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BAHT Meeting Minutes March 14 2018CITY OF BEVERLY PUBLIC MEETING MINUTES Board: Beverly Affordable Housing Trust Date: March 14, 2018 Location: Beverly City Hall, Conference Room "B" Members Present: Chair Aaron Clausen, Mayor Michael Cahill, Treasurer Bryant Ayles, Clerk Sue Gabriel, Richard Dinkin Others Present: Environmental Planner Amy Maxner, Andrew DeFranza, Harborlight Community Partners Absent: Assistant Planning Director Darlene Wynne (staff to the Trust) Recorder: Donna Musumeci Call to Order The meeting was called to order at 2:00 pm Continued Review & Decision: 2 Hardy Street — Harborlight Community Partners, Inc. Funding Application Clausen notes that at the last meeting the Board decided that a commitment letter for the requested allocation of $200K and all the meeting, conditions would discussed be drafted and reviewed at this were prepared meeting for a possible vote. He describes the letter was drafted with the assistance of the Massachusetts Housing Partnership; 7P Goldson, a consultant out of Boston, who does work with CPC's and Trusts around affordable housing; and language from an example of a housing consortium loan made in 2002 to Turtle Creek. Clausen describes information in the letter. The first half summarizes the request, and the next section addresses the affordability elements tied to the terms of the loan. The letter proposes a 30 -year, zero percent loan, with payment due at the conveyance of the sale. Prior to the financing, the applicant in this case will supply all the loan documents - the promissory note, mortgage, and the affordability restrictions. Once these have been provided, the solicitor will do a final review. Disbursement of the funds will be in a lump sum at the time of financial closing. He notes that the letter states that this project should proceed to closing before the end of this calendar year. He said if there are challenges, the trust can extend the date, but this could send a message to the state. The Mayor asked how the scoring criteria factor into the vote. Ayles clarified that Trust did not vote at last meeting, but discussed initial thoughts and were prepared to vote. The Trust discussed scoring and criteria. Mayor questioned not knowing best how to apply some of the individual criteria and impact on the scoring. He raised the notion that some scores could be low. Do we need to add certain things to the criteria and have a longer list? Or, use the list and add "included but not limited to ". General consensus was to use that language rather than making the list longer. Also discussed was the benefit of being able to think about each criteria as it Beverly Affordable Housing Trust Fund Regular Meeting March 14, 2018 relates to the project. It's not so much about the score that matters (unless there are multiple projects), rather the process. Understanding there is some economic development and a TOD benefit, the Mayor questioned how to determine giving a number versus a not applicable. Dinkin stated the Trust agreed to do these on an individual basis and to knock off the outliers (the upper and the lower); in his case he gave a 2, knowing he could throw it away. He reminded the Board that in the process of drafting guidelines they identified this policy, to discard one high and one low score. Dinkin emphasized the need to be cognizant that these score sheets will become public record and future developers will look to them for guidance. Clausen is sure this process was identified in the published guidelines. Ayles comments that there is generally a unified perception of how these criteria are weighted. Gabriel says what's most important is that the scoring sheets show a consensus. Clausen indicates there is plenty of consensus in the scoring of this project. Since there is consensus in the scoring criteria areas, and after review, the Trust votes. Dinkin: Motion to approve $200,000 in funding for the project at 2 Hardy Street, the applicant being Harborlight Community Partners, subject to the conditions in the draft award letter, and to approve the draft letter unchanged. Gabriel seconded. Motion carries (5 -0). Cahill: Motion to take a brief recess. Dinkin seconded. Motion carries (5 -0). CPC Allocation of Housing Funds The Trust discussed whether to seek CPC allocation of housing funds to the Trust. Clausen provided a document summarizing the applications currently before the CPC in Round 5. At the CPC, $390K is under review for housing alone and there is approximately $278K - $280K of funds in the specific housing pool. Mayor asked to see what the CPC has in their calculated total, how much balance has yet to be spent, and how much of that is available for housing. Dinkin asked if they pre - allocate. Mayor said they do not beyond the 10 percent. Ayles explains that CPC funds go into 4 buckets - there are 3 reserve buckets for historic preservation, affordable