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HomeMy WebLinkAbout1997-12-02; City Council; 14454; APPLICATION TO PURCHASE AFFORDABLE HOUSING CREDITS IN THE VILLA LOMA PROJECTe B iif % . . p 2 5 5 8 ‘-iB# ILjl TITLE: APPLICATION TO PURCHASE \IITG. /a-J- 97 AFFORDABLE HOUSING CREDITS IN THE VILLA LOMA PROJECT IEPT. H/RED RECOMMENDED ACTION: -L CITY OF CARLSBAD -A&A BILL 74 - ADOPT Resolution 97 - ?# as recommended by the Housing Commission, APPROVING a request by Catellus Residential Group to purchase 16.24 Affordable Housing Credits in the Villa Loma Project in order to satisfy the affordable housing obligation of the Ocean Bluff project under the City’s lnclusionary Housing Ordinance. ITEM EXPLANATION: The Ocean Bluff project is a 92 unit, single family residential development on 31 acres. The tentative map (CT93-09) application has been approved by the Planning Commission. The project will include homes of upwards of 3,000 square feet on parcels ranging from 7,500 to 13,000 square feet. The applicant is requesting to purchase affordable housing credits in the Villa Loma Project to satisfy the project’s 16.24 unit inclusionary housing obligation. The City Council is the approval body for the purchase of affordable housing credits. The Ocean Bluff project has two potential options in satisfying its’ inclusionary housing obligation. The project could potentially construct an on-site affordable units or purchase credits. The applicant previously received approval for Site Development Plan SDP93-07 for a 16-unit affordable apartment project. However, the developer has since concluded that the construction of the on-site affordable project is financially unfeasible. The City Council has adopted Policies 57 & 58 that govern the sale of affordable housing credits. The policies examine the feasibility of an on-site proposal, the advantages and disadvantages of an off-site proposal, and whether the off-site project advances the City’s housing goals and strategies. In reviewing the applicant’s request, both the Housing Commission and staff have utilized the criteria contained in Policies 57 & 58 in making their recommendation. The Ocean Bluff Project was before the Housing Commission on three occasions. At the conclusion of the first meeting, the Commission requested that staff prepare a report projecting the inclusionary housing requirements of undeveloped property within the Southwest Quadrant of the City (See Attachment 2 - September 11, 1997 Staff Report). The Commission requested this information to determine if there are adequate credits available to future residential projects. The report determined there are in fact adequate remaining credits. At the conclusion of the September meeting, the Commission requested that the applicant provide updated financial information on both the proposed apartment project and a potential for sale condominium project City (See Attachment 2 - October 23, 1997 Staff Report). The Commission requested the updated information to better analyze the applicant’s statement that the project was financially unfeasible. The information determined that the rental project would require a financial subsidy of approximately $60,000 per unit while the for-sale project would require an approximately $50,000 subsidy. After reviewing all the information, the Housing Commission’s recommended the project be allowed to purchase credits in the Villa Loma Project. I FISCAL IMPACT: The Affordable Housing Credit is currently $32,220 per unit. The purchase of 16.24 credits will result in a payment of $522,928 to the City’s Housing Trust Fund. EXHIBITS: 1. 2. 3. City Council Resolution No. q 3 - 70 3 Staff Reports to the Housing Commission dated, August 14, 1997 w/attachments, September 11, 1997 w/ attachments, and October 23, 1997, with attachments. Housing Commission Minutes from meeting of August 14, 1997, September 11, 1997, and October 23, 1997. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 I. ) _. 3. 4. CITY COUNCIL RESOLUTIC- o NO. 97- 703 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, APPROVING A REQUEST BY CATELLUS RESIDENTIAL GROUP TO PURCHASE 16.24 AFFORDABLE HOUSING CREDITS IN THE VILLA LOMA PROJECT IN ORDER TO SATISFY THE AFFORDABLE HOUSING OBLIGATION OF THE OCEAN BLUFF PROJECT UNDER THE CITY’S INCLUSIONARY HOUSING ORDINANCE. APPLICANT: Catellus Residential Group CASE NO: CT 93-09, WHEREAS, Catellus Residential Group has received approval of Tentative Map CT 93-09 for the development of a 92 unit residential development; WHEREAS, Catellus Residential Group has received a recommendation of approval from the Housing Commission that the City Council approve the purchase of 16.24 affordable housing credits in the Villa Loma Project to satisfy the inclusionary housing requirement of Tentative Map CT 93-09; WHEREAS, the City Council did hold a public meeting to consider said request for the purchase of Affordable Housing Credits by Catellus Residential Group; WHEREAS, at said public meeting, upon hearing and considering all testimony, if any, of all persons designing to be heard, said Council considered all factors relating to the application and request to purchase Affordable Housing Credits: NOW, THEREFORE, BE IT HEREBY RESOLVED by the City Council of the City of Carlsbad, California, as follows: That the above recitations are true and correct. The project is consistent with the goals and objectives of the City of Carlsbad’s Housing Element and Comprehensive Housing Affordability Strategy, the Inclusionary Housing Ordinance, and the Carlsbad General Plan. Based upon the analysis contained within the City Council Staff Report and Housing Commission Staff Reports, the City Council finds that the off-site satisfaction of the inclusionary housing requirement is in the public interest. That based on the information provided within the City Council Staff Report and the Housing Commission Staff Report and testimony presented during the public meeting of the City Council, the City Council hereby APPROVES a request by Catellus Residential Group to purchase 16.24 affordable housing credits in the Villa Loma Project in order to satisfy the affordable housing obligation of the Ocean Bluff project under the city’s inclusionary housing ordinance. 1 2 3 5. That the City Council hereby authorizes the City Manager or his designee to execute the Affordable Housing Agreement in substantially the form presented to I the City Council as Exhibit 3 of the Housing Commission Staff Report dated August 14, 1997 and to execute such other documents, or take other actions as may be necessary or appropriate to assist the developer in acquiring the Affordable Housing Credits. 4 PASSED, APPROVED, AND ADOPTED at a regular meeting of 5 the City Council of the City of Carlsbad, California, held on the 2 nd day of December , 1997 by the following vote, to wit: 6 II 7 II AYES: Lewis, Kulchin, Finnila, Nygaard & Hall 16 17 NOES: None ABSENT: None ABSTAIN: 15 II ATTEST: wCLAUDE A. LEWIS , Mayor 18 ALETHA L. RAUTENKRANZ, City C&k 19 (SEAL) 20 21 22 23 24 25 26 27 cc RESO # PAGE 2 28 Attachment No. 2 Staff Reports to the Housing Commission: August 14,1997 September 11,1997 October 23, 1997 The City of Carfsbad Rousing & Redevelopment Department A REPORT TO THE HOUSING COMMISSION Item No. 3 Stafl Craig D. Ruiz Managemen: t Analyst DATE: OCTOBER 23,1997 SUBJECT: CT 93-09 - OCEAN BLUFF - APPLICATION TO PURCHASE AFFORDABLE HOUSING CREDITS IN THE VILLA LOMA HOUSING PROJECT I. RECOMMENDATION That the Housing Commission ADOPT Resolution No. 97-010, recommending that the City Council APPROVE a request by the Ocean Bluff Partnership to purchase 16.24 AffordabIe Housing Credits in the Villa Loma housing project in order to satisfy the affordable housing obligation of the Ocean Bluff development under the City’s Inclusionary Housing Ordinance. II. PROTECT BACKGROUND This item was originally before the Housing Commission at their August 14,1997 meeting. The Commission continued the item to the September 11,1997 meeting and directed Staff to provide a report projecting the inclusionary housing requirements of undeveloped property within the Southwest Quadrant of the City. The report was to also examine if the projected development of the Quadrant could result in a demand for the purchase of off-site credits which exceeds the number of available credits. The report indicated that there are sufficient excess units to meet the potential demand of the Southwest Quadrant. The item was again continued at the September 11,1997, meeting and the Commission directed the applicant to provide updated financial information on both the proposed apartment project and a potential for sale condominium project. In addition, the applicant was directed to contact additional non-profit agencies regarding potential participation in the project. III. DISCUSSION The applicant has provided both a rental and for sale proforma (Aftnchments 2 & 3) which analyzes the finances of the 16 unit project. In March of 1995, the developer prepared a preliminary proforma on the rental project. The analysis was based on the assumption that the developer would contribute a fully constructed building pad for the affordable project. The proforma was preliminary and did not include a detailed examination of all development and operational costs. The March 1995 proforma estimated that the project would require a total City subsidy of $362,000, or an average of $22,700 per unit. - CT 93-09 - OCEAN BLUFF OCTOBER 23,1997 PAGE 2 As requested by the Commission, the applicant has prepared an updated proforma. The current proforma assumes that there will be a 4% tax credit equity investment, a conventional first trust deed loan, a City loan and a developer land contribution. Based upon these assumptions, the proforma estimates that there is a $959,000 financing gap that is proposed to be bridged by a City loan. This loan would be approximately $60,000 per unit. In addition, a proforma analyzing the cost of a for sale project was also prepared. The for sale proforma is based upon the development of eight, two-bedroom and eight, three-bedroom homes which would be sold to families earning 80% of the area median income. The proforma shows an estimated shortfall of $805,000, or $50,000 per unit, which would be bridged through a City loan. The City and developer assistance, plus a percentage of property equity would be recaptured by the City through the resale of the homes on the open market. As directed by the Commission, the developer contacted one additional non-profit group about the possibility of developing the project. The developer contacted Community Housing of North County (CHNC). CHNC stated that, due to the small size of the project, they would not be interested in developing the project. Staff is unaware of other area non-profits that could be contacted by the developer regarding this project. Included in the August 14, 1997 Housing Commission staff report was an analysis of the applicants request to purchase affordable housing credits as required by City Council Policy 57 & 58. In that report, staff relied on the financial information contained in the 1995 proforma. At that time, it was staff’s opinion that there was adequate justification to support the request to purchase credits. Further, it was staff’s belief that the requested City financial assistance of over $22,000 per unit was not a financially prudent use of the City’s Housing Trust Fund when compared to previous City gap assistance of $5,000 to $10,000 to construct affordable housing units. The current proposed assistance amount of $50,000 to $60,000 further solidifies staff’s position on this issue. As requested, the applicant has provided additional financial information to the Housing Commission to support their request to purchase credits in the Villa Loma project. Also, the applicant has shown that there appears to be adequate affordable housing credits for potential housing development in both the Southeast and Southwest Quadrants. With the additional information provided to date, staff believes that the applicant has shown that the project would not be financially feasible. Therefore, it is staff’s recommendation that the request to purchase credits be recommended for approval by the Housing Commission to the City Council. EXHIBITS 1. Housing Commission Resolution No. 97-010 2. Housing Commission Staff Reports dated August 14 and September 11,1997 3. Rental Proforma 4. For-sale Proforma The City of CarJsbad Rousing & Redevelopment Department A REPORT TO THE HOUSING COMMISSION Item No. 1 Sta# Craig D. Ruiz Management Analyst DATE: SEPTEMBER 11,1997 SUBJECT: OCEAN BLUFF - APPLICATION TO PURCHASE AFFORDABLE HOUSING CREDITS IN THE VILLA LOMA HOUSING PROJECT I. RECOMMENDATION That the Housing Commission ADOPT Resolution No. 97-010, recommending that the City Council APPROVE a request by the Ocean Bluff Partnership to purchase 16.24 Affordable Housing Credits in the Villa Loma housing project in order to satisfy the affordable housing obligation of the Ocean Bluff development under the City’s Inclusionary Housing Ordinance. II. PROJECT BACKGROUND This item was before the Housing Commission at their August 14, 1997 meeting. The Commission continued the item and directed Staff to provide a report projecting the inclusionary housing requirements of undeveloped property within the Southwest Quadrant of the City. The report was to also examine if the projected development of the Quadrant could result in a demand for the purchase of off-site credits which exceed the number of available credits. III. DISCUSSION The City is divided into 23 Facility Management Zones. Within the Southwest Quadrant, there are 11 Zones (See Exhibit “2”). Staff has reviewed the existing and potential future land uses within each zone to determine the development potential for the entire Quadrant. As detailed on the attached chart (See Exhibit “3”) within each zone, the property owner, approval date of the project, total number of approved/potential units, the number of inclusionary units required, and method of satisfying the inclusionary requirement have been identified. Projects of less than 7 units, which are eligible to pay an in-lieu fee as opposed to developing inclusionary units, have been determined to have no inclusionary housing obligation for the purposes of this report. Of the eleven zones, five have no future inclusionary requirements. Zones 3,4, 5,6 and 13 have either been previously developed or have a non-residential land use designation. With respect to H:\word\Ocean Bluff HCRPT2 Zone 9, the undeveloped land consists of the Kaiza Poinsettia Development. This project has satisfied their inclusionary obligation through their participation in the Laurel Tree project. Zone 19 is comprised primarily of the Aviara development. The inclusionary requirement for Aviara has been satisfied through the development of the Villa Loma project or will be satisfied on-site in future phases of the development. Zone 23 is currently proposing to satisfy their inclusionary obligation through the development of an on-site project. Thus, Zones 20,21 and 22 contain the remaining undeveloped land which may result in an inclusionary housing obligation at some future date. Using the growth control management point obtained from the City’s Growth Management Ordinance, there exists a maximum development potential of 1,148 residential units within the Southwest Quadrant. The development of 1,148 units will result in an inclusionary housing requirement of 172 affordable housing units, There are two combined inclusionary housing projects in the Southwest Quadrant which contain 176 excess affordable housing credits. These projects include Villa Loma, which contains 159 credits and Laurel Tree, which contains 17 credits (based on information provided to staff to date). With a build-out projection of 172 inclusionary units and an existing supply of 176 units, there exists the potential for a surplus of 4 inclusionary housing credits. Based upon staffs above projections, the current supply of 176 affordable housing credits will be sufficient to meet the needs of the Southwest Quadrant at build-out. In addition, based upon the information presented at the August 14, 1997 Housing Commission meeting, it is staffs opinion that adequate justification exists to make the finding that the off-site satisfaction of the inclusionary housing requirement is in the public interest. Therefore, staff is recommending that the request to purchase credits be recommended for approval by the Housing Commission. EXHIBITS 1. Housing Commission Staff Report of August 14, 1997 2. Southwest Quadrant Facility Management Zones 3. Affordable Housing/Market Rate Housing Spreadsheet 4. Zone 20 Property Ownership H:\word\Ocean Bluff HCRPT2 .