HomeMy WebLinkAbout1994-03-22; Housing & Redevelopment Commission; 248; 1993 Tax Allocation Bond ProceedsHOUSING ANC-1EDEVELOPMENT COMMIS;-)N - AGENDA BILL
AB# dj’f? TITLE: APPROPRIATION CfF 1993 TAX ALLOCATION BOND
PROCEEDWCAPITALIZED INTERE2X TO VARIOUS
MT& 3-22-94 HOUSING AND REDEVELOPMENT PROJECTS/ACTIVITIES.
DEPT. RED
RECOMMENDED ACTION:
ADOPT Carlsbad Housing and Redevelopment Commission Resolution No. 34 6
AUTHOFUZING the appropriation of additional 1993 Tax Allocation Bond ProceedsKapitalized
Interest to the various housing and redevelopment projects/activities as set forth therein.
ITEM EXPLANATION:
On July 13, 1993, the Housing and Redevelopment Commission approved and authorized the issuance
and sale of Village Redevelopment Project 1993 Tax Allocation Bonds in a principal amount not to
exceed $17,000,000. The bonds were approved for the purpose of refinancing the 1988 Tax
Allocation Bonds for the Village Redevelopment Area. This refinancing allows the Carlsbad
Redevelopment Agency to reduce its annual debt service payments and to obtain additional funds for
new housing and redevelopment projects/activities. These results were achieved due to a low interest
rate bond market combined with an increase in the amount of bonds issued and an extension of the
term.
The 1993 Bonds were issued on September 1, 1993 in the amount of $15,495,000. The term of the
bond issue was extended from 2011 to 2023. The true interest cost on the new bonds is 5.6 % ; the
1988 Bonds had an interest cost of 7.8%.
As a result of the bond refinancing, the Agency will realize two significant benefits:
1. Lower Debt Service Payments - The Agency was making debt service payments of
approximately $1,160,000 per year. Debt service payments on the 1993 Bonds will be
approximately $1,060,000 per year, Therefore, the annual cash requirements of the Agency
were reduced by approximately $100,000 per year.
2. Additional Bond Proceeds - The Agency has received approximately $2505,000 in additional
bonds proceeds to expend on eligible housing and redevelopment projects. Also, due to the
fact that the Agency will not be required to make any debt service payments for eighteen (18)
months, capitalized interest will be available in the amount of approximately $1,223,000;
these funds can be used without the normal “strings” attached to bond proceeds. The total
amount of funds available for expenditure on projects is $3,728,000.
Examples of projects which could be financed with the additional bond proceeds were presented on
July 13, 1993. Staff indicated that a final report on revenue received and proposed
projects/expenditures would be presented once the final results on the bond issuance were known.
Since the final results are now known, staff is presenting this report to request authorization to
appropriate funds for the redevelopment projects/activities outlined within the chart attached as
Exhibit 2.
AGENDA BILL# #
PAGE 2
Staff is proposing that the total available funds of $3,728,000 be appropriated to various projects,
including program administration, to be implemented in a continued effort to revitalize the Village
Redevelopment Area. The use of the funds are summarized below:
Redevelopment Projects/Activities
Administration Costs
Special Payment to Education Revenue Augmentation Fund
Construction Bridge Loan to Villas Affordable Housing Project
(with eventual repayment to the City)
$1,956,000
$ 689,500
$ 92,500
990,ooo $
Total Expenditure of Funds $3.728.000
The specific redevelopment projects proposed by staff originate from the Draft Master Plan prepared
by the Cannon Design Group in cooperation with the Master Plan Advisory Committee for the
Village Redevelopment Area. A summary of the proposed projects is provided in the staff report
attached as Exhibit 3. Although the new Master Plan is not yet complete, the goals and objectives
for the area have been defined by the Advisory Committee and clearly indicate a more aggressive
approach to economic development within the Redevelopment Area over the next 10 to 15 years.
