Re: Urban Renewal Funds Request - 1000 W. Main St. Molalla

From: Tim Lawler

Sent: Thu Jan 27 11:26:57 2022

To: Mac Corthell

Cc: Ben Pray; Briana Murtaugh; Darcy Vincent

Subject: Re: Urban Renewal Funds Request - 1000 W. Main St. Molalla

Importance: Normal

Attachments: image001.jpg; image002.jpg; Hwy 211 Estimate - Westech TL breakdown 01.25.22.xlsx;

Hi Mac,

Thank you for your email and all the information you have provided, it has been very helpful.

Attached is our cost estimate that was provided from Steve Ward at Westech Engineering. We have highlighted items in yellow and orange to break out the costs for their respective categories.

We understand the Urban Renewal Funding is now reduced, relative to the letter of support we utilized for initial project underwriting. We are now working to address a sources gap of $250,000 ; please let us know if you have any creative solutions that might contribute to helping us balance sources/uses.

Regarding the request for Urban Renewal funds, I have attached an estimate for expenses of approx. $86,500 for sidewalks / streets in front of our property and the neighboring Church of the Latter Day Saints. This estimate includes contingency and fees proportionate to the ask.

We have not included a request for the residents & community room as we are waiting to hear back from our tax credit investors. This type of agreement can end up causing problems and we just need confirmation prior to moving forward.

In addition to Urban Renewal Funds to help cover the public improvements of the sidewalks, we would like to request additional Transportation SDC Credits to help cover our shortfall. The capital improvement of the road, from Ona Way to the east side of the LDS church, will connect with the recently expanded right of way and create a new turn lane, wider street, and safer sidewalks. This roadway enhancement will greatly increase the safety for all residents of Molalla traveling along Main St., especially considering the increased demand from the new shopping center on Main St. Overall, the level of performance along Main St. will be greatly improved due directly to these improvements. In total we would like to ask for an additional 25 transportation SDC Credits to help with the public right of way improvements. I've priced the ask at the current SDC rates before the July 1st increase. The 25 credits, in addition to the previous 2.25 credits pledged early on, will give relief to approximately $94,532 and help us get closer to filling this funding gap. The attached spreadsheet has the SDC credit information as well.

The combination of Urban Renewal Funds and SDC credits are imperative to ensure a timely groundbreaking and the construction of quality affordable housing in Molalla. We appreciate your support and look forward to hearing from you.

Thank you ,

-Tim

Tim Lawler

"https://docs.google.com/uc?export=download&id=1bw94puT-lJgMk5PduJXdpFKMhE0PWr0H&revid=0B0Z7jRYw58NWUjFSMkNvaG00TWtkM1E2VFBtQmVpWlJSK2JBPQ"

3050 SE Division Street #270

Portland, Oregon 97202

503-528-6129 cell

www.greenlightportland.com

On Thu, Jan 27, 2022 at 8:18 AM Mac Corthell <mcorthell@cityofmolalla.com> wrote:

Hi Ben,

1. The city would not be pledging federal funds. We looked into many options, including federal CDBG money, but determined the administrative cost outweighs the benefit for this particular cooperation. With that said, the city is not concerned how you split things up, our agreement would state that upon acceptance of the improvements laid out in the agreement the city would reimburse the costs associated with said improvements.
2. There are a few sources we’ll be drawing from, but as mentioned above, the city will reimburse for the improvements so it’s not really relevant to us where you spend your funding other than that we can’t reimburse unless the improvements contemplated in the agreement are complete.

Thank you, Ben, and I’ll look forward to discussing further in the near future.

-Mac

Macahan “Mac” Corthell, J.D. | Community Development Director

City of Molalla

315 Kennel Ave. | PO Box 248 |Molalla, OR 97038

Phone – 503.759.0243

Email – mcorthell@cityofmolalla.com

Website – http://www.cityofmolalla.com

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From: Ben Pray <ben@hfdpartners.com>

Sent: Wednesday, January 26, 2022 5:00 PM

To: Mac Corthell <mcorthell@cityofmolalla.com>; Tim Lawler <tim@gl-dev.com>

Cc: Briana Murtaugh <briana@gl-dev.com>; Darcy Vincent <vincent7313@comcast.net>

Subject: RE: Urban Renewal Funds Request - 1000 W. Main St. Molalla

This is a really helpful breakdown, Mac – thank you!

A few quick thoughts –

1. Preference is to avoid Federal funds due to unknown implications. The project will have an environmental review, however, any Federal funds into hard costs would trigger prevailing wage which is not currently in our budget
1. a. If the funds were flexible – we use our $ on the improvements and apply yours to soft costs, this issue is avoided
2. I don’t think there are the same complications w/State funds – do you know the specific source?
3. We will check in with our investor on the deed provision and public access to community center – want to make sure there are no unanticipated consequences there

So – we’ll circle w/financing and legal team and be in touch – thanks again for the plan and clear communication – it is much appreciated –

Ben

Ben Pray, Owner

503.320.8929 | LinkedIn | Website

From: Mac Corthell <mcorthell@cityofmolalla.com>

Sent: Wednesday, January 26, 2022 8:23 AM

To: Ben Pray <ben@hfdpartners.com>; Tim Lawler <tim@gl-dev.com>

Cc: Briana Murtaugh <briana@gl-dev.com>; Darcy Vincent <vincent7313@comcast.net>

Subject: RE: Urban Renewal Funds Request - 1000 W. Main St. Molalla

Hi Ben,

You guys will be the first affordable housing project we’ve assisted with funding, but not the first developer by any means. What we would do is sign a development agreement with the developer and provide reimbursement upon acceptance of a given improvement. As we’ve been discussing how to best assist you guys given the various regulations that apply to this type of project and your needs as far as info for investors/lenders I’ve come up with something that may provide a bit more certainty so you can get your org chart/prospectus put together in a way that provides you more certainty visa-a-vis city assistance.

