HomeMy WebLinkAbout2014-01-28; City Council; 21496; Amendment 2013-2014 Community Development Block Grant Program Action PlanCITY OF CARLSBAD - AGENDA BILL 12
AB# 21,496 AMENDMENT TO THE 2013-2014 COMMUNITY
DEVELOPMENT BLOCK GRANT PROGRAM ACTION
PLAN
DEPT. DIREaOR U
MTG. 1/28/14
AMENDMENT TO THE 2013-2014 COMMUNITY
DEVELOPMENT BLOCK GRANT PROGRAM ACTION
PLAN
CITY ATTORNEY Mf
DEPT. CED
AMENDMENT TO THE 2013-2014 COMMUNITY
DEVELOPMENT BLOCK GRANT PROGRAM ACTION
PLAN CITY MANAGER ^yf\
RECOMMENDED ACTION:
That the Citv Council adopt Resolution No. 2014-021 amending the 2013-2014 Community
Development Block Grant (CDBG) Program Action Plan and authorizing the execution of related
documents.
ITEM EXPLANATION:
The U.S. Department of Housing and Urban Development (HUD) requires the preparation of an annual
CDBG Program Action Plan to describe how those federal funds will be used to benefit low income
households. Any substantial change to the plan requires that an Amended Action Plan be submitted to
HUD after completion of a public hearing and review process. The City currently has funds that require
reallocation to alternate projects for expenditure this program year 2013-14. Therefore, the City must
amend its 2013-2014 Action Plan to reallocate nearly $600,000 in CDBG funds to projects that will allow
for the expenditure of those funds in a timely manner in order to meet HUD expenditure requirements.
The current Action Plan includes $454,077 set aside in the City's Housing Reserve fund for use on future
affordable housing activities (that now needs to be allocated to specific projects). Approximately
$137,500 is available from the remaining balances on projects from prior years that have been completed
and did not require the full amount of allocated funding. The total of $591,577 may be reallocated to one
or a combination of the projects described below, with the majority of the funds intended for one or
more affordable housing developments or related activity. Due to the federal expenditure timelines, it is
important to allocate the funding to projects that are ready to move forward quickly. Staff recommends
allocating the funds to the following projects.
City Lighting Assessment $58,500
Solutions for Change $280,000
Bridge Housing $253,000
Citv Lighting Assessment
In June, 2013, a Neighborhood Enhancement Action Plan (NEAP) was finalized for the Carlsbad Barrio area.
A number of improvements or enhancements were included within the Plan to better serve residents in
the Barrio and address quality of life issues. CDBG funds may be used on a project in the Barrio NEAP for
improving lighting in the area for safety purposes. Residents have indicated that this would be a welcome
improvement in the area. The City's Public Works Department is requesting that $58,500 in CDBG funds
DEPARTMENT CONTACT: Frank Boensch 760-434-2818 frankboenschOcarlsbadca.gov
FOR CITY CLERKS USE ONLY.
COUNCIL ACTION: APPROVED CONTINUED TO DATE SPECIFIC •
DENIED • CONTINUED TO DATE UNKNOWN •
CONTINUED • RETURNED TO STAFF •
WITHDRAWN OTHER-SEE MINUTES •
AMENDED
Page 2
CDBG funds be allocated at this time to complete a Barrio Lighting Assessment to identify additional
lighting needs and the best plan for improving public lighting within the neighborhood. Exhibit 2 provides
a summary of the funding request. Staff is recommending that the requested funds ($58,500) be allocated
to this project because it is ready to proceed and is a priority project for both the Barrio and Village Areas.
Additional funds could be allocated at a future date based on the findings from the Assessment.
Solutions for Change
Solutions for Change assists homeless families from North County in becoming more self-sufficient and
productive members of the community. The organization provides training and other services through
their transitional housing program, also known as the Solutions University program. Graduates from the
program are eligible to become residents in traditional rental housing provided by Solutions for Change or
within the rental market. The organization has been attempting to locate property in Carlsbad that could
provide homes for their graduates, but no cost effective locations have been identified to date. The City
allocated $780,000 in HOME funds from prior years to Solutions for Change, but due to HUD expenditure
requirements the City Council found it necessary to allow the organization to use those funds to assist in
the acquisition of apartments in the City of Vista. The City prefers to use the CDBG funds within the City
of Carlsbad whenever possible, but will consider projects outside the City when necessary and
appropriate.
Solutions for Change has recently been presented with an opportunity to partner with the Kelly family and
Seaborne Development Company in securing dedicated rental homes for its families in the proposed
Encinas Creek Apartments to be developed on 6.2 acres located east of the future southerly extension of
College Boulevard and south of Cannon Road within the City of Carlsbad. Solutions for Change is
requesting up to $550,000 in CDBG funds to expend on predevelopment activities for the noted
apartment homes. Predevelopment activities may include required studies, construction plans,
development fees, etc. In return for this investment of CDBG funds from Solutions for Change, the
development partnership will reserve a designated number of rental homes for a family graduating from
the Solutions University. It is anticipated that the "per unit subsidy" for the investment will be
approximately $20,000 per unit, and allow for the dedication of approximately 10 to 30 rental homes
(depending on the level of investment) to Solutions for Change. Additional program details are provided
in the attached request letter from Solutions for Change (Exhibit 3). Staff is recommending that Solutions
for Change be allocated $280,000 of the available CDBG funding for their predevelopment expense
investment in the approved Encinas Creek Apartment project (which has a requirement to provide 65
units at rental rates affordable to low income households). It is anticipated that this will result in the
commitment of 14 to 15 dedicated low income affordable rental homes within the development to the
families graduating from the Solutions University Program. The graduating families will be required to
make the rental payments, but will have units within the development reserved especially for them
making it easier to find affordable housing within Carlsbad.
