.

Chairman Nowakowski commended and welcomed the 3,500 jobs and the 30 percent small business requirement.

7. Update on the Matthew Henson and Krohn West Hope VI Revitalization Projects

Mr. Naimark introduced Kim Dorney, Housing Director and Dee Wheeler-Cronin, Assistant Housing Director, to provide a PowerPoint presentation.

Ms. Wheeler-Cronin stated the Matthew Henson project was nearly complete. She added the Community Training and Education Center (CTEC) was a major asset for the community, providing six classrooms staffed by 40 partner agencies. She also indicated remaining funds from this project had been allowed for down payment disbursement through phase five, homeownership.

Ms. Wheeler-Cronin stated a second grant had been awarded to continue the City’s revitalization and mixed-income housing efforts. She indicated the Krohn West project was a collaborative effort of 17 city departments. Ms. Wheeler-Cronin indicated this was a smaller project that did not require the additional purchase of land, but had similar elevations to Matthew Henson. She added Krohn West would also include a CTEC, which is a critical component and requirement for Hope VI projects.

Ms. Wheeler-Cronin indicated Krohn West had received mixed financing of $105 million, with $60 million contributed by private partners such as McCormick, Barren, & Salazar.

Ms. Dorney stated the lease upgrade was above 95 percent for Hope VI projects, which is in line with the national average.

Councilman Johnson asked staff to consider revitalizing the community between Matthew Henson and Krohn West with Hope VI funds. He also asked staff to include the Boys and Girls Club. He stated Hope VI projects have had a tremendous impact in these communities, particularly senior citizens who have said they never thought they would be able to live in units such as these. Ms. Wheeler-Cronin responded the Boys and Girls Club was already a partner and provided letters of support and community meeting space for the Hope VI application process.

Ms. Dorney advised the Subcommittee that property alongside 17^th Avenue had been acquired for the Krohn West project. She also added the homes along the property had been demolished and residents relocated.

Chairman Nowakowski thanked staff for their efforts and expressed the quality of life for these communities had been enhanced by the projects.

8. Update on the 2009 Hope VI Application Submission – East Asset Management Project

Mr. Naimark stated City Council had previously authorized submission of the Hope VI application, but staff wanted to provide details about the project.

Ms. Wheeler-Cronin stated staff was working on the financing of the Frank Luke addition to identify which funds to pursue based on cost and grant options. She added staff met with financial and legal advisors on a weekly basis to prepare for the process.

Ms. Wheeler-Cronin indicated the project would consist of 700+ units located between 16^th and 18^th Streets, between Villa and McKinley. She explained the first step of the application process included community planning. Ms. Wheeler-Cronin stated five community meetings were held with the Garfield and East Lake neighborhoods to identify their needs and gather feedback. She added the planning process would continue around the site even after the application was submitted in November.

Councilman Johnson expressed enthusiasm over the Hope VI projects placement in the inner City and looked forward to similar projects in the future.

Ms. Wheeler-Cronin reminded the Subcommittee in previous Hope VI projects a master developer was hired, but the City would pursue self-development in this project.

Mr. Naimark indicated St. Luke’s Hospital, a primary partner, owned many properties and held a strong interest in revitalizing the area. He added all stakeholders involved were moving in a positive direction.

9. Bed Bug Mitigation in Public Housing

Mr. Naimark stated the discussion on this issue would take place in two phases: (1) description of situation; and (2) how to address discarding infested property. Mr. Naimark introduced Kim Dorney to present on the item.

Ms. Dorney introduced Alice Hart, Conventional Housing Property Manager and thanked John Workley, Assistant Housing Director, and Richard Beardsley, Deputy Housing Director, for researching and assembling the presentation.

Ms. Dorney provided information about bed bugs and stated while they usually remain in one unit but can spread. She added the majority of the burden to remove the bugs falls upon the resident; however, there is a process in place to address bed bug infestation as follows:

· Immediate inspection of unit takes place before and three months after follow-up is conducted.

· Resident has moved out all belongings.

· Staff and/or contractor steam cleaned unit and applied pesticide which had been done internally or contracted out for the cost of $600.

Vice Mayor Simplot expressed his appreciation of learning a protocol exists and looked forward to Phase ll’s discussion on discarding infested property.

Ms. Dorney indicated staff has worked with housing residents to properly dispose of infested furniture and frequent monitoring has helped to ensure cleanliness in the properties.

Chairman Nowakowski asked if there was a penalty for discarding mattresses. Ms. Dorney replied no.

Vice Mayor Simplot commented a joint effort between the City and community was important in mitigating the issue.

Councilman Johnson asked if neighbors were notified of potential bed bug infestation, especially residents living in areas affected by illegal dumping on vacant land. Mr. Naimark stated this would be addressed in Phase ll.

10. Request for Proposals to Rehabilitate Single-Family Historic Structures and Redevelop Vacant Property for Single-Family Residential Use in Central Phoenix

Ed Zuercher, Deputy City Manager stated this would be an action item at Wednesday’s City Council Formal meeting on October 21, 2009. Mr. Zuercher introduced Maria Hyatt, Assistant to the City Manager who informed the subcommittee members on the background of this item.

Ms. Hyatt indicated the light rail Environmental Impact Statement addressed Sections 106 and 4(f) and followed federal guidelines. She added that any modifications to the Environmental Impact Statement would require approval from the Federal Transit Administration (FTA) and the State Historic Preservation Office (SHPO). Ms. Hyatt stated that in order to receive the $587 million in federal funds for the light rail project, the City was required to enter into a Memorandum of Agreement (MOA) between the City and the FTA. The MOA required Metro and the City to identify and mitigate any adverse impacts caused by the light rail project to the Pierson Place Neighborhood at Central and Camelback Road.

Mr. Zuercher mentioned the creation of Pierson Place Historic District was one of the mitigation requirements Public Transit had to carry out for the light rail project.

Ms. Hyatt explained that the Park and Ride project had not been finalized at the time the MOA was approved. The MOA required preparation of a Historic Properties Treatment Plan (HPTP) when design was finalized for the Central and Camelback station and park-and-ride. The HPTP was developed to mitigate the impact of the light rail project and it required the five homes purchase for the light rail project to be sold via a Request for Proposals and they were to remain intact and for residential use. Ms. Hyatt pointed out an exception had been made for the 40 and 42 W. Mariposa properties that were more impacted by the light rail project. She noted the Requests for Proposals (RFP) indicated the properties were obligated for residential use unless there was no buyer interest, and then the properties could be sold for professional office use.

Councilman Johnson asked if parcels faced the park-and-ride. Ms. Hyatt replied they faced Mariposa with the park-and-ride north of them.

Mr. Zuercher stated the entire area was originally proposed for park and ride use which was rejected by the community.

Councilman Johnson asked where the two adobe homes were located on the map. Ms. Hyatt pointed out they were the two closest to the cul-de-sac near the park-and-ride. She also added the vacant land could not be included for park-and-ride but could be sold with the two adobe homes for their parking.

Vice Mayor Simplot asked if the privately owned vacant land on the west end of Mariposa was zoned P-1. Ms. Hyatt replied yes.

Chairman Nowakowski asked if there was residential impact. Barbara Stocklin, Historic Preservation Officer stated a wall, landscaping, and set-backs had been established as part of mitigation requirement efforts.

Ms. Hyatt referred back to the PowerPoint presentation that provided pictures of these properties in better times but made note that these homes were now boarded up for protection. She added staff had approached the Planning Commission to ask the zoning be changed on 514 W. Mariposa to R-3 to coincide with the surrounding properties.

Ms. Hyatt advised the subcommittee members that appraisals on the RFP were in process.

Vice Mayor Simplot left the meeting at 11:05 a.m.

Councilman Johnson asked staff to explain the meaning of fair market value return. Ms. Hyatt replied Public Transit would receive fair market value from the sale of properties. Mr. Zuercher added that would include the minimum bid.

Vice Mayor Simplot returned to the meeting at 11:06 a.m.

Councilman Johnson suggested staff replace the “or” word with “and” to read as follows in the presentation slide describing how the parcels are sold: Required highest possible return and at least payment of appraised fair market value back to transit funds.

Councilman Johnson asked if the properties would be sold for less than what the City paid. Mr. Zuercher replied sale price would be based off the current appraisal and residential value and so could be less.

Ms. Hyatt informed the Subcommittee that the issuance for the RFP had been missed but staff had coordinated with SHPO for a later issuance date in October. She added the homes and two vacant lots were included in the RFP.

