HomeMy WebLinkAbout2009-08-11; Housing & Redevelopment Commission; 418; Tavarua Senionr affordable housing developmentHOUSING AND REDEVELOPMENT COMMISSION
- AGENDA BILL
10
418AB#
MTG. Q8/11/09
DEPT. H/REED
APPROVAL OF FINANCIAL ASSISTANCE
FOR THE TAVARUA SENIOR
AFFORDABLE HOUSING DEVELOPMENT
DEPT.
CITYATTY
CITY MGR.
RECOMMENDED ACTION:
That the Housing and Redevelopment Commission adopt Resolution No. 475
APPROVING a request to provide financial assistance to the partnership of Western
Community Housing and Meta Housing in the form of a residual receipts loan of $3,750,000
from the Redevelopment Agency Housing Set-Aside Fund, and to authorize the Housing and
Redevelopment Director and City Attorney to negotiate and prepare the related loan
documents for execution prior to construction of fifty (50) affordable senior-restricted apartment
units on property located at 3574 Harding Street.
ITEM EXPLANATION:
In June of 2008, the Planning Commission approved the Harding Street Senior Condominium
development to be located at 3574 Harding Street, near the Carlsbad Village, allowing for the
development of fifty (50) senior restricted residential units. The project was approved as a
mixed income, ownership project with 35 market rate units and 15 affordable to low and
moderate income senior households. An affordable housing partnership - Western Community
Housing and Meta Housing - recently contracted to purchase the site with the intent of building
it as a 100% affordable project for low income seniors. The development team is also proposing
to change the project to rental rather than for-sale. The .90 acre site is located in close
proximity to the Senior Center, and is unique because it is not being built as a result of a master
development inclusionary housing requirement. The units provided will be above and beyond
those anticipated as part of the inclusionary housing program. As a result, the project can serve
as a combined inclusionary housing development for housing credit sales purposes for new
development in the Northwest Quadrant. The project is now proposed to be known as the
Tavarua Senior Apartments.
The Tavarua Senior Apartments will consist of a single, three-story apartment building with
subterranean garage. Proposed amenities include a well-landscaped courtyard area and a
community room. The development will also provide for diverse programming that takes a
whole-person approach to creative and healthy aging by providing arts, wellness, lifelong
learning, community building and intergenerational programs for the senior residents. The
development is proposed to include 40 one-bedroom (80%), 9 two-bedroom (18%) and one two
bedroom manager unit.
DEPARTMENT CONTACT: Debbie Fountain 760-434-2815 debbie.fountain@carlsbadca.gov
FOR CITY CLERKS USE ONLY.
COMMISSION APPROVED
ACTION:
DENIED
CONTINUED
WITHDRAWN
AMENDED
D
D
D
CONTINUED TO DATE
SPECIFIC
CONTINUED TO DATE
UNKNOWN
RETURNED TO STAFF
OTHER - SEE MINUTES
D.
D
D
D
Page 2
The project will have the following affordability levels:
• 5 units for households earning 30% of San Diego County Area Median Income (AMI);
• 5 units will be affordable to households earning 40% of AMI;
• 25 units will be affordable to households at 50% of AMI; and,
• 14 units will be affordable to households at 60% of AMI.
Financial Assistance
As part of the project financing, the Developer is requesting that the City provide a residual
receipts loan in the amount of $3,750,000, or $75,000 per unit, from the Redevelopment
Agency Low and Moderate Income Housing Set-Aside Fund. In addition to the City's financial
participation, the Developer will use a variety of sources to finance the affordable development.
The financial details of the subject project are provided below.
Uses and Sources of Funds
The total cost of the Tavarua Senior Apartments is estimated to be $18.4 million, inclusive of
the value of the land. Based on a detailed review of the costs, staff has found that the costs are
reasonable and the total per unit cost of $368,455 is generally consistent with more recent
affordable multi-family developments within the City when consideration is given to the higher
land cost within the Village Area and the need to construct underground parking for said project.
The following chart provides a breakdown of the project costs, or uses of funds
USES OF FUNDS
Expense
Land (incl. escrow costs, etc.)
Consultants
Local Permits & Fees
Construction - Hard Costs
Development (incl. reserve & contingency)
Developer Fee
Lender Fees, Interest & Costs
Total Uses of Funds
Total Amount
$3,270,000
$1,001,996
$701,134
$9,273,643
$1,325,640
$1,820,000
$1,030,293
$18,422,706
Per Unit Cost
$65,400
$20,040
$14,023
$185,473
$26,513
$36,400
$20,606
$368,455
The following chart provides a breakdown of the permanent sources of funds for the
proposed development. The three primary sources of funding for the proposed project are 1)
proceeds from the sale of tax credits to a limited partnership; 2) private loans; and 3) residual
receipts loan from the City of Carlsbad/Carlsbad Redevelopment Agency. The developer is
requesting that the City/Agency contribute a total of $3,750,000 to the project. The
City/Agency's proposed contribution of $75,000 per unit will be repaid through future surplus
cash generated from project operations.
Page 3
PERMANENT SOURCES OF FUNDS
Source
Tax Credit Investor Equity
Private Loan/Bonds
City/Agency Contribution
Deferred Developer Fee/Other
Total Sources of Funds
Total Amount
$10,933,640
$2,797,800
$3,750,000
$941,266
$18,422,706
Per Unit
$218,673
$55,956
$75,000
$18,825
$368,454
Financial Assistance Documents
As proposed, the City/Agency assistance ($3,750,000) will be provided in the form of a
residual receipts loan secured by a note and deed of trust. The outstanding principal and
accrued interest on the City loan will be amortized over fifty-five years and repaid from
surplus cash in equal annual installments of principal and interest. In the event that there is
not adequate cash surplus to repay the City loan, the outstanding balance shall accrue with
simple interest at 3% per annum. The terms of the City assistance is the same loan structure
that was utilized for each previous affordable housing project developed in the City of
Carlsbad.
