Poor Communication May Delay Everett Low Barrier Housing Projects

August 25, 2017

Everett Government

low barrier housing

The proposed site is between the fire training facility and Evergreen Way

Poor communication continues to plague the low barrier housing project planned by the City of Everett for the area east of Pecks Drive and Evergreen Way in the central part of the city.

A planned Everett City Council vote on August 30th to approve moving $400,000.00 from Everett’s low barrier housing project to HopeWorks Station II “workforce housing” at 3300 Broadway was pushed back to September 13th so the Everett City Council’s budget committee could review Streets Initiative spending including operating and capital expenditures prior to full city council approval.

MyEverettNews.com talked to budget committee chair Scott Murphy about the delay. “I asked to move this to the budget committee so we can do our due diligence,” said Murphy. “I don’t like being blindsided and then asked to approve something.”

Everett City Council member Brenda Stoneciher who also serves on the budget committee wrote an email addressed to CFO Debra Bryant on August 23rd outlining questions she had including…

• Are these financial commitments detailed in an agreement between the City and CHS? If so, please provide us with a copy of it.
• I would also like to understand the operating budget commitments we have made. The annual $200k funding is coming from the General Fund, as I understand it, and is that in perpetuity?
• If the $400k budget amendment and ongoing support is for the capital expenses of the project, why are we taking it from the General Fund? Why not CIP funds? Do we have any precedent for making an ongoing commitment to an outside agency from our operating budget?
• What other operating funds are we committing? I believe there are HOME funds in the mix? If so, how much is committed, what percentage of our HOME funding is being diverted, and what were we previously using those funds for?
• If HOME and other operating budget items are committed, where is the agreement for that?
• There have been allegations by Mr. Powell and others in our community that Cocoon House is included in the project — if that is true, I would like to understand how that fits in from both an operational and financial aspect.
• I believe some time ago, Scott Murphy requested a full accounting of all expenditures we have made and are making from any and all city budget funds for the work on the Street Initiative/Safe Streets plans. Did I miss that, or has that not yet been provided? If not, when do you anticipate we will receive it?

Basically, I feel somewhat ‘in the dark’ on the financial aspects of this project and would like more clarity on the whole picture, before I feel comfortable approving the budget amendment.

At the city council meeting on August 16th Public Health and Safety Director Hil Kaman told the council there was not enough money for both the Everett low barrier project and the HopeWorks project in the Low Income Housing Tax Credit Fund for both projects to move forward this year. A plan to share the available credits was needed and that was accomplished over a multi-week negotiation period. Here is a link to the PDF of that plan.

Project_Funding_Gap_Resources_Memo_4-5-17 (2)

Hope Works

An artist’s conception of Hope Works Phase 2 in the 3300 block of Broadway in Everett.

MyEverettNews.com talked with HopeWorks executives on Tuesday August 22nd and they explained the two sides turned from competitors for the funds to collaborators. One project was set for 72 units and the other at 70. Both have now been reduced to 65. HopeWorks Station provided the following Project Chronology of Events…

HopeWorks Social Enterprises: The HopeWorks Station Project
This project creates 65 apartments with 57 for homeless individuals and 22,000 square feet of space for workforce development programs designed as career pathways for homeless and high risk populations.
Chronology of events

July – November 2014 Mayor convenes Streets Task Force. Task Force provides recommendations for addressing the social, economic and safety issues related to homeless and transient populations on the streets of Everett. A
dominant theme is the need to develop affordable supported housing.

Four projects result:
1. The City launches a scattered site low-barrier housing initiative (private landlords) and approves $400,000 toward services for the population to be housed. This concept was tested and found not feasible.
2. The City launches a process to find a site and secure a developer to build a new low-barrier housing facility in Everett targeting chronic homeless individuals. Catholic Housing Services (CHS) is selected.
3. HopeWorks Social Enterprises launches a plan to construct a new “workforce housing” facility targeting homeless individuals desiring a career pathway.
4. Cocoon House launches a plan to construct a new facility for homeless youth.

Collaboration. The three housing developments constitute an extremely large local initiative to produce housing solutions. Resources for this many development projects are scarce. The projects must compete for the limited resources available.

The three projects are all seen as priorities by City and County officials and the three agencies agree to work together to get all three projects funded. The projects will produce 170 new supported housing units in aggregate.
Low Income Housing Tax Credits (LIHTC).

Both HopeWorks and Catholic Housing Services apply for LIHTC, which is the largest funding source available for affordable housing development. HopeWorks has the highest scoring project statewide for the January 2017 credit allocation funding round and is fully funded. Catholic Housing Services also scores high but there are not sufficient credits to fully fund this project.

The City of Everett asks HopeWorks to share a portion of its LIHTC allocation with Catholic Housing Services. The City of Everett and Snohomish County meet with HopeWorks and Catholic Housing Services and the State Housing Finance Commission to seek a solution to the funding dilemma.

An agreement is reached in March 2017 that HopeWorks will provide approximately $2 million of its LIHTC funding to the Catholic Housing Services project. Both CHS and HopeWorks agree to downsize their projects to 65 units each to save costs. The City and County agree to collectively seek $1.7 million from their various funding sources to cover the funding gap in the two projects.

Additional Funding. Consistent with options identified by the City and County, funding applications were submitted and approved in 2017 funding rounds as follows:

 Catholic Housing Services: $600,000 from Snohomish County HOME program

 HopeWorks: $500,000 from City HOME program (residential), $100,000 from County HOME (residential) and $400,000 from City “service dollar set-aside for the scattered site project” for the HopeWorks social enterprise jobs facility (commercial).

HopeWorks has previously been awarded $358,400 in City of Everett CDBG funds toward the Workforce Development Center in the HopeWorks Station building (commercial). Both the CHS and HopeWorks projects are supported by project-based rental support vouchers by the Everett Housing Authority.

In looking at the agenda items and other paperwork you can see there are still some communication challenges as the HopeWorks project says the $400,000.00 was to be used for scattered site counseling while the City of Everett says in its budget adjustment sheet that the money was for residential counselors at the low barrier housing site. “As the facility is not yet built, the funds are not needed for counselor services in 2017 or 2018. This amendment proposes to reallocate the $400,000.00 for capital support for the construction of the facility.”

low barrier

This is the budget language presented to Everett City Council on August 23rd.

Click image to enlarge.

What is interesting is that in his presentation of the 2017 budget in October of 2016 to the Everett City Council May Stephanson did ask for approval for an annual match of $200,000.00 per year for services at the facility that would also be funded by Providence Regional Medical Center and Snohomish County. There is no mention of what happened to the funds pledged by those two groups and a reasonable question is why would you budget counseling funds effective in 2017 for a building that wasn’t expected to be completed until the end of 2018?


Why pledge operating funds for a building not planned to be open until a year after the funds were set aside?

The bottom line is the City of Everett and HopeWorks are turning competition into collaboration to double the number units of much needed housing in Everett as soon as possible. Time is of the essence however as each day that passes construction costs are rising and funding plans must be set in writing and passed by the appropriate councils in order to move forward. Deadlines to have financing secured are coming up for both entities.

The City of Everett administration has promised to have all documents to the city council budget committee by September 13th for their review and possible action by the full council later that night.


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