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HomeMy WebLinkAbout2004-10-12; City Council; 17831; Villa Loma Housing affordable credits applicationCITY OF CARLSBAD -AGENDA BILL RB# 17,831 MTG- 10’12/04 - TITLE: APPLICATION TO PURCHASE AFFORDABLE CREDITS IN THE VILLA LOMA HOUSING PROJECT FOR THE THOMPSONITABATA RESIDENTIAL DEVELOPMENT RECOMMENDED ACTION: ADOPT Council Resolution No. 2004-326 APPROVING a request by Standard Pacific Corporation to purchase sixteen (16) Affordable Housing Credits in the Villa Loma combined housing project in order to satisfy a portion of the affordable housing obligation for the ThompsonlTabata residential development under the City’s lnclusionary Housing Ordinance. ITEM EXPLANATION: The ThompsonlTabata residential development was approved by the City Council in February, 2002, allowing for the development of 238 single family homes and a 24 unit condominium development afford able to low income house holds. The ThompsonlTabata development is required by the City’s lnclusionary Housing Ordinance to provide 40 units of housing affordable to lower income households. The developer originally proposed to meet the obligation by provide some on-site condominium units (15 units), some second dwelling units (15), and some credits (10). Staff was not supportive of the original proposal but agreed to support an alternate arrangement of 24 on-site, for-sale affordable condominium units with the purchase of 16 off-site affordable housing credits in the Villa Loma Project. The City Council has previously approved the on-site condominium development. The Council is now being asked to approve the purchase of the off-site affordable housing credits. Staff recommended approval of the unique arrangement to the Housing Commission. The Commission subsequently reviewed the request on September 9, 2004 and also recommended approval of the proposed arrangement to satisfy the requirement both on-site and off-site. The City Council has adopted Policies 57 & 58 to 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. Staff and the Housing Commission have reviewed these policies and recommended approval of the credit purchase for the reasons outlined below. The project has constraints in terms of locating all of the affordable housing on-site. The development is an in-fill development. The area to provide on-site affordable housing that would be compatible with the future and existing surrounding low-density development is relatively small. The site would not accommodate a 40 unit condominium project. Therefore, staff supported the development of a 24 unit condominium project on site with satisfaction of the remaining requirement off-site. In exchange for approval to satisfy some of their affordable housing requirement off-site, the Developer has agreed to provide larger bedroom units (3 and 4 bedroom) within the on-site condominium development. The Developer has also agreed to accept no public subsidy for the on-site development. The units will be affordable to households at 80% of the Area Median Income and will have no financial impact on the City. I Page 2 of AB# 17,831 FISCAL IMPACT: The Affordable Housing Credit is currently $43,000 per unit. The purchase of 16 credits will result in a payment of $688,000 to the City’s Housing Trust Fund. There will be approximately 40 credits remaining for purchase following the sale of the subject 16 credits to Standard Pacific Corporation for the Thompsonnabata development. EXHIBITS: 1. City Council Resolution No. 2004-326 approving purchase of 16 credits in the Villa Loma Project to satisfy a portion of the inclusionary housing obligation for the Thomsponnabata residential development. 2. Housing Commission Staff Report dated September 9, 2004, including the draft Affordable Housing Agreement. 3. Draft Housing Commission Minutes, dated September 9, 2004 DEPARTMENT CONTACT: Debbie Fountain (760) 434-281 5, dfoun@ci.carlsbad.ca.us 2 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 CITY COUNCIL RESOLUTION NO. 2004-326 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, APPROVING A REQUEST BY STANDARD PACIFIC CORPORATION TO PURCHASE SIXTEEN AFFORDABLE HOUSING CREDITS IN THE VILLA LOMA HOUSING PROJECT IN ORDER TO SATISFY A PORTION OF THE AFFORDABLE HOUSING OBLIGATION OF THE THOMPSON TABATA RESIDENTIAL DEVELOPMENT UNDER THE CITY’S INCLUSIONARY HOUSING ORDINANCE. APPLICANT: THOMPSONmABATA DEVELOPMENT CASE NO: CT 98-14 WHEREAS, Standard Pacific Corporation has received approval of Tentative Map CT 98- 14 for the development of 238 single family homes and a 24 unit for-sale condominium development affordable to low income households; and WHEREAS, Standard Pacific Corporation has requested approval from the City of Carlsbad City Council for the purchase of sixteen affordable housing credits in the Villa Loma housing project to satisfy the inclusionary housing requirement of Tentative Map CT 98-14 in combination with the construction of a 24 unit for-sale condominium development; and WHEREAS, the City Council did hold a public meeting to consider said request for the purchase of Affordable Housing Credits by Standard Pacific Corporation; and WHEREAS, at said public meeting, upon hearing and considering all testimony, if any, of all persons desiring 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: 1. That the above recitations are true and correct. 2. The project is consistent with the goals and objectives of the City of Carlsbad’s Housing Element, the Inclusionary Housing Ordinance, and the Carlsbad General Plan. 3 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 Page 2 of CC Resolution No. 2004-326 3. Based upon the analysis contained within the Housing Commission Staff Report dated September 9, 2004, the City Council finds that the off-site satisfaction of the inclusionary housing requirement is in the public interest. 4. That based on the information provided within the Housing Commission Staff Report, the staff report presented to the City Council and testimony presented during the public meeting of the City Council, the City Council hereby APPROVES a request by Standard Pacific Corporation to purchase sixteen affordable housing credits in the Villa Loma housing project in order to satisfl a portion of the affordable housing obligation of the ThompsodTabata residential development project under the City’s inclusionary housing ordinance. Ill/ /Ill /Ill /Ill Ill1 Ill/ /Ill /Ill /Ill Ill/ Ill/ Ill/ Ill/ /Ill 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 Page 3 of CC Resolution No. 2004-326 5. That the City Council hereby authorizes the Community Development Director to execute the Affordable Housing Agreement in substantially the form presented to the City Council as Exhibit 3 of the Housing Commission Staff Report 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. PASSED, APPROVED, AND ADOPTED at a regular meeting of the City Council of the City of Carlsbad, California, held on the 12th day of October, 2004 by the following vote, to wit: AYES: NOES: ABSENT: ABSTAIN: Council Members Lewis, Finnila, Kulchin, Hall, and None Pac ka r d ATTEST: Karen R. Kundtz, Assistant City Clerk (SEAL) 5 ~~ %!he City of C-lsbad Houshs& Redevelopment Department AREPORT TO THE HOUSXNG GOMMXSSXON Sfaff: CraJLg;Ruiz Management Analyst I Xtem No. 1 DATE: SEPTEMBER 9,2004 SUBJECT: CT 98-14 - THOMPSONKABATA REQUEST TO PURCHASE AFFORDABLE HOUSING CREDITS - RECOMMENDATION OF APPROVAL TO THE CITY COUNCIL TO APPROVE THE REQUEST TO PURCHASE SIXTEEN AFFORDABLE HOUSING CREDITS IN THE VILLA LOMA AFFORDABLE HOUSING DEVELOPMENT TO SATISFY A PORTION OF THE REQUIREMENT OF THE INCLUSIONARY HOUSING ORDINANCE FOR THE THOMPSON/TAE!ATA RESIDENTIAL DEVELOPMENT. I. RECOMMENDATION That the Housing Commission ADOPT Resolution No. 2004-03, recommending APPROVAL to the City Council to allow the purchase of sixteen affordable housing credits in the Villa Loma affordable housing development to satisfy a portion of the requirement of the inclusionary housing ordinance for the ThompsodTabata residential development. 11. PROJECT BACKGROUND In February 2002, the City Council approved the ThornpsodTabata residential development. The project approval allows for the development of 238 single-family homes and a 24-unit for-sale condominium development affordable to low-income households. The single-family homes will range in size from 2,700 to 4,200 square feet on parcels of 6,000 and 7,500 square feet. The project is generally located both north and south of Poinsettia Lane, between Aviara Parkway and Snapdragon Drive. The Thompsoflabata subdivision is required to provide 40 units of housing affordable to lower income households as required by the City's Inclusionary Housing Ordinance. The developer proposes to satisfy its inclusionary housing requirement through a unique combination of 24 on-site, for-sale affordable condominium units and the purchase of 16 offsite affordable housing credits. The condominiums will contain 1,129 square foot three bedroom units and 1,872 four- bedroom units. Of the 24 for-sale units, 16 will contain four-bedrooms. These units will serve 6 CPO3-03 - THOMPSON/TABATA AFFORDABLE HOUSING CREDIT PURCHASE SEPTEMBER 9,2004 PAGE 2 large family households, which are identified as a special needs group in the City’s Housing Element. As required by the Inclusionary Housing Ordinance, the project is conditioned to enter into an Affordable Housing Agreement. This agreement (Exhibit 3) will establish the specifics of the project including the exact level of affordability of the units (based upon the current San Diego County Median Income figures), the schedule for production of the units and purchase of the off-site credits, the tenure of affordability of the units, and resale restrictions. 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 Lorna project constitutes participation in a Combined Project. All requests to sell or purchase affordable housing credits for transactiodpurchases of ten credits or more to satisfy an inclusionary housing obligation must first be reviewed by the Housing Commission. 