09/04/2024 - SpecialWednesday, September 4, 2024
4:30 PM
City of Clearwater
Main Library - Council Chambers
100 N. Osceola Avenue
Clearwater, FL 33755
Main Library - Council Chambers
Community Redevelopment Agency
Special Meeting Agenda - Final
Special Meeting
September 4, 2024Community Redevelopment Agency Special Meeting Agenda -
Final
1. Call To Order
2. Citizens to be Heard Regarding Items Not on the Agenda
3. New Business Items
3.1 ID#24-0998 Approve funding in the form of a zero percent deferred loan in an amount not to
exceed $2,000,000 to be provided by the Community Redevelopment Agency
to Sunrise Affordable Housing Group for the land acquisition and a portion of
the rehabilitation of real property located at 801 Chestnut St. contingent upon
the satisfactory outcome of an evaluation of the relocation plan review and
authorize the appropriate officials to execute documents required to affect
closing of the loan.
4. Adjourn
Page 2 City of Clearwater Printed on 8/29/2024
Cover Memo
City of Clearwater Main Library - Council
Chambers
100 N. Osceola Avenue
Clearwater, FL 33755
File Number: ID#24-0998
Agenda Date: 9/4/2024 Status: Agenda ReadyVersion: 1
File Type: Action ItemIn Control: Community Redevelopment Agency
Agenda Number: 3.1
SUBJECT/RECOMMENDATION:
Approve funding in the form of a zero percent deferred loan in an amount not to exceed $2,000,000 to be
provided by the Community Redevelopment Agency to Sunrise Affordable Housing Group for the land
acquisition and a portion of the rehabilitation of real property located at 801 Chestnut St. contingent upon
the satisfactory outcome of an evaluation of the relocation plan review and authorize the appropriate
officials to execute documents required to affect closing of the loan.
SUMMARY:
Indigo Apartments is comprised of 208 units and was originally developed for low-income senior housing. In
2015, the property was purchased and converted to market rate, excluding 20 units that are legally
restricted by funding that was previously provided to the property by the City of Clearwater.
Sunrise Affordable Housing Group (Sunrise) is currently under contract to acquire Indigo Apartments and is
planning to convert it to legally restricted affordable housing under a 50-year affordability commitment
through the Low-Income Housing Tax Credit (LIHTC) program, implementing income and rent restrictions
on 100% of units with thresholds set at 30%, 60% and 80% of area median income. The restrictions will
result in significant rent reductions, resulting in an average +/- 51% discount when compared to today’s
market-rate rents. The property will be placed in the Pinellas County Land Trust, which will provide a
99-year lease to Sunrise Affordable Housing Group, placing 208 housing under the county’s land use
restrictions.
As a result of the conversion to affordable housing, an estimation of 59 current residents will be considered
over-qualified / over-income (above 80% AMI threshold). The estimated number of affected residents was
derived from a demographic report provided by the current owner. Sunrise retained CompassPoint
Community Partners, LLC, a relocation specialist, who has developed a relocation plan for the
aforementioned tenants, ensuring compliance with the Federal Uniform Relocation Act, which protects the
existing tenants from additional costs beyond their current rent and utility expenses. The plan includes
advisory services, commitment of funds by the developer to providing financial assistance to tenants who
do not meet the new income requirement, a strategy for relocating tenants and an appeal and grievance
process. Sunrise has included a budget of $150,000 to be reserved for relocation efforts. Should the cost of
relocation exceed the budget for relocation, the developer has agreed to debit any excess cost from the
developer fee. A third-party consultant will be retained by the CRA to review and evaluate the relocation
plan.
The developer has also included a $9.5 million capital improvement plan that will include renovation of
mechanicals including boiler, chiller, cooling tower, roofing, and life and safety upgrades that include
elevators. Temporary relocation due to rehab will not be required, as majority of the rehabilitation will not
affect the interior of the units.
To support the project, the developer is requesting a deferred, 0% interest loan in the amount of
$1,000,000 from the City of Clearwater in addition to a $2,000,000 deferred 0% interest loan from the CRA.
The purchase of the property by the Pinellas County Land Trust will inject an additional $5,000,000 in
funding and the County will also contribute $2,000,000 for renovations. Sunrise’s representation has
Page 1 City of Clearwater Printed on 8/29/2024
File Number: ID#24-0998
confirmed that they do not qualify for and will not apply for any tax exemptions. The final approval of the
loan will be contingent upon the outcome of a subsidy analysis, the receipt of a structural evaluation of the
subject property that justifies the rehabilitation component of the project, the approval of all funding
sources and a satisfactory tenant relocation plan as determined by City and CRA staff.
APPROPRIATION CODE AND AMOUNT:
Funds are available in Downtown CRA capital improvement project R2010 - Housing County.
STRATEGIC PRIORITY:
2.1 Strengthen public-private initiatives that attract, develop, and retain diversified business sectors.
2.4 Support equitable housing programs that promote household stability and reduce the incidence of
homelessness within Clearwater.
3.1 Support neighborhood identity through services and program that empower community pride and
belonging.
Page 2 City of Clearwater Printed on 8/29/2024
814800509815
900406
812818504 801808806901708904810502
902509751
802 1/2507 1/2
708804902 1/2806810 1/2808 1/2SPROSPECTAVESMYRTLEAVECHESTNUT ST
TURNER ST
COURT ST
Document Path: C:\Users\Nicholas.Finch\OneDrive - City of Clearwater\GIS - Engineering Geographic Technology\Engineering\Location Maps\801 Chestnut Street\Indigo Apartments\Indigo Apartments.aprx
Prepared by:Department of Public Works - EngineeringGeographic Technology Division100 S. Myrtle Ave, Clearwater, FL 33756Ph: (727)562-4750, Fax: (727)526-4755www.MyClearwater.com Page: 1 of 1Aerial Flown 2022
Indigo Apartments
801 Chestnut St
Parcel Number: 15-29-15-54450-17-0010
N.T.S.Scale:NFMap Gen By:DMReviewed By:8/15/2024Date:
AERIAL MAP
Parcel Size:
+/- 2.31 ac.
INDIGO
APARTMENTS
City of Clearwater
Staff Evaluation:
Executive Summary
PROFILE SUBJECT PROPERTY
Task: Analyze the proposed project for Indigo Apartments, located at 801
Chestnut St, and provide a project summary
Brief Summary: Sunrise Affordable Housing Group has submitted a request
for funding in the amount of $1,000,000 from the City of Clearwater and
$2,000,000 from the Community Redevelopment Agency, in the form of a
deferred 0% interest loan for the acquisition and rehab of Indigo Apartments.
Sunrise plans to revert the property back to low-income housing.
Indigo Apartments
801 Chestnut St.
Interior Area: 137,768 SF
Land Area: 2.31 Ac
208 Units
PROJECT HIGHLIGHTS
STAFF
ASSESSMENT
Source: Pinellas County Funding Recommendation
Staff has reviewed the proforma, sources and uses
and proposed funding stack and have determined that the funding gap and fund request are
reasonable. Staff has determined that the project
has an acceptable debt service coverage ratio of
1.15. Staff recommends the following
contingencies:
Final approval of funding is contingent upon the
satisfactory result of the subsidy analysis to be
performed by HUD.
Final approval of funding is contingent upon the
approval of all other proposed funding sources.
Final approval of funding is contingent upon
positive findings from a relocation plan analysis. Ad Valorem Taxes:
The development will not be eligible for the property tax exemption however
the estimated ad valorem tax will decrease by 28%, per the property tax
analysis that was provided by the developer due to the reduction in rental
income.
PROJECT BENEFITS
Tenant Relocation Plan
As a result of the conversion, an estimation of 59 of the current residents will
be considered over-qualified / over-income (above 80% AMI threshold).
Sunrise has developed a relocation plan for these tenants, ensuring
compliance with the Federal Uniform Relocation Act, which protects the
existing tenants from additional costs beyond their current rent and utility
expenses. The plan includes advisory services, commitment funds by the
developer to providing financial assistance to tenants who do not meet the
new income requirement, a strategy for relocating tenants and an appeal and
grievance process.
Unit set-aside for most vulnerable residents
Project to be placed in the County land trust
Large boost for Clearwater AH supply.
Strategic Plan
Obj. 2.4- Support equitable housing
programs that promote household stability
and reduce incidents of homelessness within
Clearwater.
