City Council - Special Meeting

All right, welcome everybody to the city council special meeting Tuesday, March 24th, 2026. We have several items on the agenda this afternoon. The first one being an orientation to the community development block grant and home program. So, we have Lisa with city staff to go through that with us.

Thank you, mayor, council members. As y'all know, I'm Lisa Craig, CDBG grants manager. Introduce James and Tara Reynolds, my trustworthy staff that keeps me out of trouble. So, go from there. Um, this these two programs are very very complicated. So, I'm I'm not going to read you everything on here, but you will have all of the information in your packet and I'm going to kind of go through here and then we'll deal with any questions that come up that we may refer back to things that that are in the presentation. So, why these programs matter? Um they're federal funds that come into the city of Norman and it helps to support housing activity, neighborhoods, community services, primarily benefits low and moderate income citizens and it does leverage local and private resources. We do that a lot. The National Community Development Association, they do a study each year and they through their different computations determine that for every dollar of CDBG funds that comes into a community, it leverages $4 of private investment, whether it's working with the local contractors that we have, buying local materials, um things like that. And so we operate within a five-year consolidated plan that this council approved last year. So, we're getting ready to go. Um, next month you'll see us again talking about the second year action plan. Uh, we're wrapping up the first year action plan. As I said, it's flexible funding. Um, it's based on once Congress does the appropriation, there are two formulas that uh, HUD uses to determine which which one provides the most funding for Norman. We primarily go under formula A because we're a newer community. when you compare us to the Bostons and the Philadelphiaas of the world, um that we're still growing and we really do not

have um the the formula things, the growth lag and and things like that. Um that the older communities have um poverty is the big weight in both of them. Um and so like I said that that we primarily are funded from Formula A. Our current allocation is a little over $984,000. So when you start talking about eligible projects, the one thing you have to remember is that it's a two-sided corn coin. You have to decide who is going to benefit, meeting one of the national objectives, either benefiting low and moderate income citizens, eliminating slum and blight or meeting an urgent need. The other side of the corn coin is what are refunding and that is where HUD lines out what all the eligible activities are and I'll go into that a little bit more. Um the who benefits the national objective one of three uh primarily benefit low and moderate income households nationwide. This is the most used objective uh for the city of Norman. This is the only objective we have ever used. uh since 1974 or so when the program came about, we have had 100% benefit to low mod um citizens remove slumber blight. It's not just saying this house is slumber blight. It's usually much um in a targeted redevelopment. It's a whole area that the city council would have to declare it slum and blight. Um

have we we don't have that terminology right now. We can condemn an individual structure, but to, you know, declare something slow and wide, that would be something that we'd have to work through or meet an urgent need. Yes. Oh, councle. No, I thought you had a question. Oh, no. Okay. Okay. That Yeah, that was it. If we had done that and I can't think of any large areas, abandoned areas of Normandy,

for instance, if if it was determined that you wanted to access CDBG funds to redevelop Griffin, it could be declared slum. It is in a low mod area also, but that's just kind of how you could look at those things. Meet an urgent need. Um, this never gets used. It's in there just in case. Usually by the time you can jump through all the hoops to determine that it cannot be met with any other funds, you're outside the 18month window that you have to be in. When you talk about benefiting low and mod households, there's three different ways you can do it. Individual benefit, which is what we use for housing rehab. We can operate citywide. We determine the household of the individual that will benefit. area benefit. That's where we use our target areas that we work in to where the neighborhood defined by census data is um greater than 51% of the households are at or or below 80% median family income. That's that's a lot of math. Um and you can do census data. You can do a manual survey. We have to had to do that in several several instances. uh HUD changed the rules many years ago to where um you can you can aggregate the data from contiguous census tracks. And so for instance um with I think it was the 2000 census the first courthouse area actually fell out of being a low mod area but because we can aggregate it we were able to use the average of all of the target areas and keep it in and primarily it was for a good reason in that their percentage of owner income went up.

