City Council regular meeting — February 22, 2022

Background:

• At the December 14, 2021, meeting, City Council approved a resolution authorizing the City Manager to enter into an agreement with Step Up on Second Street, Inc. in the amount of $1.5M for the provision of three years of supportive services for future residents of permanent supportive housing at 148-150 River Ford Parkway.
• Staff had proposed that American Rescue Plan (ARPA) funding be used to fully fund the three-year agreement with Step Up on Second Street, Inc.
• City Council, however, asked that only $500,000 in ARPA funding be utilized toward the agreement, and that staff identify another funding source for the additional $1.0M needed for the agreement.
• After reviewing funding options, staff is recommending that Council utilize $1.0M available in the Affordable Housing Capital Improvement Program (CIP) budget to fully fund the agreement.
• A budget amendment is required to move the $1.0M in funding from the General Capital Projects Fund to the Special Revenue Fund where the $500,000 in ARPA funds is budgeted. Committee(s):
• None Pro(s):
• Ensures full funding for the three years of the agreement with Step Up on Second Street, Inc.;
• Consolidates the budget for the agreement in the City’s Special Revenue Fund in order to ensure statutory budgetary compliance. Con(s):
• Reduces funding available for other affordable housing needs.

Fiscal Impact:

• There is no net fiscal impact from this budget amendment since the previously approved budget is simply being moved from one fund to another in order to ensure compliance with state statutes.
• The Affordable Housing Capital Improvement Program (CIP) project currently has an available budget of approximately $1.7M.
• This CIP project is funded with pay-go cash from the General Fund, so the balance can be utilized for non-capital expenses such as the agreement with Step Up on Second Street, Inc.
• After funding this agreement, approximately $700,000 will remain available in the CIP project. Nina Tovish suggested when the City Council determines to hire outside consultants that part of their due diligence is to contact community organizations to gather input before making their recommendations. In response to Councilwoman Roney about use of other funds, Director of Community & Economic Development Nikki Reid said that bond funds are not available for this use. Councilwoman Mosley noted that she voted against the contract for this for-profit entity and will not support this budget amendment.

Mayor Manheimer said that this ordinance was adopted on first reading on February 8, 2022; however, due to state law, franchise agreements require two readings. When Mayor Manheimer asked for public comment, no one spoke.

Background:

• -
• -
• -
• -
• -
• -
• The City of Asheville owns a 0.88 acre parcel at 749 Fairview Road and several uses are contained within the site (PIN 9657-58-2870-00000). At this property, Buncombe County has operated the existing Oakley Library for many years based on a verbal agreement. Buncombe County has operated the Oakley Library at this location since 1964. The arrangement was authorized by a verbal agreement between the government entities in the early 1960’s. The land and the building are owned by the City of Asheville and house a community center on the lower level, Fire Station #9, public restrooms and a lobby in addition to the Library. There is a shared gravel parking lot on the ground level. The City’s Real Estate Division approached Buncombe County’s Director of Libraries in late 2020 asking that the tenant/landlord relationship be formalized with a lease. The terms of a lease include a five year term, joint use of the parking lot, use of shared restrooms and a yearly rent of $1.00. The County must operate the premises as a public lending library and maintain the interior of the premises, including plumbing, electrical and interior finishes. The City will continue to maintain the systems that service the entire complex, such as the roof, HVAC, exterior maintenance, etc. Utilities are metered separately and the City maintains the grounds. Library interior areas are maintained by the County. Any construction of improvements by the tenant must be approved by the City. Committee(s):
• None Pro(s):
• Strengthens the City’s partnership with Buncombe County.
• Preserves a beloved library in the Oakley Community.
• Buncombe County will continue to maintain a portion of the building complex. Con(s):
• City is not charging fair market rent because of the value this library brings to the community.

Fiscal Impact:

• City will be receiving one dollar per year from the leasing of this property.

Background:

• In October, 2018, Council authorized the issuance of a Water Revenue Bond Anticipation Note (BAN) in an amount not to exceed $40 million to finance the City’s North Fork Dam improvement project.
• In August, 2021, Council approved resolutions authorizing City staff to proceed with the issuance of long-term fixed rate Water Revenue Refunding Bonds to pay off the existing amount utilized on the BAN.
• The Water Revenue Refunding Bonds were subsequently issued on September 30, 2021.
• The Water Revenue Refunding Bonds had a very low total cost of issuance of around 2.1%, and were issued as Green Bonds under the category of sustainable water management which broadened the City’s investor base and promoted its environmentally-friendly values.
• The funds generated from the issuance of the Refunding Bonds, which totaled $40.4 million, were used to pay off the existing bond anticipation note cost of debt issuance and so do not represent additional money available for City use.
• The Fiscal Year (FY) 2021-22 budget did not include appropriations reflecting the funds generated from the issuance of the Refunding Bonds.
• This technical amendment incorporates these appropriations into the budget in order to ensure that the Water Resources Operating Fund does not exceed the approved annual budget in the City’s annual financial reporting. Committee(s):
• None Pro(s):
• Amends the FY 2021-22 Water Resources Operating Fund budget in order to ensure statutory budgetary compliance. Con(s):

