Quick Strike Acquisition and Project Support Fund

 

Program Summary

The Quick Strike Fund provides financial assistance for real property acquisition and acquisition related costs in Cincinnati neighborhoods. The program is designed and managed by HomeBase Cincinnati. The City of Cincinnati provided the initial funding for the program in December 2023. The program has since evolved per recommendations by City Council (Motion 202401579).

Additional details about the program are listed below:

●       The program is designed to support non-profit CDC organizations in securing critical sites in Cincinnati neighborhoods to maintain housing supply and/or cause a redevelopment project that will have a significant impact on the neighborhood.

●       Projects funds are only eligible for real property acquisition projects. Applicants may include eligible acquisition related costs in the funding request such as title report, appraisal, and environmental site assessment costs.

●       Applicants are required to have valid purchase option to be recommended for funding.

●       All applicants are subject to a Good Standings review by the City of Cincinnati’s Income Tax Department.

Priority is given to catalytic projects, where as the project may require a substantial amount of investment in real estate development relative to the average real estate development in the neighborhood of the project; or is likely to have a substantial effect in encouraging additional investment or real estate development in the neighborhood of the project.

 

Project Selection Process and Timeline:

●       Application and Scoring Criteria, and Information is available on the HomeBase website. The program is structured as a rolling application process and is active as long as funding is available.

●       Applications will be reviewed, scored, and funds dispersed on a rolling basis.

●       Applications must include a signed Option Agreement or Purchase Agreement.

●       Applications will undergo Committee review, scoring, and projects above a score of 151 will be sent to the city for funding.

Score out of 200 points	Project Application Action
0-100	The Project will not be funded, however the applicant may be able to cure the application using the feedback provided- i.e. missing items, Catalytic Project score, etc.
101-150	These applications will go through committee review and will be queued for consideration for the next quarter of application review with feedback to theapplicant for improvements to the project / applicant- i.e. missing items, Catalytic project score, etc.
151-200	Project Application is recommended to the City for Funding.

 

Summary of Scoring Criteria:

• Catalytic Project -As mentioned above, the potential acquisition needs to be demonstrably catalytic for the neighborhood: a key property in the NBD, compliments existing controlled property for a larger development, the development plan for the building is catalytic for the community, prospective tenant would be catalytic, etc.
• Catalytic as defined per City Ordinance 275-2017:
  • i. Project requires a substantial amount of investment in real estate development relative to the average real estate development in the neighborhood of the project; or ii. Is likely to have a substantial effect in encouraging additional investment or real estate development in the neighborhood of the project.
  • Scoring prioritizes funding for the RISING 15 neighborhoods to secure property as it becomes available for future long term development opportunities. In doing so, the priority should be on critical site control and long-term impact, not necessarily leverage or short-term impact.
• Timeline - Applicants should be able to demonstrate that they can effectively exercise a purchase contract for property acquisitions in a timely manner. Option agreements must have a clearly defined closing date. The option should include an inspection period (i.e. 180 days) to allow the applicant to perform necessary due diligence (title report, environmental site assessments, site visits)>
  • Scoring will prioritize funding for projects that have no other avenues for funding or for projects that present a critical need for additional site control.
• Applicants should complete a closing by the purchase option deadline; an organization must demonstrate the ability to implement a redevelopment project in a timely manner, i.e. redevelopment should occur within 3-5 years. A redevelopment plan and timeline should be submitted with the application. Example redevelopment milestones are outlined below in Appendix 1.

Financial Need and Leverage - Applicant demonstrates that they can provide reasonable and achievable private resources (i.e. private funding, accompanying bank loan, or volunteer hours) for the project as private leverage. Additional local funds (from other City of Cincinnati programs) are not to be considered as private leverage for this program. Per City Council motion #202401579, the project funds are limited and will provide resources for these unique project opportunities.

• Scoring will prioritize funding to close gaps on acquisitions that maintain naturally occurring affordable housing in communities. An additional emphasis should be on providing the appropriate gap filler to ensure adequate cashflow from the naturally occurring affordable housing to provide support to the community development corporation for their long-term operations.
• Scoring will deprioritize projects that are already receiving significant City funding (TIF, NBDIP, NOFA, VTICA, CBR, etc) from receiving funding from this pot. QSAF Funding should not be a loan and should only be used to take the place of previously allocated City funding under extreme circumstances.
• List of Leveraged Funding and Owner's Equity Sources. Applicants may include their own equity in the project. It should also be outlined to what level of investment is included by each entity and how they will contribute to the project.