Ms. Hyatt stated on August 27, 2009 the Transportation and Infrastructure Subcommittee members asked staff to speak with the Federal Transit Administration (FTA) and SHPO to review the current plan and discuss the possibility of a new proposal. She added the current plan did not contemplate a larger scale project aside from the light rail; therefore, staff would need to work with all stakeholders before any changes could be made. Mr. Zuercher emphasized attaining approval to amend the plan could potentially cost the City an additional $200,000-500,000 in consultants to reopen the Environmental Impact Statement.

Ms. Hyatt stated SHPO stated they would consider a short delay requested by letter offering a couple of months for the City to sort out what is in its best interest.

Mr. Zuercher indicated this item would be presented at the October 21, 2009 Formal meeting for approval or at that time Council would direct staff to submit the letter for a short delay in consideration of making changes to the plan.

Chairman Nowakowski opened the floor for public comment.

Elaine McLean, resident of the Pierson Place Historic District, stated a change in the current RFP would destroy the five homes and disrupt the neighborhood. She added the 2003 agreement to mitigate the homes on these properties should be upheld by the City as written in the RFP and stated in the MOA. Ms. McLean voiced her support for the RFP as written and advised the Subcommittee members that the neighborhood was in opposition of any changes. Ms. McLean also informed the Subcommittee members that the neighborhood was not aware of a new proposal for a high-rise parking structure.

Reid Butler, private owner of the vacant land at Central and Camelback Road, stated this corner was a “crown jewel” and premiere property for new development. Mr. Butler indicated he had a better project recommendation to develop in that area versus the parking lot that would stretch seven blocks.

Councilman Johnson asked Mr. Butler to clarify what he meant by parking lot. Mr. Butler replied what he had referred to as a parking lot was actually the existing park-and-ride and the expanded lot that would be built using American Recovery and Reinvestment Act funds to create a seven block park-and-ride.

Mr. Butler indicated that he did not believe the community would be happy with a long, linear park and ride. He added following through with the RFP to sell the five single family homes with long-term deed restrictions would obstruct the opportunity to develop that corner. He asked the Subcommittee members to review this plan.

Mr. Butler suggested the City return to the Pierson Place neighborhood and present a new proposal to develop the area similar to Portland Place and the Pasadena Del Mar Station in California. Both projects were adjacent to the light rail line and included residential, retail, and preservation of historic buildings. He added this was a local decision that needed to be reopened for public discussion. Mr. Butler also indicated he believed the local decision would receive support from SHPO and FTA.

Vice Mayor Simplot asked Mr. Butler what would prevent his vision if the five homes were sold. Mr. Butler replied the sale of homes would cause the project to lose scale.

Mr. Butler suggested the homes not be sold for preservation so the area could be developed similar to Portland Place, which would include comparable dimensions, a four floor stipulation, and hide the park-and-ride lot.

Councilman Johnson asked what the sale of the properties had to do with Mr. Butler’s suggested project and the park and ride. Mr. Butler replied this was the only location where a light rail station could be surrounded by commercial development.

Councilman Johnson asked how Mr. Butler’s new proposed project would benefit the public. Mr. Butler replied the community would be within walking distance of retail, restaurants, entertainment, housing, and public transportation.

Vice Mayor Simplot asked staff what the rules and effect were for historic districts to be de-annexed if the City pursued Mr. Butler’s suggestion to include all homes north of Mariposa.

Ms. Stocklin explained the City would have to address two issues: (1) Section 106 - which required minimizing impact on the historic district; and (2) follow local Historic Preservation provisions in ordinance that address demolition and redevelopment. Ms. Stocklin indicated the public wanted to protect historic buildings and safeguard compatibility. She added she would not recommend rezoning, but it could be accommodated.

Mr. Butler stated this project was just about one street, but it would bring significant investment to the area. He asked the Subcommittee members whether or not the City wanted five historically preserved homes and a park-and-ride, or the possibility of a project like the one in Pasadena, California.

Councilman Johnson asked Mr. Butler if there was residential housing behind the Pasadena project. Mr. Butler believed there was, but Ms. Stocklin indicated there was not.

Councilman Johnson asked Mr. Butler if he thought the project would increase or decrease property values for the Historic District. Mr. Butler stated he believed the property values would increase.

Councilman Gates asked Mr. Butler what type of development he envisioned at his current site if the additional land was not included. Mr. Butler replied he had high rise entitlements of 250 feet that would include a mixed-use of a hotel, retail, office space, restaurants, condominiums, apartments, etc. He added that without the Mariposa properties, his project would turn its back to the transit center and the neighborhood.

Vice Mayor Simplot stated that Mr. Butler’s comment about turning the project away from the bus bay and transit center was not what he had previously said to the neighborhood.

Mr. Butler indicated the City’s bus bay would need to be modified.

Vice Mayor Simplot informed Mr. Butler the bus bay item was not at issue before the Subcommittee.

Chairman Nowakowski called upon citizen Greta Rogers.

Ms. Rogers asked the Subcommittee members re-evaluate how the $500,000 mentioned previously to fund the change of the agreement would be taken from Transit and reduce light rail funds. She also asked where the other funding would come from to cover this new project.

Mr. Zuercher clarified should Council pursue a change to the agreement there would be an estimated financial cost of $200,000 to $500,000 impacting the Transit 2000 Light Rail fund. Mr. Zuercher added there was no other money intended for the RFP. He stated the purpose of this RFP was to transfer responsibility for the properties to someone else through disposal of these properties for historic preservation and money from the sale of the properties would be returned to the light rail transit fund.

Ms. Rogers indicated this item required additional thorough research and stated next Wednesday was too soon for formal action.

Mr. Zuercher stated Council had at least two choices: (1) continue with the RFP to sell properties; or (2) direct staff to spend time and resources changing the agreement.

Councilman Johnson asked Ms. McLean if she agreed with the RFP. Ms. McLean replied yes and added that the City should honor its original agreement made with the neighborhood. In addition, Ms. McLean indicated the neighborhood was unaware of Mr. Butler’s proposed project and had not been given the opportunity to provide input.

Vice Mayor Simplot stated he had spoken at the Pierson Place neighborhood board meeting a month ago regarding this subject. He also asked if it would be beneficial for the City and community to take another look at the agreement.

Vice Mayor Simplot stated he was not certain where he stood on this item, but wanted to ensure the City made the right choice. He added this RFP would be ready to go in ten days but questioned where the City would find the $500,000 to cover the cost for reopening the Environmental Impact Statement. Mr. Zuercher replied the money would be taken from the Transit 2000 Light Rail funding.

Vice Mayor Simplot asked if private funding could cover the cost. Ms. Hyatt replied the use of federal funds required a competitive process that would not allow the use of direct private funding. She added the City could provide money up-front and be reimbursed at the end. Mr. Zuercher also stated the $200,000-$500,000 would cover the cost and effort to repeat the initial community involvement that took place in 2002.

Vice Mayor Simplot asked if there was any way staff could survey the community before spending any money. Mr. Zuercher replied Council had the option to have staff submit a written request to SHPO for an additional two months to test the waters and collect community input. He added the FTA would honor SHPO’s extension and staff could survey the community.

Councilman Johnson expressed concern over the risk of losing the community’s trust should the City go back on its word and not uphold its commitment to the neighborhood that had resulted from prior negotiations. He also added this change may impact Light Rail negatively.

Councilman Johnson recommended this item move forward to allow the City Council to make the decision. He also added he would ask Chairman Nowakowski to speak with the Chair of the Transportation, Infrastructure & Sustainability Subcommittee about moving this item to the Housing & Neighborhood Subcommittee since it related to housing and historic issues.

11. NSD Code Compliance Update

Jerome Miller, Neighborhood Services Director, stated this presentation was in response to street vending, parking and other code compliance issues. He added staff had drafted recommendations, laid out a timeframe, received feedback from impacted departments, and was now requesting direction from the Subcommittee. Mr. Miller introduced Erynn Crowley, Neighborhood Services Deputy Director, for the update.

Ms. Crowley stated properties continued to be inspected on a complaint basis citywide with a focus on several targeted areas. She added 17 positions have been lost and remaining staff has received additional training to help mitigate staff shortages. Ms. Crowley also indicated a 50 percent increase in vacant properties has occurred.

Ms. Crowley advised subcommittee members the following policy issues would need to be addressed:

· Abandonment of properties

· Graffiti Buster program defined as a violation or victim of a crime

· Code Enforcement

Ms. Crowley explained these areas would need to be streamlined to keep pace with demand, incorporate public input before implementation, and then be brought back to City Council for review in the spring.

Mr. Naimark indicated staff’s update was comprehensive and a menu of options would be available for the Council to evaluate and determine what to include.

Resident Greta Rogers suggested the City aggressively pursue businesses not in compliance with the codes and increase fines to begin at $10,000 and incrementally increase to $100,000. She asked that companies be required to make payment within 30 days and not be allowed to arrange payment plans. She also added inspections should be proactive, not complaint-driven.

