HomeMy WebLinkAbout10-06-20 City Commission Packet Materials - C7. Grant w HRDC for Willow Springs Townhomes Phase 21
Commission Memorandum
REPORT TO: Mayor and City Commission
FROM: Martin Matsen, Community Development Director Tanya Andreasen, Community Housing Program Manager
SUBJECT: Authorize the City Manager to sign a grant agreement with Human
Resource Development Council for the reimbursement of
construction costs associated with the building of Willow Springs
Townhomes Phase II.
MEETING DATE: October 6, 2020
AGENDA ITEM TYPE: Consent
RECOMMENDATION: Approve a grant of $240,000 from the Workforce Housing Fund, reimbursing construction costs for Willow Springs Townhomes Phase II. Approval of this Consent item is contingent on the City Commission’s approval of Resolution 5222, Budget Amendment for the Community Housing Fund, which will be considered as an Action item at this same meeting.
BACKGROUND: Willow Springs Townhomes will provide 24 units of two and three bedroom affordable homes.
The homes will be priced to be affordable to homebuyers earning 70% of Area Median Income or less. All 24 homes will be restricted by a ground lease and held in a Community Land Trust, ensuring long term affordability. On October 14, 2019 the City Commission approved a Community Affordable Housing
Advisory Board (CAHAB) recommendation to grant the Human Resource Development Council IX (HRDC) $240,000 to reimburse $20,000 construction costs for each of twelve (12) townhomes built in Phase I of the project. HRDC has successfully constructed and sold each of the 12 homes in the first phase of the project to homebuyers qualified under the City’s Affordable Housing Ordinance.
On June 15 2020, CAHAB heard a presentation made by HRDC to request for $240,000 to reimburse partial construction costs for Phase II of the Willow Springs Townhomes project. On July 8, 2020, after reviewing the application materials submitted by the applicant, scoring the
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application, and board discussion, CAHAB recommended that HRDC be granted the full amount
requested.
RECOMMENDATION: It is the recommendation of staff that HRDC’s funding request be funded at the requested
amount of $240,000.
Staff have reviewed the Phase II application materials, scored the application using the same methodology as CAHAB members, and also worked to finalize the Willow Springs Townhomes Phase I grant agreement. CAHAB composite score and staff score align closely, giving additional
support to a positive staff recommendation for this funding request.
This funding request aligns with the CAHAB approved Community Housing Fund Philosophy
(see Community Housing Fund Allocation Process and Priorities) as it will use the funds to create more housing units in Bozeman, and provides a valuable return on the investment of these funds as the homes are restricted by a ground lease and held in a Community Land Trust to ensure long-term affordability.
ALTERNATIVES: As suggested by the Commission.
FISCAL EFFECTS: The full payment of $240,000 will reduce the balance of the Community
Fund. The budget for Community Housing Fund grants for FY21 is $515,000. In combination
with another request for $500,000, a budget amendment of $225,000 is required and will further reduce the fund balance. ATTACHMENTS: - Grant Agreement HRDC Willow Springs Phase II
- HRDC request letter - HRDC funding application
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FY 2021 Grant Agreement – HRDC Willow Springs Phase II
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GRANT AGREEMENT
HRDC – Willow Springs Phase II
THIS AGREEMENT is made and entered into this ____ day of __________, 2020 (“Effective
Date”), by and between the City of Bozeman, Montana, a self-governing municipal corporation
located at 121 N. Rouse Ave., Bozeman MT 59771 (“City”) as Grantor and Human Resources
Development Council of District IX, Inc. (“HRDC”), a Montana nonprofit corporation located at
32 South Tracy Ave., Bozeman Montana 59715 as Grantee. Collectively City and HRDC may be
referred to herein as the “Parties.”
WHEREAS, on October 17, 2005 the Bozeman City Commission adopted Resolution No. 3866
establishing policies for the granting of funds from the City of Bozeman to a requesting entity;
and
WHEREAS, HRDC submitted a proposal to the City Commission for a grant of $240,000 to pay
for partial construction costs of the first twelve Willow Springs Townhomes (Phase I); and
WHEREAS, on October 14th 2019 the City Commission approved the Willow Springs Affordable
Housing HRDC Grant Agreement for Phase I; and
WHEREAS, HRDC submitted a proposal to the City Commission for a grant of $240,000 to pay
for partial construction costs of the second twelve Willow Springs Townhomes (Phase II); and
WHEREAS, the City approved HRDC’s Willow Springs Phase II grant request on _____________,
2020.
