REPORT TO THE CITY COUNCIL
FROM: JENNIFER CLARK, Director
Planning and Development Department
THROUGH: PHIL SKEI, Assistant Director
Planning and Development Department
BY: CORRINA NUNEZ, Project Manager
Community Development Division
SUBJECT
Title
Approve actions pertaining to the Blythe Village Project to be located at 3572 N. Blythe Avenue in west central Fresno (District 1).
1. Adopt a finding of Categorical Exemption per staff’s determination, pursuant to Section 15332/Class32 (Infill Development); and
2. Approve a Community Development Block Grant Program Agreement in the amount of $400,000 with Blythe Village, LP for the acquisition of the Blythe Village site for the subsequent development of a 67-unit manufactured rental housing property; and
3. Approve a HOME Investment Partnerships Program Agreement in the amount of $1,800,000 with Blythe Village, LP for hard construction costs of the project; and
4. ***Resolution - Proposing to provide Blythe Village, LP, a limited partnership, with a financial commitment to the Blythe Village Project in an amount not to exceed $800,000 (Subject to Mayor’s Veto).
Body
RECOMMENDATION
Staff recommends the City Council adopt the California Environmental Quality Act (CEQA) exemption (Exhibit A - CEQA exemption) per staff’s determination and approve: 1. a Community Development Block Grant (CDBG) Program Agreement (Exhibit B - CDBG Agreement) in the amount of $400,000 with Blythe Village, LP for the acquisition of the Blythe Village site for the subsequent development of a 67-unit manufactured rental housing property, 2. a HOME Investment Partnerships (HOME) Program Agreement (Exhibit C - HOME Agreement) in the amount of $1,800,000 with Blythe Village, LP for hard construction cost of the project, and 3. a Resolution (Exhibit D - Resolution) proposing to provide Blythe Village, LP with a financial commitment to the Blythe Village Project in an amount not to exceed $800,000.
EXECUTIVE SUMMARY
Blythe Village, LP was selected through a 2023-2024 Notice of Funding Availability (NOFA) to receive $400,000 in CDBG Program funds for acquisition and $1,800,000 in HOME Program funds for construction costs of the Blythe Village project. In addition, the City is proposing to provide an additional commitment of funding to the project in an amount not to exceed $800,000 in available City housing funds. Total project cost $14,532,689. In return for the investment of City funds, the City will receive seven CDBG-assisted units and 11 HOME-assisted units.
BACKGROUND
On May 19, 2023, the Community Development Division released a 2023-2024 Notice of Funding Availability (NOFA) for the creation of new affordable housing or substantial rehabilitation of existing housing. In response to the NOFA, several applications were received, one of which was the Blythe Village project that is being recommended to receive funding for acquisition of the site and construction of the project. In addition, the City is proposing to provide an additional allocation of available City housing funds with a proposed funding agreement to be presented to the Council in the 2025 fiscal year.
The proposed 2023-2024 federal funding was issued through a NOFA and is therefore not subject to the Better Business Act process. After preliminary underwriting and technical assessment of the applications, the Blythe Village project was determined to be one of the most shovel ready and is therefore being recommended for funding in the amount of $400,000 in CDBG Program funds as a 3rd position residual receipts loan, at 2% interest, with the balance due and payable in full at a 55-year maturity date and $1,800,000 in HOME Program funds as a 4th position residual receipts loan, at 3% interest, with the balance due and payable in full at a 55-year maturity date. This manufactured housing project was also selected in part to offer an additional housing type available to lower income households as affordable housing. The developer recently completed The Villas on Fancher Creek, a 39-unit multifamily, market rate, manufactured housing development which is similar to the proposed development of the Blythe Village project.
The Blythe Village project cost is estimated at $14,532,689: $9,406,055 construction loan, $726,634 deferred equity, $1,400,000 general partnership capital, $400,000 in the CDBG Program funds, $1,800,000 in HOME Program funds, and $800,000 in proposed City affordable housing funds. The construction cost per square foot for the residential units is estimated at $143.77 ($9,901,400 / 68,869 square feet) which was derived from the total development cost, less the costs for land, soft costs, and contingency and reserves. The per unit cost is estimated at $216,905 ($14,532,689 / 67) which was derived from the total budget divided by the number of residential units.
Blythe Village will have a total of 67 3-bed/2-bath affordable and market rate rental units. Unit size will range from 933 square feet to 1,120 square feet depending on the location within the development. The residential units will be contained within a 4.8-arce gated community at the northeast corner of N. Blythe Avenue and W. Saginaw Way in west central Fresno (Exhibit E - Project Location Maps). Development will also include 142 parking spaces, of which 80 will be covered, bicycle racks/lockers, landscaping, and irrigation. In addition, construction materials will be durable and environmentally friendly and incorporate the City of Fresno Green building standards and Universal Design features. The City’s Community Development Division will inspect the completed property annually for housing quality standards and overall property management.
Once the project is complete, the affordable single-family housing units will be counted towards the City’s affordable housing goals as identified in the 2015-2023 Housing Element, 2020-2024 Consolidated Plan, 2023-2025 One Fresno Housing Strategy, and the 2023-2024 Annual Action Plan. The proposed single-family manufactured housing developed at this vacant parcel will also help to make a positive impact to the neighborhood by offering new, in-fill, durable single-family housing within a gated community.
ENVIRONMENTAL FINDINGS
On February 16, 2024, the Planning and Development Department determined the project activities to be exempt under Section 15332/Class 32 (Infill Development) of the CEQA guidelines. On February 15, 2024, an assessment of the project activities under the National Environmental Policy Act resulted in Finding of No Significant Impact. On March 29, 2024, the City received HUD authorization to use grant funds on the proposed project.
LOCAL PREFERENCE
Local preference was not used based on the conditions of federal funding.
FISCAL IMPACT
The CDBG and HOME Program funds for the proposed Blythe Village project were appropriated in the Planning and Development Department’s Fiscal Year 2024 Budget.
Attachments:
Exhibit A - CEQA Exemption
Exhibit B - CDBG Agreement
Exhibit C - HOME Agreement
Exhibit D - Resolution
Exhibit E - Project Location Maps