Denver 9/27 Debra Bustos


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Presentation from Partners in Innovation National Symposium in Denver, CO on September 27, 2010.

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  • How TOD Fund Works: Finance land and property acquisition to produce over 1,000 affordable homes over the next 10 yearsProvide patient high-risk capital quickly at low cost to a mission-driven entity (ULC) committed to affordable mixed-use development near transitEnable property to be purchased while prices are still low so that existing housing can be preserved or “land banked” for redevelopment for a period of up to five years. Ensure that when property values go up around transit sites, lower-income families are not forced out of the housing market.
  • Regional Transit Department (RTD) has started building FasTracks$4.7 billion initiative passed by the voters in 2004*119 miles of rail lines, 60 new rail stationsnetwork of bus feeder routesHousing Demand (½ mile of light rail)Current: 45,000 households 2030: 155,000 households 344% increase [1]40% projected to be from low income households at or below 80% AMI ($57,450 /4) Up to 44,000 additional affordable homes added/preserved
  • West Corridor – expected completion 2013East line – ground breaking August 2010East Corridor – expected completion 2016
  • Basis for creation of TOD FundWest Corridor – under constructionNEWSED, local CDC identified property; acquired improvementsFunding gapULC invested its own funds to acquire land99 yr Land lease and development rightsAdjacent to Sheridan light rail station platform/garage (2013)Site is prime for redevelopment; 2012Plans include increase in density (current 62 units)
  • Sheridan Stationn is one of 11 new stations being constructed on the West CorridorThe West Corridor will connect west Denver neighborhoods with employment centers to the west (Jefferson County), downtown Denver to the east, and link to connections reaching the entire region.
  • Dark Orange – Mixed useOrange - Residential West end – Federal Center
  • Dahlia Apts– 36 unit (Preservation)Foreclosure / Bank OwnedAcquired December 2009 – bridge loanRefinanced April 2010 – TOD Fund $1,212,750 Sale Price $1,800,000 Total Development Costs $1,000,000 TOD Fund $ 770,000 NSP funds (leverage) $ 400,000 Initial Rehab (health /safety)Development Partner: Hope CommunitiesLong-term: Hope Communities will own & operate; permanent affordabilityInitial: roof, Strong neighborhood anchors: Denver Health Clinic, Elm Apartments (owned and managed by Hope Communities, a local CDC). Preserved for families at 50% Area Median Income (AMI) or belowUnited States of America: $5.92 BillionState of Colorado: $82 MillionCity and County of Denver: $39 MillionThe Neighborhood Development Collaborative (NDC)NSP was established with the purpose of stabilizing communities that have suffered from foreclosure and abandonment NDC is composed of 6 community development organizations working in partnership to stabilize Denver neighborhoods hard hit by foreclosureNDC meets bi-weekly to maintain a coordinated effort in 6 low-income Denver neighborhoods ChallengesAffordability policy: 25% of allocation to households at 50% of AMI and lessLimited administration resources for use of NSP fundsDifficult to leverage NSP funds with other financing sourcesCHALLENGES: Expiring Section 8 properties not lostDifficult to find MF propertiesMajority of existing properties available are either too small or too large to fit in with TOD loan limits.
  • Point out Avondale ½ mile circlesSelected by Denver Library Commission over two other sitesServes several neighborhoodsLocated between two light rail stations (Decatur / Knox)Bus on site
  • Partnership with City of Denver / Del Norte Neighborhood Development
  • Also own other sites near central light rail or commuter rail on East line
  • Passing of HB 10-1143: OPPORTUNITIES TO PARTNER WITH NONPROFIT DEVELOPERSHouse Bill - Bill amends the current transit oriented development statute to allow for residential uses Only commercial and retail uses were permitted under the current statuteIt will preserve local zoning and planning control while encouraging multimodal access near transit The end goal is to ensure maximum opportunities for mixed use as well as nonprofit uses along transit corridors in the metro area Bill is critical for the effective operation of the TOD fundHas obtained broad-based support in the Denver Metro region
  • Denver 9/27 Debra Bustos