WHEREAS, the City Commission finds there is a compelling public interest in increasing home
ownership opportunities for families earning less than 70% of Area Median Income, and in
increasing the number of homes affordable in perpetuity, and that the project will serve a
public purpose.
THE PARTIES AGREE:
1. Grant. The City will grant and release to HRDC a sum of up to two hundred forty
thousand dollars ($240,000) from its Community Housing Fund (the “Grant”) pursuant
to the payment terms in Section 3.
2. Use of Grant Funds. Grant funds will be used by HRDC for the sole purpose of providing
permanently affordable housing in the Willow Springs subdivision within the City of
Bozeman as described in Grantee’s Affordable Housing Plan dated _____________,
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2020 attached hereto as Exhibit A and by this reference incorporated herein. Grant
funds must be used to reimburse Grantee for costs of construction of Phase II
townhomes as described herein.
3. Term. The term of this Agreement will commence on the Effective Date and expire one
(1) year after the Effective Date unless earlier terminated as provided herein.
4. Payment of Grant Funds.
a. Grantee must meet the following requirements to receive Grant funds:
i. Grantee shall comply with all the requirements of the City of Bozeman
Affordable Housing Ordinance (Bozeman Municipal Code Division 38.380)
as established by the Bozeman and other requirements as may be
established by the Bozeman City Manager.
ii. Grantee must adhere to the requirements outlined in the Affordable
Housing Plan (Exhibit A).
iii. All work done pursuant to the Grant must be completed by licensed,
insured, and bonded contractors.
iv. During FY21, HRDC may request reimbursement for construction costs in
the amount of $20,000 per townhome only after issuance of an
occupancy permit. Requests for reimbursement must be submitted in
writing with proof of expenses paid. Acceptable forms of proof of
payment shall be as determined in the sole discretion of the City’s
Director of Finance.
b. The City will have no obligation to pay any Grant funds unless at the time of the
reimbursement request (i) all of HRDC’s representations as set forth in Section 5
are true and correct, and (ii) HRDC is not in breach of any term of this
Agreement. If any of the above conditions are not satisfied in the determination
of the City, the City shall have no obligation to reimburse any expenses and the
City’s determination to refrain from reimbursing, or its inability to reimburse,
any of the expenses shall not be or result in a default of this Agreement.
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c. Any Grant funds not requested during FY21 will remain in the City’s Community
Housing Fund and will be available for other appropriation.
d. The City reserves the right to complete a visual inspection of the finished
townhome(s) and to review such additional evidence as the Director of
Community Development may reasonably request prior to payment of Grant
funds to confirm compliance with this Agreement.
5. Grantee Representations
a. HRDC has familiarized itself with the nature and extent of this Agreement and
with all local conditions and federal, state and local laws, ordinances, rules, and
regulations that in any manner may affect HRDC’s performance under this
Agreement.
b. HRDC represents and warrants to City that it has the experience and ability to
perform its obligations under this Agreement; that it will perform said
obligations in a professional, competent and timely manner and with diligence
and skill; that it has the power to enter into and perform this Agreement; and
that its performance of this Agreement shall not infringe upon or violate the
rights of any third party, whether rights of copyright, trademark, privacy,
publicity, libel, slander or any other rights of any nature whatsoever, or violate
any federal, state and municipal laws. The City will not determine or exercise
control as to general procedures or formats necessary for HRDC to meet this
warranty.
c. HRDC represents and warrants to City that the Grant funds are necessary to
accomplish the financial requirements of the Project.
6. Permits and Compliance With Laws. HRDC will obtain, in a timely manner, all required
permits, licenses and approvals, and will meet all requirements of all local, state and
federal laws, rules and regulations which must be obtained or met in connection with
construction of the Project.
7. Reports/Accountability/Public Information. If Grant funds are paid to HRDC, HRDC will
provide to the City a formal written report that includes, at a minimum, the proof of
expenses paid. HRDC agrees to develop and/or provide such other documentation as
requested by the City demonstrating HRDC’s compliance with the requirements of this
Agreement. HRDC must allow the City, its auditors, and other persons authorized by the
City to inspect and copy its books and records for the purpose of verifying that monies
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provided to HRDC pursuant to this Agreement were used in compliance with this
Agreement and all applicable provisions of federal, state, and local law. HRDC will retain
such records for seven years after receipt of final payment under this Agreement unless
permission to destroy them is granted by the City. HRDC shall not issue any statements,
releases or information for public dissemination without prior approval of the City.