None Fiscal Impact:

• There is no net fiscal impact from this technical budget amendment.
• It will amend the FY 2021-22 budget in the Water Resources Operating Fund to reflect the receipt of refunding proceeds from the bank and the subsequent payment to bondholders to pay off the prior debt issuances.

Background:

• In December 2021, Sanitation Division staff was approached by Mr. Brad Stanback, District 9 Commissioner of the NC Wildlife Resources Commission, with the offer of a donation of $30,000 to support the purchase of additional bear-resistant trash carts.
• The purchase of additional carts would allow more residents to rent the carts and shorten the waiting list for a cart.
• This budget amendment allows the Sanitation Division to accept the donation from Mr. Stanback and appropriate the funding toward additional bear-resistant carts.
• The bear cart vendor has provided a one-time discounted price quote of $250/cart for this donation budget, so the City will be able to purchase 112 carts.

Vendor Outreach Efforts:

• N/A Committee(s):
• None Pro(s):
• Allows for the purchase of additional bear-resistant trash carts.
• Shortens the waiting list of residents wishing to rent a bear-resistant trash cart. Con(s):

None Fiscal Impact:

• $30,000 in additional revenue and expense authorization in the Sanitation Division of the General Fund.

Background:

• Due to the COVID-19 pandemic and resulting closure of public and private buildings in March 2020, portable restrooms and handwashing stations were deployed for public use as an emergency response as per direction from the City-County Emergency Operations Center and City Manager's Office.
• Griffin Waste Services in Asheville was an existing provider of services to City facilities prior to the pandemic and the only contractor identified in the region with the capacity to fulfill the services required.
• As authorized by the City Manager, a contract was established with Griffin Waste Services in June 2020 for an amount not to exceed $89,000 for rental, routine cleaning, and daily maintenance of the units.
• On September 8, 2020, City Council adopted resolution 20-157 authorizing the City Manager to execute an amended services contract with Griffin Waste Services increasing the total by $65,000, from $89,000 to $154,000, allowing the vendor to perform the work through December 2020.
• An amended contract with Griffin Waste Services to increase the total by $45,000, from $154,000 to $199,000, allowed the vendor to perform the work through May 2021.
• In May 2021, the City executed a bid seeking proposals to continue services through December 2021 and Griffin Waste Services was the only bidder.
• On June 8, 2021, City Council adopted Resolution No. 21-104 authorizing the City Manager to execute a new services contract with Griffin Waste Services through December, 2021 at an amount not to exceed $90,000.
• -
• -
• In November 2021, the City executed a bid seeking proposals to continue providing services from January 2022 through December 2022 and no bids were received. Using remaining funds previously authorized (not to exceed $90k), the contract with Griffin Waste Services was amended to continue through February 28, 2022. In January 2022, the City executed a re-bid and received one response from Griffin Waste Services. Services are currently provided at the following (3) locations:
• NW Corner of College Street & Rankin Avenue
• ABCCM Medical, 155 Livingston Street
• ABCCM Sonrise, 1543 Patton Avenue Staff recommends moving forward with the proposal from Griffin Waste Services, establishing a new services contract from March 1, 2022, through December 31, 2022.

Vendor Outreach Efforts:

• Staff performed outreach to minority and women-owned businesses through solicitation processes which included posting on the State’s Interactive Purchasing System, searched the HUB office for MWBEs in the relevant market area, and worked with the ABI Office to search for providers.
• There is a small geographic area where it is reasonable for this work to be performed and the bid process only returned one response from Griffin Waste Services.
• In the future when services are needed, staff will conduct the same process again to ensure that new MWBE businesses that have been established are provided the opportunity. Committee(s):
• None Pro(s):
• Supports public health needs during a Pandemic at (currently) three locations:
• Downtown, NW Corner of College Street & Rankin Avenue
• ABCCM Medical, 155 Livingston Street
• ABCCM Sonrise, 1543 Patton Avenue Con(s):
• Some business owners have been unhappy with the location of the downtown facility.

