Public-Private Partnerships (P3s) for Housing

Public-Private Partnerships

(P3s) for Housing

Solicitation for Development

Partner Qualications Rocky Mount, NC | Fall 2019

Table of Contents

P3s for Housing - Rocky Mount Fall 2019

About This Solicitation ........................................ 03

Site Overview ................................................ 04

DFI’s Role .................................................... 05

Aordable Housing Market Overview ........................... 06

Development Plan ............................................ 07

Submission of Qualications .................................. 08

Evaluation Criteria ........................................... 10

Submission Process And Timeline .............................. 11

Additional Information ....................................... 12

P3s for Housing - Rocky Mount Fall 2019

ESTIMATED DEVELOPMENT TIMELINE:

About This Solicitation

Source: Carl Lewis (Public Domain)

MOU signed

Nov 2019

Dec 2019

Jan 2020

Q3 2020

Preliminary LIHTC application

submitted to NCHFA

Developer Agreement signed

Q1 2021

Development partner selected

Groundbreaking

This document is an invitation for experienced private and non-prof-

it development teams to present qualications that demonstrate

their ability to undertake the development of aordable housing on

City-owned land in the City of Rocky Mount in Edgecombe County,

North Carolina. Qualied developers will demonstrate experience

with the use of 4% Low-Income Housing Tax Credit (LIHTC) and

Multifamily Revenue Bonds (Tax-Exempt Bonds), as well as federal

sources such as Community Development Block Grants (CDBG).

The selected developer will execute an agreement with the City of

Rocky Mount for the conveyance of a City-owned parcel for the de-

velopment of a minimum of 60 units to serve households earning

at or below 60% AMI. The project must prioritize households

displaced by Hurricane Matthew.

Source: GoogleMaps

Aerial view of Tarboro Street Site

Downtown Rocky Mount

P3s for Housing - Rocky Mount Fall 2019

The 1.3-acre site at 218-242 Tarboro Street is ideally located

in a Qualied Census Tract in eastern downtown Rocky Mount

in Edgecombe County. It is within a mile of essential amenities

such as a grocery store, pharmacy and shopping. Across from

Edgecombe Community College near the heart of downtown, the

site is also within walking distance of a medical center, community

center and library. Two Tar River Transit bus routes have xed

stops within a block and stops for all other bus routes, Greyhound

and Amtrak are located within a half-mile of the site.

The site is currently zoned B-4 Central Business District and is

included in the Central City Area’s exemption from minimum

parking requirements. The site is outside both the 100- and

500-year ood plains.

Site Overview

Until 2005, the site operated as a dry-cleaning facility and then

as a laundry business until 2012. As part of North Carolina’s

Dry-Cleaning Solvent Act, soil remediation activities were carried

out from April to June 2016. In February 2018, AECOM, a multi-

national engineering rm, installed a vapor intrusion monitoring

system to further evaluate any aected groundwater, and deter-

mined that environmental contamination was below risk thresh-

olds for both residential and non-residential use. In December

2018, a representative from the Dry-cleaning Solvent Cleanup

(DSCA) program at the NC Department of Environmental Quality

conrmed that the site can be used for residential development

if conditions continue to be met. A summary detailing the above

environmental activities and Phase I Environmental Site Assess-

ment conducted in June 2019 are available upon request.

Amenities in proximity to project site

P3s for Housing - Rocky Mount Fall 2019

DFI’s Role

The University of North Carolina at Chapel Hill’s School of Gov-

ernment established the Development Finance Initiative (DFI) in

2011 to assist North Carolina communities with achieving their

community economic development goals. Working with local

governments and their partners, DFI provides specialized nance

and real estate development expertise to attract private invest-

ment into transformative projects.

In November 2017, North Carolina Emergency Management

(NCEM) engaged DFI to assist with attracting private invest-

ment for the development of aordable housing for low- and/

or moderate-income households in hurricane-impacted commu-

nities. The eort, known as Public-Private Partnerships (P3s) for

Housing, is now aligned with the NC Oce of Recovery and Re-

siliency (NCORR). The program was designed to identify suitable

sites for aordable housing development in Edgecombe County,

analyze market, site and nancial conditions, engage local stake-

holders and solicit private development partners to execute on

the local and State vision for housing development.