111. POLICIES FOR THE PURCHASE OF AFFORDABLE HOUSING CREDITS The City Council has adopted two policies that 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. Council Policy 58 was established to determine the price of credits and the mechanism to satisfy a developer’s obligation under the City’s Inclusionary Housing Ordinance. 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 With the exception of the multifamily development along the project’s northwestern side, the land uses surrounding the project site are single-family with intermittent open space along a portion of the eastern boundary. In addition to satisfjmg the inclusionary housing ordinances preference to provide on-site affordable housing, there is also the issue of neighborhood compatibility with the existing and proposed single-family residences. While the overall site is relatively large (80+ acres), the area to provide on-site affordable housing that would be compatible with the future and existing surrounding low-density development is relatively small. Staff therefore supported the developer’s proposal to locate the affordable project within the interior of the overall project site and gains access off of Rose Drive, a future public street that forms a signalized intersection with Poinsettia Lane. Because of the small size of the affordable housing location, it would be impractical to design a 40-unit project that is compatible with the CPO3-03 - THOMPSONRABATA AFFORDABLE HOUSING CREDIT PURCHASE SEPTEMBER 9,2004 PAGE 3 surrounding neighborhood while at the same time being a desirable place to live. Thus a smaller scale multi-family project and the purchase of affordable housing credits is a more reasonable alternative solution. Relative AdvantagesDisadvantages of an Off-site. Proposal 0 The participation in the off-site project will allow the City to recover the costs associated with the development of excess affordable housing units. 0 The proposal meets both the objective of providing on-site affordable housing while also attempting to be compatible with the design and density of the surrounding single- family neighborhoods. 0 By allowing the developer to purchase some credits and reduce the on-site obligation, the 24 condominiums will be produced with no financial assistance required from the City. Advancing Housing Goals and Stratepies 0 The recovery of the City’s investment in the Villa Lorna 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 the Affordable Housing Policy Team’s (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. IV. EXHIBITS 1. Housing Commission Resolution No. 2004-03 2. Applicant Request to Purchase Credits 3. Affordable Housing Agreement 4. Vicinity Map 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 HOUSING COMMISSION RESOLUTION NO. 2004-003 THAT THE HOUSING COMMISSION RECOMMEND APPROVAL TO THE CITY COUNCIL TO ALLOW THE PURCHASE OF SIXTEEN AFFORDABLE HOUSING CREDITS IN THE VILLA LOMA AFFORDABLE HOUSING DEVELOPMENT TO SATISFY A PORTION OF THE REQUIREMENT OF THE INCLUSIONARY HOUSING ORDINANCE FOR THE THCMPS3NITABATA RESIDENTIAL DEVELOPMENT. APPLICANT: STANDARD PACIFIC CORPORATION CASE NO: CT 98-14 WHEREAS, Standard Pacific Corporation has received approval of Tentative Map CT 98-14 for the development of a 262 unit residential development; and WHEREAS, said subdivision of land requires the developer to provide 40 units of housing affordable to lower income households as required by Carlsbad Municipal Code Section 21.85 of the City’s Inclusionary Housing Ordinance; and WHEREAS, the Villa Loma housing project was conceived and developed with City participation based on the creation of 184 excess affordable housing units which would be available to satisfy other developers inclusionary housing obligation; and WHEREAS, Standard Pacific Corporation has received approval to develop a 24 unit for- sale condominium project to satisfy a portion of their overall inclusionary housing requirement; and WHEREAS, Standard Pacific Corporation has requested to purchase Affordable Housing Credits as a means to satisfy the remainder of their affordable housing obligations as permitted by Carlsbad Municipal Code Section 21.85 of the City’s Inclusionary Housing Ordinance and consistent with City Council Policies 57 and 58; an d WHEREAS, the request to purchase Affordable Housing Credits has been submitted to the City of Carlsbad’s Housing Commission for review and consideration; and 1 c 1 1 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 WHEREAS, said Housing Commission did, on the 9* day September, 2004, hold a public meeting to consider said request for the purchase of Affordable Housing Credits by the Standard Pacific Corporation; and WHEREAS, at said public meeting, upon hearing and considering all testimony, if any, of all persons desiring to be heard, said Commission considered all factors relating to the ’ application and request to purchase Affordable Housing Credits; NOW, THEREFORE, BE IT HEREBY RESOLVED by the Housing Commission of the City of Carlsbad, California, as follows: 1. 2. 3. 4. 5. Iff Iff 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 Consolidated Plan, the Inclusionary Housing Ordinance, and the Carlsbad General Plan. Based upon the analysis contained within the Housing Commission Staff Report, the Housing Commission finds that the off-site satisfaction of a portion of the inclusionary housing requirement is in the public interest. That based on the information provided within the Housing Commission Staff Report and testimony presented during the public meeting of the Housing Commission on September 9, 2004, the Housing Commission recommends that the City Council APPROVE a request by the Standard Pacific Corporation to purchase 16 affordable housing credits in the Villa Loma housing project in order to satisfy the affordable housing obligation of the ThompsodTabata project under the City’s Inclusionary Housing Ordinance. That the Housing Commission recommends that the City Manager or his or her designee be authorized to execute the Affordable Housing Agreement in substantially the form presented in the Exhibit 3 for the Housing Commission Staff Report 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. HC RESO. NO. 2004-03 PAGE 2 lo 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 PASSED, APPROVED, AND ADOPTED at a regular meeting of the Housing Commission of the City of Carlsbad, California, held on the 9th day of September, 2004, by the following vote, to wit: AYES: NOES: ABSENT: ABSTAIN: EDWARD SCARPELLI, CHAIRPERSON CARLSBAD HOUSING COMMISSION DEBORAH K. FOUNTAIN HOUSING AND REDEVELOPMENT DIRECTOR HC RESO. NO. 2004-03 PAGE 3 Jack Henthorn & AssociateF 5375 Avenida Encinas, Suite D Carlsbad, California 92008 Fax (760) 438-0981 (760) 438-4090 January 12,2000 Ms. Deborah K. Fountain Housing and Redevelopment Director City of Carlsbad 2965 Roosevelt Street, Suite B Carlsbad, CA 92008-2389 EXHIBIT 2 Subject: ThompsonITabata Poinsettia Properties - Request to Purchase Off-site Affordable Housing Credits - CT 98-14 Dear Ms. Fountain: This letter sewes as a formal request by Standard Pacific Homes, acting on behalf of the property owners of the Thompson/Tabata Poinsettia Properties (CT 98-14) to satisfy their affordable housing obligations through: 1) purchase of off-site affordable housing credits in the existing Villa Loma development, 2) construction of 15 for-sale town-home units on site and, 3) construction of 15 second dwelling units. Upon approval by the City, this proposal will satisfy the inclusionary housing obligations associated with the proposed subdivision. This request complies with City Ordinances and City Council policies previously adopted by the City Council as explained below: 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.’’ City Council Policy 57 establishes procedures for the City to use in determining if a proposed development meets the criteria to satisfy lnclusionary Housing Ordinance obligations at an alternative site or sites. Further, City Council Policy 58 sets for the specific evaluation and ranking procedures for the City to use when authorizing proposed developments to satisfy inclusionary housing obligations by the purchase of credits in the existing Villa Lorna project (a “Combined lnclusionary Housing Project’’). The options available to ThompsonlTabata Poinsettia Properties (CT 98-14) to satisfy its inclusionary housing obligations are: 1) construct affordable units on-site, 2) participate in an off-site combined inclusionary project within the southwest quadrant in accordance with the requirements set forth in Chapter 21.85 of the Carlsbad Municipal Code and City Council Policy 57 dated August 8, 1995, 3) enter into an agreement with the City to purchase credits from the Villa Loma Combined lnclusionary Housing Project in accordance with City Council Policy 58 dated September 12, 1995, or 4) provide a combination of :he previous alternatives. The Housing Commission has reviewed a report that analyzed the projected inclusionary housing requirements of undeveloped property within the Southwest Quadrant of the City. The report examined whether ultimate build-out of the Quadrant would result in a demand for off-site credits exceeding the number of available credits in the Villa Lorna project. The analysis shows that there are sufficient excess credits to satisfy the potential demand of the Quadrant, including that associated with these properties. In the case of the Thompson/Tabata Poinsettia Properties application, there are particular circumstances that warrant this project’s participation in the purchase of credits in the Villa Loma project, pursuant to Council Policy 58 criteria. The primary circumstances relate primarily to the economics of constructing a small affordable housing project and have driven the formulation of the hybrid approach contained in this request. Secondarily, the proposed combination of 15 townhomes and 15 secondary dwelling units with the remainder of the inclusionary housing obligation being met through the allocation of credits in Villa Loma allows for an equitable solution to the obligation requirements. This results in the production of 30 affordable housing units (over 75% of the requirement) on-site, while minimizing the required public subsidy. This combined approach was specifically designed to eliminate the necessity for the City to pay out substantial hard-dollar subsidies that would be required to satisfy the entire inclusionary obligation by building affordable apartments on-site. This proposal to purchase credits in the Villa Loma project will result in increased public benefit by reducing the level of housing fund subsidy to a level where current fund balances would be available for use in other City assisted inclusionary projects. We understand that a staff Project Review Committee will evaluate this request to determine its compliance with the criteria defined in Policies 57 and 58, and that staff will then take the Committee’s recommendation to the Housing Commission and the City Council. Our analysis of the Thompsonmabata Poinsettia Properties’ compliance with criteria set forth in City Council Policies 57 and 58 is attached to this letter for your use and reference. 