Fiscal Impact:

• All previous contracts have utilized CARES Act or ARPA funding.
• In order to preserve available ARPA funding for other projects, staff is recommending using funding from the Affordable Housing Capital Improvement Program (CIP) for this contract extension.
• The Affordable Housing CIP project currently has an available budget of approximately $1.7M and is funded with pay-go cash from the General Fund, so the balance can be utilized for non-capital expenses such as this contract.
• After funding this contract and the Step Up agreement that is also on Council’s agenda, approximately $636,000 will remain available in the Affordable Housing CIP project.

Community & Economic Development Director Nikki Reid said that this is the consideration of a request by Haywood Street Community Development for $1.3M in funding to purchase land and a $904,000 Housing Trust Fund loan to construct 45 permanently affordable rental homes on property located at 343 & 357 West Haywood Street in the City of Asheville. Review:

• Haywood Street Community Development has proposed the development of approximately 45 affordable apartments with the 5550 sq. ft. in community space on a 0.857 acre on a parcel located at 343 & 357 West Haywood Street.
• Haywood Street Congregation is an urban ministry with its main headquarters located at 297 Haywood Street.
• Core programs include weekly worship, a clothing closet, community garden, a free community lunch known as the Downtown Welcome Table, and Haywood Street Respite, which offers a safe place for adults experiencing homelessness to stay on a short term basis after being discharged from a hospital.
• Haywood St. has formed a 501(c)3 non-profit, known as Haywood Street Community Development (HSCD), with the intention to provide permanent affordable housing to the most vulnerable members of the Asheville community.
• HSCD is partnering with Ward Griffin of Grace Construction, a local development firm with over 80 years of development experience, and Austin Tyler with Dewey Property Advisors, to purchase, develop and construct the project.
• While HSCD has been serving the homeless community for quite some time, this will be their first effort towards developing a permanent residential apartment project.
• HSCD intends to construct its first development consisting of a single building with approximately 45-units, to be leased with permanent affordability deed restrictions as follows:
• 23 units at 30% AMI for voucher holders,
• 9 units at 60% AMI, and
• 13 units affordable to households at 80% AMI.
• City Council previously authorized a grant in the amount of $296,000 for due diligence and associated pursuit costs to HSCD for this project.

Proposal:

• HSCD’s total proposed project budget is $10,181,496, including due diligence and soft costs, with $7,356,102 estimated for construction.
• HSCD seeks a grant of $1.3M for the purchase of 0.857 acres of land at 343 & 357 West Haywood Street in the WECAN neighborhood.
• The land will be secured by a deed restriction for permanent affordable housing at the site. Should a project not come to fruition, HSCD must sell the site and repay the City the grant amount.
• HSCD seeks a loan of $904,000 from the City’s Housing Trust Fund (HTF) under the following terms:
• No interest and deferred payments for the first 10 years
• Interest only at a rate of 1% for the next 10 years
• -
• -
• - At year 20, the loan will either (1) convert to an amortizing loan, paying principal and interest, on a 30 year amortization at a 1% interest rate OR (2) the HTF principle will be repaid in full as part of a refinance of the total debt stack at the time HSCD has secured a grant from Buncombe County in the amount of $749,000 for the construction costs. HSCD has applied for $2M in funding from the Dogwood Health Trust. HSCD has a loan commitment of $4,121,624 from an area lender. HSCD is contributing $809,872 in equity to the project. If approved by the City Council, the transfer of the funding will be conditioned on the completion of further project due diligence, including confirmation that all zoning and necessary permits have been secured and that all financing commitments necessary to build and operate the project are in place. Committee(s):
• The Housing and Community Development (HCD) Committee reviewed and unanimously approved the proposal on February 15, 2022. Pro(s):
• The project produces 45 apartment homes for individuals and families at or below 30, 60% and 80% AMI.
• Strategic opportunity to invest in a partner offering deep affordability and a community of care in connection with Haywood Street’s core services.
• The project is ideally located near many downtown employment opportunities, with good access to transit and essential services.
• This project leverages partnership funding from both Buncombe County and Dogwood Health Trust (pending approval).
• This project will be deed restricted to permanent affordability, ensuring a long-term supply of affordable rental units in Asheville at this location. Con(s):
• The combined land and loan amount per unit is above the Housing Trust policies recommendation of $20,000 per unit.
• Project requests a total 50 year amortization for the loan, which is an exception to the HTF policy that requires loans to be limited to 30 years.

