2016 REQUEST FOR QUALIFICATIONS (RFQ) PRESERVATION PARTNERS AND PRESERVATION FOR REAL PROPERTY LOCATED AT TH STREET PROPOSAL GUIDELINES

Transcription

1 2016 REQUEST FOR QUALIFICATIONS (RFQ) PRESERVATION PARTNERS AND PRESERVATION FOR REAL PROPERTY LOCATED AT TH STREET PROPOSAL GUIDELINES SECTION A. GENERAL INFORMATION A.1 INTRODUCTION The City and County of Denver s Office of Economic Development (OED), Housing and Neighborhood Development (HAND), is requesting qualifications for partners interested in contracting with the City to preserve existing income-restricted affordable housing properties. A comprehensive strategy for creating and maintaining inclusive communities in Denver involves preservation of our existing affordable housing inventory as well as new construction opportunities. When local, state and federal dollars are invested into affordable housing, a restrictive covenant is placed on the home or the land to ensure it is available at an affordable price for an extended period of time. When the covenant expires, the owner of the rental or for-sale home is no longer required to rent or sell to an incomequalified household, and the property may be at risk of converting to market rate housing. Since OED functions as an investment arm into affordable housing and does not own and operate a portfolio of affordable properties, OED is seeking partners interested in contracting with the City to preserve existing income-restricted affordable housing properties as identified. Qualified applicants are asked to submit: 1) Overview of qualifications for ongoing partnership with the Office of Economic Development in acquiring, operating and preserving existing income-restricted affordable housing as opportunities are identified. A list of qualified partners will be maintained through December 31, 2017 when a new Request for Qualifications (RFQ) will be released to renew and update the list of qualified preservation partners. 2) Specific qualifications for partnership with the Office of Economic Development in acquiring, preserving the affordability and operating an existing income-restricted property located at th Street in the Five Points Historic Cultural District in Denver. A.2 BACKGROUND Denver s Office of Economic Development is dedicated to advancing economic prosperity for the city of Denver, its businesses, neighborhoods and residents. Among numerous other functions, OED oversees the City s investments in the development and preservation of income-restricted affordable housing units. OED Page 1 of 12

2 invests federal and local dollars into affordable housing across a range of incomes, from housing our most vulnerable residents in permanent supportive housing to workforce rental and for-sale housing for families earning up to 100% of Denver s Area Median Income at $86,100 for a family of four. When evaluating housing investments, OED assesses potential projects according to a number of different criteria, namely location specific criteria and project specific criteria. Location Specific Priorities Access to Transportation: Transportation is typically the second highest use of household income after housing for low and moderate income families. Therefore, location of affordable housing near transit is especially important. OED prioritizes investments into affordable projects near fixed-rail transit and high frequency bus lines. Neighborhoods Vulnerable to Gentrification: Public and private investment into historically underserved and/or lower income neighborhoods often has the positive intent of improving services and amenities for local populations. Such investments, though, have the potential to make the neighborhood more attractive to a new demographic of higher income residents that often results in higher property values (i.e., gentrification) but also higher property and increased rents. Higher property taxes and increased rents, can have the effect of causing involuntary displacement of lower income residents. Since much of Denver s current affordable housing stock is located in neighborhoods vulnerable to gentrification, OED prioritizes preservation and new development opportunities in these neighborhoods to reduce involuntary displacement. Access to Opportunity: Safe, stable and affordable housing has been shown to have significant positive benefits for low and moderate income families. The positive impact of affordable housing is even greater when the development is located within a neighborhood with access to opportunity factors such as high quality education, proximity to good paying jobs, and other amenities such as parks, libraries, recreation centers and grocery stores. OED prioritizes investments into affordable housing in neighborhoods with access to opportunity factors to create diverse and inclusive communities. Project Specific Qualifications Mixed income Development: The development of mixed-income neighborhoods and mixed-income buildings can help deconcentrate poverty and expose low, moderate and higher income families to a variety of different perspectives, backgrounds, cultures, and opportunities for education or workforce development. OED prioritizes mixed-income developments that might include affordable housing alongside market rate housing or a mix of affordability levels within a fully incomerestricted building. Deeply affordable units: In Denver, more than 87,000 households earning less than $64,100 for a family of four (80% of the Area Median Income) are cost burdened, meaning they are paying more than 30% of their monthly income on rent or a mortgage. Of those households, nearly half are very low income, earning less than 30% of the Area Median Income at $24,300 for a family of four. Page 2 of 12

