#2 Authorize to apply for Neighborhood Stabilization Program 3 grant funding (File Res. #2011-773)
NEIGHBORHOOD SERVICES MEMORANDUM
February 4, 2011
TO: City Council
FROM: Jennifer Petruzzello, Neighborhood Services Director
SUBJECT: Action on a Proposed Resolution Authorizing the filing of an
application with the Wisconsin Department of Commerce for
Neighborhood Stabilization Program 3 (NSP3) Grant Funding (File
Resolution 2011-773)
Summary:
The Administration is seeking the Council’s approval to apply for Neighborhood
Stabilization Program 3 (NSP3) grant funding. Similar to the original NSP
Program, NSP 3 grants are to be used to purchase foreclosed or abandoned
homes and to rehabilitate, resell, or redevelop these homes in order to stabilize
neighborhoods and stem the decline of house values of neighboring homes. The
City is proposing to request up to $1 million in funding to be used for
neighborhood stabilization efforts.
Department Recommendation:
The Neighborhood Services Staff is recommending that the City Council approve
a Resolution 2011-773 authorizing the filing of an application with the Wisconsin
Department of Commerce for Neighborhood Stabilization Program 3 (NSP3)
Grant Funding.
City Manager Recommendation:
The City Manager concurs with the Neighborhood Services Department
recommendation.
Suggested Motion:
I move to approve File Resolution #2011-773, authorizing the filing of an
application with the Wisconsin Department of Commerce for Neighborhood
Stabilization Program 3 (NSP3) Grant Funding.
Background:
The Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) of 2010
created the Neighborhood Stabilization Program 3, under which states, cities and
counties will receive a total of $1billion to acquire, rehabilitate, demolish, and
redevelop foreclosed and abandoned residential properties that might otherwise
become sources of abandonment and blight within their communities.
1
The U.S. Department of Housing and Urban Development (HUD) has made a
total of $5 million available to the State of Wisconsin. This compares to $39
million under the original NSP program.
In order to focus efforts on the areas of greatest need, the State has established
6 Criteria that must be met in order to apply for these funds:
1. Must be a current NSP1 grantee. Rock County Consortium
(along with the City of Beloit)
2. Must have achieved satisfactory Criteria met. Janesville has acquired 7
performance on NSP1 as of 6/30/10 homes for rehabilitation (contracts
and 8/15/10. awarded), 5 properties for demolition
and 1 property assisted through a
partnership with Community Action.
3. Must sign up for the FHA “First Look” Criteria met. This program allows NSP
Program. recipients an opportunity to view
properties prior to the public and at a
10% discount from the appraised
value.
4. Must have a maximum of 2 census Census Tract 3 (commonly known as
th
tracts per applicant that have a risk the 4 Ward) has the highest risk score
score of 13 or above, must have at within the City at 16, 93.39% of
least 51% of persons at ≤ 120% persons at ≤ 120% CMI, and must
County median income (CMI), and undertake a minimum of 5 projects
must be able to achieve neighborhood (properties) to meet impact. Beloit has
impact as defined by HUD. selected Census Tract 16.
5. Activities must be structured so that Application will be structured this way.
50% of grant funds are expended by A partnership is proposed with
12/31/2012 and 100% of funds are Wisconsin Partnership for Housing
expended by 12/31/2013. Development to ensure we have
sufficient capacity to meet these
expenditure deadlines.
6. 30% of Housing dollars must benefit Application will be structured this way.
households ≤ 50% of CMI. A minimum of 2 homes will be sold to
households ≤ 50% of CMI.
Based upon these criteria, six grantees are eligible to apply and five applicants
are expected to apply: City of Kenosha, Milwaukee County Consortium, Prairie
du Chien Downtown Revitalization, Inc., City of Racine and the Rock County
Consortium (Beloit and Janesville).
There is no required local match for this program, however, the City would
propose to utilize other resources where appropriate to maximize the impact to
this neighborhood, including: Lead Hazard Reduction Demonstration funds, Note
issue funding to demolish blighted property and to provide a site for a newly
constructed home.
2
The grant application is due February 21, 2011. Funding could be available as
early as June 30, 2011.
The categories of eligible NSP activities include:
Purchase and rehabilitation of homes and residential properties that have
been abandoned or foreclosed upon, in order to sell, rent, or redevelop
such homes and properties for eligible households;
Establishment of land banks for foreclosed homes;
Demolition of blighted structures;
Redevelopment of demolished or vacant properties;
All activities assisted must benefit low, moderate and middle income households,
which includes individuals at 120% of the adjusted median income or below.
However, at least 30% of total grant funding must benefit households <50% of
median income. Up to 7.5% of the funding request may be used to support
program administration.