2 13 I. Please call if you need additional information or if we may be of any other assistance. We look forward to receiving your response to this request. Very truly yours, JEH:wpc Enclosure cc: Craig Ruiz, Housing and Redevelopment Department Mike Grim, City of Carlsbad, Planning Department Gregg Linhoff, Standard Pacific Homes 3 .. THOMPSON/TABATA POINSETTIA PROPERTIES 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: 0 wner/Applicant: Standard Pacific Homes Attn: Gregg Linhoff 9335 Chesapeake Drive San Diego Division San Diego, CA 921 23-1 01 0 858-292-2200 Owner David & Karen Thompson Revocable Trust & DKST Limited Liability Company Attn: David & Karen Thompson 7040 Rose Drive Carlsbad, CA 92009 760-438-1 189 Applicant’s Representative: Jack Henthorn & Associates Attn: Mr. Jack Henthorn 5375 Avenida Encinas Suite D Carlsbad, CA 92008 760-438-4090 Owner Mendivil Family Partnership Attn: Consuelo Duncan & Carmel Verodi Frees 21241 San Miguel Mission Viejo, CA 92692 949-830-3386 Owner Owner William E. Engler 10468 Hot Mineral Spa Road Niland, CA 92257 760-354-1 533 P.O. Box 943 Tabata Family Trust Attn: Noboru & Evelyn Tabata & lsokazu Tabata Carlsbad, CA 92018 Owner 760-438-0280 Evelyn M. Weidner, Richard John Dennis P.O. Box Cardiff By-The-Sea, CA 92007 & Kathleen M Dennis 2. Off-sitelcombined Project Name: VILLA LOMA APARTMENTS 4 3. Description of Project with lnclusionary Housing Obligation: The Thompsonnabata Poinsettia Properties, CT 98-14, is a proposed 248-lotI 243 single-family unit development (with fifteen attached second dwelling units) with a 15-unit affordable town- home complex on 80.64 acres incorporating nine individual parcels under six different ownerships. The table below demonstrates the inclusionary housing responsibilities of each of the ownership parcels/entities. These individual obligations result in a total 38.7-unit affordable housing obligation for the proposed subdivision. Owners Standard Pacific Corp. David B. Thompson & Karen R. Thompson Revocable Trust, Trustees DKST Limited Liability Company The Mendivil Family Partnership William Enaler 4. 5. APN’s Title Rep. Area Ref. A, B & E 214-170-75 & 36 C 214-170-09 por. D 214-170-09 por. & 47 F 214-1 70-73 214-170-58 & 59 G. H & I 24 3.60 8. 15 & 37 6&5 54& 18 10.80 1.65 Tabata Family Trust, Noboru & Evelyn lsokazu Tabata f1/2 interest) Tabata, Co-Trustees (1/2 interest) and J & K- ~ 214-140-44 and 2 1 4- 1 70-74 12 & 51 9.45 On-site Affordable Housing Description: The ThompsonlTabata Poinsettia Properties on-site inclusionary housing project would consist of 15 attached for-sale town-home units (requiring a reduction of 6 proposed single-family lots in order to provide usable land) and 15 restricted second-dwelling units dispersed throughout the project site on the single-family residential lots. The units would be offered in a maximum saledrent range that is affordable to households earning incomes of 80% of the Area Median Income. To achieve financial feasibility, the project would require a net subsidy of approximately $400,415 (assuming a fully constructed pad is provided by the developer and unit revenues are based on a 95% occupancy rate factor) which the developer is requesting in the form of a fee credit against the purchase of housing credits in Villa Loma. These rates also assume a set base market price for the for-sale affordable units. A reduced purchase price below the assumed market rate would result in the necessity of additional hard dollar subsidy from the public. Evelyn Weidner, Richard & Kathleen Dennis Proposed Off-site Project Description: The Villa Loma 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. Villa Loma was developed by La Terraza Associates, with Bridge Housing Corporation as the Managing General Partner. The complex contains 1, 2, 3, & 4 bedroom units. L 214-1 70-46 22 3.30 Villa Loma was financed with assistance from the City of Carlsbad and the Carlsbad Redevelopment Agency. The assistance was structured to create affordable unit credits that are now marketed exclusively by the City to other developers to satisfy affordable housing obligations. The Villa Loma Apartment complex is a Combined Project according to the lnclusionary Housing Ordinance, and developers may participate in this as an “off-site” method of satisfying affordable 5 I6 housing obligations. Carnation, Hadley, Roesch, and other projects in the vicinity.) (This is also an approved site for Greystone Cove, Ocean Bluff, Lohf, The proposed purchase of 8.7 Villa Loma Affordable Housing Credits as a part of the approach to mitigate the inclusionary requirements of the Thompsonmabata Poinsettia Properties application together with the provision of 15 for-sale affordable units and 15 secondary rental units on-site is consistent with the terms established by City Council Policies 57 and 58 and the inclusionary housing ordinance. 6. Description of On-site Project Constraints: Site specific and ownership constraints exist at the Thompsonrrabata Poinsettia Properties site which diminish the feasibility of producing the full inclusionary obligation with on-site affordable housing. These constraints include the independently owned parcel configuration within the project and the significant product type difference between a large high-density attached apartment complex and the existing single-family homes in the neighborhoods adjacent to the subject site. The applicant is proposing to buffer the on-site town-home project with single-family homes to be built immediately north of the proposed site. The site is further buffered by Poinsettia Lane on the south and the parking area for the adjacent multi-family project located immediately west of the proposed site. The use of second dwelling units and Villa Loma credits reduces these conflicts and provides for integration of the units into the total project. The costs of providing a 39-unit affordable housing apartment project on-site to satisfy the full inclusionary housing obligation would result in substantial subsidies being required from public sources, including the City. The proposed allocation of off-site credits combined with the provision of for-sale units and secondary units on-site, maximizes construction new on-site affordable housing units, while minimizing the amount of subsidy required. The construction of a full 39-unit affordable facility on-site would require additional public subsidy of over a million dollars . 6 I? THOMPSON/TABATA POINSETTIA PROJECT OFF-SITE AND COMBINED INCLUSIONARY HOUSING PROJECT ASSESSMENT WORKSHEET -- WORKSHEET I. Feasibility of the On-site Proposal a. Are there significant feasibility 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? 0 The applicant's proposal incorporating three avenues, credit purchase, secondary units and new rental product increases the feasibility of on site construction. The net gap of the proposed 15 unit affordable town-home project results in over $400,000 after developer site dedication. Credits can be granted in the existing Villa Loma to offset a large portion of this gap. This approach would result in no additional cost to the City beyond fee revenues that would otherwise been paid and reinvested into the project. The combined proposal reduces the need for outside subsidy. The construction of the full 39-unit obligation (24 for-sale units and 15 second dwelling units) on-site could require an additional approximately 1 million-dollar contribution by the City. The construction of the 15 affordable town-home units and 15 secondary units on-site results in the project's market units being required to absorb about $4,650 per unit so that land value could be contributed by the applicants. This figure rises to approximately $6,300 per unit if the applicants are required to build the units on-site and close the post land development gap of approximately $400,400. The proposed combined approach, while producing over 75 percent of the project's requirement on-site, greatly reduces the potential burden that would entail if the entire obligation of 39 affordable units had to be built on-site. For example, the addition of 9 units in the proposed for-sale affordable project would result in a greater than 50% increase in both the private and public subsidies required. Given the multiple ownerships within the proposed project area, an on-site affordable project apportioned to each ownership would not be of sufficient size to be viable. A large on-site inclusionary apartment project located on a particular parcel in the CT 98-14 project area would unfairly burden certain property owners