Risk analysis: Providing predevelopment funding to the noted partnership through Solutions for Change is
fairly risky for the City. The cost for construction drawings and other expenses will be incurred and funds
expended, but there is no guarantee that the units will ultimately be built for a variety of reasons. It is
very unlikely that any of the funds will be repaid if this "no build" scenario does occur. This risk has been
discussed with HUD, and they have indicated that the risk is acceptable to them and the funds would not
need to be repaid by the City. The risk is minimized by the fact that the development will serve to meet
the inclusionary housing obligations for both Holly Springs and Cantarini developments, and has approved
entitlements. The market rate developments will have a vested interest in ensuring the development of
the Encinas Creek Apartments, to allow for their development. The projects have joint approvals.
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Bridge Housing
Bridge Housing is requesting up to $550,000 in funds for predevelopment activities related to their
affordable housing development proposed for an 11.5 acre site in Carlsbad, known as the "Parcel 4" site
located on the southeast corner of the intersection of Cannon Road and the future southern extension of
College Boulevard. The property is currently owned by the Rancho Carlsbad Owners Association and
optioned to Bentley Wing Investments. Bridge currently anticipates that the development could
accommodate up to approximately 100 affordable apartments.
Bridge Housing is requesting that the City provide up to $550,000 in funding to assist with
predevelopment costs for this proposed project. The organization has successfully developed the Villa
Loma and Poinsettia Station affordable apartments in Carlsbad, and has more than adequate capacity to
complete new developments of affordable housing in a timely manner. Bridge Housing will be seeking
other financing for the development including tax credit equity, tax exempt bond funds and potentially
additional funds from the City. Additional details are provided in the attached request letter and project
summary. (Exhibit 4)
It is important to note that the proposed project does not yet have approvals, and will require an
allocation of excess dwelling units to allow for 100 units of affordable housing on the site. As staff has
shared with the City Council on other occasions, the Northeast Quadrant is most challenged from the
perspective of allocating additional density/residential units to property due to the Growth Management
Plan and housing unit caps. Therefore, the developer has received no guarantee that the project can or
will be approved by the City. The City has completed a preliminary review of the project, and Bridge
Housing believes it can address all of the identified issues but understands that if an allocation of units
can't be provided that the project will not be able to move forward. If approved, no entitlement
guarantees or approved allocation of units are provided with the predevelopment funding.
Staff is supportive of an affordable housing development at the noted location and the development can
serve as a "combined project" under the Inclusionary Housing Ordinance allowing some developers in the
Northeast Quadrant to participate in financing the development to satisfy their inclusionary obligations.
The Northeast Quadrant is the only quadrant without a combined project for developers to satisfy their
inclusionary obligations with a housing credit purchase. Although there are risks and approval uncertainty,
staff is recommending that the Council reallocate $253,000 of the CDBG funding to allow Bridge Housing
the opportunity to continue their efforts to prepare the required plans and complete any studies to
submit a development application for Planning Commission and City Council consideration at the
appropriate time.
Risk analysis: Providing predevelopment funding to Bridge Housing for the proposed project is fairly risky
for the City for several reasons. The first reason was discussed above; the project has no entitlements and
no allocation of additional dwelling units. There are no guarantees that the project will receive these
approvals. Second, the cost for construction drawings and other expenses could be incurred and funds
expended, but there remains no guarantee that the units can ultimately be built for a variety of reasons
including inadequate financing. It is very unlikely that any of the funds will be repaid if these "no
approval" or "no build" scenarios do occur. This risk has been discussed with HUD, and they have
indicated that the risk is acceptable to them and the CDBG funds would not need to be repaid by the City.
All residential developers assume this risk with predevelopment expenses.
Page 4
STAFF RECOMMENDATION;
Staff recommends that the City Council approve the attached resolution allowing for an amendment to
the 2013-2013-2014 CDBG Action Plan for the reallocation of 1) $58,500 to be used for the completion of
a lighting assessment study as requested by the Public Works Department; 2) $280,000 to Solutions for
Change for use on predevelopment expenses for their investment in the Encinas Creek Apartment Homes;
and, 3) $253,000 to Bridge Housing for predevelopment expenses on their proposed "Parcel 4" affordable
housing development.
FISCAL IMPACT:
The City of Carlsbad has CDBG funds available to allow for the recommended reallocation of funds as
described in the staff recommendation above. Use of these funds needs to be expedited to ensure that
the City can meet federal expenditure requirements in 2014. Noncompliance with those requirements
may result in the loss of future federal funds. The CDBG Program has no fiscal impact on the General
Fund; these grant funds are provided by the US Department of Housing and Urban Development.
ENVIRONMENTAL IMPACT:
Pursuant to Public Resources Code Section 21065, approval of the submittal of an amendment to the
2013-2014 Action Plan, does not constitute a "project" within the meaning of CEQA in that it has no
potential to cause either a direct physical change in the environment, or a reasonably foreseeable indirect
physical change in the environment, and therefore does not require environmental review.