---\ - - @c-J EXHIBIT 1 The City of Cmfsbad Housing & Redevelopment Department A REPORT TO THE HOUSING COMMISSION I DATE: AUGUST 14,1997 Staj? Craig D. Ruiz Management Analvst Continued to 9/l l/97 SUBJECT: OCEAN BLUFF - APPLICATION TO PURCHASE AFFORDABLE HOUSING CREDITS IN THE VILLA LOMA HOUSING PROJECT I. RECOMMENDATION That the Housing Commission ADOPT Resolution No. 97-010, recommending that the City Council APPROVE a request by the Ocean Bluff Partnership to purchase 16.24 Affordable Housing Credits in the Villa Loma housing project in order to satisfy the affordable housing obligation of the Ocean Bluff development under the City’s Inclusionary Housing Ordinance. II. BACKGROUND The applicant, Ocean Bluff Partnership, has received approval for a tentative map (CT 93-09) to develop 92 single family homes on approximately 31 acres. The project will include homes of upwards of 3,000 square feet on parcels between 7,500 and 13,000 square feet. The subdivision is required to provide 16.24 units of housing affordable to lower income households as required by the City’s Inclusionary Housing Ordinance. To satisfy this requirement, the developer has also received approval of Site Development Plan SDP 93-07 for the development of a 16 unit affordable multi-family apartment project. When CT 3-09 was approved by the City Council, a condition of approval for the project allowed for the developer, upon showing that an on-site contribution is not appropriate, to purchase Affordable Housing Credits in the Villa Loma housing project. The developer believes that there are significant constraints which preclude the development of an on-site affordable housing project. Therefore, the developer is requesting to purchase Affordable Housing Credits (“credits”) in the Villa Loma project in lieu of on-site construction. The City’s Inclusionary Housing Ordinance permits off-site satisfaction of an inclusionary requirement through participation in a Combined Inclusionary Housing Project (“Combined Project”) if the City Council determines that it is in the public interest. Purchase of credits in the Villa Loma project constitutes participation in a Combined Project. I\ OCEAN BLUFF AUGUST 14,1997 PAGE 2 Policies Regarding Off-Site Proiects and Purchase of Affordable Housing Credits The City Council has adopted two policies which deal with off-site or Combined Projects and the sale of Affordable Housing Credits. Council Policy 57 was developed to establish the criteria to be utilized in order to make the necessary finding that off-site satisfaction of an inclusionary housing requirement, when proposed through a Combined Project, is in the public interest. This policy requires review of the request and an action recommendation from the Combined Project Review (Staff) Committee consisting of the Housing and Redevelopment Director, City Manager, Financial Management Director, Community Development Director, Planning Director and City Attorney. The Mayor is an ex-officio member of the Committee. This committee has reviewed the subject request and is recommending approval. Council Policy 58 was established to determine the price of credits and the mechanism to satisfy a developers obligation under the City’s Inclusionary Housing Ordinance. Based upon this policy, the current cost to purchase a credit in the Villa Loma project is $32,220. The Ocean Bluff Project, therefore, will be required to pay to the City of Carlsbad a total of $523,252, if approved by the City Council. RECOMMENDATION The Council Policies require staff to evaluate the request for off-site satisfaction of the inclusionary housing obligation and the purchase of credits based upon three primary criteria. The criteria includes: 1) feasibility of on-site proposal; 2) relative-advantages/disadvantages of an off-site proposal; and 3) the advancement of housing goals and strategies. The following is a summary of staffs analysis of the criteria for the project. Feasibilitv of On-site Proposal l The small scale of the affordable housing project makes the development economically unfeasible due the significant financial subsidy which would be required for the project. Further, the small scale of the affordable housing project makes it unlikely that the project will generate interest from funding sources. l It will be difficult to integrate an affordable housing apartment project into an a community of single family detached homes which have an estimated base price range of $300,000 to $350,000. Relative AdvantaPes/Disadvantapes of an Off-site Proposal l The participation in the off-site project will allow the City to recover the costs associated with the development of excess affordable housing units. l The Villa Loma project has locational advantages over the on-site project in terms of direct access to jobs, public transportation, schools, parks as well as other amenities and services due to the being located directly on a major thoroughfare. OCEAN BLUFF AUGUST 14,1997 PAGE 3 Advancirw Housing Goals and Strategies l The recovery of the City’s investment in the Villa Loma Project will provide for additional financial resources which are needed to further affordable housing development in the community. Based upon the analysis of the above criteria, it is staffs opinion that adequate justification has been provided to make the finding that the off-site satisfaction of the inclusionary housing requirement is in the public interest. Therefore, staff is recommending that the request to purchase credits be recommended for approval by the Housing Commission. EXHIBITS 1. Housing Commission Resolution No. 97-O 10 2. Applicant Request to Purchase Credits 3. Draft Affordable Housing Agreement cr 13 #--. OCEAN BLUFF F’ARTNE;SW 7825 Fay Avenue, Suite 200 La Jolla, California 92037 (619) 456-3594 July 15, 1997 Mr. Evan Becker Housing and Redevelopment Director City of Carlsbad 2965 Roosevelt Street, Suite B Carlsbad, CA 92008 Subject: Ocean Bluff Project -- Request to Purchase Affordable Housing Credits in the Villas at El Camino Real Project Dear Mr. Becker: 2: This letter serves as a formal request by the Ocean Bluff Partnership to purchase off-site affordable housing credits in the Villas at El Camino Real development to satisfy the Ocean Bluff (CT 93-09) project’s inclusionary housing obligations. This request is made as a part of final map processing activities. The request is in compliance with and is specifically supported by the following actions previously taken by the City Council: The City’s lnclusionary Housing Ordinance (CMC Chapter 21.85) establishes certain requirements under which residential developers must provide housing that is affordable to lower-income households as a condition of project approval and permit issuance. The ordinance provides that “circumstances may arise in which the public interest would be served by allowing some or all of the inclusionary units associated with one project site to be produced at an alternative site or sites.” Planning Commission Resolution 3869, CT 93-09, .conditions also provide that “a second inclusionary housing option available to the developer shall be that the developer shall enter into an agreement with the City to purchase affordable credits from Villas at El Camino Real or participate in an off-site combined inclusionary project within the southwest quadrant and as appropriate, in accordance with the requirements set forth in Chapter 21.85 of the Carlsbad Municipal Code, the Zone 20 Specific Plan, and City Council Policies 57 and 58 dated September 12, 1985”. In the case of the Ocean Bluff project, there are particular circumstances that warrant the provision of the inclusionary units off-site in combination with the existing Villas at El Camino Real Apartment project or other suitable location, pursuant to Council Policy 57 criteria. Significant feasibility issues affect the development of this project on-site. Contribution to the existing off-site project versus providing a small low-income apartment complex on-site will result in increased public benefit. 1 We understand this request will be evaluated by a staff Project Review Committee to determine compliance with the criteria defined in Policies 57 and 58. We will then take the Committee’s recommendation to the Housing Commission and City Council. As you know, we hope to expedite the process to Council since this issue must be resolved precedent to recording the final map. Please call if you need additional information or if we may be of any other assistance. Mr. Robert Wineteer cc: Mr. Jack Henthorn, Jack Henthorn & Associates OCEAN BLUFF PROJECT OFF-SITE AND COMBINED INCLUSIONARY HOUSING PROJECT ASSESSMENT WORKSHEET -- BACKGROUND The following background information is provided to assist you in your assessment. 1. Owner/Applicant Information: Ocean Bluff Partnership Attn: Mr. Robert Wineteer 7825 Fay Avenue Suite 200 La Jolla, CA 92137 456 3594 . Applicant’s Representative: Jack Henthorn & Associates Attn: Mr. Jack Henthorn Suite J 5431 Avenida Encinas Carlsbad, CA 92008 438-4090 2. Off-sitelCombined Project Name: VILLAS AT EL CAMINO REAL APARTMENTS 3. Description of Project with lnclusionary Housing Obligation: Ocean Bluff, CT 93-09, is a proposed 92-lot single family development located on a 31.2-acre parcel with a 16.24-unit affordable housing obligation. 4. On-site Affordable Housing Description: Ocean Bluff Affordable Housing, SDP 93-07, is a 16-unit multi-family, apartment project on one lot with units ranging from 1 to 3 bedrooms. The units would range in maximum rent from approximately $450 to $600, which is affordable to households earning incomes of 50% to 80% of the Area Median Income. To achieve feasibility, the project would require a subsidy of $362,737 (even assuming a fully constructed pad is provided by the developer and unit incomes are based on a 95% occupancy rate factor) . 5. Proposed Off-site Project Description: The Villas at El Camino Real project is a 344-unit apartment development in which all units are restricted and affordable to households with incomes not exceeding 60% of the San Diego County Median. Villas at El Camino Real was developed by La Terraza Associates, with Bridge Housing Corporation as the Managing General Partner. The complex contains 1, 2, 3 & 4 bedroom units. Villas at El Camino Real was financed with assistance from the City of Carlsbad and the Carlsbad Redevelopment Agency. The assistance was structured in such a way as to create affordable units which would be marketed exclusively by the City to “other developers” in order to satisfy an affordable housing obligation. Villas at El Camino Real Apartments is a Combined Project according to the lnclusionary Housing Ordinance, and developers may participate in this as an “off-site” method of satisfying their affordable housing obligation. (This is also an approved site as per Specific Plan Amendment #203 for the Costa Do Sol project, currently called Greystone Cove.) Participation in Villas at El Camino Real Apartments by the applicant would be in the form of a purchase of Affordable Housing Credits (Credits) under terms established by City Council Policies Number 57 and 58. If the applicant is afforded the opportunity to purchase Credits, the Ocean Bluff tentative map would require the purchase of 16.24 Credits to satisfy its inclusionaty housing requirement. s 6. Description of On-site Project Constraints: Specific constraints exist which would affect the on-site affordable project’s feasibility. These include the uneconomical scale of the affordable project and a the significant price difference between the affordable rental units and the proposed single-family market units that will be developed in and around this project. In addition to these constraints, the location of the Villas at El Camino Real project is superior to the on-site location. Access from the subject site to nearby jobs, shopping, transportation, schools, parks, bus stops and other services and amenities to the north and east will be limited. Direct routes will not be available to nearby Palomar Airport Road and El Camino Real until well after the units are constructed. Contrary to this, the Villas at El Camino Real project is already conveniently located with direct access onto El Camino Real, providing convenient access to needed services and jobs. OCEAN BLUFF PROJECT OFF-SITE AND COMBINED INCLUSIONARY HOUSING PROJECT ASSESSMENT WORKSHEET --WORKSHEET 1. Feasibility of the On-site Proposal a. Are there significant feasibilitv issues due to factors such as project size, site constraints, amount and availability of required subsidy, and competition from multiple projects that make an on-site option impractical? l The on-site affordable project is of marginal size as an apartment project. Given the small size of the project and its restricted rental structure, on site management and maintenance will be difficult. l The market units in this project would be required to absorb over $5700 per unit so that land development costs could be contributed. This figure would rise to over $9600 per unit if the applicant is required to build the units on site and close the post land development gap of $362,737. 4 Based on the estimated restricted rental prices of the affordable units the applicant will be facing an average subsidy requirement of approximately $22,700 per unit, beyond land contributions. This would result in each unit being subsidized with over $55,000. b. Will an affordable housing product be difficult to inteqrate into the proposed market development because of significant price and product type disparity? l Price disparities will be substantial between the low-income rental apartment units restricted at $450- 600 rent and the approved higher-end single-family, detached product with an estimated base price range of $300,000 t0 $350,000. l The integration of 16 affordable apartment units, sized at 600 to 1,000 sq. ft., into the single-family subdivision with homes over 3,000 square feet on 7,500 to 13,000 sq. ft. lots will result in major product type disparity on-site. The surrounding area will also be built-out with low density, single- family detached products consistent with the existing RLM land use designation and market demand. The on-site project would, therefore also result in substantial product disparity with the surrounding region. c. Does the on-site development entity have the capacitv to deliver the proposed affordable housing on-site? l The applicant is not experienced in the development of affordable housing. l Affordable housing developers have advised the applicant that it is unlikely that this size of project will generate interest from funding sources. 