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AHAC Surtax Subcommittee 03/07/2023 DraftMarch 7, 2023     MINUTES OF THE COLLIER COUNTY AFFORDABLE HOUSING ADVISORY COMMITTEE SURTAX SUBCOMMITTEE MEETING Naples, Florida, March 7, 2023 LET IT BE REMEMBERED, the Collier County Affordable Housing Advisory Committee Surtax Subcommittee, in and for the County of Collier, having conducted business herein, met on this date at 1 P.M. in REGULAR SESSION at the Collier County Growth Management Department Building, Conference Room #609/610, 2800 Horseshoe Drive North, Naples, Florida, with the following members present: Chairman: Vacant Steve Hruby (excused) Mary Waller Chris Hall (excused) Paul Shea (also attended) County Staff Members Also Present: Cormac Giblin, Interim Director, Economic Development & Housing Derek Perry, County Attorney’s Office Kelly Green, Accountant, Economic Development & Housing John McCormick, Principal Engineer, Real Property Management (Zoom) Jennifer Belpedio, Manager, Real Property Management (Zoom) March 7, 2023     Any persons in need of the verbatim record of the meeting may request a copy of the audio recording from the Collier County Growth Management Department. 1. CALL TO ORDER & ROLL CALL Mr. Giblin called the meeting to order at 1 p.m. A quorum of two were present. Mr. Hruby is not here today so they need to decide who will chair today’s meeting. Mr. Shea nominated Acting Chair Waller. 2. APROVAL OF AGENDA & MINUTES a. Approval of today’s agenda Mr. Shea made a motion to approve the agenda. Second by Acting Chair Waller. The motion passed unanimously, 2-0. b. Approval of the February 2, 2023, meeting minutes. Mr. Shea made a motion to approve the February 2, 2023, meeting minutes. Second by Acting Chair Waller. The motion passed unanimously, 2-0. Acting Chair Waller said if anyone wants to speak to please fill out a speaker form and hand it to Ms. Green. 3. DISCUSSION ITEMS a. Policy Guidance for Surtax Funds – Sample RFP Review Mr. Giblin said this is an evolution of the draft policy that the subcommittee has been working on for the full AHAC that will decide how the Board of County Commissioners should spend the $20 million in surtax dollars that is set aside for property acquisition for affordable housing property. This is the third version. One was presented at the first subcommittee meeting and your comments were incorporated into it. It was refined for the full AHAC meeting a couple of weeks ago. The full AHAC made comments and this is the third version, which is more detailed. The full AHAC asked that it be more detailed to combine both the land and the deal, the financing of the project, and to develop a point system to give weight to certain criteria. Acting Chair Waller said they want to go over a little at a time so they don’t miss something. One requirement was that 100% of the units be affordable. This is not something the subcommittee previously voted on. There were objections from several of us because we didn’t think it would be beneficial to securing developers if it was 100%. She and Paul have discussed it and don’t think it should go forward with 100%. It should be what was presented to voters so we don’t restrain developers. That’s a big restraint. Mr. Giblin said the surtax follows state law, which is 30% affordable and 70% market value. The AHAC had a discussion at its last meeting and some members felt that in order to maximize the dollars to their greatest power and show the greatest good for the county, the policy should include a statement that all of the units be affordable, not just 30%. If you have a different opinion, we can take it back to the full AHAC to discuss. Acting Chair Waller noted that the full AHAC didn’t vote on it. Mr. Giblin said there doesn’t need to be a vote. They just directed staff. To streamline the discussion today, he suggested concentrating on No. 2 of Section 5 of the Evaluation Criteria, the site-specific criteria. That’s where most of the AHAC’s recommendations are and is probably March 7, 2023     what’s most germane to your discussion today about the policy on which pieces of land to acquire. Acting Chair Waller noted that they hadn’t seen this before. Mr. Giblin detailed Section 5:  At the last AHAC meeting, staff was directed to take the policy goals discussed by this subcommittee and at previous AHAC meetings and turn them into an RFP-type document.  We went back to the ITN (Invitation to Negotiate) the county issued for the Bembridge property, the five acres off Santa Barbara Boulevard that the county owned and solicited developers to build on.  We’re using that as the template for the document, updated it for today’s circumstances and incorporated the AHAC’s suggestions.  The AHAC wanted to combine the deal and the land to evaluate both simultaneously.  