Housing authority’s application didn’t meet requirement
The Fayette County Housing Authority’s application for $20 million in federal funding to aid the Bierer Wood Acres makeover was rejected because it failed to meet a basic requirement concerning cost control standards. According to the rejection letter authored by Paula O. Blunt, general deputy assistant secretary of the U.S. Department of Housing and Urban Development, the FCHA application wasn’t even eligible for consideration because of that failure.
“Having not met this threshold requirement, your application was not eligible for further consideration for funding and was not rated,” wrote Blunt, whose letter to Executive Director Thomas L. Harkless was obtained by the Herald-Standard.
Blunt also noted that the FCHA application for HOPE VI funding “was not selected due to the failure of one or more threshold requirements.”
Blunt went on to explain that HUD’s notice of funds available – commonly known as a NOFA – clearly required that the cost estimates for such projects “must be certified to meet the cost control standards” by an independent cost estimator, architect, engineer or other qualified third-party professional.
Blunt quoted the NOFA, which stated, “If your costs are not certified, your application will not be rated or ranked and will be ineligible for funding.”
Blunt went on to note that other basic requirements for the HOPE VI application were:
– Projected hard development costs must be realistic, developed through the use of technically competent methodologies, including cost estimate services, and comparable to industry standards for the kind of construction to be performed in the proposed geographic area.
– Cost estimates must represent an economically viable preliminary plan for designing, planning, and carrying out your proposed activities in accordance with local costs of labor, materials and services.
– Projected soft costs must be reasonable and comparable to industry standards, and are subject to the applicable HUD “safe harbor” cost control standards that provide specific limitations on such costs as developer’s fees (between 6 and 12 percent), public housing authority administrative/consultant cost (no more than 5 to 6 percent of the total project budget), contractor’s fee (6 percent), overhead (2 percent) and general conditions (6 percent).
The FCHA’s $40 million makeover plan for Bierer Wood Acres relies on using the HOPE VI $20 million as a funding fulcrum. If that amount is ever obtained, the authority plans to seek $18.5 million in state-issued tax credits, plus it plans to kick in $1 million of its own money.
The authority’s HOPE VI application was compiled by Falbo-Pennrose of Pittsburgh, its private development partner that has also done preliminary site design work for the planned makeover. Falbo-Pennrose has been touted as experts in this field.
At the April FCHA board meeting, Harkless reported that the authority has paid $405,000 to Falbo-Pennrose for its work in preparing various master plans and for the planned makeovers of Lemon Wood Acres and Bierer Wood Acres.
The HOPE VI application is only part of that total.