Councilman Gates asked how fines are recovered for bank-owned properties. Ms. Crowley replied these were treated like any other case, but took more time and money for abatement and lien procedures. She added some courts were ruling in favor of the City based on banks that were repeat offenders. Mr. Miller also stated staff had contacts with some banks that allowed City to be more aggressive with liens and fines.

Chairman Nowakowski asked if home builders were being fined for illegal sign posting. Mr. Miller replied the Police Department handled enforcement, which was currently a low priority. He added this issue would be addressed in Item 12, Seamless Service Approach to Code Enforcement.

Chairman Nowakowski asked if staff could hold or destroy signs. Mr. Miller stated staff would explore the issue.

12. Seamless Service Approach to Code Enforcement

This item was tabled until the next meeting.

13. American Recovery and Reinvestment Act Priority Funding Update

This item was tabled until the next meeting.

14. Future Agenda Items

Mr. Naimark stated items 12 and 13 would be added to the November 24, 2009 agenda.

15. Call to the Public

No members of the public asked to speak.

16. Adjournment

The meeting adjourned at 12:09 p.m.

Respectfully submitted,

Edith Baltierrez

Management Intern

Housing and Neighborhoods Subcommittee, November 24, 2009, Item 3

CITY COUNCIL REPORT
TO:	Ruth Osuna Deputy City Manager
FROM:	Barbara Stocklin Historic Preservation Officer
SUBJECT:	CERTIFIED LOCAL GOVERNMENT GRANT APPLICATION FOR HISTORIC PROPERTY SCANNING PROJECT

This report requests that the Housing and Neighborhoods Subcommittee recommends retroactive City Council approval to apply to Arizona State Parks for a $7,336 Federal Certified Local Government (CLG) Historic Preservation Fund Pass-Through Grant, and to use up to $4,890 in 2006 Historic Preservation Bond funds as the required grant match. This funding will be used to scan historic property inventory forms for commercial and other historic properties in Phoenix, as well as National Register Nomination forms for local properties, in order to make this information more accessible to the public.

THE ISSUE

The State Historic Preservation Office (SHPO), a division of Arizona State Parks, provides matching funds for historic preservation planning activities through the Federal Historic Preservation Fund. Applicants are required to provide at least 40 percent of the funding, with the remainder provided by the SHPO. The Historic Preservation Office (HPO) is proposing to use $4,890 in available 2006 Historic Preservation Bond funds for this Project as the City’s required 40 percent match for the $7,336 federal CLG grant. The total cost of the project is $12,226. The CLG grant application deadline was Friday, October 13, 2009.

If awarded the grant, the HPO will use the funds to complete Phase II of a scanning project intended to digitize all of the HPO’s inventory forms and records on historic properties in Phoenix and to make this information more readily available to the public, ultimately through the city’s Web site. The $12,226 project would include scanning over 3,000 inventory forms and 178 National Register nominations. This project will assist property owners researching the history of their property and pursuing grant projects on historic properties. Once completed, the project will also relieve HPO staff of the time required to access and copy these materials for customers.

OTHER INFORMATION

The Historic Preservation Commission recommended approval of this item at its regular October 19, 2009 meeting.

RECOMMENDATION

This report requests that the Housing and Neighborhoods Subcommittee recommends retroactive City Council approval to apply for a $7,336 Federal Certified Local Government (CLG) Historic Preservation Fund Pass-Through Grant, and to use up to $4,890 in 2006 Historic Preservation Bond funds to complete the historic property scanning project.

Housing and Neighborhoods Subcommittee, November 24, 2009, Item 4

CITY COUNCIL REPORT
TO:	Rick Naimark Deputy City Manager
FROM:	Kim Dorney Housing Director
SUBJECT:	OASIS APARTMENTS AFFORDABLE HOUSING PROJECT – district 7

This report requests the Housing and Neighborhoods Subcommittee recommend City Council approval to loan and disburse up to $3,000,000 in HOME Investment Partnerships Program (HOME) funds to Mr. Tom Carmody, The Carmody Companies, or his city approved nominee, for a proposed affordable rental acquisition and rehabilitation housing project, the Oasis Apartments at 1501 West Grand Avenue, District 7.

THE ISSUE

The Oasis Apartments project is a former 99-unit motel built in 1958. The developer plans to convert the motel into 60 rental units with 19 studio apartments and 41 one-bedroom apartments. At least 48 percent of the units will be available to persons with incomes at or below 60 percent of area median income as determined by the U.S. Department of Housing and Urban Development (HUD) (up to $31,620 for a family of two).

The HOME Program loan will be used to rehabilitate the existing structure with extensive exterior and interior renovations including: resurfacing of parking lots, security fencing, painting, new electrical and plumbing systems, new central water heaters, windows, doors, steel walkways, HVAC and all kitchen and bathroom fixtures and appliances. Plans also include commercial space for a proposed art gallery and restaurant.

OTHER INFORMATION

The total project cost is estimated at $5 million. The developer intends to leverage the city’s HOME Program funds with private financing and borrower equity. Staff recommends a waiver of the Underwriting Guidelines to allow reimbursement for acquisition and certain rehabilitation costs that occurred prior to the HOME loan application; reimbursement will not exceed the verifiable acquisition and eligible cost basis or current appraised value, whichever is lower. The Underwriting Guidelines will be updated in the future to reflect this change, as the current policy is a disincentive to developers to commit or expend funds and hold properties for future opportunities.

The City of Phoenix HOME Program funding award is contingent upon the Project completing an environmental review and receiving a release of funds as well as the $2 million leverage. Over the last 15 years, Mr. Carmody has acquired, renovated, and leased or sold numerous properties in downtown Phoenix in the Roosevelt District and West Grand Avenue neighborhoods.

The Oasis Apartments proposed project is located in the city’s Arts, Culture and Small Business Overlay District, and is an adaptive re-use of an aged building into affordable rental units.

HOUSING IMPACT

Affordable rental housing is generally defined as housing provided to individuals or families between 40 percent and 60 percent of the adjusted family median income ($21,080 - $31,620 for a family of two). The approval of funding for the proposed Oasis Apartments project will assist the Housing Department in maintaining its mission of providing affordable housing to low and moderate income families in Phoenix.

RECOMMENDATION

This report requests Housing and Neighborhoods Subcommittee recommend City Council approval to loan and disburse up to $3,000,000 in HOME Investment Partnerships Program (HOME) funds to Mr. Tom Carmody, The Carmody Companies, or his City-approved nominee, for a proposed affordable rental acquisition and rehabilitation housing project, the Oasis Apartments at 1501 West Grand Avenue, District 7.

Housing and Neighborhoods Subcommittee, November 24, 2009, Item 5

CITY COUNCIL REPORT
TO:	Rick Naimark Deputy City Manager
FROM:	Gloria Hurtado Human Services Director
SUBJECT:	ENDING HOMELESSNESS IN MARICOPA COUNTY

The purpose of this report is to provide information to the Housing and Neighborhoods Subcommittee on the collaborative effort led by the Valley of the Sun United Way to end homelessness in Maricopa County.

THE ISSUE

Valley of the Sun United Way (VSUW) funds various programs to provide services which includes; prevention, outreach, emergency shelter, treatment, transitional housing, and permanent supportive housing. Permanent Supportive Housing provides a combination of affordable housing and services to individuals experiencing homelessness. This successful, cost-effective program provides an opportunity for the homeless to lead more stable and productive lives. In support of the Regional Plan to End Homelessness developed by the Maricopa County Continuum of Care, VSUW is leading an initiative to develop permanent supportive housing with services to prevent and end homelessness.

The strategic goals in working to end homelessness include the following:

· Provide permanent housing solutions for the chronically homeless

· Develop and strengthen broader community support to end homelessness

· Complete 250 units of permanent supportive housing by 2012 for individuals who were formally determined as chronically homeless using a regional strategy that includes projects in multiple communities across Maricopa County

· Implement a “Housing First” program within the city of Phoenix

VSUW is committed to working with public and private community partners to reduce homelessness by 75 percent in Maricopa County by 2020. The implementation of a regional permanent supportive housing plan will end chronic homelessness. This will free up emergency resources for displaced families and individuals who are experiencing homelessness for the first time.

RECOMMENDATION

Valley of the Sun United Way in collaboration with the City’s Human Services Department requests City Council support for their Permanent Supportive Housing plan as a major strategy to end homelessness.

