03/30/2007
NEIGHBORHOOD & AFFORDABLE HOUSING ADVISORY BOARD
SPECIAL MEETING MINUTES
CITY OF CLEARWATER
March 30, 2007
Present: Donald Brackett Vice-Chair
Laurel Braswell Board Member
Peggy M. Cutkomp Board Member
Josephine Carbone Board Member
Absent: Lisa Hughes Chair
John Sabatier Board Member
Kip Corriveau Board Member
Also Present: Michael Holmes Housing Manager
Patricia O. Sullivan Board Reporter
The Vice-Chair called the meeting to order at 9:00 a.m. at City Hall.
To provide continuity for research, items are in agenda order although not
necessarily discussed in that order.
2 – Presentation of Cleveland Street Apartment Project
As part of the City’s Consolidated Planning Process, Mary Thurman, Vice President of
Development for SP Cleveland LP, submitted an application on March 27, 2007, for funding
construction costs for a 75-unit rental apartment complex (Cleveland Street Apartments). The
amount of funding requested was not to exceed $455,000 in FY (Fiscal Year) 2007/08 Pinellas
County Community Housing Trust Program funds. The exact amount requested has not been
determined due to current underwriting. The note will not exceed 30 years with interest rates: 1)
Years 1-5; 0.0%; 2) Years 6-10; 1.0%; 3) Years 11-20; 2.0%, and 4) Years 21-30; 3.0%.
As proposed, the project will have 8 one-bedroom units, 59 two-bedroom units, and 8
three-bedroom units. All units will feature dishwashers and washer/dryer hook-ups. On-site
amenities will include but not be limited to a swimming pool, community room, and playground.
All units will be rent restricted: 1) 20% for families at or below 33% of area median income (AMI)
and 2) 80% for families at or below 60% of AMI.
HUD’s (Housing & Urban Development) Department CHAS-2000 Housing Needs
Tables, based on the 2000 census, identified a need for additional rental housing units in
Clearwater. Of 3,182 rental households at the poverty level (<30% of AMI), 71% (2,259
households) had housing problems and 57% (1,817 households) paid more than 50% of their
income for housing, which is considered severely cost-burdened. Of the City’s 2,636 very-low
income households (31% - 50% MFI), 84% (2,220 households) had housing problems and 41%
(1,073 households) also paid more than 50% of their income for housing.
The Bay Area Economics Nexus Study reported that during a significant tightening of the
market, Pinellas County rents had increased 12% in two years, from $716 in 2004 to $801 in
2006. During those years, vacancy rates fell from 7% to 3.8%, partly due to a reduction in rental
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housing stock (including apartment to condominium conversion) and an increase in the rental
population due to the lack of affordable housing for homeownership.
The project is anticipated to invest over $18 million in the East Gateway Neighborhood.
The Economy Inn Motel, at 1274 Cleveland Street, occupies a portion of the project site. For
several years, this property has attracted one of the area’s highest number of calls for police
service. Its redevelopment will further City and CRA (Community Redevelopment Agency)
efforts to revitalize the area.
The applicant has proposed that a portion of the project will be financed by an allocation
of Low Income Housing Tax Credits from the Florida Housing Finance Corporation. The cost
breakdown is approximately $10.5 million in hard costs, $1.8 million in soft and financial costs,
$2.1 million in developer's fees, and $3.1 million in land cost. Financial sources include a first
mortgage (lender to be determined) of approximately $1.5 million, a Pinellas County Community
Housing Trust Program loan not to exceed $500,000, ELI Subsidy - 8 units $680,000, tax credit
equity (investor to be determined) of approximately $14 million, and deferred developer's fee of
approximately $1,370,420.
Southport Financial Services, Inc., an experienced tax credit developer, will develop the
project. The firm has built or rehabbed more than 2,700 affordable housing units on the east
coast and in Florida. The applicant must apply for Low Income Housing Tax Credits by the April
10, 2007, deadline. Awards will be announced by this fall. If approved for credits, the developer
proposes to complete architectural plans, obtain site plan approval, and begin construction of
the 12 - 15 month project in May 2008.
Per the City’s Loan Approval Policy, approved in January 2005, loans greater than
$300,000 require approval by the Assistant Director of Housing, Director of Housing, Assistant
City Manager, and City Manager.
Ms. Thurman reviewed the request. As proposed, a five-story building will front
Cleveland Street, with ground-floor retail, and a two-story structure will be on Grove Street. In
addition to amenities, the project must meet Code parking requirements. A final design has not
been determined. She said Southport Financial Services, Inc. is experienced in the
development and management of affordable housing and will coordinate its efforts to attract
tenants with local social service providers. Even if all requested financing and credits are
obtained, Ms. Thurman said a financial gap for the project remains.
Economic Development & Housing Director Geri Campos said the project is in the City’s
CRA, which may be able to help with the gap. The parcel is important for area development.
Ms. Thurman said issues such as the size and use of retail space and location of parking have
not been determined. She said local financing contributions are considered when grading Low
Income Housing Tax Credit applications. Concern was expressed that additional information is
needed. Housing Manager Michael Holmes said support of this application is predicated on the
award of the tax credits, and the submission and City approval of project plans.
3 – Cleveland Street Apartments Funding Request
The NAHAB (Neighborhood & Affordable Housing Authority Board) is requested to
approve the tentative commitment of funds from FY 2007/08 Pinellas County Community
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Housing Trust Program funds. Formal approval will occur in July 2007 during City Council
review of the FY 2006/07 Consolidated Action Plan.
Member Brasswell moved to approve the tentative commitment of funds, not to exceed
$455,000, from the FY 2007/08 Pinellas County Community Housing Trust Program toward
construction costs for the 75-unit, Cleveland Street Apartment complex at 1274 Cleveland
Street, once evidence is presented to the City that the project has been awarded Low Income
Housing Tax Credits from the Florida Housing Finance Corporation. The motion was duly
seconded and carried unanimously.
4 - New/Old Business
Concern was expressed that taxpayers must bear the cost of the zero to very-low
interest loans requested for construction of affordable housing and it was suggested that these
terms should be renegotiated considering increased interest rates. It was recommended that
tenants be screened for assets, especially vehicles, which are expensive to own and maintain.
Concern was expressed that some may attempt to qualify for low-income programs by
purposely remaining cash poor.
Mr. Holmes reviewed nationwide programs that subsidize the development of low-
income housing, based on agreements to charge low rents for 30 years. Without subsidies,
developments would have insufficient cash flow and would not be built. One-third of the project
will charge a maximum of $250 for one-bedroom units and $311 for two-bedroom units.
Maximum rents for the remainder of the units will be $536 for one-bedroom units, $642 for two-
bedroom units, and $729 for three-bedroom units. Rents will not increase substantially over 30
years. Applicants must qualify to be tenants.
5 - Next Meetinq
The Bus Tour will depart City Hall at 8:45 a.m. on April 20, 2007. The next meeting is
scheduled on May 8,2007.
6 - Adiourn
air - eighborhood & A
Housing Advisory Board
The meeting adjourned at 9:32 a.m.
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