to the unearned benefit of other property owners. b. Will an affordable housing product be difficult to integrate into the proposed market development because of significant price and product type disparity? The proposal of 30 integrated on-site affordable units composed of for-sale town-homes and secondary rental units will provide affordable units that better blend in with the existing higher-end single-family detached homes in the vicinity. The combined town-home, secondary unit, and credit request proposal provides for the most effective use of the City's affordable housing budget by reducing required subsidies while providing over 75% of the inclusionary units on-site, integrated within the proposed development. The applicant is proposing to buffer the on-site town-home project with single-family homes to be built immediately north of the proposed site. The site is further buffered by Poinsettia Lane on the south and the parking area for the adjacent multi-family project located immediately west of the proposed site. A larger affordable housing project could raise greater price, product type disparity, and land use compatibility opposition with regard to the existing larger lot, higher-end detached single-family homes in surrounding developments. This could also occur with the proposed new homes in this development ranging in size from 2,800 to 4,300 square feet on 5,700 to 39,000 square foot lots with estimated base prices ranging from the upper $300,000'~ to the mid $500,000'~. 0 0 7 .. C. 2. a. b. C. d. Does the on-site development entity have the capacity to deliver the proposed affordable housing on -s i te? The ability to obtain off-site credits for the proposed combined development, in lieu of the subsidies that would be required from the City, greatly enhances the economic viability of providing the inclusionary housing project on-site, for the applicant and the City. Standard Pacific Homes is a reputable company with a long history of development success in this area. Standard Pacific Homes is working with an affordable housing development team that are experienced in Carlsbad, as well as with the requirements and procedures of State and Federal affordable housing agencies. Relative AdvantageslDisadvantages of the Off-site Proposal. Does the off-site option offer greater feasibilitv and cost effectiveness than the on-site alternative, particularly regarding potential local public assistance? 0 Villa Loma is built and has proven its feasibility; no additional assistance is required. The CT 98-14 project participation in Villa Loma will minimize the expenditure of City funds to the amount that the associated with the proposed Villa Loma credits. Future collected funds could then be used to provide additional affordable housing in other developments and locations. Conversely, an on- site inclusionary project meeting the full 39-unit obligation at this location would create demand for significant additional subsidy from the City. The ability to obtain off-site credits allows for 15 new affordable for-sale units and 15 new affordable rental units to be built onsite while minimizing additional subsidy impacts to the City. 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 combined proposal has the advantage of dispersing the affordable housing obligation across the project and within the Villa Loma development, which also results in less impact to surrounding single- family neighborhoods. The combined proposal also allows for the dispersing of affordable units within Zone 20 as the proposed development is located further to the west from Villa Loma, adjacent to Palomar Airport Road. The Villa Loma development is located within close vicinity of public transportation, jobs (in the nearby business parks and shopping centers), schools, library, shopping, parks, as well as, other amenities and services due to its location along a major thoroughfare, El Camino Real. Villa Loma is a self-contained affordable development in an area designated for higher density residential development such as condominiums and townhomes. A 157-unit multi-family residential project, Manzanita Apartments located just to the south of Villa Loma recently received City approvals. Does the off-site option offer a development entity with the capacity to deliver the proposed project? The Villa Lorna project is an existing project, developed and managed by a highly experienced and specialized affordable housing developer. Does the off-site option satisfy multiple developer obligations that would be difficult to satisfy with multiple projects? The Villa Loma project was originally established as a Combined Project specifically to address this purpose. 0 The obligation to provide all inclusionary units on-site would result in an affordable housing project that would potentially be one of several projects in the southwest quadrant competing for scarce financial assistance. Villa Loma has already been financed and built and thus, is not competing for subsidy financing. The combined proposal on-site minimizes the competition for outside financial assistance. 8 i4 3. Advancing Housing Goals and Stratew a. Does the off-site proposal advance andlor support City housing goals and policies expressed in the . Housing Element, CHAS and lnclusionary Housing Ordinance? General Plan Housing Element and CHAS Goals: The Villa Loma Apartment affordable project is targeted to the highest priority need identified, larger rental units for low-income households. The recovery of the City’s investment in the Villa Loma Project through the applicant‘s participation will provide for additional resources that are needed to sustain the city’s affordable housing activities. Villa Loma provides a large quantity and diversity of affordable housing stock with its 344 units, including a generous supply of different site units to meet various housing needs of the community. lnclusionary Housing Ordinance Policies: Consistent with the City and public interests to use existing “excess” affordable units before supporting additional new construction. In conjunction with the combined Villa Lorna project, the Thompsonmabata Poinsettia Properties 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 General Plan Housing Element. Growth Management Zone, Ord. No. NS-257 Guidelines: The combined proposal to construct 30 affordable housing units on-site with the opportunity to obtain off- site credits for the remainder of the affordable housing obligation associated with the proposed project is consistent with the guidelines. The proposed on-site affordable housing is coordinated within the proposed development and with surrounding properties and provides access to Palomar Airport Road, as well as circulation and pedestrian access to public facilities. Villa Loma 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. 9 THQMPSOWABATA POINSET71A PROPERTIES 1/1Q/oo ' .-.I REVENU E ANALYSB PLAN 2 - 2 BEDROOM PLAN 3 - 3 BEDROOM GROSS REVENUE PLAN 5 - 3 amRom MND DEVELOPMENT COS TS LANO ON SITE IMPROVEMENTS FEES AND TECHNICAL OESIGN/CONSULTANTS IMPROVED SITE COST LAND CARRY 18MO LANO DEVELOPMENT COST INClUSlONARY HOUSJNG COMPARATIVE PRO FORMA PRICE UNITS REVENUE $1 4a,ooo 5 mo.aoo - -I--- sm,ooo 5 $840,000 $1 73.400 5 sass, ooc $2,445,000 s1,125,000 w30,aoo $500,000 $as,oco $2.1 40,000 5172,000 $2.31 2,000 UNlT CONSTRUCTION COSTS 2BR. 3 0R 3 3R UNIT SIZE 1129 1362 1542 SQUARE FEET (project) SE4S6 1381 0 771 0 20.155 STRUCTURE COST S51.GO sza7,895 $347,310 sm,zio $1,028,415 ON SITE INDIRECTS $1 48,000 OVERHEAD $1 45,000 SALES B MARKETING (include closing costs) $225,COO C 0 NS TR UC TI0 N COSTS $1,548,415 $1,548.4:5 CONST FINANCING $1 12.000 PROJECT C03T 53,970,415 TOTAL GAP Oeveloper land contribution NET GAP PER UNIT NET GAP PER UNIT GROSS SUBSIDY Page 1 $1,625,415 $1 ,I 25,000 $400,413 $16,694 $1 01,694 JACK HEPJTitORN ASSOCIATES MKNAtfordable Froforrna - 15 THs.xl3 * EXHIBIT 3 RECORDING REQUESTED BY: City of Carlsbad WHEN RECORDED MAIL TO: City of Carlsbad City Clerk's Office Attn: City Clerk 1200 Carlsbad Village Drive Carlsbad. California 92008 (Space above for Recorder's Use) AFFORDABLE HOUSING AGREEMENT IMPOSING RESTRICTIONS ON REAL PROPERTY This AFFORDABLE HOUSING AGREEMENT IMPOSING RESTRICTIONS ON by and between the CITY OF CARLSBAD, a municipal corporation (hereinafter referred to as the ("City"), and Standard Pacific Corp., a Delaware Corporation, (hereinafter referred to as the ("Developer"), is made with reference to the following: REAL PROPERTY ("Agreement"), entered into as of the day of 200-9 A. Developer is the owner of certain real property in the City of Carlsbad, in the County of San Diego, California (hereinafter referred to as the ("subject property") descried in Exhibit "A", which is attached hereto and incorporated herein by this reference. B. Developer wishes to construct 238 residential housing units for sale at prevailing market prices ("Market Units") and 24 residential housing units for sale at affordable prices ("Affordable Units") on the subject property. The City has approved Zone Change ZC98- 08, Local Coastal Plan Amendment LCPA 98-04, Carlsbad Tentative Tract Map CT 98-14, Planned Unit Development 98-05, Condominium Permit CPOO-02, Hillside Development Permit HDP 98-15, Coastal Development Permit CDP 98-68 and Site Development Plan 99-06 for the proposed development (Development). The City issued these approvals subject to certain Conditions of Approval, including a condition requiring the Developer to enter into an Affordable Housing Agreement in which Developer agrees to provide 24 dwelling units affordable to lower-income households and to purchase sixteen (1 6) Affordable Housing Credits within the Villa Loma Apartment project. NOW, THEREFORE, it is mutually agreed by and between the undersigned parties as follows: 1. Satisfaction of Affordable Housing Obligation and Conditions of Atmroval. In order to satisfy the Conditions of Approval and requirements of the City's Inclusionary Housing > 'j REV. 02/05/03 L. Ordinance, Carlsbad Municipal Code Chapter 21.85, Developer shall provide a total of twenty- four (24) Affordable Units that shall be restricted and affordable to lower-income households. Jn addition, the Developer shall purchase sixteen (16) Affordable Housing Credits within the Villa Loma Apartment project. This Agreement is an Affordable Housing Agreement pursuant to Section 21.85.140 of the Carlsbad Municipal Code. Developer shall submit this Agreement to City and Agreement shall be executed prior to the approval of the final map for the subject property. 