Housing and Neighborhoods Subcommittee, November 24, 2009, Item 6

CITY COUNCIL REPORT
TO:	Ruth Osuna Deputy City Manager
FROM:	Barbara Stocklin Historic Preservation Officer
SUBJECT:	FUNDING ALLOCATION FOR LOW INCOME HISTORIC HOUSING REHABILITATION PROGRAM AND OTHER REVISIONS TO HISTORIC RESIDENTIAL GRANT PROGRAMS

This report requests that the Housing and Neighborhoods Subcommittee recommend allocation of an additional $210,000 in available 2006 historic preservation bond funds for the Low Income Historic Housing Rehabilitation (LHHR) Program during the 2009-2010 and 2010-2011 fiscal years. Historic Preservation Office staff also recommends additional grant items related to improved security while rehabilitation work is underway and foundation stabilization work be added to list of work eligible for reimbursement under the LHHR and Exterior Rehabilitation (ER) residential grant programs.

THE ISSUE

The LHHR and ER residential grant programs were established with 1989 Bond Funds, and have continued with 2001 and 2006 Historic Preservation Bond Funds. These grant programs fund exterior rehabilitation work on residences in designated historic districts. Funded exterior rehabilitation work has included window repair and replacement, roof replacement, brick repointing and other exterior wall repairs, reversing inappropriate alterations, and critical structural stabilization.

Since 1990, the city has provided up to $10,000 in grant funds, with a 50 percent match requirement, to residential property owners through the competitive ER Grant Program. To date, almost 400 property owners have participated. Recent revisions to this program have placed more emphasis on projects that contribute to overall neighborhood revitalization.

At its inception in the mid-1990s, the LHHR program was known as the Affordable Housing Program and 20 projects were completed by 2003, primarily in the Woodland and Oakland Historic Districts. In 2003, the Program was significantly revised and renamed the LHHR Program, and $350,000 in 2001 and 2006 Historic Preservation Bond funds was allocated to the Program. The 2003 changes included a focus on income restricted neighborhoods in partnership with the Neighborhood Services Department (NSD), primarily in Neighborhood Initiative Areas allowing individual property owners to apply in addition to non-profit organizations, specifying a lump sum of money from which to fund individual projects with staff review and approval and maximums capped at $25,000, and revising qualifying work to include pre-agreement architectural and structural engineering work for Historic Preservation (HP) items. The Historic Preservation Office (HPO) has heavily promoted the program and 19 projects were funded between 2003 and 2008.

In early 2009, more substantive changes were made to the LHHR program and an additional $210,000 funding allocation was authorized. The program changes included increasing individual project funding limits from $25,000 to $30,000, increasing HP Bond Fund match to 80 percent for grant recipients whose match was not paid by NSD or another city assistance program, and increasing the eligible pre-agreement soft cost amount for engineering and architectural expenses to 20 percent of the total grant award.

OTHER INFORMATION

Since the most recent early 2009 funding allocation and program changes, five additional LHHR projects have been committed and up to ten other LHHR projects have been authorized by HP staff but the projects are not yet signed and committed. More LHHR project applications have been received this fiscal year than originally anticipated due to the city’s increased efforts to promote the LHHR program. The increased interest in the LHHR program can also be attributed to lower income levels caused by the current economic recession. To ensure funding availability for all pending and new LHHR projects, and to allow funding for additional new projects, HPO staff requests an additional funding allocation of $210,000 for FY 2009-2010 and 2010-2011.

HPO staff also requests that the Housing and Neighborhoods Subcommittee approve LHHR and ER funding for security measures for HP grant-funded properties that remain vacant while rehabilitation work is underway. These protections may include perimeter fencing and window and door board-up expenses. This request comes following the recent arson at 1410 W. Polk in the Oakland Historic District, resulting in a total loss of this historic house.

Staff also recommends that funding for soil stabilization reports and work be authorized under both the LHHR and ER grant programs if required by the Development Services Department or recommended by a structural engineer as part of a foundation stabilization project.

Staff further requests funding authority for LHHR and ER projects to cover sewer and other plumbing leaks that are contributing to structural stabilization problems, as determined and documented by a structural engineer, if the plumbing work is included with an HP grant funded structural stabilization project.

The Historic Preservation Commission recommended approval of this item at its regular October 19, 2009 meeting.

RECOMMENDATION

Staff recommends that the Housing and Neighborhoods Subcommittee:

Recommend that City Council authorize an additional $210,000 in HP Bond Funds for the LHHR Program in FY 2009-2010 and 2010-2011 fiscal years; and
Support the proposed program revisions to the LHHR and ER Programs to include additional eligible work items as described above.

Housing and Neighborhoods Subcommittee, November 24, 2009, Item 7

CITY COUNCIL REPORT
TO:	David Cavazos City Manager
FROM:	Debra Wilkins Stark Planning Director
SUBJECT:	SIGNAGE FOR ZONING ADJUSTMENT, BOARD OF ADJUSTMENT AND PLANNING HEARING OFFICER CASES

This report requests that the Housing and Neighborhoods Subcommittee recommend City Council approval of a new notification signage format and materials for Zoning Adjustment (ZA), Board of Adjustment (BOA) and Planning Hearing Officer (PHO) cases.

THE ISSUE

The Planning Department installs notification signage for ZA, BOA and PHO cases. These signs are constructed from 3 sheets of 14” x 22” paper panels for ZA and 2 sheets of 14” x 22” panels for BOA and PHO. The signs are assembled using plastic lamination and are installed with wooden stakes. (See Figure 1)

In response to a 2007 staff complaint regarding the off-gassed airborne contaminants from the laminator believed to cause respiratory irritation and distress, the Personnel Department Safety section conducted a formal evaluation. The evaluation resulted in several recommendations including providing a portable air cleaning system to remove contaminants off-gassing from the laminator.

Even though the recommendations from Personnel Safety were implemented, the Planning Department continued to receive complaints about air quality issues that were attributed to the laminator. Some of these resulted from the laminator inadvertently being left on for an extended period of time and from issues with the age of the laminator including the thermostat function and the buildup of laminating materials.

OTHER INFORMATION

In an effort to address safety and environmental concerns related to use of a laminator while also considering costs, staff reviewed alternate sign materials, format and construction that do not involve use of a laminator. One of the main considerations was ensuring the new signage maintained or improved clarity and visibility by residents. After significant research, staff determined that corrugated plastic sheets (called coroplast) and crack and peel paper would be the best material from a cost, safety and clarity/visibility perspective.

The new sign material would include pre-printed 24” x 24” coroplast backing sheets. 60# gloss crack and peel material would be used to place customized case information on each coroplast sheet. Under most conditions, a single metal “H” stake (rather than multiple wood stakes) would be used to install each sign. The same basic format and materials would be used for ZA, BOA and PHO signs. A copy of the proposed new format is attached. (See Figure 2)

In addition to addressing safety and environmental concerns, the proposed sign materials also have a number of additional benefits:

· The font size on the proposed new sign format would be the same or larger than the current signs. This would at a minimum maintain and in some cases improve clarity and visibility by residents.

· Based on cost estimates, the new ZA signs will cost approximately $2.50 less per sign, and the new BOA and PHO signs will cost about $.50 less per sign. Based on the case volumes of the last two fiscal years, this could result in savings of between $4,400 and $5,500 per year.

· Based on field tests, the new materials have shown to be more durable and able to withstand a wider range of temperatures, moisture and UV conditions than the current materials.

· The new materials also have the option of being reused/recycled. Current materials cannot be reused. While staff does not collect the signs after the hearing, the new materials provide the option for reuse.

RECOMMENDATION

Staff requests that the Housing and Neighborhoods Subcommittee recommend City Council approval of a new 24” x 24” signage format that addresses safety concerns, results in cost savings and maintains or improves visibility/clarity for Zoning Adjustment (ZA), Board of Adjustment (BOA) and Planning Hearing Officer (PHO) cases.

Attachments

Figure 1 - Current Posting Signs

Figure 2 - New Sign Layout

Housing and Neighborhoods Subcommittee, November 24, 2009, Item 8

CITY COUNCIL REPORT
TO:	Rick Naimark Deputy City Manager
FROM:	Jerome E. Miller Neighborhood Services Director
SUBJECT:	SEAMLESS SERVICE APPROACH TO CODE ENFORCEMENT

At the May 13, 2009 Housing and Neighborhoods Council Subcommittee meeting, staff provided updates on vending and vehicle parking code enforcement efforts that involved multiple departments, and numerous codes and ordinances. Following the updates, staff was directed to research the issue of overlapping codes and enforcement efforts to ensure the most seamless and effective approach to addressing neighborhood code issues is being utilized. This report provides a summary of the issues involved and a status on the intradepartmental review underway.

THE ISSUE

Code enforcement issues impacting neighborhoods and other parts of the community are covered by a wide range of city codes and ordinances, regulating issues including trash, graffiti, over-height fences, fences built in the right-of-way, vendors on private property and in the right-of-way, illegal parking, alley and other right-of-way maintenance, and open and vacant properties. Many of these code enforcement issues are regulated by multiple codes and ordinances and involve enforcement by two or more departments.