Organizational Capacity - Applicant has capacity and sufficient experience to carry out the project, or can demonstrate that it has project partners with relevant experience and available capacity

 Organizational Eligibility:

Any neighborhood business association, community council, community development corporation, or community based organization housed within a Cincinnati neighborhood can apply for funding, that meets the following criteria;

• Nonprofit Status: Applying organizations must be a registered 501(c3), or if not a 501 1(c3), the organization's registered State of Ohio non-profit status for the state of Ohio. Provide either:
• IRS determination letter, if a 501(c3) or;
• Proof of active status as a non-profit in the State of Ohio - Certificate of Continuing Existence. Applicants may check their status by visiting the Ohio Secretary of State Business Search website at businessearch.ohiosos.gov
• Neighborhood Development Entity: The organization submitting an application must demonstrate that the primary portion of its purpose / mission is to improve the quality of life and growth of a neighborhood, and must show proof of existence and activity in neighborhood for a minimum of five years. Evidence of such purpose may be shown in any one or more of the following ways:
  • in the language of the entity's formation documents;
  • in the language of the entity's governing documents;
  • Board resolution or Board Minutes.
  • By providing minutes of meetings (including sign-in sheets of meetings, if available) of the entity that show evidence of the purpose; or
  • Any other documentation of the entity that shows evidence of the purpose that is acceptable to DCED.

• Members or Staff: The organization must show proof of capacity to execute on the proposed project through one or more of the following;
  • Current staff, officers, or volunteer members and their positions / or titles, whichever is applicable to the formation of your organization.
  • List of Board members
  • Organization's Total Operating Budget and Proposed Budget for the applicable Project.

IF AWARDED:

1. Future Project Plans:

• If Awarded, the Awardee must show evidence that a real estate development project will occur on the property to be acquired that will encourage neighborhood revitalization for the community. Awardees must provide, at a minimum, the following items to HomeBase prior to commencement of the Future Project Plans including but not limited to:
  • a. Plans, drawings, and specifications,
  • b. Construction schedule, 
  • c. Construction contract,
  • d. A commercial general liability insurance policy that has been obtained by Awardee, and
  • e. Financing sufficient to complete the Future Project.

 

• 2. Closing & Disbursement Requirements for Acquisition.
• HomeBase will require the following of each Awardee:
  • a) Closing Date. Awardee shall acquire the real property identified in its application prior to the expiration of the secured purchase option. Disbursement Conditions. Awardee shall not be entitled to its Award funds until it delivers all of
  • b) the following to Grantee for Grantee's review and approval:
    • i)Purchase Contract. A copy of an active purchase contract between Awardee and the current owner of the property;
    • ii) Deed. A copy of the proposed deed conveying fee title of the property to Awardee;
    • iii) Clear Title & Title Commitment. Evidence of clear title and a title commitment for the property;
    • iv) Restrictive Covenant. An executed restrictive covenant in substantially the form attached to this Exhibit A as Addendum I (Form of Restrictive Covenant) (the "Restrictive Covenant"), which will be recorded against the property at closing and memorializes Awardee's agreement not to sell, transfer, or convey any interest in the property without the City's prior written consent, which may be withheld in the City's sole and absolute discretion;
    • v)Insurance. Property Insurance written in standard form by companies of recognized responsibility and credit, that are authorized to do business in Ohio, and that have an A.M. Best rating of A VII or better;
    • vi) Environmental Report. An environmental report prepared by a certified professional in connection with the property, which includes, without limitation, a Phase I Environmental Site Assessment and any additional assessments as may be required by Grantee or the City (Grantee shall also require Awardee to deliver to the Grantee and the City an Environmental Reliance Letter issued by the Awardee's certified professional, stating that the Granteeand the City shall be entitled to rely upon all environmental reports and the like prepared by Awardee's environmental certified professional in connection with the property; and
    • vii) Closing Statement. A signed closing statement signed by Awardee and the current owner of the property.

