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3. Lumber Yard_CPA Narrative.pdf 1 Community Preservation Project Proposal Project: Redevelopment of former Northampton Lumber Yard Applicant: Valley Community Development Corporation (Valley CDC) Project Location: 256 Pleasant Street, Northampton MA Map 32C, Block 171, Lot 1 Map 32C, Block 337, Lot 1 The property is located along the lower Pleasant Street corridor between Holyoke Street and Short Street, a private road. The property is located within the Central Business District and subject to Central Business zoning and Central Business Architecture Committee approval. Community Preservation Criteria: Program Area – Community Housing The redevelopment of the former Northampton Lumber Yard will meet the following Community Preservation Plan criteria: • Contributes to the preservation of Northampton’s unique character, boosts the vitality of the community, and enhances the quality of life for its residents – the project provides affordable rental housing for very low-to-moderate income households earning between 30 and 60 percent Area Median Income (AMI) and adds to the social and economic diversity of the City. • Addresses recommendations contained in the Sustainable Northampton Comprehensive Plan and is consistent with other city- wide planning efforts that have received broad-based scrutiny and input and can demonstrate wide community support – the Sustainable Northampton Strategic Plan and the City’s Master and Strategic Housing Plans support the preservation and development of affordable housing and housing specifically along a range of income levels. • Saves resources that would otherwise be threatened – one- and two- bedroom apartments are in high demand in Northampton and as the downtown area becomes more developed and vibrant and as young professionals move into the City, affordable rental housing located downtown will be in higher demand. • Serves under-served populations – our project provides affordable rental housing to very low-to-moderate income households earning between 30 and 60 percent AMI. • Places high value on sustainable, ecologically responsible, energy- conserving structures, locations, and materials – this project will be new construction with buildings that at a minimum will meet Energy Star standards and green materials will be used to the fullest extent possible. 2 • Received endorsement by community groups, municipal boards and/or departments, and City residents – the project has the support of local social service agencies, the Northampton Housing Partnership, and Mayor David Narkewicz. See attached support letters from the Center for Human Development, Friends of the Hampshire County Homeless, City Councilor At-Large Bill Dwight, and Northampton residents. • Leverages additional public and/or private funds, or demonstrates that other funding sources are not readily available or sufficient – Valley CDC will seek funding from a variety of sources from the Department of Housing and Community Development. We expect to seek the maximum allowed from these State programs. We will also be requesting funds from the Smith College Affordable Housing Fund in addition to the funding from CPC. Valley CDC will also be submitting an application for $150,000 from the City's Community Development Block Grant allocation. • Demonstrates a high benefit/cost value – the project will ensure long term affordability and decent, safe affordable housing for either 99 years or in perpetuity due to the affordable housing restriction required by Department of Housing and Community Development funding. • Can be implemented expeditiously and within budget – Valley CDC needs the written commitment of the CPC to be competitive in the State’s rental funding round. Valley CDC has developed two affordable housing projects during the past five years and both projects were completed on time and within budget. Community Housing Project Evaluation Criteria Additionally, this proposal meets 10 of the 14 Project Evaluation Criteria for community housing projects as outlined below: • Create or preserve community housing with a focus that matches community needs for households – Valley CDC is creating approximately 60 units of affordable rental housing that meets the City's high demand for one and two bedroom apartments. • Promote and encourage use by diverse populations – One hundred percent of the proposed units will serve very low to moderate income individuals earning between 30 and 60 percent AMI in an otherwise higher-income neighborhood. • Provide housing that is harmonious in design and scale with the surrounding community – This will be a new construction project that will adhere to current Central Business zoning. The architects have reviewed the surrounding buildings and streetscape so that the new building(s) will complement the surrounding neighborhood. • Ensure long-term affordability – Valley CDC agrees to an affordable housing restriction which maintains the housing as affordable for 3 at least 99 years; from experience, the State will also approve of this length of restriction. • Construction on a previously developed site – The proposed project will make use of the former Northampton Lumber Yard site. • Provide the City credit for units under M.G.L. Chapter 40B – These units can be added to the City's inventory of affordable housing. • Is LEED or Energy Star certified – At