Table of Contents
Cover page ............................................................................................................................................................. 1
Table Of Contents ................................................................................................................................................ 2
Request for Funding ............................................................................................................................................... 3
Clearwater Housing Authority LOI .............................................................................................................. 14
Relocation Plan ...................................................................................................................................................... 16
The Indigo Apartments
Request for Clearwater CRA Funding
June 27, 2024
The Indigo Apartments – Request for Clearwater CRA Funding 6/27/2024
APPLICANT OVERVIEW
Name Sunrise Affordable Housing Group (“Sunrise”)
Address 233 Miraflores Palm Beach, FL 33480
Authorized Contact Sam Caspert
Title Principal
Email sam@sunriseaffordable.com
Phone (201) 673-0094
PROJECT OVERVIEW
Property Name The Indigo Apartments
Address 801 Chestnut St, Clearwater, FL 33756
Total Project Cost $47,888,431
City CRA Funding Request $2,000,000
Total # of Units 208
Proposed # of Affordable Units 208
Parking 149 Surface Spaces
Construction 17-Story High-Rise
PROJECT HIGHLIGHTS
208 affordable housing units under county’s control forever, due to county land trust
Decrease Indigo rents by an average 35% vs. today, and as much as 76% for extremely low-income tenants
50+ units covered under a Project-Based Voucher for the most vulnerable residents of Clearwater
Commitment to keep 208 units in Clearwater rent-restricted for 50+ years
Commitment to keep 208 units in Clearwater reserved for low-income residents for 50+ years; 100% of
tenants will be required to earn less than 80% AMI
Major rehabilitation to extend the useful life of a 50-year-old asset, with a focus on build systems, MEPs
and energy-efficient improvements
Demonstrated government support, at the city, county, state and federal level
The Indigo Apartments – Request for Clearwater CRA Funding 6/27/2024
PROJECT DETAILS
The Indigo Apartments (fka Prospect Tower) has historically operated as a 55+ low-income community totaling
208 units with 96 studios and 112 1-bedrooms. In 2020, existing ownership terminated the age restrictions, invested
money in cosmetic upgrades and transformed the Property into market-rate housing. Current ownership increased
rents by nearly 50% and displaced 100% of the existing senior tenant base.
Sunrise is currently under contract to acquire The Indigo Apartments and has site control for the next year through
a Purchase & Sale Agreement.
Affordable Housing Transformation: Sunrise plans to acquire the Property and convert it back to affordable housing
with a 50-year affordability commitment through the LIHTC program, implementing income and rent restrictions
on 100% of units with thresholds set at 30% AMI, 60% AMI and 80% AMI. The restrictions will result in significant
rent reductions, resulting in an average ~51% discount to today’s market-rate rents. The property will also be placed
in a 99-year land trust with Pinellas County, putting 208 affordable housing units under the county’s control forever.
Rehabilitation: Sunrise has planned a $9.5 million capital improvement plan designed to preserve and extend the
useful life of the 1971-vintage asset. Construction will be completed within 12 months of closing. The renovation
will encompass a variety of holistic improvements, including renovation of all classic apartment units, site
infrastructure / MEP upgrades, green energy-saving initiatives, and life & safety upgrades.
Resident Services: Sunrise will also be providing countless programs for its residents to significantly improve the
tenant experience. Programs include financial counseling, holiday activities, computer training, healthcare visits,
homebuying seminars, among others. There will be an on-site service coordinator paid for by Sunrise.
Commitment from Other Government Departments: Sunrise is requesting Clearwater CRA funds to use, in
conjunction with a HUD loan, tax credit equity and soft funding from Pinellas County and city of Clearwater’s
Economic Development & Housing department, to finance the acquisition, capital improvement plan and affordable
housing transformation. With your support, we can provide quality affordable housing to Clearwater forever.
PROJECT’S COMMUNITY IMPACT
The need for affordable housing in Clearwater is more apparent than ever. Rents have been growing at
unprecedent levels since 2020 and tenant demand for affordable housing is at all-time highs. On top of
that, Clearwater is experiencing a massive shortage of affordable housing supply and has not seen much
new stock over the past few years. As of today, there are only a handful of LIHTC properties in Clearwater,
and there has only been 1 new delivery in the last 5 years. These properties have an average occupancy of
96% and many are fully occupied with long waitlists. An additional 208 affordable housing units,
including 100 covered by a PBV, would be tremendous for the community & fill up immediately.
Source: CoStar.
LIHTC PROPOERTIES - 3-MILE RADIUS
# Property Name Address Type Year Built # of Units Occupancy
1 Madison Point 380 S Martin Luther King Jr Ave LIHTC 2019 80 99%
2 Lexington Club 1200 S Missouri Ave LIHTC 2000 240 97%
3 Foundation Village 910 Woodlawn St LIHTC 1984 28 95%
4 Clearwater Apartments 1000 N Keene Rd LIHTC 1983 90 99%
5 Pine Berry 1225 S Highland Ave LIHTC 1962 85 99%
6 Palmetto Park 1003 West Ave LIHTC 1949 179 90%
Total / Weighted Average 702 96%
The Indigo Apartments – Request for Clearwater CRA Funding 6/27/2024
TENANT / MARKET INFORMATION
Sunrise is decreasing rents at The Indigo by an average of 35%, a discount of $466 per unit
Rents will then be restricted for the next 50 years.
o 50 units will have their rents decrease by ~75%
o 82 units will have their rents decrease by ~35%
o 75 units will have their rents decrease by ~10%
Sunrise is decreasing rents at The Indigo to an average 51% discount vs. today’s market rents
That is only going to increase with time.
Sunrise has applied for a 100-unit Project-Based Voucher with the City of Clearwater, which will allow
us to rent to the community’s most vulnerable households.
100% of tenants will be required to earn less than 80% AMI. Sunrise has reserved units for tenants
earning 30% AMI, 60% AMI and 80% AMI.
Describe policies for how the tenants will be selected.
All tenants will be required to earn less than 80% AMI; the AMI restrictions are shown in the table on the prior
page. Additionally, Sunrise applied for a 100-unit project-based voucher with Clearwater Housing Authority,
which will allow us to provide housing for deeply subsidized and “at-need” tenants.
Historically, the property has served the senior (55+) population and currently over 30% of units are above the 55-
age threshold. Sunrise anticipates continued rental demand from seniors / individuals.
Sunrise has hired WRH Realty, a professional and affordable housing specialized 3rd-party party property
manager with experience in Pinellas County. The management agent will establish an Affirmative Fair Housing
Marketing Plan that will be clearly posted for all tenants and potential applicants. This plan will be reviewed on a
quarterly basis to ensure compliance/adherence for application intake, waitlist, income verifications and other
various fair housing topics. Fair Housing Act training for on-site staff will be conducted annually.
Given the large discount to market-rate comparables, we expect exceptional tenant demand to live at The Indigo.
PRO FORMA RENTS
(A) (B)(C) Pro Forma Discount vs.
Unit AMI Total Current Clearwater Pro Forma Current Clearwater
Type Restriction Units Indigo Rent Market Rent Indigo Rent Indigo Rent Market Rent
Studio 30% AMI 23 $1,250 $1,700 $351 (72%) (79%)
Studio 60% AMI 38 $1,250 $1,700 $853 (32%) (50%)
Studio 80% AMI 35 $1,250 $1,700 $1,188 (5%) (30%)
1-Bedroom 30% AMI 27 $1,400 $1,800 $337 (76%) (81%)
1-Bedroom 60% AMI 44 $1,400 $1,800 $874 (38%) (51%)
1-Bedroom 80% AMI 40 $1,400 $1,800 $1,233 (12%) (32%)
Total / Avg. 60% 207 $1,330 $1,754 $865 (35%) (51%)
($466) ($889)
The Indigo Apartments – Request for Clearwater CRA Funding 6/27/2024
DEVELOPMENT TEAM
Sunrise has assembled a best-in-class development team to help execute the business plan. All of the below
companies have extensive affordable housing and LIHTC rehab experience throughout Florida. Additionally, all
of these companies have previously executed a tax credit rehab in Clearwater. Resumes for each are in the email.
- Architect: Gallo Herbert Architects
- General Contractor: ETC Construction
- Construction Management: SCT Consulting
- Property Management: WRH Realty Services
- Resident Programs: WRH Realty Services
PROJECT SCHEDULE & PROCESS
Sunrise is seeking financing indications from the City.