EXHIBITS:
1. Resolution No. 2014-021 approving the submittal of an amendment to the 2013-
2014 Action Plan to the U.S. Department of Housing and Urban Development and authorizing the
execution of related documents
2. Request for funding from Public Works Department.
3. Request for funding from Solutions for Change.
4. Request for funding from Bridge Housing.
1 RESOLUTION NO. 2014-021
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2 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA, AUTHORIZING THE SUBMITTAL OF AN AMENDMENT
TO THE 2013-2014 ACTION PLAN FOR THE CITY'S COMMUNITY
4 DEVELOPMENT BLOCK GRANT PROGRAM TO THE U.S.
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT AND
5 AUTHORIZING THE EXECUTION OF RELATED DOCUMENTS.
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7 WHEREAS, the City must prepare an amendment to the 2013-2014 Action Plan to add
8 new projects to be undertaken that were not included as part ofthe original Action Plan; and
WHERAS, the City Council has taken all testimony into account.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad,
California, as follows that:
1. The above recitations are true and correct.
14 2. That the City Council approves the submittal of an amendment to the 2013-2014
Action Plan for the Community Development Block Grant Program to the U.S
Department of Housing and Urban development to allow for the expenditure of the
following funds: $137,500 for the City to complete a lighting assessment and
subsequent lighting improvements for the Barrio Area, and $454,000 to the
20 Solutions for Change effort to partner with the developers of the Encinas Creek
21 Apartments to provide housing for families graduating from the Solutions University,
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2^ predevelopment expenses (including fees) up to the maximum allocation of
27 $454,000.
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with the condition that for each unit restricted by the property owner for residency
by a Solutions graduate household for a minimum of 20 years, the City will release
$20,000 in Community Development Block Grant funds to reimburse developer for
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3. That the Interim City Manager is authorized to execute related documents for the
purposes stated above, subject to review as to form by the City Attorney, and the
Administrative Services Director is authorized to disburse said funds subject to the
noted funding agreements.
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PASSED, APPROVED AND ADOPTED at a Regular Meeting ofthe City Council ofthe City
of Carlsbad on the 28*^ day of January, 2014, by the following vote to wit:
AYES:
NOES:
Council Members Hall, Packard, Wood, Blackburn and Douglas.
None.
ABSENT: None.
ATTEST:
,,BAft3ARA ENGLESON^y Clerk
^ EXHIBIT 2
CITY OF
^ CARLSBAD
Memorandum
November 13, 2013
To: Frank Boensch, Senior Management Analyst
From: Bryan Jones, Deputy Transportation Director
Re; Request for CDBG funds for Lighting Assessment
The Public Works Department - Transportation Division respectfully requests funding from the
Community Development Block Grant (CDBG) program to do a lighting assessment ofthe barrio
generally bound by Carlsbad Village Drive to the north, 1-5 to the east. Tamarack Avenue to the
South, and railroad to the west. This is a Capital Improvement Program project identified in the
2013-2014 CIP Budget approved by city council and is a priority project for village revitalization.
The assessment will cost $58,500 and will identify solutions for dark areas to enhance safety
and visibility. The assessment should be complete no later than April 2014 if a contract can be
executed in December 2013. We will make conscious effort to expedite the assessment and
should have a draft for review by staff within 8-10 weeks of a notice to proceed. Kimley Horn
was chosen from on-call civil engineering list for consultants to perform this type of work.
Attachment
Scope of Work
Boundary Area
cc: Kathy Dodson, CED Director
Debbie Fountain, Housing &. Neighborhood Services Director
Skip Hammann, PW Director
Public Works Department
y^-df 1635 Faraday Ave. I Carlsbad, CA 92008 I 760-602-2730 I 760-602-8562 fax I www.carlsbadca.gov
1
So\uUor)6ior Change
December 20,2013
Frank Boensch
Sr. Management Analyst
City of Carlsbad
1200 Carlsbad Village Drive
Carlsbad, CA 92008
Subject: Request for CDBG Funds for Affordable Housing Development - Encinas Creek Apartment Homes
Dear Mr, Boensch:
Solutions for Change is requesting that the City of Carlsbad consider funding up to $550,000 for 20-30 units of
affordable housing within the Encinas Creek Apartment Home project being developed by Seaborne
Development Company in partnership with the Kelly family. Solutions for Change envisions the partnership with
Seaborne whereby the units would be set aside for graduate families ofthe Solutions for Change Solutions
University program. Solutions for Change currently enrolls between twelve and twenty-five families per year
who live and have resided In Carlsbad, some for their whole lives. These families have lost their jobs, some have
experienced serious health issues and all are either literally homeless with their kids or teetering on the verge of
homelessness.
Solutions for Change intervenes and engages the parent(s) and their children in a rebuilding process that equips
each family wilh the skills, knowledge and resources needed to not just get rehoused, but to most importantly
maintain their housing, thereby solving their homelessness permanently. The process is holistic and
comprehensive and is aimed at delivering permanent solutions to resolve root causative factors. The results are
transformative both In human terms and in economic terms. Families once stuck in a poverty cycle of temporary
services such as shelters, feeding programs and human service transactions are lifted out of poverty and
elevated into permanent housing, sustainable employment and permanent health solutions. They transition
from being heavy users of publically funded aid, many consuming as much as $60,000 per year in various cash
aid and services to being completely off welfare, food stamps; back in the workforce and stable.
This project would be part of a broader regional plan called The Imperative to Solve Family Homelessness in
North San Dlego. The project has received broad based community support, Including the commitments from all
five 78 corridor City Mayors and dozens more public and private sector civic and faith leaders and groups
including many Carlsbad stakeholders such as the TaylorMade Golf Company, Servant Leadership Institute and
many more.
I look forward to the opportunity to develop this project with and for the community of Carlsbad.