Staff is also proposing that $689,500 of the capitalized interest funds be used to fund administrative
costs of the Agency and to make the special payment ($92,500), due May 10, 1994, to the Education
Revenue Augmentation Fund, as required by the State of California. In addition, on an interim basis,
staff is recommending that $990,000 of the funds be used to provide a short term construction bridge
loan to assist in financing the Villas at El Camino Real Affordable Housing Project (see Exhibit 4
for further details). After the project loan has been repaid to the Agency, it is suggested that the
$990,000 be used to repay a portion of the loans made by the City to the Agency for previous
redevelopment activities. As of this date, the Agency owes the City’s General Fund approximately
$8,000,000.
FISCAL IMPACT:
The refinancing of the bonds has reduced the annual debt service payments of the Agency by
approximately $100,000 per year. The additional bond proceeds and capitalized interest amount to
approximately $3,728,000. This revenue may be used for various eligible housing and redevelopment
projects/activities and/or to repay amounts owed to the General Fund of the City of Carlsbad. Staff
is proposing that a total of $2,738,000 be expended on redevelopment projects/activities, including
administrative costs and the special payment to the Education Revenue Augmentation Fund, and
$990,000 be used on an interim basis to provide needed construction financing for the Villas at El
Camino Real Affordable Housing Project. After the loan to the Villas project is repaid to the Agency,
it is proposed that these funds ($990,000) be used to repay a portion of the loans from the City to
the Agency for previous redevelopment activities. The remitted funds will be available to the City
for use on any activity/project approved by the City Council.
The redevelopment projects proposed by staff are outlined in Exhibit 2. It is important to note that
by purchasing property for commercial and/or housing projects, as proposed by staff, the Agency and
the City will receive some financial return/benefit. For example, with estimated property
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AGENDA BILL # a4P
PAGE 3
improvements of $9,100,000, the City could receive an estimated $72,500 per year (sales tax) and
the Agency could receive approximately $91,000 (tax increment) per year. In addition, by exercising
our existing option and purchasing the property on the northeast corner of Roosevelt and Carlsbad
Village Drive with the bond proceeds, the Agency will reduce its annual operating costs by an
additional $52,200 per year; the property is currently leased for public parking purposes.
EXHIBITS :
l- Resolution No. authorizing the appropriation of 1993 Tax Allocation Bond
ProceedsKapitalized Interest to the various housing and redevelopment projects as set forth
therein.
2- List of redevelopment projects proposed to use 1993 Tax Allocation Bond Proceeds and
Capitalized Interest.
3- Staff report on redevelopment projects proposed for use of 1993 Tax Allocation Bond
Proceeds and Capitalized Interest.
4- Staff report on need for interim construction financing for the Villas at El Camino Real
Affordable Housing Project and the process for accomplishing the action.
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HOUSING & REDEVELOPMENT COMMISSION RESOLUTION NO. 246
~ A RESOLUTION OF THE HOUSING AND REDEVELOPMENT
COMMISSION OF THE CITY OF CARLSBAD, CALIFORNIA
TO AUTHORIZE THE APPROPRIATION OF ADDITIONAL
1993 TAX ALLOCATION BOND PROCEEDWIAPITALIZED
INTEREST TO VARIOUS HOUSING AND REDEVELOPMENT
PROJECTS AND/OR ACTIVITIES.
WHEREAS, the Housing and Redevelopment Commission of the City of
Carlsbad approved and authorized the issuance and sale of Village Redevelopment
Project 1993 Tax Allocation Bonds on July 13, 1993; and
WHEREAS, the 1993 Tax Allocation Bonds were issued on September
1, 1993 in the amount of $15,495,000; and
WHEREAS, the 1993 bond issuance has resulted in additional proceeds
in the amount of approximately $2,505,000 and capitalized interest in the amount of
approximately $1,223,000; and
WHEREAS, the Village Redevelopment Agency has a need to fund various
housing and redevelopment projects/activities with the additional bond proceeds and
capitalized interest.
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.