a minimum, the building(s) will be Energy Star certified. Green building products will be used to the greatest extent possible. • Provide mixed-use development opportunities – In addition to the approximately 60 units, this project will include approximately 3,500 square feet of commercial space. • Provide housing in location that promotes walking, biking, and use of public transportation – The existing site is located in downtown Northampton close to shopping and all modes of transportation. • Provide housing for households below 80% AMI including households with incomes below 50% or 30% AMI – One hundred percent of the units will provide housing to those with incomes between 30% and 60% of AMI. Community Needs Served: This project serves under-served populations by creating approximately 60 apartments affordable to households earning at or below 60% of AMI. According to the City of Northampton Housing Needs Assessment and Strategic Housing Plan (2011), there is a "significant need to house families, particularly those earning within the poverty level, as well as growing numbers of smaller households that are increasingly including single parents with children as well as unrelated individuals." The plan also states that "there are substantial numbers of two-person households with unmet housing needs" and that these households comprise about one- third of the City's households, yet smaller units are in short supply. The Housing Authority has substantial numbers of families on their wait list for larger units, indicating a further need for larger subsidized rental units. The proposed project will have one, two, and three-bedroom apartments for families. The neighborhood where the project is located is in one of the lesser- developed sections of downtown Northampton. Since this section is along one of the major gateways leading into the City, lower Pleasant Street is considered a priority area for the City’s future development. The former Northampton Lumber Yard property has a prime location along the Pleasant Street corridor that is close to public transportation and nearby amenities downtown. The project would guarantee the availability of affordable housing in this up-and-coming area. 4 The development's on-site facilities will include a laundry room, a community space where residents can host meetings or events, and a management office. There will be on-site green space available for residents and we expect to be able to accommodate between 0.7 to 1 parking space per unit for the convenience of residents as well as to minimize pressure on street parking and parking for the surrounding residential and commercial areas. The City of Northampton has submitted a grant application to the MassWorks Infrastructure Program for $1,028,365 with a local match of $46,246 for infrastructure improvements to lower Pleasant Street. These improvements include crosswalk and sidewalk repairs and improvements and the addition of trees and assessing the feasibility of moving power lines underground. The project will benefit greatly from these infrastructure improvements but they will also serve the greater community. Long-term Preservation: In order to leverage public funds including allocations of LIHTCs (from Federal and State LIHTCs) and State affordable housing soft debt, the Department of Housing and Community Development will require a recorded Affordable Housing Restriction (AHR). It is expected that the AHR will require either for a minimum of 99 years or in perpetuity that the 60 apartments are restricted to households earning between 30% and 60% of AMI. Community Support: Valley CDC has met with the following individuals and entities to discuss the redevelopment of the former Northampton Lumber Yard: • Mayor David Narkewicz • Northampton Housing Partnership • City of Northampton Housing/Community Development Planner Peg Keller • City of Northampton Director of Planning and Sustainability Wayne Feiden • City of Northampton Senior Land Use Planner and Permits Manager Carolyn Misch • City of Northampton Economic Development Director Terry Masterson • Undersecretary for Housing and Community Development Aaron Gornstein The project has been met with positive response from these parties. Additionally, Valley CDC has also received several letters of support for the project from Northampton residents (see attached). 5 Success Measurement: Successful completion of construction of the project, with the above mentioned affordability restriction, will ultimately be how success is measured. Due to the long lead time for the creation of affordable units, success is often broken down into steps which can include site control, zoning/planning approvals, funding applications, awarding of funds, construction, and ultimately the rent-up of affordable units. Furthermore, the future success will be measured by the ongoing financial viability of the project as projected in the attached 20-year operating budget. Ongoing Maintenance: Once completed, the project will be managed by a qualified Property Management company chosen by Valley CDC. Valley CDC’s current units in Northampton and Florence are managed by Home City Housing based in Springfield and the Amherst units are managed by the Amherst Housing Authority. Valley CDC’s project in Easthampton that is currently under construction will be managed by HAP, Inc. The selected Property Management Company will