2. Relative AdvantaneslDisadvantaqes of the Off-site Proposal. a. Does the off-site option offer greater feasibilitv and cost effectiveness than the on-site alternative, particularly regarding potential local public assistance? l Villas at El Camino Real is built and has proven its feasibility; no additional assistance is required. l Nearly 500 affordable units have been recently completed or are in process of approvals in the southwest quadrant. It is possible that affordable unit production could outpace market development. l The applicant’s participation in Villas at El Camino Real would permit the intended recovery of City investment provided to the project through utilizing “excess units”. These funds could then be used 5 to provide additional affordable housing. Conversely, the developer’s on-site project would create the demand for additional new subsidy. . The small size of the on site project could result in additional future subsidy requests related to operating costs. b. Does the off-site proposal have location advantages over the on-site alternative, such as proximity to jobs, schools, transportation, services; less impact on other existing developments, etc.? . The Villas at El Camino Real location has advantages over the on-site project in terms of direct access to jobs, public transportation, schools, parks, as well as, other amenities and services due to being located directly on the major thoroughfare, El Camino Real. l Villas at El Camino Real is a self-contained affordable development in an area designated for higher density residential development such as condominiums and townhomes. l The on-site proposal could be a source of land use conflicts that typically occur when higher density development is permitted adjacent to larger lot single family development. c. Does the off-site option offer a development entity with the capacitv to deliver the proposed project? l The Villas at El Camino Real project is an existing project, developed and managed by a highly experienced and specialized affordable housing developer. d. Does the off-site option satisfy multiple developer obliaations that would be difficult to satisfy with multiple projects? l Villas at El Camino Real project was originally established as a Combined Project, specifically to address this purpose. l The proposed on-site project would be one of several projects in the southwest quadrant competing for scarce financial assistance. Villas at El Camino Real has already been financed and built and thus, would not be competing for subsidy financing. 3. Advancing Housing Goals and Strateqy a. Does the off-site proposal advance and/or support City housing goals and policies expressed in the Housing Element, CHAS and lnclusionary Housing Ordinance? General Plan Housing Element and CHAS Goals: l Villas at El Camino Real Apt. affordable project is targeted to the highest priority need identified, larger rental units for low income households. l The recovery of City investment in Villas at El Camino Real through the applicant’s participation will provide additional resources which are needed to assist further affordable housing development. l Villas at El Camino Real provides a large quantity and diversity of affordable housing stock with its 344 units, including a generous supply of different size units to meet various housing needs of the community. lnclusionary Housing Ordinance Policies: l Consistent with the City and public interests to use existing “excess” affordable units before supporting additional new construction. l In conjunction with the combined Villas at El Camino Real project, Ocean Bluff will provide for 15% of the total units for affordable (lower income) residential units. The project also complies with the lnclusionary requirements as contained in the Zone 20 Specific Plan and the General Plan Housing Element. 6 I? Growth Management Zone, Specific Plan (SP 203) Ord. No. NS-257 Guidelines: . Villas at El Camino Real is coordinated with surrounding properties by providing direct access to a major Circulation Element Roadway, El Camino Real, as well as circulation and pedestrian access to public facilities. l Villas at El Camino Real affordable housing product is consistent with the anticipated clustered multi- family attached and stacked flat unit types identified in the Specific Plan. . Planning Commission Resolution No. 3869, Case No. CT 93-09, approved by City Council: l The offsite provision of inclusionary housing is consistent with Condition #22 which reads: “Upon showing by the developer that an onsite contribution is not appropriate for the project, a second inclusionary housing option available to the developer shall be that prior to final map approval, the developer shall enter into an agreement with the City to purchase affordable credits from Villa Loma or participate in an offsite combined inclusionary project within the southwest quadrant and as appropriate, in accordance with the requirements set forth in Chapter 21.85 of the Carlsbad Municipal Code, the Zone 20 Specific Plan, and City Council Policies 57 and 58 dated September 12, 1985. Prior to City Council approval, the developer shall submit a signed Affordable housing Agreement to the Housing and Redevelopment Director.” 7 AFFORDABLE HOUSING AGREEMENT This AFFORDABLE HOUSING MITIGATION AGREEMENT, entered into this day of ,I9 , by and between the CITY OF CARLSBAD, a Municipal Corporation (hereinafter referred to as the "City"), and OCEAN BLUFF PARTNERSHIP, (hereinafter referred to as the "Developer"), is made with reference to the following: A. Developer is the owner and developer of property generally located at the northwest corner of the future Poinsettia Lane and Blackrail Court in the Zone 20 Specific Plan' area and Locals Facilities Management Zone in the City of Carlsbad, in the County of San Diego, California (hereinafter referred to as the "subject property").. The subject property is more particularly described in Exhibit "A", which is attached hereto and is incorporated herein by this reference. B. Developer wishes to construct 92 single family homes upon the subject property. The City Council has approved Zone Change ZC93-04, Local Coastal Plan Amendment LCPA95-09, Carlsbad Tract/Parcel Map CT 93-09, Hillside Development Plan HDP 93-09 and the Planning Commission has approved Site Development Plan SDP 93-07, for the proposed development. The City Council and Planning Commission issued these approvals subject to conditions of discretionary approval. C. The Developer was conditioned with the ability to satisfy its affordable housing obligation in accordance with Chapter 21.85 of the Carlsbad Municipal Code by purchasing sixteen and twenty four one-hundredths (16.24) Affordable Housing 2\ Credits (Credits) in the Villa Loma affordable housing project. D. Pursuant to the above-referenced conditions of approval, and in accordance with City Council Policies 57 and 58, the Developer has received approval from the City Council by Resolution No. 97- , dated ‘ 1997, to purchase Credits in the off-site project known as Villa Loma. The City controls and has available these Credits in Villa Loma and the project meets the requirements of a Combined Inclusionary Housing Project as defined in Chapter 21.85 of the Carlsbad Municipal Code. Purchasing Credits according to the terms of this Agreement satisfies the developer's affordable housing obligation in accordance with Chapter 21.85 of the Carlsbad Municipal Code and the developer's conditions of approval. NOW, THEREFORE, it is mutually agreed by and between the undersigned parties as follows: 1. SATISFACTION OF AFFORDABLE HOUSING OBLIGATION AND CONDITIONS OF TENTATIVE MAP APPROVAL THROUGH THE PURCHASE OF AFFORDABLE HOUSING CREDITS Within sixty (60) days of the City Council approval of Developer's request to purchase Affordable Housing Credits, and prior to receiving Final Map approval, Developer shall execute this Agreement and pay to' the City the sum of $ 523,252 as its payment for sixteen and twenty four one-hundredths (16.24) Credits. Execution of this Agreement by the parties and payment of the sum of $ 523,252 to the City by the Developer shall fully satisfy the Developer's affordable housing obligation pursuant to Chapter 21.85 of the Carlsbad Municipal Code and the above- referenced conditions of approval. Upon execution of this Agreement and receipt of the above payment from developer, City 22 - h will record an appropriate release of the developer’s obligation. Failure of the Developer to perform according to the terms of this Agreement will be a failure to satisfy the Tentative Map Conditions with respect to the subject property and Chapter 21.85 of the Carlsbad Municipal Code; and the City may exercise any and all remedies available to it with respect to the Developer's failure to satisfy the Tentative Map Conditions including but not limited to withholding the issue of building permits for the subject property. 2. CITY ACKNOWLEDGES DEVELOPER PAYMENT. By executing this Agreement, City acknowledges receipt' of Developer's payment under the terms of this Agreement. 3. DEVELOPER WAIVES RIGHTS TO OTHER METHODS OF SATISFYING AFFORDABLE HOUSING OBLIGATION. By executing this Agreement, developer waives any and all rights to other means of satisfying the affordable housing obligations required by Chapter 21.85 of the Carlsbad Municipal Code and the conditions of approval. 4. HOLD HARMLESS. The undersigned developer (hereinafter referred to as "Indemnitor") , for and in consideration of the City of Carlsbad's approval of this Agreement, and for other good and valuable consideration, the receipt and sufficiency whereof is hereby acknowledged by Indemnitor, does hereby covenant, undertake and agree that it will indemnify and hold harmless (without limit as to amount) the City of Carlsbad and its elected officials, officers, employees and agents in their official capacity (hereinafter collectively referred to as "Indemnitees"), and any of them, from and against all loss, all risk of loss and all 23 damage (including expense) sustained or incurred because of or by reason of any and all claims, demands, suits, actions, judgements and executions for damages of any and every kind and by whomever and whenever made or obtained, allegedly caused by, arising out of or relating in any manner to this Agreement, and to protect and defend Indemnitees, and any of them with respect thereto. 5. NOTICES. All notices required pursuant to this Agreement shall be in writing and may be given by personal delivery or by registered or certified mail, return receipt requested, to the party to receive such notice at the addresses set forth below: TO THE CITY OF CARLSBAD: City of Carlsbad Housing and Redevelopment Department Attn: Housing and Redevelopment Director 2965 Roosevelt Street, Suite B Carlsbad, CA 92008-2389 TO THE DEVELOPER: Ocean Bluff Partnership Attn: Bob Wineteer 7825 Fay Avenue, Suite 200 La Jolla, California 92037 Any party may change the address to which notices are to be sent by notifying the other parties of the new address, in the manner set forth above. - 6. INTEGRATED AGREEMENT. This Agreement constitutes the entire agreement between the parties and no modification hereof shall be binding unless reduced to writing and signed by the parties hereto. 7. DURATION OF AGREEMENT. This Agreement shall terminate and become null and void when the City has received the payment described in Paragraph 1, except as to the indemnity and hold harmless provisions setforth in Paragraph 4. 8. SEVERABILITY. In the event any limitation, condition, restriction, ' covenant, or provision contained in this Agreement is to be held invalid, void or unenforceable by any court of competent jurisdiction, the remaining portions of this Agreement shall nevertheless, be and remain in full force and effect. - IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the day and year first above written. DEVELOPER Ocean Bluff Partnership By: Signature Print Name Title: - CITY OF CARLSBAD A Municipal Corporation By: MARTIN ORENYAK Community Development APPROVED AS TO FORM: RONALD R. BALL City Attorney Dir EXHIBIT "A" PROPERTY DESCRIPTION Lot 3 in Section 22, Township 12 south, range 4 west, San Bernardino base and meridian in the County of San Diego, Sate of California, excepting therefrom those portions thereof lying north of the south boundary line of Ranch0 Agua Hedionda, as said south line was established May 5, 1913, by decree of the Superior Court of the State of California, in and for San Diego County, in that certain action (No. 16830) entitled Kelly Investment Company, a corporation, vs. Clarence Dayton Hillman and Bessie Olive Hillman. .*. -Vlll- - f PALOMAR AIRPORT ROAD ISY Built-out or Non-Residential * Affordable Housing Projects YIYOFCARLSBAD LOCALFACILITIES~AGEMENTZONES ~OUTHWESTQUAD~ r‘..j ot to .>ro e c- j yellow = projects < 7 units cream = pending/appr’vd/built It.blue = proposing construct. gold = existing combined prjct Affordable Spreadsheet EXHIBIT 3 BUILT OUT/NON-RES BUILT OUT/NON-RES 0.00 BUILT OUT/NON-RES 0.00 Kaka Poinsettia: 94-04 Al * 94-05A2’ 94-06 A3 l 94-06 A4 l 94-08 Bl = 94-12 C withdrawn 28.00 ~~~~+~~~~ .““‘~~V.,..~....~~,~ ,.. . . . . . . . . . . . . *,:;l.... > .\: BUILT OUT/NON-RES 0.00 Aviara Phase 1 * 329.00 1093.00 677.00 151.00 Broccato l CT8919 Murphy Mtsuchi 449.00 l/8/91 72.00 . . . . . . . ,.~~ ..~ . ..<..< .~. .< v . . . . < .,... . . . . :i. .<. . . . . . . ..i . i..~~. . . ~~~~~~~~~~~~~~ ~~~~~~~~~ ~~~~~ ::..::.~ . . . . . .._.._... % ..,..... x%x . . . . . . . . ..> . . . . . . . . . . . . . . . . ..^ . < . . . . . . . . . Aitchinson Cardosa Carnation Cobblestone * DeJong Emerald Ridge: East l West’ Engler Fernandez Greystone Cove * Hadley Hildalgo Kaiser Kramer Linn Mar Vista l Mariano l * 510196 8/l 3196 412196 3/l 9196 113196 Mendivil Moore Muroya Nelson Ocean Bluff l Poinsettia Partners Roesch ( - ) 412196 1 :: : 2 0 2 0 0 2 1 0 3 ; 0 2 $0 0 0 c 4 8 3 9 I: 5 1.00 X 1.00 X i’~:~~~~~ ~~~~~~~~~ :2...:.,. .,.,..,.... . . . . . . . . . . . I .A :. .A . ..A ‘... .:., 2 ,.: * ‘a0 .oo 0.00 7.00 4.00 .oo 0.00 6.00 3.90 .oo a0 1.00 4.00 .oo 9.00 .w 7.00 .oo a0 a0 .oo 2.00 a0 2.00 .oo 5.00 4.00 0.00 0.00 3.15 2.00 0.00 6.00 0.00 4.00 0.00 0.00 0.00 0.00 X 6.00 1.20 5.06 1.00 X 2.00 8.00 2 7 7 6 4 I 7 1 2 9 21 4 I! 9250.00 8975.00 6050.00 1425.00 0950.00 14075.00 8975.00 22850.00 3400.00 3600.00 6325.00 3875.00 57950.00 ~~~ 515.00 3060.00 2575.00 57180.00 ?575.00 3060.00 7090.00 10 L.Tree Affordable Spreadsheet Page1 -a Affordable Spreadsheet yellow = projects < 7 units cream = pending/appr’vdlbuilt It.blue = proposing construct. gold = existing combined prjct Iudvalis jambi l San Dieguito jarkaria jchindler iud. Int. Mission jugino rabata Trust rabata N&E: *hompson ‘hompson ‘hompson ;hom pson Veidner ‘amamoto ..~.“~.:.,‘..““.~,;~,,~ ~~~~~~~~~~~ ?:.:.:.x.>:.:.> ..,.._ i.. L-u . . . . . . . . . ..r_ IL Yestem Pacitic l 7eiter,Whitney, jfregola.Bowen ( - ) ilaldonado ions ;arlsbad Partners ( - ) Xy of Carlsbad teiter .ohf Jamikas iudduth cevane - lesaska iteiner ~ . . ,?. ,.:..w..:::~::::::::~:~~:.:.>:<.~.:.:, .,..,. . . . rarious owner: Ward and Lear Devlin EdwardslRounsv’le Tartaglia Cambell Alsop Shugard Donahue Stanton Wood Bachman Dickie and Berry Hart McCabe ‘allas / BUILT OUT ‘oinsettia Properties:’ was Lusk) :f97-1Q incomplt :T97-11 PA 2 :T97-12 PA 4 II Coast Enterp. Jeiss(1) ‘arious owners: Pacific Riviera Crowell and Smith Schreiber Cannon 7W.00 0.00 0.00 0.00 7.09 0.00 .,., ., ~~~~~~~ 0.00 0.00 106.00 106.00 16.00 310050.00 24.00 24.00 4.00 70200.00 23.00 23.00 3.00 67275.00 32.00 32.00 5.00 93600.00 16.00 16.00 2.00 46800.00 16.00 16.00 2.00 46800.00 . ., . ..y. .,,yy<.r,ry.. %.., ,.,> ~~i~~~~~~~~~~~~~~~~~~~ s. .n k. ._. . . . . . . . . . . _.,. > _...... ..A......%. . X...... . . . . . I.. A..... ..A.. . . . . ,.. 160.00 0.00 0.00 24.00 24.00 4.00 70200.00 38.00 38.00 6.00 111150.00 38.W 38.00 6.W 111150.00 29.00 29.00 4.00 84825.00 I~~~~~~~~~ 0.00 . . . . . ..L....... . . . 0.00 . . ..__._........_ 84.00 84.00 13.00 245700.00 344.00 19.00 19.00 2.85 55575.00 75.00 75.00 11.25 219375.00 18.00 18.00 2.70 52650.00 15.00 15.00 2.25 43875.00 33.00 33.00 4.95 96525.00 :~~~:::r~~i~X~~~~~~ o w .,.. t .,._.,.,. ::::.::::::.,:.,,::,:,,:.:.:.:.:. . 0.00 12.00 12.00 1.80 35100.00 66.00 66.00 10.00 193050.00 .W .W .W .oo .27 2 4 3078.25 4255.25 1 : 2 2 1 i i 1 1 1 z i : 2 2 2 2 27090.00 27090.00 22575.00 ~~~~~~~~ 722400.00 22575.00 m30.00 ( L438.10 Z438.10 E438.10 $876.20 ‘314.30 !438.10 1876.20 1876.20 1876.20 3616.95 !438.10 t438.10 !438.10 12620.15 !2845.90 !4110.10 $@&~ .,... ;:.:.:.:.::;::;:;: 38.00 Affordable Spreadsheet Page2 30 yellow = projects < 7 units cream = pending/appr’vd/built It.blue = proposing construct. gold = existing combined prjct Affordable Spreadsheet Addison 5959.60 Alcaraz 4469.65 Graben 4244.10 Fisher 2979.90 Dettmer 3973.20 Yanez 4966.50 60.00 Affordable Spreadsheet Page3 3\ -- EXHIBIT 4 , .,~y:;: ;:-. g;; pY ,!.q;;:.