Grant Proposal:
For the City of Janesville’s portion of the Rock County Consortium application, a
collaboration is proposed with the Wisconsin Partnership for Housing
Development, Inc. The Partnership is a non-profit organization which has been in
existence for 25 years with a mission of providing affordable housing and
neighborhood revitalization services. They have also served as Technical
Assistance providers for Housing and Urban Development Programs, including
NSP. Specifically as it relates to NSP1, the Partnership has worked with the City
of Appleton, Waukesha County, NW Wisconsin Consortium, and the City of
Madison. They have experience in doing substantial rehabilitation projects,
including: kitchen, bath, energy efficiency improvements, exterior improvements
and lead abatement.
Under the proposed collaboration, the Wisconsin Partnership for Housing
Development would serve as a developer. They would enter into a developer’s
agreement with the City. Under this agreement, the Partnership would be
responsible for purchasing the properties, coordinating the rehabilitation, and
selling the properties. The City would be responsible for overall program
administration. If the City is awarded this grant, the proposed developer’s
agreement would come back before the City Council for approval.
The City will propose to utilize grant funds for a combination of:
Buy, rehabilitate and resell foreclosed homes for home ownership,
Direct homeownership assistance,
Redevelopment of vacant properties,
Program administration.
3
At the time this memo is being prepared, the City intends to request funding to
purchase, rehabilitate and resell 6 homes, construct one new home, and provide
down payment assistance to 7 households. As the homes are resold, additional
properties will be purchased consistent with these goals.
cc: Eric Levitt, City Manager
Jay Winzenz, Assistant City Manager and Director of Administration
4
RESOLUTION NO. 2011-773
A RESOLUTION AUTHORIZING THE FILING OF AN APPLICATION WITH THE
WISCONSIN DEPARTMENT OF COMMERCE
FOR NEIGHBORHOOD STABILIZATION PROGRAM 3 (NSP3) GRANT FUNDING
WHEREAS
, the Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) of
2010 created the Neighborhood Stabilization Program 3 (NSP3) for emergency
assistance for redevelopment of abandoned and foreclosed homes and residential
properties; and
WHEREAS,
funds may be used to acquire, rehabilitate, demolish, and redevelop
foreclosed and abandoned residential properties that might otherwise become sources
of abandonment and blight within their communities; and
WHEREAS,
the State of Wisconsin has received a total of $5,000,000 to implement a
NSP 3 Program on a state-wide basis; and
WHEREAS,
funding will be allocated by the State to the areas of greatest need,
including those with the greatest percentage and number of home foreclosures; the
highest percentage of homes financed by subprime mortgage related loans; and
identified as likely to face a significant rise in the rate of home foreclosures; and
WHEREAS,
the City of Janesville has a need for Neighborhood Stabilization funds as
evidenced by the number of home foreclosures in our community, our vacancy rate, and
our unemployment rate; and
WHEREAS,
there is no local match requirement for NSP, however, grantees are
encouraged to use other sources of funds to complement the proposed activities under
NSP and contribute to a comprehensive community development/neighborhood
redevelopment project which will lead to neighborhood stabilization; and
WHEREAS,
the recently approved Neighborhood Plans for the Historic Fourth Ward
and Look West neighborhoods support housing redevelopment; and
WHEREAS
, the Common Council of the City of Janesville find that it is in the best
interest of the city, its properties, businesses, and overall community to allocate staff
and funding resources, such as this grant if awarded to the City of Janesville, towards
neighborhood stabilization efforts; and.
WHEREAS,
the City is seeking up to $1,000,000 in funding through the NSP 3 Grant to
be used for neighborhood stabilization efforts.
NOW, THEREFORE BE IT RESOLVED
by the Common Council of the City of
Janesville that the City Manager and/or his designee is/are hereby authorized and
directed to submit an application to the Wisconsin Department of Commerce for said
NSP3 Grant including, but not limited to, all certifications; and that the City Manager
and/or his designee is/are authorized to act in connection with the application, to
provide such additional information, and to take other actions from time to time and at
any time as may be required and/or desirable to administer the program in accordance
with all applicable State and Federal regulations; and
BE IT FURTHER RESOLVED,
that the City Manager and his designees are hereby
authorized to negotiate, draft, prepare, execute, file, and modify such other documents,
papers, and agreements ancillary and/or pertaining thereto and, from time to time, to
take and/or make whatever other minor actions and/or minor modifications to the above
described agreements and processes as the City Manager and/or his designee may
deem necessary and/or desirable to effectuate the purposes of such grant, agreements,
and/or the intent of this Resolution.
ADOPTED:
Second by:
APPROVED:
Councilmember Aye Nay Pass Absent
Brunner
McDonald
Perrotto
Eric J. Levitt, City Manager
Rashkin
Steeber
ATTEST:
Truman
Voskuil
Jean Ann Wulf, City Clerk-Treasurer
APPROVED AS TO FORM:
Wald Klimczyk, City Attorney
Proposed by: Neighborhood Services Director
Prepared by: Neighborhood Services Director and
City Attorney