    1. 1. Partners in Innovation:Rental Housing Preservation and TOD – the Denver Story<br />September 27, 2010<br />Denver, Colorado<br />
    2. 2. Urban Land Conservancy (ULC)<br /><ul><li>501(c)(3) nonprofit, supporting organization to the Denver Community Foundation. Established 2003, staffed 2007
    3. 3. Mission: To acquire, develop, and preserve community assets in urban areas in the Denver Metro area
    4. 4. Invested over $21 million in real estate, serving over 10,000 low and moderate income people
    5. 5. 400 full and part-time jobs are supported by ULC real estate investments
    6. 6. Promote community development; strengthen neighborhoods through preservation of key areas of influence
    7. 7. Preserve community assets in existing or emerging neighborhoods to ensure their continued public benefit
    8. 8. Acquire strategic sites in anticipation of market changes through land banking along transit corridors</li></li></ul><li>Denver Transit Oriented Development (TOD) Fund<br />$15 Million fund designed to finance land and property acquisition for affordable homes near transit<br /> - Enterprise Community Partners: Assemble loan capital; fund manager; largest investor $5 million<br /> - ULC: 10% investor ($1.5 million) and sole borrower<br /> - City of Denver: Top loss funding of $2.5 million & recipient of the MacArthur Foundation <br /> Housing Preservation Award: $2 million PRI and $250,000 grant for early warning system<br />Up to 1,200 affordable homes over the next 10 years<br /> - 60% AMI rental, 95% AMI ownership<br /> - Goal of 15% of homes targeted for 30% AMI households<br />Quickly provides patient, high-risk capital at low cost: Fixed at 3.38% at 90% LTV<br />Purchase and hold sites for up to 5 years<br />
    9. 9.
    10. 10.
    11. 11.
    12. 12. Jody Apartments (preservation & redevelopment) <br />Pre- TOD<br /><ul><li>Less than 300 feet from a future RTD light rail stop on the West Corridor.
    13. 13. ULC owns land and has extended a 99-year land lease to NEWSED,
    14. 14. NEWSED owns the improvements - 4 rental buildings serving 100+ residents.
    15. 15. Total acquisition and rehab: $3.25 million </li></ul>Partnership with NEWSED. 99 yr ground lease <br />Hold Period: up to 5 yrs until redevelopment (2012)<br />Development Plan: redevelop/ increase density; 52 of the 62 apartments are permanently affordable, with 12 of the 52 committed to households at 30% AMI <br />
    16. 16. Jody Apts<br />Parking Garage<br />Sheridan Station<br />
    17. 17. Station Area<br />
    18. 18. Dahlia Apartments (preservation & redevelopment) <br />TOD & NSP<br /><ul><li>.First TOD Fund acquisition - $1,000,000
    19. 19. Leveraged with $770,000 Neighborhood Stabilization Funds (NSP) funds
    20. 20. Foreclosure. 36 units (2 bdrm – 6 buildings)
    21. 21. 1 block from high frequency bus line
    22. 22. Total acquisition and rehab: $1.75 million
    23. 23. Challenge: deferred maintenance</li></ul>Partnership with Hope Communities.<br />Hold Period: up to 3 yrs until Development Partner secures permanent financing<br />Initial Rehab - $360K health/safety. Hope Redevelopment- an additional $15k/unit<br />
    24. 24. Yale & I-25 <br /><ul><li>First TOD new construction
    25. 25. 1.51 acres
    26. 26. Adjacent to light rail station
    27. 27. Stabilized neighborhood - Lacks </li></ul> sufficient affordable housing<br /><ul><li>Hold period: 4 years
    28. 28. Partner: Mercy Housing
    29. 29. Program: 70 units workforce rental housing
    30. 30. Serving 30 - 60% AMI
    31. 31. Hold period: 4 yrs
    32. 32. 9% LIHTC</li></li></ul><li>
    33. 33. The West Line Corridor<br />
    34. 34.
    35. 35. $15 million TOD Fund closed April 2010<br />Transactions to Date:<br />CLOSED - Dahlia - Preservation – 36 units (bus corridor)<br /> Price: $1,212,750 TOD Fund: $1,000,000<br />CLOSED - Yale – new construction – 70 units (existing light rail)<br /> Price: $1,325,000 TOD Fund: $1,192,500<br />UNDER CONTRAC T - Avondale – new construction – 70 units (bus corridor)<br /> TOD Fund: $1,926,000<br />IN NEGOTIATION – new construction – 63 units (existing light rail) - $1,078,110<br />Total Expected to be deployed $5,196,610 (Not including ULC investment)<br />239 units of affordable housing near transit<br />
    36. 36. TOD Fund provides:<br /><ul><li>Ability to preserve land and buildings around transit corridors
    37. 37. Opportunity to preserve/create affordable housing
    38. 38. Benefit to low-income households that on average spend 60% of their gross income on housing and transportation expenses combined
    39. 39. Creates opportunities for wealth-building and greater access to employment and educational opportunities
    40. 40. Increases ridership on public transit
    41. 41. Reduces gentrification pressures
    42. 42. Provides employers with access to an expanded workforce
    43. 43. Smart growth infill development (high density) helps reduce negative environmental impact of sprawl</li></li></ul><li>Debra Bustos<br /><br />Urban Land Conservancy<br />305 Park Avenue West<br />Denver, Colorado 80205<br />(303) 377-4477<br /><br />