DFI will assist developers with understanding and responding to

the City’s requirements for the site’s development. The develop-

ment partner selected for the Tarboro Street development will

be expected to nance the project with 4% LIHTC and tax-exempt

bonds. DFI will also be available to help the selected developer

pursue gap nancing that may include Community Development

Block Grants for Disaster Relief (CDBG-DR).

Source: (top and bottom): Wikimedia Commons

The Imperial Centre for Arts & Sciences

Rocky Mount Mills

P3s for Housing - Rocky Mount Fall 2019

Aordable Housing Market Overview

The City of Rocky Mount and Edgecombe County face an aord-

able housing crisis. Approximately 2,200 low-income households

living in rental units in Edgecombe County are severely cost-bur-

dened, 41% of these are one-person households (Source: HUD

CHAS). The lack of aordable rental housing has been magnied

by signicant ood and hurricane events which have further

depleted the availability of housing stock. Following Hurricane

Matthew in October 2016, over 1,300 rental households applied

for assistance through FEMA (Source: FEMA Housing Assistance

Program).

A limited supply of quality and naturally occurring aordable

housing will drive demand for additional aordable rental units

over the next ve years. The County has about 530 active low-in-

come housing tax credit (LIHTC) units with vacancy rates of 3%

or less. In addition to LIHTC, the County has 440 units of public

housing, and 400 units with Section 8 project-based vouchers

(Source: National Housing Preservation Database).

However, these units may be at risk of physical deterioration.

In March 2019, 88% of public housing units – located in the City

and built in 1954 – received physical inspection scores of 72 out

of a possible 100 points, suggesting a need for new, high-quality

units. Approximately 20% of subsidized units are located within

the 100-year oodplain, placing them at risk for ooding (Source:

HUD Real Estate Assessment Center).

Edgecombe County’s Area Median Income is $54,700. The Fair

Market Rent for a one-bedroom apartment is $555 per month,

and $721 for a two-bedroom apartment (Source: HUD). Current

median rents are $659 per month (Source: 2017 ACS 5-Year).

Source: HUD Comprehensive Housing Aordability Strategy (CHAS) 2012-2016

P3s for Housing - Rocky Mount Fall 2019

Development Plan

DFI worked with Dekker/Perich/Sabatini Architects and the City of Rocky Mount to identify a conceptual plan appropriate for the site. The

plan attempts to contribute to the vibrant downtown setting and maximizes the potential density within the physical constraints of the site

and the regulatory requirements imposed by North Carolina Housing Finance Agency (NCHFA)’s Qualied Allocation Plan.

The selected development partner will be expected

to rene its own site plans; however, these conceptu-

al plans should serve as a framework for the type and

scale of development desired by the local government

partner.

DFI tested the feasibility of a conceptual plan with 60

family units aordable to households earning at or

below 60% of the Area Median Income (AMI). The plan

includes a mix of 30 studios, 24 one-bedrooms, and 6

two-bedrooms with 66 parking spaces to accommodate

the development on the 1.3 acre site. NCHFA parking

standards are 1.75 spaces per unit, so the selected de-

velopment partner must seek NCHFA approval to reduce

the standards prior to the preliminary application for

tax credits.

Preliminary cost estimates of the tested concept are

available upon request. The project is expected to

utilize 4% LIHTC and tax-exempt bonds. It is anticipated

that additional gap nancing will be required. Federal

funding sources may be available to address the gap. For that reason, respondents will be evaluated in part on their experience utilizing

federal nancing sources such as CDBG, CDBG-DR, and HOME, among other federal sources.

The City of Rocky Mount has committed to conveying or leasing the property at no cost to the development, subject to aordability covenants

or restrictions. The selected developer will enter into an option agreement with the City upon execution of a Memorandum of Understand-

ing (MOU). An example of an option agreement for the land is available upon request.