Presldent\i)d CEO
722 West Califomia Avenue • Vista, Califomia • 92083
Phone: 760.941.6545 • Fax; 760.941.1715 • www.solutlonsforchange.org
EXHIBIT 4
l\ I tm^\3l tmm BRIDGE KOUSINO
CORPORATION
SUflDiNG SUSTAINING LEADING
MANAGEMENrCOMPANY
SAY AR£A S£N!G
December 20, 2013
tiSIDGE f COKiOMIC
Ms. Debbie Fountain
Housing Director
Housing & Neighborhood Services
City of Carlsbad
1635 Faraday Avenue
Carlsbad, CA 92008
RE: Proposed Affordable Housing Project
"Parcel 4" Site - SE comer of College/Cannon
Dear Debbie,
As you are aware, BRIDGE Housing is pursuing the development of an affordable housing
community on the 11.5-acre "Parcel 4" site at the intersection of Cannon Road and College
Boulevard in Carlsbad. Our preliminary site plan for the project indicates that approximately
100 affordable housing units could be delivered on this site. We are working with Bentley ^
Wing Investments (BWI) and the Rancho Carlsbad Owner's Association (RCOA) to acquire
ownership of the site through an assignment of BWI's option with RCOA.
In March 2013 we submitted a conceptual site plan to the City for a Preliminary Review of
the project. The City issued a response in May 2013. We have reviewed the response and
believe the City's comments can be accommodated as the project design is further developed.
In order to move forward with the project, a complete zoning, general plan update and
environmental process will need to be completed including a minor subdivision map and a
Site Development Permit. Our intent is to tier off the City's currently planned EIR for this
area. Also, because the current zoning would yield only 14 residential units on the proposed
4.3 net acre site (according to the City's Planning Department), the City would have to make
an allocation of approximately 86 units fi-om the City's Excess Dwelling Unit Bank to allow
for the creation of these 100 affordable housing units.
7
December 20,2013
Ms. Debbie Fountain
Page 2 of 2
Our preliminary projections indicate the need for a $9.87M City loan ($98,700/unit) for
fmancial feasibility. Other financing will include 4% tax credit equity and tax exempt bond
funds. Please see the attached preliminary proforma summary.
In addition to a $200,000 payment to BWI to secure the purchase option as well as reimburse
BWI for previous entitlement costs, BRIDGE anticipates that approximately $350,000 in
predevelopment costs for planning, architectural, civil, and legal consultants will be required
to achieve the entitlements described above. We understand that the City has access to
CDBG and/or HOME funds that could be used to fund predevelopment costs. We
respectfully request that the City provide a predevelopment loan of up to $550,000 so we can
mitigate BRIDGE'S capital outlay during the entitlement phase of this project.
We would like to confirm the City's preference regarding structuring of the land ownership,
i.e. City ownership with lease to BRIDGE vs. BRIDGE ownership.
We are very excited to be working again with the City on another affordable housing
community in Carlsbad. BRIDGE'S Villa Loma and Poinsettia Station projects are success
stories for BRIDGE, the City, and the families that call those communities home. We look
forward to furthering the partnership between BRIDGE and the City on this newly proposed
project.
Once you have had a chance to review the attached project summary, proforma, and
predevelopment budget, please feel firee to contact me or Brad Wiblin to discuss.
Sincerely,
JeffWilliams
Project Manager
BRIDGE Housing Corporation
Parcel 4 - Carlsbad
College Blvd./Cannon Road
December 20,2013
Proiect Summarv
BRIDGE is working with Bentley Wing Investments (BWI), to assume their interest in a Purchase and Sale
Agreement with the owners of 11.6 acres of vacant, un-entitled land, known as Parcel 4. Parcel 4 is owned
by the Rancho Carlsbad Owners Association (RCOA). RCOA is a large, upscale manufactured home
community including 503 homes on 116 acres. RCOA currently uses a portion of Parcel 4 for RV storage
and garden plots. Following entitlements, the RV storage and garden plots would be replaced on a site
already approved as part of a recently entitled CCRC (Dos Colinas), across College Blvd from Parcel 4. The
Replacement Site is a condition of approval of Dos Colinas and part of the Zone 15 infrastructure
requirements that also include construction of College Blvd., and Encinas Creek drainage improvements. In
addition to Dos Colinas, there is an adjacent single family subdivision called Canterini Ranch and 17.5 acre
mixed use property that are all part of Zone 15 and will share proportionally in the infrastructure costs
thereof See the attached map for locations of these properties.
KTGY Group has prepared a conceptual site plan showing a 3-story tuck-under building type parked at 2
spaces per unit, this plan yields approximately 100 units. This conceptual design was the basis for the
preliminary planning review package that was submitted to the City in the March 2013. The City responded
with review comments in May 2013. We believe the City's comments can be accommodated as the project
design is further developed.
The proposed financing for the project is expected to include 4% tax credits, tax exempt bonds and City of
Carlsbad funds. The attached Proforma indicates a City loan of approximately $9.0 million. Additional
sources of funds could include in-lieu payments by Dos Colinas, Canterini Ranch and the 17.5 acre Wal-
Mart site.
Initial Purchase Offer and Strategy
BRIDGE is negotiating an Option Agreement and Assignment and Assumption Agreement with BWI to
modify the existing deal BWI has with RCOA. Significant deal points include:
Price: As appraised, subject to approval of RCOA and BWI (estimated at $50,000
per unit or $5,000,000), reduced by BRIDGE'S out-of-pocket expenses to
gain enfitlement approvals.
Deposit: $200,000 passed through to the seller at the end of an 80-day feasibility
period, or 30 days after signed Assignment Agreement, an additional
$ 100,000 is due BWI following City approvals.
Entitlements: Parcel Map, SDP, GPA, Zoning, HMP, EIR or Neg Dec, Housing Bank
credits, esfimated at 18-20 months. City is in process of performing a GP
update and Zoning with EIR that we hope to tier off of.
Close of Escrow: 30 days following completion of College Blvd. and / or delivery and
completion of improvements on the Replacement site (estimated at 18-24
months).
