Approve an amendment to an existing loan agreement with Del Norte Neighborhood Development Corporation for the acquisition of vacant land, closing costs, consultant fees, appraisal and market study costs, and tap fees associated with property to be developed at 1402 Irving Street in Council District 1 (201208314). (HEALTH SAFETY EDUCATION AND SERVICES) Approves an amendment to an existing loan agreement with Del Norte Neighborhood Development Corporation for the acquisition of vacant land, closing costs, consultant fees, appraisal and market study costs, and tap fees associated with property to be developed at 1402 Irving Street in Council District 1 (201208314). The last regularly scheduled Council meeting within the 30-day review period is on ???.  The Committee approved filing this bill at its meeting on 1-7-14.
Now I have asked the Office of Economic Development what is the average cost per residential unit in this particular development? And what I got back was $237,500 taken a loan. That probably doesn't mean a whole lot. I mean, what what's the average cost of anything out there? But that seemed very expensive to me. So I did send a additional email asking, well, as far as said, is the total amount of government money per unit on the cheaper or more expensive side? And the answer I got back, this is certainly a more expensive project. Now, the question is, how expensive is this? I called Paul Jacobs and asked what would be the cost of a single family home? If we're going to compare it to that. Well, the typical single family home is less by $14,000. Then I asked, Well, what would be the typical condo price? Well, the typical condo price is $92,000 less. I called the people at Denver Housing Authority because they are building a a development in my district. And I know it has the same high energy efficiency as this particular unit. So I said, what are your average units cost? And the new units cost $77,000 less for each one of them. So this is a very expensive project. The issue is not to me whether citizens value affordable housing or don't viable for affordable housing. Let's say they do value affordable housing. The question is whether they feel the sky's the limit in cost or whether we should exercise cost control. This was an expensive project when it was first brought to committee. Without this additional million dollars added, I am not willing to vote for something that adds yet another million dollars to the costs. Now the costs are well over $20 million. Thank you, Councilwoman Fox, Councilwoman Ortega, you just want to make your. I just want to indicate that I am on the board of this organization, have been for 30 years and I have two abstained from the vote tonight. Thank you. Thank you, Councilwoman. Councilwoman Sheppard. Thank you, Madam President. So I would like to ask Seneca Holmes to come to the front and talk a little bit more in depth about this situation through a conversation I had with him. I'm understanding that our per unit subsidy from Denver is actually a really fair number. I'm also understanding that our collateral is fully insured when the building is constructed. And then finally, I would like you to address Seneca, also something that we spoke about, what the overall goals of the broader Neighborhood Stabilization Program are, which is where the funding comes from for this project. Thank you, Madam President. Seneca Arms with the Office of Economic Development. Welcome. Thank you. Can I can. If I may, I'll take your last question first. The money that went into this project were from the Neighborhood Stabilization Program. This is a program that came out of the American Reinvestment Recovery Act. The Stimulus Act, it's a temporary program, actually ended in 2013. Unlike other funding sources that were used for housing. And ACP is not just about unit production. It's about neighborhood investment and revitalization. Specifically, this program allows us to assemble and redevelop vacant land for the purposes of stabilizing neighborhoods by encouraging the reuse of blighted property to revitalize the neighborhood. This property was really ideal to meet all of those requirements. We've talked at length in committee about the residential and amenities that will come with the development of this project. There's going to be a grocery store within walking distance. It's proximity to bus, light rail, and there's going to be on site childcare facility. What we haven't really talked about as much is kind of the neighborhood aspect of it. This was a blighted property. There used to be a dry cleaning facility on it. So there is extensive pollution both in the soil and in the water that required remediation. It's a high quality structure, and it's adjacent to the city's almost $40 million investment for the new Corky Gonzales Library. So we've really considered this project together with the library as being a a footprint for greater catalytic investment in the neighborhood. So to just look at this, I think based on the units that are being developed out of it, you miss a lot of the neighborhood revitalization aspects of this program. And I think maybe you can argue that you're looking at it with with too narrow of a lens to speak about the actual investment from OPD. We have $1 million in NSP money and a roughly, you know, $20 million project. And so to give you an idea, I went back the last three years and did an average of our per unit subsidy for projects around the city. So we're talking about on average, $19,525 per unit for this project. We're putting in under $13,000. So in terms of city money, this is a real bargain for us. And Councilman Shepard is quite right. We're collateralized, fully collateralized once the building is complete. So upon completion, we will realize our full collateralization at this point in time. We don't want to do anything that would actually jeopardize the construction of that building. Thank you, Mr. Holmes. Did you have another question? I don't have any more questions, but maybe some other folks do. But I definitely have comments, so I'll defer to others if they have questions. Now you can go ahead and make your comment. I think the others just have