Over the years, the Neighborhood Services Department (NSD) has partnered with Police, DSD, Fire, Street Transportation, Public Works, Finance, Fire, City Clerk, Planning and the Law Department to successfully resolve code enforcement issues on both an individual case basis and through taskforces and intradepartmental teams. NSD has also trained other departments on how to easily report common code violations to enhance seamless service referrals. NSD also spearheaded the intradepartmental Environmental Court Taskforce, which provides a practical working forum for all departments who issue civil, non-traffic citations for Municipal Court to coordinate with Court staff on Court related issues.

OTHER INFORMATION

Currently NSD is involved in several enhanced seamless service code enforcement efforts to more effectively meet community needs. NSD, Fire and Public Works are transitioning an annual Spring effort to prevent fires, including fires caused by high and dry vegetation, to a streamlined, year-round, intradepartmental referral and enforcement process.

NSD is also partnering with the Police, Planning and Law Departments to address the increasing problem of illegal vehicle sales at residential properties in the West Phoenix area. To date, this partnership has resolved cases at 228 properties and work continues on to address 98 other cases. The team is exploring the feasibility of a Zoning Ordinance text amendment to more effectively address this issue. Staff also worked with the Arizona Department of Public Safety on the related issue of fraudulent vehicle sales practices as another means of addressing the problem.

The growing complexity of code issues, and the significant reduction in staffing and resources in most departments, requires NSD and its partner departments ensure code enforcement efforts are as seamless and efficient as possible. To this end, NSD is asking all involved departments to partner and launch a Seamless Code Enforcement Working Group with representatives from NSD, Development Services, Police, Finance, City Clerk, Street Transportation, Public Works, Fire, Law, Planning, Budget and Research, Municipal Court and City Auditor to complete a review of overlapping areas of codes and related enforcement.

Staff anticipates providing the Housing and Neighborhoods Council Subcommittee with a report and presentation on the working group’s findings and related recommendations in March 2010.

RECOMMENDATION

This item is for discussion and direction.

Housing and Neighborhoods Subcommittee, November 24, 2009, Item 9

CITY COUNCIL REPORT
TO:	Rick Naimark Deputy City Manager
FROM:	Kim Dorney Housing Director
SUBJECT:	AUTHORIZATION TO AMEND AUTHORITY GRANTED IN ORDINANCE S-36040 REGARDING THE PARK LEE APARTMENTS

This report requests the Housing and Neighborhoods Subcommittee recommend City Council approval of the amendments to Ordinance S-36040 as noted below for the City and its instrumentality to gain control of the Park Lee Apartments (the “Project) located at 1600 W. Highland Avenue, Phoenix, AZ 85015. The Project is situated on approximately 31.58 acres and consists of 34 buildings and 523 units with an approximate vacancy rate of 60 percent, or 314 units.

THE ISSUE

The owner of the Park Lee Apartments is Park Lee Highland; Community Services of Arizona is the managing member of Park Lee Highland. Park Lee Highland defaulted on the FHA-insured first mortgage. Due to the default, the U.S. Department of Housing and Urban Development (HUD) paid the FHA mortgage claim and now owns the note and first mortgage. If HUD was to foreclose on the first mortgage, the City would not recoup its $2,500,000 investment, and the income and rent restrictions for the HOME-assisted units would be terminated. Additionally, per HOME regulations, the City would be required to repay the HOME funds to HUD from a non-federal source. The Housing Department has exercised its rights under the City’s Deed of Trust to make protective advances on the City’s loan, has purchased property insurance, and is considering property management assistance.

The City anticipates that the City or the City’s instrumentality, Phoenix Central City Revitalization Corporation (PCCRC), will acquire the note and first-priority deed of trust from HUD and accept a deed in lieu of foreclosure from Park Lee Highland. Once PCCRC acquires title to the property, PCCRC anticipates selling the property to the Owner Entity, who will rehabilitate the Project. PCCRC will be the managing member of the Owner Entity.

The project has severely deteriorated and has become an ongoing liability and blight on the neighborhood. The Housing Department is interested in preserving the Park Lee Apartments’ affordability and continuing its positive contribution to the community. The City anticipates using $6 million of Neighborhood Stabilization Project and $5 million of GO Bond funds for the purchase and rehabilitation of the note/property. Staff will provide a verbal update on the most current status of the transaction at the Subcommittee meeting.

OTHER INFORMATION

On April 15, 2009, the City Council approved Ordinance S-36040 authorizing the City to take certain actions to gain control of and revitalize the Park Lee Apartments. Staff is now recommending the prior authority granted by the City Council in Ordinance S-36040 be amended to permit the following additional actions to be taken to allow the City and/or its instrumentality to gain control of and revitalize the Project as determined necessary by the Housing Department:

1.	Cause the City to sell the first mortgage note and assign the deed of trust securing the first mortgage note to the City’s instrumentality, Phoenix Central City Revitalization Corporation (“PCCRC”).
2.	Consent to the transfer of title to the Property by Park Lee Highland, LLC (“Park Lee Highland”) to PCCRC.
3.	Consent to the assignment by Park Lee Highland of the City’s existing $2,500,000 HOME loan (the “HOME Loan”) to PCCRC and PCCRC’s assumption of the HOME Loan and obligations under the loan documents and the declaration of land use restrictive covenants governing the HOME units.
4.	Consent to the transfer of title to the Property by PCCRC to a limited liability company managed by PCCRC as the managing member, PCCR Park Lee LLC (the “Owner Entity”).
5.	Consent to the assignment by PCCRC of the City’s HOME Loan to the Owner Entity and the Owner Entity’s assumption of the loan and obligations under the loan documents and the declaration of land use restrictive covenants governing the HOME units.
6.	Modify the City’s HOME Loan to provide for forgiveness of the HOME Loan upon the Owner Entity’s completion of the rehabilitation of the Project, but retaining the land use restrictions for HOME units.

Authorization is also requested for PCCRC to take the following actions:

1.	Purchase the first mortgage note from the City.
2.	Accept the assignment of the Deeds of Trust securing the HOME Loan and the existing loans by the Arizona Department of Housing and Johnson Bank and assume the obligations under the loans and declarations of land use restrictive covenants governing said loans.

RECOMMENDATION

Staff requests the Housing and Neighborhoods Subcommittee recommend City Council approval of the above amendments to Ordinance S-36040 for the City and its instrumentality to gain control of the Park Lee Apartments.

Housing and Neighborhoods Subcommittee, November 24, 2009, Item 10

CITY COUNCIL REPORT
TO:	Rick Naimark Deputy City Manager
FROM:	Kim Dorney Housing Director
SUBJECT:	HOUSING DEPARTMENT CAPITAL INVESTMENT STRATEGY

This report requests the Housing and Neighborhoods Subcommittee recommend City Council approval of the Capital Investment Strategy (CIS) prepared by Housing Solutions and next steps as recommended by the Housing Department.

THE ISSUE

With the assistance of Housing Solutions, the Housing Department developed a CIS to project the capital needs of the Department’s properties, evaluate potential asset repositioning strategies, and determine mechanisms to ensure the financial viability of the properties in the future. Asset Management rules from HUD require that each property or asset be performing by July 1, 2011. New ratings systems are being developed, but will continue to emphasize financial balance along with strong inspection ratings. After several months of research and analysis, Housing Solutions developed a final report that outlines the Department’s long-term capital needs and recommends refinancing, leveraging assets, and diversifying funding streams to meet these capital needs.

Housing Solutions provided a general assessment of the capital needs of each property and projected capital costs over the next 20 years. The result of this assessment varies greatly for each property. Similar to public housing authorities across the nation, Phoenix’s public housing capital needs cannot be financed exclusively by capital funds provided by the U.S. Department of Housing and Urban Development (HUD). In addition, affordable housing properties are not in a position to fully fund capital needs solely from cash flow.

OTHER INFORMATION

Currently, the Housing Department’s properties have an estimated $31 million backlog in capital improvements. Based on industry standards, Housing Solutions suggests the Department’s capital renewal reinvestment should be $8.5 million annually. However, the average annual funding for these purposes is $2.7 million in Capital Fund Program and $1 million in Affordable Housing proceeds. These capital needs can be satisfied through ongoing leveraging of grants, tax credits and other funds. Also, building systems can and will continue to be maintained beyond a standard lifespan through quality maintenance.

