Title
Heartwood Financing Plan (B)
Explanation
The former Kennedy Homes site is a well-known property in East Gainesville. However, over the years the property unfortunately came to embody many negative stereotypes associated with low-income housing. Challenged by poor maintenance, drug, and crime issues, problems at Kennedy Homes resulted in negative impacts to the surrounding community. As a result of a fire, the buildings were eventually demolished due to disrepair. In 2007, the City purchased and cleared the property for a total of $2,605,738; of which $575,000 was borrowed from the Home Fund to be repaid from the land sale proceeds. Simultaneously, the City and the CRA coordinated the Southeast Gainesville Renaissance Initiative (SEGRI), which produced a Master Plan consisting of a series of conceptual development visions for six key southeast Gainesville sites, including Kennedy Homes. The site was designated as a residential component of the master plan due to the overwhelming absence of new housing stock in the area. The new residential development would bring an increase in tax values to offset the initial investment made by the City. After many stakeholder meetings lead by the CRA Staff and an outside marketing team, “Heartwood” emerged as the favorite of the community as the name of this new development.
Heartwood is a 15.1 acre infill redevelopment project that will accommodate 34 single family detached homes. After receiving the third and final round of comments from City Planning for permitting, and the St. John’s River Water Management District for storm water, CRA Staff is nearing the conclusion of the construction permitting approval process, which would yield construction documents for storm water, site work, wetland mitigation, roads and sidewalks, utility infrastructure and more. This approval will allow construction to begin and the continuation of the Design Plat approval process.
In May 2017, Staff worked with the City’s Purchasing Department on a public solicitation for a site contractor in the form of an Invitation to Bid. The contracted site work would include utility infrastructure, wetland improvements, paved streets, curb and gutter, sidewalks, and pad ready sites. There were three responsible and responsive bids received; all being over the budgeted amount of $1.7M. At its June Meeting, the CRA Board approved O’Steen Brothers, Inc. as the lowest most responsive and responsible bidder. At that meeting, CRA Staff presented a recommendation to move the project forward after collaborating with City Budget and Finance and a third party financial services partner. The recommendation was passed with the condition that Staff would bring a fully vetted deal to the City Commission for approval.
Fiscal Note
$1,346,279.59 remaining in the Heartwood project account W920 will be used towards the site improvements. The CRA Board approved the utilization of the remaining $305,362.51 Kennedy Homes Demolition bond funding account C333 towards the current scope. In addition, Staff proposes securing a ~$1.1M loan from the City to be used towards the site improvements. The additional funds required for incentives were appropriated during the FY2018 Adjusted Budget presented at July’s CRA Board Meeting. Finally, Staff proposes to prioritize the repayment of HOME Fund Capital from lot sale proceeds.
Recommendation
City Manager to City Commission: 1) Approve the CRA Executive Director to move forward with securing a loan from the City of Gainesville for Heartwood site work as described; and 2) Approve Staff to prioritize the repayment of the Home Fund Revenues from lot sale proceeds.