HomeMy WebLinkAbout10-152 . ,
Resolution No. 10-152
RESOLUTION
AUTHORIZING AND APPROVING AMENDMENT TO THE CITY OF ELGIN
NEIGHBORHOOD STABILIZATION PROGRAM (NSP)
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ELGIN, ILLINOIS, that
the amendment to the City of Elgin Neighborhood Stabilization Program (NSP) as set forth in the
"Elgin, Illinois Substantial Amendment to the City of Elgin's Neighborhood Stabilization Program
(NSP)June, 2010", is hereby approved, a copy of such amendment being attached hereto.
SI Ed Schock
Ed Schock, Mayor
Presented: July 28, 2010
Adopted: July 28, 2010
Omnibus Vote: Yeas: 7 Nays: 0
Attest:
s/Diane Robertson
Diane Robertson, City Clerk
Elgin, Illinois
Substantial Amendment to the City of Elgin's
Neighborhood Stabilization Program (NSP)
June, 2010
Jurisdiction: Elgin, Illinois NSP Contact Person: Matthew Fitzgibbon
City of Elgin
150 Dexter Court
Elgin, IL 60120
Telephone: 847-931-5912
Fax: 847-931-6075
Email: fitzgibbon_m@cityofelgin.org
Jurisdiction Web Address: http://www.cityofelgin.org/grants
The City of Elgin proposes to amend the above-referenced NSP Plan for the purpose of
fulfilling the program requirements to obligate Neighborhood Stabilization Program ("NSP")
funds from the U.S. Department of Housing and Urban Development ("HUD") authorized
under Title III of the Housing and Economic Recovery Act of 2008 ("HERA"). The
amendment proposes three changes to the approved plan. Each of the activities identified in
the proposed amendment were identified in Elgin's approved NSP Plan as activities that
"may be carried out", but were not budgeted funds. The proposed amendment merely seeks
to fund activities previously not budgeted and reallocate funds to the other activities. The
proposed amendment is as follows:
1. NSP Purchase, Rehab and Resale Program: Reallocate the originally budgeted
$539,906 for NSF) Activity #2, "NSP Purchase, Rehabilitate, and Rental Program" to NSP
Activity #1 "NSP Purchase, Rehabilitate, and Resale Program".
2. Demolition and Redevelopment Program: Budget funds eligible activity#7 NSP
"Demolition and Redevelopment Program".
3. Financing Mechanisms for Purchase and Redevelopment: Reallocate the originally
budgeted $58,408 for NSP Activity#4 "Financing Mechanisms for Purchase and
Redevelopment", to "Demolition and Redevelopment" in the amount of$25,000 and to "NSP
Purchase, Rehabilitate, and Resale Program" in the amount of$33,408.
Public Comment Period A 15 Day public Comment period began on Wednesday, June 16,
2010 and ended on Thursday, July 1, 2010. Persons interested in providing public comment
were advised to contact the NSP Contact Person identified herein. The amendment is posted
on the City's website. The City of Elgin received no public comments regarding the
proposed amendment.
1
Activity#1 by City of Elgin
(1) Activity Name: NSP Purchase, Rehab and Resale Program
(2)Activity Type: NSP (B) —Purchase, rehab, sale of foreclosed properties CDBG—24
CFR 570.201(a) Acquisition; 24 CFR 570.202 Rehabilitation; 24CFR 570.2012(n) Direct
Homeownership Assistance; 24CFR 570.201(b) Disposition
(3)National Objective: 24 CFR 570.208(a)(2) Limited clientele activity benefiting low and
moderate and middle income persons (up to 120% of MFI permitted under NSP)
(4)Projected Start Date: March, 2009
(5) Projected End Date: Funds obligated no later than August, 2010; rehabilitation of
properties will be completed by July, 2011; homes sold to income eligible households by
December 2011; activity will continue with program income.