This is just a though exercise for now, but I would appreciate you all’s feedback on it to see if you think it would be more or less beneficial to you than the process we use for commercial/industrial developments.

My thought is this-

You guys provide engineered cost estimates for: 1) sidewalk, curb, and ADA ramps as needed for the entire frontage from the east side of the church to the west side of your lot, you may include additional civic space attached to the sidewalk if you’d like; 2) for the publicly available portion of your on-site community center (including walkway to access it from the sidewalk).

At that point the City will review and offer a commitment of funds through a development agreement. I anticipate this agreement may include the city covering all costs for sidewalk/associated curbs/ADA Ramps for the entire frontage, and some portion of the community center that would be determined upon review.

In exchange, the developer would agree to construct the improvements mentioned, and include a deed provision to ensure the purported public portion of the community center remains public.

I think this will provide an exciting opportunity to bring in state and federal services amongst other things. We can discuss the deed provision, I presume you guys have some sort of idea as to how this would be managed and I want to ensure the agreement represents a shared understanding of that room since public funds would be used, in part, to construct it.

Let me know if this process suits you and we can proceed accordingly. Thank you!

-Mac

Macahan “Mac” Corthell, J.D. | Community Development Director

City of Molalla

315 Kennel Ave. | PO Box 248 |Molalla, OR 97038

Phone – 503.759.0243

Email – mcorthell@cityofmolalla.com

Website – http://www.cityofmolalla.com

From: Ben Pray <ben@hfdpartners.com>

Sent: Tuesday, January 25, 2022 2:16 PM

To: Mac Corthell <mcorthell@cityofmolalla.com>; Tim Lawler <tim@gl-dev.com>

Cc: Briana Murtaugh <briana@gl-dev.com>; Darcy Vincent <vincent7313@comcast.net>

Subject: RE: Urban Renewal Funds Request - 1000 W. Main St. Molalla

Hi Mac –

Thanks for this – while my colleagues work on the cost estimates, I’m hoping you can answer a clarifying question on the funds –

Are the funds awarded to the project as a grant? Is the typical structure that the funds go to a nonprofit organization associated with the development?

Any information you have about restrictions/structure of the funding would be great, as we pull together our project org chart and engage more with lender/investor.

Thanks!

Ben

Ben Pray, Owner

503.320.8929 | LinkedIn | Website

From: Mac Corthell <mcorthell@cityofmolalla.com>

Sent: Wednesday, January 19, 2022 8:28 AM

To: Tim Lawler <tim@gl-dev.com>

Cc: Ben Pray <ben@hfdpartners.com>; Briana Murtaugh <briana@gl-dev.com>; Darcy Vincent <vincent7313@comcast.net>

Subject: RE: Urban Renewal Funds Request - 1000 W. Main St. Molalla

Hi Tim and Team,

I had a chance to review your proposal and the good news is that we do believe the public community center will work as a publicly beneficial improvement with some slight wrangling. There would need to be a deed restriction that requires the community room to be open and free use to the public with the exception of cleaning fees and/or security deposit. We think it would be an ideal location to bring in services such as Oregon Medicaid, on occasion to work with our income challenged, and other in-need communities.

Here’s what I need in order to sequester funds and provide you guys with an agreement that will guarantee the level of city assistance. I need these to be separate cost estimates please:

1. Engineered cost estimate for sidewalk, curb, gutter, striping in front of the Church adjacent to the East of your site (City will pay full freight).
2. Engineered cost estimate for the Community Room (you can just get the whole club house building cost out, then use square footage to determine the community room portion).
3. Engineered cost estimate for the sidewalk, curb, gutter, striping along your frontage (not storm, sewer, water, etc… just those items mentioned).

While I cannot make an “offer” of assistance without these numbers, I anticipate the City would be able to assist with full construction costs of the sidewalk, curb, gutter, and striping along your frontage and the church frontage, and provide a proportion of the cost of the community building. The likely total would be in the neighborhood of $100,000.

Once we have the cost estimates, I will review them and draft an agreement that guarantees a specific sum of funding assistance. Please let me know if you have further questions, if not I’ll look forward to the cost estimates discussed. Thank you.

Sincerely,

Macahan “Mac” Corthell, J.D. | Community Development Director

City of Molalla

315 Kennel Ave. | PO Box 248 |Molalla, OR 97038

Phone – 503.759.0243

Email – mcorthell@cityofmolalla.com

Website – http://www.cityofmolalla.com

From: Tim Lawler <tim@gl-dev.com>

Sent: Thursday, January 13, 2022 5:28 PM

To: Mac Corthell <mcorthell@cityofmolalla.com>

Cc: Ben Pray <ben@hfdpartners.com>; Briana Murtaugh <briana@gl-dev.com>; Darcy Vincent <vincent7313@comcast.net>

Subject: Urban Renewal Funds Request - 1000 W. Main St. Molalla