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HomeMy WebLinkAbout1983-05-10; City Council; Resolution 72171 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 2E RESOLUTION NO. 7217 A RE OLUTION OF THE CITY COUNCIL OF TH CITY OF CARLSBAD, CALIFORNIA, ACCEPTING THE PROPOSAL OF EMPIRE ECONOMICS TO PERFORM AN ECONOMIC FEASIBILITY STUDY FOR THE MORTGAGE REVENUE BOND PROGRAM. WHEREAS, proposals have been received by the City of Carlsbad for a Market Feasibility Study for the Mortgage Revenue Bond Program; and WHEREAS, the firm of Empire Economics has submitted a proposal of $8,500 for this purpose; and WHEREAS, the City's Bond Underwriter, and Director of Building and Plannin! are satisfied that Empire Economics can produce the desired study; and WHEREAS, the City has $55,000 in good faith deposit from developers that can be used for this purpose. NOW,JHEQEFOEE, 13E IT RESOLVED, by the City Council of the City of Carlsbad California, as follows: 1. The above recitations are true and correct. 2. The proposal by Empire Economics for an Economic Feasibility Study (attached hereto and made a part hereof) is hereby accepted and the Mayor is authorized to execute a letter stating such acceptance. PASSED, APPROVED AND ADOPTED by the City Council of the City of Carlsbad, at a regular meeting held on this 10th day of May, 1983, by the following vote, to wit: AYES: Council BWrkxrs Casler, Lewis, Kulchin, and Presmtt NOES: "-e ABSENT: Council Member Chick ATTEST: ELL MARY H. ,jlASLER, rlayor April 1, 1983 Mr. Marty Orenyak . City of Carlsbad 1200 Elm Avenue Carlsbad, CA 92008 . Re: Market Demand, Income, and Average Area Purchase Price Studies for the City of Carlsbad's Mortgage Revenue Bond Issue Dear Mr. Orenyak: This letter will serve as a proposal, and upon execution, an Agreement regarding the E-larket Demand, Income, and Average Area Purchase Price Studies for the City of Carlsbad's Mortgage Revenue Bond Issue. Accordingly, this Agreement will provide you with a description of the research that shall be conducted, aiong with the performance schedule and financial considerations for the studies. Background Empire Economics is a firm specializing in market demand studies for residential, commercial and industrial projects located throughout southern California. Recently, we conducted market demand studies for mortgage revenue bond issues for San Bernardino County, Riverside County, Palm Springs, Oceanside, Montclair, Rancho Cucamonga, Ontario and Azusa, as well as market demand studies for improvement bonds for Ontario and Corona. Additionally, we have published articles on housing in various professional journals and also have articles in the Los Angeles Times Real Estate Section, from time to time. Description I of Economic _I Research Market Demand Study The primary objective of the Market Demand Study is to determine the market absorption of the project(s) in the Carlsbad Mortgage Revenue Bond Issue .I This will be accomplished through a professional and comprehensive analysis of all of the relevant factcrs, including: -- -- - '< . , Mr. Marty Orenyak April 1, 1983 Page Two * 1E 3E * The growth prospects for Carlsbad's primary economic bases, local industry and commuters from San Diego, are assessed, to forecast its expected population and employment growth over the 1983-90 period. The expected Carlsbad is then used to determi ng demand over the 1983-85 pe he composition of this demand by product typ the distribution of income for h Next, the f using demand is adjusted to reflect the ate criteria that the purchasers The supply then analyzed, according to housing units completed and under construction, as well as projects that may come on the market in the near future. Wh f the active eir location, tor determining their absorption is the financing that they offer, so this is analyzed comprehensively. ditionally, the projects in the mortgag rograms of other cities in the mark analyzed, i.e., Oceanside. The competitiveness ct(s> in the Carlsbad Mortgage Revenue Bond Issue will be assessed, in terms of its location, product type, price, features, and amenities, and, of course, the special financing that it will be able to offer through the mortgage revenue bond program. Finally, based- upon a careful consideration of all of the housing demand and supply conditions during the 1983-85 period, along with the special criteria that the purchasers must fulfill, the absorption schedule for the projects in the Carlsbad Mortgage Revenue Bond Program is determined. Therefore, the Market Demand Study will perform a comprehensive analysis of all of the.relevant economic and housing market conditions that will affect the success of the Carlsbad Mortgage Revenue Bond Issue. Additionally, the key conclusions of the market demand study will be summarized in an Executive Summary. Mr. Marty Orenyak April 1, 1983 Page Three Income Study The. Income Study will perform an analysis of the three alternative measures of income to determine which of these is the highest: the statewide media ncome; the county-wide median household income; or t ily income for the Sari Diego's SMSA. Then, the relevant income statistics will be up- dated to 1983 and also f Average Area Purchase Pr According to the Safe H Price Limits, the maximum price for housing units in Carlsbad's Mortgage Revenue Bond Program would be approximtely $115,000. However, based upon a recent Average Area Purchase Price Study by Empire Economics, the San Diego's SMSA's average purchase price was approximately $130,000. The computations by Empire Economics were based upon a comprehensive sample of some 6,000 sales in the SMSA, as compared to the Safe H -- The President of Empire Economics, holds a Ph.D. in economics with specializations in regional economics and forecasting, and is also an economics pro essor at California State College, San Bernardino. Alth is backed by a highly trained staff that provides suppor ms of compiling data and clerical assistance, every study is actually researched and written by Dr. Janczyk. Due to this unique situation, ydur project is provided with he highest "le of professional research possible. The research for the Mark-et Demand Study is expected to commence on or about April 15, 1983 and be completed no later than four weeks thereafter. Progress reports will be provided upon request, if so desired. This time schedule takes into consideration the other mortgage revenue bond programs that we are presently involved in. Consequently, we will be able to devote our full attention and efforts to Carlsbad's mortgage revenue bond program. Mr. Marty Orenyak April 1, 1983 Page Four 0 Fin an c i a 1 Cons i (1 e rations -- The-fees for the Market Demand, Income, and Average Area Purchase Price Studies, along with the payment schedule, are as follows: Final Study Payment Market Demand $4,000 Income 500 Average Area 1,000 Purchase Pric The retainer ement of the days of the We would certainly welcorne the sting you with your Mortgage Revenue Bond Issue. JT J : re APPROVED : APPROVED : -- Marty Orenyak Date Date