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2. That additional 1993 Tax Allocation Bond Proceeds ($2,505,000) are
hereby appropriated for the following capital projects which will provide
a public benefit:
0 Specialty Commercial Center at the Transit Station ($425,000);
0 Roosevelt Block Project, including exercise of option to purchase
property at southeast corner of Roosevelt Street and Carlsbad
Village Drive ($1,006,000);
0 Facade Improvements and Alternative Signage Design Assistance
Program ($75,000);
0 Barrio Study/Land Use Plan ($25,000);
0 Master Plan for Existing Redevelopment Area - additional project
funding ($25,000);
0 Scattered Site Acquisition for Affordable Housing in the Village
Redevelopment Area ($400,000); and,
0 General Redevelopment Administrative Costs ($549,000).
3. That tax increment funds ($1,223,000) resulting from the fact that no
debt service payments will be required on the bonds for eighteen (18)
months are hereby appropriated for the following projects/activities upon
their receipt by the Redevelopment Agency:
l General Redevelopment Administrative Costs ($140,500);
0 Special Redevelopment Education Revenue Augmentation Fund
(ERAF) as required by State of California ($92,500); and,
0 Short-term construction loan ($990,000) for the Villas at El
Camino Real Affordable Housing Project with subsequent
repayment of portion of loan(s) from City of Carlsbad to
Redevelopment Agency.
. . . .
. . . .
. ..s
..‘,
4. That the Finance Director is hereby authori.zed to reduce the
appropriation for principal and interest on the tax allocation bonds by
$686,000 as the debt service requirements have been lowered.
PASSED, APPROVED, AND ADOPTED at a meeting of the Housing and
Redevelopment Commission of the City of Carlsbad, California, held on the 22nd
of m, 1994, by the following vote, to wit:
AYES: Commissioners Lewis, Nygaard, Finnila
NOES: None
ABSENT: Commissioner Kulchin
ABSTAIN: Commissioner Stanton
T’=K INCREMENT BOND REFUNDING ‘4OCEEDS
PROJECT(S) FUNDING PROP0,s-L EXHIBIT 2
Investment Action Project Title Total Agency Total Est. Property
Investment Improvements
$425,000 $3,100,000
Financial Benefit
to City/ Agency
$31,000 per year
&ww)
Specialty Commercial
Center at Transit Station
l Purchase Property
($400,000)
l Market Analysis & RFP
($25,000)
$37,500
per year (City)
Roosevelt Block Project 0 Purchase Property
($656,000 - corner)
($300,000 - mid-blk)
$3,000,000 $30,000 per year’
&ww)
$1,006,000
$35,000 per year
OW l Feasibility Analysis & Conceptual
Plan
($50,000)
Barrio Study/Land Use
Plan
l Consultant to obtain public
illDUt
$25,000 N/A N/A
Master Plan for Existing
Village Redevelopment
Area
l Additional Consultant Costs
($15,000)
$25,000 N/A N/A
l Additional Public Participation
($10,000)
0 Financial and Consultant Design
Services to assist Village
Merchants
$75,000 No estimate at this
time.
No estimate at
this time. Facade Improvements and
Alternative Signage Design Assistance Program
Scattered Site Acquisition l Sites for residential infill
development $4oo,ooo $3 ,oOO,OOo
(Approx. 25 units)
$30,000 per year
GQwW
General Redevelopment
Administrative Costa
l Operating Costs of Agency N/A N/A $689,500
$92,500 N/A N/A 0 Pmt. required by State of California Special Redev. Payment to
Education Revenue
Augmentation Fund
Villas at El Camino Real
Affordable Housing Project Financing; repayment of
portion of loans to City.