3 Since the lowest income households are the most vulnerable to rising rents and home values in Denver, OED prioritizes development of affordable units for families earning below 30% AMI. Special populations: Some segments of Denver s low and moderate income community have unique housing needs and/or are at higher risk of housing instability based on demographics of the population. Such special populations may include seniors, veterans, individuals experiencing homelessness or large families. In some scenarios, adequately providing safe, stable and affordable housing for these populations includes special amenities or wrap around supportive services. OED prioritizes development of affordable housing for special populations and accompanying amenities or services as needed. There are currently more than 20,000 income-restricted housing units within the City and County of Denver. Units are income restricted through public investments from OED and its public partners at the U.S. Department of Housing and Urban Development, Colorado Housing and Finance Authority, Colorado Division of Housing and Denver Housing Authority. Over the next five years, more than 2,700 units have expiring income-restrictions through a contract or covenant with one of these agencies. When the covenant expires, the owner of the rental or for-sale home is no longer required to rent or sell to an income-qualified household, and the property may be at risk of converting to market rate housing. Denver s Preservation Ordinance helps the City preserve existing income-restricted affordable housing by requiring property owners with expiring contracts or covenants to notify OED if they plan to sell their building or convert existing affordable units to market rate. In 2015, City Council adopted updates to the ordinance that: 1) expanded the number and type of projects required to notify the City of planned sale or conversion; 2) increased the notification period to provide increased opportunity for preservation; and 3) allowed the City or its designee the right of first refusal when owners do plan to sell. More information about Denver s Preservation Ordinance, including notification periods and details on the City s right of first refusal for existing income-restricted housing can be found in Sec et seq., D.R.M.C. here. Since OED functions as an investment arm into affordable housing and does not own and operate a portfolio of affordable properties, OED is seeking partners interested in contracting with the City to preserve existing income-restricted affordable housing properties as identified. A.3 SCHEDULE OF EVENTS 2016 RFQ IS AVAILABLE THURSDAY, SEPTEMBER 29, 2016 At COMPLETED RFQ SUBMISSION DEADLINE WEDNESDAY, OCTOBER 19, 2016 (4 P.M. MDT) A.4 APPLICATION, GUIDELINES, CHECKLIST AND ACRONYM REFERENCE, TERMS AND DEFINITIONS OED continues to implement the grant management system WizeHive for its RFQ application processes. The online application allows all applicants to use one document to gather general data and information, while Page 3 of 12

4 requesting specific information related to each separate Part. The application contains helpful background and clarifying information in yellow highlighted text boxes, while yellow highlighted question marks indicate that additional information is available. All uploads must be in.pdf format. Qualified applicants are encouraged to submit an application for up to two available Parts. For example, an applicant may submit an application for Part One alone, Part Two alone, OR Parts One AND Two together. 1) Part One Qualifications for Preservation Partners: Overview of qualifications for partnership with OED in acquiring, rehabilitating, or preserving existing income restricted affordable housing as opportunities are identified. A list of these qualified partners will be maintained through December 31, A new Request for Qualifications will be released thereafter to renew and update the list of qualified partners in preservation. Specific requirements for Part One applications are listed in Section C.2 of these Guidelines. 2) Part Two Qualifications for Partner in Acquiring and Preserving Property at th Street: Specific qualifications for partnership with OED in acquiring, operating and preserving an existing income restricted property located at th Street in the Five Points Historic Cultural District. Specific requirements for Part Two applications are listed in Section C.2 of these Guidelines. Three documents have been created to assist you in the application process. This document, the RFQ Guidelines, provides background and instructions about the RFQ. An RFQ Checklist itemizes the documents to be downloaded and uploaded as attachments to the online application. An Acronym Reference, Terms and Definitions document is also provided for clarification purposes. It is very important to have all three documents accessible when completing the application. A.5 APPLICATION QUESTIONS Technical questions regarding use of the Online RFQ application must be submitted in writing by to OEDProposals@denvergov.org. SECTION B: APPLICATION PARTS B.1 PART ONE: QUALIFICATIONS FOR PRESERVATION PARTNERS The objective of Part One is to determine a pool of potential property owners interested in acquiring, operating and preserving existing income restricted affordable housing as opportunities are identified. A list of qualified partners will be maintained through December 31, 2017 when a new RFQ is released to renew and update the list of qualified partners in preservation. Investments from OED and its public partners at the U.S. Department of Housing and Urban Development, Colorado Housing and Finance Authority, Colorado Division of Housing and Denver Housing Authority cover a variety of different income-restricted program and investment types. OED recognizes that public and private partners interested in owning and operating income-restricted affordable housing will have areas of program expertise, and varying levels of familiarity with the regulations of different investment types. Page 4 of 12

