EDC Minutes 7.9.2024 - Laserfiche WebLink

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CITY OF SOUTH BEND I ECONOMIC DEVELOPMENT COMMISSION July 9, 2024 A. Presentation of Project: 466 Works Community Development Corporation (Southeast Neighborhood Project) Mr. Erik Glavich, Director of Growth and Opportunity, presented on the Southeast Neighborhood Project. A map was shown as to where the development will take place. Project cost is $8.8M and the City would support the project through a $3.5M EDC statute forgivable loan. Money would be disbursed as houses are built at a rate of $116,000 per house. Private investment commitment is about $5.3M and committed completion date is end of 2027. 30 homes will be built. The Board of Public Works recently approved the transfer of 17 vacant lots to 466 Works for the project. At least 12 of the homes will be sold to households at 120% or less of area median income. On June 27 the Redevelopment Commission approved a development agreement that authorized the $3.5M of TIF funds and established the commitments of 466 Works. The Redevelopment Commission also approved a resolution that authorized the TIF funds to be used through the form of a forgivable loan. The ordinance was introduced at the July 8 Common Council meeting and received its first reading. Vice President Rafael Morton asked what rationale was used to come up with the requirement that12 of the 30 houses would need to be sold to households at 120% or less average median income (AMI). Mr. Caleb Bauer, Executive Director of Community Investment, responded that it was 40% of the total development and the rationale was that, as appraisals have gone up in the neighborhood, it can create challenges in terms of affordability for low-income buyers. In working with 466 Works, they felt the 120% AMI rate was reasonable rate for 40% of the homes, that buyers could still qualify for a mortgage. Secretary Renata Matousova asked about the amount of payroll as a percentage of the entire project cost. Mr. Glavich commented that housing construction costs are coming in at about $290k. A slide was shown that detailed the costs 466 Works estimated, and Mr. Glavich indicated that those costs are in line with other projects we have seen. President Cecilia Lopez Monterrosa asked about whether the home would be built in sort of a subdivision and whether there are existing homes there or empty lots. Mr. Glavich indicated they are all empty lots and showed a map of all the parcels. President Cecilia Lopez Monterrosa asked what determines whether a house is 2 bedrooms or 4 bedrooms. Mr. Bauer explained that 466 Works pre -sells their homes so they work with the buyer on the home design.