Yes ma'am. Um could you please give me an example of a house that would qualify for the housing rehabilitation? It would be a family whose income is 80% below median income that has an urgent situation that that is health or life safety such as that the heat went out, water heater went out, the roof is leaking. Uh we don't do general homeowner maintenance. Um I think a single household it's about $45,000 and so it's it's it's on up there. And what we find is that it's usually senior citizens who have paid off their homes that are now on a fixed income that their roof starts leaking and they just can't afford the $20,000 to to repair it. And so we have those going on all over the city. Um we do 30 to 45 of those a year.

That's perfect. Thank you so much because that's actually what I want to email you about. So you bet. Um 30 to 45 roof replacements a year. Yeah, council Bruce. It's more than roofs. It's I mean the whole gamut of stuff.

It's, you know, sewer lines that have collapsed, uh, roofs that are leaking, heat and air units that don't work, water heaters that go out. We have had a run this year of various things breaking underneath the slabs of houses, whether it's a sewer line that collapses, a water heater that starts leaking. And as you can imagine, those really start adding up when you start busting out concrete. Um and then the limited clientele, we use that a lot for public services such as uh if we are providing scholarships to meals on wheels or something like that. We really haven't done that much in in the recent years because we have been f focusing more on housing rehab, but that is another option that you have to to qualify incomewise. Um again, this is just talking about slum and blight. Um, and then meeting an urgent need. It goes into it a lot more in detail and um, I don't want you guys to fall asleep on me, so just leave those in there. Um, then on the other side of the corn, we talk about eligible activities. Um, HUD has defined 17 of these. Uh, the ones that are in red are the ones that we have done either currently or in the past, which is acquisition of real property, public facilities improvements. We do park improvements in the target areas, uh, public services, housing rehab, and then program administration.

Yes, council member Bruce, I just want to make sure I'm straight. Um, I look at this as two different two programs in the same umbrella. So, I guess individual houses and then you have area. Yes. Both are funded independently.

Yes, they are. They are. We have a U oversight committee that we work with that sets our priorities for the consolidated plan and then is reflected in the action plan. As you guys are aware when you hear me each year up there giving you the spiel, our main program is housing rehabilitation and approximately a little over half of our money goes for that. Um CDBG by statute can work on private property unlike general funds. And so we uh we determined many many years ago that that was the highest and the best use for these funds to be able to address the needs of the the low and moderate income citizens keeping them in their their homes. Ineligible activities, they define those also. Uh buildings for general government conduct, we can't go build another city hall. general government expenses. We can't decide that we're going to pay for sanitation in the in the CDBG area instead of the city paying for it. Political activities, purchase of equipment. We can't just go buy a fire truck. Um operating and maintenance expenses, income payments, and new housing construction. So the things to remember is again the two-sided coin. National objective eligible activity. CDBG is a reimburseed based funding. The city actually fronts the money and then monthly Terra and I work to draw down and reimburse the city for the expenses we had. Public services, we have a 15% cap based on our allocation, 20% cap on admin, lots of reporting and monitoring that goes by. And the main thing to remember is that with these funds and the home funds that when you use these, you're going to trigger a whole alphabet soup of other federal requirements, uh, wage rates,

section 3A, leadbased paint, uniform relocation act, things like that that we have to be very, very careful that if we trigger them that we address them. Again, why compliance matters with with CDBG funds? If HUD determines that we did something wrong, actually it's you guys that did something wrong because you approve everything. Um the funds have to be paid back to HUD by a non-federal source. And so it kind of hits y'all in the pocket pocketbooks. Um or they can require a substantial modification. Uh they can restrict future flexibility on projects. if they determine the city doesn't have the capacity to do what they need to be doing, then they can reduce the amount of funding. Um, if continued access to federal funds because we are CDBG entitlement back when we had the wildfires and the tornado in 2011 2013 because we were an entitlement community, we had access to $17 million of disaster funding. And so once you get on the bad list, you don't have access to those funds anymore. The top compliance risk, income qualification errors. You know, we we spend a lot of time counting the nickels with people to make sure that that we get them in there. Our goal is to not disqualify, but do everything we can to qualify them. Um documenting the national objective and making sure that we have to do an environmental review on every project that we do. It's it's kind of nea light, but it is still quite an extensive process that we have to go through. Annually, HUD does a risk assessment on both the CDBG and home programs uh to determine if we need additional oversight or monitoring. I am pleased to report that the last time we were monitored was 2013. So, we must be