Site Control Obtained (via PSA) 5/28/2024
Other Sources of Soft Funding Obtained Throughout July
Bond / Tax Credit Application Submitted 7/16/2024
Bond / Tax Credit Allocation Obtained 8/7/2024
End of Sunrise PSA Due Diligence Period
*Large deposit becomes non-refundable 8/12/2024
Property Acquisition Completed 3/31/2025
Property Capital Improvements Plan 3/31/2025 – 12/31/2025
Property Lease-Up 3/31/2025 – 12/31/2025
Stabilization 1/1/2026
The Indigo Apartments – Request for Clearwater CRA Funding 6/27/2024
PROJECT SOURCES & USES
PROJECT COSTS
Total Per Unit
Purchase Price $25,500,000 $122,596
Construction Costs $8,528,000 $41,000
GC Fees $1,164,800 $5,600
Contingency $948,480 $4,560
P&P Bond $104,333 $502
Total Hard Costs $10,745,613 $51,662
3rd-Party Inspection Reports $101,600 $488
Architect $260,000 $1,250
Permits $200,000 $962
Title / Recording $125,000 $601
Legal $350,000 $1,683
Corporate $35,000 $168
Builder's Risk Insurance $83,466 $401
Resident Relocation $150,000 $721
Contingency $65,253 $314
Total Soft Costs $1,370,320 $6,588
Tax Credit Costs $234,700 $1,128
Bond Costs $352,710 $1,696
Equity Bridge Loan Costs $512,066 $2,462
Permanent Financing Costs $1,592,203 $7,655
Total Financing Costs $2,691,679 $12,941
Operating Reserves $1,492,378 $7,175
Developer Fee $6,088,441 $29,271
Total Project Costs $47,888,431 $230,233
PROJECT FUNDING
Total Per Unit
HUD 221(d)(4) Loan $16,800,000 $80,769
Tax Credit Equity $16,065,311 $77,237
Property Operating Cashflow $1,186,563 $5,705
Deferred Developer Fee $3,836,557 $18,445
Total Soft Funding $10,000,000 $48,077
Total Sources $47,888,431 $230,233
Soft Funding Sources:
Pinellas County Land Trust $5,000,000 $24,038
Pinellas County $2,000,000 $9,615
Clearwater Econ. Devt. & Hous. Department $1,000,000 $4,808
Clearwater CRA Department $2,000,000 $9,615
The Indigo Apartments – Request for Clearwater CRA Funding 6/27/2024
Construction Scope
Current ownership has made substantial cosmetic upgrades to the Property, but has neglected the infrastructure of
this 50-year-old asset. As such, Sunrise will focus on long-term preservation upgrades, including the below:
- MEP: New mechanicals including boiler, chiller, cooling tower, storage tank, pumps, roof fans
- Building Envelope: New roof, full window replacement, new entry doors
- Common Area: Elevator modernization, common area AHUs, fire alarm upgrades
- HOME Units (20): Full interior rehab including new LVT flooring, upgraded kitchens/bathrooms
- ADA/HVI Units (16): Adaptation of 11 ADA-compliant units and 5 HVI-compliant units
- Energy-Efficient Improvements: New lo-flow appliances, updated LED lighting, AC fan coil units
- Amenities: New computer room, business center, car wash, community garden
PRO FORMA INCOME
PRO FORMA INCOME
Total Per Unit
Gross Potential Revenue $3,256,830 $15,658
Economic Vacancy ($162,841) ($783)
Total Rental Income $3,093,988 $14,875
Other Income $69,219 $333
Total Revenue $3,163,207 $15,208
Payroll $343,900 $1,653
Administrative $146,936 $706
Utilities $141,649 $681
Contract Services $103,614 $498
Repairs & Maintenance $65,000 $312
Management Fee $126,528 $608
Insurance $506,688 $2,436
Real Estate Taxes $301,478 $1,449
Replacement Reserves $62,400 $300
Total Expenses $1,798,193 $8,645
Net Operating Income $1,365,015 $6,563
Less: Debt Service $1,186,563 $5,705
Net Cash Flow $178,452 $858
The Indigo Apartments – Request for Clearwater CRA Funding 6/27/2024
PROPERTY PICTURES / AMENITIES
The Indigo Apartments – Transaction Rationale
1. This Transaction will Result in a Significant Boost to Clearwater’s Affordable Housing Supply
The Indigo Apartments conversion will establish the third largest LIHTC community in Clearwater, ensure the
City and County have site control indefinitely and increase the stock of Affordable Housing units in the City by
18%. As seen in the chart below, there are only 9 LITHC properties in Clearwater totaling 1,127 units. This
transaction is an opportunity to make the largest increase to the Clearwater Affordable Housing stock over the
last two decades and nearly match the amount of units produced during that timeframe.
This transaction is not Affordable Housing preservation, it is Affordable Housing creation.
2. Produce New Affordable Housing Units at 42% Discount to New Development Costs
Last month, Clearwater announced its first new LIHTC development project in a few years, Clearwater Gardens.
It is reported this deal has a cost basis of $395k per unit. The cost basis for The Indigo Apartments is
approximately $229k per unit which represents a 42% discount to Clearwater Gardens.
3. Solving Affordable Housing Crisis Through Only New Development is Not Feasible
As demonstrated by Clearwater Gardens, it is incredibly difficult to identify feasible ground-up affordable
housing deals due to increased construction costs, soaring insurance premiums, higher interest rates, and
appreciating land values. Once a project does look financially feasible, it is still subject to winning a 9% LIHTC
FHFC award, which is incredibly competitive and an unpredictable lottery process. Notably, it was reported that
the Clearwater Gardens project had been in pre-development planning since 2020 due to multiple years of a failed
9% LIHTC FHFC awards.
The city will not be able to address the growing affordable housing crisis if new ground-up development is the
only means to creating Affordable Housing. It will take years for new projects to match the number of Affordable
Housing units being created in this transaction.
LIHTC Properties in Clearwater
Property Name Property Address Year Built # Units
Madison Point 380 S Martin Luther King Jr Ave 2019 80
Woodlawn Trail 803 Woodlawn Loop 2019 80
Garden Trail 700 Eldridge St 2017 76
Lexington Club 1200 S Missouri Ave 2000 240
Wellington Apartments 2900 Drew St 1998 269
Foundation Village 910 Woodlawn St 1984 28
Clearwater Apartments 1000 N Keene Rd 1983 90
Pine Berry 1225 S Highland Ave 1962 85
Palmetto Park 1003 West Ave 1949 179
Total 1,127
Source: CoStar. Rent-Restricted properties.
4. 100% of Indigo Units Will Be Rent & Income Restricted into Perpetuity
As part of this transaction, The Indigo Apartments will restrict rent & incomes for all units to ensure 100% of the
residents earn less than 80% AMI. As illustrated in the unit mix below, Sunrise will set-aside units within a range
of income bands from 30% AMI to 80% AMI. On average, we are decreasing property rents by ~32%.
Additionally, by placing the property in the Pinellas County Land Trust, the county & city will have control of
this property in perpetuity. There is no opportunity for any owner in the future to convert The Indigo Apartments
back to market-rate housing.
5. Set-Aside for Community’s Most Vulnerable Residents via Project-Based Voucher Subsidy
As part of Sunrise’s commitment to affordability, 52 units will be set-aside for residents who earn 30% AMI or
less. Sunrise is not aware of any other LIHTC properties in Clearwater targeting this underserved population at
this scale.
In coordination with Clearwater Housing Authority, Sunrise will provide subsidy on all 52-units through a
project-based voucher. This will ensure access to clean, safe and secure housing for the city’s most vulnerable
and at-need residents. The City of Clearwater PBV award letter attached.
6. Hired a Third-Party Consultant That Devised a URA-Compliant Relocation Plan for Over-
Qualified Residents
Sunrise has hired a 3rd-party Tenant Relocation expert to devise a relocation plan that is URA-compliant and
abides by all relevant regulations, including HUD. The relocation plan is attached and briefly summarized below:
- No resident will be evicted
- Substantial notice of non-renewal
- Sunrise to pay for reasonable moving costs
- Sunrise to pay for 1-on-1 meetings between residents and relocation specialist to find new living
- Sunrise to pay for any increased rent as a result of this transaction for 42 months
The average income for the over-qualified residents is ~$85,000 per year which is around 120% AMI, and many
of those residents have reported over six-figure salaries.
7. Gentrification by New Owners May Displace a Majority of Existing Residents
Sunrise was introduced to this project by JLL, which was marketing The Indigo as an opportunity to increase
rents by $300 per unit per month. If Sunrise were not to acquire The Indigo, the Property is likely to be bought
by a new market-rate owner, who will continue the gentrification process by pushing rents higher to meet market
levels. If this were to come to fruition, much of the existing residents are likely to be displaced with no URA-
compliant tenant relocation plan or government oversight.
8. $3 Million Loan from Clearwater will Result in $25 Million in County and Federal Funding
The City of Clearwater will be able to attract $25 million in County and federal funding through a $3 million
dollar loan to this development. For every dollar committed, Clearwater will receive an 8.3x funding multiple
from the County and Federal government. This includes $7 million from Pinellas County through the Penny for
Pinellas Program and $18 million from the federal government in tax credits.
1
Resident Engagement
&
Relocation Assistance Plan
The Indigo Apartments
801 Chestnut St, Clearwater, FL 33756
Prepared for
Sunrise Affordable
By
CompassPoint Community Partners, LLC
2
Background:
The Indigo Apartments is a 17-story high rise located in Downtown Clearwater,
Florida. The property was originally built in 1971 and comprises 208 studio and 1-
bedroom units, totaling 92,894 square feet.
Sunrise Affordable Housing Group (“Sunrise Affordable” or “Sunrise”) will be
acquiring the property and simultaneously placing it into the LIHTC program with
set-asides at 30% AMI, 60% AMI and 80% AMI. As a result of the conversion, 59 of
the current residents will be considered over-qualified / over-income (above 80%
AMI threshold).
