HomeMy WebLinkAbout1994-03-22; Housing & Redevelopment Commission; 247; Villas at El Camino Real Affordable Housing Proj.;) /’ &‘> i” (/ g&‘-~‘./
HOUSING AND- EDEVELOPMENT COMMISk-)N - AGENDA BILL 0 a
AB#di?%&- TITLE: DEPT. HD.&
MT& 3-22-94 RESTRUCTURING OF REDEVELOPMENT AGENCY CITY Ad@?-
DEPT. RED FINANCIAL ASSISTANCE FOR THE VILLAS AT
EL CAMINO REAL AFFORDABLE HOUSING PROJECT CITY MG-
RECOMMENDED ACTION:
ADOPT Housing and Redevelopment Commission Resolution No. 2 qg amending
Housing and Redevelopment Commission Resolution No. 237 dated October 26, 1993, to
restructure the Carlsbad Redevelopment Agency’s financial assistance to the Villas at El Camino
Real Affordable Housing Project.
ITEM EXPLANATION:
On October 26, 1993, the Housing and Redevelopment Commission approved a program of
financial assistance supporting the Villas at El Camino Real Affordable Housing Project (“The
Villas”). The Villas will provide 344 housing units affordable to low and very low income
households on 21-acres presently owned by the City located on El Camino Real south of Camino
Vida Robles. The project assistance originally included fee exemptions and deferrals from the
City of Carlsbad. and direct cash assistance using Federal Community Development Block Grant
(CDBG) for property acquisition, and Redevelopment Low-Moderate Income Housing Set-Aside
Funds for other development costs.
Since Housing and Redevelopment Commission action on the Villas, the project has proceeded
toward obtaining its other financing commitments and approvals, including bank construction and
permanent financing, an allocation of Low-Income Housing Tax Credits and funding from the
Federal Home Loan Bank Affordable Housing Program. A review of the uses and sources of
funds related to development costs for the project was also completed by the developer(s). Final
financial projections indicate that the project no longer requires city financial assistance in the
form of certain fee exemptions and long term fee deferrals. Although a short term deferral of all
city-controlled fees is still necessary, the project will be able to pay all city fees at Certificate of
Occupancy.
At this time, a few changes to the Agency’s financial assistance program are being recommended
by staff based on the anticipated requirements of other financing sources, particularly the
construction lender and Tax Credit investor. These recommended changes are as follows:
1. Provide approximately the cash equivalent of previously approved City assistance in
exempted/deferred fees ($2.4 million) in the form of a loan from the Village
Redevelopment Agency. The loan will be funded by Redevelopment Low-Moderate
Income Housing Set-Aside Funds and Redevelopment Tax Increment funds. The
Agency’s loan will allow the project to pay the city fees from bank construction
financing. Repayment (with interest) of the loan would occur during the project’s
operational phase from surplus cash and sale of affordable housing credits. Exhibit 2
illustrates, in a flow chart, the sources, timing and use of Agency funds as a loan to the
project.
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AB# c&(7 -.
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2. Permit the use of up to $500,000 of project cash flow and/or proceeds from sale of
Affordable Housing Credits for reserves or guarantees as required by other financing
sources.
The above changes do not result in an increase in the Agency’s actual permanent dollar
commitment to the project (which will be $500,000). However, the restructuring does commit
additional Agency assistance of $ 2.4 million in the form of construction period bridge
financing. The proposed changes will assist the project in several ways:
1. They allow bank construction loan savings by reducing the bank construction loan amount
and the time the loan is outstanding;
2. They allow Tax Credit equity to be increased by including the expenditures for City fees
as a project cost;
3. The use of project cash flow or the proceeds from selling Affordable Housing Credits
provides for reserves or guarantees to cover the contingency of greater than expected
initial operating deficits. Although the budgeted project operating reserve of $ 500,000 is
believed to be sufficient for the operating deficit contingency, a larger rental project must
be prepared to address the problem which may arise if the market is unable to quickly
absorb all of the units, notwithstanding deeply subsidized rents. The Tax Credit investor
may require up to $1 million in additional project reserves/guarantees to insure that a
longer than expected lease-up period can be accommodated. The reserve/guarantee would
diminish over time as the project reaches and maintains a stabilized occupancy.
FISCAL IMPACT
The actions recommended by staff do not result in an increase in permanent funding for the
project above that which was previously approved by the City Council and the Housing and Redevelopment Commission. The actions do recommend use of $ 2.4 million as a construction
period loan to the project and potentially a reserve/guarantee of up to $500,000 using project-
generated income.