Conceptual plan for Tarboro Street Site

P3s for Housing - Rocky Mount Fall 2019

Submission of Qualications

1. LETTER OF INTRODUCTION

a. Include a summary of the respondent’s qualications, experience, current capacity and commitment to commence and complete

the project within the proposed timeframe, and reasons for interest in this opportunity. The letter must be signed by a principal or

authorized ocer of the entity.

2. DEVELOPMENT TEAM

a. Identication of partner rms and roles, including co-developers, architects/designers, and potential general contractor or subcon-

tractors and management rm.

b. Overview of each rm on the team, including brief history of rm, licensure, past experience working with the developer, and rela-

tionship of the rm’s parent company with the oce responsible for this project, if applicable.

c. Documentation of partner rm’s eligibility for LIHTC awards in North Carolina and identication of management team with at least

one LIHTC project in current portfolio. Include proof of valid NC real estate license and registration with NC Secretary of State.

d. Identication and resumes of lead sta (principals and project managers) who will be responsible for negotiating a development

agreement and completing the remainder of the preconstruction approval process.

3. EXPERIENCE AND REFERENCES

a. List of three current and/or completed projects (preferably in the last ve years) relevant to proposed plans. Specically include

projects demonstrating experience with 4% LIHTC and environmentally sensitive sites. Include the following information:

• Location and name of project (preference for projects in North Carolina)

• Development team members, including architects/designers and general contractors

• Scope and scale of development program

• Photos/illustrations of completed project

• Total development budget by use

• Capital stack, indicating governmental sources

• Financing partners

• Name and address of management company

• Project development timeline

P3s for Housing - Rocky Mount Fall 2019

b. Two most recent examples, if any, of the development team’s experience using federal sources such as CDBG, HOME or NSP funds

(may be one or more of the projects listed in section 3(a).

• Include all information requested above in section 3(a)

c. Name, organization, title and contact information for three local government or other public agency ocials or sta that have

engaged with your team on one or more of the projects listed above.

4. TIMELINE

a. Indicate whether proposed timeline under “Estimated Development Timeline” is feasible. If not, include proposed timing here.

5. DISCLOSURE

a. Disclosure of any potential conicts of interest that could be relevant to this project in any manner.

b. Disclosure of any projects/nancing on which the team or any of its members has defaulted.

c. Disclosure of whether the developer or any ocer, director, or owner thereof has had judgments entered against it, him or her within

the past 10 years for the breach of contracts for governmental or nongovernmental construction or development.

d. Disclosure of whether the developer has been in substantial noncompliance with the terms and conditions of prior construction

contracts with a public body.

e. Disclosure of whether any ocer, director, owner, project manager, procurement manager, or chief nancial ocial thereof has

been convicted within the past 10 years of a crime related to nancial fraud or to governmental or nongovernmental construction or

contracting.

f. Disclosure of whether any ocer, director, or owner is currently debarred from bidding or contracting, pursuant to an established

debarment procedure, by any public body, agency of any state, or agency of the federal government.

P3s for Housing - Rocky Mount Fall 2019

Evaluation Criteria

Once DFI and City sta have reviewed all respondents’ qualications, sta will recommend a development partner to City Council. While

an endorsement by Council will not be a nal approval, it will trigger an exclusive period of negotiation between the City and their selected

partner for a development services agreement for the development of aordable housing on City-owned land.

A development partner will be selected to enter into negotiations with the City based on the following criteria:

• Qualications and experience of the development team, in particular with the following: 4% LIHTC and tax-exempt bond nancing with

proof of development partner’s eligibility for LIHTC awards in North Carolina.

• Federal funding sources, such as HOME or CDBG multi-family development

• Demonstrated ability to secure complicated funding to execute a project of similar scale and complexity in a reasonable timeframe.

• References from previous local government partners, if any.

• Ability to meet or exceed estimated timeline.

City ocials may request interviews (by phone or in person) with respondents prior to the selection of a preferred partner.