doing something right. Again, CDBG total funding 984 443. Administration, we're below our 20% cap. Our public services, we're below our 15% cap. We are currently funding a position in conjunction with the housing authority that is going out and increasing the availability of section 8 landlords. Um, I've got a report that I'll I'll get out to you guys showing the impact and the number of units. Two years ago when we started this, there were many apartment complexes that would no longer accept section 8. They felt it was a hassle. A lot of it was just word of mouth of of bad attitude kind of. and he has really gone and sold the program and we have, you know, really increased the numbers um of apartment complexes as well as mom and pop landlords that are now accepting section 8. Neighborhood improvements, working with the target areas. Uh we're doing a little bit of placemaking, some park stuff. you know, the three neighborhood parks. When you look at the big capital project thing, you know, the park needs are so much that this helps by being able to lift some of those projects up into a higher priority and get those done for those neighborhood parks. And then acquisition of affordable housing, working with the affordable housing corporation as well as Habitat to acquire properties that they can then use for affordable housing. So to give you a little more information on on our main program is since 77 we've done 1334 rehab projects with a total investment of over $11 million. Um prior to 1988 um HUD had the requirement that the rehab had to occur within the target area and that's the way it was when I first started working here in ' 84. And so we were kind of bound by these and

every now and you'd get one that's just across the street and you couldn't help it. And so that in 88 is when Hun changed the reg regulations to determine that it was a individual benefit instead of an area. Um when you look at all of the housing programs of CDBG and home over the year we have done over 2500 units. And as y'all know, funding kind of comes and goes for special things. And so we're we're really proud of of that number. Here's a map that shows the impact of the CDBG um projects. As you can see, most of them are concentrated within the core area due to that that that first couple years, several years of having to be restricted to that. But you can see that we clear on the other side of the lake. You know, James will have a project over there and he's gone a half a day. Well, by the time he drives out there and deals with the homeowner and the contractor and then comes back. So, part of the CDBG uh cool things, if you are CDBG and entitlement, you have access to a section 108 loan program. And it's a loan guarantee tied to your CDBG allocation that you can borrow against CDBG allocations up to five times of your annual allocation and still has to meet national objective eligible activity because typically it is CDBG funding. These are used for huge redevelopment projects, infrastructure supporting development, mixeduse, multifamily house, multi-unit housing. Um, all kinds of things that can be done to leverage private investment. Uh, we have never done a section 108 loan. Um, one of the things, so if you run the numbers that we have right now, technically we could borrow up to $4.9 million over a 20-year time frame.

um this chart kind of tells you the the pluses and the minuses. Um you have to pay it back. That's the bad thing. And so what what most communities do is they work to make sure that there is a dedicated income stream to pay that back. Only leveraging future CDBG funds in the worst case scenario. If we were to take that $4.9 million over 20 years and decide that we need this money for something and we want to we don't have an income stream to pay it back, but we want to do a project. It would be about $250,000 out of our $950,000 allocation for 20 years that would go to pay this back. the interest rate is a little bit higher than a geo bond or a municip municipal bond, but it does not require a uh a voter approval. So,

um Lisa, also in terms of that loan program, one of the things when you issue a geo bond, there is a cost of issuance and the underwriter gets paid and the bond attorneys get paid. In this scenario, those costs are avoided going through the section 108 loan program. So, as as Lisa's kind of described, all the projects that we've done, um, glad we get to have this conversation with council to say that's just the way it has been done. That does not say that's the way you must do it in the future. Your uh, prior and current investments in uh, Crimson Flats, if you drive out that way, you'll vertical construction. It's super duper cool. Um, just ponder the concept of another nearly $5 million potential investment in additional units that would reduce funding in future years by about 225,000 a year. If we didn't have any income stream from that other project, it's entirely possible you would have an income stream from another project like that that would cover the debt service and you would still get another 98.