Refinancing, Leveraging, and Diversifying

To address these capital needs, the CIS presents a series of recommendations that vary based on each property’s projected revenues and costs. These strategies build on the Department’s leveraging activities with the affordable properties, HOPE VI grants, general obligation bonds and other resources. For many of the City’s properties, Housing Solutions recommends funding capital improvements by conveying the properties to City-controlled instrumentalities and obtaining Low Income Housing Tax Credits (LIHTC) and tax credit investor equity. To fill the gap not covered by the equity financing, the City could deploy grant funds such as the American Recovery and Reinvestment Act (ARRA) funds or other grant funds as awarded. If the Department conveys a property to an instrumentality, it may continue to handle property management and oversight.

To further diversify and increase funding streams, Housing Solutions recommended project-basing housing vouchers at some public housing properties and/or converting some public housing units into affordable housing units. These changes will increase revenues to support operations and fund capital improvements and may also diversify the current tenant population.

Refining the Strategy: Additional Efforts

As recommended by the CIS, the Housing Department will conduct additional assessments to refine the Department’s strategy and meet the needs of its residents and the Phoenix community. An assessment of the community’s housing needs is being developed through the Five-Year Consolidated Plan process led by the Neighborhood Services Department. The results of this assessment will allow the Housing Department to develop an approach to target imbalances in the current housing market.

Next, the Department has contracted with Ameresco, Inc. to conduct energy audits of its properties to determine mechanisms to decrease utility costs, enhance property viability, and maintain or improve resident quality of life. Additionally, though the CIS analysis provides the Housing Department information on the need for and timing of its future capital costs, the Department will develop more detailed property-specific capital needs assessments with accompanying action plans and update them regularly. These plans will be used to monitor conditions and expenditures in order to take timely, cost-effective actions. The Department’s subscription to the Housing Solutions capital model will be reviewed.

Next Steps

The Housing Department is taking several steps to continue the momentum and implementation of the CIS. During the study period, many grant opportunities became available and the City has been successful in receiving some awards. The following activities will be pursued:

· Analyze or develop department capital investment policies, including setting the appropriate level of replacement reserves to be maintained for each property.

· Prioritize properties for capital improvements. Specifically, the Department will prioritize improvements that receive ARRA grant funds, leverage grants such as HOPE VI, or are underperforming.

· Finalize a timetable to diversify each property’s funding streams, if applicable, and implement capital improvements.

· Implement the prioritized capital projects in Attachment A over the next two years.

RECOMMENDATION

The Housing Department requests the Housing and Neighborhoods Subcommittee recommend City Council approval of the CIS report and the Department’s implementation activities to ensure the financial viability of the Department’s properties in the future.

Short Term Capital Strategy

Property	Type	Plan
McCarty on Monroe	Public Housing - Seniors	Complete tax credit project and lease up. Add solar with CDBG-R (ARRA) funds.
Krohn West	Public Housing - Family	Redevelopment with HOPE VI Award, tax credit, TCAP (ARRA funds awarded through State)
Marcos de Niza	Public Housing - Family	Received ARRA award of $3.4 million project to “Green” property, add some square footage, landscape, paint, etc. Convert 25% of units to Section 8. Leverage with 4% tax credits, Energy Performance Contract (possibly), Capital Fund Program.
Sunnyslope Manor	Section 8 New Construction – Seniors	Received ARRA award up to $1.7 million for “Green” improvements.
Frank Luke Addition	Public Housing - Family	Apply for HOPE VI grant to redevelop. Leverage with tax credits, IDA bond financing, Scattered Sites sales proceeds, other.
Paradise Village	Affordable - Family	Weatherization improvements/solar. Leverage site revenues and NSD funds.
Scattered Site Homes	Public Housing - Single Family Homes	Weatherize half of properties
Public Housing and 5 Affordable Properties	Various	Energy Audits and schedule/evaluate
Foothills	Public Housing - Family	Analyze/Restructure
Public Housing Various	Family and Senior	Using $4.3 million Capital Fund Program Recovery (ARRA) funds sealcoat roofs, landscape, paint, cabinets, carpets, lighting, playgrounds.

Housing and Neighborhoods Subcommittee, November 24, 2009, Item 11

CITY COUNCIL REPORT
TO:	Rick Naimark Deputy City Manager
FROM:	Jerome E. Miller Neighborhood Services Director Kim Dorney Housing Director
SUBJECT:	UPDATE ON SINGLE FAMILY MORTGAGE FORECLOSURES AND NEIGHBORHOOD STABILIZATION PROGRAM EFFORTS

This report provides the Housing and Neighborhoods Subcommittee an update on efforts relating to mortgage foreclosures in Phoenix and the ongoing Neighborhood Stabilization Program activities to address foreclosures in Phoenix neighborhoods.

THE ISSUE

The Neighborhood Services Department (NSD) and the Housing Department are currently implementing a $39.4 million Neighborhood Stabilization Program (NSP1) grant from the U. S. Department of Housing and Urban Development (HUD), expected to restore approximately 900 foreclosed single- and multi-family units to productive use through acquisition and rehabilitation. A $60 million grant request to HUD for additional Neighborhood Stabilization Program (NSP2) funds is pending.

OTHER INFORMATION

The following is an update on the Neighborhood Stabilization Program I (NSP1) activity and NSD’s work related to foreclosure prevention and scams.

Homeownership Assistance and Buyer Interest: As of mid-November, 15 homebuyers have purchased homes, and another 20 have pending purchase contracts using the city’s NSP-funded down payment assistance. There are currently 106 families with eligibility certificates shopping for homes that completed their pre-purchase counseling and have applied for down payment assistance.

Homeownership Programs with Rehabilitation Assistance: The Subcommittee provided feedback on the staff recommendation to create a starting inventory of homes for the two ownership programs that include rehabilitation. To that end, 19 properties are in progress with offers accepted. Of those, NSD and the two development partners, the Foundation for Senior Living and the National Farm Workers, have 14 homes with accepted offers, including 12 that will be renovated and resold to an owner occupant, and two that are severely blighted and will be demolished. Two additional properties are being donated to the program by Wells Fargo. Three of the homeownership assistance program buyers have identified homes needing rehabilitation and have been approved for rehabilitation assistance, with homes under contract. The first five properties will close in early December.

Multi Family Rental Acquisition with Rehabilitation: The Park Lee Apartments project is in final negotiations between the city, the current owner and the U.S. Department of Housing and Urban Development (HUD). This project will utilize $6 million in NSP funds and $5 million of general obligation (GO) bond funds for the purchase and rehabilitation of the property’s 523 units. An 80 unit project that will be acquired by Arizona Housing Inc. will obligate an additional $3.892 million in NSP funds and provide permanent homes for men, women and small families that were previously homeless. These two projects will commit almost all of the multi family NSP funding and will satisfy the HUD requirement to use 25 percent of the funds to benefit households with incomes at or below 50 percent of area median income.

Foreclosed Properties and Competition: At the last Housing and Neighborhoods Subcommittee meeting, members encouraged staff to find ways to more effectively link the program with willing sellers of foreclosed properties (REO sellers). NSD staff, along with its NSP1 partners, is proactively working with five of the top ten REO sellers in the NSP priority areas and are looking to expand those relationships with other REO sellers.

The National Community Stabilization Trust has also agreed to extend to our partners direct access to their referrals. Additionally, staff has tracked the effectiveness of offer and acquisition approaches and determined that MLS offers have produced only a 20 percent success rate, while direct negotiations have resulted in a success rate of over 80 percent.

Foreclosure Prevention and Scams: HUD has funded a national education and prosecution support effort directed at the growing problem of foreclosure prevention "scams;" bogus companies that seek up front fees and promise assistance in preventing a foreclosure while actually providing little or no service. The Lawyers' Committee for Civil Rights Under Law and NeighborWorks will initiate the program in a number of pilot cities, including the Phoenix metropolitan area, in the next few months. Their representatives are working through the Arizona Advocacy Network and the City to make connections with the Arizona Foreclosure Prevention Task Force, Community Legal Services and others to support the awareness campaign, solicit local attorneys to assist victims, and to capture data on scams in order to pursue fraudulent companies.

RECOMMENDATION

This report is for information only.

Housing and Neighborhoods Subcommittee, November 24, 2009, Item 12

CITY COUNCIL REPORT
TO:	Rick Naimark Deputy City Manager
FROM:	Jerome E. Miller Neighborhood Services Director
SUBJECT:	ARRA WEATHERIZATION UPDATE

This report provides an update to the Housing and Neighborhoods Subcommittee on the Weatherization Assistance Program, which received funding from the American Recovery and Reinvestment Act (ARRA) in April 2009.