8. Independent Contractor Status. The Parties agree that HRDC, its agents, employees,
contractors, or subcontractors, are independent contractors for purposes of this
Agreement and are not to be considered employees or agents of the City for any
purpose. HRDC and its agents, employees, contractors, or subcontractors, are not
subject to the terms and provisions of the City’s personnel policies handbook and may
not be considered a City employee for workers’ compensation or any other purpose.
HRDC, its agents, employees, contractors, or subcontractors, are not authorized to
represent the City or otherwise bind the City in any way.
9. Default and Termination. If HRDC fails to comply with any condition of this Agreement
at the time or in the manner provided for, the City may terminate this Agreement if the
default is not cured within fifteen (15) days after written notice is provided to HRDC.
The notice will set forth the items to be cured. If this Agreement is terminated pursuant
to this Section, HRDC will repay to the City any Grant funds already delivered to HRDC
for the Project. In the event of termination under this Section, HRDC shall, under no
circumstances, be entitled to claim or recover consequential, special, punitive, damages
of any nature arising, or claimed to have arisen, as a result of the termination.
10. Limitation on HRDC’s Damages; Time for Asserting Claim
a. In the event of a claim for damages by HRDC under this Agreement, HRDC’s
damages shall be limited to contract damages and HRDC hereby expressly waives
any right to claim or recover consequential, special, punitive, lost business
opportunity, lost productivity, field office overhead, general conditions costs, or
lost profits damages of any nature or kind.
b. In the event HRDC wants to assert a claim for damages of any kind or nature,
HRDC must first provide City with written notice of its claim, the facts and
circumstances surrounding and giving rise to the claim, and the total amount of
damages sought by the claim, within ninety (90) days of the facts and
circumstances giving rise to the claim. In the event HRDC fails to provide such
notice, HRDC shall waive all rights to assert such claim.
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11. Representatives
a. City’s Representative. The City’s Representative for the purpose of this
Agreement shall be the City of Bozeman Finance Director or such other
individual as City shall designate in writing. Whenever approval or authorization
from or communication or submission to City is required by this Agreement, such
communication or submission shall be directed to the City’s Representative and
approvals or authorizations shall be issued only by such Representative;
provided, however, that in exigent circumstances when City’s Representative is
not available, HRDC may direct its communication or submission to other
designated City personnel or agents and may receive approvals or authorization
from such persons.
b. HRDC’s Representative. HRDC’s Representative for the purpose of this
Agreement shall be HRDC’s Executive Director or such other individual as HRDC
shall designate in writing. Whenever direction to or communication with HRDC
is required by this Agreement, such direction or communication shall be directed
to HRDC’s Representative; provided, however, that in exigent circumstances
when HRDC’s Representative is not available, City may direct its direction or
communication to other designated HRDC personnel or agents.
12. Indemnity/Waiver of Claims/Insurance. To the fullest extent permitted by law, HRDC
agrees to defend, indemnify and hold the City and its agents, representatives,
employees, and officers (collectively referred to for purposes of this Section as the City)
harmless against all third party claims, demands, suits, damages, losses, expenses,
action or other proceeding whatsoever including reasonable defense attorney fees, (i)
arising or purportedly arising out of, or resulting or purportedly resulting from, the
construction or installation of the Improvements, any violation by HRDC of any
agreement, condition or covenant of this Agreement, the maintenance and operation of
the Project, or the presence on any portion of the Land, of any dangerous, toxic or
hazardous pollutants, contaminants, chemicals, waste, materials or substances; or (ii)
which is proximately caused by HRDC or its officers, agents, contractors, consultants or
employees.
Such obligations shall not be construed to negate, abridge, or reduce other rights or
obligations of indemnity that would otherwise exist. The indemnification obligations of
this Section must not be construed to negate, abridge, or reduce any common-law or
statutory rights of the indemnitee(s) which would otherwise exist as to such
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indemnitee(s). HRDC’s indemnification obligations under this Section shall be without
regard to and without any right to contribution from any insurance maintained by City.