It's it's a very useful tools that that I've got an example in here. I'll show you later. Oklahoma City does a lot. Of course, they received $14 million of CDB CDBG money. Um, but I've got uh two examples in here to show how they they leverage those funds to to basically make something whisbang and cool. And here it is. Uh, we've never done one, but Oklahoma City used it for the Fred Jones manufacturing plant redevelopment. Um, they they the national objective was low mod income benefit. Eligible activity was economic development by job creation. They created 138 jobs and it it leveraged historic rehabilitation tax credits, tiff financing and private capital. Uh and it basically it allowed the city to borrow at that reduced interest rate to make the financing package more more attractive. And then the Dow Oklahoma City campus. I bet you guys didn't know driving up the highway that that was a section 108 project. Again, job creation. That's what you see a lot of section 108's done for is to leverage different things for job creation or such as if there is a a development that is does not have the adequate infrastructure you can run the infrastructure with the section 108 and leverage the job creation from that from that development. As with everything, there's a risk. You got to figure out how to pay it back. Um, revenue projections may not materialize. You know, all the all the usual business things that have to be considered in that this is a loan that has to be paid back. So, before I hop into home, do you guys

have any any more questions? Yeah, Dixie, I just say I think you're done a wonderful job. This is a great program. Um I think this money is some of the best money spent on the whole holistic like homelessness issue. I think this is um these dollars are to keep people from becoming homeless are invaluable. And yeah. Um and also I was glad to hear that you told Daryl you're going to stay on it for another 10 years. Is that right? guarantee I have it in writing pretty sure. So I don't have nearly as much for home but u Bruce did you have a

it is yeah just the uh calculation the national calculation come down and gives our our allocation our allocation has historically been a million almost a million 800,000 bounced right around a million just depending on how Congress funds the program and then you will see every now and then they will kind of sweeten the pot with a with a new program but you know put money out based upon that for So segregate this bucket. Now we're going to talk about another bucket. That's also based upon a formula. Yes. Okay.

I do not know what the formula for the home program is. Uh we receive about half amount of that. Um CDBG there are eight entitlements communities in Oklahoma. In home there are only four. Oklahoma City, Tulsa, Norman, and Lton. And it is primarily housing. uh it does require 25% non-cash match to where um it's third-party money that comes into a project. For instance, when we were doing a down payment assistance program, uh some people would we'd have a generous banker that would give them a quarter of a percent. We multiply that over 30 years goes into match bank. Um someone does a 184 Native American loan where they have to pay PMI, calculate that out, goes into the match bank. Uh we have $3 million of non-m money sitting in the match bank. Um which is nice because that gives us the flexibility as we do projects. We can draw from that that bank if we don't have the actual third party money coming into the into the deal. Um, we're allowed 10% admin. Our CHOTO community housing development organ organization is a special 501c3. Uh, Norman Choto 2015 is our CHOTO. Uh, we're required to provide them 15% of our funding. Currently, they have a house up on Leaning Elm that is under construction using several years worth of Choto money and then a development of affordable housing of 330,000. Um,

and they said that was the site of a home that had burnt down. I'm not for sure why it was torn down. It was torn down for some reason and now a new home's Yeah.

being built in a and a family that meets the uh affordability criteria will be the new long-term tenants. So over the years working with the affordable housing corporation and and the Norman Cho, we have 44 properties that are developed debt-free, rented at affordable rates, generate approximately $100,000 of program income that because they're both 501c3s, their mission is affordable housing. Those funds keep rolling right on in there. Um we have a down payment assistance program. Currently, we have money for eight households within our three neighborhood target area that we're working in. We'll pay up to 1499 uh households 80% and below um in in exchange for you living there for 5 years. We release that after five years. And so, it's a it's a good start to get into housing. Um, we have done some tenant based rental assistance in the past uh to work with households exiting homelessness and uh because we are a home entitlement, we received a little over $1.5 million of home ARP funding that will be we're accessing those funds as well as the the home funds that we have to build the facility over on Triad Village. So again, low mod restrictions, long-term affordability dependent on how much money goes in it and what the construction type is. New construction is automatically 20 years, lots of compliance monitoring. Uh again, working closely with the affordable housing corporation. They are really good at reertifying the tenants, making sure everybody stays within the income income guidelines. So, and then I wanted to show you guys how all of these HUD tools can work together. So, you've got CDBG, which is