2. Terms Governing Provision of Affordable Units. 2.1. Obligation to Provide Affordable Units. ,,, 2.1.1. Developer shall provide the twenty-four (24) Affordable Units in relation to Market Units ("Market Units") on the Subject Property. The Affordable Multifamily Units shall include three and four bedroom units in the numbers and with the square footage indicated in "Attachment B" to this Agreement. The maximum allowable income level of buyers of the affordable units shall be restricted to a maximum of 80% of the area median income. 2.2 Schedule for DeveloDing Affordable Units. 2.2.1. Prior to the approval of any Final Map for the Development: (i) this Agreement shall be duly executed and recorded; (ii) the developer of the Affordable Units shall have received approval of a Site Development Plan for all of the Affordable Multifamily. 2.2.2 Prior to the release of any building permits for the Development, the Developer shall purchase 16 affordable housing credits in the Villa Loma Apartments. 2.2.3 Upon satisfjmg the applicable conditions stated in Sections 2.2.1 and 2.2.2, building permits can be released for a total of eighty (80) market rate units and twenty- four (24) Affordable Units. 2.2.4 Once building permits have been released and the foundations for the twenty-four (24) Affordable Units are complete, inspected and approved, an additional seventy-nine (79) building permits for market rate housing shall be released at Developer's request. 2.2.5 Once the final Certificate of Occupancy is issued for the last of the twenty-four (24) Affordable Units to be constructed, the building permits for the remaining seventy-nine (79) market rate housing units shall be released at Developer's request. 2.3 Terms for Sale of Affordable Units. 2.3.1. The Schedule of Maximum Eligible Buyer Incomes and Affordable Subsidized Purchase Prices (the "Schedule") attached hereto and incorporated herein as Exhibit 1 e3 REV. 02/05/03 8 1 D sets forth the City's requirements for determining the maximum household income of buyers of the Affordable Units ("Eligible Buyers") and the methodology for calculation of the subsidized purchase prices of Affordable Units which will be affordable to each of the Eligible Buyers (the "Affordable Purchase Prices"). The Schedule also includes initial estimates of Eligible Buyer actual incomes and the corresponding Affordable Purchase Prices. The Final Schedule shall be established prior to sale based on the San Diego County Area Median Income and the cost factors applicable at the time. The Final Schedule shall be submitted by the Developer and approved by the City's Housing and Redevelopment Director prior to the marketing of the Affordable Units. 2.3.2. The Developer shall sell the Affordable Units only to Eligible buyers whose household incomes have been verified by the Developer. The purchase price for an Affordable Unit (the "Market Purchase Price") shall be the market price charged for a comparable unit (and not to exceed fair market value); provided, however, that the Developer shall cany back financing equal to the difference between the Market Purchase Price and the Affordable Purchase Price for the particular Eligible Buyer (the "Primary Affordability Subsidy"). The carryback financing shall be assigned by the Developer to the City, and shall be evidenced by a promissory note from the Eligible Buyer to the City, secured by a second mortgage deed of trust on the Affordable Unit (the "City Second Mortgage"). The balance of the Market Purchase Price shall be paid by the Eligible Buyer to the Developer in cash, utilizing downpayment monies and first mortgage proceeds. 2.4 Terms for Re-sale of Affordable Units. After the initial sale of the inclusionary for- sale units at a price affordable to the target income level group, inclusionary for-sale units shall remain fiordable to subsequent low income eligible buyers pursuant to a resale restriction for a minimum term of fifteen (15) years. Beginning sixteen (16) years after the initial purchase of an Affordable Unit, for-sale units may be sold at a market price to other than targeted households provided that the sale shall result in the recapture by the City or its designee of a financial interest in the units equal to the amount of subsidy necessary to make the unit affordable to the designated income group and a proportionate share of any appreciation. Funds recaptured by the City shall be used in assisting other eligible households with home purchases at affordable prices. To the extent possible, projects using for-sale units to satisfy inclusionary requirements shall be designed to be compatible with conventional mortgage financing programs including secondary market requirements. 3. City Amroval of Documents. 3.1. The following documents, in form and substance acceptable to the City, shall be used in connection with the sale of Affordable Units. Documents to be prepared by the Developer shall be submitted to the Housing and Redevelopment director for review and approval no later than the start of construction of the Affordable Units. 3.1.1. A marketing plan establishing the process for seeking, selecting and determining the eligibility of buyers of the Affordable Units shall be prepared by the Developer. 3.1.2. An educational program informing Affordable Unit purchasers of the obligations of home ownership and the specific features of this program shall be prepared by the Developer. 3.1.3. Purchase and Sale Agreements for sale of the Affordable Units shall be prepared by the Developer. 3.1.4. City Second Mortgage promissory note, deed of trust, and borrower disclosure form shall be provided by the City. 3.2 Any of the documents identified in this section 3.1 may be revised by Developer fkom time to time with the prior Written approval of the Housing and Redevelopment Director. 4. Mortgage Credit Certificate Promam. Buyers of the Affordable Units may qualify for income tax credits pursuant to Mortgage Credit Certificate (MCC) Program, for a portion of the annual interest paid on a first mortgage used to acquire the Affordable Unit. City shall cooperate with Developer in obtaining and providing to prospective buyers Mortgage Credit Certificates fkom allocations that it may receive. 5. Reportinn and Compliance Monitoring. A report verifjmg compliance with the requirements of this Agreement covering the initial sales of the Affordable Units shall be provided to the City by the Developer and approved by the Housing and Redevelopment Director. Developer shall provide the City with other reports as reasonably required by the City to verify compliance with this Agreement. 6. Default. Failure of the Developer to cure any default in the Developer's obligations under the terms of this Agreement within (90) days after the delivery of a notice of default fkom the City (or where the default is of the nature which cannot be cured within such ninety (90) period, the failure of the Developer to commence to cure such default within the ninety (90) day period or the Developer's failure to proceed diligently to complete the cure of such a default within a reasonable time period but in no event not greater than 180 days) will constitute a failure to satisfy the Conditions of Approval with respect to the Subject Property and the requirements of Chapter 21.85 of the Carlsbad Municipal Code and void the approval of the Final Map and Site Development Plan; and the City may exercise any and all remedies available to it with respect to the Developer's failure to satisfy the Conditions of Approval, including but not limited to, the withholding of building permits for the Market Units within the Subject Property until such cure is completed. 7. Appointment of Other Agencies. At its sole discretion, City may designate, appoint or contract with any other public agency, for-profit or non-profit organization to perform the City's obligations under this Agreement. 8. Release of Subiect Property From Agreement. The covenants and conditions herein contained shall apply to and bind the Developers and its heirs, executors, administrators, ..-. ~ L... REV. 02/05/03 .L -3 I successors, transferees, and assignees of all the parties having or acquiring any right, title or interest in or to any part of Subject Property and shall run with and burden the Subject Property and shall run with and burden the Subject Property until terminated in accordance with the provisions hereof. Prior to the issuance of building permits, the Developer shall expressly make the conditions and covenants contained in this Agreement a part of any deed or other instrument conveying any interest in the Subject Property. Notwithstanding anything to the contrary set forth in the Agreement, individual purchasers of units pursuant to an approved public report in compliance with the California Subdivided Lands Act, and mortgage lenders holding deeds of trust on such individual units after sale to such purchasers, shall not be subject to the terms of this Agreement; and the terms of this Agreement shall be of no further force or effect with respect to such completed unit on the date of the recordation of a deed to the individual purchaser. Upon issuance of certificates of occupancy for all of the Affordable Units, the entire Subject Property, with the exception of the property subject to the approval Site Development Plan SDP99-06, shall be released from the burdens of this Agreement. The burdens of this agreement shall remain in full force and effect and recorded against the property subject to the approval Site Development Plan SDP99-06 for the duration of this agreement. 