In order for the project to receive the $3,750,000 loan, the Developer is required to enter into
loan and regulatory agreements with the City of Carlsbad/Carlsbad Redevelopment Agency.
As one of the actions set forth within this report, the Housing and Redevelopment
Commission is being asked to authorize the Housing and Redevelopment Director and City
Attorney to negotiate and prepare the required loan documents for execution by the
City/Agency and the Developer. The required documents are explained further below:
1. Loan Agreement states the terms and conditions relating to the City/Agency's loan.
2. Regulatory Agreement records the terms of affordability and the operation requirements
for the project.
3. Promissory Note is executed by the Developer and expresses their intent to repay the
loan.
4. Deed of Trust is recorded against the property to secure the City/Agency's interest in the
subject property and related improvements.
It is important to also note that the City/Agency will ultimately be required to subordinate the
subject documents to the senior lien holder. If approved, the attached resolution authorizes
the City Manager/Executive Director, or his designee, to execute subsequent subordination
agreements. While the loan and related subordination documents will not return to the City
Council/Commission for review and approval, Staff will take the necessary steps to insure
that the documents provide the City/Agency with adequate security, notice and cure ability.
The subordination documents will be reviewed by, and be subject to final approval by the City
Attorney, acting as legal counsel for the Carlsbad Redevelopment Agency.
Page 4
HOUSING COMMISSION RECOMMENDATION ON FINANCIAL ASSISTANCE
At their meeting on July 9, 2009, the Housing Commission reviewed the request from the
Developer for financial assistance in the amount of $3,750,000. The Commission
recommended (4-0) that the City Council and/or Housing and Redevelopment Commission
approve the loan in the amount of $3,750,000 from the Redevelopment Agency's Low and
Moderate Income Housing Set-Aside Fund.
STAFF RECOMMENDATION
The proposed request for financial assistance was reviewed by the Housing Policy Team
(staff). The Team also recommends that the City Council adopt the attached resolution to
authorize financial assistance for the Tavarua Senior Affordable Apartment Project, as
recommended by the Housing Commission.
ENVIRONMENTAL REVIEW
The noted senior residential development was reviewed pursuant to the California
Environmental Quality Act (CEQA). Staff conducted an environmental impact assessment to
determine if the project could have a potentially significant impact on the environment
pursuant to CEQA Guidelines and the Environmental Protection Ordinance (Title 19) of the
Carlsbad Municipal Code. As a result of said review, the initial study (EIA Part 2) identified
potentially significant effects on the environment, but mitigation measures agreed to by the
applicant would avoid or mitigate the effects to the point where clearly no significant effect on
the environment would occur, and there is no substantial evidence in light of the whole record
that the project as conditioned may have a significant impact on the environment. A Mitigated
Negative Declaration (MND) was approved by the Planning Commission on June 4, 2008.
FISCAL IMPACT:
The financial assistance in the form of a $3,750,000 residual receipts loan will be provided
from the Village Redevelopment Low and Moderate Income Housing Set-Aside Fund, which
has a current undesignated fund balance of approximately $5.5 million.
EXHIBITS:
1. Housing and Redevelopment Commission Resolution No. 475 (to approve
financial assistance for the Tavarua Senior Affordable Apartment Development
2. Project Location Map
3. Project Financial Proforma
4. Housing Commission Staff Report and Resolution, dated July 9, 2009.
5. Draft Housing Commission Minutes, dated July 9, 2009.
1 RESOLUTION NO. 475
2 A RESOLUTION OF THE HOUSING AND REDEVELOPMENT
COMMISSION OF THE CITY OF CARLSBAD, CALIFORNIA, TO
3 APPROPRIATE REDEVELOPMENT AGENCY HOUSING SET-
4 ASIDE FUNDING IN THE AMOUNT OF $3,750,000 TO ASSIST IN
PROVIDING FINANCIAL ASSISTANCE TO THE PARTNERSHIP OF
5 WESTERN COMMUNITY HOUSING AND META HOUSING FOR
THE CONSTRUCTION OF FIFTY (50) AFFORDABLE SENIOR-
6 RESTRICTED APARTMENT UNITS WITHIN THE NORTHWEST
QUADRANT OF THE CITY OF CARLSBAD AND OUTSIDE THE
7 REDEVELOPMENT PROJECT AREA(S).
8 APPLICANT: WESTERN COMMUNITY HOUSING/META HOUSING
9 CASE NO: SDP 06-12
10
WHEREAS, Western Community Housing and Meta Housing have partnered and have
11
proposed to construct 50 senior-restricted affordable apartment units on Harding Street in the
1 - Northwest Quadrant of the City of Carlsbad, which is located outside the boundaries of the
14 Redevelopment Plan areas (Village and South Carlsbad Coastal Redevelopment Project Areas);
15 and
16 WHEREAS, Western Community Housing and Meta Housing has requested that the
*' Carlsbad Redevelopment Agency provide financial assistance in the form of a construction
18 and/or permanent loan to assist in the construction of said apartment units; and
19 WHEREAS, the Redevelopment Agency of the City of Carlsbad, hereinafter referred to
20
as "Agency", is a Community Redevelopment Agency organized and existing under the
21
Community Redevelopment Law, Health and Safety Code Section 33000, etc.seq., hereinafter
22
referred to as the "Act", and desires to assist in the financing of said project to be developed by
£*3
24 Western Community Housing and Meta Housing; and
25 WHEREAS, the Agency is authorized to implement the housing activities within the
26 Redevelopment Plans for the Carlsbad Village, which has a plan that has recently expired but has
27
28
5
1 a continuing obligation to provide affordable housing, and South Carlsbad Coastal
2 Redevelopment Project Areas; and
WHEREAS, Section 33334.2 of the Act requires that not less than twenty percent (20%)
4
3
of all taxes which are allocated to the Agency be used for purposes of increasing and improving
5 the community's supply of low and moderate income housing; and
6
WHEREAS, pursuant to Section 33334.2 of the Act, the Legislature declares its intent
7
that the Low and Moderate Income Housing Set-Aside Fund shall be used to improve and
8
„ increase the supply of affordable housing within the community; and
WHEREAS, to carry out the purposes of increasing and improving the community's
11 supply of low and moderate income housing, Section 33334.2(e) of the Act states that the
12 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
14 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,
16
lower income households, or persons or families of low and moderate income, or other powers to
17
carry out the purposes of the Act; and
18
WHEREAS, pursuant to Section 33334.2(g) (1) of the Act, the Agency may use said
2Q funds outside the project area(s) upon a resolution of the Agency and the Legislative body that
21 the use will be of benefit to the project area(s); and
22 WHEREAS, on the 9th day of July, 2009, City of Carlsbad Housing Commission did
23 hold a public meeting to consider a request for Agency financial assistance for the construction
of said 50 senior-restricted affordable housing apartment units by the affordable housing
25 developer partnership of Western Community Housing and Meta Housing, and subsequently
26
recommended approval of the request for assistance; and
27
28
1 WHEREAS, the Housing and Redevelopment Commission did hold, on the date of this
2 resolution, a public meeting to consider said request for Agency financial assistance for the
construction of said 50 senior-restricted affordable housing apartment units by the affordable
housing developer partnership of Western Community Housing and Meta Housing; and,
5"
4
//
6
7n
WHEREAS, at said public meeting, upon hearing and considering all testimony, if any,8
of all persons desiring to be heard, said Housing and Redevelopment Commission considered all
10 factors relating to the application and request for financial assistance; and,
11 WHEREAS, the Housing and Redevelopment Commission approved the appropriation
12 and expenditure of $3,750,000 from the Low and Moderate Income Housing Set-Aside Fund
13 outside the Redevelopment Project Areas for the purposes of providing loan proceeds to assist in
14 the financing of construction of 50 senior-restricted units of rental housing for very low, low and
15 moderate income persons/families to Western Community Housing and Meta Housing.
16
NOW, THEREFORE, BE IT HEREBY RESOLVED by the Housing and
17
Redevelopment Commission of the City of Carlsbad, California, as follows:
18
1. The above recitations are true and correct.
20 2. The request for Agency financial assistance is consistent with the goals and
objectives of the City of Carlsbad's Housing Element and Consolidated Plan, the
21 Carlsbad General Plan, and the approved Redevelopment Plans for the Village
Area (which has an expired plan but a continuing obligation to provide for
22 affordable housing) and South Carlsbad Coastal Redevelopment Project Areas.
23 3. The request for Agency financial assistance will assist the affordable housing
developer to construct a total of 50 one and two bedroom senior-restricted
affordable apartment units. The project, therefore, has the ability to effectively
serve the City's housing needs and priorities as expressed in the Housing Element
and the Consolidated Plan as well as meet the housing needs for the
26 Redevelopment Project Area(s) in the City of Carlsbad.
27
28
1
1 4. That the expenditure of monies from the Low and Moderate Income Housing
Fund for the purposes of funding a construction and/or permanent loan to
2 Western Community Housing and Meta Housing, for a senior-restricted
affordable housing project containing 50 rental units outside the Redevelopment
Project Area(s), in which such funds are generated, are and will be of benefit to
the respective Project Area(s) based on the following findings:
5 a. The Village Area consists of a number of restaurants, small retail operations
and various services which depend on local residents for their financial
6 viability as a business. The proposed residential units will provide an
additional market of customers for the wide variety of goods and services
' offered within the Village Area and within very close walking distance of said
project.
9 b. The South Carlsbad Coastal Redevelopment Area is proposed to have several
new restaurants, small retail operations and services which will also depend
10 on and offer an attractive shopping and service area for local residents. The
proposed housing project will assist in providing affordable housing
11 opportunities for those new customers/residents and ultimately benefit the
project area by providing an enhanced customer base which is located within
very close driving proximity to the project area.
13 c. The proposed project is located on bus routes and connects to major
14 transportation corridors which will allow direct access to the Village Area and
the South Carlsbad Coastal Redevelopment Project Area. The households
15 residing within the proposed project will be able to take advantage of the
public transportation systems which will allow them to eat, shop and play in
the Village Area and ultimately in the South Carlsbad Coastal Redevelopment
Area as well. This will have a significant impact on the Redevelopment
Agency's efforts to revitalize the both the Village Area and South Carlsbad
j o Coastal Redevelopment Project Area.
19 5. That the Low and Moderate Income Housing Set-Aside Funds will promote the City of
Carlsbad's housing goals and satisfies specific requirements of the Community
20 Redevelopment Law to expend a portion of its tax increment to produce affordable
housing opportunities for low and moderate income persons.
22 6. That the expenditure of the subject Low and Moderate Income Housing Set-Aside Funds
to provide financial assistance to the subject project in the form of a residual receipts loan
23 in the total amount of $3,750,000 is consistent with the Low and Moderate Income
Housing Set-Aside Spending Strategy/Plans.
24
7. That the Housing and Redevelopment Commission authorizes the Agency's Executive
25 Director or his/her designee, including the Housing and Redevelopment Director, and the
Agency's Legal Council to negotiate and prepare for execution all documents related to
provision of the Agency assistance to fund the subject residual receipts
27 construction/permanent loan to Western Community Housing and Meta Housing for
28
development of the subject senior-restricted affordable housing project.