The proposed restructuring of the Agency’s financial assistance will significantly aid the Villas
chances for success, including obtaining other financing commitments and approvals and is,
therefore, recommended by staff.
EXHIBITS
l- Resolution No. &‘& approving an amendment to Housing and Redevelopment
Commission Resolution No. 237, dated October 26, 1993, to allow for a restructuring of
the Agency’s financial assistance to the Villas at El Camino Real Affordable Housing
Project.
AB# A97 PAGE 3
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2- Flow Chart representing the sources, timing and use of Agency/City funds for a
construction period loan for the Villas project.
3- Staff report regarding the facts on record which support the use of Low/Moderate Income
Housing Funds outside the Village Redevelopment Area.
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HOUSING & REDEVELOPMENT COMMISSION RESOLUTION NO. 245
A RESOLUTION OF THE HOUSING AND REDEVELOPMENT
COMMISSION OF THE CITY OF CARLSBAD, CALIFORNIA
APPROVING A RESTRUCTURING OF FINANCIAL
ASSISTANCE FOR THE VILLAS AT EL CAMINO REAL
AFFORDABLE HOUSING PROJECT WHICH RESULTS IN THE
APPROPRIATION OF A TOTAL OF $2,900,000 FROM THE
REDEVELOPMENT LOW AND MODERATE INCOME
HOUSING SET-ASIDE AND TAX INCREMENT FUNDS FOR A
BRIDGE CONSTRUCTION LOAN AND OTHER PROJECT
DEVELOPMENT COSTS
WHEREAS, theRedevelopment Agency of the City of Carlsbad, hereinafter
referred to as “Agency”, is a Community Redevelopment Agency organized and existing
under the Community Redevelopment Law, Health and Safetv Code Section 33000,
et.seq., hereinafter referred to as the “Act”; and
WHEREAS, the Agency is authorized to implement the Redevelopment Plan
for the Carlsbad Village Redevelopment Project Area; and
WHEREAS, Section 33334.2 of the Act requires that not less than twenty
percent (20%) of all taxes which are allocated to the Agency shall be used for purposes
of increasing and improving the community’s supply of low and moderate income
housing; and
WHEREAS, pursuant to Section 33334.2 of the Act, the Legislature declares
its intent that the Low and Moderate Income Housing Set-aside Fund shall be used to
improve and increase housing in the community; and
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. . . .
WHEREAS, to carry out the purposes of increasing and improving the
community’s supply of low and moderate income housing, Section 33334.2 (e) of the
Act states that the Agency may exercise any or all of its powers, including without
limitations, acquiring land or building sites, improving land or building sites with onsite
or offsite improvements, donating land to private or public persons or entities,
constructing buildings or structures, acquiring buildings or structures, providing
subsidies to, or for the benefit of, very low income households, lower income
households, or persons or families of low and moderate income, or other powers to
carry out the purposes of the Act; and
WHEREAS, on October 26, 1993, the Housing and Redevelopment
Commission approved Commission Resolution No. 237 authorizing the expenditure of
$2,000,000 from the Low and Moderate Income Housing Set-aside Fund outside the
Redevelopment Project Area for the purposes of providing property and related
improvements for the construction of 344 units of rental housing for persons/families
within low and very low income households;
WHEREAS, the Villas at El Camino Real Affordable Housing Project has
proceeded toward obtaining its financing commitments and approvals, including bank
construction and permanent financing, an allocation of Low Income Housing Tax
Credits and funding from the Federal Home Loan Bank Affordable Housing Program;
and
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WHEREAS, a need has been identified to restructure the Agency’s financial .
assistance program based on the anticipated requirements of oth.er financing sources,
particularly the construction lender and Tax Credit investor.
NOW, THEREFORE, BE IT HEREBY RESOLVED by the Housing and
Redevelopment Commission of the City of Carlsbad, California, as follows:
1. The above recitations are true and correct.
2. That the Housing and Redevelopment Commission hereby approves
financial assistance to the proposed affordable housing project known as
“The Villas” at El Camino Real as set forth in Housing and
Redevelopment Commission Resolution No. 237, dated October 26,
1993, and as amended by paragraph 3 below.