‘; .‘h. I,* “_” 1 :.g )‘.,.‘r-.r.q~ ,.5;‘: , “.Y -j .:::“h-‘, ,-‘G* .s _ _ .: “, ..I,. g;g . g Y 3 :,gg 4 / $ -“’ . . . . . : ) .< ,.( ‘., 1 ” ,: :,,;. 33 - RENTAL PROJECT- AFFORDABLE HOUSING ANALYSIS OCEAN BLUFF APARTMENTS, CARLSBAD FINANCIAL SUMMARY OCTOBER 2,1997 Funding Sources & Uses j Sources: 1 Tax Credit Investor Equity Conventional Mortgage #l AHP Loan Redevelopment Loan - front end HOME Loan DeveloperLoan ) Construction Period Revenues 1 Developer Loan Deferred Developer Fee Catellus Land Contribution I Total Sources $1,241,441 j 117,086 0; 959,000 j 01 Oi 2,400 0 01 Uses: Property Acquisition - Land Property Acquisition - Imprmnts Hard Construction Costs A&EJLegaYConsultants Permits & Fees Developer Fees I Reserve Funds / Marketing/Models/Office 1 Financing & Other Soft Costs ! 252,083 1 180,540 / 1,304,725 201,607 300,236 ! 160,000 / 24,000 i 40,000 ) 190,254 99,105: $2,752,550 j Financial Structure Construction Loan I Amount f I .358,600 Lender: Term: Security: to-be determined 19 months First Trust Deed r Recourse: 50% Repayment Guarantee, Completion Guarantee, Environmental Indemnity Conventional Mortgage Loan Amount: %I 17,086 Issuer: Conventional Mortgage Lender Security: First Trust Deed Term: 30 years LTV: 75.0% DSC: 1.25 x Interest Rate: 9.500% Cap Rate: 8.50% Credit Enhancement Credit: Not Applicable Term: Spread: LTV: DSC: Resourse: Rating: 10/03/97 :conomics Year Year Year Net Operating Income NOI after 1stTD Debt Service Net Income(Loss) / S 14.780 $0’ (596,253j Developer Fees S160,OOO Contract Mgmt Fees S77.000 Year 1 Ground Lease Income 0 Year 1 Loan Debt Service 0 Year 1 Partnership Management Fee 0 Year 1 Distributions 0; Tax Credits Amount: Investor: Pay-in Date: Recourse: $1,241,441 .I to be determined 100% occupancy on low income units, 1 I and 1.25 x Debt Service Coverage 1 30 month Operating Defecit Guarantee 1 Buy-out: Equal to Investor’s tax liability 1 Housing Set-Aside Amount: $959,000 Source: City Redevelopment Agency Pay-in Date: Commencement of Construction Recourse: Special terms: 100% to partnership upon failure to maintain affordability none Other Amount: Pay-in Date: Term: SO Interest Rate: Security: i : :” zc f ! : k . : .* : qc z c ” v a c 7 ; :” SC F c (I w : k g :” if E ii i SC : ‘5 P t; m c I i a 5 I ? c 1 I 2 5 a : . 9 . : . r ¶ : 2 r i . 9 . : . r 1 t 1 , i . 2 . . . . r > 4 3 : . 9 . T;yq%’ *‘“i’ * * ““.qg EL ,-,c O! ‘0.2~~” 0 NC -1 - 0 _/ -’ o o o o $ s El Z\ gig/ c 0 ;;z.J’“n 01 00 0011 , ~~~~~~~~ ‘“C’“,” N= 0 00 002 0 0-1 ,61 t-4 7 :I- El -/ ;Q,I .p Y -- OX! M =I ,o gz c /- 1 j+ -1 I 0 *on YYC” ;j”o / 0, ?,“I Ef I a j $3 qq c I ‘0 i ‘S$ZS R O* **z ZiEl 9 giy c 4 0 000~0 3 00 002 $fi I-‘; 8,3 c 7 / *I I I -Pm ~~~~~~~~~ 1-i/ 000~0 a $ 00 ; 002 Y a &O < 0 I I o o o *‘*/ GI 0101 o * ,I :I;1 o I 1 v c jDEVELOPMEN1 SCHEDULE Number of Unih Density Per Acre 0.689 Acres I 16 2323 du Start Predevdopment “W Jan-96 Predevelopment (Months) PndW 4 Aquisition of Land acp May-96 RetoninOlApproval Penod (Mcnths) rezone 0 ProjecI Approvat/Start ProjecI Dasign design May-96 Working Cccumenls Period (Months) drawing 4 Project Finandng Completed funds sep9a Sitework Period (Mcnlhs) sltework 2 CMstNcuo” stat-l slarl Now90 Consbwtion Period par Phase (nwnths) mnstr 9 First Phase Completed I Start Leasing phase1 Aug-99 Total Cwtructio” Period (months) mnsb-2 9 Final Certificate of Occupancy built Aug.99 Total Lease-Up Period (Months) leaseup 1 Stabitiied 0carpa”c-y leased sep-99 Units Leased per Month absorb 16 0 Holding Period (Mcnths) hold 3 Takewt Financing takeout No-d-99 Property Sale 15 Sep.2014 ITAX CREDIT ASSUMPTlONS I Cradit Year 1996 Federal Tan Credit Rate 6.65% State Tax Credit Rate 0.00% Oif6cult to Davelop X lW.WW Apptlcable Fractlcn lW.WO% Adjusted Eligible Basis 2,027.537 Annual Tax Credits 175.362 Investor Yield on 99% of Total Credit Alkxatlon 71.50WtlH Investor After Tax IRR 15% target 15.07% Grou lnveslw Conkibution to Lower Tin 1.241.441 Deferred Pay-In on Tax Credit Equity (Months) 15 0 Affordability Pool Pants 16.126 Credit Utilisation Points 0.000 Rent Burden X 777777 ‘HUD INCOME GUIDELINES I FMR I UflLllY I BASIS LIMITS I For. SAN OtEGO COUNTY as of: 1 Person 2 Person 3 Person 4 Person 5 Person 6 Person 7Persc” 6 Person lz27i96 OB/lYgS Feb-96 02Jl B/97 Utility TCAC $34.000 &nts-- 536.900 Non-Elevator 643.7w 5473 f10 64.921 Studio 548.600 5541 515 74.655 l-BR 552.5W 5677 $26 90.276 2.BR S56.4W $940 335 115.553 J-BR 560,3Qa SI.109 544 128,731 4-BR s64.2W 8x1s Fealures’): (Y/N) Y :RESIDUAL SALES VALUE Nel Opentlng Income - Yr 16 Capttallzatlon Rate Gross Sales Value Less: Sales Expense Less: Oebt Rcpaynwnl Permanent Debt 6alancs Redeveloproam Loan Balance Redevelopmenl Loan Accrued Mterest HOME Loan Balance AHP Loan Balanca Loan Balance Land Conlributlcn Accnzd Partnership Mgmt Fees Awed &set Mgml Fees Exit Payment to Tax Credit Partner 7 13,Wl 8.50% 160.017 3.WK (4.601) (94.263) ~959.ooo) (431,550) 0 0 (252.06:) (109.43:) 0.00% 0 Residual Sales Value 0 FINANCING ASSUMPTlONS I 1 Conventional Conventional Retail CONSTRUCTIOkUPERMANENT LOANS Construction Mortgage I1 Mortgage 112 Loan t1 Base Index 1 Yr LISOR C.I.P. Base Interest Pate 7.000% 6.950% 0.000% 0.000% Point Margin 2.000% 2.000% Excess Coverage 0.000% 0.550% Credit EnhancemenI Interest Rale Cap Total Inlerest Rate 9.000% 9.500% 0.000% 0.000% Interest Rate Cap (7 years) 0.000% Loan Underwriting lnlerest Rate 9.500% 0.000% o.wox Arbitrage Investment Rate 0.000% Loan Points 6 Fees 1.00% 1 .OO% 0.00% 0.00% Bond U”dewiting Fees Credit Enhancement Fee Bond Agency Issuance Fee Loan Term (Years) 30 30 30 Debt Service Coverage P.aUo (DSC) 1.25 0.00 0.00 Maximum Loan To Value Ratio (LTV) 75.0% 0.0% 0.0% Cap Rate 6.50% 8.50% 8.50% Cash Available for Dabt Service 0.x LTV 14.766 2,956 0 Pmject Maximum Debt Capadty 1.25 67.4% 117.160 0 0 Underwltlng Debt service Limit 11.624 0 0 Total Permanent Loan Required 1.25 67 3% 117.068 0 0 Total Annual Payment 11.614 0 0 Oweloper OTHER OEBTROANS A ulsition Redevelo mt Loan Interest Rals 0.00% 3.00% 0.00% Loan Points 6 Fees 0.00% 0.00% 0.00% Loan Term (Years) 55 0 Ground Lease $0 Land Basis O.WW Return on Basii SOURCES AND USES OF FUNDS Resldentlal Comnwlcal TOTAL 1 lW.OX 0.0% USES: muma- Property Acquisition - Land 15.755 Property Acquisttlon - lmprmnls Il.264 Hard Constructton Costs 6l.s.45 A6ERagaL’Co”sulta”ls 12.600 Permits 6 Fees IB.765 Developer Fees t0Wl Reserve Funds t.sa MarkeUngfModelsfOfRce 2.mo Financing 6 Other Sot? Cosls 11.W Contingency 6 ls4 A 252.063 0 252.063 Or* 160.540 0 16o.540 s.m 1304.725 0 1.304.725 b7.4~ 201.667 0 291.667 7.7% 300.236 0 300.236 10.6% 16O.ooO 0 160,ooo 5.6m 24.000 0 24.000 0.6% 40,000 0 40,000 1.5% 190.254 0 196.254 6.0x 99,105 0 99.105 3.m Total ProjecI Uses SOURCES: 172.034 2.752.550 0 2.752.556 Tax Cradil lnvestcr Equity 77.590 Convenllcnal MorIgage 111 1.31s Conventional Mortgage R 0 HOME Loan 0 AHP Loan 0 Redevelopment Loan-front end ss.958 DeveloperLoan 0 C~st~cUon Period Revenues 164 Developer Loan 0 Derened Developer Faa 0 Calellus Land Contribution 27,039 Total Projecl Sources 172.W Construction Loan Conunitmsnl 62,763 1.241.441 0 1241.441 117.066 0 117,066 0 0 0 0 0 0 0 0 8 0 m.oxl 959.000 0 959,000 0 2.4: 0 0 0 0 2.400 0 i 0 0 0 0 432,623 0 432,623 2.752,550 0 2,752.556 1.358.600 Required Lccal Subsidy Required Local Subsidy per Affordable Unit Total Sedrooms Required Local Subsidy per BR Local Subsidy as K of Total Costs 1.391.623 92,775 47 29.609 50.56% UNIT RENT ASSUMPTIONS 01:16 PM [UNIT MlX/AFFORDARlLlTY BENEFIT ANALYSIS Mgn Unit3 2BRnBAa2BR12BA38R12BAM Income Level (AMI) 35.00% 0 1 2 2 40.00% 45.00% 80.00% Market Total has 18 40.0% % Sq. Ft./Unit e.50 as0 1.056 1.226 0 0 0 0 0 1.033 Resident&l SF 860 4,260 5,290 6.130 0 0 0 0 0 16.520 Related Residential SF Comrrwnity Center(s) 600 Leasing Gf6ce 0 Fitness Center 0 LaUl3dl-y 80 Commercial SF Retail 0 TOTAL SQUARE FEET 17cmO< sq. ft. (MARKET RENTAL RATE VALUATION -Mar-- -IawA!a Psf RENTS: Standard Rent PSf 850 1,000 1.080 916 $1 .w so.95 JO.66 so.oi SO.08 $0.0: $0.0: so.89 view Premium Intlatinn Premium Adjusted Rent Psf % Affurdabiltty Potential Market Proforma Rents Affordable Ret-4 Reduction 0% 2% so.ooo 0.0% 0 0% 2% 07t $1.02 73.3% 52.280 0% 2% 1,025 so.97 77.3% 61.600 0% 2% 1,107 50.90 75.6% 66.420 0% 2% so.oi 0.0% 0 0% 2% $o.ooo 0.0% 0 0% 2% $0.0: 0.0% 0 0% 2% $0.: 0.0% 0 0% 0 938 so.91 $180.180 So.91 a3,74a SO.42 96,432 [OPERATlNG CASH FLOW. AFTER RESERVES Inilalion Index (y/n) Y Income Inflator 2.60% Expense Inflator 3.50% Base Year 1998 Constmtlon lntlat!m index 0 Stabilked lnllation Index 1 YRI YRZ YR3 YR4 YRS YR6 YR IO YR 11 YR 15 YR 16 Net Rentat Income 82.465 64.647 66.661 08.828 91,046 93.325 103,013 105.588 116,66ll 119.463 Owathg Expense (56.326) ‘yo;l ‘734$ ‘y;’ @w32) w.w (78,710) (81.379) (92,999) Reserves (9.377) (9,706) (9,706) (9,706) (9.708) (9,706) ‘9y$ NOI 1 14 760 14 541 14 711 14 , 731 14,597 14.504 13 Sol 1st TO Mofigage Pmt (11,814) (11.814) (11,814) (11.814) (11,814) (11.814) (11.814) (11.814) (11.814) (11.814) Other Debt Se&e 0 0 0 0 0 0 0 0 0 0 Ground Lease cent 0 0 0 0 0 0 0 0 0 0 2nd TO/other fies Cash for distnb. (2,966) (2,727) (2.601) (2.636) (2.897) (2,917) (2,783) (2,690) (2.031) (1.767) 0 0 0 + 0 0 0 0 0 0 [PARTNERSHIP ALLOCATIONS Developmt Psrtnrshlp SdW Tax Procacdr ExsrmQn Tax Credtl (Ltd) Developer Non-PmM (GP) Investor (Ltd) 99.00% 99.00% 99.00% 99.00% 50.00% 0.00% 0.00% 100.00% 0.00% O.W% 0.00% 100% 50.00% 100.00% 1 .oo% 1 .oo% 1 .OO% 1 .OO% 100.00% 0% ~~~~1* ’ - l.olyI-UIII onr.-(pm, OWN.-WV*, La4 u sooou 1.80% L‘M 1-u LOJI ton1 WI 2m.a-a ,,,cci ry.a# LZmO ,ztci ~,100 400.030 0 2d 5.m ‘ma 2z w3 ::t I . -““E:E 0.m ‘I - - ‘Yz ,,.cci cwequ*ee.Ru* -rmm.- LDOI : DrQPk.W 0 M-r” otd : Mad. k Me4 nm Meu-D,“.uw ok-4 calv-tw.oH omli : - 14.11, Am’ m.Ka -*k =Js--- -- pbpmf.pa Ud Corr- -h-l -,~--lron x*r- wpILwlm%mwe- 1.001 l.mm 0.00x l.Ka u sDDDL.3 w.~ E ‘mm u ‘3.sm t.,n 0 I.003 :“, ‘Oi ‘0.ooo 0 0 hMdcm+c- * -gab’- 2 - IIuITu.-- -I-- + - I - -w TOTAL -cl - -49 0 -- Id : lS.om SOPI m u(ti ’ . - *Irr mu Ica - 4- pg” B.vta 2s I.“’ k-a $a0 ‘ROYM tru.x4. 0 zM7.a rrszq - 1 BLUFF APARTMENTS, CARLSBAD NET OPERATING INCOME Income Inflator 2.50% Expense lnffator 3.50% lnflatlon Index 1 .oooo RENTAL INCOME: Gross Potential Rent Credit Check/Late Fees/Laundry Retail Revenue Vacancy Allowance - Residential Vacancy Allowance - Retail Net Rental Income OPERATING EXPENSES: General & Administrative: Advertising Leasing & Commissions Legal Accounting/Audit/Recerts Security Oftice Supplies 8 Expense Property Management Fee Utilities: Fuel Electricity Gas Telephone Water and Sewer Payroii/Payroii Taxes: Manager Assistant Manager Community Coordlnator Leasing Agent Maintenance Supervisor Maintenance Personnel Security Personnel Payroll Taxes/Workers Comp Health Insurance Maintenance: Painting & Decorating General Repairs Trash Removal Exterminating Building & Grounds Maintenance Elevator 8 Other Equipment Facility Services TOTAL VARIABLE EXPENSES Taxes & insurance Property Tax Assessment Other Tax Assessments Partnership Taxes Property Insurance Unsubordlnated Ground Lease: TOTAL FIXED EXPENSES TOTAL EXPENSES NET OPERATING INCOME: STABiLiZED YEAR 1 $5.00 /unit 0 $0.00 lsf 5.00% 10.00% 5,030 /unit $25 Imo 311 $0 lmo 0 $125 /mo 1,553 $292 Imo 3,623 SO Imo 0 $100 imo 1,242 8.35% of NOI 6,888 $0.00 /uniVm 514.00 /uniVm 512.00 /uniVm SlOO /mo $29.00 /uniVm 5750 /ma 9,315 $0 Imo 0 $0 lmo 0 SO /mo 0 SO Imo 0 5500 Imo 6,210 SO Imo 0 20.00% 3,105 580 fmo 994 53.00 /uniVm 596 67.50 /uniVm 1,490 515.00 /uniVm 2.981 $2.00 /uniVm 397 $25.00 /unit/m 4,968 SO Imo 0 SO /mo 0 S3.376 /Unit 55,844 SO /unit SO Imo SO Imo S150 /unit SO Imo S150 /Unit 53,526 /Unit Reserves: 0.60% of hard costs or Replacement Reserve $489 /unit Operating Reserve SO /unit Other Reserves 21,071 S77 /unit TOTALRESERVES 18,502 S566 /Unit NET OPERATING INCOME (inci. Reserves): 85.842 985 (4.34:) 0 82,485 0 2,782 2,385 1,242 5,764 0 0 0 2,484 0 2,484 58,328 24.157 8,102 0 1.275 9,377 14.780 AFFORDABLE HOUSING ANALYSIS OCEAN BLUFF APARTMENTS, CARLSBAD MASTER BUDGET BREAKDOWN CONSOLIDATED SUMMARY OCTOBER 2,1997 DATE REVISED UNITS 1 ACRES 7 0.689 1 BUDGET SUMMARY I CODE I DESCRIPTION / 1000 1500 2000 2300 2500 3000 3900 4000 5000 5900 6000 6800 7000 8000 Property Acquistion 25.15 Permits and Fees 17.46 Offsite Improvements 1.03 Common Area 0.00 Engineering 2.27 Onsites - Direct 40.00 Lot Improvements 16.28 Construction Indirects 14.07 Project Development 9.45 Overhead 13.78 Financing 12.46 Property Taxes 0.00 Model / Sales Complex 0.87 Sales and Marketing 1.45 Contingency 5.76 I s:\projectiiurbanhou\oceanblu\9~29~97.wk4 TOTAL 160.03 APPROVED BY: PER SF Project Manager Division Head Finance PER UNIT 27,039 432,623 18,765 300,236 1,108 17,725 0 0 2,438 39,000 43,000 688,000 17,500 280,000 15,125 242,000 10,163 162,607 14,813 237,000 13,391 2 14,254 0 0 938 15,000 1,563 25,000 6,194 99,105 172,034 2,752.550 Construction Marketing -t.m,- Irr-l.m,.m b.4 LzzL,,- -1 ~hw.6.I.m -*UP- Im.mmh...-L... i=ZZ=-- wc..a-II ~9-d~” YWL.9P.l-H --I~-& U,W.l*rrr) I.# WI~.n.wmU u*m.-- Y:=‘ez ,m,,,mT.s.,s. ,rCII-,r hC*-D1I . hW-DCIIW I”Wc.mhm NOti- --- ~~~ -- 0 D : a . * : : : : : : : : 0 : : : : : : : : : : : : : : : : : : : : : : : : : : : . . : : 0 . : : : : : : : : s * : : : . : : : : : : : : : ‘7 : : : : : : : : . : : : : D * lSY . a a : : Y a .’ : : : : %E : : : : : m.2 OD Im a : : fD.(IDI : : : I 0 : : : : : : : : : : : : : : : : : : a ,*.oDD : : : E.rm : : - : : . : : : I;?; : : : 0 : 7,: : : : : : : : : : : : D : : : : : : : : : D : : : 0 0 * : : : : : : 0 3 . 1 A,: : : : u u : : : : : : . . . . . . : : : : : : : : : : 7: : I * . * ,.w. a scziL.m -*u1* ,1wIc y$ Id : : : : : : : : : : : : - II a I l * * . . , 0 * I . u*uA DIP”- YW ,“I 0 a D 0 0 . 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D : : : : asi : . e 4 ,” I ‘ n344 c 7d-YD.U -uu iZZZ--- -I- -u- lhu- Du-Rm --c- 2 s.t3 : : : : : : : : : : : wd- ,?2 0 : 0 v-*la.ra.- : : : : : : : P P : P 0 Ym*llarra.Rw lOoo+ 0 0 0 0 0 : : 0 : : IuRalw- WuullNa ca?luLI; UlrlHkw-l.aaunn U- f-T p&m Anlam Troll Rmudd z Mwm ~UIIIIM- EG=?- 2 TOT4 -THI) -I NETo?LUTURIWCOIL’ - w---n Qrm- z cam- M TOTU RE-a Net -nNa UMYE (ha!. Pm-,: OTHIR INcWl VW”4 - OTHU nrwfl amlId L *dl*lUH LurLpIulteb-a- %!=-zE”“” hmwam----c -Erpnr.hm-l9N 0 I.- ,.- : : : 0 : : 0 : 0 : : : : 0 0 0 : : 0 0 0 mMlr I.- : a : 0 0 : : 0 : 0 : : : : @ 0 0 0 P : : 0 0 I.01484 l.O,N LomoO I- : : 0 0 0 0 0 0 Lcr-ti amud tar.: mm Y- ttz.xzT” - *matI Rnrx. z a- E-z2 Or-¶.arbQnn p-W- 2 w -nNll lYOOlr !JiZk-W %--4---U 2 an- M Torul?.E- OIMU ,Koul kWl!Z!SU- olw!R-u onrd‘Lrmrwe#l -IuNh- csmld~-~*ru wfd-mk=-a --.aeeuamw --.RmMFw TOIN. omtLn UPEWES Hnl*EQu -*- IrU*flM bcdl WI 0 Wl7W t.- : : : 0 : 0 P 0 : 0 : : : : : 0 : : 0 0 0 l.mooO I.