TOTALS
N/A N/A l Provide interim financing to
Villas through short term loan.
l Repay a portion of loan(s) from
$990,000
City to Agency City to Agency
$91,000 per year
Uww)
$3,728,000 $9,100,000
$72,500 per year
City)
Total Refunding Bond Proceeds Available:
Total Capitalized Interest:
Total Proceeds/Interest Available for Projects:
$2,505,000
$1.223.000
$3,728,000
Total Proposed Housing and Redevelopment Projects: $3.728.000
’ As a note, by purchasing the property on the comer of Roosevelt Street and Carlsbad Village Drive, the Agency will also decrease operation costs by approximately $52,000 per year; we are currently making lease payments on the property for public parking purposes.
EXHIBIT 3 February 1, 1994 -
TO: CITY MANAGER
FROM: HOUSING AND REDEVELOPMENT DIRECTOR
SUMMARY OF PROPOSED NEW REDEVELOPMENT PROJECTS/ACTIVITIES
The following summary of proposed new redevelopment projects/activities for funding through
the additional 1993 Bond Proceeds and Capitalized Interest is provided as supplemental
information for review by the City Council in considering the appropriation of the subject funds:
SPECIALTY COMMERCIAL CENTER AT TRANSIT STATION
Attached is some information from the draft Master Plan document which provides a more
detailed description of the Specialty Commercial Transit Center Project Village Redevelopment
Area. This project was reviewed by the Master Plan Advisory Committee and they felt that it
would be a very positive addition to the Village Redevelopment Area.
ROOSEVELT CENTER COMMERCIAL PROJECT
Although this project was not included in conceptual form within the draft Master Plan
document, the Housing and Redevelopment Department believes that this project has great
potential within the Village Redevelopment Area. The project is proposed for the block which
is located on the east side of Roosevelt Street between Carlsbad Village Drive and Grand
Avenue. It would encompass most of the property within the noted block. The Redevelopment
Agency currently owns the property at mid-block where one of the public parking lots is located.
Also, the City has an option to purchase the property ‘on the corner of Roosevelt and Carlsbad
Village Drive (which is the location of a second public parking lot at this time). With the
possible purchase of property which is located between the two public parking lots, the Agency
could control a majority of the block.
The concept for the proposed project is a mixed use type commercial project which would also
provide for a public parking lot (perhaps a parking structure). With Redevelopment Agency
participation, the noted site is a prime area for development. Staff would like to develop its
concept further by completing a feasibility study, initial site planning and some preliminary
drawings. If approved, the Agency would also immediately exercise its option to purchase the
corner lot (Roosevelt and Carlsbad Village Drive).
BARRIO STUDY/LAND USE PLAN
This project has already been approved by the City Council and is currently in process. The
funds for this project were previously appropriated by the Council. The project is noted here to
incorporate it into the spending plan for the bond proceeds.
MASTER PLAN FOR EXISTING REDEVELOPMENT AREA
The original contract for the Master Plan for the existing Village Redevelopment Area was
executed on October 8, 1991. Upon initiation of the project, it was anticipated that the project
would take approximately 8 months to complete. However, due to the nature of various issues
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impacting the Village Area, the project is taking much longer to complete. It is now estimated
that the Master Plan will not be complete until June, 1994 (2 years longer than anticipated). In
order to complete the project, the consultant has requested an additional $15,000. Staff believes
the Consultant’s request is reasonable based on the work completed by the Consultant to date.
The Consultant has been very cooperative and made every effort to accommodate the Master
Plan Advisory Committee and City Staff in developing the Master Plan. Although not part of
their contract, the Consultant also provided a considerable amount of assistance in designing the
new Transit Station.
Staff is also proposing that an additional $10,000 be appropriated to the Master Plan project to
assist with the public outreach program required once the Draft Master Plan is complete and
ready for public review. Staff would like to provide appropriate information to every property
owner within the Village Redevelopment Area and hold two (2) or more public workshops to
present the Master Plan results. Funds will also be needed to print copies of the Master Plan
once it is final.