P3s for Housing - Rocky Mount Fall 2019

Submission Process & Timeline

Development Partner responses are due at 5:00 p.m. EDT on Friday, November 22. Responses should be submitted electronically in PDF

format to Sarah Odio at [email protected] and Rory Dowling at [email protected].

Responses must be prepared in conformance with the guidelines described under “Submission of Qualications.” The e-mail subject must

be “Development Partner Qualications: Rocky Mount.” Responses received after the deadline will not be considered.

All responses are subject to public disclosure under the North Carolina Public Records Law. DFI recognizes that respondents must submit

nancial information that it may deem condential and proprietary to comply with the requirements of this solicitation. To the extent

permissible by law, DFI agrees to keep condential any condential proprietary information included in a response, provided that (1) the

respondent identies the condential proprietary portions of the response, (2) the respondent identies as condential and proprietary

only those portions of the submittal that are condential and proprietary, and (3) the respondent states why protection is necessary. Re-

spondents shall not designate their entire response as condential and proprietary, nor shall they so designate information that is already

public.

Any information that the respondent would like to remain condential should be e-mailed under separate cover to [email protected]. The

e-mail subject must be “PROTECTED: Development Partner Qualications: Rocky Mount.”

Please direct any questions regarding the solicitation to Sarah Odio at [email protected].

P3s for Housing - Rocky Mount Fall 2019

Additional Information

All facts and opinions stated in this solicitation are based on available

information and are believed to be accurate. Nevertheless, neither the

City of Rocky Mount nor the UNC School of Government, nor any of their

ocers, agents, or employees, shall be responsible for the accuracy of

any information provided to any respondent as part of this solicitation

or vetting process. All respondents are encouraged to independently

verify the accuracy of any information provided. The use of any of this

information in the preparation of a response to this request is at the

sole risk of the respondent.

Those submitting responses to the Solicitation for Development Partners

assume all nancial costs and risks associated with the submission. No

reimbursement or remuneration will be made by the City, NCORR, or

UNC to cover the costs of any submittal, whether or not such submittal

is selected or utilized.

The City reserves the right to reject any or all submittals, or to waive ir-

regularities or informalities in any submittal, in its sole and absolute dis-

cretion and accepts no responsibility for any nancial loss by such action.

Furthermore, although programs of nancing have been developed by

NCORR and NCHFA for projects similar to the one envisioned by this

solicitation, there is no guarantee that this project will be approved for

such funding. Respondents assume all risks and costs associated with

the application process for such funding and for the possibility of being

rejected by one or more programs of nancing. DFI’s predevelopment

analysis and coordination with the City have been conducted in order

to reduce the risk as much as possible, but the nancing risk cannot be

eliminated.

Any agreements that may be entered into between the developer(s) and

the City, including but not limited to a Development Services Agreement,

are subject to all statutory and legal requirements and ultimate approval

by the City Council in its sole and absolute discretion and nothing herein

is to be construed as binding on the City. In modeling this project, it was

assumed that the City will convey the property to a private developer

pursuant to its authority to convey property for aordable housing

under Chapter 157 and section 160A-456 of North Carolina General

Statutes, among other statutory authority.

The City makes no express or implied warranty as to matters of title,

zoning, tax consequences, physical or environmental conditions,

valuation, nancial conditions or economic matters, accuracy of the any

materials or reports provided, governmental approvals, governmen-

tal regulations, or any other matter or thing relating to or aecting the

properties described herein or any proposed transaction or agreement

contemplated herein.

DFI does not act as a broker or agent of the City, and no representation

made by DFI during the solicitation and vetting process shall be binding

on the City. Notwithstanding any provision herein, this solicitation shall

not constitute an oer to contract on the part of the City and shall not

be construed to impose any legal obligations on the City.

This solicitation does not create any obligation or relationship such as a

partnership, joint venture or other similar legal relationship between the

City and any potential party. Any references to “partner,” “partners” or

other similar terms will not be deemed to create a legal relationship or

otherwise alter, amend or change the relationship between any parties

in the absence of a formal written agreement specically detailing the

rights, liabilities and obligations of the parties as to a new, specically

dened legal relationship.