TO: Mayor and Members of City Council
THRU: Kelly Olivera, Assistant City Manager
FROM: Christopher Cauley, MPA, Director of Economic and Community Development
DATE: January 31, 2024
RE:
Title
Murchison Choice Implementation Grant Application - Partnership Certification and Leverage
end
COUNCIL DISTRICT(S):
Council District(s)
Districts 2, 3, 4
b
Relationship To Strategic Plan:
Strategic Operating Plan FY 2022 - 2026
GOAL I: The City of Fayetteville will be a safe and secure community.
1.4: To engage citizens in community watch and safety events.
GOAL II: The City of Fayetteville will have a Responsive City Government supporting a diverse and viable economy.
2.1: To ensure a diverse City tax base
2.2: To invest in community places to ensure revitalization and increase quality of life
2.3: To leverage partnerships for job creation and retention, with a focus on the local and regional workforce to increase per capita income
2.4: To sustain a favorable development climate to encourage business growth.
GOAL III: The City of Fayetteville will be a city invested in Today and
Tomorrow.
3.2: To manage the City's future growth and strategic land use
GOAL IV: The City of Fayetteville will be a highly desirable place to live, work and recreate.
4.1: To maintain public transportation investments with high quality transit and airport services
4.2: To enhance diverse recreation, leisure and cultural opportunities
4.3: To improve mobility and connectivity through sidewalk, trail, and bike lane investments
4.4: To provide a clean and beautiful community with increased green spaces
4.5: To ensure a place for people to live in great neighborhoods
4.6: To reduce poverty and homelessness
GOAL VI: The City of Fayetteville will continue to have a collaborative citizen and business engagement base.
6.1: To ensure collaborative relationships with the business community, local governments, military, and stakeholders
6.3: To inform and educate about local government by enhancing public outreach and increasing community dialog, collaboration and empowerment.
Executive Summary:
City staff in partnership with the Fayetteville Metropolitan Housing Authority (FMHA) are making final preparations to submit the Murchison Choice Implementation Grant by February 13, 2024. City Council is asked to authorize the Mayor to sign a leverage letter documenting planned and future leverage to support the Murchison Choice Implementation effort. Council is also asked to authorize the City Manager to execute a Choice Partnership Certification with the FMHA, Cumberland County Schools (CCS), JBS Developers, Inc. (JBS), and Urban Strategies, Inc. (USI).
Background:
In December of 2020, the City of Fayetteville, in partnership with the FMHA, was awarded a HUD Choice Neighborhoods Planning Grant for the Murchison neighborhood. Through the Grant, the City and FMHA have worked with local residents and a variety of community stakeholders - including nonprofits, faith-based organizations, anchor institutions, supportive services agencies, businesses, and others - to create a forward-looking Transformation Plan with a strong commitment to diversity and inclusion. The Plan is centered on redevelopment of FMHA’s Murchison Townhouses, which includes 60 units of low-income public housing. The Transformation Plan seeks to replace 100% of those housing units within the neighborhood as part of new mixed-income developments.
The Choice Implementation Grant was announced on September 6, 2023 and is due by February 13, 2024. The Choice Neighborhood Initiative is the Department of Housing and Urban Development’s signature affordable housing program that seeks to rebuild distressed public housing while simultaneously investing in the neighborhood, people, and housing at various income levels. From their website:
The Choice Neighborhoods program leverages significant public and private dollars to support locally driven strategies that address struggling neighborhoods with distressed public or HUD-assisted housing through a comprehensive approach to neighborhood transformation. Local leaders, residents, and stakeholders, such as public housing authorities, cities, schools, police, business owners, nonprofits, and private developers, come together to create and implement a plan that revitalizes distressed HUD housing and addresses the challenges in the surrounding neighborhood. The program helps communities transform neighborhoods by revitalizing severely distressed public and/or assisted housing and catalyzing critical improvements in the neighborhood, including vacant property, housing, businesses, services and schools.
In Fayetteville, the grant will propose to utilize approximately $20M to demolish Murchison Townhomes and develop 207 units of mixed income housing at the Elliot Circle site. This grant will also provide resources to ensure funding to create jobs skills training, educational opportunities, and health benefits for the residents of both Elliot Circle and Murchison Townhomes. Elliot Circle was chosen as the primary site for redevelopment due to its proximity to Fayetteville State University and the City’s neighborhood parks and trails. The project team believes this site is incredibly impactful to spur the revitalization of this neighborhood and address housing quality, public safety, and economic opportunity for FMHA residents and the current residents of Elliot Circle, all of which have the right to return to the new development and will benefit from the Uniform Relocation Act requirements. A future affordable development consisting of approximately 88 units will be developed on the Murchison Townhomes site, outside of the Choice grant but potentially coinciding with the project schedule.
Multiple People and Neighborhood enhancements will also be funded by approximately $4M and $3M respectively. These funds will be used to develop and implement the following strategies:
• People: Creating economically stable and self-sufficient households.
• People: Improving mental and physical health.
• People: Preparing children to enter kindergarten.
• People: Ensuring children are proficient in core academic subjects.
• Neighborhood: Improve access to healthy foods and lifestyles.
• Neighborhood: Create access to trails and multi-use paths.
• Neighborhood: Develop place making and neighborhood branding.
• Neighborhood: Improve access to public parks and housing quality.
USI was brought on board to assist with the development and execution of the People and Neighborhood plans while FMHA and JBS serve as co-developers of the Housing plan mentioned above.
Issues/Analysis:
The grant requires a legally binding agreement by and between all parties to implement their portion of the Murchison Choice Implementation grant and also requires significant leverage from the community. A variety of government partners, nonprofits, and other institutions have submitted leverage letters to support the application.
Budget Impact:
Funding in the amount of approximately $27M (final housing projections may increase the grant amount marginally) will be made available through the HUD Choice Neighborhood Implementation Grant. However, additional funds are required to support the grant and provide financing for the Housing Plan. The City must commit at least $1,500,000 of Community Development Block Grant funding to the Transformation Plan over the eight-year period. The City will pledge up to $4.5M in available HOME Investment Partnership funds to support the Housing Development.
The Housing Plan also requires local dollars to close projected financial gaps in the multifamily, residential façade improvements, and homebuyer portions of the plan. These efforts will require the City to fund up to $6M in local housing funds. The Housing Opportunity General Obligation Bond was approved by voters in 2022 and can be utilized for acquisition, construction, demolition, rehabilitation, and down payment assistance for qualified homebuyers. These funds will require a property tax rate increase, which is currently estimated to not exceed 0.275 cents per $100 dollars in property value. Prior to budget adoption, staff will be working to ensure the timing of these funds takes advantage of market conditions to keep the cost of borrowing low.
Options:
1. Authorize the Mayor to sign a leverage letter and the City Manager to sign a Partnership Agreement substantially similar to the one presented.
2. Do not authorize the Mayor to sign a leverage letter and the City Manager to sign a Partnership Agreement substantially similar to the one presented.
3. Direct staff to some other action.
Recommended Action:
Staff recommends that City Council motion to authorize the Mayor to sign a leverage letter and the City Manager to sign a Partnership Agreement substantially similar to the one presented.
Attachments:
CNI - Partnership Certification Fayetteville, NC
CNI Leverage Letter Fayetteville, NC
Choice Neighborhoods Implementation Grant Presentation