3. That the Housing and Redevelopment Commission hereby amends
Resolution No. 237 to restructure the financial assistance for the Villas
at El Camino Real Affordable Housing Project as outlined below:
a. With the use of Low and Moderate Income Housing Funds and
Tax Increment Funds from the Village Redevelopment Agency, a
bridge loan of $2.4 million shall be made to the project during the
period of construction. Repayment of the loan (with interest) shall
occur during the project’s operational phase from surplus cash and
sale of affordable housing credits; and
b. The Agency shall permit the use of up to $500,000 of project
cash flow and/or proceeds from sale of Affordable Housing Credits
for reserves or guarantees as required by other financing sources.
4. That the expenditures of monies from the Low and Moderate Income
Housing and Tax Increment Funds for the purposes of financing
development costs, on both a short term ($2.4 million) and long term
($500,000) basis, for an affordable housing project containing 344 rental
units outside the Redevelopment Project Area, in which such funds are
generated, are and will be of benefit to the respective Project Area based
on the following findings:
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a. The Village Redevelopment Area currently consists of a number of
restaurants, hotels, time-share projects and small retail operations
which ‘depend on and offer employment at low to moderate
income wages. The proposed housing project offers affordable
housing opportunities with restricted rents affordable to low and
very low income households. These type of restricted rent housing
opportunities are currently not available to employees working
within the Village Redevelopment Area.
b. The proposed project is located on bus routes and connects to
major transportation corridors which will allow direct access to the
Village Redevelopment Area. The households residing within the
proposed project will be able to take advantage of the public
transportation systems which will allow them to work and shop in
the Village Redevelopment Project Area. This will have a
significant impact on the Redevelopment Agency’s efforts to
revitalize the Village Project Area.
5. That the use of $2.9 million in Low and Moderate Income Housing Set-
Aside and Tax Increment Funds will promote the City of Carlsbad’s
housing goals and satisfies specific requirements of the Community
Redevelopment Law to expend a portion of its tax increment to produce
affordable housing opportunities for low and moderate income persons.
6. That the expenditure of the subject Low and Moderate Income Housing
Set-Aside and Tax Increment Funds is consistent with the Village
Redevelopment Area Low and Moderate Income Housing Set-Aside
Spending Strategy/Plan.
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7. That the Housing and Redevelopment Commission hereby authorizes the
Finance Director and the Housing and Redevelopment Director to execute
documents required for the appropriation of the $2,900,000 in funds
from the Redevelopment Low and Moderate Income Housing Set-aside
and Tax Increment Funds in order to provide financing for development
related costs for construction of a 344 rental unit project for low and
very low income persons within the City of Carlsbad.
PASSED, APPROVED, AND ADOPTED at a regular meeting of the
Housing and Redevelopment Commission of the City of Carlsbad, California, held on
the 22nd of March, 1994, by the following vote, to wit:
AYES: Commissioners Lewis, Stanton, Nygaard, Finnila
NOES: None
ABSENT: Commissioner Kulchin
ABSTAIN: None
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EXHIBIT 2
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March 9, 1994
_- EXHIBIT 3
TO: CITY MANAGER
FROM: HOUSING AND REDEVELOPMENT DIRECTOR
FACTS ON RECORD WHICH SUPPORT THE USE OF LOW/MODERATE INCOME HOUSING
SET-ASIDE FUNDS OUTSIDE THE VILLAGE REDEVELOPMENT AREA
In order to expend Low and Moderate Income Housing Set-Aside Funds for Affordable Housing Projects
outside the Village Redevelopment Area, the Redevelopment Agency must find that the proposed project
benefits the Redevelopment Area. The Agency has found that the proposed project does, in fact, benefit
the Village Redevelopment Area based on the following findings:
1. The Village Redevelopment Area currently consists of a number of restaurants, hotels, time-share
projects and small retail operations which depend on and offer employment at low to moderate
income wages. The proposed housing project offers affordable housing opportunities with
restricted rents affordable to low and very low income households. This type of restricted rental
housing project offers opportunities which are currently not available to employees working
within the Village Redevelopment Area.
2. The proposed project is located on bus routes and connects to major transportation corridors which will allow direct access to the Village Redevelopment Area. The households residing within
the proposed project will be able to take advantage of the public transportation systems which will
allow them to work and shop in the Village Redevelopment Area. This will have a positive impact
on the Redevelopment Agency’s efforts to revitalize the Village Project Area.
Additional information on specific facts related to the above findings is attached for review by the
Housing and Redevelopment Commission.
In addition to the above findings, Section 33334.6 of the Health and Safetv Code states that the legislature
has declared that the provision of housing is itself a fundamental purpose of the Community
Redevelopment Law and that a generally inadequate statewide supply of decent, safe and sanitary housing
affordable to persons and families of low or moderate income threatens the accomplishment of the
primary purposes of redevelopment. The legislature has, therefore, found and declared that the provision
and improvement of affordable housing outside of redevelopment project areas can be of direct benefit to
those project areas in assisting the accomplishment of redevelopment objectives.