9. Hold Harmless. Developer will indemnify and hold harmless (without limit as to amount) City and its elected officials, officers, employees and agents in their official capacity (hereinafter collectively referred to as '7ndemnitees"), and any of them, from and against all loss, all risk of loss and all damage (including expense) sustained or incurred because of or by reason of any and all claims, demands, suits, actions, judgments 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 Developer's performance or non-performance pursuant to this Agreement, and shall protect and defend Indemnitees, and any of them with respect thereto. The provisions of this section shall survive expiration or other termination of this Agreement or any release of part or all of the Property from the burdens of this Agreement: and the provisions of this Section 9 shall remain in full force and effect 10. Insurance Requirements: Developer shall obtain, at its expense, comprehensive general liability insurance for the development of the Subject Property naming Indemnitees as additional named insureds with aggregate limits of not less than five million dollars ($5,000,000) for bodily injury and death and property damage, including coverages for contractual liability and products and completed operations, purchased by Developer or its successors or assigns from an insurance company duly licensed to engage in the business of issuing such insurance in the State, with a current Best's Key Rating of not less than A-:V, such insurance to be evidenced by an endorsement which so provides and delivered to the Housing and Redevelopment Department prior to the issuance of any building permit for the Subject Property.. 11. 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 addressed set forth below: -_ -3. REV. 02/05/03 I TO THE CITY OF CARLSBAD CITY OF CARLSBAD Housing and Redevelopment Department Attn: Housing and Redevelopment Director 2965 Rooseveit Street, Suite B Carlsbad, California 92008-2389 TO THE DEVELOPER: STANDARD PACIFIC COW. Attn: 9335 Chesapeake Drive San Diego, CA 92123-1010 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. 12. the parties and no modification hereof shall be binding unless reduced to writing and signed by the parties hereto. Integrated Agreement. This Agreement constitutes the entire Agreement between 13. Duration of Agreement. This Agreement shall terminate and become null and void upon the earlier of: (a) the closing of the sale of the last of the Affordable Units to an individual purchaser pursuant to a sale on an approved public report in compliance with the California Subdivided Lands Act, or (b) upon the granting of a written release by the Community Development Director. This Agreement, and any section, subsection, or covenant contained herein, may be amended only upon the written consent of Developer and the Community Development Director. 14. Recording of Agreement. The parties hereto shall cause this Agreement to be recorded against the Subject Property in the Official Records of he County of San Diego. 15. 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. ? 7 REV. 02/05/03 - IN WITNESS WHEREOF, the parties hereto have caused 1 executed as of the day and year first above written. .is agreement to be DEVELOPERS CITY City of Carlsbad, a Municipal corporation By: By: Todd Palmer, President Standard Pacific of San Diego, a Division of Standard Pacific Corp., Authorized Representative Sandra L. Holder Community Development Director By: Brian Utsler, Vice President, Standard Pacific of San Diego, a Division of Standard Pacific Corp., Authorized Representative Proper notarial acknowledgment of execution by contractor must be attached. If a Corporation, Agreement must be signed by one corporate officer from each of the following two groups. *Group A. Chairman, Secretary, President, or Vice-president **Group B. Assistant Secretary, CFO or Assistant Treasurer Otherwise, the corporation must attach a resolution certified by the secretary or assistant secretary under corporate seal empowering the officer(s) signing to bind the corporation. APPROVED AS TO FORM: RONALD R. BALL, City Attorney By: Assistant City Attorney REV. 02/05/03 : 1 -3 ATTACHMENT A LEGAL DESCRIPTION OF SUBJECT PROPERTY . " REV. 02/05/03 27 ATTACHMENT B LOCATION, SIZE, AND BEDROOM COUNT OF AFFORDABLE UNITS REV. 02/05/03 3 6 ATTACHMENT C BUILDING PERMIT PHASING PLAN Action Required/ 1 # of Building I Phasing Permits & Type Released 80 Receive Approval of an SDP for the affordable housing project, execute and record the Affordable Housing Agreement approved by the Housing and Redevelopment Director, affordable purchase 16 affordable housing condominium credits. units All building permits issued and foundations complete, inspected market rate and approved for all 24 affordable condominium units. market rate building permits. 24 79 building permits Final Certificate of Occupancy 79 I issued for all 24affordable market rate 262 Units I I % of Total Comments Permits for Project 3 1% Final maps allowed for a total of262 units. A total of and 104-building permits could be issued at this point in 9% time; 40% of total permits I 30% At this point, 159 market rate units (67% of the market rate units) could be under, or begin construction. I At this point, all 238 market rate units could be under, or begin construction. 3 0% 100% Allows for a total of 238 market rate and 24 affordable units. 3, REV. 02/05/03 ATTACHMENT D MAXIMUM ELIGIBLE BUYER INCOMES REV. 02/05/03 3z Exhibit 4 CT98-I 4 ThompsodTa bata DRAFT Minutes of: HOUSING COMMISSION Time of Meeting: 6:OO P.M. Date of Meeting: September 9,2004 Place of Meeting: HOUSING AND REDEVELOPMENT OFFICE CALL TO ORDER Vice Chairperson Huston called the Meeting to order at 6:OO p.m. PLEDGE OF ALLEGU~CE The Pledge of Allegiance was waived because there wasn’t a flag at the Housing and Redevelopment Office. ROLL CALL Present: Commissioners: Renee Huston Doris Ritchie Margaret Schraml Bobbie Smith Absent: Edward Scarpelli Staff Present: Housing and Redevelopment Director: Debbie Fountain Management Analyst: Craig Ruiz APPROVAL OF MINUTES Minutes of March 1 1,2004, were approved as written. VOTE: 4-0 AYES: 4-0 NOES: None COMMENTS FROM THE AUDIENCE ON ITEMS NOT LISTED ON THE AGENDA There was no audience in attendance, who wished to speak at this time. NEW BUSINESS Vice Chairperson Huston stated we would be reviewing CP 03-03, Bressi Ranch Financial Assistance. A recommendation of approval to the City Council to provide $2,000,000 in financial assistance and approval of the borrower loan documents for development of one hundred affordable condominium units to satisfy the requirements of the inclusionary housing ordinance for the Bressi Ranch Master Plan. Craig Ruiz gave a verbal presentation. Bressi Ranch is a Master Plan Community on the comer of Palomar Airport Road and El Camino Real. There will be a total of 623 residential units. As part of that, 523 of those units will be single-family homes, which will be market rate units. There will also be a condominium project of 100 for-sale units that will be available to low-income households. That will satisfy their inclusionary housing requirement. Out of the 100 units, they will be two and three bedrooms, ranging from 900 to a little over 1,100 square feet. In exchange for that, they are asking for $2,000,000 in financial assistance. The Staff Report breaks down the subsidy analysis on page 3. The average cost of the units are about $2 15,000. The units will sell for about $177,000. That average cost is just the cost of construction. It will not include the cost of the land. The total revenues for the project would be about $17,700,000 if all the units sold. The project cost will be about $21,500,000 so that leaves a shortfall. That gap doesn’t include the land so the proposal is to fill that 3.7 million dollars contribution from the developer of $1,700,00 and the City’s contribution would be $2,000,000. In the past, the assistance has been given to the builder during construction, which is a construction loan, and then the obligation to repay the loan is transferred to the buyer of those units. 3c1 0 HOUSING COMMISSION MINUTES SEPTEMBER 9,2004 PAGE 2 of 8 Instead of providing the money during construction, we are going to give the money to the buyer of the affordable unit as part of the escrow process. It will be more of a first-time homebuyer program in that no real money will be coming to the buyer. It will be delivered into escrow; part of the sales transaction. That assistance as well as the developer’s assistance is recorded as a second deed of trust. The buyer must stay there for fifteen years. If they do sell within the fifteen years, they have to sell it to another affordable household. If they sell it after year fifteen, they can sell it at a market price, but the subsidy and the builder’s subsidy is recaptured, plus there is a share in the equity. In addition to recommending approval of the money, there is also the loan documents the borrower will actually use which is a typical promissory note, the deed of trust and a resale agreement. Also a disclosure statement that explains in plain English explain the process to each of the buyers. Roughly a third of someone’s monthly income who is low income can go toward the total of their household cost. Household cost consists of paying the loan, the principal and interest, but it is also the property taxes, HOA fees. Usually the HOA fees pick up the insurance requirement, but if there is a separate insurance requirement, then it goes into the housing cost. The recommendation is the $2,000,000 in financial assistance as a homebuyer assistance program and then recommending approval of all