5 Denver s Preservation Ordinance covers a majority of investment and program types from these public partners, and opportunities to preserve existing income-restricted properties and enact on the City s right of first refusal may cover any of these program types. Therefore, a pool of qualified and interested partners within the following general program areas is essential to a rapid response when faced with the risk of losing existing income-restricted housing. Funding from the Office of Economic Development may be available for acquisition and rehabilitation of existing income-restricted housing through low interest, subordinate debt. Specific structure and terms of the financial commitment shall be negotiated and underwritten as appropriate given the preservation opportunity. Investment and Program Types Federal preservation projects: Properties having project-based rental assistance contracts for some or all of the units (such as section 8 and project rental assistance contracts) including those developed under a variety of HUD mortgage assistance and interest rate reduction programs. Federal preservation projects also include properties with ten (10) or more units with federallyfunded loans, contracts, or insurance. Federal preservation projects include Housing Assistance Payments (HAP) Section 8 contracts through HUD. Local preservation projects: Properties with ten (10) or more rental units which received financial assistance from one or another local entity, to create or preserve housing serving households below eighty (80) percent of Median Family Income which have current affordability restrictions. Financial assistance programs include: subsidies from the City and County of Denver, Denver Urban Renewal Authority, the State of Colorado or the Colorado Housing and Finance Authority (CHFA); or which have received bond financing issued by the City and County of Denver or the Colorado Housing and Finance Authority. Local preservation projects also include project with low income housing tax credits (LIHTC) administered by CHFA. B.2 PART TWO: QUALIFICATIONS FOR PARTNER IN ACQUIRING AND PRESERVING PROPERTY AT TH STREET Interested preservation partners are asked to separately provide an overview of qualifications in acquiring and preserving an existing income-restricted property located at th Street in the Five Points Historic Cultural District in Denver (the Property). The objective of Part Two of the current RFQ is to select an individual, firm or organization who will work in partnership with the Office of Economic Development to acquire, operate and preserve the Property, with the ultimate aim of maintaining income-restricted housing for each of the units. The Property meets a number of investment priorities for the Office of Economic Development, including deeply affordable housing units and location with a neighborhood vulnerable to, and currently experiencing, gentrification. Additionally, the Property is located within a quarter mile of the 25 th Street and Welton Street light-rail stop. With expiring covenant restrictions in May of 2017, it is essential that the selected Qualified Preservation Partner for the Property must close within 120 days of an executed Purchase and Sale Agreement according to the City s Preservation Ordinance. Page 5 of 12

6 Preservation Opportunity Background 1) Location The Property, located at th Street, is within the heart of the Five Points Historic Cultural District. The Property is a corner parcel bounded on the South by 26 th Street, and on the East by Welton Street, with alley access to the east ordinal direction. The Property is approximately 125 by 75 feet and includes lots 17 through 19 on Block 151 of the City and County of Denver. The Property is flat and is zoned C-MX-8, UO-1, UO-2. The Property is located within a quarter mile of the 25 th Street and Welton Street light-rail stop along Denver s D Line. See the link below for relevant City planning, zoning and Assessor s Office information. In 2002, the City and County of Denver designated the Welton Street corridor between 24 th and 30 th Streets an historic district. What is now called the Five Points Historic Cultural district was the cultural and commercial heart of Denver s African-American community from the post-civil War era through the mid-1960s. Two primary documents set forth the vision for the Welton Corridor: The Northeast Downtown Neighborhoods Plan (2011) establishes the City s primary vision for the area. The plan can be found at: ans/northeast_downtown_neighborhoods_plan.pdf The plan identifies Denver s strategic vision for land use, development character and height, mobility economic development opportunities, and livability and the public realm for the Welton Corridor and other Northeast Downtown neighborhood areas. For the Welton Corridor, the plan identifies opportunities along the Welton Corridor to re-establish the historical character of Five Points and proposes moderate densities (3 to 5 stories) along the Welton corridor. The plan also identifies transit oriented development along the Welton Corridor and the future Central Corridor extension along Downing as a key transformative concept. The Five Points Business Vision Plan Implementation and Revitalization Strategy further sets forth the vision from the 2011 Neighborhoods Plan: 2) Property Details This plan identifies a phased revitalization strategy for the Welton corridor that first establishes Welton as a destination. The plan also identifies specific actions to promote economic development and identifies challenges and opportunities to achieving a revitalized Welton corridor. The Property is a multifamily 22-unit affordable rental building that has an existing Housing Assistance Payments (HAP) Section 8 contract through the U.S. Department of Housing and Urban Development (HUD) that currently expires on May 23, There are 22 one-bedroom units Page 6 of 12

