Fiscal Note
This Resolution reallocates funding between two Department of Planning and Community & Economic Development capital projects, both administered by the Community Development Division. There is no impact upon the tax levy. This action does, however, require an amendment to the 2015 Adopted Capital Budget, as follows:
(100,000) 17110-62-140 Affordable Housing Fund (DPCED Project #42)
100,000 10588-62-140 Permanent Supportive Housing (DPCED Project #35)
Title
Amending the 2015 Adopted Capital Budget to reallocate funding between two CDD-administered capital projects, to help mitigate a shortfall in the budget for the Permanent Supportive Housing project on Rethke Avenue, and thus better enable the developer to move forward with the project.
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BACKGROUND
The 2015 Adopted Capital Budget includes $2 million (comprised of $1,050,000 in City general obligation borrowing, plus $950,000 from Dane County) to support the construction costs associated with the first phase of the City’s initiative to develop very low-cost permanent housing units to serve persons who are homeless or recently homeless. The first phase, which is being undertaken in partnership with Heartland Housing, Inc., will develop 60 housing units on Rethke Avenue. The construction of these new housing units is anticipated to begin in 2015. Pre-development costs for Phase I were incurred in 2014, and included successful efforts to secure Federal Low Income Housing Tax Credits.
Heartland only recently learned that, due to the project’s reliance on Section 8 vouchers, it is subject to federal Davis-Bacon Act requirements. The unexpected cost of compliance with Davis-Bacon provisions has left the developer with a more than $450,000 gap in the project budget, and has thus delayed its closing. (The original project schedule anticipated closing by the end of May 2015.)
Heartland Housing has succeeded in reducing most of this unanticipated shortfall by leveraging a larger equity commitment fro...
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