Should any indemnitee described herein be required to bring an action against HRDC to
assert its right to defense or indemnification under this Agreement or under HRDC’s
applicable insurance policies required below the indemnitee shall be entitled to recover
reasonable costs and attorney fees incurred in asserting its right to indemnification or
defense but only if a court of competent jurisdiction determines HRDC was obligated to
defend the claim(s) or was obligated to indemnify the indemnitee for a claim(s) or any
portion(s) thereof.
In the event of an action filed against City resulting from the City’s performance under
this Agreement, the City may elect to represent itself and incur all costs and expenses of
suit.
HRDC also waives any and all claims and recourse against the City or its officers, agents
or employees, including the right of contribution for loss or damage to person or
property arising from, growing out of, or in any way connected with or incident to the
performance of this Agreement except “responsibility for his own fraud, for willful injury
to the person or property of another, or for violation of law, whether willful or
negligent” as per 28-2-702, MCA.
These obligations shall survive termination of this Agreement.
In addition to and independent from the above, HRDC shall at HRDC’s expense secure
insurance coverage through an insurance company or companies duly licensed and
authorized to conduct insurance business in Montana which insures the liabilities and
obligations specifically assumed by HRDC in this Section. The insurance coverage shall
not contain any exclusion for liabilities specifically assumed by HRDC in this Section
unless and to the extent coverage for such liability is not reasonably available.
The insurance shall cover and apply to all claims, demands, suits, damages, losses, and
expenses that may be asserted or claimed against, recovered from, or suffered by the
City without limit and without regard to the cause therefore and which is acceptable to
the City and HRDC shall furnish to the City an accompanying certificate of insurance and
accompanying endorsements in amounts not less than as follows:
• Workers’ Compensation – statutory;
• Employers’ Liability - $1,000,000 per occurrence; $2,000,000 annual aggregate;
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• Commercial General Liability - $1,000,000 per occurrence; $2,000,000 annual
aggregate
The City of Bozeman, its officers, agents, and employees, shall be endorsed as an
additional or named insured on a primary non-contributory basis on the Commercial
General Liability policy. The insurance and required endorsements must be in a form
suitable to City and shall include no less than a thirty (30) day notice of cancellation or
non-renewal. The City must approve all insurance coverage and endorsements prior to
delivery of Grant funds to HRDC. HRDC shall notify City within two (2) business days of
HRDC’s receipt of notice that any required insurance coverage will be terminated or
HRDC’s decision to terminate any required insurance coverage for any reason.
13. Nondiscrimination and Equal Pay
HRDC agrees that all hiring by HRDC of persons performing this Grant Agreement shall
be on the basis of merit and qualifications. HRDC will have a policy to provide equal
employment opportunity in accordance with all applicable state and federal anti-
discrimination laws, regulations, and contracts. HRDC will not refuse employment to a
person, bar a person from employment, or discriminate against a person in
compensation or in a term, condition, or privilege of employment because of race,
color, religion, creed, political ideas, sex, age, marital status, national origin, actual or
perceived sexual orientation, gender identity, physical or mental disability, except when
the reasonable demands of the position require an age, physical or mental disability,
marital status or sex distinction.
HRDC represent it is, and for the term of this Agreement will be, in compliance with the
requirements of the Equal Pay Act of 1963 and Section 39-3-104, MCA (the Montana
Equal Pay Act). HRDC must report to the City any violations of the Montana Equal Pay Act
that Contractor has been found guilty of within 60 days of such finding for violations
occurring during the term of this Agreement.
HRDC shall require these nondiscrimination terms of its subcontractors providing
services under this Grant Agreement.