The property will undergo substantial rehabilitation but mostly of the exterior and
building envelope. There will be no reconstruction of the units that would require
tenants to be temporarily relocated.
The property currently has 20 HOME units that are covered under an existing HOME
agreement for 20 years. Additionally, the project will receive the following federal
financial assistance:
o HUD 221(d)(4) loan; estimated at ~$20M
o Project Based Vouchers from Clearwater Housing Authority
The acquisition of real property for this project is subject to the Uniform Relocation
Act (“URA”) and the requirements described in 49 CFR Part 24, subpart B. Therefore,
all impacted tenants including those who are over-income are protected by the URA.
These impacted tenants will be fully informed in writing of their URA rights and
protections, provided the necessary advisory services and offered permanent
relocation assistance.
General Approach:
In formulating this Plan, Sunrise incorporated key features of the Federal Uniform
Relocation Act (URA) and U.S. Department of HUD Relocation Handbook 1378. In a
situation where tenants will be displaced from their homes, for example, the HUD
relocation handbook recommends:
A) The owner or agency issues a General Notice with proof of receipt.
B) Each displaced unit will receive notice explaining eligibility for relocation
services and assistance.
C) Each household receives a notice identifying the date of move at least 90
days in advance.
D) There is an appeal and grievance process.
E) The owner or agency offers advisory services as outlined above.
3
The Federal Uniform Relocation Act also extends straight-forward guidance for the
work envisioned by the owner:
1) In the event of displacement, any apartment identified must be decent,
safe, and sanitary.
2) The resident should not incur any additional expenses beyond the current
rent and utility costs.
3) Financial assistance will be provided for the tenants.
4) The owner or agency shall give advance written notice.
Sunrise has put in place a detailed and carefully thought-out plan for
the relocation of over-income tenants, which is laid out in the 7 steps
below:
1) Distribution of General Information, Non-Displacement, and
Eligibility Notices:
Sunrise and their consultant, CompassPoint Community Partners, will determine who
must be displaced and who will be allowed to remain at the property. After making
these determinations, they will issue the appropriate relocation notices: either a
Notice of Eligibility (for relocation assistance) (Exhibit A) or a Notice of Non-
Displacement (Exhibit B), which will be provided to each affected head of household
by hand-delivery.
This important correspondence to the residents will contain the following
information in English, Spanish, and other languages as needed:
• Explain that a project has been proposed and caution the person
not to move.
• Provide directions for contacting the on-site coordinator to set up
a coordination meeting.
• Confirm that this action by the team will require residents to
permanently move due to the planned conversion.
• Inform the person that they will not be required to move without
at least 90 days’ advance written notice of (1) at least one
"comparable replacement home" that is available and (2) the
expiration of their current lease.
• Describe the household’s right to file a grievance or complaint.
4
2) Initial Interview:
A crucial part of the resident engagement process and plan will be the initial interview
with the head of household after the distribution of the Notice of Eligibility.
The heads of household will be contacted at an early date and personally interviewed
by a representative of the Agency to determine the household’s relocation needs and
preferences for replacement housing and advisory services. The interviewer will ask
certain questions about the makeup of the household, including questions about
income.
Each affected household will be given a HUD brochure titled “RELOCATION
ASSISTANCE TO TENANTS DISPLACED FROM THEIR HOMES”.
3) Preparing Each Household for Moving
Sunrise and/or their property management partner will explain the procedures and
steps that residents will have to follow to pack and move their belongings. Under no
circumstances will any resident be forced to relocate prior to the expiration of their
lease. Tenants will be given enough time to make plans for moving. Unless there is a
health or safety emergency, residents will not be required to move without at least
90 days advance written notice of (1) at least one "comparable replacement home"
that is available and (2) the expiration of their current lease.
4) Financial Assistance:
Each household will receive financial assistance that will cover the following:
1) Reimbursement of reasonable out-of-pocket expenses (e.g. – cost of moving)
2) Any increase in monthly rent / utility costs at the replacement units
Financial assistance will be received at the time of their move, and according to the
apartment type occupied by the resident at the time of the GIN. The head of household
will sign a receipt for the financial assistance which sets forth the anticipated financial
assistance to each household.
Each household will be able to choose from the following options:
Payment for Moving Expenses:
You may choose either:
a) Payment for Your Actual Reasonable Moving and Related Expenses, or
5
b) Fixed Moving Expense and Dislocation Allowance, per the URA Fixed
Residential Moving Cost Schedule which is based on the number of rooms in
the unit or number of rooms of furniture you will be moving
a. For example, studios will receive $1,150 and $1,350 for 1-bedrooms.
Replacement Housing Assistance:
This will cover any increase in monthly rent / utility costs. Displaced residents may
choose either of the below, to enable them to rent, or if preferred, buy a comparable
or suitable replacement home, you:
a) Rental Assistance, or
b) Purchase Assistance
The rental assistance is based on the difference between the comparable replacement
unit and the lessor of (1) the current rent and average utility payments or (2) 30% of
the residents’ income. Times 42 months. We will cover the difference in rent for 3.5
years.
5) Advisory Services:
On behalf of the team, Sunrise’s consultant, CompassPoint Community Partners, LLC
will coordinate all aspects of this plan with the site staff. Advisory services will
include the following scope of work:
1) Determine the needs and desires for assistance through an initial survey.
2) Explain the procedures, costs, and coordination involved in the process.
3) Assist with translation, as necessary.
4) Coordinate scheduling of moves and/or access with each household and
management.
5) Process approved assistance established in this Plan.
6) Explain the procedures for packing and securing each resident’s personal
belongings and assist any displaced household with moving arrangements.
7) Keep files for each household related to the process.
8) Maintain a line of communication with all related entities and individuals, city
officials, and residents.
6) Appeal & Grievance Process:
Under the URA and HUD Handbook, a household can dispute the adequacy of their
assistance, and appeal their relocation benefits eligibility status after receipt of a
written relocation notification. In the case of the Plan, there will be no final
determination of relocation benefits or disallowed expenses. The appeal and
grievance process, therefore, should be a method for each household to file
complaints with the owner. A general email will be established and shared that allows
6
residents to submit their complaints directly to CompassPoint and Sunrise.
7) Records:
Sunrise Affordable and CompassPoint will establish a separate file for each
household. A record of all correspondence with each resident will be kept in the
household file, along with any receipts and other additional materials needed for
monitoring and administrative purposes. Sunrise Affordable and CompassPoint will
maintain a record for each household with a general comment sheet to record
information, concerns, and miscellaneous/other items. Likewise, the team will make
available all the resident-related documentation maintained for the Plan when
requested by the Agency.
7
Exhibit A – DRAFT
NOTICE OF ELIGIBILITY FOR URA RELOCATION ASSISTANCE
Date: _____/_____/_____
BY HAND DELIVERY
NAME:
UNIT #:
Dear: ____________________________________________:
On ___(date) _, Sunrise Affordable notified you of proposed plans to acquire the property
you currently occupy at (address)_______ for a project which could receive funding assistance
from the U.S. Department of Housing and Urban Development (HUD) under the
_______________________ program.
It has been determined that you will be displaced by the project.
Since you are being displaced in connection with this federally funded project, you will be
eligible for relocation assistance and payments under the Uniform Relocation Assistance
and Real Property Acquisition Policies Act (URA). This is your Notice of Eligibility for
relocation assistance.
The effective date of your eligibility is _______________.
(NOTE: Pursuant to Public Law 105-117, aliens not lawfully present in the United
States are not eligible for relocation assistance, unless such ineligibility would result in
exceptional hardship to a qualifying spouse, parent, or child. All persons seeking relocation
assistance will be required to certify that they are a United States citizen or national, or an
alien lawfully present in the United States.) To carry out the project, it will be necessary for
you to move. However, you do not need to move now. You will be provided written notice of
the date by which you will be required to move. This date will be no less than 90 days from
the date comparable replacement housing has been made available to you. Enclosed is a
brochure entitled, "Relocation Assistance to Tenants Displaced From Their Homes." Please
read the brochure carefully. It explains your rights and provides additional information on
eligibility for relocation payments and what you must do in order to receive these
payments.
The relocation assistance to which you are entitled includes:
• Relocation Advisory Services. Including counseling and other assistance to help you
find another home and prepare to move.
• Payment for Moving Expenses. You may choose: (1) a payment for your
actual reasonable moving and related expenses, or (2) a fixed moving
payment in the amount of $________ based on the URA Fixed Residential Moving Cost
Schedule.
• Replacement Housing Payment. You may be eligible for a replacement housing
payment to rent or buy a replacement home. The payment is based on several
factors including: (1) the monthly rent and cost of utility services for a comparable
8
replacement dwelling, (2) the monthly rent and cost of utility services for your
present home, and (3) for low-income persons, 30 percent of your average monthly
gross household income. This payment is calculated on the difference in the old and
new housing costs for a one-month period and multiplied by 42.