oversee project operations such as tenant marketing and selection as well as ongoing maintenance and janitorial work and overall financial management and oversight. Project Budget: See: Attachment A • Development Project Budget (contains sources and uses of funds for $19.9 million development project and 20-year operating budget for apartments and commercial space) Multi-Year Funding: Not requested Project Timeline: Planning Board review October 2014 Central Business Architecture Committee October 2014 All permits obtained February 2015 First pre-application to DHCD February 2015 First OneStop+ application to DHCD March 2015 If not funded in June 2015: Second pre-application to DHCD September 2015 Second OneStop+ application to DHCD October 2015 Funding awarded December 2015 Closing/Demolition/Construction May 2016 Construction 100% complete May 2017 100% occupancy August 2017 Feasibility: Valley CDC has a signed Option Agreement to purchase the property for $1,000,000 for which Valley CDC has obtained an acquisition loan commitment from the Community Economic Development Assistance Corporation (CEDAC). 6 Site plan review by the City's Planning Board and design review by the Central Business Architecture Committee are projected to commence in October 2014. A Project Notification Form will be filed with the Massachusetts Historic Commission. There is an underground stormwater management drainage conduit that dates back to the mid 19th century that runs diagonally across the property. It presents a design challenge since the drainage system will have to be replaced and relocated. Valley CDC has already researched initial feasibility of moving the conduit and though it is feasible, it will add to the cost of the project. Additionally, there are requirements regarding properties that were previously owned by the railroad company as well as requirements regarding properties abutting railroad properties. These requirements include getting approval on site improvements by the owners of the railroad. The railroad will be owned by the Commonwealth but Pan Am Railways, the current owner, will still be operating the freight line. Approval for a building permit will be needed from both parties. Valley CDC will share its initial site plans at the appropriate time. Once all due diligence responsibilities have been completed, a One Stop application will be submitted to DHCD in March 2015. An application for additional funding will be submitted to the Smith College Affordable Housing Fund and Valley CDC will also submit an application to the City of Northampton requesting $150,000 from its Community Development Block Grant allocation. Valley CDC expects a funding commitment from DHCD by December 2015 at latest. After receiving all funding commitments, the selected architects, Davis Square Architects, will produce a complete set of drawing and construction specifications based on their preliminary design. Once completed, plans and specs will be reviewed and approved by local building and fire department officials. Valley CDC will invite three-five responsible and responsive regional general contractors to bid. General contractors must be experienced in affordable housing development. Bids will be obtained in early 2016 from the invited general contractors. Once bids have been reviewed, general contractors with the lowest responsible bids will be interviewed. References will be obtained and checked and a contractor will be selected by early March 2016. The closing for project funding will take approximately six months. In that time, all closing documents including a "Mass Docs" Affordable Housing Restriction Agreement (AHR) will be drawn up by closing attorneys with all funding sources including the Northampton CPA. Under M.G.L. 40 Section 54A, Valley CDC will need to obtain permission from the Massachusetts 7 Department of Transportation (Mass DOT) prior to obtaining a local building permit. Once approval is obtained from Mass DOT, a building permit, along with performance and lien bonds will be obtained by the contractor. The owner will contract with a lender-approved construction term inspecting engineer and clerk of works overseeing all construction work and requisitions for funding. The owner will also obtain builders risk and general liability insurance for construction. Once completed and approved by attorneys, all closing documents will be executed and recorded at the Hampshire Registry of Deeds. Typically the AHR is in first position. Construction will begin in May 2016 and be completed in 12 months – May 2017. All work will be overseen by an owner's representative, inspecting engineer, clerk of works, and Davis Square Architects. The project will be Energy Star rated and compliant. Design and construction will utilize green building products to the fullest extent possible. Certificates of Occupancy for each unit are obtained from the building department. Any marketing and tenant selection for these units will commence approximately six months prior to construction completion. Maps & Visual Materials: See: - Attachment B: Survey - Attachment C - Assessors Map Attachments: - Attachment D: Zoning map - Attachment E: 21E Phase 1 & 2 Reports (provides evidence that the site is free of hazardous materials) - Attachment F: Names and addresses of project architects and consultants - Attachment G: Option agreement - Attachment H: Letters of support