TO: Chair and Housing Authority Commissioners
THROUGH: Krishna Namburi, Executive Director
FROM: Nicole Utz, Director of Housing
SUBJECT:
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Memorandum of Understanding for a partnership between Community Development Partners and the Salem Housing Authority to develop affordable housing
Ward(s): All Wards
Commissioners(s): All Commissioners
Neighborhood(s): All Neighborhoods
Result Area(s): Safe and Healthy Community; Welcome and Livable Neighborhood
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SUMMARY:
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The proposed memorandum of understanding (MOU) is for the purpose of allowing Salem Housing Authority (SHA) to enter into a partnership agreement with Community Development Partners (CDP) for the development, financing, ownership and operation of an affordable housing project at ODOT Salem - Current Park-and-Ride lot at the NW corner of Market Street NE and Hawthorne Avenue NE, Salem, Oregon.
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ISSUE:
Shall Salem Housing Authority authorize the execution of the MOU for the purpose of co-development and co-ownership between SHA and CDP for the development, financing, ownership and operation of an affordable housing project located at the NW corner of Market Street NE and Hawthorne Avenue NE?
RECOMMENDATION:
recommendation
Authorize the execution of the MOU for the purpose of co-development and co-ownership between SHA and CDP for the development, financing, ownership and operation of an affordable housing project located at the NW corner of Market Street NE and Hawthorne Avenue NE.
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FACTS AND FINDINGS:
The current Park-and-Ride lot, located at the NW corner of Market Street NE and Hawthorne Avenue NE, is owned by the Oregon Department of Transportation (ODOT). ODOT has determined this property to be surplus and has made it available for acquisition by another state agency, a political subdivision, nonprofit organizations, and Indian tribes, on the condition that they develop the property for affordable housing.
CDP Oregon LLC, an Oregon limited liability company (CDP) and Salem Housing Authority (SHA) have set forth proposed terms for a co-development and co-ownership partnership for the development, financing, ownership, and operation of an affordable housing project (the Project) at this location in an MOU.
The Project will be developed and owned by a to-be-formed Oregon limited partnership in which SHA will have a 1% interest and will act as the managing general partner. CDP will have a 99% interest and will act as the administrative general partner.
The partnership will pay CDP and SHA, as co-developers, a fee for services in the form of a developer fee, paid 80% to CDP and 20% to SHA from Partnership net cash flow.
CDP and SHA will share responsibility for payment of all pre-development expenses. Once site control is obtained SHA and CDP will each dedicate $50,000 for feasibility. If both parties deem the project feasible and agree to move forward, SHA will dedicate $500,000 of predevelopment funds to be used for the first $500,000 of architectural fess to Scott Edwards Architecture. CDP will cover the rest of the predevelopment expenses to achieve a Low-Income Housing Tax Credit (LIHTC) closing.
CDP will be primarily responsible for management of the development and construction of the Project. SHA shall be primarily responsible for the Project’s resident services and community engagement operations.
BACKGROUND:
SHA seeks to facilitate the construction of affordable housing units that will serve low-income individuals and families in need of stable, accessible, and affordable living conditions. The development aligns with the City's broader housing goals, which include expanding affordable housing options, addressing housing shortages, and promoting equitable community growth.
Nicole Utz
Director of Housing
Attachments:
1. Memorandum of Understanding - CDP and SHA