(6) Responsible Organization: City of Elgin, 150 Dexter Ct. Elgin, IL 60120, (847) 931-
5912, Matthew Fitzgibbon, Senior Planner
(7) Location Description: Census tracts identified in approved plan; other census tracts with
equal need, as they are identified over the course of the program
(8) Activity Description: This activity will address neighborhood stabilization in one of the
approved census tracts through purchase, rehab, and re-sale of abandoned or foreclosed
properties. The specific neighborhoods within the census tracts will be identified at the time
the NSP funds are available for drawdown and as the program progresses. Purchase of
specific foreclosed properties will be dependent on highest degree of neighborhood need and
availability of foreclosed, moderately priced properties. Note that all of the funds used for
this activity will benefit moderate or middle income housing requirements for those below
the 120% of area median income. The City of Elgin may also provide low interest, payment
deferred loans to•the homebuyer beneficiaries of this activity. The term of assistance,
therefore, will be until the homebuyer sells the home or the home is no longer the
homebuyer's principal residence. Such deferred, or "soft second loans" will be considered a
financing mechanism under NSP (B) and, as such, funds received by the City of Elgin in
repayment of such loans may be retained by the City of Elgin and treated as CDBG funds to
be used in accordance with Section 2301 of HERA. A portion of the homes may be
affordable in perpetuity through deed restriction, shared equity agreements, or land trust
models. All properties acquired under this activity must meet the required purchase discount
of at least 1% less than current market appraised value.
(9) Total Budget: $1,341,207 public NSP funds for initial purchase and rehab; this budget
includes purchase of homes, closing costs, rehabilitation costs, carrying costs until sale,
project delivery costs directly attributable to a specific address, and closing costs at resale.
(10) Performance Measures: Eight(8) units of housing to be acquired, rehabilitated, and sold
to eight (8) eligible households that are below 120% of area median family income.
2
Activity#1 by Habitat for Humanity of Northern Fox Valley
(1) Activity Name: NSP Purchase, Rehab and Resale Program
(2)Activity Type: NSP (B) —Purchase, rehab, sale of foreclosed properties CDBG —24
CFR 570.201(a) Acquisition; 24 CFR 570.202 Rehabilitation; 24CFR 570.2012(n) Direct
Homeownership Assistance; 24CFR 570.201(b) Disposition
(3)National Objective: 24 CFR 570.208(a)(2) Limited clientele activity benefiting low
income persons.
(4) Projected Start Date: July, 2010
(5) Projected End Date: Funds obligated no later than August, 2010; rehabilitation of
properties will be completed by July, 2011; homes sold to income eligible households by
December 2011; activity will continue with program income.
(6) Responsible Organization: Habitat for Humanity, 20 South Grove, Suite 201,
Carpentersville, IL 60110, (847) 836-1432, Bill Klaves, Development Director.
(7) Location Description: Census tracts identified in approved plan; other census tracts with
equal need, as they are identified over the course of the program
(8) Activity Description: This activity will address neighborhood stabilization in one of the
approved NSP census tracts through purchase, rehab, and resale of foreclosed properties.
The specific neighborhoods within the census tracts will be identified at the time the NSP
funds are available for drawdown and as the program progresses. Purchase of specific
foreclosed properties will be dependent on highest degree of neighborhood need and
availability of foreclosed, moderately priced properties. Note that 25% of the total, original
grant funds will be used for this activity to benefit low income housing requirements for
those below 50% of area median income. The tenure of beneficiaries will be ownership.
This activity will be carried out by Habitat for Humanity of Fox Valley. Habitat for
Humanity may also provide low interest, payment deferred loans to the homebuyer
beneficiaries of this activity. The term of assistance, therefore, will be until the homebuyer
sells the home or the home is no longer the homebuyer's principal residence. Such deferred,
or "soft second loans" will be considered a financing mechanism under NSP (B) and, as such,
funds received by the City of Elgin in repayment of such loans may be retained by the City of
Elgin and treated as CDBG funds to be used in accordance with Section 2301 of HERA. A
portion of the homes may be affordable in perpetuity through deed restriction, shared equity
agreements, or land trust models. All properties acquired under this activity must meet the
required purchase discount of at least 1% less than current market appraised value. As home
program income is received, neighborhood stabilization through homebuyer activity may be
expanded to additional census tracts as funds permit.