Kev issues for Considerafion
• This is a complex project that has interlocking issues with adjacent developments. The timing of
regional infrastructure improvements that are the responsibility of others is the real trigger for a land
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closing. The timing to finance and complete those improvements should allow BRIDGE to
complete the entitlements for the Parcel 4 property.
Parcel 4 is not currently zoned for housing - a complete zoning, general plan update and
environmental process will need to be completed. The City of Carlsbad is in the process of updating
their General Plan through the "Envision Carlsbad" process. This parcel is recommended for R-30
land use designation (23-25 du/ac), and would also change the zoning to RD-M, allowing our
proposed use. It is our understanding that the City is scheduled to complete the review and approval
ofthe "Envision Carlsbad" update in IQ 2014.
In addition to an EIR, the project will require that the City of Carlsbad allocate approximately 85
housing units from its "Housing Bank" to this project. This process is allowed under the City's
master infrastructure plan.
Structure: It is our understanding that the City prefers to own land in these types of transactions
and lease it to the developer. It is our intent that when entitlements are secured, the City would
acquire the land.
Site Description
The Site
The site is direcfiy across the street from a brand new high school whose inaugural class will be attending in
the fall of 2013. The site is bordered on the North and East by vacant land, some of which is set aside for
habitat and some that is entitled for single family homes (Canterini Ranch). The 4.6 acre site is defined on
the South by a small drainage known as Encinas Creek; further South is the site of Dos Colinas CCRC and
the existing RCOA manufactured housing community.
Proiect Description
The overall property is 11.6 acres, following the lot split BRIDGE would own (or lease) 4.6 acres, the 7 acre
balance would be owned and managed by the Zone 15 infrastructure district. The property is heavily
disturbed with garden plots used by RCOA residents and an asphalt parking lot for their RV's.
We will continue to work with our selected consultants, KTGY and Hunsaker (civil) to refine the conceptual
architectural site plan, preliminary grading plan, and a lot split exhibit to respond to the comments from the
Preliminary Application process. We will obtain hard cost pricing from local general contractors to confirm
our Proforma assumptions.
Unit Mix and Rental Structure
The current plan includes the following mix:
Unit Type Total 50% AMI 60% AMI MGR
IBR 24 5 20
2BR 67 14 52
3BR 9 2 5 2
Totals 100 21 77 2
We are currently underwriting the project as a 4% tax credit deal with 20% at 50% AMI and 80% at 60%
AMI. We have assumed two 3 bedroom manager units.
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Predevelopment Funding
BRIDGE requests that the City provide predevelopment funding for BRIDGE'S anticipated out of pocket
predevelopment costs, including: (1) a $200,000 payment to BWI to secure the purchase opfion as well as
reimburse BWI for previous entitlement costs, and (2) BRIDGE'S expected entitlement costs, currently
estimated at $350,000. These entitlement costs include funding for necessary pre-development activities,
including preliminary architectural and engineering plans, City submittals, financing applications. A
predevelopment budget is attached.
Overall Proiect Feasibility
A preliminary pro forma is attached indicating the relevant details of the proposed project.
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PREDEVELOPMENT BUDGET: Parcel 4 - College/Cannon - Carlsbad, CA
December 20, 2013
Project Name:
Location:
Carlsbad Parcel 4
Carlsbad, CA
Total Number of Units: 100
Number Affordable Units: 98
USES OF PREDEVELOPMENT FUNDS
Option payment and reimbursement of entitlement costs to BWI $ 200,000
Architecture (prelim, site planning, building design) $ 50,000
Civil Engineer $ 40,000
Geotechnical and Enviromental Engineer $ 15,000
Planning Consultant $ 50,000
Market Study/Appraisal $ 10,000
Special studies - traffic, env, etc. $ 60,000
Legal $ 25,000
Predevelopment Loan Interest $ 10,000
Taxes, Insurance $ 5,000
Syndication Consultant $ 5,000
Fees & Permits $ 50,000
Contingency $ 30,000
Total Uses $ 550,000
SOURCES OF FUNDS
City of Carlsbad Predev. Loan - CDBG/HOME Funds $ 550,000
Total Sources $ 550,000
Summary Printai: 11/70013
Parcel 4 - College/Cannon site - Carlsbad, CA - 4% CREDITS
Assumptions Cradits: 4%
County;
Site Area (Acres)
Nuniber of Units 100
Number of Paridng Spaces 200 2.00 spaces per unit
A. DEVELOPMEMT BUDGET SUMMARY
SanOi«go
4.30 187,308 s.f. Density (Units per Acre):
Construction Type:
23.3 DUAC
3 stories wood frame
Total per P«r per
Description Amount RasM. Unit Resld. NSF ResidGSF