8. That the Housing and Redevelopment Commission authorizes the Agency's Executive
„ Director or his/her designee to execute subsequent subordination agreement(s)
subordinating the Agency's Regulatory Agreement and Deed of Trust to the Deed of
4 Trust for construction and permanent lenders, as required, subject to review and approval
by the Agency's General Counsel, and subject to the Executive Director's finding that no
5 other financing that does not require subordination is reasonably available.
9. That the Housing and Redevelopment Commission authorizes the Finance Director to
appropriate and expend the funds set forth within this approval to provide the proceeds
($3,750,000) for the residual receipts construction/permanent loan to Western
o Community Housing and Meta Housing for the subject affordable housing project, and as
set forth in the approved loan documents.
9"
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PASSED, APPROVED AND ADOPTED at a Special Meeting of the Housing and
Redevelopment Commission of the City of Carlsbad on the 11th day of August 2009, by
the following vote to wit:
AYES: Commission Members Lewis, Kulchin, Hall, Packard and Blackburn
NOES: None.
ABSENT: None.
A LEWIS, Chairman
ATTEST:
LISA HILDABRAND, Secretary
(SEAL)
= £/ ESTABLISHED \\\
EXHIBIT 2
NOT TO SCALE
SITEMAP
SOURCES & USES
CONSTRUCTION
Land
Acquisition Costs
Architecture/Engineering
Impact Fees
Const. Loan Interest
Other Soft Costs
Onsite/Offsites/Demo
Hard Costs
Dev. Fee
TOTAL USES
PERMANENT
Land
Acquisition Costs
Architecture/Engineering
Impact Fees
Const. Loan Interest
Other Soft Costs
Onsite/Offsites/Demo
Hard Costs
Dev. Fee
TOTAL USES
$$$$$
$
$
$
$
$
$$$
$$
$
$$$
$
3,270,000
-
961,996
636,134
847,315
1,613,618
1,091,429
8,182,214
1 ,820,000
18,422,706
3,270,000
-
961 ,996
636,134
847,315
1,613,618
1,091,429
8,182,214
1,820,000
18,422,706
CONSTRUCTION
1st Construction Loan
City of Carlsbad
TCAC ARRA Award (TCAP Funds)
Accrued Interest on City Loan
County
Other •
Tax Credit Equity
Deferred Costs
TOTAL SOURCES
PERMANENT
Perm Lban
City of Carlsbad
TCAC ARRA Award (TCAP Funds)
Accrued Interest on City Loan
County
Other
Tax Credit Equity
Deferred Dev. Fee
Gap Amount
TOTALSOURCES
100%
95%
100%
100%
100%
25.0%
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
9,000,000
3,750,000
1
2
1
,520,043
225,000
-
-
,333,399
,594,265
18,422,706
2,797,800
3
1
9
,750,000
,600,045
225,000
-
,333,595
-
716,266
18,422,706
XI
TO
H
U)
DEVELOPMENT BUDGET
Total Number of Units:50
LAND COST
Acquisition
Demolition
Closing Costs/Legal Costs
TOTAL LAND COST
Offsite Improvements
Existing Improvements Value
TOTAL ACQUISITION COSTS
'DIRECT COSNTRCT. COST
Building -,
Gen Cond/Overhead/Profit
Other
Onsite/Offsites/Demo
Subtotal Direct Const.Cost
Contingency
TOTAL CONSTRUCTION
SOFT COSTS
Appraisal
Arch., Structural, MEP, Landscape
Reimburseable/Reproductions
Civil, Survey & Soil Engineers
Construction Manager
Environmental
Escrow/Title
Furnishings
Insurance
Legal
Marketing/Lease Up
Market Study
Original Permits/Fees
Development Impact Fees
Real Estate Taxes
Permit Processing
Syndication Fees
Tax Credit Fee
Capitalized Operating Reserve
Capitalized Replacement Reserve
Additional Rent Reserve
Misc. (Organization, Accounting, etc.)
Subtotal Direct Const.Cost
Soft Cost Contingency
TOTAL INDIRECT CONST.
8.00%
0%
10%
Total Cost
$ 3,200,000
$
S 70,000
$ 3,270,000
$
$
$ 3,270,000
S 6,844,715
S 650,563
S
S 1,091,429
$ 8,586,707
$ 686,937
$ 9,273,643
S 10,000
$ 585,471
$ 35,000
$ 341,525
S 250,000
S 40,000
S 40,000
S 120,000
$ 121,973
$ 85,000
S 75,000
S 10,000
S 65,000
$ 636,134
S 34,500
S
S
S 76,221
$ 107,603
$
S
S 120,000
$ 2,753,427
$ 275,343
$ 3,028,770
Cost Per
Unit
$ 64,000
$
$ 1,400
$ 65,400
$
$ 65,400
$ 136,894
$ 13,011
$
$ 21,829
$ 171,734
$ 13,739
$ 185,473
$ 200
$ 11,709
$ 700
$ 6,831
$ 5,000
$ 800
$ 800
$ 2,400
$ 2,439
$ 1,700
$ 1,500
$ 200
$ 1,300
$ 12,723
$ 690
$
$
$ 1,524
$ 2,152
$
$
$ 2,400
$ 55,069
$ 5,507
$ 60,575
Cost Per
Sq. Ft.
