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Home My WebLink About09-164 Resolution No. 09-164 RESOLUTION AUTHORIZING EXECUTION OF A CONSORTIUM AGREEMENT WITH THE CHICAGO METROPOLITAN AGENCY FOR PLANNING (CMAP) FOR THE NEIGHBORHOOD STABILIZATION PROGRAM 2 (NSP2) BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN, ILLINOIS, that Sean R. Stegall, City Manager, be and is hereby authorized and directed to participate as a Consortium Party to apply for Neighborhood Stabilization Program 2 (NSP2) funding and to execute an agreement on behalf of the City of Elgin with the Chicago Metropolitan Agency for Planning (CMAP) as the Lead Agency as provided for through the Housing and Rehabilitation Act (HERA) of 2008, the American Reinvestment and Recovery Act (ARRA or Recovery Act) of 2009, and the Housing and Community Development Act of 1974 as amended, a copy of which is attached hereto and made a part hereof by reference. s/Ed Schock Ed Schock, Mayor Presented: July 8, 2009 Adopted: July 8, 2009 Vote: Yeas: 7 Nays: 0 Attest: s/Diane Robertson Diane Robertson, City Clerk . . CONSORTIUM AGREEMENT I Neighborhood Stabilization Program 2 (NSP2) Consortium for Chicago Metropolitan Area Purpose: The US Department of Housing and Urban Development (HUD) has established the Neighborhood Stabilization Program 2 (NSP2) for the purpose of stabilizing neighborhoods whose viability has been, and continues to be, damaged by the economic effects of properties that have been foreclosed upon and abandoned. The NSP2 funds will be awarded through competition of eligible applicants which includes states, units of general local government, nonprofits, and consortia of nonprofits. A Consortium has been formed of units of general local governments and nonprofits for the purpose of cooperatively carrying out the NSP 2 program in the Chicago Metropolitan Area. THIS AGREEMENT has been signed by Sean D. Stegall, City Manager for the City of Elgin (Consortium Party), who attests to the following: 1. The Consortium Party will cooperatively carry out the NSP2 program. 2. The Consortium Party has designated the Chicago Metropolitan Agency for Planning (CMAP) to act in a representative capacity for all members of the consortium. J. The Consortium Party, if a state, Indian tribe, or unit of general local government, agrees to assume all responsibility for environmental review, decision-making, and action for proposed projects within its jurisdiction on behalf of the consortium in accordance with the requirements of 24 CFR Part 58. 4. If the Consortium for Chicago Metropolitan Area NSP2 application is accepted by HUD, consortium funding agreements in a form acceptable to the Consortium Party will be executed no later than December 1,2009. City of El � ^� �'� � �� 8y� , ' ` �� ~� � � S | �� Date City anager r:\Legal Dept\Agreement\s|Sm_Cuo,vmunoAgreement/(z)'c|ouno'oo-0v.dv,x July 2, 2009 m TO: Mayor and Members of the City Council FROM: Sean R. Stegall, City Manager Matthew Fitzgibbon, Planning Manager SUBJECT: Application for Neighborhood Stabilization Program 2 Funding Being Filed in Conjunction with Chicago Metropolitan Agency for Planning PURPOSE The purpose of this memorandum is to provide the Mayor and members of the City Council with information regarding the City's application for funding through the U.S. Department of Housing and Urban Development's Neighborhood Stabilization Program 2 as part of a consortium organized by the Chicago Metropolitan Agency for Planning. RECOMMENDATION It is recommended that the City Council authorize the filing of an application for funding through the U.S. Department of Housing and Urban Development's Neighborhood Stabilization Program 2 in conjunction with the consortium organized by the Chicago Metropolitan Agency for Planning. BACKGROUND In May 2009, the Department of Housing and Urban Development (HUD) issued a notice of funding availability for the Neighborhood Stabilization Program 2 (NSP2) as part of the American Recovery and Reinvestment Act of 2009. The NSP was established for the purpose of stabilizing communities that have suffered from foreclosures and abandonment by making funds available for the purchase and redevelopment of foreclosed and abandoned residential properties. The City will be receiving $2.1 million dollars under the original NSP, and NSP2 is generally modeled after that first program. Unlike NSP, which awarded entitlement communities like Elgin funding subject to an approved application, the NSP2 funds are awarded on a competitive basis among states, local governments, nonprofit organizations and any consortia comprised of those entities. NSP2 also differs from NSP in that HUD has established minimum thresholds under NSP2 for both funding requests ($5 million) and housing units affected (100). These changes effectively discourage individual applications and compel the creation of consortiums for funding requests. NSP2 establishes specific guidelines for creating consortiums and employs an application scoring system that encourages a regional approach to NSP2 grant applications. Application for Neighborhood Stabilization Program 2 Funding Being Filed in Conjunction with Chicago Metropolitan Agency for Planning July 2, 2009 Page 2 There are two consortia that the City may join to apply for NSP2 funds: (1) the Chicago Metropolitan Agency for Planning (CMAP) consortium which includes Aurora, Berwyn, Cicero, and Joliet, plus Cook, DuPage, Kendall, Lake and Will Counties, or (2) the Kane County/Mercy Housing Lakefront consortium. The Mercy Housing Lakefront is a Roman Catholic not-for- profit organization that provides affordable housing. A staff selection committee comprised of the City Manager, Assistant City Manager, Corporation Counsel, Community Development Director, and Planning Manager was created to review the two consortia and make a recommendation. The CMAP consortium was selected by that committee for the reasons below. The CMAP consortium