THE ISSUE

As part of the ARRA, the national Weatherization Assistance Program (WAP), funded by Department of Energy’s (DOE) Office of Energy Efficiency and Renewable Energy, received $5 billion in funding to disburse to states using an allocation formula. Phoenix received a $7.2 million award to be implemented over three years, continuing its Weatherization Assistance Program provided to families under the 200 percent poverty level set by the U.S. Department of Health and Human Services. A total of 1,200 Phoenix homes are expected to be weatherized over the three year grant. To date, 143 homes have been weatherized, and 236 homes are under construction.

OTHER INFORMATION

Over the years, the Neighborhood Services Department (NSD) has weatherized more than 3,000 homes. In addition to meeting DOE’s national goal of reducing energy use and the carbon footprint, a primary goal of DOE ARRA funding is job creation and/or retention, and capacity building. To this end, NSD developed a mentorship and scholarship program to reimburse eligible licensed contractors up to 50 percent of the cost of skills training needed to perform energy audits and weatherization measures in residential housing. Currently, seven contractors have submitted program forms for tuition reimbursement.

In response to direction received from the Housing and Neighborhoods Subcommittee, staff has developed a full scholarship program valued at $1,600 per voucher for non-profit workforce or job linkage community partners. The participating non-profit organizations will be chosen from established partners serving communities in the City’s targeted areas. As part of the process, each organization will be asked to submit a one-page overview of its workforce development component in order to receive five vouchers to be used at the Southwest Building Science Training Center (SBSTC). The SBSTC, operated by the Foundation for Senior Living, offers weatherization skills training and Building Performance Institute certification. The SBSTC will direct bill the program for training rendered up to $1,600 per voucher.

Each non-profit organization will select the training candidate based on fit and aptitude. Other workforce and job placement-related case management and referral services will also be provided or facilitated by the non-profit organization.

Candidates can use the vouchers to enroll in the following courses:

	Energy Basics - Introduction to Weatherization
	Pressure Diagnostics I and II
	Building Performance Institute Preparation and Certification
	Weatherization Boot Camp

A total of $120,000 of ARRA WAP funding is available for this training component. The deadline for using the vouchers will be December 31, 2010.

The following non-profit community organizations will be invited to participate in the voucher program:

	Arizona Opportunities Industrialization Center
	Arizona Call-A-Teen Youth Resources
	Chicanos Por La Causa
	City of Phoenix Workforce Connection
	Community Excellence Project
	Farm Workers Service Center
	Friendly House
	Golden Gate Community Center
	Goodwill of Central Arizona
	Greater Phoenix Urban League
	Keys Community Center
	Rehoboth Community Development Corp
	Valley Interfaith Project

RECOMMENDATION

This report is for information only.

Housing and Neighborhoods Subcommittee, November 24, 2009, Item 13

CITY COUNCIL REPORT
TO:	Rick Naimark Deputy City Manager
FROM:	Jerome E. Miller Neighborhood Services Director Kim Dorney Housing Director
SUBJECT:	AMERICAN RECOVERY AND REINVESTMENT ACT PRIORITY FUNDING UPDATE

This report provides an update to the Housing and Neighborhoods Subcommittee on the Neighborhood Services and Housing Departments’ progress in pursuing funding opportunities and implementing projects under the American Recovery and Reinvestment Act (ARRA).

THE ISSUE

Highlighted in this report are the projects and funding updates from the Neighborhood Services and Housing Departments. Both departments have determined a priority list that includes formula funding and competitive grants that have been awarded, as well as additional competitive grant opportunities which staff is pursuing.

OTHER INFORMATION

A summary status update of these priorities is as follows:

Neighborhood Stabilization Program II: Competitive - $60 Million Requested: Under this round of funding, grants will be awarded to applicants targeting the areas most affected by foreclosed homes to further help stabilize neighborhoods. Staff submitted an application for $60 million in the second round of the Neighborhood Stabilization Program (NSP2); HUD has informed staff that the City remains in the pool of applicants being considered for funding. HUD will announce award recipients in Winter 2009/2010.

Community Development Block Grant Recovery (CDBG-R): Formula Fund Allocation - $4,575,410: In September 2009, HUD approved NSD’s application for $4.5 million of CDBG-R stimulus funds, and released the funding to the City. The City Council has approved CDBG-R funds for identified eligible public facility and infrastructure projects that focus on stimulating the economy. Several projects have been approved to move forward, including the Gompers Habilitation Center ADA playground, St. Mary’s Food Bank Alliance and Community Food Connections Downtown Public Market energy efficiency improvements, and Andalucia sidewalk infrastructure improvements. All projects must be completed by September 30, 2012.

The Gompers Habilitation Center ADA playground project will install new playground equipment, planters for gardening, benches for seating, landscaping, playhouses and tot turf, material made exclusively with recycled rubber. The new playground will primarily serve children with physical and mental challenges and help make physical/recreational therapy classes available to adults. On September 24, NSD staff joined Mayor Phil Gordon and members of the Gompers Board of Directors at a ground breaking ceremony of the playground project and revealed the architect’s renderings of the fully accessible playground. In addition to CDBG-R funding, the project is leveraged with additional funding by CIGNA, Boundless Playgrounds, Matrixx Initiatives, and John F. Long Properties. This project is anticipated to begin construction in early 2010.

St. Mary’s Food Bank Alliance energy efficiency improvements are scheduled to begin in January 2010 with installation of interior and exterior industrial cold storage high speed automatic doors. Over the last year, the food bank witnessed a 70 percent increase in clients as a result of the current economic downturn. Funds saved through a decreased energy cost will go directly to food and programs for people impacted by the recession.

The Community Food Connections Downtown Public Market, another energy efficiency improvement project, will also be underway in the next few months. This project provides energy efficient physical improvements, including replacing the antiquated exterior air conditioner and installing small business vendor shade structures. The HVAC system will be replaced by late December, and a second round of bids will be solicited to install the exterior shade canopies for vendors in mid-January. The downtown market will offer a central location where the community can purchase affordable, locally-grown food and products.

In addition, the Andalucia sidewalk infrastructure improvements are scheduled to begin by early December. This is Phase III and IV of a four-phase project to install approximately 12,000 linear feet of sidewalk in the area bounded by Indian School Road on the south, Pierson Street on the north, 51^st Avenue on the west, and 47^th Avenue on the east.

Weatherization Assistance Program (WAP): Formula Fund Allocation - $7.2 million: The WAP is offered as a one-time grant to homeowners and renters. The program provides for replacement of existing building components and improvements to reduce energy consumption, including sealing duct systems; insulation; cooling and heating systems; and lowering heat-gain through windows and doors. Over the years, NSD has successfully provided assistance to low income residents through this program. A total of 1,200 Phoenix homes are expected to be weatherized over the three year grant. To date, 143 homes have been weatherized, and 236 homes are under construction.

Healthy, Home Demonstration Program (HHDP) Competitive - $875,000: The HHDP helps demonstrate and promote cost-effective, preventive measures to correct residential health and safety hazards that produce serious diseases and injuries in children and the elderly in low-income households. Staff is waiting for approval on a research request required by the Phoenix Children’s Hospital Institutional Review Board (IRB) which oversees behavioral research involving people with the aim to protect the rights and welfare of the research subjects. The new required research request included an application with program study questions, protocols, an assessment of risk to the patient, and Health Insurance Portability and Accountability Act requirements. All documentation was submitted, with approval expected by late November.

In the meantime, program start-up activities are proceeding and are in-line with program and benchmark expectations. More than 550 individuals have received Healthy Homes education materials at seven outreach activities and 52 partners received Healthy Homes skills training. The program has six qualified households including eight children under the age of 11.

Lead Hazard Control Program (LHCP) Competitive - $2.3 million: The LHCP remediates lead hazards in privately-owned housing using a grant from HUD. The purpose of the program is to prevent childhood lead poisoning by creating lead-safe housing. LHCP has evaluated 19 properties, and 15 with lead hazards qualified for the program. Of those properties, three are completed, three properties are awaiting contract signatures, and nine are in progress awaiting bid opening or scope of work development. More than 1,000 individuals have participated in education and outreach activities, with 60 contractors and grant partners participating in lead skills training.

Capital Fund Recovery Grant (CFRG): $4.3 Million Formula Fund Allocation: CFRG funds are used to carry out priority capital and management activities in public housing. The Housing Department received a formula fund allocation on April 18, 2009. Staff identified 12 projects that meet the criteria for expending the capital funds. The work has been performed at various conventional public housing, senior housing and scattered site properties. Completed projects include roof sealing at multifamily and senior sites, and interior painting in the common areas of senior housing sites. The remaining projects are either in progress, out for bid, or specifications are being created. This work will include exterior painting, sidewalk repairs, landscape and playground improvements, lighting replacements, HVAC upgrades, security door and shade screen replacements, bathtub refurbishing, and flooring and roof replacements.