48.70
-
1.07
49.77
$
$ 49.77
104.17
9.90
-
. 16.61
130.68
10.45
141.13
0.15
8.91
0.53
5.20
3.80
0.61
0.61
1.83
1.86
1.29
1.14
0.15
0.99
9.68
0.53
-
-
1.16
1.64
-
-
1.83
41.90
4.19
46.09
% of Total
Budget
17.37%
0.00%
0.38%
17.75%
0.00%
17.75%
37.15%
3.53%
0.00%
5.92%
46.61%
3.73%
50.34%
0.05%
3.18%
0.19%
1.85%
1.36%
0.22%
0.22%
0.65%
0.66%
0.46%
0.41%
0.05%
0.35%
3.45%
0.19%
0.00%
0.00%
0.41%
0.58%
0.00%
0.00%
0.65%
14.95%
1.49%
16.44%
Eligible Basis
0
0
$ 6,844,715
$ 650,563
$
$ 321,429
$ 7,816,707
$ 686,937
$ 8,503,643
$ 10,000
$ 585,471
$ 35,000
$ 341,525
$ 250,000
$ 40,000
$ 40,000
$ 120,000
$ 121,973
$ 85,000
$
$ .10,000
$ 65,000
$ 636,134
$ 34,500
$
$
$
$
$
$
$ 15,000
$ 2,389,603
$ 275,343
$ 2,664,946
FINANCING
Const, Loan Points
Const. Lender Reports and Costs
Const. Lender Legal
Const. Loan Interest
Permanent Loan Points & Fees
Perm. Lender Reports and Costs
Permanent Lender Legal
Issuance Costs
TOTAL FINANCING
DEVELOPMENT FEE
TOTAL PROJECT COST
$ 90,000
S 15,000
S 30,000
$ 847,315
$ 27,978
$ 5,000
$ 15,000
$
$ 1,030,293
$ 1,820,000
$ 18,422,706
$ 1,800
$ 300
$ 600
$ 16,946
$ 560
$ 100
$ 300
$
$ 20,606
$ 36,400
$ 368,454
1.37
0.23
0.46
12.90
0.43
0.08
0.23
-
15.68
27.70
$ 280
0.49%
0.08%
0.16%
4.60%
0.15%
0.03%
0.08%
0.00%
5.59%
9.88%
100%
$ 90,000
$ 15,000
$ 30,000
$ 847,315
$
$
$
$
$ 982,315
$ 1,400,000
$ 13,550,904
TJiG City of Csarlmbad. HoixaUng «&EXHIBIT 4
Staff: Detobie Fountain
Housing and Redevelopment
Director
Item. No. I
DATE: July 9,2009
SUBJECT: SDP 06-12 - TAVARUA SENIOR APARTMENTS- RECOMMENDATION
OF APPROVAL TO THE CITY COUNCIL AND HOUSING AND
REDEVELOPMENT COMMISSION TO PROVIDE $3,750,000 IN FINANCIAL
ASSISTANCE FOR CONSTRUCTION OF FIFTY AFFORDABLE
APARTMENT UNITS RESTRICTED FOR SENIORS ONLY IN THE
NORTHWEST QUADRANT OF THE CITY.
I. RECOMMENDATION
That the Housing Commission ADOPT Resolution No. 2009-002, recommending
APPROVAL to the City Council and Housing and Redevelopment Commission to
provide $3,750,000 in financial assistance from the Carlsbad Redevelopment Agency
Housing Set-Aside Funds for construction of fifty (50) affordable apartment units
restricted to seniors only in the northwest quadrant of the City of Carlsbad.
II. PROJECT BACKGROUND
In June of 2008, the Carlsbad Planning Commission approved the Harding Street Senior
Condominiums. This project is a fifty (50) unit housing project which was approved as a
mixed income, ownership project - 35 market rate and 15 affordable to low and moderate
income senior households. An affordable housing development partnership - Western
Community Housing and Meta Housing - has recently contracted to purchase the site
with the intent of building it as a 100% affordable project for low income seniors. The
development team is also proposing to change the project to rental rather than for-sale.
The property is located at 3574 Harding Street, in close proximity to the Senior Center.
This project is unique because it is not being built as a result of a master development
inclusionary housing requirement. The development team of Western Community
Housing and Meta Housing has pursued the project on its own and as a "stand alone"
affordable complex. The units provided will be above and beyond those anticipated as a
result of implementation of the inclusionary housing program in Carlsbad, and the project
can, therefore, serve as a combined inclusionary housing development for housing credit
sales purposes.
SDP 06-12 - TAVARUA SENIOR APARTMENTS
July 9, 2009
PAGE 2
III. PROJECT DESCRIPTION
The affordable housing apartments will be located on a .90 acre parcel that is located at
3574 Harding Street, on the southeast corner of Palm Avenue and Harding Street. The
site is currently developed as a 35 bed senior assisted care facility. Interstate 5 is located
adjacent to the site on the east side and at a 22 foot higher elevation. The surrounding
properties to the north, south, and west are development with single family, two family
and multifamily residential structures. As noted above, this project was originally
approved as a mixed income affordable condominium/ownership senior only
development. The project will be revised to operate as a senior only rental development
with some design modifications, and 100% affordable to low income households.
The proposed 50-unit affordable apartment project is anticipated to consist of a single,
three story building with a subterranean garage. Proposed amenities include a well-
landscaped courtyard area and community room. The development will also provide for
diverse programming that takes a whole-person approach to creative and healthy aging by
providing arts, wellness, lifelong learning, community building and intergenerational
programs for the senior residents. The proposed development includes 40 one bedroom
(80%), 9 two bedroom (18%), and one two bedroom manager unit. Of the 50 units, 5
units will be affordable to households earning 30% of the San Diego County Area
Median Income (AMI), 5 units will be affordable to households earning 40% of AMI, 25
units will be affordable to households earning 50% of AMI, and 14 units will be
affordable to households at 60% of AMI. An 2009 income chart with rent levels is
attached for information purposes.
