Submitted By: Roberto Ellis
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Presentation By: Aubrey Hale
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Department: Growth Management
STAFF RECOMMENDATION (Motion Ready):
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Approve a New Construction Incentive Program grant (CRA24-45676) to Eunus Enterprises, LLC for the construction of a 16-unit residential development in the West Ocala Community Redevelopment Agency subarea in the amount of $165,000
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OCALA’S RELEVANT STRATEGIC GOALS:
Quality of Place, Economic Hub
PROOF OF PUBLICATION:
N/A
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BACKGROUND: One of the statutory functions of a Community Redevelopment Agency (CRA) is to undertake activities that facilitate the redevelopment and improvement of properties. Incentive programs aimed at encouraging private investment into properties have proven successful in carrying out this redevelopment function. The New Construction Incentive Program (Program) is intended to support projects within the CRA subareas that have the potential for catalytic impact. This program encourages new construction and major redevelopment, applying to the various facets of development.
The program, approved by the CRA Board on August 15, 2023, is flexible in how the funds are disbursed to the applicants, with options for disbursement over three consecutive fiscal years. To be considered for a grant award, the applicant should attain a minimum score of 80 points. The score is determined by the West Ocala CRA Advisory Committee (Advisory Committee).
On April 19, 2024, Eunus Enterprises, LLC (Applicant) applied to the West Ocala CRA New Construction Incentive Program. The grant request was made to support the construction of 16 residential units on a vacant 1-acre portion a property located at 2650 NW 2nd Street. The multifamily units will be available for rent at rates within the workforce and affordable thresholds. The project will contribute to addressing a significant housing deficit across the city.
FINDINGS AND CONCLUSIONS: The project will be constructed at 2650 NW 2nd Street, (Parcel ID: 2260-228-000). Key details of the project are summarized below:
• The entire parcel is approximately 3.07 acres; however, the proposed development will be located on the eastern 1.0-acre portion of the property.
• The estimated capital investment for construction of the project is $2,779,267.
• The multi-family development is proposed to be approximately 20,000 square feet.
• Four units will be reserved as affordable housing units, and the other 12 will be kept as workforce housing units.
• All units will have three bedrooms and three bathrooms.
• The project is scheduled to be completed by June 2025.
The Grant Review Committee met on May 13, 2024, and they recommended approval of the grant. The scoring criteria weigh the fiscal impact, feasibility and experience, catalytic benefit, and community goals for project proposals. The Advisory Committee reviewed the project on May 16, 2024, and it received an average score of 85.6 points. A detailed breakdown of the scoring is provided in Table 1 below.
Based on the estimated capital investment, the CRA can provide up to 10 percent, or $277,900, in the form of a grant. The Advisory Committee recommended awarding the project a maximum grant amount of $165,000. During the discussion of the proposal, Advisory Committee members emphasized that while the primary community benefit is housing for future residents, only four units will be reserved for low-income residents. One of the core priorities of the CRA is addressing the affordable housing challenges faced by the subarea. The applicant indicated they were open to offering more units at affordable rates in the future. Additionally, the Advisory Committee considered the feasibility of the project based on construction costs provided, increases in ad valorem revenue, and the disbursement of funds from the CRA account when determining the maximum award amount.
If approved, this amount will be paid over three years. The CRA Board has the option of approving the recommended amount or increasing/decreasing the award amount. Table 1 summarizes the award amounts and estimated payback periods considered by the Advisory Committee.
Table 1. Advisory Committee - Grant award recommendation.
FISCAL IMPACT: The West Ocala CRA grant account (623-016-560-559-55-82010) has an available balance of $320,783. If the project is completed within schedule, one-third of the approved amount will be paid during Fiscal Year 2024-25. The remaining payments will be budgeted in the appropriate fiscal year.
PROCUREMENT REVIEW: N/A
LEGAL REVIEW: N/A
ALTERNATIVE:
• Approve with changes
• Table
• Deny