Based on the findings noted above and the fact that the proposed housing project promotes the City of
Carlsbad’s housing goals and satisfies specific requirements of the Community Redevelopment Law to
expend a portion of its tax increment to produce affordable housing opportunities for low and moderate
income persons, Agency staff has, and continues to, recommend APPROVAL of the use of set-aside
funds for the affordable housing project known as the Villas at El Camino Real.
ATTACHMENTS:
1. Summary on jobs/employment opportunities within the Village Redevelopment Area.
2. Summary on bus service available to Village Redevelopment Area.
, ( ATTACHMENT 1
CITY OF CARLSBAD
VILLAS AT EL CAMINO REAL
VILLAGE REDEVELOPMENT AREA RECORD OF FACTS
The facts outlined within this report were considered and evaluated in the Agency’s decision to
use Village Redevelopment Low and Moderate Income Housing Set-Aside Funds on the Villas
at El Camino Real Affordable Housing Project which is located outside the Redevelopment
Area.
A 1992 study on employment trends completed by Keyser Marston Associates, Inc. for the
Village Redevelopment Area highlights the following statistics on jobs/employment opportunities
(non-government) within the employment sectors noted below. There are approximately:
0 41 jobs in Agriculture, Forestry, Fishing & Mining;
0 399 jobs in Construction;
0 145 jobs in Manufacturing;
0 106 jobs in Transportation, Communications, & Utilities;
0 180 jobs in Wholesale Trade;
0 1606 jobs in Retail Trade;
0 609 jobs in Finance, Insurance and Real Estate; and,
0 2,164 jobs in Services Employment Sector.
As reflected above, the largest Village employers fall within the Retail Trade; Finance,
Insurance and Real Estate Trade (F.1.R.E); and, Services Sector.
The employers include Carl’s Junior, Jack in the Box, Kentucky Fried Chicken, Denny’s
Restaurant, Neiman’s Restaurant, Coyote Bar and Grill, antique dealers, children’s wear, apparel
and beach wear, handicraft and gift shops, four service stations, Big Bear Supermarket, a,
pharmacy, liquor stores, a clock repair shop, donut shops/bakeries, delicatessens, small pubs,
cleaners, etc. Professional Office Buildings, within the Village, are comprised of smaller
professional tenants such as medical, chiropractor, dentist, legal, financial, insurance and real
estate tenants.
In a July, 1989 study~-conducted-by-Keyser MarstonAdo;iiates Torthe City of San Diego, a
conclusion was reached which indicated that a “nexus can be established between the employees
of the various commercial and industrial buildings and the number of lower income households
associated with the buildings.” Carlsbad Staff has applied some of the findings of Keyser
Marston’s study to Village statistics on employment to provide a rough estimate of the number
of lower income employees which will benefit from affordable housing inside or outside the
Village Redevelopment Area:
Employment Sector Total # of % of Lower Income Est. # of lower income
Jobs Employees employees
Manufacturing I 25.2%
Retail Trade 1 1606 I 27.6% I 443
Office (F.1.R.E) 1 609 1 114
Service I 2,164 1 32.9% I 712 I 4,524 I 1.305
The conservative estimates noted above indicate clearly that there is a substantial number of
lower (below 80% of median) income employees within the Village Redevelopment Area which
can benefit from the Villas at El Camino Real Affordable Housing Project. Due to the “mom
and pop” nature of the businesses in the Village, it is probably safe to assume that the actual
number of lower income employees is much larger than the above figure of 1,305.
On a related note, the conclusions of Keyser Marston’s 1992 Housing Survey for the Village
Redevelopment Area indicates that household income levels in the Village are substantially lower
than in the City or County as a whole. The median income was approximately $23,000. Almost
one third of households in the downtown area earn less than $15,000 annually. The detailed
housing survey concluded that more than three-fifths of renters in the downtown area make total
housing payments in excess of 30% of income. Based on these survey findings, current residents
of the Village Redevelopment Area also have a need for more affordable housing. Since there
is currently no “restricted rent” housing available within the Village Area, the Villas project will
provide a new affordable housing opportunity for current residents of the area as well as
employees who may or may not live in the Village.