- : : : 0 : 0 0 0 : : : i 0 : : 0 : : 0 0 - - jpCtAN BLUFF APARTMEN-. - RUN DATE: [ Family Medlan 35% 40% 45% 80% 100% 1 Sbr horn* of Medlm of Median of Median of Median of Median 1 34.000 11.900 13.600 15,300 27,200 34,000 2 38.900 13.615 15,560 17,505 31,120 38,900 3 43.700 15,295 17,480 19.665 34.960 43.700 4 48.600 17.010 19,440 21.870 38,880 48.600 5 52.5UO 18.375 21.000 23,625 42.000 52,500 6 56,400 19,740 22.560 25,380 45,120 58.400 7 60,300 21,105 24,120 27,135 48,240 80,300 8 64,200 22.470 25,680 28.890 51.360 64,200 Family Size Unit Type Number of Units Maximum Monthly Rent UUlity Allowance Net Net MOllthly Annual Rent Rent Unit Total Rend Sq. Ft. Sq. Ft. Sq. Fti % of Median 35.00% 35.00% 35.00% 35.00% 35.00% 35.00% SW% 35.00% 35.00% 40.00% 40.00% 4O.W# 40.00% 40.00% 40.00% 40.00% 40.00% 40.00% 45.00% 45.00% 45.00% 45.00% 45.00% 45.00% 45.00% 45.00% 45.00% 80.00% 80.00% 8O.W% 80.00% 80.00% 80.00% 80.00% 80.00% 80.00% Market Market Market Market Market Market Market Market Market 20RI2EA Mgr 2BRnSA 2BRlzBA Mgr 2BRl2EA 2BRf28A Mgr 2BRf2BA 28Rl2EiA Mgr 2BRnBA 30FU20A 4BRf2BA 2BRlZBA Mgr 2ERREA 48W2BA 0 0 2 2 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 TOTAL PROJECT RELATED RESlDENTtAL SPACE: Comnwn’8y Center(r) 600 Leasing Offke 0 Fiiners Center 0 Laundry 80 Total Related ResIdenthI Space 680 TOTAL PROJECT RESlDENTtAL SQUARE FOOTAGE 17.200 341 26 381 26 441 35 493 44 0 0 0 0 0 0 0 0 0 0 436 26 436 26 505 35 563 44 0 0 0 0 0 0 0 0 0 0 491 26 491 26 568 35 634 44 0 0 0 0 0 0 0 0 0 0 873 26 873 26 1,010 35 1,127 44 0 0 0 0 0 0 0 0 0 0 0 0 850 0 1,000 0 1,080 0 0 0 0 0 0 0 0 0 0 0 0 0 355 4,260 406 9,744 449 lo.?76 0 0 0 0 0 0 0 0 0 0 0 0 410 9.840 470 5.640 519 12.456 0 0 0 0 0 0 0 0 0 0 0 0 465 11.160 533 12,792 590 7.080 0 0 0 0 0 0 0 0 0 0 0 0 847 0 975 0 1,083 0 0 0 0 0 0 0 0 0 0 0 0 0 850 0 1,000 0 1,080 0 0 0 0 0 0 0 0 0 850 850 1,058 1,226 0 0 0 0 0 850 850 1.058 1,226 0 0 0 0 0 850 850 1,058 1,226 0 0 0 0 0 850 850 1 Ass 1,226 0 0 0 0 0 850 650 1.058 1,226 0 0 0 0 0 0 850 2,116 2,452 0 0 0 0 0 0 1.700 1.058 2.452 0 0 0 0 0 0 1,700 2.116 1.226 0 0 0 0 0 0 0 0 0 0 0 0 0 0 850 0 0 0 0 0 0 0 SO.00 SO.42 so.38 SO.37 S0.W SOo.W so.00 so.00 SO.00 S0.W SO.48 80.44 SO.42 2:: SO.00 ::Ei ii:: 2: Ei SO.00 s0.w s0.W t0.W $1.00 so.92 so.88 i:: so.00 Et: to:00 $1.00 so.95 SO.88 SO.00 SO.00 SO.00 So.00 10.520 PROJECT DEVELOPMENT COSTS 6 FINANCING - PART Vlll CTCAC APPLICATION / \OEVELOPMENT COSTS TOTAL NON- DEPRECIABLE BASIS TOTAL 1 PER UNIT DEPRECIABLE RESIDENTIAL NON-RESONT AMORTIZED EXPENSED RESIDENTI. ] Land Cost LtgaVBroktr Fetfillt Off-sib lmprovtmtnb Dtmolifion Edsting lmprovemtnb value Totti AcquItWon Corft r Sbudurts General Rtquirtmtnls Confractor Overhead conlraclcr PfOfil Total New Conrtructlon Cortr Design SUpervisiOn Total Archlttctunl Costs AcquirlUon Loan lnttresl Loan Ori@naUon Ftt Prootrlv Taxer Gr&ndvLtast Payments Ccnstrudion Ptfiod Iruunmx Cwltuclion lnsotclicm Fnr 1?Ut & Reaxdh~ Total Constnxtlon Intwtrt 6. Fees Loan Origination Ftt CrtdU Enhancemtnl and &@icaUon Ftt Title 6 Recording Tottl Ptmuntnt Fhanclng Cortt 50,ow 3,125 0 53.000 0 0 0 w.ooo 5.000 313 0 5,ow 0 0 0 J.ooo Ltndtr Legtl Costs Paid By A+plicd Led - Rtal Esttb L&l - syl?dicatkxl 0 0 0 0 0 0 0 0 Total Attorney Costs 55.ow 3,438 0 55.000 0 0 0 55,ooo Rtnl Reserves Olher Total Rtnt Rtrtfft Cortt Ql!w TCAC AppJRtttwJMcnitting Fees EnWonmenbVloxic Rtmtdblkx Local Ptrrnil Fees Marketing FumisMgs CapibI Fees Optnting ShWnaU Sofl Cal Contingency Total Other Cotu TOTAL PROJECT COST Con&nUPrccts.sing Agtnt Ftts Pro&l AdminisLraUon OlhW Total Dtvtloptr Costt 160,ow lO.oW 0 160,wo 0 0 0 160,ow 26.500 1.656 0 26.500 0 0 0 26,500 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 166,500 11,656 0 166.500 0 x 0 186.500 TOTAL PROJECT BASIS 2.741.550 171,347 474.346 2.176.614 0 51.746 38.642 2.741.550 SyndicaUon Ltgai Costs Tax Crtdit CmsuUanb Syndicalion AaounUngrAudiUng Total NorMarls Cosb lO.WO 625 0 0 0 lO.Wo 0 lO.wxl 0 2 : 0 0” 0 i 0 1SW 0 1 ,000 l.ooO 11,wo 668 0 0 0 11,WO 0 11,ow TRUE PROJECT COST a . , . 0 62,746 2 752 550 172034 474 348 2176614 36,642 2.752.55(3 Projeci Subadies Olher Basis RtducUon Total Barls Rtductiona NET PROJECT BASIS 432,623 27.039 432.623 0 0 0 0 432.623 0 0 0 0 0 0 0 0 17.725 1.106 17.725 0 0 0 0 17.725 0 0 z 0 0 0 0 0 0 0 0 0 0 0 0 450,346 26,147 450.346 0 0 0 0 450,346 260,OW 17.6cu 0 280.00(3 0 0 0 260,Wa 6aa.MM 43.Wa 0 666.wo 0 0 0 wmlo 162.Wa 11.375 0 162,ooo 0 0 0 162.000 6Q.000 3.750 0 60.000 0 0 0 m.ow 77.000 4;l313 0 77:Wo 0 0 0 77,WQ 1.267.000 80.436 0 1.287.000 0 0 0 1.267.WO 106.000 6,625 0 106.m 0 0 106.000 0 0 0 0 0 0 0 106,000 6,625 0 106,wo 0 0 0 KwW 39,000 2,436 0 39,wo 0 0 0 39,ooo 6a.600 4.y)o 0 29,956 0 0 36,642 @x800 0 0 0 0 0 0 0 0 13.566 649 0 13.566 0 0 0 13.568 x 0 0 0 0 0 24.10; 0 0 0 0 i x 24,107 I.507 0 0 24,107 4.4w 275 8 4.4w 0 0 8 4.400 10,wo 625 0 10,ow 0 0 0 10,Wo 120,693 7.556 0 62.051 0 0 36,642 120,693 2.171 136 0 0 0 2.171 0 2,171 0 0 0 0 0 0 0 0 10,ow 625 0 0 0 lO.OW 0 1 o.Wo 12,171 761 0 0 0 12,171 0 12.171 24.000 1.500 24,WO 0 0 0 0 24,WO 0 0 0 0 0 0 0 1,500 24.000 0 0 0 0 24,WO 5,000 313 0 5.000 0 0 0 s.wo 61,386 3,637 0 61.386 0 0 0 61,386 14.575 911 0 0 0 14,575 0 14.575 3W.23: 16.765 0 0 0 x0.2360 0 0 0 0 0 300.238 0 25,Wil 1.563 0 0 0 25,d 0 25.WO 15,oW 934 0 15,WO 0 0 0 15,wo 0 0 0 0 0 0 0 0 1.722 108 0 1.722 0 0 0 1,722 37,719 2,357 0 37.719 0 0 0 37.719 394,252 24,641 0 354,677 0 39,575 0 39,252 2.555.050 159,691 474.348 1.990.114 0 51.746 38.642 2.555050 0 0 0 0 0 0 0 0.000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2.752.550 172.034 474.348 2.176.614 0 62.146 36@2 2,x2.553 - OCEAN, -CARLSBAD 1 Q103197 CTCAC TIEBREAKER CALCULATIONS Threshold Average Affordability: less Proposed Average Affordability: Amount Below Threshold 56.000% 39.872% 16.128 Points (Maximum of 16 Points) 16.000 on Poiats San Diego County Threshold Basis Limits - Non-Elevator (02/18/97) Unit 2BRl2BA Mgr 2BRl2BA 3BRJ2BA 4BRl2BA Total Net Project Basis Requested Eligible Basis Credit Utilization Points TCAC’s #Units Basis- 1 90,276 90,276 5 90,276 451,380 5 115,553 577,765 i 128,731 0 643,655 0 0 0 0 0 0 0 0 0 ii 0 0 16 1.763.076 2.176,614 TCAC’s Basis Limits -Featuresi 103,817 103,817 103,817 519,085 132,886 664,430 148,041 0 740,205 0 : 0 0 0 0 0 0 2,027,537 2,176,614 2.027.537 0.000 RUN DATE: I OlOW97 TAX CREDIT CALCULATIONS Preliminary Eligible Basis Federal . Its 2,027,537 State Credits 2,027,537 Deductions from Eligible Basis: Grant Proceeds Used to Finance Costs in Eligible Basis 0 0 Federal Loans Used to Finance Costs in 9% Eligible Basis 0 0 Non-Qualified Non-Recourse Financing 0 0 Non-Qualifying Portion of Higher Quality Units 0 0 Historic Credit (Residential Portion Only) 0 0 Total Deductions from Eligible Basis Total Eligible Basis 2,027,537 2,027,537 High Cost Area Adjustment Total Adjusted Eligible Basis Applicable Fraction Total Qualified Basis Tax Credit % Total Annual Tax Credits LP Share of Credits Credits Available to Equity Provider Credit Period Total Credit Allocation Investor Yield Gross Investor Contribution Less Lower Tier Syndication Expenses: Legal - Syndication Syndication Consulting Syndication Accounting Total Syndication Expenses Syndication Expenses funded from Construction Loan: Net Investor Contribution 100.00% 100.00% 2,027,537 2,027,537 100.000% 100.000% 2,027,537 2,027,537 8.65% 0.00% 175,382 0 1,753,820 99.00% 99.00% 99.00% 173,628 0 1,736,281 IO 1 1,736,281 0 1,736,281 0.715000 0.715000 0.715000 1,241,441 0 1,241,441 10,000 0 10,000 0 0 0 1,000 0 1,000 11,000 0 11,000 (11,000) 0 (11,000) 1,241,441 0 1,241,441 RUN DATE: 1%3197" 1 1998 2 1999 3 2000 4 2001 5 2002 6 2003 7 2004 8 2005 9 2006 10 2007 ii 2008 12 2009 13 2010 14 2011 15 2012 16 2013 17 2014 18 2015 19 2016 Tax Credit Partner (15,000) (1,226,441) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 i 0 Federal 0 173,628 173.628 173,628 173.628 173,628 173.628 173.628 173,628 173,628 173,628 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 40.00% Tax Savings 32.8;; 35,463 36,823 35,704 34,828 34,188 34,145 34.042 33,283 32.580 32,519 32,452 32,379 32,298 32,209 29,439 0 0 Asset 0 247 2,946 2.733 2,806 2.861 2,899 2,917 2,915 2,892 2,846 2,776 2,680 2,557 2,406 2,224 1,862 0 0 Sales 40.00% Distribution Proceeds & Income Tax of Fvit Payment uahilih! (:I 0 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) 0 (0) G (0) 0 (0) 0 (0) 0 0 0 0 0 (9:) (1,178) (1,093) (1,122) (1,144 (1,159) (1,167) (1,166) (1.157) (1,138) (1,110) (1 .OW (1,023) (962) (ago) (745) 0 0 JOTAl (14,918) (1,019,789) 210,859 212,091 211,015 210,173 209,555 209,523 209,419 208,646 207.916 34,185 34,060 33,913 33.741 33,543 30,556 0 0 20 2017 0 0 0 0 0 0 0 0 0 TOTAL (1,241,441) 1,736,281 0 535,310 40.565 (4) 0 (16,225) 1.054,487 IRR 15.07% - ~‘“*o”,;<~ g***-- 0-Q 9 E I::- “, f J’“‘“~y~ ~**“**~*-- = I - * f...OIQ(d &oooooy-* 9 E ljll” ; $‘““~~~ y-**~*-* 0 yoo*~~, poooo~opo T d ~*.a** 9 2:: a^***** OPO f j&a* 2 I p**o* -1, -. 5 5 - .” 6 ~o**o*yPa d ~o*“llzt y-~*** < ! - o ~*oo* -*g f Z /+” ~*****~*** ~***o yr 4 f*o*** *o* 2 *a- (5 !! ~***“i~2 5 j*****i;*** 0 dollop, q*****B*o* 5 0 D ~**** 5 y; gc.o*** 000 c! 3 ~0000 5 5;” “,E 2 = fooooPSoo* y**“,yf ~*****g-- 0 +ooa’l! t z E ~000002Q*oc P 0 lo 1_ , 0 IQ 0 I- t- * 10 , / ;* I I0 I0 D I- ! 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E It IQ 3 OQO~ i z y-* ,==ig **o* 0000 0000 0000 OOOD OOOD 0000 0000 0000 OOOP OOPO 0000 0000 0000 0000 pa * 9 s !I j 1 fY’ 9 000 0 000 !i 000 T=* 000 0 ODO f 000 0 QOO 8 000 0 aoo f 000 0 000 f QOO 0 000 5 000 0 QOO 8 d 000 *r* 000 0 000 f oao 0 000 !i 000 0 000 9 o-0 0 o-0 J 000 0 000 i 00000 00000 0*0*0 *a*** aaOaO 00000 OOQOO *o*o* 00000 00000 00000 00000 QOOOO 00000 ooo*o *o*oo **a** ****0 *oooo *oooo DO000 **0*0 0***0 00000 00000 OOOQO ***0* DOOOI 00000 QOOOO = 3 c J oooo~oog***~~i~ n 9 ii c / ’ - 5 6 y-~““yf” c a Ii /rj = / 1 2 2 %““‘“~““g,“““~,“j~, A :! ” I-: / i 2 ; x rJ--*~-g-*~~g d r 11 If i I f** ” 3 g w- 5** o - A 2s 00 g p d f ** 5 z’6 8 ** ; “2 8”” ~ - ; 22 f ** 5 “f 8 O0 f g: $ O0 4 as ff 00 !: or “5 d a f ** f %:1 f a* f 2% g 88 f “g. .e f 33 f “f i $9 2 =f ES! ;24n7 : z f ss~rsscas~aa~;sss~a~~~~~~~~~~~~~~~~~~~~ $5 -.~-n--o.*nqhnqcn.~c m.cn .c xsxsssssssPti g . ni Atiachxnent4 a co u 0 LL / OS0 0 000 0 000000 0 000000000010 00 0 Y) d / ’ i i 1 a / i I ; i j i ,, - -r z z UC 3 ‘i < t . - t i -p 3 ‘5 c z . - ? 7 2 s ‘5 P L . - c I: f ” 5 c 5 . - : k g ! !? L z Li ; - IPROPERTY SUMMARY J [SOURCES AND USES Number cl Units 10 unifs USES: l?lahlu 0.402 NeI 0.089 Gmss Pmperly Aquisitioo -Land 15.755 252.g cdl ACreS 15.00 Pmm Acquis~tioh - Impmwnnts 11,284 180.546 10.75 Omsily 39.0 du 23.2 du Hard constnrc0M 85.032 1.380.511 80.98 emdenq 5x33% A6ELqalICmsulbnb 15,224 243.580 14.50 Permits 6 Fees 10,700 315,193 16.76 OeveloperOvemead 9.083 158.122 9.41 ~OBVELOPMENTSCHEOULE Marlteting co93 8.405 150.474 0.98 Fhanang L omer son costs 5.521 08.331 5.26 Pmjecf Commencement Year oimim.3 n8w Total Project uses 171,602 2.748.835 163.62 Slat Pmdevelopment ofmime aft Pred~do~ment shms\ 4 omdev SOURCES: Aquisi&of-Laid Financing Period (Months) Project Finanting Completed Silwmk Pedod (hbnm.3) Finish Skew& I Stab Models Lag behvem Models 6 Phase I start Sal Phase I Unit Conskwtioh Total Cohsuuc6on Phases hbrns per Cohswucti~ Phase TOM CMWUCUO~ P&d (hioflms) Completion/CefUficale of Occupancy starl of Sales Unit Sales per h40hm hfohms per Sales Phase Total sates Pedod (MohlhS) Pmpefty Sell-out a.0 Osmlm.5 aq 4 finance 08101190 runds 2 filework iimima modtis 0 Ml 11/01/96 phase1 1 phases 9 phase 9 consw 00401190 finish owozms sell a.0 absorb : sales 1om1me sellout ConslNction Loan Marlteflng Casts pad in Escmw Cakllus Land Contribution Land hion~lization Equily -up fmnl Eqlkly - ccosbuctioh matching Finandal Partner Equity - coosu. malching Land OrmecCohtnbulion -up fmnl Redevelopmmt Set &de -up fmnl Total Cohstruclfw Sources Redevelopmaht BeI AsIde -back end Equcy Repaymeol lo Total Proj.4 Sources Agmcy Homebuyer Oowhpayment Awslance ToGI Redeveiopmeht Agency Pahiapaiion 77% LN 1.452.903 sa.309 432,623 Lt : 0 0 0 0” 50.313 805900 2.748.835 0 0 2.748.835’ 0 0 50.313 6fJ5,Mx [FINANCING ASSUMP~ONS AQE Loan lhmresl Rale Consln~cUm Loan Interest Rate LIBOR - 6 mos. 5.61 x Point Margin 2.wx excess cowage 0.00% Construction Loan Poinls 6 Fees Maximum Loan to Market Value Maximum Loan to Tobl Cost CaWrucUan Loan Payoff Premium I 0.00% ?.a!% l.W% 05.0% LN 05.0% LTC 110.0% ISALES EXPENSEABSUMPIlONS I Broken Ccmmissiohs 0.00% Escrow Closing Costs 52.500 lander Tax 1.10% Wamnty Resawe so Litigation Resewe 0.00% IHOMEBUYER flNANClNC ASSUMPTIONS i Mortgage km Interest Rate 7.75% Pt.41 pemehtage mle 0.55% Hazard klwtanca me 0.04% Property Tak tale 1.10% hblhly HOA dues s120.w Homebuyer Dcwhpaymenl 5.00% /HUD MEDIAN INCOME GUIDELINES SAN DIEGO COUNTY, effective December 27.1988 Family Sire: Median Incoma 1 person 2 Person 3 Person 2:: 4 PenoIl ua&x 5Pamoh 652,xX) 0 Penoh 7Persoo %t a P~EO~ &2w Average Persons per Bedmcm 1.5 Housing Pmt as % of Income 33% [UNIT MIX B PRICING PRODUCT: AMomJabilily 5aooK 75.wx 05.wx 100.00% Marcat Pal8 WW (moderate) Total Unils x Mix Bedrm Barnmoms UNIT SQUARE FOOTAGE TOTAL SOUARE FEET Ease Mwket Value View Premium Adjusted Ma&et Value Market Value as K of AMI Market Value per sf SlW.WO Sl35.OW so 0.0: so so so S117.5Gl avg. base 0.0% 0.0% 0.0% 0.0% 0.0% 0.0: 0.0% 0.0% slw.wo S135.000 so so 78.34% 66.40% O.W% 0.00% 0.w: so so so Sll7.5W avg. yalu? 0.00% 0.00% 0.00% $111 $113 so so so so so so $112 wvp. psf Appraised Value per Link so SO Avg. Pmmium per Unit 0 0 Adjusled Appraised Value SO SO eLBcsl ,ELAJiz EIAM PLAtu. rQIAl. 0 0 : 0 0 a 0 : : 0 0 0 0 0 16 0 0 0 0 0 0 0 0 0 0 i 0 0 0 ti 0 0% 9% O.W% % 0.0% 100.0% 0.0% a 50.0% 2 1.0 800 7300 a 50.0% 2.: t ,200 9.0w 0 0.0% 0.0” z 0 00% 0: : 0 0.0% 0 0.0 0 0 0 0.0% 0 0.0 0 0 0.0: 0 0.0 : / 0 ! 16 0.0% ’ lW.OY 0.: 1.050 avg. 51 : 16.0w lotal Sf so So 50 SO so SO appiaised 0 0 0 0 so so so SO SO avg. adj. ;PROJECT PROFlTABlUTY UNIT SALES PRICE 50% Affordable WY w 75% AtfofdaMe (bw 85% Affordable ow 100% Afbdable (moderate) Market Rae .EuNJ eu4.2 euu eutu so so SO so 85.402 112.654 0 0 0 0 0 0 8 8 Kmlpervait so $0 so 0 1.064~ 104.026 0 0 0 0 0 i 0” TOW Sales pmceeds $763217 t801.229 Redevelopment Proceeds (upfront or backsnd) Total Pmjecl Oevelopmenl Costs (less Developer Towhead) Developer Ovemead 4 Comma Mamgemeht Fees Preiefred Return Payments so 30 so SO so so $1.881,~18 5104.026 $1.237.023 77.351 PROJECT SURPLUS (SHORTFALL) PROFIT Project Profit X - CONSTRUCTION ASSUMPTIONS [CONSTRUCTION I SALES PHASE TIMING CONSTRUCTION Duration SALES Duration aaIl Einish(monthd siad EioishImonths) Sitework 09/01/96 11/0119% 2 MOdeIS I l/01/98 08101/99 9 Models oa/oz99 0 Phase 1 I l/oima oa/oi/99 9 Phase 1 oa/oi/99 10/01/99 2 Build Out Build Out oaIoi/99 10/01/99 2 Total 09ioi/9a oa/ol199 11 08102199 1oio1l99 2 [UNIT MIX BY CONSTRUCTION PHASE I Sitwork Models Phase 1 Build Out Total Units % E!L.!wlwPlAN3 : : 0 0 0 : 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0” 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 01 0’ 0 14 0 0 0 : 0 0 0 0.0% 12.5% 87.5% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% /HOMEBUYER AFFORDABILITY ANALYSIS lzLANlwpy\Nw Bedrooms 2 3 Bathrooms 1.0 2.0 Maximum Family Size (Persons) 3.0 4.5 0.0 0.0 0.0 0.0 0.0 0.0 Median lnc0me Level 43,700 50.550 0 .O 0 0 0 0 Mortgage Calculation 2 75% Affordable Sales Price 95,402 112,654 0 0 0 0 0 0 Downpayment Assistance 0 0 0 0 0 0 0 Buyers Cost 95.402 112.654 0 0 0 : 0 0 Homebuyer Downpmt (4.770) (5.633) 0 0 0 0 0 0 Mortgage Amount 90.632 107,021 0 0 0 0 0 0 Homabuyer Monthly Costs Mortgage 7.75% 649 767 0 0 0 0 0 0 PMI 0.55% 44 52 0 0 0 0 0 Hazard Insurance 0.04% 3 4 0 0 i 0 0 0 Pmparty Taxes 1.10% a7 103 0 0 0 0 0 0 HOA dues 120 120 0 0 0 0 0 0 Total Monthly Cost 904 1,045 0 0 0 0 0 0 Affordability Calculation Total Annual Cost 10.644 12.544 Housing Cost Coverage 33% 33% 33: 33; 33,” 33: 0 0 33% 33% Supportable Income Level 32.660 36,013 0 0 0 0 0 % Affordability 75.20% 75.20% 0.000% 0.00% 0.00% 0.00% 0.00% CODE 1000 1.500 2000 2300 2500 3000 3900 4000 5000 5900 6000 6800 7000 8000 C AFFORDABLE HOUSING ANALYSIS OCEAN BLUFF CONDOMINIUMS - CARLSB~ MASTER BUDGET BREAKDOWN CONSOLIDATED SUMMARY OCTOBER 2,1997 DATE REVISED UNITS ACRES 161 0.689; BUDGET SUMMARY DESCRIPTION PER SF Land 25.75 Bonds and Fees 17.87 Offsite Improvements 1.06 Common Area 0.00 Engineering 2.32 Onsites - Direct 45.00 Lot Improvements 16.67 Construction Indirects 14.40 Project Development 11.49 Overhead 9.41 Financing 4.72 Property Taxes 0.28 Model / Sales Complex 1.49 Sales and Marketing 7.04 Contingency 6.12 Land Owner Contribution (25.75 TOTAL. 137.87 144,763 t 2,316,212 APPROVED BY: Project Manager PER UNIT 27,039 18,762 1,108 0 2,438 47,250 17,500 15,125 12,061 9,883 4,960 297 1,563 7,394 6,423 (27,039 { 432,623 300,184 17,725 0 39,000 756,000 280,000 242,000 192,98 1 158,122 79,367 4,758 25,000 118,309 102,766 (432,623 Division Head Finance Construction Marketing tasT - 1 , 4 I ,: Iam Yew *rr uau a I 4 8 H lr CODI OIISLIIIOW I - Iy WWn w JIW A- ssew mu, N”:: Dr- mQaQ~ M- IecQl la-d- -- l-* MIMn.bwn8.e 10.w10 kdu -,ma Ia.w1 -w.hn ,&tam -- SE 0 0 : : ptwa 0 0 0 0 : : llDy0 : : : : : : : : : : : : : : : : : 0 : : : P 0 : : : p” : : : : : : : : : - D 0 : 0 4a2.4 : 0 0 0 D 0 : 1Mo9 Lqllh-Lmd- A-.