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Home My WebLink About1981-08-18; City Council; 6716; Jefferson Senior Housing Project,A 4 CITY OF CARLSCAD -pm-- AGENDA RILL NO. 6 7/6 A---_- -.---.-_- DATE: August 18, 1981 -------.-....- -- DEPARTiYENT: Housing and Redevelopment --- Subject: --- 48 UNIT SENIOR HOUSING PROJECT-BILL RICK Statement of the Makter _--__ .--I_---. On September 23, 1981, staff presented a proposal to build a 48 unit seniors-only housing project under the provisions of the City's senior ordinance. Mr. Bill Rick, the applicant, and the Housing and Redevelopment staff cooperated in a joint effort to analyze the current economic feasibility of the proposal. The conclusion of the analysis was that the senior rental project is feasible only with a "write- down" in the vicinity of $300,000. At that time, Council directed staff to pursue County Housing Development fund assistance for the project. In the interim, staff has been meeting with the County and Mr. Rick's staff. All parties agree that we now have a workable project and financial plan (See attached memo). The County Housing and Development Department is satisfied that the project meets all HUD requirements for funding. The next step in the funding process is to authorize the City to negotiate with the County for the funding. A letter from the Mayor to the Board of Supervisors would satisfy this requirement and would probably result in the funds being earmarked for this project. Staff anticipates that the total program will be brought back for full Council consideration by January 1982. EXHIBITS ‘i Memo to Housing and Redevelopment Director dated August 10, 1981 Draft of letter to Board of Supervisors FISCAL IMPACT Council authorization could result in setting aside up to $300,000 in San Diego County Housing Development funds for Carlsbad's Senior Housina oroiect. Additional write-down of development f e es of up to $38,000 from the City's'pr'lor year's Housing Development allocat i on could also result. RECOMMENDATION Staff recommends that Count Board of Supervisors reques this project. APPROVED 1 authorize mayor to forward a letter to the County ing that they set aside $300,000 for the purpcse of .+ .., 2.“- -i -:_ (. -‘- .$$; ‘%’ ;. :-.+ : : >, $y MEMORANDUM DATE: August 10, 1981 TO: Jack E. Henthorn, Housing and Redevelopment Director FROM: Chris Salomone, Administrative Aide/Block Grant ec)* SUBJECT: 48 UNIT SENIOR HOUSING PROJECT, APPLICANT - Bill Rick LOCATION - Northeast corner of Intersection of Jefferson and Oak SOURCE OF FUNDS- Housing Development Fund - A pool of County Community Block Grant monies set aside for Housing projects available on a project by project basis to applicants from urban county cities and unincorporated areas. Over the past several months staff has been meeting, per Council direction, with the applicant and the County Housing and Community Development Department to refine Carlsbad's Senior Housing project. The result is a concept that the County and City staff agree is workable. The project will generate 48 seniors-only housing units. Ten of the units will be for tenants with incomes of less than 80% of the County median income. These units will satisfy H.U.D. eligibility requirements and therefore will be credited against the City Housing Element goals. All parties agree that the best approach to making the project financially feasible is a land write-down program. A development cost write down and fee waiver approach was not feast 'ble due to restrictive Federal requirements and the current economic conditions. Under the land write-down concept, 1) the County would buy the land with Housing Development Block Grant funds, 2) the land would be deeded to the City and, 3) the City would lease the land to the applicant for a negligible annual amount. This would allow the applicant to reduce debt service to a manageable degree. Staff estimates land cost to be less than $300,000. Additionally, due to current annual interest rates near 17%, mortgage revenue bond financing may be necessary to achieve an affordable operating level for the applicant. Mortgage revenue bond financing is a method of generating below market interest rate funding for the development of rental housing. The security for the bonds is the mortgage payment m&de by the developer over the life of the project. At present, Mortgage Revenue Bonds would result in a reduction of interest rates from 17% to 11%. This means the developer needs lower cash flow to meet debt service. . -Jack E. Henthorn - August 11, 1981 page 2/Senior Housing Project In its Sixth Year CDBG application, the City set aside $38,000 as its allocation for housing development in Carlsbad. These monies could be used to write down some fees or development costs if necessary to make the project feasible. The developer will enter into a development and disposition agreement with the City assuring all eligibility compliance. For this project to continue toward closure the following actions should take place over the next two months: 1) City Council authorization to negotiate with County. 2) Board of Supervisor's earmark of funds for consideration. 3) Authorization of Appraisal. 4) Environmental clearances (HUD site approval). 5) Finding of General Plan conformity. 6) Final draft of development and disposition agreement between applicant and City. Staff feels the project is workable and is confident that the complete program can be brought back for full Council consideration in January of 1982. CS:al 3 L - 1200 ELM AVENUE CARLSBAD, CALIFORNIA 92008 Qitp of CarImsbab TELEPHONE: (714) 729-1181 August 11, 1981 Board of Supervisors County of San Diego 1600 Pacific Highway San Diego, CA Honorable Chairman: The City of Carlsbad has been actively seeking to meet the housing needs of its citizens. Mr. Bill Rick, a long time Carlsbad citizen active in community affairs, has submitted a proposal for consideration by the City. The project would result in the creation of 48 seniors-only housing units, more than 20% of which would be set aside for low-income seniors. This will help Carlsbad in attaining their "good faith 'I housing efforts. In today's tight economic market, we realize the public sector must meet the developer half way in order to assure a feasible project. The City has been working with Mr. Rick for several years in developing a senior ordinance and processing methods to encourage this type of housing. We feel the project is worthy of consideration by the Board for Housing Development Fund Assistance. We request that the Board authorize the County to negotiate with the City of Carlsbad for funding this project with Block Grant funds. The estimated funding to make the project possible should not exceed $300,000. We urge your consideration of Carlsbad's senior housing project. Sincerely, RONALD C. PACKARD Mayor