Fiscal Impact:

• This action includes a $904,000 loan from the City’s Housing Trust Fund, and an allocation of $1.3M from the City’s Affordable Housing General Obligation (GO) Bond Land Banking program.
• Both of these amounts are already included in the adopted budget so no budget amendment is required with this action. Ms. Reid said that the key takeaways is that (1) this is a strategic opportunity to invest in a partner offering deep affordability and a community of care in connection with Haywood Street’s core services; (2) the project is ideally located near many downtown employment opportunities, with good access to transit and essential services; (3) this project leverages partnership funding from both Buncombe County and Dogwood Health Trust (pending approval); and (4) this project will be deed restricted to permanent affordability, ensuring a long-term supply of affordable rental units in Asheville at this location. She then provided the following background (1) Haywood Street Congregation formed a 501 (c) 3 non-profit, Haywood Street Community Development (HSCD), with the intention to provide permanent affordable housing to the most vulnerable members of the Asheville community; (3) Haywood Street is partnering with Ward Griffin of Grace Construction and Austin Tyler with Dewey Property Advisors to purchase, develop and construct the project; (3) this will be HSCD’s first effort towards developing a permanent residential apartment project; and (4) City Council previously authorized a grant in the amount of $296,000 for due diligence and associated pursuit costs to HSCD for this project. This is for an 0.857 acre parcel located at 343 and 257 West Haywood Street. The approximately 45 affordable units will consist of: 23 units at 30% AMI, 9 units at 60% AMI, 13 units at 80% AMI, and 5550 sq. ft. of community space. The proposed budget is $10,181,496
• estimated $7.4 Million for construction costs. She said the potential funding breakdown is City Affordable Housing Bond
• $1.3 Million; City Housing Trust Fund loan
• $904,000; Buncombe County grant
• $749,000; and Dogwood Health Trust funds
• $2 Million. HSCD has a loan commitment of $4,121,624 from an area lender. In addition, HSCD is contributing $809,872 in equity to the project. She said HSCD seeks a loan of $904,000 from the City’s Housing Trust Fund (HTF) under the following terms: (A) no interest and deferred payments for the first 10 years; (B) interest only at a rate of 1% for the next 10 years; and (C) at year 20, the loan will either (1) convert to an amortizing loan, paying principal and interest, on a 30-year amortization at a 1% interest rate, OR (2) the HTF principle will be repaid in full as part of a refinance of the total debt stack at the time. The total term of the loan is 50 years. HSCD is also seeking a grant of $1.3 Million for the purchase of 0.857 acres of land. The land will be secured by a deed restriction for permanent affordable housing at the site. Should a project not come to fruition, HSCD must sell the site and repay the City the grant amount. She said the City Council Housing & Community Development Committee endorsed this recommendation to City Council. There was discussion, initiated by Councilwoman Wisler, about the amount Buncombe County contributed to this project. Pastor Brian Combs, applicant, said that they are proposing 45 1, 2 and 3 bedroom apartments at the edge of downtown, which are all 100% affordable in perpetuity, with the land deed restricted. They have made nearly 200 contacts, along with 4 voluntary meetings on site and a transparency tracker online. They are finalizing a contract with the Givens Estate for property management, and they have partnered with Ward Griffin, a contractor and consultant. On the Haywood Street Congregation side, they have spent 12 years on the street listening to people who need housing the most. Equity is an essential issue to them. They are committed to prioritize the most disenfranchised and displaced people first. They will have an aggressive affirmative fair housing marketing plan by (1) advertising heavily with sister nonprofits; (2) leveraging with African American churches in the area; and (3) handing out applications. He urged City Council to support this project. There was a brief discussion, initiated by Councilwoman Kilgore, about how this project model differs from public housing models or other nonprofit organization models that build affordable housing. Councilwoman Roney supported this project because it is a step in the right direction. PUBLIC HEARING TO CONSIDER CONDITIONAL ZONING OF PROPERTY LOCATED ON 343 AND 357 W. HAYWOOD STREET FROM COMMUNITY BUSINESS I DISTRICT TO COMMUNITY BUSINESS II DISTRICT/CONDITIONAL ZONE

Principal Planner Shannon Tuch said that this is the consideration of an ordinance to conditionally zone property located on 343 and 357 W. Haywood Street from Community Business I District to Community Business II District/Conditional Zone. This public hearing was advertised on January 14 and 21, 2022. On January 25, 2022, this public hearing was continued to this date.