Acquisition & Related 4,500,000 $ 45,000 $ 56 $ 50
Land related CosK $ 15,000 $ ISO $ 0 $ 0
subtotal * 4,515,000 $ 45,150 $ 56 $ 51
Construction Site Work + Hard Costs $ 12,525,234 t 125,252 t 156 $ 140
General Conditions $ 1,002,019 % 10,020 i 12 $ 11
Contractor Fee $ 782,827 i 7,828 t 10 $ 9
Furnishings and Equipment $ 75,000 i 750 i 1 $ 1
Hard Cost Contingency $ 1,001,706 10,017 * 12 $ 11
subtotal * 15,386,785 $ 153,868 $ 192 $ 172
Architecture/Engineering i 1,413,000 % 14,130 $ 18 $ 16
Permits and Fees i 2,155,053 i 21,551 $ 27 $ 24
Constmction Loan Interest/Fees t 1,076,291 t 10,763 * 13 $ 12
Permanent Loan Fees/Costs t 85,000 t 850 i 1 i 1
Legal i 95,000 $ 950 $ 1 $ 1
Appraisal/Market Study i 30,000 $ 300 $ 0 i 0
Marl(eting/Lease-up $ 180,000 $ 1,800 $ 2 $ 2
TIUe/Audit/Cost Certification i 78,000 i 780 $ 1 $ 1
Insurance $ 126,231 % 1,262 $ 2 $ 1
Property Taxes $ 59,063 i 591 i 1 $ 1
Soft Cost Conttngency and Reserves $ 737,401 $ 7,374 i 9 * 8
subtotal $ 6,035,038 $ 60,350 $ 75 $ 68
Syndication Costs and Developer Fee $ 2,629,500 % 26,295 $ 33 $ 29
TOTAL DEVELOPMENT COSTS $ 28,566,323 $ 285,663 $ 356 $ 320
$2a.566.323 (ched()
B. SOURCES AND USES
Sources of Funds
271% TBD (Const)
TBD (Perm)
Qty of Carlsbad
o.« 0
Agency Const Interest
32% Defefied Developer Fee
34.9% Investor Equity (10% at constnxflon)
00% GP Equity (0.01% of LP pay-in)
TOTAL SOURCES
9S,672 t
0 S
Construction
Period
( 20,113,221 $ - $
4,500,000 $ %
91,875
Permanent
Period
7,750,000
9,867,166
900,000
9,956,286
Acquisition / Demolition 45,150 % 4,515,000 $ Construction $ 15,386,785 $ A/E, Permits t 3,568,053 $ Indirect Expenses $ 509,231 $ Rnancing and Cany Costs t 1,161,291 $ Other $ 260,365 $ Developer Fee $ 300,000 $
TOTAL USES » 25,700,724 $
NET SURPLUS(SHORTTAa) i 0 $
11/7/201337:20 ========
S 25,700,725 $ 28,566,323
4,515,000
15,386,785
3,568,053
509,231
1,161,291
796,464
2,629,500
FIfUNCING ASSUMPnONS
0 CONSTRUCTION LOAN
Lender:
Loan Amount:
Loan Term:
Loan/Bond To Value:
1 PERMANENT DEBT SOURCE 1
Lender:
Loan Amount:
Loan Term:
Note Rate:
Payment (annual):
DCR:
Loan/Bond To Value:
2 PERMANENT DEBT SOURCE 2
Lender:
Loan Amount:
Loan Term:
Note Rate:
Payment (annual):
DCR:
3 PERMANENT DEBT SOURCE 3
Leivler:
Loan Amount:
Loan Term:
Note Rate:
Payment (annual):
OCR:
4 PERMANENT DEBT SOURCE 4
Lender:
Loan Amount:
Loan Term:
Note Rate:
Payment (annual):
DCR:
5 PERMANENT DEBT SOURCE 5
Lender:
Loan Amount:
Loan Term;
Note Rate:
Payment (annual):
DCR:
6 Investor Equity - Federal Credit
Net Rate
Net PayHn !
Initial Paynn
Credit Rate (Jan 2013)
Investor Equity - State Credit
Net Rate
Net Paynn !
Gross Bulding Area
Net Rentable Bldg. Area
Foplprint
D. FIVE YEAR CASH FLOW
89,341
22,335
TBD (Const)
$ 20,113,221
3.00<M>
78.26%
TBD (Perm)
$7,750,000
30
5.25<M>
(SS13,549)
1.15
aty of Carisbad
$9,867,166
55
3.00<V«>
(5296,015)
1.15
0.00%
$0
0.00
Affordable Rents
Misc Income (Laundry)
Gross Potential Income
less Vacancy A^olection Loss
Effective Gross Income
less Operating Expenses
less Replacement Reserves
0
less Interoxinect Fees
Net Operating Inoome
Total HanJ Debt Payments
DISTRIBUTABLE CASH FLOW
less PM, AM Fees 8i Add! Rep Reserve
Net Cash Flow
BRIDGE - Deferred Developer Fee Payment
Cash Flow Distribution
Oty of Carlsbad
No Cash Flow to Third Mortgage
Incentive Management Fee to GP
Net Cash Flow
1. TBD (Perm) Debt Coverage Ratio
Debt Coverage Ratio
5500%
0.00<Mi E. ANNUAL OPERATING EXPENSES (/UNIT)
$0
0.00
F. UNIT MIX AND RENTS
30<M>
35%
40<H>
45<M>
50<M>
60<Vfa
$1.08
9,956,286
995,629
3.25%
$0,000
2015 2016 2017 2018 2019 2020
2.50% $1,201,818 $1,231,864 $1,262,660 $1,294,227 $1,326,582 $1,359,747
2.50% $9,600 $9,840 $10,086 $10,338 $10,597 $10,862
$1,211,418 $1,241,704 $1,272,746 $1,304,565 $1,337,179 $1,370,609
($60,091) ($61,593) (S63.1331 (S54,7H) ($66,329) ($67,987)
$1,151,327 $1,180,111 $1,209,613 $1,239,854 $1,270,850 $1,302,621
3.50% ($523,648) ($541,976) ($560,945! {$580,578) ($600,898) ($621,930)
0.00% ($35,000) ($35,000) !$35,000; ($35,000) {$35,000) ($35,000)
$0 ($35,000) (S3S,000) iS3S,000! ($35,000) ($35,000)
$0 $0 $0 $0 $0 $0
$592,679 $603,135 $613,668 $624,276 $634,952 $645,692
($513,549) ($513,549) ($S13,M9) ($S1J,S49) ($513,549) ($513,549)
$79,130 $89,585 $100,119 $110,726 $121,402 $132,142
($28,000) ($28,700) ($29,418) ($30,153) ($30,907) ($31,679)
$51,130 $60,885 $70,702 $80,573 $90,496 $100,463
$51,130 $60,885 $70,702 $80,573 $90,496 $100,463
50.0% $0 $0 $0 $0 $0 $0
0.0% $0 $0 $0 $0 $0 $0
0.0% $0 $0 $0 $0 $0 $0
50.0% $0 $0 $0 $0 $0 $0
100.0% = ======== ========= ========= ========= ========= $51,130 $60,885 $70,702 $80,573 $90,496 $100,463
I.IS 1.17 1.19 1.22 1.24 1.26
1.15 1.17 1.19 1.22 1.24 1.26
$5,036 per unit per year
$503,648 per year
0 01 bed manager
0 0 0 0
0 0 0 0
0 0 0 0
0 0 0 0
4 IS 2 21
20 52 5 Z2
24 67 9 100
24% 67% 9%
Cotege Cannon 4% 11 07 13 jw.bw
CITY OF CARLSBAD
PUBLIC HEARING AND NOTICE OF PUBLIC REVIEW PERIOD FOR