the foundation tool, gives us the flexibility to invest in neighborhoods. Lots of different things we can do. Section 108 is more of a catalyst that allows the city to take on a larger redevelopment project. And then home is the housing production tool. uh much more targeted, but it can be leveraged uh with partnerships with developers to ensure long-term affordability requirements. Um it's it's amazing how they all kind of dovetail together to be able to do these things without a lot of overlap or contradiction on those. Um you know, I'm going to go down swinging on this one. So, this is how this could work if and when the redevelopment of Griffin comes about, you know, we've already got neighborhood investment going on in the surrounding areas, have some options for some financing, and then home to support long-term housing conditions. Um, I just thought I'd throw an example in there so that you could actually get in your mind how these things could possibly work for Norman.

Yes, I think that's the best example we probably have. So place that's and it's nearly not enough money. So you know, but it's what can get it jump started on something. I think like you were talking about and council Dixon mentioned that um this is a big part of preventing homelessness is one keeping people in the homes they already have, especially senior citizens. and then to um expanding the pool of places that will take housing vouchers and then people that are in the shelter faster much more better chance of getting them out faster if there's more places that will take and it just dominoes on up, you know. So, Council Brown,

yes. Could you go back to the slide where it was like a capital stack for either the Fred Jones? Uh, let's see here. Oh, the Dell City one will work. Okay, that's the the Dell campus. They're very similar. So, whenever I think about Griffin, I think about like a something similar where it could be TIFF funds. Um actually maybe historic tax credits given the area.

Um there could be additional state and federal incentives. Uh definitely the section 108 loan. There was a developer that we talked to that we said this is an economic opportunity zone which means it definitely qualifies for section 108. And you know you could see the wheels turning about how that might make a project like they were proposing financially possible. So, um I just wanted to say that I think like this is not unoured like this is a great way to fund a project.

Well, and I and I think like I said, we've never done a section 108 loan. Uh Shaunie did one as an economic development that was a help build a factory for a company that made poop scoopers. And uh it worked. I mean, you know, it was it was a small loan. They're very small entitlement, but it was enough to leverage the private investment to make the deal doable and the developer paid back the money and so they they weren't on the hook for that. So, so you've got really small things like that and then you've got Dell and Fred Jones. So,

any other questions for Lisa? Okay. Well, thank you very much. I appreciate the update. It's very helpful info and uh like we said it's it is part of the overall holistic uh operation of keeping people housed, reducing homelessness, getting people out of it faster. Okay. Thank you very much. All righty. So, we'll keep those thoughts in mind when council does its uh annual retreat uh this summer and be happy to take any ideas that come up to apply it more. Uh I you have to talk to someone and there's money involved, you know. All right. Item number two is continue

42 is not enough. Continued discussion of the proposal from Sooner Mall for a sales tax rebate agreement.

Uh thank you councel. Just an update from council's last conversation. Staff took the uh term sheet and met with the economic development advisory board or EDAB. Those are council uh appointees that review such uh proposals and actually some great questions and conversations came from that meeting and they were questions at the time they were asked we we didn't have access to the to the answers. So, uh, we formulated the questions, shipped them over to Derek, our mall manager, and said, "We know you have the answers to these questions, uh, questions to the effect primarily of mall ownership and the footprint of the mall as we recognize it to be considered in this sales tax rebate program. Recognizing that uh, two properties are not owned by them all. one being Dillards, which is actually a little over nine acres that includes a large portion of the parking lot and then uh Longhorn Steakhouse. And the question was how how do we account for um their participation in the program if it's a different ownership group than the mall? H how does the maintenance happen in that scenario and how would those uh investments actually develop? And uh Derek shared that the management of those properties is all done by the mall. So you have kind of uniformity in the investment on the whole footprint, not just properties owned by the mall group. So the properties owned by other parties even including a potential future uh owner of the seir site different than the mall that they have