7 available to serve tenants earning below 30% of the Area Median Income, or $16,850 for an individual in Denver. The Property was constructed in 1889 and is subject to the Five Points Historic Cultural District Design Guidelines, including design review for exterior alteration, additions, demolition and new construction. The Property is identified within the Five Points Historic Cultural District Design Guidelines as a contributing structure and therefore must be preserved. See additional details on the building and Five Points Cultural District Design Guidelines here: idelines/five_points_historic_cultural_district_dsg.pdf Photographs of the Property are included below. Along Welton: Along 26 th Street: Page 7 of 12

8 Front Corner of 26 th & Welton: Rear of building: 3) HUD Housing Assistance Payments (HAP) Contract Details The Property is currently income-restricted through an existing HAP Contract under the Section 8 Program through HUD that expires on May 23, HAP Contracts provide rental subsidies directly to the owners of residential properties. HAP Contracts specify the number of units in a particular residential property for which the Section 8 assistance will be provided. Under HAP Contracts, HUD provides Section 8 rental subsidies to the project owners in an amount equal to the different between the HUD approved fair market rent for a particular assisted unit and the HUD required rental contribution from eligible tenants. All units within the Property are covered by the existing HAP Contract. Page 8 of 12

9 Acquisition of the Property will require the new owner to assume the existing HAP Contract, a process that will require approval from HUD for the new owner. Existing HAP Contracts can be extended as part of the assumption process for a period of one, five, ten or twenty years. Extension of the existing HAP contract through HUD will be required by the City s preservation partner with preference given to applicants willing to extend to the maximum HAP Contract term of 20 years. Find more information about the HAP Program and Contract terms here. Applicants are asked to outline their intent to preserve the Property through acquisition and rehabilitation of the property as appropriate to maintain affordability for existing residents in the current structure. Funding from the Office of Economic Development shall be available for acquisition and rehabilitation of the Property as appropriate through low interest subordinate debt. Specific structure and terms of the financial commitment shall be negotiated upon selection of a qualified applicant. A maximum loan amount of $650,000 in gap financing will be considered. Applications for acquisition and rehabilitation of the Property require the inclusion of a Denver OED 2016 Housing Funding Loan Application with details of public and private finance sources and uses. SECTION C: EVALUATIONS C.1 EVALUATION TEAM All applications will be reviewed by an Evaluation Team comprised of OED staff and other evaluators. All data and information from the Applicant must be submitted through the online RFQ submission and documents uploaded before submission. No additional information, documents or inquiries pertaining to the application, including and phone calls, will be considered during the selection process. C.2 EVALUATION CRITERIA Applications should be comprehensive, accurate, and concise presentations of the requested information. To facilitate the review of applications by the Office of Economic Development, all applications must follow the schedule, format, and content requirements as detailed herein in order to be considered responsive to this RFQ. Applicants are asked to respond to Part One, Part Two or both Parts of the RFQ. Applicants are asked to clarify in their cover letter the Part(s) for which they are submitting qualifications. Requirements of all Applications Cover letter clarifying Part(s) for which they are submitting applications List of Preservation Partner Qualifications: o Familiarity with the rules and regulations of the applicable program or investment type o Demonstrated experience and success in owning and managing income-restricted affordable housing within applicable program or investment type o Good standing with the City and County of Denver and with the state of incorporation or organization Page 9 of 12