IV. DEVELOPMENT TEAM
A partnership team of Western Community Housing and Meta Housing will develop,
own, and operate the affordable housing project. The team is experienced and has
recognized expertise in developing high-quality affordable apartment communities for
seniors at all income levels, while also enhancing their quality of life. This is the first
affordable housing development in Carlsbad for this team. However, they are well
established within the affordable housing development industry and have worked with
several California cities and non-profit organizations to produce quality residential
developments. Promotional materials provided by Meta Housing are attached for review
by the Housing Commission.
SDP 06-12 - TAVARUA SENIOR APARTMENTS
JULY 9, 2009
PAGE 3
V. FINANCIAL ASSISTANCE
A. Cost Reasonableness
The developer has provided a detailed development proforma for review by staff and the
Housing Commission (See Attachment 2). Since development costs are one of the key
variables determining the need for subsidies, it is important that those costs be
reasonable. At approximately $18.4 million, including the cost of the land, the average
unit cost of $368,454 is, in fact, high but reasonable when consideration is given to the
requirement to pay state prevailing wage rates, the continuing high cost of land in the
coastal area, current costs of construction and the added cost of building underground
parking.
B. Undue Gain
It is important that any financial assistance have the effect of making the units more
affordable and not creating undue gain for any party. The Developer will receive a
"Developer Fee" of $1,820,000, or approximately 10% of total project costs (including
land). The developer fee is fairly consistent with other affordable housing projects in
Carlsbad. It is reasonable in light of the project size, affordability and financing
complexity.
C. Subsidy Analysis
The Developer is proposing to finance the project with a conventional loan of
approximately $2.8 million and tax credit equity of approximately $10.9 million. The
Developer is also requesting a total of $3,750,000 in financial assistance from the City.
Staff is recommending that direct financial assistance be provided to the project in an
amount of $3,750,000. This direct financial assistance will equate to $75,000 per
affordable unit.
The $75,000 per unit is larger than what has been previously approved for similar affordable
housing projects. The City assisted in the financing of one other affordable rental project that was
built outside the inclusionary housing requirement, which means there is no Master Developer to
assist with the financing. For that project, a total of approximately $50,000 was provided in per
unit City subsidy. However, staff believes that the greater amount of assistance is warranted for
the current project for two reasons. First, the project is being developed in the northwest
quadrant and outside of the City's Inclusionary Housing Program, which means the project can
be used as a combined affordable housing development for the purpose of purchase of credits by
other developers. There is currently no combined project other than the small Habitat project (11
units) on Roosevelt Street in which credits can be purchased for satisfaction of the inclusionary
housing requirements. These "credit" units are and will be greatly needed by the development
community upon rebound of the economy. The additional units will also help significantly in the
City's efforts to meet its housing goals. Second, the development will be for senior citizens only
SDP 06-12 - TAVARUA SENIOR APARTMENTS
JULY 9, 2009
PAGE 4
and have rents that will be affordable to households ranging from 30% of the area median
income to 60% of the area median income. This is lower than the requirements of the
Inclusionary Housing Program and will assist the City in meeting the needs of the very
low income senior households in need of affordable housing. The City currently has only
one other senior restricted, affordable rental complex in Carlsbad - Tyler Court - and it is
owned by the Carlsbad Redevelopment Agency.
The following is a summary of the sources and uses of funds based on the estimated
development costs and the proposed financing structure. The developer's detailed
proforma is attached as Exhibit 2:
SUMMARY PROFORMA
PERMANENT SOURCES OF FUNDS
Conventional Loan
City/Agency Contribution
Tax Credit Investor Equity
Other
Total Sources
TOTAL
$2,797,800
$3,750,000
$10,933,640
$941,266
$18,422,706
PER UNIT
$55,956
$75,000
$218,673
$18,825
$368,454
D.Form of Assistance
City/Agency cash assistance will be in the form of a residual receipts loan secured by a
note and deed of trust. The loan will begin accruing after the completion of construction
of the improvements. The outstanding principal and accrued interest on the City/Agency
loan will be amortized over fifty-five years and repaid from cash surplus in equal annual
installments of principal and interest. In the event that there is not adequate cash surplus
to repay the City/Agency loan, the outstanding balance shall accrue with simple interest at
3% per annum.
The financial assistance will be provided from the Redevelopment Agency Housing Set-
Aside Funds.
E. Security
The Developer will be required to provide completion bonds to both the City/Agency and
the permanent lender to insure that construction is completed.
SDP 06-12 - TAVARUA SENIOR APARTMENTS
JULY 9, 2009
PAGES
F. Risk
In its role as a lender to the project, the City/Agency is exposed to three risks inherent to
real estate development. These risks generally include 1) predevelopment (project does
not get to construction), 2) construction (project cannot be completed, cost overruns,
contractor problems), and 3) operation (revenues do not cover expenses). Adding to this
risk, any City/Agency financial assistance will be subordinated to conventional financing.
A number of factors mitigate the risks. First, the development team has a strong track
record with similar affordable housing projects. The presence of other major financial
commitments, such as a tax credit investment, is also key as this means that other
stakeholders depend on the success of the project both short and long term. Finally, the
position of City/Agency and other subordinated financing is a feature that helps attract the
necessary private financing.
VI. FINANCIAL ASSISTANCE AGREEMENT
With a recommendation from the Housing Commission and approval of the City Council
and Housing and Redevelopment Commission, appropriate documents, including a
Financial Assistance Agreement, Regulatory Agreement, Promissory Note and Deed of
Trust, will be prepared and executed to set forth the terms of the financial assistance and
its repayment.