related documents. Vice Chairperson Huston said she had a little difficulty understanding the documents and asked for clarification. Is the recommendation of $2,000,000 in financial assistance from the Housing Trust Fund in the form of low-income buyer down payment assistance? Craig Ruiz said that is correct. Vice Chairperson Huston continued, of the $2,000,000, you have down payment money and approval of the borrower loan document for construction of 100 affordable condominiums. Craig Ruiz said he understands and it is a little misleading. He said the loan documents that are attached are separate from the money. All 100 households that buy those units are going to use these loan documents. Then the money plus the documents, are all to allow for the building of those 100 affordable units. Vice Chairperson Huston said she noticed it also said the developer of Lennar Homes is not receiving a developer fee for the development of this project. How much would the developer fee be? Craig Ruiz answered that some developer fees for past projects, primarily on rental projects, have brought anywhere from 7% to 15% of the hard construction cost. Vice Chairperson Huston asked what the reason was that they didn’t get a developer fee. Craig Ruiz replied that on one hand, there is Lennar and then affiliated with Lennar is Greystone Homes, another subsidiary. Greystone will be building the units, and there is a profit that Greystone will earn when building them. There is some money that is being earned there, It is not in addition to the developer fee. If you hired a general contractor, there would be the cost of construction plus their profit. It would be reasonable to charge a developer fee, but it just adds to the cost and there is only so much money we will fill. Basically we just add to the subsidy amount needed to the project. Vice Chairperson Huston asked if the developer fee was waived then? 35 HOUSING COMMISSION MINUTES SEPTEMBER 9,2004 PAGE 3 of 8 Craig Ruiz said in a sense, yes. There is only so much money you can make on the sale, and if 10% is added, that would just widen the gap between the revenues and cost. There is no other subsidy sources out there for these types of for-sale projects. Vice Chairperson Huston asked the Commissioners if there were any questions. Commissioner Ritchie asked where the $2,000,000 comes from. Craig Ruiz replied that the City has an Affordable Housing Trust Fund that when builders build small projects, they pay in-lieu fees. Also, money from other affordable housing loans have been paid back with interest; that money goes into the Housing Trust Fund. Also, with the Villa Loma Project, there are all the extra units there. It was built with 183 extra units and we sell credits in those to smaller developments so people pay us that way. The fund has a total value of $14,000,000 when you add in all the loans. There is over $8,000,000 in money available to lend to projects. Commissioner Ritchie asked about the cost per square foot. How does that compare with what we have dealt with previously? Craig Ruiz said it is hard to compare. The last for-sale project that we saw was in 1999 and the costs are so dramatically different we didn’t really go into that. Tom Sakai, Principal for Springbrook Realty Advisors, said from the developer’s perspective, these costs are the equivalent of what are seen for other market rate projects, not affordable projects, in Orange and San Diego County. This reflects the high quality of this project. Commissioner Smith asked if the two bedroom, one bathroom units are one bath or half a bath? Tom Sakai answered it is one bathroom in the two bedroom floor plan. For a three bedroom affordable unit, two bathrooms are provided. It is hard to serve all people on a limited construction budget. Vice Chairperson Huston stated that the fund currently has a balance of 9.1 million dollars. If we take $2,000,000 out, that leaves it at 7.1 million dollars. With all the projects that are out there, is that an adequate remaining balance to do what is needed? Craig Ruiz replied that yes it is. We look at what projects are out there and what they can possibly request. It is hard to judge since a lot of the loans that have been done are called residual receipts. That is the profit left over after paying expenses and paying the other loans that are ahead of us. It is an estimate so it is a revolving fund. There should be enough money for all of the projects. There could be some timing issues or there may never be an issue. Vice Chairperson Huston said she understood, we are in the safety zone. Craig Ruiz said yes, definitely. Tom Sakai and Keith Reinhawn showed a drawing of the plans. Keith Reinhawn is from Greystone Homes. He said they are building ten, ten-plex units. They are two and three bedroom. Each building is identical. It has been incorporated into the Master Plan for Bressi Ranch and will have access to amenities throughout the community. There is a recreation center and a pool and other amenities. Vice Chairperson Huston asked where the parkmg units are? Mr. Reinhawn said they have garages. There will be additional parking for guests throughout the community. 36 HOUSING COMMISSION MINUTES SEPTEMBER 9,2004 PAGE 4 of 8 Commissioner Ritchie commented that Mr. Reinhawn said a pool. Commissioner Ritchie understood there wouldn’t be a pool in Bressi Ranch. Mr. Remhawn said there is a pool being built at Bressi Ranch. The buildings will have a Spanish-type architecture. It blends in nicely with the community. It is being built with high speculation levels. For an affordable community, it is something that the City of Carlsbad can be proud of. The neighborhood of Bressi Ranch is a high end, upscale community that will fit in this neighborhood very nicely. Commissioner Ritchie asked where it is located. Mr. Remhawn pointed it out on the plans. It will be in the center of the community up on the hill and has some ocean views. The recreation building and the pool is within walking distance. Commissioner Ritchie asked where the Boys and Girls Club will be located. Mr. Reinhawn pointed out where the Boys and Girls Club will be, which is close to the affordable housing units. He shared the different elevation drawings of the project. Vice Chairperson Huston said she noticed the vegetation shows full grown trees. She asked if they will be planting full-grown trees? Mr. Reinhawn said no, probably not. John Slatton, Director of Operations at Lennar Homes, commented further on the vegetation and said there will also be planters. On the original Bressi Ranch, there were several mature trees saved and boxed and have already been replanted. This is a high-end affordable community. The exterior elevations are typical of any condominium project. Commissioner Schraml asked if there has been any discussion about the buildings being in the flight path of the airport? Any foreseen problems? Craig Ruiz said that was addressed when the master plan was approved through the planning process. There is a flight path adjacent to it. This is why you see the commercial and industrial along the major roads and the residential is further in. Commissioner Schraml asked if the future buyers will be aware that they are on a flight path? Craig Ruiz said yes, when a project is approved anywhere in the City, that is one of the things they have to disclose. Then there is something they have to sign as well stating they are aware of it. Commissioner Smith commented that when Bressi Ranch was submitted to the San Diego Awards Committee, she happened to have been on it. She said it is a beautiful project and an honor to have them in Carlsbad. Vice Chairperson Huston asked if there were any other questions or comments. Vice Chairperson Huston asked for a recommendation of approval to the City Council to provide $2,000,000 in financial assistance and approval of the borrower loan documents for development of one hundred affordable condominium units to satisfy the requirements of the Inclusionary Housing Ordinance for the Bressi Ranch Master Plan. Commissioner Ritchie moved and Commissioner Smith seconded the approval. VOTE: 4-0-0 31 HOUSING COMMISSION MIES SEPTEMBER 9,2004 PAGE 5 of 8 AYES: NOES: None ABSTAIN: None Huston, Ritchie, Schraml, and Smith Vice Chairperson Huston continued with the second item, CT 98-14, Thompsoflabata request to purchase affordable housing credits. It is a recommendation of approval to the City Council to approve the request to purchase sixteen affordable housing credits in the Villa Loma Affordable Housing Development to satisfy a portion of the requirement of the Inclusionary Housing Ordinance for the ThompsodTobata Residential Development. Craig Ruiz said the Thompsoflabata Project was approved in 2002 by the City Council and it allows for 238 single-family homes and 24-unit for-sale condominium development. The single-family homes, like the last project, will be market rate units, and the condominiums are to satisfy a portion of their affordable housing requirement. This project is unique in that they are going to build some affordable units and then they are seeking to purchase credit. The requirement would be a total of forty units; 24 units would be built and 16 credits would be purchased. The site is unique in that it is more of an infill development. Around it are existing homes and existing communities. This project will have streets that will be going into these existing communities. Because this project is unique, we have come to this proposal and to be more compatible with the existing neighborhood. The condominiums have already been approved. All the units will be three and four bedroom units, which is another reason we have supported this unique project. We don’t have a lot of large family units; that is one of our largest needs. Large for- sale units are unique to any project that we have seen. The reason this project is before you for the credit is because anytime a project is seeking to purchase