-* 1mlOO ?awa.hUlv*) . Is.47, M m.I1oD mu.*.ulrrul x.12 n %z : : : : : : : : ,;:g *L”:lo : : H.I(oo Pmriarrrwlvu, Ma& ~edpwmn, aEl : : : : : : : : : : : : : bcI I,. *co% 1s.m 0 0 D 0 Pzum . FEES wm M alLI= : I : 0 : : am t2Jm I : urn 209 14 0 : z y-““~q’ * - --mw=l - om-WV-, - CM--rl*w-., *= %2lZLmvclwm -- moom nucmvh~. = ==z- :,, :: Sdi : : : : : : : : : : : : OOU ” I P e 0 0 e D 0 0 a 0 0 E-74” snksnr* coo+ .a yyYLIwcLcow* 1.w M $310 : : : : 0 0 : : : 0 : : : : maxa-- Zrurb-Llooh- s”“, : : P 0 0 P LUDDI s*&uaeq II u CI SPDDk - ~r*Ulrh--w I,% - LUI : ,” : : : : : : : : d 5.d --dn-. OM Lam a,,: d 0 : : : 0 : : : : : : : 0 a 0 m 2% 1.784 M lZ4244 0 0 0 0 0 0 I 0 0 0 IM Ia% 4ed.m u+ : 3.IY 0 : : : 0 : 1.lY : 0 : 1.131 0 : 0 : : : 1.1Y : 0 : I.,Y 0 : : : 0 : 1.124 ii : ,I,” 0 : 0 : 0 : P yL.m : : ,.4 0 : : : 0 : eeuCnnu. --wwl--J ~*wyv~hi’ -, --- wonr- Dr*Oh.*kid Drrrt+h.-- 7 ,I. -- NIcm~cIIMn WWkd bd-,~lon.- - ziz : : 0 0 D 0 a D OM : : : : : : : : : : : : : u : : : : : : : : &a% : : : P 0 0 : ” ” 0 : : : : : : : : : : : n.am M D 0 0 0 0 0 0 0 0 0 p-m:;-~;;’ 0 mnr.khn*rn) -lkw*-, - Imad -.fWA mm M : : 0 0 0 0 : 0 0 0 0 0 s..II H OEi : : : : : : : : : : : : tk% M : : : 0 : : : : : i : : : 0 0 * 0 D P 0 0 OU-lCa, . --lcvl, 22 ~“~w~~ =zr--” -1 MYnYlOYUCYn @I- Loor : : : : : : : : : : : : P “2 : : : : : : : : : : : : Lmu 0” : : : : ii : : : : : : *.m M 0 0 0 0 0 0 0 0 0 0 0 0 --Is-vrq 0 t”“z&%y z=sF--’ -uw a: ii? : : : : : : : : : : : : ,iil : : : 0” : : : : : 0 LOOI D 0 0 0 : P 0 : 0 : : : 0 @W 0 0 0 0 P 0 0 0 0 : -(r-l a- p”“L-: E-c--vww=., -- Ldh.Wnr* L-M-.- - -0 : : : : : : : : : : : : 0 : 0 : : 0 : 0 P * * 0 : : : : : : : : 0 : : : : : : 0 0 D : : : : : : : 0 0 0 0 : : D : 0 : : 0 0 0 0 0 CIMt-Is--, --w*hn1 --w*hn1 -w -w - - Oum-uoII” Oum-uoII” e ,-eQln YY-M. -lob-- :- :. : : : : : : : : : : 1l.d tt5D00 u P 0 * 0 I 0 a 0 0 *mu 0 0 2 64 : t.ul w 0 : : : 13.1 : 0 : n.I -yLL s--b- ,: z -UYbl-1 --. - -0 MO&f- =sz-“” --urrm m.wwsrmdnlnl- --bwDI tip-“- IyhmmU-- HI-- --Lm- - ---. RUNDATE: I- cvELoPyu(T AND - Ezl ~Mirw , iRfiw 1 2 J 4 I 7 . , lb 11 TOTAL Jm-ll F&W Mwe8 AWe8 khJ.ea Jd 11 hlnl Au0.m sapI 0cl-w Nor48 c,&, 2 2 11 14 i a : : : 0 1e 0 0 d 0 0 0 d d d d 16' d 2 14 0 i i 0 0 0 Buydca : l&ml udh Avaboh 1e 0 0 0 0 0 0 0 0 d 0 0 0 bt%F- &OWlmnh : I 0 0 ix: e PLAN4 z ii t : :* 0 0 0 0 0 0 0 0 0 0 i : : Total unll cbshes $6 0 0 0 0 0 0 0 0 0 0 0 0 sala c- oat, M-m S*hr camphlk37 Dab LPm GROSS SALES PRCCCEDI w3e441.ue to so so so sb so so so so SO so REDEVELOPMENT SElWIDEd*CK END SO 0 0 0 0 0 0 0 0 0 0 Y 0 Sa*a 4 km coala Bmws- 0.00x 404 0 ESGWckUblJColo 2.sm 0 : i : i : i 0 0 0 0 0" 0 i 0 1nrkr Tax LloK wx4 0 Wnu*yRufU O.& : : : i i i i ii i : L? : . LilbalblllhwM 0 0 0 0 0 0 0 0 a0 0 0 0 ToW s&s L vlrranp 350% ewoe 0 0 0 0 0 0 0 0 0 0 0 0 CASH AVAIUILE FOR DEW SERWCI! 4. .I 0 0 0 0 0 0 0 0 0 0 0 0 Loan Rhau Pmnmd ll.&52.00() 0 0 0 0 0 0 0 0 0 0 0 0 NET SALES PRGCLEDS IlJfy 0 0 0 0 0 0 0 0 0 0 0 0 Pwlw Pdmwd Rdlm O.mX 0 Pnhmd Ilm O.CO% : 0 i : : i 0 0 0 0 0 0 0 i : 0 0 Pwlnw cqully RapaJmml 0 0 0 mum7 nwwnaa 0 0 : : 0 : i 0 0 0 t 0 0 0 : 0 : PmJEcT PRGFI? lUzJ4 0 0 0 0 0 0 0 0 0 0 0 0 Ihr* Pro* 1 mY%u : 0 : 0 i : 0 0 0 i 0 FlNncbl Pubu Rdl 0 0 0 0 0 0 0 : Orolur Pwtklpadng Pm* 0 0 0 : 0 0 0 0 0 0 0 0 0 0 DEVELCWENT AND SALES ANUYSlS iimima llrnme mldoul Total unn StArtl F 050169 PIUS81 WQlnQ 2 14 mldo\1 Total Units Avallab!a 0 0 d 0 0 d d 18 d 0 0 o- kte- PLAN2 2z: l@al unit tugs 8.0 Da mm-ml 8 0 0 0 0 0 4 4 0 0 0 0” : : : 0 : if : 0” : 0 I 0 0 : i : i : : : : 0 0 : : 0 0 0 : 0 i 0 0 0 0 0 0 0 0 0 0 0 : 0 : : : : 0” i : : 0 : : : : 0” 0 0 0 0 0 0 0 I G 0 sa*r C-namln Date M-m SIks C0mpkU.m DIM sepm it!cF= : 0” 0 0 PLAN2 0 0 : : : 4 0 0 4 0 : 0 : PUN3 0 PUN4 : : : i i 0 0 : i : G i : 0 0 : G 0 0 0 0 : 0 a0 0 : 0 0 i 0 0 0” : : i : : : : : 0 : : : Tow unn l4lwltuy 0 0 0 0 0 0 0 8 0 0 0 0 GROSS SALES PROCEEDS so so 50 so so 50 se32223 50 50 50 REOEVELOPMENT SR ASIDE-BACK END 7 0 0 0 0 0 0 0 “9 0 0 0 sa1qq i hwkatlng cost* amkamnblm Roe% 0 ii : : ii : : 20.d 0 0 0 0 rwtg”” cost 1.10% 2x0 : 2o.wo 0 0 0 0 0 9.154 9,194 : : : W-R- 0.02 0 : UllgatbnR- 0 0 i : : : : : : 0 Total sa*a L MuwIng 3.50% 0 0 0 0 0 0 0 2Q.lY 28.15( : : : 0 CASN AVAILABLE FOR DEBT SERVICE 0 0 0 0 0 0 0 803.089 9al.089 0 0 6 Loan RqLlau Paymnt 0 0 0 0 0 0 0 (799.067) (e.qeQ7) 0 0 0 NET SALES PROCEEDS 0 0 0 0 0 0 0 3.972 149,292 0 0 0 Partner Pnhnd Relum O.CG% 0 0 0 0 0 0 0 0 0 0 Pnlrmd Rqlum 0.00x 0 0 0 0 0 : : Parlmr Equity Rqpaymutl : i EqW W.wmnt 0 : 0 : : 0 : i 0 0 0 : : 0 : 0 0 PROJECT PROFIT 0 0 0 0 0 0 0 3.972 149262 0 0 0 D*wlop#r Prom FItuncIal Puinw Pro(n Bmkw Pwtklpaung Pmln A : 0 i 0 0 0 0 3.972 149262 0 0 0 0 0 i 0 : i : : ii 0” : : 8 - TRANSMISSION VERIFICATION PORT TIME : 10,‘03/1997 12: 53 NAME : CATELLUS K RES IDEbIT I AL : 714-251-1933 : 714-251-6108 DATE, TIME FAX NO. /NAME %E”:;y” RESULT MODE la/63 12: 34 17684386981 8: 18: 56 OK STANDARD Attachment No. 3 Housing Commission Minutes: August 14,1997 September 11,1997 October 23,1997 (Draft) HOUSING COMMISSION MINUTES August 14, 1997 Page 4 VOTE: AYES: NOES: ABSTAIN: purchase 2.55 affordable housing credits in the Villa Loma Housing Project in order to satisfy the affordable housing obligation of the Mar Vista at La Costa Project under the City’s Inclusionary Housing Ordinance. 7-o-o Calverley, Escobedo, Latas, Rose, Scarpelli, Walker, Wellman None None 2. OCEAN BLUFF - Application to purchase affordable housing credits in the Villa Loma housing project. Craig Ruiz reviewed the background of the request and stated that this project went through the same process as the Mar Vista at La Costa project just presented. Mr. Ruiz described the project as 92 single-family homes on a 3 1 -acre site. The homes will be on lots of between 7,500 and 13,000 square feet. The Inclusionary requirement on this project is 16.24 units, with a credit price of $32,220 per unit. If approved by the City Council, a payment of $523,252 will go into the City’s Housing Trust Fund. Mr. Ruiz stated that this project was originally before the Commission in February 1996. To satisfy the Inclusionary obligation, the applicant proposed the 92 single-family homes and a 16-unit apartment complex. At that time, there was a proforma analysis that was done that showed the cost to build the project, and there was no mention of how the project was going to be financed. When the project was approved by the City Council in April of 1996, they approved the Planning Commission’s condition that said the developer had the option of building the 16-unit apartment complex or purchasing housing credits in an approved Combined Project, if approved through the Combined Project Review process. The developer is now requesting to purchase credits in the Villa Loma project. Per the developer’s request, the proposed affordable housing project is not feasible and the developer would like to purchase credit as opposed to the previous approvals they have received to construct the 16 units on site. Mr. Ruiz explained that Council Policy 57, as discussed earlier, was also applied to this project. Mr. Ruiz stated that the small development of this 16-unit development makes it economically unfeasible due to the significant financial subsidy which would be required for the project of about $55,000 a unit. Mr. Ruiz added that the year-old proforma is still relatively accurate. In addition, small projects have more difficulty generating interest from funding sources. Mr. Ruiz explained the advantages and disadvantages of the off-site proposal as being similar to what was heard with the previous project. Vice Chairperson Wellman asked if there were any questions of Mr. Ruiz. Commissioner Calverley asked how the applicant had proven that it was not feasible to build. Mr. Ruiz responded that this information is based upon the proforma and an analysis. Staff believes that the purchase of credits is the best option for this project. Commissioner Scarpelli asked how the $500,000 in credits from this project would be applied. Ms. Fountain responded that there are several projects that have money committed to them, i.e., the Laurel Tree project, the Sambi project (a first-time homebuyer project). Any money coming in would be used on those existing projects; then future projects would be looked at. Ms. Fountain added that there are quite a few projects on the horizon that will potentially ask for money; one being Poinsettia Properties, a lo&unit apartment project. HOUSING COMMISSION MINUTES August 14, 1997 Page 5 Ms. Fountain added that generally a $22,000 per unit subsidy is not the best “bang for the buck” for only 16 units. A 108-unit apartment or a 50-unit apartment project with $10,000 to $12,000 per unit in subsidy would be something Staff would be more comfortable recommending.. Vice Chairperson Wellman asked if Staff weighed the advantages of original proposal with the affordable on-site apartments, which goes toward the mixed use and not segregating lower income people to certain areas. Vice Chairperson Wellman asked if condo or homeownership is also not feasible on this 3 1 -acre site. Mr. Ruiz responded that Staff looked at the proposal that the developer put forward, which is a 16-unit complex. Staff did not look at a for-sale project, because that was not what was presented to Staff. Staff did evaluate whether this was the best place to put this type of project. If the City Council wants to put in $22,000 per unit, maybe it would be feasible. The City put in $700,000 for 138 units at Villa Loma; putting in a half million dollars to get 16 units plays into the decision. Staff has to balance an Ordinance that may have been written at a time when they wanted to see one out of every seven units built, but then Staff has to balance that against the reality. Staff has been told that there is nobody out there looking to build or loan on a small project like this that doesn’t typically generate a lot of cash flow. This is a small project and it will be difficult to get financing and hard to get somebody to manage. It makes it difficult with an Ordinance with a certain ideal and a different reality. Vice Chairperson Wellman commented that with the competitiveness of tax credits, it seems even difficult for large units now, e.g., Laurel Tree. She added that there is no guarantee that large units will get funding. Mr. Ruiz responded affirmatively. Commissioner Calverley questioned the $22,000 in subsidy that was taken from the proforma the Commission saw in February. Commissioner Calverley said that since February 1996 the revenues have changed as far as rents and does not believe that $22,000 is anywhere near accurate as far as what the subsidy would be on these units. Mr. Ruiz responded that the proforma has not been updated. Staff looked at the proforma as a year old; and said that the numbers will change some but not significantly. Commissioner Calverley stated that she believes the proforma was not accurate to begin with. Vice Chairperson Wellman asked how much money is in the Housing Trust Fund that is not being loaned out to other developments. Mr. Ruiz responded that it is at about $1,700,00 right now. Vice Chairperson Wellman commented that there are monies available in City funds to put into this project on-site. Vice Chairperson Wellman invited the applicant to speak. Mr. Jack Henthom, Jack Henthom & Associates, 543 1 Avenida Encinas, Suite 543 1, Carlsbad, CA 92008, addressed the Commission and stated that the project was approved by City Council in April 1996 with positive recommendations from both the Housing and Planning Commissions. Mr. Henthom stated that at that time the project’s conditions of approval included language that specifically acknowledged that an alternative method to the on-site provision of housing for this specific project was available in the form of the Policy 57/58 mechanism. Mr. Henthom said that this project was pretty marginal back then in that the 16-unit apartment project was not being well-received by the developers who historically do them. There was some question as to whether or not the tax credit program at that point in time was going to change. Mr. Henthom stated that he remembers addressing the Commission in February 1996 and stating that one of the assumptions the applicant was making when presenting the project was that the tax credit - - HOUSING COMMISSION MINUTES August 14, 1997 Page 6 program was going to move to be more favorable toward smaller projects. There was a concern on the Villa Loma project or the Villas at El Camino Real that that project might have to be funded over two tax credit years because it was too large at that time. Unfortunately what happened was the tax credit program went through a series of evolutions to where today there is no real priority for anything--it’s a lottery-driven program. As far as small projects go, once you get through that initial lottery phase, and getting into some of the more discretionary things that go on with that program, smaller projects are basically getting funded where they are either in-fill projects or they are truly rural farm- type projects where there are other criteria to evaluate them. Basically the assumptions being made back then were that if the tax credit program took certain evolutionary directions, this project could possibly work. That’s why at that point, the applicant specifically said they were not asking for funding. The applicant did a proforma based on the information provided by the development community and their own sources, which also happens to be the group that’s doing the Laurel Tree project. Mr. Henthom expressed his confidence in the proforma. Mr. Henthom said that the cost of getting funding for the 9 percent tax credit program that was being utilized then was relatively low. So when you looked at small projects, spreading the cost, obtaining that funding wasn’t as critical as it is in today’s environment where you’re dealing with a 4 percent bond issuance program. The cost of issuing bonds to cover a deal like this on a 4 percent credit program are significant. Regarding the proforma, Mr. Henthom added that for everything that possibly went up in revenue, there has been an increase on the cost side. Henthom therefore doubts that there have been any changes that are significant to the proforma. Mr. Henthom said that the developer both alone and in concert with the Staff of the Housing and Redevelopment Department went out and tried to attract developers to this project when it became apparent to the applicant that this project was not feasible. The applicant spoke with Bridge, Katellas, and Silverwood Developments. These developers said that a 16-unit project did not justify participation. The interest in the project was that there were no economies of scale, and it was not something they were interested in doing (as recent as three months ago). Mr. Henthorn added that the minimum size project that seems to be feasible anymore is about 50 units; 50 to 100 units seems to be where the breakpoint is roughly. As a result, the developer then came to the City and sought to have the alternative provided for in its original project’s conditions of approval that would allow for the purchase of credits in Villa Loma. The Policy 57 Committee reviewed the project, and they recommended approval of the alternative that was in the condition. The applicant is here with a positive recommendation from the Committee to purchase credits in Villa Loma because the on-site proposed project is not feasible. Market-rate developers are not interested in the project. The applicant is asking that the alternative that was put into place when the project was approved which allows purchase of credits be recommended to the City Council by the Housing Commission. Mr. Henthom pointed out that this project is probably the first of a bunch of these the Commission will see. He added that Staff is beginning to look seriously at what remains in the southwest quadrant to be developed. The largest parcel remaining to be developed south of Palomar Airport Road in the southwest