Listed below are three comparable replacement dwellings that you may wish to
consider for your replacement home. If needed, we can arrange transportation for
you to inspect these and other replacement dwellings.
Address Rent & Utility Costs Contact Info
1. ________________________________________________________________
2. ________________________________________________________________
3. ________________________________________________________________
We believe that # () is the most representative of your present home. The monthly rent and
the estimated average monthly cost of utilities for this dwelling is $ and it will be used to
calculate your maximum replacement housing payment. Please contact us immediately if
you believe this dwelling is not comparable to your current home. We can explain our basis
for selecting this dwelling as most representative of your current home and discuss your
concerns. Based on the information you have provided about your income and the rent and
utilities you now pay, you may be eligible for a maximum replacement housing payment of
approximately $ (42 x $____), if you rent the dwelling identified above as the most
comparable to your current home or rent another dwelling of equal cost. Replacement
housing payments are not adjusted to reflect future rent increases or changes in income.
This is the maximum amount that you would be eligible to receive. If you rent a decent, safe
and sanitary home where the monthly rent and average estimated utility costs are less than
the comparable dwelling, your replacement housing payment will be based on the actual
cost of the dwelling. We will not base your payment on any dwelling that is not a
comparable replacement home. All replacement housing payments must be
paid in installments. Your payment will be paid in #_ installments. Should you choose to
purchase (rather than rent) a decent, safe and sanitary replacement home, you would be
eligible for a downpayment assistance payment which is equal to your maximum
replacement housing payment, $_________*. Let us know if you are interested in purchasing a
replacement home and we will help you locate such housing. Please note that all
replacement housing must be inspected in order to ensure it is decent, safe and sanitary
before any replacement housing payments are made.
If you have any questions about this letter and your eligibility for relocation
assistance and payments, please contact (name) , (title) at (phone) , (address) before you
make any moving plans. He/she will assist you with your move to a new home and help
ensure that you preserve your eligibility for all relocation payments to which you may be
entitled.
Remember, do not move or commit to the purchase or lease of a replacement home before
we have a chance to further discuss your eligibility for relocation assistance.
Sincerely,
___(name & title)_____
9
Exhibit B – DRAFT
General Information Notice
Notice of Non-Displacement
Date: _____/_____/_____
BY HAND DELIVERY
NAME:
UNIT #:
Dear: ____________________________________________:
_____________________________________________________ intends to improve _________________, through
____ (provide work details here) ____ and continue affordable housing at the property.
This is a general information notice, and your occupancy is NOT in jeopardy because
of this action. We urge you NOT to move from your unit.
This planned scope of work will not affect affordability protections provided
to the property.
Advisory services will be available to help coordinate the work. Throughout the process, if
you have a complaint or concern you can file a grievance at any time. Sunrise
Affordable/CompassPoint will be responsible for the resolution of any complaints or
concerns. The contact information for both is available at the site office.
Please keep in mind that you must continue to comply with the terms and conditions of
your lease throughout the renovation time period including payment of rent.
Thank you,
________________________________
By: _____________________________________
Its, _________________
INDIGO
APARTMENTS
City of Clearwater
Staff Evaluation:
Executive Summary
PROFILE SUBJECT PROPERTY
Task: Analyze the proposed project for Indigo Apartments, located at 801
Chestnut St, and provide a project summary
Brief Summary: Sunrise Affordable Housing Group has submitted a request
for funding in the amount of $1,000,000 from the City of Clearwater and
$2,000,000 from the Community Redevelopment Agency, in the form of a
deferred 0% interest loan for the acquisition and rehab of Indigo Apartments.
Sunrise plans to revert the property back to low-income, senior housing.
Indigo Apartments
801 Chestnut St.
Interior Area: 137,768 SF
Land Area: 2.31 Ac
208 Units
PROJECT HIGHLIGHTS
STAFF
ASSESSMENT
Source: Pinellas County Funding Recommendation
Staff has reviewed the proforma, sources and
uses and proposed funding stack and have
determined that the funding gap and fund
request are reasonable. Staff has determined
that the project has an acceptable debt
service coverage ratio of 1.15. Staff
recommends the following contingencies:
Final approval of funding is contingent upon
the satisfactory result of the subsidy analysis
to be performed by HUD.
Final Approval of funding is contingent upon
the approval of all other proposed funding
sources. Ad Valorem Taxes:
The development will not be eligible for the property tax exemption however
the estimated ad valorem tax will decrease by 28%, per the property tax
analysis that was provided by the developer due to the reduction in rental
income.
PROJECT BENEFITS
Tenant Relocation Plan
As a result of the conversion, an estimation of 59 of the current residents will
be considered over-qualified / over-income (above 80% AMI threshold).
Sunrise has developed a relocation plan for these tenants, ensuring
compliance with the Federal Uniform Relocation Act, which protects the
existing tenants from additional costs beyond their current rent and utility
expenses. The plan includes advisory services, commitment funds by the
developer to providing financial assistance to tenants who do not meet the
new income requirement, a strategy for relocating tenants and an appeal and
grievance process.
Unit set-aside for most vulnerable residents
Project to be placed in the County land trust
Large boost for Clearwater AH supply.
Strategic Plan
Obj. 2.4- Support equitable housing
programs that promote household stability
and reduce incidents of homelessness within
Clearwater.
Table of Contents
Cover page ............................................................................................................................................................. 1
Table Of Contents ................................................................................................................................................ 2
Request for Funding ............................................................................................................................................... 3
Clearwater Housing Authority LOI .............................................................................................................. 14
Relocation Plan ...................................................................................................................................................... 16
The Indigo Apartments
Request for Clearwater CRA Funding
June 27, 2024
The Indigo Apartments – Request for Clearwater CRA Funding 6/27/2024
APPLICANT OVERVIEW
Name Sunrise Affordable Housing Group (“Sunrise”)
Address 233 Miraflores Palm Beach, FL 33480
Authorized Contact Sam Caspert
Title Principal
Email sam@sunriseaffordable.com
Phone (201) 673-0094
PROJECT OVERVIEW
Property Name The Indigo Apartments
Address 801 Chestnut St, Clearwater, FL 33756
Total Project Cost $47,888,431
City CRA Funding Request $2,000,000
Total # of Units 208
Proposed # of Affordable Units 208
Parking 149 Surface Spaces
Construction 17-Story High-Rise
PROJECT HIGHLIGHTS
208 affordable housing units under county’s control forever, due to county land trust
Decrease Indigo rents by an average 35% vs. today, and as much as 76% for extremely low-income tenants
50+ units covered under a Project-Based Voucher for the most vulnerable residents of Clearwater
Commitment to keep 208 units in Clearwater rent-restricted for 50+ years
Commitment to keep 208 units in Clearwater reserved for low-income residents for 50+ years; 100% of
tenants will be required to earn less than 80% AMI
Major rehabilitation to extend the useful life of a 50-year-old asset, with a focus on build systems, MEPs
and energy-efficient improvements
Demonstrated government support, at the city, county, state and federal level
The Indigo Apartments – Request for Clearwater CRA Funding 6/27/2024
PROJECT DETAILS
The Indigo Apartments (fka Prospect Tower) has historically operated as a 55+ low-income community totaling
208 units with 96 studios and 112 1-bedrooms. In 2020, existing ownership terminated the age restrictions, invested
money in cosmetic upgrades and transformed the Property into market-rate housing. Current ownership increased
rents by nearly 50% and displaced 100% of the existing senior tenant base.
Sunrise is currently under contract to acquire The Indigo Apartments and has site control for the next year through
a Purchase & Sale Agreement.
Affordable Housing Transformation: Sunrise plans to acquire the Property and convert it back to affordable housing
with a 50-year affordability commitment through the LIHTC program, implementing income and rent restrictions
on 100% of units with thresholds set at 30% AMI, 60% AMI and 80% AMI. The restrictions will result in significant
rent reductions, resulting in an average ~51% discount to today’s market-rate rents. The property will also be placed
in a 99-year land trust with Pinellas County, putting 208 affordable housing units under the county’s control forever.
Rehabilitation: Sunrise has planned a $9.5 million capital improvement plan designed to preserve and extend the
useful life of the 1971-vintage asset. Construction will be completed within 12 months of closing. The renovation
will encompass a variety of holistic improvements, including renovation of all classic apartment units, site
infrastructure / MEP upgrades, green energy-saving initiatives, and life & safety upgrades.
Resident Services: Sunrise will also be providing countless programs for its residents to significantly improve the
tenant experience. Programs include financial counseling, holiday activities, computer training, healthcare visits,
homebuying seminars, among others. There will be an on-site service coordinator paid for by Sunrise.
Commitment from Other Government Departments: Sunrise is requesting Clearwater CRA funds to use, in
conjunction with a HUD loan, tax credit equity and soft funding from Pinellas County and city of Clearwater’s
Economic Development & Housing department, to finance the acquisition, capital improvement plan and affordable
housing transformation. With your support, we can provide quality affordable housing to Clearwater forever.