To date 15 firms are under contract for these improvements, and approximately $2.2 million (50 percent) of funds have been obligated. Additionally, as of September 30, 8.3 full-time equivalent positions have been created as a result of this award.

The capital funds received must be obligated within one year from the date received (April 2010) and expended within three years (April 2012).

Capital Fund Recovery Competition (CFRC): $3.4 Million Obtained: HUD allocated $995 million in CFRC funds to Public Housing Authorities (PHAs) in four categories: (1) Addressing the Needs of Elderly or Disabled - $95 million; (2) Public Housing Transformation - $100 million; (3) Gap Financing for Stalled Projects - $200 million; and (4) Energy Efficient, Green Communities - $600 million.

Based on the criteria for each category, the City applied for four grants totaling $16.5 million. The City was informed it did not receive two grant awards for $6.7 million and $6.4 million under Categories 2 and 4, respectively. Both grant awards were to rehabilitate the Foothills Village public housing community.

The City received a $3.4 million Category 4 grant award for the Marcos de Niza public housing community. The Housing Department will use these funds to improve the property to increase energy efficiency, maintain healthy, safe living environments, and conserve energy, water, and other resources. The Department will use a mixed-finance approach to leverage additional funds, including Low Income Housing Tax Credit (LIHTC) equity. An Annual Contributions Contract (ACC) Amendment was executed by the department director and sent to HUD on September 24^th as requested. The Housing Department is currently procuring an architect for the project and creating a Limited Liability Company to partner with a tax credit equity investor.

All CFRC funds awarded must be obligated within one year. Further, 60 percent must be expended within two years, and 100 percent expended within three years.

Tax Credit Assistance Program (TCAP): $2.1 Million Obtained: Staff submitted an application to the Arizona Department of Housing (ADOH) for a $2.1 million TCAP grant award for the Krohn West HOPE VI site. Staff also submitted an application for a LIHTC award. The Housing Department received notice of awards for both the LIHTC and TCAP programs. The Housing Department will use these funds to fill the financing gap for the new Krohn West HOPE VI community.

Green Retrofit Program: Received Up to $1.7 Million in Competitive Funds: Green Retrofit Program funds are awarded to facilitate utility-savings that produce environmental and economic benefits. As the City was eligible to apply for funds for two properties that serve seniors, the Housing Department submitted grant applications for both Sunnyslope Manor, which is located at 205 E. Ruth Avenue, and Fillmore Gardens, which is located at 802 N. 22^nd Place.

On September 23, 2009, the Housing Department received notice of award for up to $1.7 million for Sunnyslope Manor. An exact award amount will be determined based on the HUD inspection that took place on October 28^th. The proposed upgrades at Sunnyslope Manor include Energy Star rated appliances, dual-paned windows, low-flow plumbing fixtures, reflective metal roofs, high efficiency hot water heaters, and photovoltaic panels. The Housing Department has held a public meeting with residents to explain the upgrades and is starting the process to procure a general contractor. The City did not receive a $1.8 million grant award for Fillmore Gardens.

The City of Phoenix must obligate GRP funds by September 2010. All work must be completed and funds expended within two years.

RECOMMENDATION

This report is for information purposes only.

1.	Call to Order	Michael Nowakowski, Chair
2.	Review and Approval of the October 14, 2009 Housing and Neighborhoods Subcommittee Meeting Minutes	Page 5
Items 3 and 4 are for Consent. Although no presentations are planned, staff will be available to answer any questions.
3	Certified Local Government Grant Application for Historic Property Scanning Project: This report requests retroactive Subcommittee approval to apply to Arizona State Parks for a $7,336 Federal Certified Local Government Historic Preservation Fund Pass-Through Grant, and to use up to $4,890 in 2006 Historic Preservation Bond funds as the required grant match. Funding will be used to scan historic property inventory forms for commercial and other historic properties in Phoenix, as well as National Register Nomination forms for local properties, in order to make this information more accessible to the public. This item is for action.	Barbara Stocklin, Historic Preservation Officer Page 17
4.	Oasis Apartments Affordable Housing Project – District 7: This report requests the Housing and Neighborhoods Subcommittee recommend City Council approval to loan and disburse up to $3,000,000 in HOME Investment Partnerships Program (HOME) funds to Mr. Tom Carmody, The Carmody Companies, or his city approved nominee, for a proposed affordable rental acquisition and rehabilitation housing project, the Oasis Apartments at 1501 West Grand Avenue, District 7. This item is for discussion and action.	Kim Dorney, Housing Director Page 19

DISCUSSION AND POSSIBLE ACTION ITEMS:
5.	Ending Homelessness in Maricopa County: This report provides information on the collaborative effort led by the Valley of the Sun United Way to end homelessness in Maricopa County. This item is for discussion and possible action.	Gloria Hurtado, Human Services Director Est: 10 minutes Page 21
6.	Funding Allocation for Low Income Historic Housing Rehabilitation Program and Other Revisions to Historic Residential Grant Programs: This report requests the Housing and Neighborhoods Subcommittee recommend allocation of an additional $210,000 in available 2006 historic preservation bond funds for the Low Income Historic Housing Rehabilitation Program during the 2009-2010 and 2010-2011 fiscal years. This item is for discussion and action.	Barbara Stocklin, Historic Preservation Officer Est: 5 minutes Page 23
7.	Signage for Zoning Adjustment, Board of Adjustment and Planning Hearing Officer Cases: This report requests that the Housing and Neighborhoods Subcommittee recommend City Council approval of a new notification signage format and materials for Zoning Adjustment, Board of Adjustment and Planning Hearing Officer cases. This item is for discussion and action.	Debra Stark, Planning Director Est: 5 minutes Page 27
8.	Seamless Service Approach to Code Enforcement: At the May 13, 2009 Housing and Neighborhoods Council Subcommittee meeting, staff provided updates on vending and vehicle parking code enforcement efforts that involved multiple departments, and numerous codes and ordinances. Following the updates, staff was directed to research the issue of overlapping codes and enforcement efforts to ensure the most seamless and effective approach to addressing neighborhood code issues are being utilized. This report provides a summary of the issues involved and a status on the intradepartmental review underway. This item is for discussion and direction.	Jerome Miller, Neighborhood Services Director Erynn Crowley, Neighborhood Services Deputy Director Est: 10 minutes Page 31
9.	Authorization to Amend Authority Granted in Ordinance S-36040 Regarding the Park Lee Apartments: This report requests the Subcommittee recommend approval of the amendments to Ordinance S-36040 as noted below for the City and its instrumentality to gain control of the Park Lee Apartments located at 1600 W. Highland Avenue in Phoenix. This item is for discussion and action.	Kim Dorney, Housing Director Est: 10 minutes Page 33
10.	Housing Department Capital Investment Strategy: This report requests the Housing and Neighborhoods Subcommittee recommend City Council approval of the Capital Investment Strategy prepared by Housing Solutions and next steps as recommended by the Housing Department. This item is for discussion and action.	Kim Dorney, Housing Director Est: 10 minutes Page 35
11.	Update on Single Family Mortgage Foreclosures and Neighborhood Stabilization Program Efforts: This report provides the Housing and Neighborhoods Subcommittee an update on efforts relating to mortgage foreclosures in Phoenix and the ongoing Neighborhood Stabilization Program activities to address foreclosures in Phoenix neighborhoods. This item is for information and discussion.	Jerome Miller, Neighborhood Services Director Kim Dorney, Housing Director Est: 10 minutes Page 39
12.	ARRA Weatherization Update: This report provides an update to the Housing and Neighborhoods Subcommittee on the Weatherization Assistance Program, which received funding from the American Recovery and Reinvestment Act in April 2009. This item is for information and discussion.	Jerome Miller Neighborhood Services Director Est: 10 minutes Page 41
13.	American Recovery and Reinvestment Act Priority Funding Update: This report provides an update to the Housing and Neighborhoods Subcommittee on the Neighborhood Services and Housing Departments’ progress in pursuing funding opportunities and implementing projects under the American Recovery and Reinvestment Act. This item is for information and discussion.	Jerome Miller, Neighborhood Services Director Kim Dorney, Housing Director Est: 10 minutes Page 43
14.	Future Agenda Items: This item is scheduled to give Subcommittee members an opportunity to mention possible topics for future Subcommittee agendas or to request City staff to follow-up on Subcommittee issues.
15.	Call to the Public: Consideration, discussion and comments from the public; those wishing to address the Subcommittee need not request permission in advance. Action taken as a result of public comment will be limited to directing staff to study the matter or rescheduling the matter for further consideration and decision at a later date.
16.	Adjournment

Councilman Michael Nowakowski, Chair	Councilman Michael Johnson
Councilman Bill Gates	Vice Mayor Tom Simplot

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Phoenix - All America City - 2009

THE ISSUE