access to the common spaces and the uh adjoining property uh is maintained by the mall group. So made complete sense that such investment would include uh those properties in the in the footprint of the mall. Another question that came up to be considered in the development of the final agreement. What's on council's uh consent document tonight? Is this the term sheet to advance to negotiations for that uh agreement? uh to include that in the event of a a property sells, if the Sears site goes to a different end user, that should the end user say, "Hey, city, we want we want uh such a a sales tax rebate deal, it's directed back to the mall property." That would be the deal, the relationship for the entire mall footprint, not multiples, not multiple bites at the apple. And then the third uh question that was posed was uh did council consider the uh higher cap at 500,000 and a 50/50 share versus a lower cap at 300,000 and 100%. In that conversation uh primarily was to uh more heavily frontload when we looked at a five-year deal. um the ability to move quicker at a lower cap. Uh if successful, the mall rebate would be capped at 1.5 million. At a higher cap of 500,000, uh if if we get back to where we were pre- pandemic, the sales tax rebate would be 2.5 million. So 100% at a lower cap with success, the city keeps a bigger chunk uh of those dollars. So, wanted to let you know uh we did uh ask and receive answers to those questions

that EDAB had proposed. Uh the next step would be uh the negotiations of that final deal that would once again come back to council for your ultimate uh consideration and decision. And I said, Derek, do me a favor. be here in case any additional questions come up that have to do with the contractual relationships between uh other property owners and tenants in the mall owned property. So, and to remind us the baseline that we'd be going off of that is in the 60,000 about 60 well gross cap if we did the 100%.

Yes. Gross sales uh at the mall post pandemic are in the $66 million range. Pre- pandemic $89 million range. Uh yeah, based on the last three years, this is a conversation of about $60,000 if they generate and to get up to the $300,000 cap, they would have to increase sales at the mall property by 13 million. 13 million. And if we did the 500, they'd have to increase the sales by close to that uh historic cap. Actually, if I can speak, if we do the 50-50 split, oh, sorry, Derek Hall, general manager of the mall. If we do mathwise, if we do the 5050 split, the to get that $500,000 cap, we'd have to increase by $44 million.

Sales at the mall would have to increase two increase by 44 million. So, from mid60s to over 100 million, you'd have to increase your sales to get that. Want to be clear about that for sure, which would be amazing. Um questions for city manager on this? Um any further action? You said this is to enter into negotiation. It's it's uh on your consent calendar this evening. It's just a term sheet. The uh economic development advisory board uh supported the term sheet going forward. So you could uh continue those negotiations on the final agreement that will come back to council. My guess is the final agreement will come back to council for approval and there'll be a public hearing. Correct.

Council member Noire. Uh, yeah. I was just wondering how much have you actually invested so far into the projects that you're looking for. Um, what we've invested so far, I don't have an actual number on. I can tell you we've got a little over 1.2 million in the plan for the next five years. Perfect. Any other questions for Daryl or Derek? So, uh, Mrs. Katherine Walker and the city attorney's office will be participating in those negotiations on council's behalf. We'll keep you posted and give you advanced notice before that final document comes back to you for your consideration.

Okay. Again, that'll be a city council meeting in front of the public with public comment and everything like that. So, okay. Any other comments about this for right now? Okay. All right. Thank you for the update. All right. All right. Item number three is a consideration of adjourning into an executive session as authorized by Oklahoma statutes under title 25 uh 307B4 to discuss settlement of a pending torque claim submitted by Clifford Jimson and to discuss threatened litigation regarding ordinance number 0-2425-2. And I need a motion to adjourn out of special session and convene into an executive session in order to discuss the settlement of payment torque claim and threaten litigation.

Motion second. All right. All those in favor signify. I opposed. Okay. for a little bit. Thank you, though. Messenger text.