quadrant, outside of the Poinsettia Shore project, is 30 acres. There are parcels that range from two acres down to 30 acres. The rest of the land to be developed is covered by Master Plans and covered by agreements with the Villa Loma project, the Aviara project. In Zone 2 1, the largest parcel is a mitigation bank parcel. According to Mr. Henthom, the Commission is going to see a number of projects coming forward with this very same issue. The best thing that can happen in this instance, is to look to an alternative like this to provide a funding mechanism to have somebody come in and continue to explore the provision of affordable housing in increments that are viable--in 40-, 50-unit increments. The goal of having every sixth unit in a development be affordable has been acknowledged as being laudable, but not achievable. Mr. Henthom pointed out the condominium alternative using the Sambi project and the lack of progress on the condo deal. There is a lot of litigation with the condo market right now, according to Mr. Henthom. Mr. Henthom stated that he happens to represent a lot of properties in the southwest quadrant, and he will be coming before the Housing Commission probably 40 times with the same issue. He added that this is a 30-acre parcel and one of the larger remaining developable parcels in the whole southwest quadrant. Mr. Henthorn is asking for the recommendation of the Staff and the Policy 57 HOUSING COMMISSION MINUTES August 14,1997 Page 7 Committee to allow this project to make its contribution to the implementation of the City’s Housing Element through the payment of the funding to purchase the credits in the Villa Loma project. Vice Chairperson Wellman asked if there were any questions of Mr. Henthom. Vice Chairperson Wellman asked if the cost of purchasing units in Villa Loma is considerably less than what the applicant would have to pay to develop on-site in some form. Mr. Henthom responded it is about a wash. Vice Chairperson Wellman asked if the City provided the necessary funding, would that resolve the feasibility issue in building the apartment units. Mr. Henthom responded that it would resolve the financial feasibility issue, but not the land use issues. Vice Chairperson Wellman stated that there are many more non-profit developers than the three that Mr. Henthom contacted. Those developers the applicant inquired of tend to do large projects. Vice Chairperson Wellman added that there are developers that do smaller projects, including local developers in Carlsbad and a group in Escondido. Vice Chairperson Wellman asked Mr. Henthom if he inquired of any of the smaller developers. Mr. Henthom stated that their concern was to get someone in who understood tax credits and who could bring the funding to the project to make it happen. Mr. Henthom said one of the keys is knowing how to deal with other components of the financing. Taking the tax credit aspect away creates other problems because now you have to go look for traditional funding sources. If you ask any of the non-profits, it’s very, very scarce; and when you can find them, they are very difficult to deal with and very costly. Vice Chairperson Wellman commented that there is a funding source with City funds. Mr. Henthom responded it depends on how much money the City wants to put into the deal. He added that it is an economy of scale thing. Vice Chairperson Wellman commented that the Commission needs to discuss these kinds of units--big units, small units, integrated units, units in a certain area, etc. Mr. Henthom agreed that there are a number of policies that have to be addressed as future development continues in this area. He added what the Commission is seeing tonight is just the beginning. Commissioner Latas inquired about the number of times Mr. Henthom will be coming before the Commission with other projects and asked if all the projects will be in the 50- to loo-unit range. Mr. Henthom responded that some projects will be relatively small, like this project with 17 units. There are some parcels that will not handle much more than 17 or 18 units. Probably the largest increment of development will be in the vicinity of 25 to 30 units on any individual property, unless other properties get a density bonus or want to do apartments or possibly do a combined Inclusionary project. Commissioner Calverley asked about the density bonus the applicant received on this property to cover costs to provide the affordable housing. She also asked about the size of the lot onto which the applicant was originally going to build the affordable units. HOUSING COMMISSION MINUTES August 14, 1997 Page 8 Mr. Henthorn responded that the density bonus goes away if this project is approved as presented tonight. In response to the second question, Mr. Henthom said the lot is about one acre. Commissioner Calverley commented that the applicant paid $1,300,000 for the 3 1 acres in 1989. She questioned the applicant’s improvement costs of three quarters of a million dollars for grading one acre of land. Mr. Henthom stated that the proforma on the entire site shows the costs. He added that the proforma is valid and was reviewed by Staff. He suggested comparing this proforma to the Laurel Tree site or some other project, adding that there are other projects it can be compared to. The applicant’s proforma has been compared with the Laurel Tree proforma according to Mr. Henthorn. Commissioner Calverley commented that she would like to see the proforma. Mr. Henthom commented that if one cannot get a developer to build the project, the numbers on the proforma mean nothing. Commissioner Scarpelli asked about the rollback number of the 92 homes. The way the City calculates their density program, with 116 total units, the project rolls back to where the aggregate number of units in a project would be 96; therefore, the 92 number is the rolled backed number according to Mr. Henthom. Vice Chairperson Wellman asked the Commission if they had a chance to see where the development is located. Mr. Ruiz displayed a map showing the Commission the location of the applicant’s project. The apartments, if built, would be located in the southwest comer. Mr. Henthom answered questions the Commissioners had about the location of the project in relation to other streets in the area. Mr. Henthom explained that there is a SDG&E easement located in the area in addition to a large slope making some of the area unavailable for roads. There being no other persons desiring to address the Commission on this topic, Vice Chairperson Wellman declared the public testimony closed and opened the item for discussion among the Commission members. Commissioner Scarpelli commented that this project has raised some concern regarding the availability of other property for affordable housing. Commissioner Scarpelli wonders if the Commission has looked at all the alternatives before passing on this recommendation. Initially Commissioner Scarpelli agreed with Staffs recommendation. He added that if a project of this size (92 homes without the density) cannot get affordable housing, then we are in serious trouble. And if there are not very large projects in the southwest quadrant to look at, the Commission needs to seriously evaluate this project for other alternatives or solutions. Vice Chairperson Wellman commented that she has similar kinds of reservations. She commented that the Commission needs more evidence to review the feasibility issues. Vice Chairperson Wellman said that by using different sources of funding other than tax credits, there may be other ways to build the apartments or something else on-site. She commented about the findings of the Policy 57 Committee of there not being enough transportation and said this is in a state of flux in Carlsbad right now with different proposals with North County Transit. She added that she does not find the worksheet particularly helpful. In looking at the worksheet and the information that was presented on this project, she would answer the questions differently to show that this project could be developed on- site, She added that the Commission needs more study if there are a lot more of these types of projects coming before the Commission. If the Commission makes a finding on this 3 l-acre project that the on-site option is not feasible, than the next applicant with a similar sized project may think the Commission has set a policy that they will either go for larger project of 50 or more or go to second dwelling units, which there are some reservations about. It seems nobody HOUSING COMMISSION MINUTES August 14, 1997 Page 9 is building many apartments, even though most low-income people are in apartments because that is what they can afford. Vice Chairperson Wellman added that just because the City got such a good financial deal with Villa Loma, they should not rule out considering spending more than $10,000 per unit on other projects. Vice Chairperson Wellman would like to see affordable housing integrated in the quadrant in smaller developments. Commissioner Scarpelli asked the applicant if he had looked at the feasibility of working something together with the developers of Laurel Tree and this property. Mr. Henthorn responded affirmatively and explained one of the alternatives that is available is working with the Mariner’s Point project which had 300 units at one time until the school district acquired part of the site. They had an obligation of approximately 90 units, and 175 of those units went away when the school district acquired the site. This made available 19 additional units in the Laurel Tree project. Mr. Henthom stated they explored with them the possibility of participating in those 19 units. They are amenable to that. It is a viable alternative. They control the credits. The applicant has discussed this with Staff. It has already been approved with a specific plan amendment, and when the Laurel Tree project was approved, it was approved as a combined site for Zone 20. Commissioner Scarpelli asked why this option was rejected. Ms. Fountain responded that it was a Staff decision, because whether the applicant goes with Villa Loma or Laurel Tree, they are going off-site either way. Staff felt more comfortable buying credits in Villa Loma because the project is already built and the City needs to start recovering their costs. At this point, Laurel Tree is not in need of money except for getting the tax credits approved. Letting TRC buy into Laurel Tree is not going to help it get financed. Staff thinks there are going to be excess units, but this has not been confirmed yet, so Staff feels more comfortable recommending that if the applicant is going to buy credits, that they be in the Villa Loma project. Mr. Henthom added that the money comes into the Housing Trust Fund, which ultimately ends up in Laurel Tree anyway. Commissioner Scarpelli asked if anybody has looked into the possibility of moving these affordable units into the other project if Laurel Tree goes to option 2. Ms. Fountain responded that either way the applicant is going off-site. If the hope is to get more units out of doing this, that is something that would have to be looked at. Ms. Fountain does not know if there is a guarantee because of the site constraints. It will probably result in getting less units if Laurel Tree goes to a condo project rather than more units. Ms Fountain said there are a lot of unknowns with the second option. Mr. Henthorn commented that it all boils down to being the same amount of money whether it goes to Laurel Tree directly or whether it goes into the Housing Trust Fund--the money still ends up the same location. Commissioner Calverley expressed her concern for projects with less than 350 units, or less than 50 affordable units, automatically going into a combined project. Commissioner Latas asked for a projected build-out for this quadrant to determine if Laurel Tree and Villa Loma will take care of everything. Vice Chairperson Wellman asked if Staff could provide the Commission with this information. Vice Chairperson Wellman asked Staff for a report next month concerning the southwest and southeast quadrants with regard to proposed developments and future developments to build-out; and how many affordable units will be necessary for the quadrant; and how many of those will need to go into a combined project. HOUSING COMMISSION MINUTES August 14, 1997 Page 10 Ms. Fountain understands that the Commission needs information about all the market-rate projects that are in the southwest and southeast quadrants that have requirements to do affordable housing. She asked the Commission if they would like to know what the affordable housing number is and how it is proposing to meet the requirement or does the Commission want information on the total number of units being proposed. Commissioner Walker responded that the Commission wants to know what the requirements are in the quadrant in order to see whether or not the Laurel Tree and Villa Loma projects will satisfy those requirements. Ms. Walker added that based upon the information presented tonight, the Commission is assuming that future projects will request to be combined projects. Assuming this, the Commission needs a number as to what the total would be in those quadrants. Ms. Fountain stated that the City’s Growth Management Plan could provide some insight as to all the projects out there and their maximum development potential on the site. From plans already submitted Staff has reports that show the number of the affordable housing projects that are in process. Ms. Fountain added that Staff has been thinking about the combined projects on a pretty regular basis. #en the Inclusionary Housing Ordinance started, everybody had an ideal of what it looked like, and over time it has developed a little bit differently from the ideal--the market is driving things a little bit differently. Ms. Fountain added that Staff has been thinking about being more creative, for instance, by buying existing apartment projects and converting them so they are restricted. It appears that Staff will see small projects coming forward not knowing how to do the project with affordable housing. She added that there has been controversy over the second dwelling units, which at one time was considered the “savior” of the affordable housing process. Staff is constantly thinking of alternative ways to help the developers meet their requirement and meet the City’s goal of getting affordable housing. Ms. Fountain said Staff can pull the report together probably, but maybe not by the next meeting. Staff may be able to provide it at the meeting in October. She expressed concern in the meantime for the Ocean Bluff project and how they will meet their requirement, which affects them financially in being able to go forward with their market-rate project. Vice Chairperson Wellman requested that Staff provide the Commission with a report on the southwest quadrant by the next meeting and a report on the southeast quadrant at the following meeting. Ms. Fountain responded that Staff will “give it their best shot.” Mr. Henthorn showed a desire to speak and the Commissioners wanted to get feedback from him. He said he would like to make a request of the Commission by working with Staff to get the information to the Commission next month. He said they have done quite a bit of work with the zone plan in this quadrant. He also said he would like to request, if possible, to continue this item until next month and allow it to be discussed possibly in a broader context. ACTION: VOTE: AYES: NOES: ABSTAIN: Motion by Commissioner Scarpelli, and duly seconded, to CONTINUE TO THE NEXT MEETING Housing Commission Resolution No. 97-O 10, recommending that the City Council approve a request by the Ocean Bluff Partnership to purchase 16.24 affordable housing credits in the Villa Loma Housing Project in order to satisfy the affordable housing obligation of the Ocean Bluff Project under the City’s Inclusionary Housing Ordinance. 