10 All applications must clearly delineate how the Applicant s qualifications can support the activities outlined in Sections B.1 and/or B.2. The quality and detail of responses will figure significantly in the overall evaluation of applications. Applicants are encouraged to give examples and provide additional information to support capabilities on each point. Part One Requirements List of Applicant s current properties in Denver List of the Applicant s other properties outside of Denver Description of Applicants preferred property types for preservation partnership a. Federal Preservation Projects, i.e. Section 8 b. Local Preservation Projects, i.e. LIHTCs Part Two Requirements Project concept a narrative of the team s concept for the Property Deal Structure a more detailed outline of the proposed acquisition deal structure, including types of public and private financing, approach to Property acquisition, compliance with Five Points Historic Cultural Design Guidelines Schedule Agreement to the Proposed Schedule Timeline a. RFQ Application Deadline: Wednesday, October 19 b. Part Two: Contract and Financial Negotiations for Acquisition of Property through November 2016 c. Enter in to Purchase and Sale Agreement: No later than Friday, December 9 d. Qualified Preservation Partner for Property must close within 120 days of executed Purchase and Sale Agreement according to the City s Preservation Ordinance Housing Funding Loan Application Completion of Denver OED s 2016 Housing Funding Loan Application is required for Part Two applications Qualification reviews and awards are contingent upon Responders being current to the City on any loan, contractual, or tax obligation as due, or with any rule, regulation, or provision on existing or past City contracts. C.3 EVALUATION PROCESS Qualifications will be scored and ranked utilizing the WizeHive Evaluation Tool based upon the information contained in the application itself and uploaded attachments. Performance outcomes of prior contracts with OED will be considered in the overall rating of qualifications submitted by Applicants who currently have, or have previously had, contracts with OED. C.4 DECISIONS Based upon the information provided by the Applicants, the Evaluation Team will evaluate qualifications. The evaluations will be ranked according to scores in WizeHive and forwarded to OED Senior Management. OED reserves the right to postpone or cancel this RFQ, if it deems it to be in the best interests of OED to do so. OED reserves the right to waive any technical or formal errors or omissions, and to reject any and all applications, or to award contracts, either in part or in whole, if deemed to be in the best interests of OED. Page 10 of 12

11 Successful Applicants shall be in complete compliance with all of the specifications, terms and conditions of the RFQ. OED shall not be liable for any costs incurred in the preparation of applications or for any work performed in connection therein. Successful Applicants for Part Two will be invited to enter into contract negotiations and development of a loan agreement. SECTION D. ADDITIONAL CONTRACT REQUIREMENTS D.1 IRS FORM W-9 All Applicants must have a current IRS Form W-9 available and attached to their application. Obtain the form and instructions here: D.2 CERTIFICATE OF GOOD STANDING FROM SECRETARY OF STATE All Applicants must be registered with the Colorado Secretary of State and have an active Certificate of Good Standing attached to their application. See for more information. D.3 CERTIFICATE OF INSURANCE Please attach Certificates of Insurance evidencing the following coverage required of all City Contractors: Commercial General Liability: $1,000,000 per occurrence, $1,000,000 for each personal and advertising injury claim, $2,000,000 products and completed operations aggregate, $2,000,000 policy aggregate. Business Auto Liability: $1,000,000 combined single limit. Workers Compensation: $100,000 per occurrence for each bodily injury claim, $100,000 per occurrence for each bodily injury caused by disease claim, and $500,000 aggregate for all bodily injuries caused by disease claims (or statement of rejection of coverage in accordance with (1), C.R.S.). Additional coverage may be required upon award. D.4 SYSTEM FOR AWARD MANAGEMENT DATABASE AND DATA UNIVERSAL NUMBERING SYSTEM (DUNS) NUMBER All entities who contract with the City and County of Denver must be registered in the System for Award Management Database ( and obtain a Central Contractor Registration (CCR) expiration date. This requires a Data Universal Numbering System (DUNS) Number. Dun & Bradstreet issues unique nine digit DUNS Numbers without charge for all businesses required to register with the US Federal government for contracts or grants with the City and County of Denver. Please see for more information. All entities must have an active CCR at the time of contract execution. D.5 DIVERSITY AND INCLUSIVENESS IN CITY SOLICITATIONS INFORMATION REQUEST FORM All Applicants are required to complete the Diversity and Inclusiveness in City Solicitations Information Request Form. The information provided on this form will provide an opportunity for City contractors/consultants to describe their own diversity and inclusiveness practices. Contractors/consultants are not expected to conduct intrusive examinations of its employees, managers, or business partners in order to describe diversity and inclusiveness measures. Rather, the City simply seeks a description of the contractor/consultant s current practices, if any. Diversity and Inclusiveness information provided by City Page 11 of 12

12 contractors/consultants in response to City solicitations for services or goods will be collated, analyzed, and made available in reports consistent with City Executive Order No However, no personally identifiable information provided by or obtained from contractors/consultants will be in such reports. A link will be provided in the application for Applicants to complete an e-form. Page 12 of 12