PROJECT’S COMMUNITY IMPACT
The need for affordable housing in Clearwater is more apparent than ever. Rents have been growing at
unprecedent levels since 2020 and tenant demand for affordable housing is at all-time highs. On top of
that, Clearwater is experiencing a massive shortage of affordable housing supply and has not seen much
new stock over the past few years. As of today, there are only a handful of LIHTC properties in Clearwater,
and there has only been 1 new delivery in the last 5 years. These properties have an average occupancy of
96% and many are fully occupied with long waitlists. An additional 208 affordable housing units,
including 100 covered by a PBV, would be tremendous for the community & fill up immediately.
Source: CoStar.
LIHTC PROPOERTIES - 3-MILE RADIUS
# Property Name Address Type Year Built # of Units Occupancy
1 Madison Point 380 S Martin Luther King Jr Ave LIHTC 2019 80 99%
2 Lexington Club 1200 S Missouri Ave LIHTC 2000 240 97%
3 Foundation Village 910 Woodlawn St LIHTC 1984 28 95%
4 Clearwater Apartments 1000 N Keene Rd LIHTC 1983 90 99%
5 Pine Berry 1225 S Highland Ave LIHTC 1962 85 99%
6 Palmetto Park 1003 West Ave LIHTC 1949 179 90%
Total / Weighted Average 702 96%
The Indigo Apartments – Request for Clearwater CRA Funding 6/27/2024
TENANT / MARKET INFORMATION
Sunrise is decreasing rents at The Indigo by an average of 35%, a discount of $466 per unit
Rents will then be restricted for the next 50 years.
o 50 units will have their rents decrease by ~75%
o 82 units will have their rents decrease by ~35%
o 75 units will have their rents decrease by ~10%
Sunrise is decreasing rents at The Indigo to an average 51% discount vs. today’s market rents
That is only going to increase with time.
Sunrise has applied for a 100-unit Project-Based Voucher with the City of Clearwater, which will allow
us to rent to the community’s most vulnerable households.
100% of tenants will be required to earn less than 80% AMI. Sunrise has reserved units for tenants
earning 30% AMI, 60% AMI and 80% AMI.
Describe policies for how the tenants will be selected.
All tenants will be required to earn less than 80% AMI; the AMI restrictions are shown in the table on the prior
page. Additionally, Sunrise applied for a 100-unit project-based voucher with Clearwater Housing Authority,
which will allow us to provide housing for deeply subsidized and “at-need” tenants.
Historically, the property has served the senior (55+) population and currently over 30% of units are above the 55-
age threshold. Sunrise anticipates continued rental demand from seniors / individuals.
Sunrise has hired WRH Realty, a professional and affordable housing specialized 3rd-party party property
manager with experience in Pinellas County. The management agent will establish an Affirmative Fair Housing
Marketing Plan that will be clearly posted for all tenants and potential applicants. This plan will be reviewed on a
quarterly basis to ensure compliance/adherence for application intake, waitlist, income verifications and other
various fair housing topics. Fair Housing Act training for on-site staff will be conducted annually.
Given the large discount to market-rate comparables, we expect exceptional tenant demand to live at The Indigo.
PRO FORMA RENTS
(A) (B)(C) Pro Forma Discount vs.
Unit AMI Total Current Clearwater Pro Forma Current Clearwater
Type Restriction Units Indigo Rent Market Rent Indigo Rent Indigo Rent Market Rent
Studio 30% AMI 23 $1,250 $1,700 $351 (72%) (79%)
Studio 60% AMI 38 $1,250 $1,700 $853 (32%) (50%)
Studio 80% AMI 35 $1,250 $1,700 $1,188 (5%) (30%)
1-Bedroom 30% AMI 27 $1,400 $1,800 $337 (76%) (81%)
1-Bedroom 60% AMI 44 $1,400 $1,800 $874 (38%) (51%)
1-Bedroom 80% AMI 40 $1,400 $1,800 $1,233 (12%) (32%)
Total / Avg. 60% 207 $1,330 $1,754 $865 (35%) (51%)
($466) ($889)
The Indigo Apartments – Request for Clearwater CRA Funding 6/27/2024
DEVELOPMENT TEAM
Sunrise has assembled a best-in-class development team to help execute the business plan. All of the below
companies have extensive affordable housing and LIHTC rehab experience throughout Florida. Additionally, all
of these companies have previously executed a tax credit rehab in Clearwater. Resumes for each are in the email.
- Architect: Gallo Herbert Architects
- General Contractor: ETC Construction
- Construction Management: SCT Consulting
- Property Management: WRH Realty Services
- Resident Programs: WRH Realty Services
PROJECT SCHEDULE & PROCESS
Sunrise is seeking financing indications from the City.
Site Control Obtained (via PSA) 5/28/2024
Other Sources of Soft Funding Obtained Throughout July
Bond / Tax Credit Application Submitted 7/16/2024
Bond / Tax Credit Allocation Obtained 8/7/2024
End of Sunrise PSA Due Diligence Period
*Large deposit becomes non-refundable 8/12/2024
Property Acquisition Completed 3/31/2025
Property Capital Improvements Plan 3/31/2025 – 12/31/2025
Property Lease-Up 3/31/2025 – 12/31/2025
Stabilization 1/1/2026
The Indigo Apartments – Request for Clearwater CRA Funding 6/27/2024
PROJECT SOURCES & USES
PROJECT COSTS
Total Per Unit
Purchase Price $25,500,000 $122,596
Construction Costs $8,528,000 $41,000
GC Fees $1,164,800 $5,600
Contingency $948,480 $4,560
P&P Bond $104,333 $502
Total Hard Costs $10,745,613 $51,662
3rd-Party Inspection Reports $101,600 $488
Architect $260,000 $1,250
Permits $200,000 $962
Title / Recording $125,000 $601
Legal $350,000 $1,683
Corporate $35,000 $168
Builder's Risk Insurance $83,466 $401
Resident Relocation $150,000 $721
Contingency $65,253 $314
Total Soft Costs $1,370,320 $6,588
Tax Credit Costs $234,700 $1,128
Bond Costs $352,710 $1,696
Equity Bridge Loan Costs $512,066 $2,462
Permanent Financing Costs $1,592,203 $7,655
Total Financing Costs $2,691,679 $12,941
Operating Reserves $1,492,378 $7,175
Developer Fee $6,088,441 $29,271
Total Project Costs $47,888,431 $230,233
PROJECT FUNDING
Total Per Unit
HUD 221(d)(4) Loan $16,800,000 $80,769
Tax Credit Equity $16,065,311 $77,237
Property Operating Cashflow $1,186,563 $5,705
Deferred Developer Fee $3,836,557 $18,445
Total Soft Funding $10,000,000 $48,077
Total Sources $47,888,431 $230,233
Soft Funding Sources:
Pinellas County Land Trust $5,000,000 $24,038
Pinellas County $2,000,000 $9,615
Clearwater Econ. Devt. & Hous. Department $1,000,000 $4,808
Clearwater CRA Department $2,000,000 $9,615
The Indigo Apartments – Request for Clearwater CRA Funding 6/27/2024
Construction Scope
Current ownership has made substantial cosmetic upgrades to the Property, but has neglected the infrastructure of
this 50-year-old asset. As such, Sunrise will focus on long-term preservation upgrades, including the below:
- MEP: New mechanicals including boiler, chiller, cooling tower, storage tank, pumps, roof fans
- Building Envelope: New roof, full window replacement, new entry doors
- Common Area: Elevator modernization, common area AHUs, fire alarm upgrades
- HOME Units (20): Full interior rehab including new LVT flooring, upgraded kitchens/bathrooms
- ADA/HVI Units (16): Adaptation of 11 ADA-compliant units and 5 HVI-compliant units
- Energy-Efficient Improvements: New lo-flow appliances, updated LED lighting, AC fan coil units
- Amenities: New computer room, business center, car wash, community garden
PRO FORMA INCOME
PRO FORMA INCOME
Total Per Unit
Gross Potential Revenue $3,256,830 $15,658
Economic Vacancy ($162,841) ($783)
Total Rental Income $3,093,988 $14,875
Other Income $69,219 $333
Total Revenue $3,163,207 $15,208
Payroll $343,900 $1,653
Administrative $146,936 $706
Utilities $141,649 $681
Contract Services $103,614 $498
Repairs & Maintenance $65,000 $312
Management Fee $126,528 $608
Insurance $506,688 $2,436
Real Estate Taxes $301,478 $1,449
Replacement Reserves $62,400 $300
Total Expenses $1,798,193 $8,645
Net Operating Income $1,365,015 $6,563
Less: Debt Service $1,186,563 $5,705
Net Cash Flow $178,452 $858
The Indigo Apartments – Request for Clearwater CRA Funding 6/27/2024
PROPERTY PICTURES / AMENITIES
The Indigo Apartments – Transaction Rationale
1. This Transaction will Result in a Significant Boost to Clearwater’s Affordable Housing Supply
The Indigo Apartments conversion will establish the third largest LIHTC community in Clearwater, ensure the
City and County have site control indefinitely and increase the stock of Affordable Housing units in the City by
18%. As seen in the chart below, there are only 9 LITHC properties in Clearwater totaling 1,127 units. This
transaction is an opportunity to make the largest increase to the Clearwater Affordable Housing stock over the
last two decades and nearly match the amount of units produced during that timeframe.
