Title
Approval of a Resolution Authorizing the Execution of a Real Estate Purchase and Sale Agreement with 228 Olympia, LLLP for 303 Franklin Street
Recommended Action
Committee Recommendation:
Not referred to a committee.
City Manager Recommendation:
Move to approve a Resolution authorizing the execution of a real estate purchase and sale agreement between City of Olympia and 228 Olympia, LLLP for 303 Franklin Street for use as affordable housing.
Report
Issue:
Whether to approve a Resolution authorizing the execution of a real estate purchase and sale agreement between City of Olympia and 228 Olympia, LLLP for 303 Franklin Street for use as affordable housing.
Staff Contact:
Jacinda Steltjes, Affordable Housing Program Manager, Office of Community Vitality, 360.753.8482
Presenter(s):
None - Consent Item
Background and Analysis:
The City’s 2023 Work Plan includes pursuing an agreement to allow an affordable housing project at 303 Franklin Street to proceed. Staff has worked closely with TWG Development, managing general partner of 228 Olympia, LLLP, on an 81-unit multi-family rental housing project that will serve homeless residents, disabled residents, and households with incomes at or below 60% of Area Median Income. Staff is also working with TWG Development to incorporate a workforce development element as well as optional supportive services into the project.
TWG Development and 228 Olympia, LLLP
TWG was founded in 2007 and is headquartered in Indianapolis, Indiana. City staff has worked closely with TWG development directors based out of Bellevue, WA. TWG is a fully integrated real estate development company specializing in commercial, market rate, affordable and senior housing developments across the country. They have worked in 17 states, including Washington. TWG has experience in development, financing, design, construction and management of housing projects and has built over 10,000 units nationwide. TWG’s mission is to produce value to the diversity, enrichment, and advancement of a community through the management and development of high-quality housing.
TWG is the managing general partner of 228 Olympia, LLLP, which is a Washington Limited Liability Limited Partnership entity created in anticipation of the project seeking 9% Low Income Housing Tax Credit financing from the Washington State Housing Finance Commission.
Project Type
The project type is what’s is commonly referred to as affordable housing with supportive services. This is different from permanent supportive housing in that housing with supportive services makes a variety of services available to tenants, who may have a wide range of service needs, but who can typically retain housing with minimal support.
Revised Code of Washington 36.70A.030(19) defines permanent supportive housing as subsidized housing which features a low-barrier entry model, prioritizes people who need comprehensive support services to retain housing tenancy, and offers voluntary supportive services designed to support a person living with a complex and disabling behavioral or physical health condition who was experiencing homelessness or at imminent risk of homelessness prior to moving into the housing. The goal of permanent supportive housing is to improve resident's health status and connect the resident with community-based health care, treatment, or employment services.
Population Served and Unit Mix
Approximately half, or 40, of the project’s units will be intended for households with incomes at or below 30% of Area Median Income by household size, as determined by the U.S. Department of Housing and Urban Development (HUD). Another one-quarter (25%), or 20, of the units will be intended for households with incomes at or below 40% Area Median Income. The remaining one-quarter, or 20, units will be intended for households with incomes up to 60% of Area Median Income. For reference, a one-person household with an income that is 30% of area median income has an annual income of $21,550. A one-person household with an income that is 40% of area median income has an annual income of roughly $28,740 and a one-person household with an income that is 60% of area median income has an annual income around $43,100. Approximately one-quarter, or 20, of the units will be targeted toward serving homeless households, as defined by the McKinney-Vento Homeless Assistance Act. Another one-quarter, or 20, of the units will be targeted toward serving households including a person living with a disability.
Development Timeline
TWG plans to pursue state financing this summer and fall. To be eligible for state financing sources, TWG needs to show site control. A real estate purchase and sale agreement will meet this need. TWG anticipates it will have full financing for the project by spring 2024 and will be able to break ground in fall of the same year. The development timeline is expected to be between 15 and 18 months. Lease up is anticipated to occur in early 2026.
Climate Analysis:
The project will occur on property adjacent to the Olympia Transit Center. Per city code, the project will include minimal parking spaces in an effort to increase housing density, decrease greenhouse gas emissions and encourage use of public transportation. Per Resolution No. M-2289, the building will be constructed to utilize electric all electric energy in an effort to reduce natural gas use and associated carbon dioxide emissions.
Equity Analysis:
The proposed project will meet several community needs by providing housing for homeless households, households living with a disability, and extremely low-income households.
Disabled Households
City staff recently conducted an Analysis of Fair Housing as part of its Five-Year Consolidated Plan, to be submitted to the U.S. Department of Housing and Urban Development (HUD). According to the analysis, an estimated 7,385 individuals in Olympia have one or more disabilities, of which nearly 16% had incomes below the federal poverty level. Approximately 80 individuals who responded to a data-gathering survey associated with the analysis reported they have difficulty accessing transportation near where they live. Many also reported it is challenging for them to find housing units that are both affordable and easily accessible. The Franklin Street affordable housing project will provide easily accessible, affordable housing located in close proximity to transportation for approximately 20 disabled households.
Low Income and Homeless Households
There is an immense need for deeply affordable housing for Olympian households whose income is 30% or less of area median income. According to the Thurston Regional Housing Council’s Housing Needs Assessment produced in 2021, an average of 7,605 of Olympia’s current 23,000 households are cost burdened. Of these cost burdened households, 2,375 have annual incomes at or below 30% of area median income. Additionally, according to the Washington State Department of Commerce, Olympia will need to plan for nearly 12,000 new housing units by 2045 to meet the City’s projected population growth. Of those 12,000 units, an estimated 2,300 units are needed for households whose annual incomes are at or below 30% of area median income. Another 2,715 units are needed for households with annual incomes between 30 and 50% of area median income.
Neighborhood/Community Interests (if known):
Affordable housing is a community concern.
Financial Impact:
The property is owned by the City and will be sold to 228 Olympia, LLLP for $1 to facilitate the development of a multi-family affordable housing project. A restrictive covenant will be recorded, which will limit the property’s use in perpetuity for affordable housing for low-income populations.
If the City of Olympia does not execute the real estate purchase and sale agreement before August 2023, it will negatively impact 228 Olympia, LLLP’s ability to attract state financing needed to develop the project and will delay the project by a year or more.
Options:
1. Approve the Resolution authorizing the execution of a real estate purchase and sale agreement between City of Olympia and 228 Olympia, LLLP for 303 Franklin Street.
2. Approve the Resolution with amendments authorizing the execution of a real estate purchase and sale agreement between City of Olympia and 228 Olympia, LLLP for 303 Franklin Street.
3. Do not approve the Resolution authorizing the execution of a real estate purchase and sale agreement between City of Olympia and 228 Olympia, LLLP for 303 Franklin Street.
Attachments:
Resolution
Agreement