• -
• -
• Displacement and Healthy Communities of Opportunity for all residents in and around Opportunity Zones.” The Asheville City Council adopted Resolution No. 21-224 on October 26, 2021 committing to grant funding in the amount of $296,000 for due diligence related to this project. The Haywood Street Congregation (applicant) is requesting an additional 1.3 million to assist in the purchase of the property and a Housing Trust Fund loan of $904,000. Landscaping, open space and tree canopy preservation requirements will be satisfied. A pedestrian connection across W. Haywood St. is recommended at either Jefferson St. or Hilliard Ave., in order to allow residents to connect to the sidewalk that leads to transit stops at the intersection of Hilliard and Clingman Ave. The project is seeking a number of exceptions to technical compliance, including:
• Density
• applicant is requesting 52.3 units/acre (maximum density of 50 units/acre).
• Structure size
• applicant is requesting to construct a single building that is 51,000 square feet (maximum building square footage for a multi-story building is 45,000 square feet)
• Building Height
• applicant is requesting a height of 41’-9” (maximum height is 40 feet). Plan Consistency: Living Asheville Comprehensive Plan
• The proposed development supports a number of goals including encouraging responsible growth by providing infill development in targeted growth areas (p. 131) and by increasing the supply of housing, including affordable housing (pp. 179 & 183) in proximity to employment, transit and parks (pp. 246 & 251).
• The Future Land Use map identifies the subject properties as “Downtown” which is described as “the urban mixed-use center of Asheville” and “to encourage high density residential development, which will complement other downtown uses and surrounding neighborhoods.” (p. 339). WECAN Citizens Master Plan
• The WECAN plan (adopted in 2000) envisioned separating local traffic from interstate traffic by extending Patton Ave. as a city entryway boulevard with small to mid-scale multi-family along the boulevard. I-26 Connector Project
• The I-26 Connector Project plans have evolved to include a pattern similar to what was first envisioned in the WECAN plan over 20 years ago, and proposes to separate local from interstate traffic along Patton Avenue.
• These plans continue to evolve with final alignments and designs still to be confirmed.
• It is anticipated that the final road design would be most appropriate for multi-story, mixed-use and multi-family development given the strategic location and goals to create an urban gateway boulevard leading into downtown.

Compatibility Analysis:

• The high density residential project is compatible with the small commercial services/offices located to the east and west of the property, and with the other multi-family and institutional uses to the south.
• The property currently abuts controlled access right-of-way for Interstate-240 to the north; however, this portion of right-of-way is for the Patton Ave. exit (Exit 4B) which carries less traffic than the eastbound lanes of I-240.
• Additionally, the site is separated topographically with the ground floor sitting approximately 30-35’ above the grade of the Patton Ave. exit and will include landscape buffering between the building and the road, mitigating the effect of the interstate on residents. Committee(s):
• Technical Review Committee (TRC)
• December 6, 2021
• approved with conditions.
• Planning & Zoning Commission (PZC)
• January 5, 2022
• recommends approval unanimously, 7:0.

Staff Recommendation:

• Staff recommends approval of this rezoning request based on the reasons stated above. Ms. Tuch reviewed the site plan of one building totalling 49,000 gross square feet: 4 stories; 41’-9” tall; 45 units, all affordable; 55 parking spaces (35 structured, 20 surface); 10’ wide sidewalk on West Haywood Street; and indoor and outdoor community space. She then showed the building elevations. She reviewed how the project complies the Living Asheville Comprehensive Plan (1) consistent with the Future Land Use map by providing high density residential development; (2) encourages responsible growth by providing infill development in targeted growth areas; (3) increase the supply of housing in proximity to employment, transit and parks; and (4) provides affordable housing options. It also complies with WECAN Citizen’s Master Plan by (1) small to mid-scale multi-family; (2) pedestrian improvements; and (3) affordable housing. Some of the conditions include (1) technical modifications (a) density: 52.3 units/acre; (b) building height: 41’-9”; and (c) structure size: 49,000 square feet; (2) mitigating conditions (a) location next to the I-240 interstate and compatibility with other visible buildings along the interstate (Harrah’s, Hyatt Place, Hotel Indigo, etc.); (b) architectural style that takes cues from the existing community; (c) consistent with mass/scale of other projects in the Downtown Future Land Use Map area; (d) pedestrian orientation with wide sidewalks; (e) structured parking with minimal surface parking; and (e) new pedestrian street crossing to transit; and (3) public benefits
• 45 affordable housing units: permanently affordable; 13 or the 45 units (29%) at 60-80% AMI; 9 of the 45 units (20%) 30-60% AMI; and 23 of the 45 units (51%) will accept housing choice (HUD) vouchers. Mayor Manheimer opened the public hearing on the land acquisition, Housing Trust Fund loan and the conditional zoning and when no one spoke, she closed the public hearing at 6:37 p.m. Councilwoman Roney said that it would be great in projects like this in general, that if the community that is going to create a neighborhood here and live and celebrate together, had a hopefulness of one day cooperatively owning this space. Mayor Manheimer said that members of Council have been previously furnished with a copy of the resolution and it would not be read.