The attached chart provides a breakdown of selected job classifications which can be found in
the various employment sectors located within the Village Redevelopment Area. Although we
do not have precise figures on the actual number of people within each job classification, based
on stafrs experience in working with the employers/employees within the Village, we believe
it is reasonable to assume that a majority of the subject employees have positions similar to those
outlined and are receiving comparable compensation.
As a final note, the Redevelopment Agency proposes to expend a maximum of $2 million on an
interim basis and a maximum of $500,000 on a permanent basis of Redevelopment Low and
Moderate Income Housing Set-Aside funds for the subject project. These amounts represent a _
total of 8% and 2%, respectively, of the total sources of funds needed for the project. Of the
total City subsidy to the project, these amounts represent 38 % and 10%) respectively, of the total amount.
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CITY OF CARLSBAD -
VILLAGE REDEVELOPMENT AREA
SELECTED JOB CLASSIFICATIONS AND WAGE INFORMATION
JOB TITLE ANNUAL EARNINGS’ INCOME
LEVEL*
Preschool Teacher El
Purchasing Agent JB
$16,800
$27,369
Very Low
LOW
Tax Interview/Preparer JJJ
Food Service Manager III
$28,800
$19,680
LOW
Very Low
Lodging Manager JB
Computer Operator III
824.960 LOW
$23,856 LOW
Account Clerk JB
General Clerk BI
$20,160
$17,664
Low
Very Low
secretary ill
Switchboard Gperator/Receptionist
Hotel Desk Clerk JB
$23.808
$14.400
$14,400
LOW
Very Low
Very Low
Medical Secretary Ul $19,680 Very Low
Ii Cashier IB I $12,960 I Very Low
Stock Clerk. StockroomWarehouse BJ
HairKosmotology El
$13,440
$19.200
Very Low
Very Low
Janitor/Cleaner JB $15,360
Maid/Housekeeping III $11,040
Very Low
Very Low
Medical Assistant JB
Sales Agent, Advertising IB
Sales Person, Retail BJ
Electrical Installer/Repairer III
General Maintenance
Maintenance Electrician - Manufacturing
Maintenance Mechanic - Machinery
Maintenance Mechanic - Motor Vehicle
Tim Repaimrs/Changers JIJ
Driver, Sates Worker
Offset Litho Press Setter/Gperator BJ
Truckdrivers - Service Products
Carpenter U
Lather II
$17,280
$20,640
$12,480
$23,520
$17,760
$29,088
$27,379
$29.760
$15.360
$14.880
$26.880
$19,200
Very Low
LOW
Vety Low
LOW
Very Low
LOW
LOW
LOW
Very Low
Very Low
LOW
Very Low
$28,320 LOW
326.429 LOW
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1. Sources: “Annual tig Information, San Diego Metrop an Statistical Area”, June 1992,
State Employment Development Department, Labor Market Information Division, and
“Occupational Compensation Survey: Pay Only, San Diego, Ca. Metropolitan Area”, October,
1991, U.S. Department of Labor, Bureau of Labor Statistics
2. Assumptions: Family Size is equal to 2.59 or three (3) persons; single wage earner
Attachment 2
CITY OF CARLSBAD
VILLAS AT EL CAMINO REAL
VILLAGE REDEVELOPMENT AREA RECORD OF FACTS
The following facts related to bus service from the project location to downtown (Grand and
Washington) were considered and evaluated in the Agency’s decision to use Village
Redevelopment Low and Moderate Income Housing Set-Aside Funds on the Villas at El Camino
Real Affordable Housing Project which is located outside the Redevelopment Area.
a A resident of the Villas at El Camino Real Housing Project can take the Route 309
North County Transit District bus to Plaza Camino Real and then transfer to the Route
322 bus to be transported to the Village Redevelopment Area. The fti stop would be
at the bus transfer station located at Grand and Washington (in the heart of the downtown
area). This bus route will also allow residents to use the new Commuter Rail System
which is proposed to be operational by September, 1994. The new Commuter Rail
Station will be located on Grand Avenue between State Street and Washington Street.
0 Using the bus as transportation, it will take residents of the Villas approximately forty
(40) minutes to one (1) hour to arrive in the downtown area. As an example, a resident
who catches the bus at the comer of Camino Vida Roble and El Camino Real at 6:42am
would arrive at Plaza Camino Real at 7:OOam. He/she would then transfer to the Route
322 bus which leaves the Plaza stop at 7:03am and arriving at Grand and Washington at
7:4oam.
0 The cost of a one way trip on the bus is $1 JO. Transfers are free for all riders when
requested at time fare is paid.
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