STRATEGIC PRIORITY: Economic and Neighborhood Vitality
AGENDA DATE: June 23, 2021
COUNCIL DISTRICT(S): 7
DEPARTMENT: Department of Housing & Neighborhood Revitalization
EXECUTIVE: Dr. Eric A. Johnson
______________________________________________________________________
SUBJECT
Title
Authorize the (1) sale of up to five Land Transfer lots to Women That Soar, L.L.C., and/or its affiliates (Developer) subject to restrictive covenants, a right of reverter, and execution of all necessary documents, pursuant to the City's Land Transfer Program; Estimated Revenue: General Fund $12,509.93; (2) release of lien for all non-tax City liens, notices, or orders that were filed on up to five Land Transfer lots sold to Developer prior to or subsequent to the deeds transferring the lots to the City of Dallas; and (3) execution of a development agreement with Developer for the construction of up to four single-family homes on the Land Transfer lots - Estimated Revenue Foregone: $8,930.90
Body
BACKGROUND
On May 22, 2019, City Council adopted the Land Transfer Program by Resolution No. 19-0824, as amended, for the purpose of incentivizing: (1) the development of quality, sustainable housing that is affordable to the residents of the City and (2) the development of other uses that complement the City’s Comprehensive Housing Policy, economic development policy, or redevelopment policy. Specifically, the Land Transfer Program authorizes the City to sell qualifying city-owned real property and resell tax-foreclosed real property to for-profit, non-profit and/or religious organizations, as applicable, in a direct sale at less than fair market value of the land, consistent with the authorizing state statute or city ordinance. The tax foreclosed lots are being sold pursuant to 34.051 of the Texas Property Tax Code.
In June 2021, a qualified participating developer, Women That Soar, L.L.C. (WTS), submitted an application (proposal) to purchase a total of five Land Transfer lots. The Department of Housing and Neighborhood Revitalization (Housing) evaluated the application pursuant to the standards set forth in the Land Transfer Program guidelines, which included determining whether the developer met the eligibility standards to be deemed a “Qualified Participating Developer” and underwriting the proposal. The application was determined to be “complete” and met minimum scoring to be eligible. Housing collaborated with Women That Soar, L.L.C. regarding the terms of sale of the vacant lots as well as the terms related to the construction and subsequent sale of single-family housing units to income eligible homebuyers.
WTS is a domestic limited liability company formed in Texas in 2007 by managing member Gina Grant. The organization is a Dallas-based organization focusing on community development strategies specifically targeting minority, low-moderate income individuals. The organization, WTS produces fiscal literacy and homebuyer education courses to assist their target audience in becoming successful homeowners. At this time, WTS intends to partner with Simply Custom to advance their objectives by developing affordable housing. Simply Custom is a Dallas-based builder with experience in residential and commercial construction. Developer has previously participated in the City’s Land Bank Program and successfully completed the lot acquisition, development, and sale of six homes to income-qualified homebuyers on Land Bank lots over the past four years. Past performance suggests that the Developer will continue to construct quality affordable housing units on the lots while meeting the requirements of the Land Transfer Program.
The project consists of the construction of four single family units, four models, ranging from 1,665 square feet to 2,244 square feet with a minimum of three bedrooms and two baths. Developer proposes to re-plat 2517 and 2519 Samoa into one lot due to the size of 2517 Samoa, 2,513 square feet. The price range of the proposed units will be $234,500.00 - $249,900.00 targeting homebuyers in an income range of 61% - 120% area median income (AMI). The developer has committed to subsidizing each unit with subsidies ranging from $25,000.00 - $150,000.00. These subsidies will reduce the price range to $99,900.00 - $212,500.00. Specifically, the price point for the Model: A is expected to be $234,500.00 and is expected to be subsidized by WTS in the amount of $25,000.00 for a final sales prices of $209,500.00 to an eligible homebuyer within 81-120% AMI. The price point for the Model: B is expected to be $249,900.00 and is expected to be subsidized by Texas Capital Bank in the amount of $150,000.00 for a final sales prices of $99,900.00 to an eligible homebuyer within 61-80% AMI. The price point for the Model: C is expected to be $245,500.00 and is expected to be subsidized by WTS in the amount of $85,000.00 for a final sales prices of $160,500.00 to an eligible homebuyer within 61-80% AMI. The price point for the Model: D is expected to be $237,500.00 and is expected to be subsidized by WTS in the amount of $25,000.00 for a final sales prices of $212,500.00 to an eligible homebuyer within 81-120% AMI. In addition, the developer intends to market the City of Dallas Homebuyer Assistance Program to those homebuyers categorized in the 60-80% AMI range.
