Title
Heartwood Home Construction (B)
Explanation
On June 22, 2022, GCRA staff received approval from the City Manager to move forward with utilizing Heartwood funds to construct market-rate homes in Heartwood, upon approval by the GCRA Board and City Commission. The GCRA would contract with the builders on two homes and sell the homes upon completion. The proceeds from the sales of the first two homes would be placed back in the GCRA fund. Those funds would then be used to build one or two more homes at a time if lots are still available.
GCRA staff is proposing to utilize the cost-plus model for these market-rate homes similar to the one used for the Dreams2Reality homes. Under this model, the builders are reimbursed for labor and materials costs and earn a set percentage in addition to those costs for overhead and profit. All purchases are tracked and receipts are submitted with each payment request. The builders have requested a slight change to the terms used for the Dreams2Reality homes, and are requesting a 4% increase for overhead and profit, from 18% to 22%. The additional 4% was requested to help cover the cost of supervisory personnel onsite, which is not allowable under the terms of the Dreams2Reality contracts.
GCRA Staff is working with procurement and legal on the contract documents.
Today’s request is to use up to $620,000 from its Heartwood Fund 1132 to build two market-rate homes. The proceeds from the sales would go back into the Heartwood fund and would be used to build one or two additional homes at a time until all lots are sold.
Strategic Connection:
This project is connected to Goal 3: A Great Place to Live and Experience, and Goal 4: Resilient Local Economy in the City’s Strategic Plan and is a high priority item.
Fiscal Note
Department of Gainesville Community Reinvestment Area has $620,000 available in the GCRA Heartwood Fund 1132.
Recommendation
City Manager recommends the City Commission approve the request to us...
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