VII SUMMARY AND STAFF RECOMMENDATION
It is the role of the Housing Commission to make financial assistance recommendations
to the City Council and Housing and Redevelopment Commission based on several
considerations with respect to affordable housing projects. These are:
The proposal's effectiveness in serving the City/Agency's needs and priorities as
expressed in the Housing Element of the General Plan and the Consolidated Plan.
The proposal's consistency with the City's affordable housing policies and
ordinances as expressed in the Housing Element and Inclusionary Housing
Ordinance.
The proposal's development and operating feasibility, emphasizing the
development team capacity, financing sources and the role of the City/Agency in
providing financial assistance or incentives.
The Tavarua Senior affordable apartment project is proposed by a capable
development team that is committed to affordable housing. The financing
structure of the project is sound. The proposed City/Agency assistance meets the
SDP 06-12 - TAVARUA SENIOR APARTMENTS
JULY 9, 2009
PAGES
City/Agency's three key underwriting goals of a strong borrower, reasonable project costs
and a high degree of leveraging. The project quality includes good design and location.
City/Agency housing goals are supported by the project's unit mix and affordability.
It is the Affordable Housing Policy Team's (staff) recommendation that the Housing
Commission approve the resolution of support recommending to the City Council and
Housing and Redevelopment Commission that the City provide a total of $3,750,000 in
financial cash assistance to the Tavarua Affordable Senior housing development within
the northwest quadrant of the City of Carlsbad.
VIII. EXHIBITS
1. Housing Commission Resolution No. 2009-002
2. Proforma
3. Promotional Materials for Meta Housing
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HOUSING COMMISSION RESOLUTION NO. 2009-003
THAT THE HOUSING COMMISSION RECOMMEND APPROVAL TO THE CITY
COUNCIL AND HOUSING AND REDEVELOPMENT COMMISSION OF $3,750,000
IN FINANCIAL CASH ASSISTANCE FROM REDEVELOPMENT AGENCY
HOUSING SET-ASIDE FUNDS TO WESTERN COMMUNITY HOUSING INC AND
META HOUSING CORPORATION FOR CONSTRUCTION OF FIFTY (50)
AFFORDABLE APARTMENT UNITS IN THE NORTHWEST QUADRANT OF THE
CITY OF CARLSBAD ON PROPERTY LOCATED ON 3574 HARDING STREET.
APPLICANT: WESTERN COMMUNITY HOUSING/META HOUSING
CASE NO: SDP 06-12
WHEREAS, the Western Community Housing and Meta Housing Corporation has
proposed to construct 50 apartment units affordable to lower income households within the City
of Carlsbad and has requested financial assistance from the City of Carlsbad and/or Housing and
Redevelopment Commission to assist in the financing of said affordable housing project; and,
WHEREAS, the request for financial assist to construct said units has been submitted to
the City of Carlsbad's Housing Commission for review and consideration; and
WHEREAS, said Housing Commission did, on the 9th day of July, 2009, hold a public
meeting to consider the request for financial assistance for the construction of said 50 affordable
housing apartment units for seniors by the affordable housing developers, Western Community
Housing and Meta Housing; and
WHEREAS, upon hearing and considering all testimony, if any, of all persons desiring to
be heard, said Commission considered all factors relating to the proposal to construct said
affordable housing units.
1 NOW, THEREFORE, BE IT HEREBY RESOLVED by the Housing Commission of the
2 City of Carlsbad, California, as follows:
3
1. The above recitations are true and correct.
4
2. • The request for financial assistance is consistent with the goals and objectives of
the City of Carlsbad's Housing Element, Consolidated Plan, the Inclusionary
Housing Ordinance, Redevelopment Plan and the Carlsbad General Plan.6
7 3. The request for financial assistance will assist the affordable housing developer to
construct a total of 50, one and two bedroom affordable apartment units for
g seniors which will be affordable to households ranging from 30% to 60% of area
median income for San Diego County. The project, therefore, has the ability to
9 effectively serve the City's housing needs and priorities as expressed in the
Housing Element and the Consolidated Plan as well as the Redevelopment Plan.
10
. That based on the information provided within the Housing Commission Staff
Report and testimony presented during the public meeting of the Housing
Commission on July 9, 2009, the Housing Commission hereby ADOPTS
Resolution No. 2009-03, recommending APPROVAL to the City Council and
13 Housing and Redevelopment Commission to provide up $3,750,000 in financial
cash assistance from the Carlsbad Redevelopment Agency Housing Set-Aside
14 Funds to Western Community Housing and Meta Housing for the construction of
fifty (50) affordable apartment units for seniors within the City of Carlsbad at
15 property located at 3574 Harding Street within the Northwest Quadrant of the
City.16 y
17 "'
18 ///
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222.2.
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5. That the Housing Commission recommends that the City Manager or Executive
Director or his or her designee be authorized by the City Council and/or Housing
and Redevelopment Commission to prepare and execute all documents related to
provision of the City/Agency assistance, including but not limited to a Financial
Assistance Loan Agreement, Note, Deed of Trust and Regulatory Agreement,
subject to review and approval by the City Attorney, as legal counsel to the City
of Carlsbad and Carlsbad Redevelopment Agency.