comments as well. Really, we can call Seneca back up. I'm sure he wouldn't mind. Okay. So I just, you know, want to say that you Urban Land Conservancy bought this land exactly. For this purpose to couple some affordable housing with the opportunity that a brand new state of the art library being created in this corridor would would provide. And currently we are 25,000 short of affordable housing units in the city, and we need a whole lot more and we need a whole lot more serious discussion and action about how we're going to create that. I've been doing a lot of data gathering on conditions in the West Colfax corridor, and I think it speaks to the broader points that you brought up, Seneca, about the Neighborhood Stabilization Program. And I just want to point out, we're talking about a severely blighted corridor where 20% of the families are currently living below the property, the poverty line, 22% of people that live in West Colfax don't have a car. Over 75% of female headed households with children under five are in poverty. Unemployment is over twice what it is citywide. We are dealing with a lot of very severe blight conditions and real challenges about how to lift up an entire corridor and a community. It's also almost 70% Hispanic in this corridor. And I was talking with the wonderful librarian who will be in charge of putting together some of the programing at that library. And I just want to talk about what some of the opportunities are that are going to be there. Number one, there's going to be 40 to 50 computers available and people in that library who are going to be helping residents with basic computer literacy skills. There's going to be programing about how to write resumes and build interview skills. There's going to be opportunities for, you know, to learn to deepen your understanding of the English language. For those that are not native speakers, there's going to be opportunities to help with children's homework. You want to build affordable housing in areas where the services are there to support that. Number one, you've got all those amazing educational opportunities at the library. As I mentioned earlier, we've got the light rail built that will connect job seekers with employment centers such as downtown and also at the federal center. You've got the busiest bus in all of Denver, the West Colfax bus coming down that line for all the people in the quarter that can't afford to own a car. You've got an elementary school right across the street. You've got the Girls Inc, which is the modern incarnation of Girls Club. Also across the street you have the Boys Club two blocks away. There's so many. And then not to mention the fact that this grocery store, the only grocery store in that entire corridor, is literally in the same complex. So the services are there to support this population and to help give them this, you know, the ability to have access to the very programs that will help them become more self-sufficient. And, you know, there will be continually new jobs created in that corridor, too. So this is exactly the place where we want affordable housing and we are getting it for a good, very good price. As Seneca pointed out in I could not support this project more, so thank you for hearing me out on that. And I ask my colleagues to support it as well. Thank you. Thank you, Councilwoman Shephard, Councilwoman Carnation. Thank you, Madam President. If I may, one question for Seneca Homes before my comments. Thank you. Seneca, can you refresh me? This is the second time we've discussed this project at council. We had a very similar debate the first time. What was the amount of the city's investment? The first time we debated the project. It's the same amount. It's still $1 million. So we have not added any more money to this contract. Okay. Thank you for clarifying that. We're simply changing the order by which we would be reimbursed in the case of of, you know, being being paid back. Is that right? That's correct. To compensate for increases in construction costs, of course, we are allowing them a little bit more cushion so that they can proceed with construction. Okay. So I think that's really important. Thank you, Seneca, too. To just refresh, folks, that the amount of the city investment in this project is staying exactly the same. We are not increasing our investment at all. And so and I want to just give a one disclaimer before I start, which is that I'm sorry I missed last week . I had a family emergency and I actually had a very similar idea to Councilwoman Foster appears because I called DHS this afternoon to ask them about their average per unit costs. And they said to me, they said, well, we had another inquiry from a colleague and the question was about construction costs, but did you want the full cost, including the value of the land and the soft costs? Because we didn't provide that. So it turns out that perhaps the figures they gave you might not have included the full costs. And so they've offered to do you a fact sheet that they can get to all of us. And they didn't want me to bring any numbers because they were concerned they might have given out, you know, an earlier set of numbers that they didn't know what the purpose was for. So I just wanted to share that information that I'm not ready yet to say that these units are that much more expensive because it appears that the soft costs, which are real soft costs, are the architects designing the building and the insurance. And those are things that are they have to be paid on top of, you know, actually buying bricks and mortar and paying workers to put a building together. So I don't want to re debate all of the same wonderful points that my colleague shared and that, in fact, we debated the first time this project came through council and also the Chestnut project, but just to refresh two important concepts. So if this is too much money for units and are somehow we should do it more cheaply. I want to take that argument to its logical conclusion. How might that occur? How might we create the housing that's needed and spend a lot less? The way I see it, there's only two options. One is build in a really cheap place, put