This transaction is not Affordable Housing preservation, it is Affordable Housing creation.
2. Produce New Affordable Housing Units at 42% Discount to New Development Costs
Last month, Clearwater announced its first new LIHTC development project in a few years, Clearwater Gardens.
It is reported this deal has a cost basis of $395k per unit. The cost basis for The Indigo Apartments is
approximately $229k per unit which represents a 42% discount to Clearwater Gardens.
3. Solving Affordable Housing Crisis Through Only New Development is Not Feasible
As demonstrated by Clearwater Gardens, it is incredibly difficult to identify feasible ground-up affordable
housing deals due to increased construction costs, soaring insurance premiums, higher interest rates, and
appreciating land values. Once a project does look financially feasible, it is still subject to winning a 9% LIHTC
FHFC award, which is incredibly competitive and an unpredictable lottery process. Notably, it was reported that
the Clearwater Gardens project had been in pre-development planning since 2020 due to multiple years of a failed
9% LIHTC FHFC awards.
The city will not be able to address the growing affordable housing crisis if new ground-up development is the
only means to creating Affordable Housing. It will take years for new projects to match the number of Affordable
Housing units being created in this transaction.
LIHTC Properties in Clearwater
Property Name Property Address Year Built # Units
Madison Point 380 S Martin Luther King Jr Ave 2019 80
Woodlawn Trail 803 Woodlawn Loop 2019 80
Garden Trail 700 Eldridge St 2017 76
Lexington Club 1200 S Missouri Ave 2000 240
Wellington Apartments 2900 Drew St 1998 269
Foundation Village 910 Woodlawn St 1984 28
Clearwater Apartments 1000 N Keene Rd 1983 90
Pine Berry 1225 S Highland Ave 1962 85
Palmetto Park 1003 West Ave 1949 179
Total 1,127
Source: CoStar. Rent-Restricted properties.
4. 100% of Indigo Units Will Be Rent & Income Restricted into Perpetuity
As part of this transaction, The Indigo Apartments will restrict rent & incomes for all units to ensure 100% of the
residents earn less than 80% AMI. As illustrated in the unit mix below, Sunrise will set-aside units within a range
of income bands from 30% AMI to 80% AMI. On average, we are decreasing property rents by ~32%.
Additionally, by placing the property in the Pinellas County Land Trust, the county & city will have control of
this property in perpetuity. There is no opportunity for any owner in the future to convert The Indigo Apartments
back to market-rate housing.
5. Set-Aside for Community’s Most Vulnerable Residents via Project-Based Voucher Subsidy
As part of Sunrise’s commitment to affordability, 52 units will be set-aside for residents who earn 30% AMI or
less. Sunrise is not aware of any other LIHTC properties in Clearwater targeting this underserved population at
this scale.
In coordination with Clearwater Housing Authority, Sunrise will provide subsidy on all 52-units through a
project-based voucher. This will ensure access to clean, safe and secure housing for the city’s most vulnerable
and at-need residents. The City of Clearwater PBV award letter attached.
6. Hired a Third-Party Consultant That Devised a URA-Compliant Relocation Plan for Over-
Qualified Residents
Sunrise has hired a 3rd-party Tenant Relocation expert to devise a relocation plan that is URA-compliant and
abides by all relevant regulations, including HUD. The relocation plan is attached and briefly summarized below:
- No resident will be evicted
- Substantial notice of non-renewal
- Sunrise to pay for reasonable moving costs
- Sunrise to pay for 1-on-1 meetings between residents and relocation specialist to find new living
- Sunrise to pay for any increased rent as a result of this transaction for 42 months
The average income for the over-qualified residents is ~$85,000 per year which is around 120% AMI, and many
of those residents have reported over six-figure salaries.
7. Gentrification by New Owners May Displace a Majority of Existing Residents
Sunrise was introduced to this project by JLL, which was marketing The Indigo as an opportunity to increase
rents by $300 per unit per month. If Sunrise were not to acquire The Indigo, the Property is likely to be bought
by a new market-rate owner, who will continue the gentrification process by pushing rents higher to meet market
levels. If this were to come to fruition, much of the existing residents are likely to be displaced with no URA-
compliant tenant relocation plan or government oversight.
8. $3 Million Loan from Clearwater will Result in $25 Million in County and Federal Funding
The City of Clearwater will be able to attract $25 million in County and federal funding through a $3 million
dollar loan to this development. For every dollar committed, Clearwater will receive an 8.3x funding multiple
from the County and Federal government. This includes $7 million from Pinellas County through the Penny for
Pinellas Program and $18 million from the federal government in tax credits.
1
Resident Engagement
&
Relocation Assistance Plan
The Indigo Apartments
801 Chestnut St, Clearwater, FL 33756
Prepared for
Sunrise Affordable
By
CompassPoint Community Partners, LLC
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Background:
The Indigo Apartments is a 17-story high rise located in Downtown Clearwater,
Florida. The property was originally built in 1971 and comprises 208 studio and 1-
bedroom units, totaling 92,894 square feet.
Sunrise Affordable Housing Group (“Sunrise Affordable” or “Sunrise”) will be
acquiring the property and simultaneously placing it into the LIHTC program with
set-asides at 30% AMI, 60% AMI and 80% AMI. As a result of the conversion, 59 of
the current residents will be considered over-qualified / over-income (above 80%
AMI threshold).
The property will undergo substantial rehabilitation but mostly of the exterior and
building envelope. There will be no reconstruction of the units that would require
tenants to be temporarily relocated.
The property currently has 20 HOME units that are covered under an existing HOME
agreement for 20 years. Additionally, the project will receive the following federal
financial assistance:
o HUD 221(d)(4) loan; estimated at ~$20M
o Project Based Vouchers from Clearwater Housing Authority
The acquisition of real property for this project is subject to the Uniform Relocation
Act (“URA”) and the requirements described in 49 CFR Part 24, subpart B. Therefore,
all impacted tenants including those who are over-income are protected by the URA.
These impacted tenants will be fully informed in writing of their URA rights and
protections, provided the necessary advisory services and offered permanent
relocation assistance.
General Approach:
In formulating this Plan, Sunrise incorporated key features of the Federal Uniform
Relocation Act (URA) and U.S. Department of HUD Relocation Handbook 1378. In a
situation where tenants will be displaced from their homes, for example, the HUD
relocation handbook recommends:
A) The owner or agency issues a General Notice with proof of receipt.
B) Each displaced unit will receive notice explaining eligibility for relocation
services and assistance.
C) Each household receives a notice identifying the date of move at least 90
days in advance.
D) There is an appeal and grievance process.
E) The owner or agency offers advisory services as outlined above.
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The Federal Uniform Relocation Act also extends straight-forward guidance for the
work envisioned by the owner:
1) In the event of displacement, any apartment identified must be decent,
safe, and sanitary.
2) The resident should not incur any additional expenses beyond the current
rent and utility costs.
3) Financial assistance will be provided for the tenants.
4) The owner or agency shall give advance written notice.
Sunrise has put in place a detailed and carefully thought-out plan for
the relocation of over-income tenants, which is laid out in the 7 steps
below:
1) Distribution of General Information, Non-Displacement, and
Eligibility Notices:
Sunrise and their consultant, CompassPoint Community Partners, will determine who
must be displaced and who will be allowed to remain at the property. After making
these determinations, they will issue the appropriate relocation notices: either a
Notice of Eligibility (for relocation assistance) (Exhibit A) or a Notice of Non-
Displacement (Exhibit B), which will be provided to each affected head of household
by hand-delivery.
This important correspondence to the residents will contain the following
information in English, Spanish, and other languages as needed:
• Explain that a project has been proposed and caution the person
not to move.
• Provide directions for contacting the on-site coordinator to set up
a coordination meeting.
• Confirm that this action by the team will require residents to
permanently move due to the planned conversion.
• Inform the person that they will not be required to move without
at least 90 days’ advance written notice of (1) at least one
"comparable replacement home" that is available and (2) the
expiration of their current lease.
• Describe the household’s right to file a grievance or complaint.
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2) Initial Interview:
A crucial part of the resident engagement process and plan will be the initial interview
with the head of household after the distribution of the Notice of Eligibility.
The heads of household will be contacted at an early date and personally interviewed
by a representative of the Agency to determine the household’s relocation needs and
preferences for replacement housing and advisory services. The interviewer will ask
certain questions about the makeup of the household, including questions about
income.