(9) Total Budget: $539,906 public NSP funds for initial purchase and rehab; this budget
includes purchase of homes, closing costs, rehabilitation costs, carrying costs until sale, and
project delivery costs directly attributable to a specific address.
(10) Performance Measures: Four(4) units of housing to be acquired, rehabilitated, and
resold to households that are below 50% of median family income.
3
Activity#2
(1) Activity Name: NSP Purchase, Rehab and Rental Program
(2) Activity Type: NSP (B)—Purchase, rehab, rental of foreclosed properties CDBG —24
CFR 570.201(a) Acquisition; CFR 570.202 Eligible rehabilitation and preservation activities.
(3)National Objective: 24 CFR 570.208(a)(2) Limited clientele activity benefiting low
income persons.
(4) Projected Start Date: N/A.
(5) Projected End Date: N/A.
(6) Responsible Organization: City of Elgin, 150 Dexter Ct. Elgin, IL 60120, (847) 931-
5912, Matthew Fitzgibbon, Senior Planner; additional organizations with demonstrated
capacity to carry out this activity may be added at the discretion of the City of Elgin and such
additions shall not be considered a Substantial Amendment to the Action Plan.
(7) Location Description: Census tracts identified in approved plan; other census tracts with
equal need, as they are identified over the course of the program.
(8) Activity Description: This activity will address neighborhood stabilization in one of the
census tracts listed in Sections A and B through purchase, rehab, and renting of foreclosed
properties. The specific neighborhoods within the census tracts will be identified at the time
the NSP funds arc available for drawdown and as the program progresses. Purchase of
specific foreclosed properties will be dependent on highest degree of neighborhood need and
availability of foreclosed, moderately priced properties. The tenure of beneficiaries will be
rental. Although individual leases must be for at least one year period, the properties will
remain affordable in perpetuity for those below 50%of arca median income through deed
restriction. All properties acquired under this activity must meet the required purchase
discount of at least 1% less than current market appraised value. As program income is
received from NSP activities, neighborhood stabilization through rental activity may be
expanded to additional census tracts as funds penult.
(9) Total Budget: $0 public NSP funds. If it is determined that the Purchase, Rehab, and
Rental activity would be a beneficial use of NSP funds, NSP funds will be transferred to this
activity from another activity.
(10) Performance Measures: Perfoi mance measures will be determined when and if this
activity is funded.
4
Activity#3
(1)Activity Name: NSP Administration
(2)Activity Type: NSP allows 10%of initial allocation, and 10% of program income, to be
used for general administration and planning activities (Federal Register, Vol. 73,No. 194,
Il. H.) CDBG—24 CFR 570.205 and 24 CFR 570.206
(3)National Objective: To administer activities that benefit low and moderate income
persons under 24 CFR 570.208(a)(2) and potentially under 24 CFR 570.208(a)(1) (up to
120% of MFI permitted under NSP)
(4) Projected Start Date: March, 2009 (Federal Register, Vol. 73,No. 194, IL C. allows
reimbursement for pre-award costs)
(5) Projected End Date: July 30, 2013; however, monitoring of projects and receipt of
program income will continue indefinitely.
(6) Responsible Organization: City of Elgin, Community Development Group, 150 Dexter
Ct. Elgin, IL 60120, (847) 931-5912, Matthew Fitzgibbon, Senior Planner
(7) Location Description: Census tracts identified above; other census tracts with equal need,
as they are identified over the course of the program
(8) Narrative: This activity will provide the general administration and planning activities
required to receive NSP funding and implement a successful NSP program.
(9) Total Budget: $215,962 public NSP funds over the five year program period,beginning
with pre-award activities as of September 29, 2008. Should this activity not require the
allowed amount of administration funds, these funds may be re-assigned to any of the
activities identified herein and such re-assignment shall not be considered a Substantial
Amendment to the Action Plan.