14. Public Meetings and Access to Public Records
a. Meetings of HRDC that pertain to the receipt or expenditure of Grant funds from the
City are subject to the open meeting requirements of Montana law, including those
set forth in Title 7, Chapter 1, Part 41, MCA and Title 2, Chapter 3, MCA. To ensure
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compliance, HRDC will provide agendas for meetings that pertain to the receipt or
expenditure of Grant funds covered by this Agreement to the City Clerk’s office no
later than 72 working hours prior to meeting for notice on the City’s official posting
board and any other sites deemed reasonable by the Clerk’s office. In addition,
meeting minutes will be kept by HRDC and provided to the City Clerk’s office no later
than 90 days after the meeting. These minutes shall be posted and made available
to the public by the City Clerk’s office except for those minutes taken during a closed
meeting in accordance with 2-3-203, MCA. Minutes taken during a closed meeting
shall also be provided to the City Clerk’s office but shall be handled in accordance
with the City Clerk’s regular executive session protocol and kept private in a secured
cabinet.
b. In accordance with 7-1-4144, MCA and subject to any applicable legal obligation to
protect and preserve individual confidential or private information, upon reasonable
request and at reasonable times during normal business hours, HRDC shall make
such records available for inspection and copying by members of the public. HRDC
may charge for such copying in accordance with the policies of the City, which HRDC
hereby adopts for such purposes.
c. To determine whether a meeting or part of a meeting may be closed to the public
and to determine whether information contained in HRDC documents is protected
by law from disclosure, HRDC may seek a determination of the City Attorney at no
cost to HRDC. Such request and determination shall not create an attorney-client
relationship between HRDC and the City.
15. Attorney’s Fees and Costs. In the event it becomes necessary for a party to this
Agreement to retain an attorney to enforce any of the terms or conditions of this
Agreement or to give any notice required herein, then the prevailing party shall be
entitled to reasonable attorney’s fees and costs, including fees, salary, and costs of
counsel to include City Attorney.
16. Integration and Modification. This document contains the entire agreement between
the Parties and no statements, promises or inducements made by either party or agents
of either party not contained in this written Agreement may be considered valid or
binding. This Agreement may not be modified except by written agreement signed by
both Parties.
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17. Dispute Resolution
a. Any claim, controversy, or dispute between the Parties, their agents, employees,
or representatives shall be resolved first by negotiation between senior-level
personnel from each party duly authorized to execute settlement agreements.
Upon mutual agreement of the Parties, the Parties may invite an independent,
disinterested mediator to assist in the negotiated settlement discussions.
b. If the Parties are unable to resolve the dispute within thirty (30) days from the
date the dispute was first raised, then such dispute may only be resolved in a
court of competent jurisdiction in compliance with the Applicable Law provisions
of this Agreement.
18. No Assignment. HRDC may not subcontract or assign HRDC’s rights, including the right
to Grant payments, or any other rights or duties arising hereunder, without the prior
written consent of City.
19. Successors Bound By Agreement; No Third Party Beneficiary. Subject to compliance
with Section 26, this Agreement will inure to the benefit of and be binding upon the
Parties and their respective successors in interest and permitted assignees. This
Agreement is for the exclusive benefit of the Parties, does not constitute a third-party
beneficiary agreement, and may not be relied upon or enforced by a third party.
20. Choice of Law. This Agreement shall be governed and construed in accordance with the
laws of the State of Montana without regard to conflict of law provisions. The Parties
agree to submit to the personal and exclusive jurisdiction of the courts located within
Gallatin County, Montana.
21. Non-Waiver. A waiver by either party of any default or breach by the other party of any
terms or conditions of this Agreement does not limit the other party’s right to enforce
such term or conditions or to pursue any available legal or equitable rights in the event
of any subsequent default or breach.
22. Severability. If any portion of this Agreement is held to be void or unenforceable, the
balance of the Agreement shall continue in effect.
23. Counterparts. This Agreement may be executed in counterparts, which together
constitute one instrument.
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IN WITNESS WHEREOF, the Parties hereto have executed this instrument the day and year
indicated below.
CITY OF BOZEMAN
_______________________ Date: __________
Jeff Mihelich, City Manager
HRDC
_______________________ Date: __________
Heather Grenier, President and CEO
Approved as to form:
_______________________ Date: __________
Greg Sullivan, City Attorney
City of Bozeman
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FY 2021 Grant Agreement – HRDC for Willow Springs Ph. II Exhibit A
Exhibit A
Affordable Housing Plan
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Willow Springs Subdivision Affordable Housing Plan
Amendment 1
Development Name: Willow Springs Subdivision
Project Location: Sartain Street and Hoover Way, Bozeman, MT
Legal Description: E1/2, W1/2, SW ¼, SW ¼, Section 35, T.1S, R5E, of PMM
Current Zoning: R-3
Current Use: Vacant
Community Plan Designation: Residential
Property Owner and Applicant:
Human Resource Development Council of District IX 32 S Tracy Ave., Bozeman, MT 59715
Contact: Heather Grenier, President/CEO
406-585-4840
hgrenier@thehrdc.org
Introduction:
HRDC seeks the use of affordable housing incentives for the Willow Springs Subdivision
development. The development is 100% affordable. This affordable housing plan contains
amendments to the plan submitted for the Willow Springs townhomes to reflect necessary
changes identified by City and HRDC staff. WS will consist of 24 townhomes, with a mix of 2 and
3 bedroom homes provided. All 24 units will be priced to be affordable to families and
individuals making 70% of the area median income, using the City’s maximum pricing schedule.