provides the City with an opportunity to receive additional stimulus funding through a large-scale regional application while maintaining City control over the implementation of NSP2 funds for purchasing, rehabilitating and selling foreclosed and abandoned homes. CMAP is a distinguished and competent regional planning agency that is particularly capable of taking the lead in securing the additional NSP2 funds. CMAP will function as the coordinating agency to develop the regional application to HUD and has sufficient staff and expertise to meet the July 17, 2009 federal application deadline. The City, other consortium members and CMAP are strategically positioned to merit a successful, competitive application by leveraging their regional resources to meet the minimum thresholds established by HUD. The Mercy Housing Lakefront (Mercy) is a Roman Catholic not-for-profit organization that provides affordable housing. The Kane County/Mercy consortium is proposing to develop new affordable housing units throughout Kane County, including two sites within Elgin: (1) the Sanfilippo TIF district site at the southwest corner of Illinois Route 31 and U.S. Route 20, and (2) the Church of the Brethren site south of Interstate 90 on the east side of Dundee Avenue. These projects include proposals to create up to 500 new housing units at the Sanfilippo site and 260 new housing units at the Church of the Brethren location. The Kane County/Mercy consortium's proposal for new affordable housing units is inconsistent with the City's established comprehensive housing plan. The City has been successfully maintaining and rehabilitating its existing, affordable housing so that approximately 45 percent of the City's existing housing is categorized as "affordable" by the State of Illinois. Filing a NSP2 application with the CMAP coalition best enables the City to maintain this affordable housing objective. The City's NSP2 application is requesting a total of $2,711,111. Elgin's NSP2 proposed program will consist of: (1) Purchase, Rehabilitate, and Resell Program, $1,800,000; (2) Purchase, Demolition, Redevelopment and Resell Program, $640,000; and (3) Administration, $271,111. Under all circumstances, a minimum of 25 percent of NSP funds will be used for . . . Application for Neighborhood Stabilization Program 2 Funding Being Filed in Conjunction with Chicago Metropolitan Agency for Planning July 2, 2009 Page 3 housing individuals and families whose incomes do not exceed 50 percent area median family income as a federal requirement of NSP2. Each property purchased with NSP funds must be purchased at a minimum of one percent below market value; the total NSP portfolio must be purchased at five percent below market value. The CMAP consortium must submit an application for NSP2 funds by July 17, 2009. The City will be required to enter into an agreement with CMAP for the distribution of the approved funds not later than December 1, 2009. The NSP2 funding guidelines require 50 percent of the funding to be used within two years of the signing of the application agreement, and that all the funds be expended in three years. COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED In accordance with federal notification requirements, CMAP will provide public notice to be distributed regionally and to be included in a newspaper of local circulation; the notice will be published on July 1, 2009. A 10-day public comment period will take place from July 1, 2009 through July 11, 2009; community groups or persons interested should submit their comments to CMAP during the public comment period. FINANCIAL IMPACT The NSP2 program guidelines provide for allocating up to 10 percent of the total NSP2 funds to offset Elgin's personnel and administrative costs in overseeing the program. NSP2 funds allocated for administrative functions are divided among CMAP, the consortium members and the Illinois Housing Development Authority which may result in receiving less than the 10 percent allotment. CMAP is requesting a total of$7,537,250 for administration, of which Elgin is requesting $271,111. LEGAL IMPACT None ALTERNATIVES 1) The City Council may choose to authorize the filing of an application for funding through the U.S. Department of Housing and Urban Development's NSP2 in conjunction with the consortium organized by the Chicago Metropolitan Agency for Planning. 2) The City Council may choose to authorize the filing of an application for funding through the U.S. Department of Housing and Urban Development's NSP2 solely with the Kane County/Mercy Housing Lakefront consortium. . , . . Application for Neighborhood Stabilization Program 2 Funding Being Filed in Conjunction with Chicago Metropolitan Agency for Planning July 2, 2009 Page 4 3) The City Council may choose to authorize the filing of an application for funding through the U.S. Department of Housing and Urban Development's NSP2 in conjunction with both the consortium organized by the Chicago Metropolitan Agency for Planning and the Kane County/Mercy Housing Lakefront consortium. (If this alternative is selected, any identified census tract in the City may receive NSP2 funds from only one, not both, of the consortiums.) 4) The City Council may choose to decline filing an application for NSP2 funds. Respectfully submitted for Council consideration. MF Attachment • , • • .., OF Ei Memorandum ii • ! 4: City of Elgin .,,,, .tirDI, Date: July 13, 2009 To: Matt Fitzgibbon, Assistant Community Development Director From: Jennifer Quinton, Deputy City Clerk Subject: Resolution No. 09-164, Adopted at the July 8, 2009, Council Meeting Enclosed you will find the agreement listed below. Please retain a copy for your records. If you have any questions please feel free to contact our office 847-931-5660 and we will do our best to assist you. Thank you. • Consortium Agreement with the Chicago Metropolitan Agency for Planning (CMAP) for the Neighborhood Stabilization Program 2 (NSP2)