(10)Performance Measures: The City of Elgin will complete necessary planning activities to
receive NSP funds; 100% of NSP funds will be accurately administered; NSP Activities 1, 2,
4, 5, 6, and 7 will be completed accordingly.
5
Activity#4
(1) Activity Name: NSP Financing Mechanisms for Purchase and Redevelopment
(2)Activity Type: NSP (A)—Development of financing mechanisms; as part of an activity
delivery cost for an eligible activity under CDBG—24 CFR 570.206 and NSP (B)—Purchase
of foreclosed properties; CDBG—24 CFR 570.201(a) Acquisition; 24 CFR 570.202
Rehabilitation; 24 CFR 570.2012(n) Direct Homeownership Assistance
(3)National Objective: 24 CFR 570.208(a)(2) Limited clientele activity benefiting low and
moderate income persons (up to 120% of MFI permitted under NSP)
(4)Projected Start Date: N/A.
(5) Projected End Date: N/A.
(6) Responsible Organizations: City of Elgin, 150 Dexter Ct. Elgin, IL 60120, (847) 931-
5912, Matthew Fitzgibbon, Senior Planner(additional organizations with demonstrated
capacity to carry out this activity may be added at the discretion of the city of Elgin and such
additions shall not be considered a Substantial Amendment to the Action Plan)
(7) Location Description: Census tracts identified above; other census tracts with equal need,
as they are identified over the course of the program
(8) Activity Description: This activity will address neighborhood stabilization in one of the
census tracts listed above through the establishment of financing mechanisms for purchase
and redevelopment of foreclosed upon homes and residential properties, including such
mechanisms as soft-seconds, loan loss reserves, shared-equity loans for low-and-moderate-
income homebuyers. The specific neighborhoods within the census tracts will be identified
at the time the NSP funds are available for drawdown and as the program progresses.
Purchase of specific foreclosed properties will be dependent on highest degree of
neighborhood need and availability of foreclosed, moderately priced properties. The tenure
of the beneficiaries will be home ownership. The City of Elgin may also provide low
interest,payment deferred loans to the homebuyer beneficiaries of this activity. The term of
assistance, therefore, will be until the homebuyer sells the home or the home is no longer the
homebuyer's principal residence. Such deferred, or "soft second loans" will be considered a
financing mechanism under NSP (A) and, as such, funds received by the City of Elgin in
repayment of such loans may be retained by the City of Elgin and treated as CDBG funds to
be used in accordance with Section 2301 of HERA. A portion of the homes may be
affordable in perpetuity through deed restriction, shared equity agreements, or land trust
models. All properties acquired under this activity must meet the required purchase discount
of at least 5% less than current market appraised value, and must be as high as required to
keep the total NSP portfolio within the required purchase discount level of 15%. As home
program income is received, neighborhood stabilization through homebuyer activity may be
expanded to additional census tracts as funds permit. Minor rehab will be allowed in this
activity.
(9) Total Budget: $0 public NSP funds. If it is determined that financing mechanisms
would be a beneficial use of NSP funds, NSP funds will be transferred to this activity from
another activity.
(10) Perfoiniance Measures: Performance measures will be determined when and if this
activity is funded.
6
Activity#5
(1)Activity Name: Homebuyer Counseling
(2) Activity Type: NSP (B) Purchase, rehab, and resale of foreclosed properties (homebuyer
counseling is required); CDBG 24 CFR 570.201(e) Public services for housing counseling.
(3)National Objective: 24 CFR 570.208(a)(2) Limited clientele activity benefiting low and
moderate income persons (up to 120% of MFI permitted under NSP)
(4) Projected Start Date: November, 2010 Identify and counsel qualified, potential
homebuyers.
(5) Projected End Date: Funds obligated no later than August, 2010; activity will continue
with program income.
(6) Responsible Organization: Neighborhood Housing Services of the Fox Valley, 163 E.