7-o-o Calverley, Escobedo, Latas, Rose, Scarpelli, Walker, Wellman None None ANNOUNCEMENTS: Ms. Fountain gave the status of Laurel Tree and said there has not been a formal announcement yet as to all the final allocations from the Tax Credit Allocation Committee, but added that things are looking a little bit more favorably right Minutes of: HOUSING COMMISSION Time of Meeting: 6:00 P.M. Date of Meeting: SEPTEMBER 11, 1997 Place of Meeting: CITY COUNCIL CHAMBERS CALL TO ORDER: Vice Chairperson Wellman called the Regular Meeting to order at 6: IO p.m. PLEDGE OF ALLEGIANCE: The pledge of allegiance was led by Commissioner Scarpelli. ROLL CALL: Present: Vice Chairperson Wellrnan and Commissioners Calverley, Latas, Rose, Scarpelli, and Walker Absent: Commissioners Escobedo, Noble, and Schlehuber Staff Present: Debbie Fountain, Acting Housing and Redevelopment Director Craig Ruiz, Management Analyst Leilani Hines, Management Analyst Bobbi Nunn, Housing Program Manager APPROVAL OF MINUTES: ACTION: Motion by Commissioner Scarpelli, and duly seconded, to approve the Minutes of the Regular Meeting of August 14,1997, as submitted. VOTE: AYES: NOES: ABSTAIN: 6-O-O Calverley, Latas, Rose, Scarpelli, Walker, Wellman None None COMMENTS FROM THE AUDIENCE ON ITEMS NOT LISTED ON THE AGENDA: There were no comments from the audience. NEW BUSINESS: 1. OCEAN BLUFF - Application to purchase affordable housing credits in the Villa Loma housing project. Craig Ruiz stated that last month the Commission requested that Staff give a report about the potential build-out of the southwest quadrant to determine if there were sufficient excess units in the combined projects of Villa Loma and Laurel Tree to support future development within the southwest quadrant. Mr. Ruiz explained the City’s Facility Management Zones, in particular, the I 1 zones within the southwest quadrant. He then thoroughly discussed the Exhibit 3 spreadsheet which each Commissioner received in their packet. Staff found that there can be a total of 38 13 units built within the southwest quadrant (page 3 of Exhibit 3). Of those projects that are greater than seven units, there will be 1,148 units that will have an obligation to provide Inclusionary units. Fifteen percent of the 1,148 units indicates a need to provide 172 Inclusionary units. Mr. Ruiz stated that there are 159 excess units available to be purchased in the Villa Loma project, and the Laurel Tree project has 17 units which are going to be available for purchase; making this a total of 176 credits for sale for people in this quadrant. Based on a worse-case build-out situation, there is only going to be a need for 172 units, leaving a 4- unit surplus based on Staffs report. One important caveat, Mr. Ruiz said, is that Staff uses the “growth control HOUSING COMMlSSlOi MINUTES SEPTEMBER 11,1997 PAGE 2 management point,” which typically is the maximum somebody can get. Through practice Staff has found that very few projects achieve this maximum. In all likelihood then, the 1,148 would be a lower number; therefore, the future number of units to be produced would be a lower number as well. Mr. Ruiz added that one of the concerns Mr. Henthom raised last month was that there are numerous projects with less than 10 Inclusionary units in this quadrant. Mr. Ruiz stated that there are only six projects that have more than 10 Inclusionary units. Staff is therefore still recommending that the request be approved for the purchase of 16 affordable housing credits in the Villa Loma project. Vice Chairperson Wellman asked if there were any questions of Staff. Commissioner Calverley asked about the Laurel Tree project. Mr. Ruiz stated that Laurel Tree got tax credit approval for the rental project and the escrow is moving forward. Commissioner Calverley asked about the amount of money currently in the Housing Fund, in particular the $7 million. Mr. Ruiz responded that the amount of money available that could be spent today on projects is approximately $1.7 million. Mr. Ruiz added that the $7 million Commissioner Calverley is referring to includes money that has been encumbered for other projects. Commissioner Calverley asked for a breakdown of this money. Mr. Ruiz stated that the Finance Department provides either on a monthly or quarterly basis an accounting of these funds. Vice Chairperson Wellman asked about the need for units in the southeast quadrant. Mr. Ruiz stated that Staff is working on a report on the southeast quadrant for next month. He added that there are two primary projects, one of which is the Ranch0 Carrillo project, which will be presented tonight; the other being The Villages of La Costa. There is a lot of land that will not be developed that will be set aside for the Habitat Management Program, which is part of The Villages of La Costa. Two smaller projects--the Mariano project and the Bressi Ranch ‘project--will each have about 50 units each in this quadrant, he said. These four projects and a few small subdivisions will take up just about all of the developable land. Vice Chairperson Wellman asked whether the City Staff has independently confirmed Mr. Henthom’s data. Mr. Ruiz responded affhmatively. Vice Chairperson Wellman invited the applicant to speak. Mr. Robert Wineteer, General Manager, Ocean Bluff Partnership, 7825 Fay Avenue, Suite 200, La Jolla, addressed the Commission and asked the Commission to accept Staffs recommendation for approval to go off-site. Vice Chairperson Wellman asked if there were any questions of Mr. Wineteer. Commissioner Calverley asked if Mr. Henthom had checked with some smaller, local non-profits for their assistance in building these units. Mr. Wineteer stated that his understanding is that the project is not large enough in scope. - - HOUSING COMMISSION MINUTES SEPTEMBER 11, 1997 PAGE 3 Vice Chairperson Wellman asked if the year-old proforma had been updated. Mr. Wineteer stated that Mr. Henthom is coordinating the proforma with the architect and engineer. Ms. Fountain added that she asked Mr. Henthom about the proforma, and he stated that the numbers he provided before are still accurate. Vice Chairperson Wellman responded that up-to-date data would strengthen any future applications. Vice Chairperson Wellman opened the item for discussion among the Commission members, Commissioner Scarpelli stated that the Commission tabled this item from last month because of concern about the situation in the southwest quadrant. Based on a review of what has been presented and approved by the Staff, Commissioner Scarpelli stated that his concerns have been satisfied. Commissioner Calverley stated that she would like to verify the numbers on the proforma with Mr. Henthom. She said that her major concern is that in purchasing credits in Villa Loma, the City is still not providing affordable units. Commissioner Calverley stated that she contacted Villa Loma and found out that there are 50 people on the waiting list for one bedroom units, 40 families on the waiting list for two bedroom units, and 30 families on the waiting list for three bedroom units; so there are 120 families the City is not providing units for. To continue to throw cash at it, does not take care of the problem, she said. She suggested to the applicant tabling this item until the Commission can get a better feeling as to the cost of these units and exactly why the applicant cannot currently build them, and what the other alternatives are for this project, i.e., apartments, for-sale units, etc. Vice Chairperson Wellman stated that she shares Commissioner Calverley’s concerns and stated the Commission needs updated information to determine if the 16-unit apartment complex is not feasible. Vice Chairperson Wellman also suggested continuing this item until next month and asked how the applicant felt about this. Mr. Wineteer stated that it would be wise to have a continuance. Mr. Ruiz asked for clarification of the data that Commissioner Calverley is requesting. Commissioner Calverley responded that one of the charges of the Commission is to evaluate the financial considerations of the projects presented to them. She said she would like to see an evaluation of doing the apartment project and doing for-sale units; and if these do not work, she would like to know why. She added that both types of projects can be done locally. Vice Chairperson Wellman added that Staff can phone the Commissioners next week if they need further clarification. ACTION: VOTE: AYES: NOES: ABSTAIN: Motion by Commissioner Rose, and duly seconded, to CONTINUE to next month Resolution No. 97-O 10, recommending that the City Council APPROVE a request by the Ocean Bluff Partnership to purchase 16.24 Affordable Housing Credits in the Villa Loma housing project in order to satisfy the affordable housing obligation of the Ocean Bluff development under the City’s Inclusionary Housing Ordinance. 6-O-O Calverley, Latas, Rose, Scarpelli, Walker, Wellman None None HOUSING COMMISSION MINUTES OCTOBER 23,1997 PAGE 6 DRAFT Chairperson Schlehuber asked if there were any questions of Staff. Commissioner Latas asked for clarification of the numbers. Mr. Ruiz clarified the numbers for him as stated in the paragraph above. 3. OCEAN BLUFF - Application to purchase affordable housing credits in the Villa Loma housing project. Mr. Craig Ruiz stated that this project is a request by the applicant to purchase affordable housing credits in the Villa Loma project. Previously they had been approved to build a 16-unit apartment project on their property to satisfy their Inclusionary Housing obligation, and now they are requesting to purchase credits. It is the developer’s statement that due to the large subsidies to develop the apartment project, it would be fmancially unfeasible to construct. This item has been continued twice by the Commission. When the project was fast presented, a question was raised about the future projects if this project purchased credits. This inquiry resulted in the two reports on the southeast and southwest quadrants. At the conclusion of the first meeting it was continued again. The original Staff report had a proforma for a rental project that was prepared in 1995, and the Commission asked for an updated rental profoima. It was also asked that the applicant provide a proforma for a for-sale project; and the developer was asked to contact additional non-profit agencies about developing this project. Mr. Ruiz said that the proformas are attached to the Staff report as Attachments 3 and 4. The new rental proforma indicates that there would be a financing shortfall of approximately $1 million; with a 16-unit project that would work out to about $60,000 per unit. The for-sale proforma indicates there would be about an $800,000 financing gap which would require a subsidy of approximately $50,000 per unit. Staff has looked at the proformas and done some analysis of them, and they seem acceptable as far as the numbers provided. Mr. Ruiz said that the developer, as requested, contacted an additional non-profit organization-- . Community Housing of North County--who indicated that due to the small size of the project they would not be interested in developing the project because it would not be financially feasible for them. As stated at the two previous meetings, it is Staffs opinion that there is adequate justification to support the request to purchase credit in Villa Loma. The subsidies needed to develop the project make the development unfeasible and would not be the best use of the Housing Trust Fund. Compared with projects the City has done in the past with subsidies of between $5 and $11,000, this project would not be acceptable, he said. As shown in the two quadrant reports, there are credits available that can be purchased by this project, therefore, Staff continues to recommend this project. Chairperson Schlehuber asked if there were any questions of Staff. Commissioner Rose asked how many units are still available at Villa Loma. Mr. Ruiz responded that there are currently 157; and if this project is approved, there will be 141. Chairperson Schlehuber invited the applicant to speak. Mr. Jack Henthom, Jack Henthom and Associates, 543 1 Avenida Encinas, Suite J, Carlsbad, addressed the Commission and asked for the Commission’s acceptance of Staffs recommendation. He stated that he has responded to the Commission’s request for additional information and would be happy to answer any questions Staff may have. Chairperson Schlehuber asked if there were questions of the applicant. Commissioner Walker asked about the non-profit the applicant contacted. HOUSING COMMISSION MINUTES OCTOBER 23,1997 PAGE 7 DRAFT Mr. Henthom responded that the ideal situation seems to be about 50 units. After getting over 25, it starts to become more feasible, and the closer you get to 50 the more feasible it becomes. Commissioner Calverley asked for clarification of the “required local subsidy per affordable unit” of $92,775. Mr. Henthom responded that the $92,775 includes a subsidy from the developer of $432,000. Commissioner Calverley asked for clarification of what it will cost to build each one of the units. Mr. Henthom responded that the total project cost per unit is $172,000. Mr. Henthom added that the numbers are high for the Laurel Tree project as well; and said there are a number of fixed costs that go into the project and added that the data is straight out of the computer as though it were prepared for a tax credit project. Commissioner Calverley said she cannot imagine not being able to build these 16 units at a lower cost because the developer is not using marble or granite or building fireplaces. Mr. Henthom said that the hard construction costs are $82,000. Commissioner Calverley asked that for future projects the Commission get this information weeks before the meeting instead of five hours before the meeting so that the Commissioners have time to thoroughly review the data. There being no other persons desiring to address the Commission on this topic, Chairperson Schlehuber declared the public testimony closed and opened the item for discussion among the Commission members. ACTION: VOTE: AYES: NOES: ABSTAIN: Motion by Commissioner Walker, and duly seconded, to ADOPT Resolution No. 97-O 10, recommending that the City Council APPROVE a request by the Ocean Bluff Partnership to purchase 16.24 Affordable Housing Credits in the Villa Loma housing project in order to satisfy the affordable housing obligation of the Ocean Bluff development under the City’s Inclusionary Housing Ordinance. 7-1-o Escobedo, Latas, Noble, Rose, Scarpelli, Schlehuber, Walker Calverley None 4. POINSETTIA PROPERTIES - Request for conceptual review of Affordable Housing Component of Poinsettia Properties Specific Plan. Mr. Craig Ruiz stated that this project is a Specific Plan that has been submitted to the City and his presentation is a conceptual review of the affordable housing project. Mr. Ruiz said Staff is not asking for any approvals of any specific projects. A Site Development Plan for an affordable project and an Affordable Housing Agreement will be brought before the Commission at a later date. Mr. Ruiz said that this Specific Plan is composed of eight planning areas and is located at Poinsettia and I-5. He described Planning Area 1 as a commercial area. Planning Areas 2 and 4 are going to be single-family residential homes. Planning Area 3 is going to be open space or a recreation area for the two single-family areas. Area 5 is going to be the site of the affordable housing project. Area 6 is going to be a mixed-use project with first floor commercial with the ability to do apartment units upstairs. Area 7 is going to be market-rate apartment units. The Specific Plan allows Area 8 to either be developed as multi-family apartments or for-sale condominiums. The Specific Plan also allows that the developer to do second dwelling units in Areas 2 and 4; and they would be allowed to do 20 percent, which would be a maximum of 30 second dwelling units if they build out to the maximum of 857 market-rate units. Planning Area 5 is the affordable housing project; the density there would apply a maximum of 142 units, but it will 17