housing, and open spaces. The 4th bucket includes anything left over. He says there is a 5% budget for administrative costs, which they underspend every year. Maxner says that is spent on signs, appraisals, etc. Ayles says the budget is created for anticipated revenue in the coming year, and that is where administrative costs are captured, any funds not used go back to the 4 bucket. Dinkin clarifies that 65% of the fund is for discretionary use. The Board concurs. Gabriel clarifies that any money not spent on affordable housing rolls forward. Stated an example that Cambridge has 75% of funds allocated to housing resources, and less in historic or open spaces. If the CPC trying to ensure they have all the funds they need, it would be good to know what is in the buckets. There are not restrictions when they spend the funds, Harborlight may not be ready to take it yet, but the funds are reserved. CPC is on the agenda to discuss how to determine funding coming to the AHT and relationship with the CPC. Mayor states the primary question is, does the Trust go to the CPC with a formal 2 Beverly Affordable Housing Trust Fund Regular Meeting March 14, 2018 request to transfer over the housing money to the AFHT and second, to the make that a recurring request going forward. Mayor is not sure he is interested in a commitment of the other 65% rather that should be expended on as- needed basis. Gabriel supports having unrestricted funds. Gabriel asks if it matters to have support of multiple boards when trying to leverage funds or is it better for the applicant to have a streamlined process. Dinkin suggest streamlined process is favorable to the applicants. Clausen says it's an interesting question and it may be a stronger case if more boards show support. Mayor asks if have received any guidance from the state on best practices related to the CPC or the AFHT. Massachusetts Housing Partnership had advised the Trust that many CPC's use a trust to deal with housing, but the relationship can be different in every community, city vs. town etc. First, trusts are used because they have a board with more specific experience. Second, trusts are set up to move funds and can potentially move more quickly. Mayor notes that CPC funds require City Council approving CPC allocations and public hearings; this could be problematic only with timing of potential real estate transactions. Mayor says he thought he would be ready to go on this, but notes the members could benefit from hearing more about how this works in other cities and towns. Clausen notes that showing the CPC members how they've reviewed the Hardy Street project is essential in showing thoughtfulness and care in review and they can use this to assuage concerns of the CPC in the future. Dinkin says he's of two minds. He says that centralizing the money in one body will expedite the construction of affordable housing; however he notes CPC money is really taxpayer money whereas the AHT monies is really payment in lieu of. Mayor notes that the argument could be made to allocate the 10% because the Trust is able to act more quickly. Not looking for any of the 65% keeps the process running through the CPC statue and keeps City Council involved. Gabriel likes that idea, noting the 10% funds are already restricted for housing and the trust has shown to do it well. The CPC could decide to allocate more money to the AHT if they see a need. Ayles suggests a joint meeting with the CPC. Mayor says we will plan to go to the CPC when ready. He says we could ask them to allocate the 10 %, however the applicant still has to make the case with the CPC and the City Council. The AHT can be part of that voice with the applicant, if they feel strongly. Clausen notes that the AHT will have a letter with the scoring matrix to be used for supporting CPC funding. Dinkin suggests AHT can also do letters of support and show up for public hearings. Clausen states that the next step is to convene a joint meeting with the CPC after they are done with the current process which will allow time to put together the information on the trust. Mayor asked to invite Shelley Goehring back and invite the CPC Chair and Vice -Chair for a fact finding and discussion meeting, rather than a decision - making meeting. The members generally agree. Mayor notes that the trust may take a vote to make a formal request to the City. Gabriel confirms that the allocation is a yearly vote. Mayor asked Maxner to verify the yearly allocation and requested the City Solicitor in the next meeting. Ayles confirmed that the balance of the AHTF is approximately $550K. Maxner confirmed Mayor would like her to confirm the need to vote each year for the transfer of the 10% funds from the CPC. Discussion ensued as to when to hold a next meeting. 3 Beverly Affordable Housing Trust Fund Regular Meeting March 14, 2018 Adiournment• Gabriel: Motion to adjourn at 2:55pm. Dinkin seconded the motion. Motion passes (5 -0). 0