by Bob Weiss
The Holly House Development Task Force(HHDTF) in the last month has made a presentation at the First Saturday Conversation in April and at a Town Hall on Sunday, April 22. For those of you unable to attend, here is a summary of the highest financial offers from an affordable housing developer and from a market-rate developer. The Holly House property is zoned R-30 and the lot is ¾ of an acre so the number of units that can be built is limited as shown below.
Affordable Housing Option
The highest offer for affordable housing development is for $1.5 million to build 17 units – 10 affordable housing and 7 at market rate – with the potential to increase to $2 million if the City proposal to increase density for affordable housing on religious properties gets passed. The bidder has indicated their intent to convert all of the units to affordable housing. This includes $75,000 earnest money and East Shore would receive full payment after a feasibility study taking 12-18 months. With this developer, the risk could be moderate because this bidder is an apparently well-known organization with a good track record. All units would reach a high level of energy efficiency with Evergreen Development Standard and will be solar ready. The builder will strive to meet net zero and Five Star Built Green standard. This bidder offers a unique feature in their proposed project – utilizing a Community Land Trust model which means the land is held in trust, with the improvements sold to qualified buyers with a ground lease and specific covenants to maintain a level of control over future re-sales that will ensure the 17 units will still be available at affordable housing prices (60% of AMI – Average Median Income).
Market Rate Option
The highest offer from a market-rate developer is for $3 million to build 15 units with the possibility of up to 17 units, depending on the city of Bellevue permitting process. If they get approval for 17 units, then the purchase price would rise to $3.4M. Earnest money is $75,000 and East Shore would expect to receive full payment in a maximum of 18 months. We assess this proposal as low risk as the developer submitted detailed plans including very substantial proof of financial capability. They also included considerable information on how their homes meet state-wide green standards.
Both offers listed here and the other five offers received include some risk, as the developer will need to go through a lengthy and complicated process to see what limits this particular property will place on the proposed designs, to secure their full financing, to develop architectural plans for the structures, secure permitting, etc.
We conducted a HHDTF Town Hall on April 22, and it was well attended with lots of questions. The Task Force intends to have another Town Hall in May. Our intent is to offer education to the congregation about our options and the issues associated with those options, so we will be prepared to vote at the annual meeting on June 3 whether to develop the Holly House property as affordable housing or market-rate development. Then the Task Force will begin negotiating in earnest on the course approved. Whatever the outcome, the congregation will need to decide at a later point as to how to use the money from the sale of this property. More detailed copies of the case for affordable housing and market-rate development will be available on our website and paper copies will be at the front desk soon.