all the housing in the same place. That's really cheap. And again, we have experience with that in Sun Valley and we have experience with that in the Alma. And what we know is that concentrating poverty is not good for communities. And so it's not the right thing to do to just put the housing in the cheapest place and put it only there that mixed income, diverse communities are stronger, both for the residents of the affordable housing as well as for the market rate neighbors. Right. So we're in the process of undoing that everywhere else. I don't think we want to go backwards. Secondly, how else could we make it all cheaper? Well, we could certainly use cheaper materials. We could certainly spend less on the architects and less on the facade and and spend less on all of those things. I think what we know, though, is that, again, we did that. We did that in the fifties and sixties, and we ended up with what people refer to as projects. Right. Something that people can readily identify when they're on the outside of it, something that neighbors don't want to live by. If we want to have housing integrated in a fully diverse community, we have to be able to mix it in ways that are good for neighborhoods. So I'm not here talking to Main about the interests of low income residents, which my colleague Susan Sheppard did very eloquently. I'm here in favor of neighborhoods. High quality construction that blends with the rest of the neighborhood is something we hear from them every day that they want. And mixed income diversity, rather than concentrations of pockets is something else we hear. And this is the way to do it, which is to spread our investments prudently for the same amount that it was just a few months ago throughout various neighborhoods in the city. It doesn't mean we don't have to try to be very frugal with our dollars, but these dollars were intended for this purpose. Thank you very much, Madam President. Thank you, Councilwoman KALISH. Councilman Lopez. Thank you, Madam President. I know my colleagues made a lot of the same points that a lot of us feel are on this runs council chambers. But I just wanted to just simplify it. Last last meeting, you know, it was stated that this wasn't our role, basically wasn't our role of government. We all know that this is a big issue. You know, those of us who rented very recently. Or are renting. We'll find that it's very hard to find a decent place at an affordable price. And there are a lot of people who do not have that opportunity, not just in Denver, because of the economic impact of the recession, but also because of other floods that happened in our city. You have a lot of people moving into Denver, into the metro area. Right. We cannot afford to have, you know, two or three unit apartments going for 1500 to $2000 a piece. Imagine somebody who is just, you know, making either minimum wage or just how are you making a minimum wage but your average hard working family with two incomes. It's almost impossible to do. And it's not right that they pay more than 30% of their income towards rent. It's just not right. That's not what Denver is supposed to be. You know, we got to be careful in becoming this is delusional of Manhattan in our eyes. Right. We have to make sure that we are a city of neighborhoods where people can live. This is a great project. Yeah, it's pricey. But so is building a hotel downtown and so is building the hotel at DIA. And if this city became, we can be in the business of building hotels. We can be in the business of building for rent apartments at an affordable price housing. After all, this is something that not only us as a city value, but the state values. Look at CML and you look at one of the top priorities is affordable housing all around the state. So there's a great need out there. We're trying to make it and we're not we're not trying to trump private business to be able to do it either. We're just being able to to have it available. So this is one of those great projects. Not all Denver. This is one of our nonprofits. It's one of our nonprofits in our community doing this. And we usually pass the buck on our nonprofits for a lot of the work that we cannot do as government. The least we can do is have their back with some project like this and be able to continue to support our efforts and our mayor's efforts in our own efforts to make sure this is a solid deal for our constituents. Thank you. Madam President. Thank you, Councilwoman. Councilman Lopez. Councilman Brooks. Thank you, Madam President. I was not here last week on a chair of the Health Safety Education Services Committee. Obviously, this came through our committee passed unanimously. I think my colleagues have made excellent points. And, you know, anyone who knows anything about construction that's going on right now knows that if you're a developer, if you're if you're constructing something in the city, you're dipping into your contingency fund because costs are on the rise. And we're just adjusting that for this development. And then secondly, I would just say that we are at a critical time in our city where disparity is existing. Right. And as we look in the news and we read about, you know, my colleague talked about Manhattan and all the issues that they've been dealing with for the last ten years and rising housing costs. And we're experiencing right now my neighborhood, City Park, is one of the most expensive neighborhoods in the city right now. We have an opportunity and I would say we have a call as a city to to provide housing for all. And so, you know, this is this is an excellent opportunity. And I think all my colleagues have mentioned why, and I hope that everybody up here will be voting in favor of this. Thank you. Thank you, Councilman Brooks. Councilwoman Fox, I see your name back up. Did you have a second comment you'd like to make? No, Madam President. Thank you, Councilwoman. Thoughts? All right. I think those are the comments. We're ready for the roll call. But no. Herndon, I can each lemon. Lopez All right. Montero. Nevitt Hi. Ortega Rob Shepherd. Brooks Brown. Hi, Madam President. Hi. Madam Secretary. Close the voting. Announce the results.