 

• 3. Post-Closing Requirements: Grantee shall require that each Awardee agree to the following upon acquisition of the property, each of which Awardee shall be required to comply with in order to obtain a release of the Restrictive Covenant:
  • a. Property Maintenance. Awardee must maintain the property in good condition and repair and otherwise in accordance with all laws and regulations;
  • b. Final Plans. Awardee must submit final versions of the Future Project Plans for review and approval by the Grantee;
  • c. Commencement. Awardee must commence the Future Project in accordance with the terms and conditions of the Grant Agreement; and
  • d. Completion. Awardee must complete the Future Project in accordance with the terms and conditions of the Grant Agreement.
  • HomeBase may include any other reasonable terms and conditions for the Future Projects. HomeBase shall provide a draft of each Grant Agreement to the City for review and approval prior to executing such agreement with an Awardee. HomeBase shall not permit an Awardee to commence incurring expenses for which Grant funds will be disbursed prior to entering into a binding Grant Agreement.

 

• 4. Closing Requirements.
  • a. Closing Deadline. Grantee shall set closing deadlines for each Awardee and notify the City of these deadlines (which, to the extent applicable, will be consistent with those identified in the purchase contract or purchase option, as may be amended from time to time
  • b. Recorded Deed. Grantee shall cause each Awardee to execute and record a deed at closing reflecting its ownership of the property.
  • C.Recorded Restrictive Covenant. At the closing on the property, HomeBase shall cause each Awardee to execute and record the Restrictive Covenant against the property. HomeBase shall ensure the Restrictive Covenant is recorded against the property in the Hamilton County, Ohio Recorder's Office, immediately after the aforementioned deed, and shall then deliver a time- stamped original of the recorded Restrictive Covenant to the City, all at Awardee's sole expense.

 Appendix 1:

Example Milestones and Recourse Clause

HomeBase Cincinnati Approval of Development; HomeBase’s Right to recourse and the City's Right to Purchase Property.

(0)        The Quick Strike Funding Agreement shall remain in effect until the Property is acquired, and redevelopment of the Property is commenced. However, HomeBase agrees that it will not exercise the Recourse Clause if the following conditions are met, according to the following timeline (the conditions occurring at or prior to the times listed being the example "Milestones"):

(i)          ~90 Days After Award is Granted ("Milestone 1"): Grantee has closed on property, or made significant progress towards closing, additionally there is a proposed final full redevelopment plan, timeline, and proforma.

(ii)         6 Months After Closing ("Milestone 2"): Both of the following constitute Milestone 2:

(1) Grantee's completion of the Project, to the satisfaction of the City; and (2) City approval, through DCED, of a proposed developer and a development plan, which must include sources and uses of funding.

(iii)       6 Months After Milestone 2 ("Milestone 3"): City approval, through DCED, of a detailed development plan substantially conforming to the proposals submitted for Milestone 2 (including drawings, pro forma, proposed project schedule, any other information required by the City at that time) and proof of financing to perform the development.

(iv)       6 Months After Milestone 3 ("Milestone 4"): Closing with the selected developer, only after (and contingent upon) City approval of any environmental assessments required by the City based upon initial environmental assessments required under this Agreement, and any subsequent environmental investigation or testing as may be required by the City pursuant to the results of such initial environment assessment.

(v)         Completion of development ("Milestone 5"): Completion of the development shall be the final Milestone. After the development of the Property that was approved by the City has been completed to the City's satisfaction, in accordance with the approved plans, the City will permanently relinquish the Purchase Option and, upon Grantee's request, will provide a release of the Restrictive Covenant.

 

Application Begins:

Required Contact Information: Two contacts must be provided.

Project Application: (with Corresponding Points per category):

Required Information to provide and Required Attachments listed below. 

Proposal will not be considered if any of the following documents are missing or topics are not answered.

SECTION 1:

Project Feasibilitiy & Neighborhood Alignment (Section Worth 90 points)

Project Funding and City Alignment (section worth 50 points)

Neighborhood Priority (worth 20 points)

Organization Maturity (worth 40 points)

Please upload proof of:

Allowed Additional Attachments (no points):

1Neighborhood Organization Collaboration: Letters of support from community organizations within the neighborhood. Proof of attempted cross community organization collaboration or support for the project; i.e. communications with or letters of support from community council, business associations, community development corporations, and/or other relevant community based organizations. Support letters must demonstrate that the project was recently presented in an open public forum.

2.   Additional documentation in support of this project you feel should be shared with the reviewer.

3. Letters of support from project partner organizations.