HRDC intends to place the subject property into their Community Land Trust in order to
maintain the affordability of the units in perpetuity. HRDC will place a deed restriction on all
units. HRDC has requested $20,000 per unit to act as a permanent subsidy that will remain
with the home in perpetuity and require no subsidies from the City in the future.
As discussed further in this plan the requested one time grant from the City would result in the
following.
• None of the 24 units would be eligible for City funded down payment assistance
• None of the homes would be eligible for impact fee reimbursement
• None of the homes would require a non-cash subsidy lien at the time of closing
1. Number of affordable homes proposed in each affordable home category and number
of market-rate homes:
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Willow Springs townhomes
Total number of homes for development 24
Total Number of market-rate homes 0
Total Number of affordable homes 24
*It is the developer’s intent to make these homes perpetually affordable by inclusion in a
community land trust (CLT).
2. The number of bedrooms in each affordable home
Willow Spring Subdivision Project- Home Type and
bedroom mix of Lower-Priced Homes
Studio and/or 1 bedroom homes 0
2 bedroom homes 10
3 bedroom homes 14
Total Units 24
3. Pricing and deed restrictions
The "transfer price" for all Willow Springs homes is the AHO price by bedroom size as
set by the City of Bozeman. This is also the "base price" that is set out in the Ground
lease, and represents the base from which owners will receive the 2% annual
appreciation limit that impacts subsequent sales and ensures permanent
affordability. The difference between "transfer price" and appraised value is recognized
as the subsidized amount held by the Community Land Trust via the deed restriction.
Regardless of appraisal method, this difference is realized as the subsidy. The base price
is always the AHO limit, meaning that all 2 bedroom homes will have the same base
price, and all 3 BR homes will have the same base price.
Willow Springs Pricing Schedule
2 bedroom homes $217,322
3 bedroom homes $243,227
4. Location of affordable homes in the development (lots in the plat or units within a site
plan):
All 24 units in Willow Springs will be affordable to individuals and families making 70%
of the area median income.
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5. Timing of delivery of the affordable homes in relation to the market-rate homes in the
development:
The entire project is considered affordable; therefore, no market-rate homes will be
provided.
6. Marketing plan describing how affordable homes will be offered to the public:
HRDC engaged a real estate agent through a competitive RFP process to sell Willow
Springs homes. As the CLT process is different than the typical fee simple purchase,
HRDC will produce a FAQ sheet to help buyers and their representatives understand the
unique financing and ownership structure for the Community Land Trust.
7. Plan for construction of affordable homes in phased developments:
Willow Springs will be constructed in 2 phases of 12 homes each; all homes will be
affordable.
8. Any other information that is reasonably necessary to evaluate the compliance of the
affordable housing plan with the requirements of this article:
HRDC’s investment of Neighborhood Stabilization funds to purchase the property and
develop the lots provides the opportunity to create a development that exceeds the
City’s affordable housing ordinance by providing 100% affordability in perpetuity. The
land trust model supports the family to attain and sustain homeownership by taking
land and site development costs out of the sales price. In return, the homeowner agrees
to sell the home at an affordable price to another lower-income homebuyer in the
future. Consequently, the family is able to successfully own a home and build wealth,
while the land trust is able to preserve the investment in the home permanently to help
family after family and requires no future re-subsidization of the homes.
While HRDC is the developer of the Willow Springs it is understood that the request for
a lump sum per unit that will remain with the home in perpetuity will preclude the
homes from receiving impact fee reimbursement. It is also understood that down
payment assistance (DPA) through the City of Bozeman will not be permitted for first
time or subsequent sales of Willow Springs units.