We followed the same evaluation criteria labeled 1-7 on top of the first page. Those are the components that would feed into the RFP and add to 100 points.  When it makes it to that stage, the selection committee or Purchasing Director can weigh in on how valuable certain elements should be, so points are not set in stone.  The rest of the document provides detail about what each of these criteria is looking for.  The first is a cover letter that explains a proposer’s interest in the project, what their plan is and who their team is.  Evaluation No. 2 gets into more detail about the property and business plan. We would ask a developer to explain the scope, whether it’s rental, owner-occupied housing, multi- family or single family, the dwelling size, one to three-bedroom, and a conceptual plan of the development.  We’d asked them to describe how it would impact the community, what incomes it would serve, and how it best fits the county’s long-range strategic goals.  No. 3 asks the developer to describe the property’s current zoning and any zoning changes or amendments they would need to fulfill their conceptual development plans.  We would grade them on a timeline based on how long it would take to complete all of that to construction.  No. 5 is the site-specific criteria. This is where the AHAC spent a lot of time. We want developers to quantify the density. We want to make it clear the BCC is seeking proposals that would provide moderate to high density units.  We would identify all dwelling types, the bedroom makeup and types of building configurations.  We would have them define their project’s set-asides. The BCC has previously adopted guidance that 10% of any county supported housing project contain at least 10% for seniors, veterans or special-needs populations.  We would ask them to define how they’re going to target certain incomes and how those match needs identified in the Community Housing Plan.  Another requirement is that 100% of the project be designated as affordable housing. The subcommittee and AHAC can discuss that further to nail it down.  We want a project that serves a range of income needs, not solely all low income, all moderate income or all very low income – a project that hits several different income strata would be preferred. Then we’d target the units with the greatest need.  Currently the greatest need in Collier County is multi-family rental, low-income units.  The property acquisition cost cannot exceed the appraised value. Acting Chair Waller noted that the need the county is targeting now is rental. If that changes, is there something in this document that will enable that to change? March 7, 2023     Mr. Giblin reported that:  We can refine the wording, but the policy goal is that land acquisition be targeted to units in the greatest need at the time. That changes over time based on housing needs and methodology conducted annually. It is subject to change.  Leased properties in affected Disaster-Evacuation Zones would be given greater consideration.  Properties with utility service or close to utility service get greater consideration.  Properties must be less than 20% wetlands, with greater consideration given to properties with less wetlands.  They must pass a Phase 1 environmental standard.  Properties that pass the Phase 2 environmental standard get greater consideration.  Properties on arterial roads are given greater consideration than those that are not.  Shovel-ready properties would be given more points/greater consideration.  Higher densities are given greater consideration.  Proximity to schools, bus-stops and activity centers will be given greater consideration.  Topography: Greater consideration is given to properties in flood zones AH and X, which have low flood impacts.  Eliminate properties in the Velocity Zone because they’re prone to three feet or more of flooding from a hurricane.  Those are the site-specific criteria for property acquisition that made it into this document, which details other aspects of the deal. Acting Chair Waller noted that 35 points is the largest, the property and business plan. [A brief discussion of the Evaluation Criteria Maximum Points ensued] Mr. Giblin further detailed the point system and Section 5:  The Cover Letter/Management Summary (2 points). It explains the proposer’s interest in the project and who their team is.  The Property and Business Plan (35 points) and No. 3, Financing and Cost of Services to the County (20 points), are the most important.  The proposer would detail their financing, what they’ve got lined up, they would produce their pro forma, detail market costs, soft and hard costs and any contingencies and proposed funding sources they want to use.  The total project value would be the value of all the improvements that eventually will be built on the property.  If they’re going to have a taxable value, what is the value to the county?  