The La Plata Economic Development Alliance (Alliance) Housing Catalyst Fund (Catalyst Fund) is a public private partnership to create seed funding to support below market housing development in La Plata County. The Catalyst Fund was initially funded by donations and grants, and administered by a group of community leaders and housing experts.
Catalyst Fund proceeds may be used for a variety of predevelopment costs, including but not limited to project feasibility studies, environmental studies, engineering, architectural, market studies, options, legal fees, soil studies, site preparation, appraisals, surveys, development consultants and other items associated with determining project feasibility.
One of the primary recommendations from the Economic Alliance Three-Year Housing Investment Strategy was the creation of a local predevelopment initiative to help housing projects move forward, take advantage of the significant funding opportunities under the American Rescue Plan Act (ARPA) and also to prepare for funding from Proposition 123 which is anticipated to be available in late summer of 2023. Predevelopment funding is the first funding for any project and is also the riskiest funding for an investor.
Eligibility & Selection Criteria for Funding
Eligible applicants include local non-profit organizations, corporations, private developers, and local public agencies. All recipients of the Catalyst Fund must show evidence that their proposed project will commit at least 25% of the units to below market/affordable housing if pursuing state funding and/or intends to preserve existing below-market housing. If providing units through other resources or programs, the applicant will tell the fund what % it can commit to.
“Below-market” is defined as housing that can be delivered to local community members at the following prices for local community members:
- Rental housing that delivers new rental units that provide rents affordable to households earning less than 140% AMI
- For-Sale housing that delivers affordable housing units available to households earning less than 160% AMI.
All affordability calculations will follow the HomesFund’s annual calculations for their loan fund and the current City’s Fair Share program. All rental affordability calculations will follow CHFA guidelines.
In addition, eligible applicants, their partners, and/or development team members must have experience with affordable/below-market housing and be able to demonstrate that the applicant has well-functioning and acceptable financial management systems and experience in managing real estate development.
If the applicant has no prior affordable housing development experience, the applicant must partner with an experienced co-developer or use a housing consultant with significant experience to meet the threshold for eligibility under the Catalyst Fund.
Interested eligible applicants will submit an application with a proposed project and if selected, would receive an award letter, based on their proposed project size, to support project development. Selected projects would also receive up to 10 hours of technical assistance from a regional housing consultant and guidance from local public agencies on land use and development requirements. Applications will be reviewed and ranked using Readiness to Proceed as a primary factor which is a best practice in the housing field and a transparent way to select projects that may receive significant public investment.
When reviewing Readiness to Proceed, the following criteria will be used. Evidence of readiness to proceed must be submitted with the application.
- Development is zoned for proposed development type, or a re-zone is feasible within 12 months.
- Development site has infrastructure, water and sewer. (If the project does not have infrastructure, the application must include a cost estimate, timeline to obtain infrastructure, and strategy for public funding.
- Proposed project owner is willing to partner and enter into a formal agreement to provide below-market lots, units or both.
- Total costs for a home through this proposed project will result in below-market unit prices. This should be verified through the local HomesFund’s annual affordability analysis.
- Development team has experience in development directly or through a consulting team and is in good standing with local governments and state funding agencies.
- Proposed Project’s location is within a reasonable distance to services/amenities, based on proposed population to be served and anticipated future funding source requirements.
- Proposed Project has local government support.
The Catalyst Fund Committee approves all funding guidelines, reviews applications to the fund, and approves funding allocations.
This committee is comprised of the following individuals:
Kent Curtis, CEO, First Southwest Bank
Eva Henson, Housing Innovation Program Manager, City of Durango
Mark Garcia, Town Manager, Town of Ignacio
Nicol Killian, Community Development Director, Town of Bayfield
Chris Lopez, Community Relationship Manager, CHFA
Adam Rogers, Director of Finance, La Plata County
Steve Short, Board of Trustees Member, Fort Lewis College
Pat Vaughn, Commercial Real Estate Consultant, Stultus LLC
Amounts and Terms
The Catalyst Fund awards will be in the form of a grant ranging from $25,000-$75,000. If awarded, grant agreements will require that applicants provide quarterly progress reports and report on the following:
- Predevelopment activities completed
- Results of feasibility studies
- Changes on project concept
- Updates to development timeline and approach
- Final report on project feasibility and final unit count and anticipated costs of the project. If not feasible, lessons learned on factors limiting success of the actual development project for use by the Catalyst Fund Committee