The ground lease governing the property and home includes language that addresses
the situation in which HRDC were to sell the land to an institution or individual resulting
in the ground lease being lifted. That language reads as follows:
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3.3 CLT SALE. If the CLT transfers its interest in the Land, this Lease continues and
the Homeowner becomes the tenant of the transferee under this Lease. If the CLT
wants to transfer the Land to anyone other than a similar institution that shares
the Goal, a nonprofit organization, charitable trust or government agency, the
CLT hereby grants the Homeowner a right of first refusal to purchase the Leased
Land Interest, the details of which are in the attached Exhibit: First Refusal. Any
transfer of the Leased Land Interest contrary to this section is void.
This Affordable Housing Plan proposes that the non-cash subsidy required by the
ordinance would not apply to any of the proposed units. The issue will also be
addressed in the grant agreement between HRDC and the City. It is understood that the
city may want to further protect the municipal investment in the homes. HRDC would
agree to a deed restriction, grant agreement or covenant which would grant the city the
right to intervene and arrange a new owner/leaseholder agreement and further ensure
that municipal funds invested in the home, meant to stay with the home in perpetuity,
would be returned to the city in the event of a land sale resulting in the home no longer
being affordable.
9. List of Approved Relaxations – Willow Springs
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April 3, 2020
Marty Matsen
Community Development Director
City of Bozeman
20 East Olive Street #202
Bozeman, MT 59715
RE: Willow Springs Phase Two Funding and Support Request
Director Matsen,
Please accept this letter as HRDC’s official request for financial support of the second phase of
permanently affordable townhomes at Willow Springs. When complete, Willow Springs
Townhomes, located at the corner of Hoover Way and Sartain Street, will provide 24 units of
housing priced to be affordable to households earning 70% of the Area Median Income. The homes
will be restricted by a ground lease and held in a Community Land Trust (CLT) to ensure that the
homes are affordable in perpetuity. The CLT model uses a 75-year, renewable ground lease that
limits resale prices while ensuring that the community investment in affordable housing endures
beyond the first homeowner. HRDC has worked closely with the nationally-recognized Community
Land Trust authority, Grounded Solutions, to develop a pricing and resale model that will serve our
community’s workforce for years to come.
HRDC is committed to keeping Willow Springs affordable in perpetuity, and has invested over $1.5
million in Neighborhood Stabilization Program funds into the land and infrastructure costs of the
site. We ask the City to assist in this effort as well, by committing $20,000 per unit for the 12 units
in this phase of the project, totaling $240,000. The City’s investment in this development will
ensure that affordable housing endures in our community long after this assistance.
HRDC is grateful for the support from the City of Bozeman for phase 1 of Willow Springs. Response
to phase 1 of the homes been strong and we anticipate continued strong demand for phase 2, even
in light of the recent public health crisis. The Willow Springs Townhomes meet needs identified by
the City in their Housing Needs Assessment, and will provide a permanent contribution to the
community’s inventory of affordable homes at a price similar to that of those provided through the
affordable housing ordinance for much shorter terms. We hope that the City will support HRDC’s
continuing efforts to provide a source of permanent, deeply affordable housing for our citizens.
Thank you for your consideration of our request.
Sincerely,
Tracy Menuez
Associate Director
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City of Bozeman
Workforce Housing Fund Funding Request Application
Organization Seeking Funding
Organization Name: Human Resource Development Council of District IX, Inc. (HRDC)
Address: 32 South Tracy, Bozeman, MT 59715
Contact Phone Number: 406-585-4890 Contact Email Address:tmenuez@thehrdc.org
Project Information:
Project Name: Willow Springs Townhomes Phase 2
Location of Project: Georgia Marie Lane, Units 2777, 2780, 2781, 2784, 2785, 2788, 2791, 2792,
2795, 2796, 2797, 2798
Project Description*: The Willow Springs townhomes provide a total of 24 homes affordable to
households earning 70% of the Area Median Income, held affordable in perpetuity via a
Community Land Trust. The first phase of this project, consisting of 12 homes, will be completed
in June 2020, with all homes under contract. The City contributed $20,000 per home in Phase 1
in order to achieve permanent affordability. Phase 2 consists of an additional 12 homes,
affordable at 70% AMI and affordable in perpetuity in HRDC’s Community land trust.
*Attach project documents if desired.
Project Timing: Currently under construction, scheduled to be completed February 2021.