AMENDMENT TO 2013-2014 COMMUNITY DEVELOPMENT
BLOCK GRANT PROGRAM ACTION PLAN
THE PUBLIC IS HEREBY NOTIFIED THAT the City of Carlsbad has prepared an amendment
to its 2013-2014 Community Development Block Grant (CDBG) Action Plan to allow for the
expenditure of available funds as required by the U. S. Department of Housing and Urban
Development (HUD). The Carlsbad City Council will be holding a public hearing to obtain
comments on the proposed amendment on Tuesday, January 28, 2014.
The City of Carlsbad is eligible to receive funding through the federal CDBG Program to finance
projects which serve the needs of lower income persons. The funds are to be used to develop
viable urban communities through the provision of decent housing and a suitable living
environment and by expanding economic opportunities for lower income persons. The total
amount of CDBG program funds available for reallocation by the City is up to $591,577.
As identified in the Annual Plan, the general policy of the City of Carlsbad is to assist very low
and low-income groups as a first priority through the use of available Federal, State, and local
resources. In addition to affordable housing strategies, the City has established other local
objectives within the Annual Plan, as the strategies the City will pursue in the upcoming year to
meet the community development needs of low and moderate income Carlsbad residents.
The City is committed to contributing at least 70% of the total CDBG funds received from HUD
each year to assist low/moderate income persons throughout Carlsbad. It is also the intent of
the City that no CDBG assisted project will result in the displacement of low/moderate income
persons from their homes. However, if low/moderate income persons are displaced as a result
of a CDBG funded project, the City will provide relocation assistance as required by Section
570.606(b)(2) of the federal regulations for the CDBG Program.
Residents of Carlsbad are hereby notified that the City of Carlsbad's draft amendment to its
2013-2014 Annual Plan will be available for public review and comment from January 30, 2014
to March 3, 2014. Copies of the document will be available for review at the Carlsbad City
Libraries (1250 Carlsbad Village Drive and 1775 Dove Lane), and the Housing and
Neighborhood Services Department (1200 Carlsbad Village Drive).
Written or verbal comments will be accepted until 5:00 pm on March 3, 2014 at the Housing
and Neighborhood Services Department. Comments must be submitted to the attention of
CDBG Coordinator, City of Carlsbad, Housing and Neighborhood Services Department, 1200
Carlsbad Village Drive, Carlsbad, CA 92008. Questions or Comments Call (760) 434-2818.
CITY OF CARLSBAD
CITY COUNCIL
PUBLISH: January 24, 2014
PROOF OF PUBLICATION
(2010 & 2011 C.C.P.) Tiiis space is for the County Clerk's Filing Stamp
STATE OF CALIFORNIA
County of San Diego
I am a citizen of the United States and a resident
of the County aforesaid: I am over the age of
eighteen years and not a party to or interested in
the above-entitled matter. I am the principal clerk
of the printer of
UT - North County
Formerly known as the North County Times and
which newspaper has been adjudicated as a
newspaper of general circulation by the Superior
Court of the County of San Diego, State of
California, for the City of Oceanside and the City of
Escondido, Court Decree numbers 171349 &
172171, for the County of San Diego, that the
notice of which the annexed is a printed copy (set
in type not smaller than nonpariel), has been
published in each regular and entire issue of said
newspaper and not in any supplement thereof on
the following dates, to-wit:
January 24*^ 2014
I certify (or declare) under penalty of perjury that
the foregoing is true and correct.
Dated at Oceanside, California
On This ifV^y January 2014
Proof of Publication of
CITY OF CARLSBAD
PUBLIC HEARING ANDNOTICEOF PUBLIC REVIEW PERIOD FOR AMENDMENT
TO 2013-2014 COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM ACTION PLAN
THE PUBLIC IS HEREBY NOTIFIED THAT the City of Carlsbad has prepared on amendment to its 2013-2014 Communi-
ty Development Block Grant (CDBG) Action Plan to allow for the expenditure of available funds as required by the U. S. De-
partment of Housing and Urban Development (HUD). The Cansbad City Council will be holding a public hearing to obtain
comments on the proposed amendment on Tuesday, January 28, 2014.
The City of Carlsbad is eligible to receive funding through the
federal CDBG Program to finance proiects which serve the needs of lower income persons. The funds are to be used to de-veSop viable urban communities through the provision of decent housing and a suitable living environment and by expanding economic opportunities for lower income persons. The total
amount of CDBG program funds available for reallocation by the City is up to $591.,577.