FACADE IMPROVEMENTS & ALTERNATE SIGNAGE DESIGN ASSISTANCE
Staff is proposing that a program be established to provide funding for architectural services to
design facade improvements and/or signage for existing businesses. Since A-Frame signs will
no longer be allowed after January 1, 1995, staff believes that it might be helpful for the Agency
to provide some assistance to help businesses design new signs to gain better exposure. For
example, a creative, attractive projecting sign could be designed to replace a previous A-Frame
Sign.
During the Master Plan Advisory Committee meetings, there was a considerable amount of
interest expressed in cleaning up the unsightly businesses on North State Street. A number of the property owners indicated an interest in improving their buildings. However, they stated that
they needed some help in designing the improvements. In response to this need, staff is
proposing the “Facade Improvement Design Assistance” Program.
If acceptable to the Housing and Redevelopment Commission, staff will research and design a
program to address the need. The details of the program will be presented to the Housing and
Redevelopment Commission at a later date.
SCATTERED AFFORDABLE HOUSING PROJECT SITE ACOUISITION
Staff is proposing that some property within the Village Redevelopment Area be acquired by the
Agency to provide for in-fill affordable housing projects. For the past year, Housing and
Redevelopment has been working with the Building Department to identify sites which need to
be redeveloped and may be acceptable for affordable housing. The affordable housing projects
would be small in size and compatible with the character of the Village.
GENERAL REDEVELOPMENT ADMINISTRATIVE EXPENSES
Staff is proposing that the Redevelopment Agency fund its administrative operations with funds
from the Debt Service Savings Account (Capitalized Interest) and New Bond Proceeds. This
action would reduce the Redevelopment Agency’s financial impact on the General Fund.
SPECIAL REDEVEL3PMENT PAYMENT TO ERAF
Per State Law, the Agency is required to make a special payment to the Education Revenue
Augmentation Fund in an amount of $92,500. Staff is proposing that this payment be made from
the Debt Service Savings Account.
INTERIM FINANCING FOR THE VILLAS AFFORDABLE HOUSING PROJECT AND
REPAYMENT OF A PORTION OF LOAN61 TO CITY
Initially, staff is proposing that $990,000 be used to provide a short-term construction loan to
assist in the financing for the Villas at El Camino Real Affordable Housing Project. The need
to provide the short-term assistance is provided in the attached memorandum to the City
Manager. Following repayment of the loan to the Redevelopment Agency, it is recommended
that the $990,000 be used to repay a portion of the loans made by the City to the Agency for
previous redevelopment activities.
The Village Redevelopment Agency currently owes the City’s General Fund approximately $8
million for past projects/activities/programs. Repayment of a portion of the loan(s) will allow
the City Council to ultimately fund other activities/projects approved by the Council.
SUMMARY
By issuing the new bonds for a longer period of time and at a lower interest rate, the Agency
was able to obtain some additional funds and reduce its debt service by approximately $100,000
per year. This means that on an annual basis the Redevelopment Agency will be able to cover
a larger percentage of its operation costs. The Agency reduces its impact on the General Fund
by $100,000 by the lower debt service. Also, by exercising our purchase option on the property
at the northeast corner of Carlsbad Village Drive and Roosevelt Street, we will save about
$52,000 per year.
On a more long term basis, by investing some of the funds in a few significant economic
development projects (i.e., Specialty Commercial Center at Transit Station), the Agency and the
City will realize some financial benefits in future years from increased property taxes and sales
tax.
EVAN BECKER
Housing and Redevelopment Director
Carfsbad Vi//age Haste -‘Ian
PROJECT D: SPECIALTY COMMERCIAL AT TRANSIT CENTER
The establishment of the future commuter rail station in the Village offers some unique opportunities.