ten or more credits, it has to come before the Housing Commission for a recommendation to the City Council. As part of the Staff Report, it is unique because it is within an existing community; more of an infill project. Staff is supportive of this proposal because it is compatible with the community. Vice Chairperson Huston asked what the reason is if they are building 24 units, then why do they need to put the other sixteen somewhere else. Craig Ruiz answered it was a combination of a negotiation between the City and the builder. It is also based on a lot of community input about where to put the affordable units. Vice Chairperson Huston asked if he was saying that the community didn’t want it. Was that it? Debbie Fountain, Director of Housing and Redevelopment, said they have a unique situation in that they have property on both sides of Poinsettia so when we were trymg to fmd the location for the affordable housing, it was difficult to figure out where the best location was. It was constrained on how many total units can be produced there. Because they said they would do larger bedroom sizes, we agreed they could do a portion of&e units on site and portion of the units off site. Originally they wanted to do for-sale town homes and second dwelling units, but at the time all of that was going on, the second dwelling units were getting a lot of criticism because people felt llke they really didn’t meet the affordable housing need. At that time, they wanted to do a split; some credits, some second dwelling units and some town homes. We agreed if they did the larger town homes, we didn’t really want to get the second dwelling units at that point so we agreed that we would just let the rest of them be the credits. They were going to originally do the 24 units and then incorporate the second dwelling units in the homes, but we said we would rather them buy into Villa Loma rather then give us a second dwelling unit. Because all of that was designed and it worked well and they were giving us the larger units, we agreed that we could accept that as a deal. Vice Chairperson Huston asked if Villa Loma has sixteen units to spare? Debbie Fountain said yes. Vice Chairperson Huston asked how many units are available there. HOUSING COMMISSION MINUTES SEPTEMBER 9,2004 PAGE 6 of 8 Craig Ruiz said there is over 60 credits still available. Vice Chairperson Huston said then by credits, you mean units? Craig Ruiz said yes. Vice Chairperson Huston commented that this would bring them to 44. Debbie Fountain we have determined to make sure that we have an adequate number and we have always included this number in that. Vice Chairperson Huston continued that by the time we get to the City's build out and add all the affordable units in, will that 44 be enough? Debbie Fountain answered that staff thinks so. Staff also has another project that they are looking at across the street from Villa Loma that will give us additional credits. They are looking at doing a 56 unit affordable housing project that is not being done as an inclusionary housing project. We will be able to have some extra credits in there if we needed to. Craig Ruiz stated that is a project we will see before the end of this year. Debbie Fountain agreed and said they would be coming back for financial assistance. Joanne Watanabe, Standard Pacific Homes, stated they are currently building at Poinsettia. The affordable units and the single family homes will all belong to one homeowner's association and they will all share the common amenities. Whether the amenities are near the affordable site or intermixed within the single-family homes, they are all equally shared by every resident. Commissioner Ritclue asked if they are on both sides of the road? Joanne Watanabe said most of the amenities are on the south side of the road where the affordable units are. The north side is constrained because it is not a big site. The majority of the amenities are on the south side. Vice Chairperson Huston asked for a recommendation of approval to the City Council to approve the request to purchase sixteen affordable housing credits in the Villa Lorna Affordable Housing Development to satisfy a portion of the requirement of the Inclusionary Housing Ordinance for the ThompsodTobata Residential Development. Commissioner Ritclue moved and Commissioner Schraml seconded the approval. VOTE: .4-0-0 AYES: NOES: None ABSTAIN: None Huston, Ritchie, Schraml, and Smith CHAIRPERSON'S REPORT No reports. HOUSING COMMISSION MINUTES SEPTEMBER 9,2004 PAGE 7 of 8 DIRECTOR REPORT: At the October 14, 2004 meeting, we are going to start having some workshops to get some community input on what the needs in Carlsbad are. The decision has been made that a good place to have those workshops is with the Housing Commission. This will be the first workshop and housing applicants will be invited to attend the meeting, the Planning Department will make a presentation and attain some feedback. We have hired a consultant to do the housing element where in the past the staff has always done the housing element, but we’ve decided this time to hue a consultant, Bridges. Veronica Kemp, the lead, will be at that meeting getting input from the Housing Commission. If you want to think about any thoughts you might have about affordable housing and what the needs are within the community, we’ll be hearing from the advocate as well. There will probably be some more workshops to follow up that because there will be a lot of interest we believe. This time around it will be for housing for the disabled, moderate-income housing, and the ongoing demands for housing for low-income groups. Senior housing will be another topic. Our housing element needs to address all of the different types of special needs groups. It is a fairly lengthy process. As mentioned previously, we have a 56-unit apartment project that has already been approved by the City Council, but we need to present the financial assistance for that project to the Housing Commission. It is unique because it is the first project being built that is not being built as a result of the inclusionary housing. It is an affordable housing developer that identified a piece of property and wants to come in and build a project. Though the structure of the deal is going to be a little different. It will not only be financial assistance, but we are going to look at other ways to assist the project. That project will probably not be October, more like November or December. We also have a project on Roosevelt Street that has been mentioned before. It is an eleven-unit apartment project and that financial assistance will need to come to the Housing Commission. Vice Chairperson Huston asked if they are only building eleven units, are they subject to inclusionary housing? Debbie Fountain answered that it is going to be a hundred percent affordable project. This is the property the Redevelopment Agency purchased so we are actually initiating the project. We partnered with Wakeland Housing who will actually be developing and owning and operating the apartment project. We are doing it for two fold reasons. One, the Redevelopment Agency itself has requirements to build affordable housing and most of the time we are going to include the inclusionary end with that project. There have been projects that have been prior to the inclusionary housing being implemented but the Redevelopment Plan was in effect so we have some need to provide some units. Commissioner Ritchie asked where that development is located. Debbie Fountain answered it is down toward the end of Laguna, next to Brittany Court office building. The property used to be used for storage and there was an abandoned house that was boarded up. We have cleaned up the site and we are working on the permit to get that project built. Everyone received invitations for the Mariposa Grand Opening. It would be a good idea to go up to the site as it is beautiful. Some of the units have ocean views. Villages of La Costa is under construction and doing their affordable housing. Their project overlooks the golf course. Bressi Ranch is moving forward. ThompsodTabata project is moving forward. The Summit, which is a mixed income project, across from El Camino Real, and it is under construction. Commissioner Ritchie asked about the property being built on Cannon Road and Faraday; do we have anythmg in there? Debbie Fountain answered that it is called Pacific View and yes there are 11 1 affordable units in there. Vice Chairperson Huston asked how many units there were total? . HOUSMG COMMISSION MINUTES SEPTEMBER 9,2004 PAGE 8 of 8 Craig Ruiz said there are 450 total units. Debbie Fountain continued that they have luxury units and the affordable units. They are very nice. Commissioner Smith asked if that also has a home development? Debbie Fountain said yes. Vice Chairperson Huston asked if there was going to be another grocery store on that commercial property? On the east side of El Camino Real? Debbie Fountain was not aware of that. She did say Sunny Creek or Robertson Ranch is supposed to have a grocery store in it. Commissioner Smith asked if Bressi Ranch was supposed to have a movie theatre and a shopping area? Debbie Fountain did say they are supposed to have a shopping area, a commercial area, but I don’t know what has been proposed. They are still working on it, but I don’t thmk it is supposed to have a theater though I may be wrong. Commissioner Smith also said they are supposed to have a school. Debbie Fountain did say there is a shopping area next to the affordable project along with the Boys and Girls Club. In addition, Craig Ruiz, Management Analyst, will be leaving the City of Carlsbad. ADJOURNMENT By proper motion, the meeting of September 9,2004 was adjourned at 6:45 p.m. Respectfully submitted, Debbie Fountain Housing and Redevelopment Director PATRICIA CRESCENT1 Minutes Clerk MINUTES ARE ALSO TAPED AND KEPT ON FILE UNTIL THE WRITTEN MINUTES ARE APPROVED.