Chicago Street, Elgin, IL 60120, (847) 695-0399, Johnny Placeres, (additional organizations
with demonstrated capacity to carry out this activity may be added at the discretion of the
City of Elgin and such additions shall not be considered a Substantial Amendment to the
Action Plan)
(7) Location Description: Census tracts identified above; other census tracts with equal need,
as they are identified over the course of the program
(8) Narrative: This activity will provide the home buyer counseling required under the NSP.
Counseling services may include,but are not limited to, eight required hours of counseling,
individual financial literacy assistance, individual case management, and follow-up.
(9) Total Budget: $37,548 public NSP funds. Additional funds may be transferred to this
activity from Activity 2 "Administration" as needed. Budget includes offering counseling
services to 30 clients who are prospective home buyers of the NSP properties over a five year
period to produce 10-15 qualified buyers.
(10) Performance Measures: 100% of home buyers under the NSP program must complete at
least eight (8) hours of homebuyer counseling. This is approximately 12- 15 buyers in the
first round plus any homebuyers through NSP program income.
7
Activity#6
(1)Activity Name: NSP Land Bank
(2)Activity Type: NSP (C)— Establish land banks for homes that have been foreclosed
upon; CDBG—24 CFR 570.201(a) Acquisition; 24 CFR 570.201(b) Disposition
(3) National Objective: 24 CFR 570.208(a)(2) Limited clientele activity benefiting low and
moderate income persons (up to 120% of MFI permitted under NSP)
(4) Projected Start Date: N/A.
(5) Projected End Date: N/A.
(6) Responsible Organizations: City of Elgin, 150 Dexter Ct. Elgin, IL 60120, (847) 931-
5912, Matthew Fitzgibbon, Senior Planner; (additional organizations with demonstrated
capacity to carry out this activity may be added at the discretion of the City of Elgin and such
additions shall not be considered a Substantial Amendment to the Action Plan)
(7) Location Description: Census tracts identified above; other census tracts with equal need,
as they are identified over the course of the program
(8) Activity Description: This activity will allow the establishment of land banks for homes
that have been foreclosed upon. The specific neighborhoods within the census tracts will be
identified at the time the NSP funds are available for drawdown and as the program
progresses. Properties acquired for land banking purposes will then become part of Activity
1, NSP Purchase, Rehab, and Resell Program, Activity 5-NSP Rental Program, or Activity 7
—NSP Demolition and Redevelopment Program.
(9) Total Budget: $0 public NSP funds. If it is deteim►mined that establishment of a land bank
would be a beneficial use of NSP funds, NSP funds will be transferred to this activity from
another activity.
(10) Performance Measures: Performance measures will be determined when and if this
activity is funded.
8
Activity#7
(1)Activity Name: NSP Demolition and Redevelopment Program
(2)Activity Type: NSP (D) Demolish blighted structures and NSP (E) Redevelop
demolished or vacant properties; CDBG—24 CFR 570.201(a) Acquisition; 24 CFR
570.201(b) Disposition; 24CFR 570.201(d) Clearance for blighted structures only; 24 CFR
570.201(c)public facilities and improvements
(3)National Objective: 24 CFR 570.208(a)(2) Limited clientele activity benefiting low and
moderate income persons (up to 120% of MFI permitted under NSP); there is potential for
area-wide benefit under 24 CFR 570.208(a)(1) at the discretion of HUD
(4) Projected Start Date: March, 2009
(5) Projected End Date: Initial funds obligated no later than August, 2010. Demolition of
structures completed no later than November, 2010. Redevelopment of site completed no
later than May, 2012.
(6) Responsible Organizations: City of Elgin, 150 Dexter Ct. Elgin, IL 60120, (847) 931-
5912, Matthew Fitzgibbon, Senior Planner; additional organizations with demonstrated
capacity to carry out this activity may be added at the discretion of the City of Elgin and such
additions shall not be considered a Substantial Amendment to the Action Plan.