Which Community Housing Action Plan strategy / action item does this project address?:
Creation of Community Land Trusts homes
# Affordable Dwelling Units to be Generated / Renovated: 12
Area Median Income % Targeted: Homes are priced to be affordable to households earning 70%
AMI. Households earning up to 120% AMI are eligible to purchase the homes.
Project Partners (if applicable): Montana Department of Commerce, Gallatin County, City of
Bozeman
Indicate how this project ensures permanent or long term affordability:
Deed Restriction ______
Land Trust x
Other ______
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_____________________________________________________________________________
Please explain: All homes in Willow Springs will be held in HRDC’s Community Land Trust,
subject to a Ground Lease agreement. The agreement, which outlines the roles and
responsibilities of the CLT and the owner members restricts annual appreciation to 2%, and
requires that subsequent purchasers of the home meet the qualification standards of the CLT.
All homes are required to be owner-occupied.
Project Funding (Please Attach Budget if Available):
Total Project Budget:
Primary Project Funding Sources (list sources and amounts):
1. HRDC Investment of NSP funds $ $850,587
2. City of Bozeman Grant $240,000
3. Unit Sales $2,652,762
Willow Springs Budget - Phase 2
Project:
Willow
Springs P2
EXPENSES
Land 99,500
Infrastructure 275,000
Local fees 97,000
Professional fees 186,850
Construction costs 3,030,000
Financing costs 55,000
TOTAL Expenses 3,743,350
Revenues
HRDC Investment of NSP funds 850,587
COB Grant 240,000
Unit Sales
Gross Sales 2,763,294
Less: Sales Costs 110,532
Net Sales 2,652,762
TOTAL Revenues 3,743,349
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Amount Requested From Workforce Housing Fund: $240,000
Which Project Elements Will Funds Be Used For? (attach line item budget if needed): see budget
above
1. $__________________
2._____________________________________ $__________________
3._____________________________________ $__________________
Type of Funding Requested (circle one): Grant / Loan
If you selected Grant, would you consider a Loan if Grant was not available? Yes / No
In our effort to keep this affordable in perpetuity, the amount requested would need to remain
with the property in perpetuity. If structured as a loan, the amount due at sale would need to be
added to the sales price in addition to the 2% annual appreciation increase, resulting in a home
that is immediately less affordable to subsequent purchasers.
Would you accept 50% of your requested amount? Yes / No
In order to achieve affordability at 70%, as required by our PUD, 100% of the funding is
necessary. If the amount were to be reduced, it is likely we would explore the funding provided
under the AHO to units sold at 70% AMI, which would result in a nearly equivalent request.
Would you accept 25% of your requested amount? Yes / No
Could the Grant / Loan be split among multiple years? Yes / No
When would the funds requested need to be received in order to optimize the benefit of the
funds requested for the project? Following the precedent set in our Phase 1 grant, we propose
receipt of grant funds upon occupancy by a qualified individual.
Have you received workforce housing fund assistance in the past 5 years? Yes / No
Additional Information:
What additional funding sources have you solicited for this project?
Between Phases 1 and 2 of the Willow Springs townhomes, HRDC has invested $1.5 million in
NSP developer revenue (from proceeds of our West Edge development). This investment will
remain in the development in perpetuity as well. The source of these NSP funds is repayment of
previous West Edge loans, which we reinvested into a community housing need. NSP funds were
provided to HRDC for West Edge via sponsorship of the CDBG-NSP grant by Gallatin County,
funded by the Montana Department of Commerce via pass-through funds from HUD.
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What is the level of urgency behind the funding request?
Ownership housing for working households has been identified as a critical need in Bozeman in
both the current Community Housing Needs Assessment, and in all previous assessments. As
more of our friends and neighbors struggle to find housing that is affordable to them, the
Willow Springs townhomes meet a critical and urgent community need.
If Workforce Housing Funds are not allocated to this project, how does impact the project?
If the requested grant is not provided, HRDC would request the allocation of Workforce Housing
funds allowed under the AHO, consisting of impact fee deferral and up to $10,000 in down-
payment assistance. The amount of that request would be slightly less than the $240,000
requested in this application, however; it would also result in the homes being less affordable
for subsequent purchasers, as the amount due at sale would need to be added to the sales price
in addition to the 2% annual appreciation increase.
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