The development terms applicable to each lot are as follows:
• Vacant Lot Sales Price: Attached as Exhibit A.
• Single-Family Home Sales Price: The sales price of the home cannot exceed the 2021 U.S. Department of Housing and Urban Development (HUD) HOME homeownership sales price for the Dallas, TX HUD Metro FMR Area and must be affordable based on the income of the targeted homebuyer.
• Targeted Income of Homebuyer: 61%-120% AMI.
• Construction Timeframe: Developer must apply for a construction permit and close on any construction financing within 60 days of purchase from the City. In addition, Developer should complete construction and sale of each affordable housing unit to an income eligible homebuyer within two years of the date of acquisition of the vacant lot utilized for construction of the unit.
• Restrictive Covenants: Developer must: (1) sell each lot to an income eligible household and (2) prior to the sale, must provide to Housing staff written documentation of the income of the proposed purchaser and the sales price. After sale of the home, the property must be occupied as an income eligible household’s principal residence during the entire term of the affordability period.
• Affordability Period: Once the property is sold to an income eligible household, it must be occupied as the household’s principal place of residence for at least five years. If the original purchaser re-sells the property during the affordability period, the property may only be sold to another income eligible household.
• Right of Reverter: Title to the property may revert to the City if Developer has (1) failed to take possession of the land within 90 calendar days after receiving the deed to the parcels of real property; (2) failed to complete construction of all required housing units or other required development on the real property, or failed to ensure occupancy by eligible households within the development timeframe set forth in the development agreement; (3) incurred a lien on the property because of violations of city ordinances and failed to fully pay off the lien within 180 days of the City's recording of the lien; or (4) sold, conveyed, or transferred the land without the consent of the City.
• Unit Sales Price: Units must be sold to an income eligible homebuyer between 61-120% of the area median income, after developer subsidies, at a final sales price between $99,900.00 and $212,500.00.
ESTIMATED SCHEDULE OF PROJECT
Begin Project August 2021
Complete Project August 2023
PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS)
This item was not previously reviewed by the Housing and Homeless Solutions Committee. However, staff and proposed developer have met with members of the HHS Committee as well as the Councilman for District 7.
FISCAL INFORMATION
Estimated Revenue: $12,509.93 (include estimated future property tax revenue and the sale of lots)
The City of Dallas will receive revenue from the sale of the lots, see attached Exhibit A, in the amount of $5,000.00. For tax foreclosed lots, the sales price for each lot is a minimum of $1,000.00 for lots up to 7,500 square feet and an additional $0.133 per square foot for lots which exceed 7,500 square feet. Surplus lot shall be offered at fair market values. A discount is available if project underwriting indicates that the discount is needed either to ensure the viable sale, lease or lease-purchase to an income-qualified buyer. The surplus lots identified on Exhibit A are being sold at a discounted price of $1,000.00 each. Upon completion of the proposed four housing units the expected property tax revenue for the City of Dallas is expected to be $7,509.93 annually.
Estimated Revenue Foregone: General Fund $8,930.90
In addition, Exhibit A details the Estimated Foregone Revenues from the release of non-tax City liens: $8,930.90.
M/WBE INFORMATION
In accordance with the City’s Business Inclusion and Development Policy adopted on September 23, 2020, by Resolution No. 20-1430, as amended, the M/WBE participation on this contract is as follows:
|
Contract Amount |
Procurement Category |
M/WBE Goal |
M/WBE % |
M/WBE $ |
|
$631,433.00 |
Construction |
32.00% |
32.00% |
$202,058.00 |
|
• This contract meets the M/WBE goal. |
|
• Women That Soar L.L.C. - Local; Workforce - 100.00% Local |
DEVELOPER
Woman That Soar, L.L.C.
Gina Grant, Managing Member
MAP
Attached