(7) Location Description: Census tracts identified above; other census tracts with equal need,
as they are identified over the course of the program
(8) Activity Description: This activity will allow the demolition of blighted structures and
redevelopment of demolished or vacant properties. The specific neighborhoods within the
census tracts will be identified at the time the NSP funds are available for drawdown and as
the program progresses. Properties under this activity may be redeveloped with housing that
will then become part of Activity 1, NSP Homebuyer Program, or, if allowed by HUD, be
redeveloped with public facilities to serve either a limited clientele or low - moderate -
middle moderate income persons. Redevelopment activity will be funded with program
income.
(9) Total Budget: $25,000 public NSP funds.
(10) Performance Measures: One (1)blighted house will be demolished, the site will be
cleaned up and redeveloped with a new home for future sale to one (1) eligible households
that is below 120% of area median family income. Or the property will be redeveloped with
public facilities to serve either a limited clientele or low—moderate—middle income
persons.
9
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City of Elgin Agenda Item No. ti
or
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July 8,2010 friI
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-
TO: Mayor and Members of the City Council
07 it,
FROM: Sean R. Stegall, City Manager AP-43.4 '41
Matthew Fitzgibbon, Senior Planner 01/14
SUBJECT: City of Elgin 2010 Neighborhood Stabilization Program Amendment
PURPOSE
The purpose of this memorandum is to provide the mayor and members of the city council with
information to consider an amendment to the City of Elgin's Neighborhood Stabilization
Program.
RECOMMENDATION
r It is recommended that the city council approve the proposed amendment to the City of Elgin's
2010 Neighborhood Stabilization Program and authorize staff to submit the amendment to the
U.S. Department of Housing and Urban Development(HUD).
BACKGROUND
The City of Elgin's Neighborhood Stabilization Program (NSP) was approved in 2008 in the
amount of $2,159,623 to assist with the purchase, rehabilitation and sale of approximately 12
vacant, foreclosed homes.
The city is seeking to amend its NSP by making three changes to the approved plan. The
proposed amendments merely seek to fund activities previously not budgeted by reallocating
funds from other activities. The proposed amendments are as follows:
1. NSP Purchase, Rehab and Resale Program: The proposed amendment reallocates the
$539,906 originally budgeted for the "NSP Purchase, Rehabilitate, and Rental Program"
component 1 to the "NSP Purchase, Rehabilitate, and Resale Program." These funds
represent the 25 percent of program funds "set aside" to benefit low-income households,
or households that are 50 percent of the area median income or less. The city will be
providing these funds to Habitat for Humanity of Northern Fox Valley as its NSP partner,
to serve this low-income segment of the community through the rehabilitation and sale of
four NSP homes.
. •
City of Elgin 2010 NSP Amendment
July 8,2010
Page 2
2. Demolition and Redevelopment Program: The proposed amendment provides for
$25,000 in funds to be used for the demolition and site cleanup of the home at 209
Franklin Street recently acquired by the city using NSP funds.
3. Financing Mechanisms for Purchase and Redevelopment: The proposed amendment
reallocates the $58,408 originally budgeted for the "Financing Mechanisms for Purchase
and Redevelopment," program. $25,000 (of the $58,408) will be reallocated to the
"Demolition and Redevelopment" program component for the 209 Franklin Street
demolition. $33,408 (of the $58,408) will be reallocated to the "NSP Purchase,
Rehabilitate, and Resale Program." The city has not identified any additional financing
mechanisms for purchase and redevelopment requiring a budget at this time.
COMMUNITY GROUPS/INTERESTED PERSONS CONTACTED
A copy of the proposed amendment was posted on the city's website. A 15-day public comment
period began on Wednesday, June 16, 2010 and ended on Thursday, July 1, 2010. Persons
interested in providing public comment were instructed to contact the city by Thursday, July 1,
2010. No public comments were received regarding Elgin's proposed NSP amendments.
FINANCIAL IMPACT
\ 1\ NJ' There is no additional cost associated with approving the proposed NSP amendment.
GAL IMPACT
4 None.
ALTERNATIVES
1. The city council may choose to approve the 2010 NSP Amendment.
2. The city council may choose to not approve the 2010 NSP Amendment.
Respectfully submitted for council consideration.
.441)