As identified in the .Annual Plan, the general policy of the City of
Carlsbad is to assist very low and low-income groups as a first priority through the use of available Federal, State, and local
resources. In addition to affordable housing strategies, the City has established other local obiectives within the Annual Plan, as
the strategies the City will pursue in the upcoming year to meet the community development needs of low and moderate income
Carlsbad residents.
The City is committed to contributing at least 70% of the total CDBG funds received from HUD each year to assist low/moderate income persons throughout Carlsbad. It is also
fhe intent of the City that no CDBG assisted project will result in ihe displacement of low/moderate income persons from their
homes. However, if low/moderate income persons are displaced as a result of a CDBG funded project, the City will provide relo-
v::ation cGoistance as required by Section 570.606(b)(2) of the fed-era! regulations for the CDBG Program.
Residents of Carlsbad are hereby notified that the City of Carlsbad's draft amendment to its 2013-2014 Annual Plan will be available for public review and comment from January 30, 2014
to March 3, 2014. Copies of the document will be available for review at the Carlsbad City Libraries (1250 Carlsbad Village Drive and 1775 Dove Lane), and the Housing and Neighborhood
Services Department (1200 Carlsbad Village Drive).
Written or verbal comments will be accepted until 5:00 pm on
March 3, 2014 at the Housing and Neighborhood Services De-partment. Comments must be submitted to the attention of
CDBG Coordinator, City of Carlsbad, Housing and Neighbor-hood Services Department, 1200 Carlsbad Village Drive,
Carlsbad, CA 92008. Questions or Comments Call (760) 434-2818.
CITY OF CARLSBAD CITY COUNCIL
PUBLISH: January 24, 2014
Jane Allshouse
NORTH COUNTY TIMES
Legal Advertising
Morgen Fry
Subject:
Attachments:
FW: Alternative Council Actions - AB #21,496
emai dept logo.png; emai dept logo.png
CITYCOUNCJL .
ACM V!.CA_^CC_JZ-/
Date ^/ay City Manager ^tf: From: Debbie Fountain <Debbie.Fountain@carlsbadca.gov>
Date: January 28, 2014 at 10:39:38 AM PST
To: Kevin Crawford <Kevin.Crawford(g)carlsbadca.gov>. Kathy Dodson <Kathv.Dodson@carlsbadca.gov>. Celia Brewer
<Celia.Brewer(5)carlsbadca.gov>
Cc: Frank Boensch <Frank.Boensch(5)carlsbadca.gov>, Glen Van Peski <Glen.VanPeski@carlsbadca.gov>
Subject: Alternative Council Actions - AB #21,496
AB# 21,496 - Amendment to the 2013-14 Community Development Grant Program
After the public liearing and consideration of all related public comments tonight on the above item, the
City Council will be asked to make a decision on how to reallocate surplus CDBG funds and unallocated
funds from this year's program to ensure that the City meets expenditure timeliness requirements set
forth by HUD. A total of $454,077 was previously set-aside for one or more low income affordable
housing project within the City, and now needs to be allocated to one or more projects. A total of
$137,500 is available as remaining balances from prior years projects and may be expended on any
eligible capital project to benefit low income households.
Staff has provided a recommendation to allocate funding to the City Lighting Assessment for the Barrio
($58,500), Solutions for Change/Encinas Creek Apartments Development ($280,000) and proposed new
Bridge Housing development in Carlsbad ($253,000).
An alternative staff recommendation is offered below ifthe Council decides after consideration ofthe
public testimony it would like to allocate funding to only one affordable housing development at this
time to ensure maximum benefit to low income households:
• Allocate $454,000 to the Solutions for Change effort to partner with the developers of the
approved Encinas Creek Apartments in Carlsbad to provide long term housing for homeless
families graduating from the Solutions Academy.
• Allocate $137,500 to the lighting assessment and subsequent security lighting improvements for
the Barrio Area (based on the assessment results).
If there are any questions regarding the staff recommendations, please contact Frank Boensch or
myself.
Thank you,
Debbie
Date: l/AS-/(tf-
Distribiftion:'
City Clerk
Asst. City Clerk
Deputy Clerk
Book
Amendment to 2013-2014
Community Development Block
Grant Annual Action Plan
Annual Action Plan Amendment
•U.S. Department of Housing and Urban
Development (HUD) requires Annual Plan to
receive federal Community Development
Block Grant (CDBG) funds.
•Annual Plan provides details on how funds will
be used.
Annual Action Plan Amendment
•Public hearing for amending the Plan is
required for any substantial change.
•Amendment is needed to allocate funds to
meet HUD expenditure regulations.
Annual Action Plan Amendment
•City Lighting Assessment Study
•Solutions for Change Partnership with
Affordable Housing Development
•Bridge Housing Affordable Housing
Development
City Lighting Assessment Study
•Enhancement Action Plan for Barrio Area
completed in 2013 identified desire for
lighting improvements.
•Public Works request for $58,500 for
consultant study of additional public
lighting needs for safety purposes.
Solutions for Change Partnership
•Request for $550,000 to enter into
partnership agreement with developer of
affordable housing.
•Units in approved Encinas Creek Apartments
would be reserved for graduates of Solutions
University program.
Bridge Housing
•Request for $550,000 to assist with
affordable housing predevelopment costs.
•Proposed development needs to obtain
entitlement approvals and allocation of
excess dwelling units.
Recommended Action
Approve Resolution 2014-021 allocating:
$58,500 for a City Lighting Assessment,
$280,000 to Solutions for Change to enter into a partnership for affordable housing, and
$253,000 to Bridge Housing for affordable housing predevelopment costs.
Amendment to 2013-2014
Community Development Block
Grant Annual Action Plan