Evaluation Criteria No. 4 evaluate the experience and capacity of the team (20 points). This is where they will detail their previous experience, provide letters of reference, details on other projects they have successfully completed that are similar and how many years they’ve been successfully doing this.  Criteria No. 5 is the experience of the specialized team members (13 points), such as if they brought in a builder that specializes in affordable-housing development, or if they were to bring in marketing or financing people, a team that sets them up for success.  No. 6 is an additional bonus, if they’re a Certified Minority Business Enterprise (5 points).  No. 7 is a Local-Vendor Preference (5 points), which is part of our purchasing policy.  The full AHAC wanted to look at how this would look once all these decisions about the property are made. This is what it will look like once it gets to the Real Property Division and to the Purchasing Division, which would send it out as an RFP. Mr. Shea noted that he was in the business for years. We were constantly critical of the quality March 7, 2023     of the request for qualifications or proposal because it never gave the prospective bidder enough detail of what would go through the head of the review. This is very good and very detailed about what the county is looking. He wished he’d seen something like these details in business. At least a developer will know what you’re thinking before he submits a proposal. Acting Chair Waller asked if they wanted to add non-profits to No. 6 with Certified Minority Business Enterprises. Could they give preference to that? Mr. Giblin said that’s a decision for the full AHAC. Acting Chair Waller suggested putting that in there tentatively and giving it 15 points and subtract 5 points from No. 4; subtract 3 points from No. 5 and add those to the Property and Business Plan. Give the Specialized Team 10 points and move the 3 points to the Property and Business Plan because that is the biggest part and will be the deciding factor on everything. We need to have room for deductions and additions to the point system. Mr. Shea agreed that would be better. Mr. Giblin asked Mr. McCormick for his opinion. Mr. McCormick said he agreed with the higher allocation. Acting Chair Waller told Mr. Giblin that he did a great job putting all the ideas into the document. She’s been on this committee for many years and we did not want to see an area that was all low-income housing. You don’t want to have that segregated out and pointed out to everyone as they go by. It should be a community where everything is mixed in together and blends together. Not making it 100% will make it a more blendable-type community that will attract more residents and developers. Mr. Giblin asked, What if there were a system built into the RFP that the percentage of the land acquisition cost that you receive were equivalent to the percentage of the affordable housing units in your development. For example, if a property costs $1 million and you’re only doing 30% affordable, you only get $300,000. Acting Chair Waller said that would be great. That would be an incentive and would give developers an incentive to move up and do a larger percentage if they wanted more money. Ms. Belpedio said from her review of the statute, that speaks to surtax. There’s nothing in there that specifically limits the funding to paying for the entirety of the property, so that definitely can be done. We can work on it internally at the staff level just to ensure it all fits, but she likes it because they could fund more projects. A discussion ensued and the following points were made:  That will get projects moving faster.  The county has run into some details about how to hold title. We may have to carve the property into smaller tracts.  If the county is only paying for 30% so they don’t have to worry about co-ownership.  The other 70% might have an objection to that.  The amount the county contributes toward will be owned by Collier County. Mr. Shea made a motion to move the Draft RFP/Affordable-Housing Surtax Funding RFP Evaluation Criteria forward to the full AHAC, with the Evaluation Criteria Maximum Points adjustments going to 43 points on No. 2; 15 points on No. 4; and 10 points on No. 5. Second by Acting Chair Waller. The motion passed unanimously, 2-0. Mr. Shea complimented staff on their hard work. Acting Chair Waller said this document was what the AHAC was looking for. Mr. Shea said we want to explore the percentage of funding being a function of the percent of affordable housing. That’s important. March 7, 2023     4. PUBLIC COMMENT None 5. NEXT MEETING DATE TBD There being no further business for the good of the County, the meeting was adjourned by the order of the chairman at 1:30 p.m. COLLIER COUNTY AFFORDABLE HOUSING COMMITTEE SURTAX SUBCOMMITTEE ______________________________________ Mary Waller, Acting Chair