It will reinforce the already strong focus at the State Street/Grand Avenue intersection and while it is
unlikely to provide sufficient pedestrian activity to support a significant project on its own, the
commuter rail station would play an important supporting role in contributing to the success of a
specialty center at this prime Village location. There are several examples of similar developments
in the San Francisco Bay Area along the Cal Train commuter rail route and the Bay Area Rapid Transit
(B-T) corridor. At the time of PrepratiOn of this document, it is not known whether the Bauer
Lumber Company retail operation fronting on State Street will be relocated along with the lumber
storage yard now on the railroad right-of-way. If it is and the State Street site becomes available for
development, it could be combined with the City’s property (i.e., plaza, parking lot and small
restaurant) at the Grand Avenue comer and the one small intervening property to create a substantial
development parcel at one of most desirable commercial locations in the Village. The site can be
developed in a manner which is supportive of the commuter rail station’s functional needs. A concept
sketch of such a development is shown in Figure 10. Uses would incIude a mix of retail shops,
restaurants and offices. The existing fountain and plaza at the Grand Avenue comer would be retained
artd a strong pedestrian connection established between State Street and a plaza in front of the
commuter rail station. While initially the North County Transit District (NCTD) land which fronts
on’ Grand Avenue would be devoted to parking, NCTD recognizes the desirability of future
commercial uses in that location and the Grand Avenue frontage cquld be added to the Rail Statibn
Spe-%lty ten.: iri a later ph’ase. iikewise, additional’property along the State Street frontage could’
. be added at a future time. ’ t
Proiect Summary
Site Area:
Development:
Parking:
1.05 Acres
30,000 - 45,000 Sq. Ft. of Retail
and Office Use
Provided off-site in a public facility
26 II
Carlsbad Village Master Plan
Specialty Commercial at Transit Center Project Figure 10
27 I2
March 16, 1994 EXHIBIT 4
TO: CITY MANAGER
FROM: HOUSING AND REDEVELOPMENT DIRECTOR
BRIDGE CONSTRUCTION LOAN FOR THE VILLAS AT EL C-0 REAL
AFFORDABLE HOUSING PROJECT
The City of Carlsbad has made a commitment to assist in financing the Villas at El Camino Real
Affordable Housing Project. The City’s financial commitment originally consisted of $2.5
million in “direct” financing from CDBG and Redevelopment Set-Aside Funds and
approximately $2.4 million in deferred or exempted fees.
When presented to the City Council for approval, it was staff’s intent that the “deferred and
exempted” fees would simply be a “paper loan” to the project and that no actual cash would
need to be exchanged between the City and the developer(s). However, Tax Credit Counsel for
the BRIDGE Housing Corporation recently indicated that it is their legal opinion that the project
will actually need to pay the fees in order for them to “count” in the calculation of the total tax
credits to be awarded for the project, which is the largest source of financing for The Villas.
The implication is that instead of simply declaring the deferred fees to be a loan, the project
must actually pay the fees from some source of financing.
Since the amount of private construction loan funds the project can receive are limited, BRIDGE
Housing Corporation has requested, and staff is recommending, that the Housing and
Redevelopment Commission approve a gap, or “bridge” loan from the Redevelopment Agency
to the project for construction purposes. As originally proposed and approved by the City
Council, this loan would eventually be repaid to the Redevelopment Agency through the sale of
housing credits which will be available to other developers to meet their inclusionary housing
requirement(s).
The loan funds from the Redevelopment Agency would be used to pay development costs related
to the project other than fees and the construction loan from the bank will be used to pay all of
the city fees and remaining development costs. The attached chart summarizes the process for
making the loan to the project and eventual loan repayment. The “bridge loan” to the project will
be repaid during the operational phase of the project from surplus cash and when the affordable
housing credits from the project are sold to interested developers. This concept of a bridge loan
to aid in the development costs does not change the city’s permanent approved dollar
commitment to the project.
At this time, staff is recommending that the Housing and Redevelopment Commission declare
its intent to use $990,000 from the Redevelopment Agency’s Debt Service SavingsKapitalized
Interest Account to make the construction “bridge” loan to the Villas at El Camino Real
Affordable Housing Project. A separate agenda bill will be presented to the Commission and
City Council requesting approval of the final, full financing plan for the Villas project and
authorization to expend the Redevelopment Funds based on the appropriate findings.
EVAN E. BECKER
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