Each affected household will be given a HUD brochure titled “RELOCATION
ASSISTANCE TO TENANTS DISPLACED FROM THEIR HOMES”.
3) Preparing Each Household for Moving
Sunrise and/or their property management partner will explain the procedures and
steps that residents will have to follow to pack and move their belongings. Under no
circumstances will any resident be forced to relocate prior to the expiration of their
lease. Tenants will be given enough time to make plans for moving. Unless there is a
health or safety emergency, residents will not be required to move without at least
90 days advance written notice of (1) at least one "comparable replacement home"
that is available and (2) the expiration of their current lease.
4) Financial Assistance:
Each household will receive financial assistance that will cover the following:
1) Reimbursement of reasonable out-of-pocket expenses (e.g. – cost of moving)
2) Any increase in monthly rent / utility costs at the replacement units
Financial assistance will be received at the time of their move, and according to the
apartment type occupied by the resident at the time of the GIN. The head of household
will sign a receipt for the financial assistance which sets forth the anticipated financial
assistance to each household.
Each household will be able to choose from the following options:
Payment for Moving Expenses:
You may choose either:
a) Payment for Your Actual Reasonable Moving and Related Expenses, or
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b) Fixed Moving Expense and Dislocation Allowance, per the URA Fixed
Residential Moving Cost Schedule which is based on the number of rooms in
the unit or number of rooms of furniture you will be moving
a. For example, studios will receive $1,150 and $1,350 for 1-bedrooms.
Replacement Housing Assistance:
This will cover any increase in monthly rent / utility costs. Displaced residents may
choose either of the below, to enable them to rent, or if preferred, buy a comparable
or suitable replacement home, you:
a) Rental Assistance, or
b) Purchase Assistance
The rental assistance is based on the difference between the comparable replacement
unit and the lessor of (1) the current rent and average utility payments or (2) 30% of
the residents’ income. Times 42 months. We will cover the difference in rent for 3.5
years.
5) Advisory Services:
On behalf of the team, Sunrise’s consultant, CompassPoint Community Partners, LLC
will coordinate all aspects of this plan with the site staff. Advisory services will
include the following scope of work:
1) Determine the needs and desires for assistance through an initial survey.
2) Explain the procedures, costs, and coordination involved in the process.
3) Assist with translation, as necessary.
4) Coordinate scheduling of moves and/or access with each household and
management.
5) Process approved assistance established in this Plan.
6) Explain the procedures for packing and securing each resident’s personal
belongings and assist any displaced household with moving arrangements.
7) Keep files for each household related to the process.
8) Maintain a line of communication with all related entities and individuals, city
officials, and residents.
6) Appeal & Grievance Process:
Under the URA and HUD Handbook, a household can dispute the adequacy of their
assistance, and appeal their relocation benefits eligibility status after receipt of a
written relocation notification. In the case of the Plan, there will be no final
determination of relocation benefits or disallowed expenses. The appeal and
grievance process, therefore, should be a method for each household to file
complaints with the owner. A general email will be established and shared that allows
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residents to submit their complaints directly to CompassPoint and Sunrise.
7) Records:
Sunrise Affordable and CompassPoint will establish a separate file for each
household. A record of all correspondence with each resident will be kept in the
household file, along with any receipts and other additional materials needed for
monitoring and administrative purposes. Sunrise Affordable and CompassPoint will
maintain a record for each household with a general comment sheet to record
information, concerns, and miscellaneous/other items. Likewise, the team will make
available all the resident-related documentation maintained for the Plan when
requested by the Agency.
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Exhibit A – DRAFT
NOTICE OF ELIGIBILITY FOR URA RELOCATION ASSISTANCE
Date: _____/_____/_____
BY HAND DELIVERY
NAME:
UNIT #:
Dear: ____________________________________________:
On ___(date) _, Sunrise Affordable notified you of proposed plans to acquire the property
you currently occupy at (address)_______ for a project which could receive funding assistance
from the U.S. Department of Housing and Urban Development (HUD) under the
_______________________ program.
It has been determined that you will be displaced by the project.
Since you are being displaced in connection with this federally funded project, you will be
eligible for relocation assistance and payments under the Uniform Relocation Assistance
and Real Property Acquisition Policies Act (URA). This is your Notice of Eligibility for
relocation assistance.
The effective date of your eligibility is _______________.
(NOTE: Pursuant to Public Law 105-117, aliens not lawfully present in the United
States are not eligible for relocation assistance, unless such ineligibility would result in
exceptional hardship to a qualifying spouse, parent, or child. All persons seeking relocation
assistance will be required to certify that they are a United States citizen or national, or an
alien lawfully present in the United States.) To carry out the project, it will be necessary for
you to move. However, you do not need to move now. You will be provided written notice of
the date by which you will be required to move. This date will be no less than 90 days from
the date comparable replacement housing has been made available to you. Enclosed is a
brochure entitled, "Relocation Assistance to Tenants Displaced From Their Homes." Please
read the brochure carefully. It explains your rights and provides additional information on
eligibility for relocation payments and what you must do in order to receive these
payments.
The relocation assistance to which you are entitled includes:
• Relocation Advisory Services. Including counseling and other assistance to help you
find another home and prepare to move.
• Payment for Moving Expenses. You may choose: (1) a payment for your
actual reasonable moving and related expenses, or (2) a fixed moving
payment in the amount of $________ based on the URA Fixed Residential Moving Cost
Schedule.
• Replacement Housing Payment. You may be eligible for a replacement housing
payment to rent or buy a replacement home. The payment is based on several
factors including: (1) the monthly rent and cost of utility services for a comparable
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replacement dwelling, (2) the monthly rent and cost of utility services for your
present home, and (3) for low-income persons, 30 percent of your average monthly
gross household income. This payment is calculated on the difference in the old and
new housing costs for a one-month period and multiplied by 42.
Listed below are three comparable replacement dwellings that you may wish to
consider for your replacement home. If needed, we can arrange transportation for
you to inspect these and other replacement dwellings.
Address Rent & Utility Costs Contact Info
1. ________________________________________________________________
2. ________________________________________________________________
3. ________________________________________________________________
We believe that # () is the most representative of your present home. The monthly rent and
the estimated average monthly cost of utilities for this dwelling is $ and it will be used to
calculate your maximum replacement housing payment. Please contact us immediately if
you believe this dwelling is not comparable to your current home. We can explain our basis
for selecting this dwelling as most representative of your current home and discuss your
concerns. Based on the information you have provided about your income and the rent and
utilities you now pay, you may be eligible for a maximum replacement housing payment of
approximately $ (42 x $____), if you rent the dwelling identified above as the most
comparable to your current home or rent another dwelling of equal cost. Replacement
housing payments are not adjusted to reflect future rent increases or changes in income.
This is the maximum amount that you would be eligible to receive. If you rent a decent, safe
and sanitary home where the monthly rent and average estimated utility costs are less than
the comparable dwelling, your replacement housing payment will be based on the actual
cost of the dwelling. We will not base your payment on any dwelling that is not a
comparable replacement home. All replacement housing payments must be
paid in installments. Your payment will be paid in #_ installments. Should you choose to
purchase (rather than rent) a decent, safe and sanitary replacement home, you would be
eligible for a downpayment assistance payment which is equal to your maximum
replacement housing payment, $_________*. Let us know if you are interested in purchasing a
replacement home and we will help you locate such housing. Please note that all
replacement housing must be inspected in order to ensure it is decent, safe and sanitary
before any replacement housing payments are made.
If you have any questions about this letter and your eligibility for relocation
assistance and payments, please contact (name) , (title) at (phone) , (address) before you
make any moving plans. He/she will assist you with your move to a new home and help
ensure that you preserve your eligibility for all relocation payments to which you may be
entitled.
Remember, do not move or commit to the purchase or lease of a replacement home before
we have a chance to further discuss your eligibility for relocation assistance.
Sincerely,
___(name & title)_____
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Exhibit B – DRAFT
General Information Notice
Notice of Non-Displacement
Date: _____/_____/_____
BY HAND DELIVERY
NAME:
UNIT #:
Dear: ____________________________________________:
_____________________________________________________ intends to improve _________________, through
____ (provide work details here) ____ and continue affordable housing at the property.
This is a general information notice, and your occupancy is NOT in jeopardy because
of this action. We urge you NOT to move from your unit.
This planned scope of work will not affect affordability protections provided
to the property.
Advisory services will be available to help coordinate the work. Throughout the process, if
you have a complaint or concern you can file a grievance at any time. Sunrise
Affordable/CompassPoint will be responsible for the resolution of any complaints or
concerns. The contact information for both is available at the site office.
Please keep in mind that you must continue to comply with the terms and conditions of
your lease throughout the renovation time period including payment of rent.
Thank you,
________________________________
By: _____________________________________
Its, _________________