PASSED, APPROVED, AND ADOPTED at a meeting of the Housing Commission of
the City of Carlsbad, California, held on the 9th of July, 2009, by the following vote, to wit:
AYES: Bradwell, Kirk, Ritchie, and Smith
NOES: None
ABSENT: Wrisley
ABSTAIN: None
'BOBBI SMITH, CHAIRPERSON
CARLSBAD HOUSING COMMISSION
DEBORAH K. FOUNTAIN,
HOUSING AND REDEVELOPMENT DIRECTOR
EXHIBITS
I Downrown News August 20,2007
Meta Goes Mega
Developer Proves Affordable Housing Can Also Be Profitable
m EVAN
vrw>
A ratable housing devd .'• i was •A.iH,-
. ."• million housing
com pie . ii ip i-\emly buiti in ' '
. • ;',;i!(iy thing happened. A resident himn^oui .1 sec-
- : • i»dknriy shuuied do\\n U) the sideu.iik, "Thank
•. I . I's thl owner"
he added
Thai sip) of gratitude is not the fioi';>i m Ciiv \V.-
ohie, mils .iiui •.^sninj: luxury bousing «.invnK"\e>- s*»n it--
times pit residents who rciv nn affordable but often ding)'
apartments against bndta • . -imi/c profits,
Mean , i • lrx>k Jl communities »:
Lent io IMwntmvn Los Angefe> .is ,rn mue.ssiasijiv important
affordable houM!>i; near ir.nKport.irjtir
The need is not IOM on i lu4x-*\ '.ihosv ior-pmfit ionium,
Met d I ioi,)S!i5ji, is vwuking on four affordable pronv •
• • :. ' r.Oj lejdent.
n i;c>ii]j> in hj\r p
,dli>rd to tiyc hes.
Qnuidlman Ed Revex whose l"ir>( District inciudi- n •
lite films Omtitown project;,. "I *\ish ; ui;jk: Jane them."
Mela's K.Vunil Ftm-nikl Terr^- : i in May,
; ' .KlulLs and 113 Jiikhm
opening edebraii< -- p -^ned iiw next mdnth, fol-
i nstniciion ,u i .?45 ritH-raJd Dr.
Lcs-s than d n;ik .:•. tunipldc Lilian Poini
Limily ,!'•• i . . , I'Unil '>uikiin^
tiwt sumiuntfe a shady twurtyurti. 7"hc 58 miilkin project and
.moihcr 21-uiiil afsirtnicnt huiidini;. C'omnilsi ;b, _: .
>.7.5 milli: 1 1 ' ipfn in \'u\enihc'r. l\\ .• .•.
i :!ie developer, which specialises in
senior hi". .
Then there's ihc nussivc \orthwesi Ci.ilnvax' p .
i,: Second streets: Me(<t ;'.
S70 miiliun. 27"-unit huiidin^ whi*.h \vill [HMNI 5™ ,ii!nid-
\\'hik- Mcia ! lousing s oiik-r -KM^ piuieci.- arc devoted
c\Jiisi\-d\ 10 teiwnts \V!K^ ni.ikc Ivmwn Mr.o ,ind W>- of the
• • - - ii() lor ,1 (nmiiv o! iiiiir-, North\W"i
• -:>;in.s.il!]Hc.Hik ii .
J lu.ske) !•« okjy with that, "iuvjitNi1 ii hrciiks pi-c ;
-• • "When ,t pi-fi :
camiDunity member move in, f c.ui chj&nge ^ ou un uiio is
;
RiKiin? the Market". . " linking};',)! rlsMiin in lv-h
: • • .-<r> ;n ilie xui fVniifiidu
', jik- "!h,.it is vx-minglv ,i Ur ^r.- ironi low-mc'--.
Turns out iht- !•• . d >J.Tcni, v.ut! i |;i--.f. :»
K i'! ttesiyn fiiresighi. --nisirt hranoaJ panning
,HK| wJid ni;tii,ijii.'MK-ni.
Mure ihiin jm'ihini;, ih- • -rtd undeiscfved
demartLi, said 1 .uminit-
It-*.- lor |}K- MTirtiihk i laiisiilj; Trusl rand IISM-'
lames Hafaa
•
"MHiilu-m c.tiilornu. Met;; Housing announced ii.
(ious, miwd-inctwie 'vnliv.cM i iau-w;^ v.s.niplt.v o
. . ,
•• ;. of ihe famed Red Car fu id
\or.-prciit Onlun I lousing) the primary It'ndt,
development, also planned -o prmnlr on flte inforinjt and
1 . |(th :
•• and other local k i i
. ;iie, land iust south of ihe site went up Im - >• '•
ta I :>> -h.iiiv.' i- • dei d< p ..noiv on the
same block, ihis rime at r. !
Emerald Terrau- am.1 ihc G>rmi •:!(„• wer<. dnmn ^n,
tion .-in irk' former begirt in November 2(X)5,
But iu-si is the Northwefl Uitewyy pniject re^vd a[\ so did
the price of construction niatcriaU, ihreuUv;
IxiJanced OVXed-tttCome pniieti. Uu-kev s
thojie to lotus on ihe .iilnnlabk1 jm>iecls and relintjui.'Jxx] the
lead on Norih\ML-i i
\vliik- EV*A now heads UK- development)
i olcr, who !ia> worked with Huskey several times
...
.itiid (h<i! Clou's \vlu.Te I lusko s prionties lay.
; ••. vercvi e\en vihen it's been I manually pain-
ful," saki Wooler."Some c-ievelojXTs ms! walked •-
hest pntiects and John rwilly ftuck with it and bore
the financiil burden to H\'C up to what he proniiseii."
Emerald in the Bbdc
••
bkit* jnd jjniy iTtiiki- i • I -/nice sliiiub mn
neglected apjmment compk'xes ivarl^1.
Jnskk-.1. • im patio furniture and pfa] •
equipment sib amid .1 view of the Mxm-lo-be-g"
1 • • ;\trk.
,-). over-
looks that courtyard, MII.I sne "till vdn't believe her luck.
A customer scn'ice representative for . •.
\ •. ' • 775 a mortih for h..
hmerajd IVrra^c. I hat heat .my-thmj! in I'asijJetu, CTCTI svith «i
n; sheoould uc! '.hrou^/'
"Oh in . ' ERg like this thai was not mokl-in
fe-iieci, run-down, dru^-infisUd? No, nothing v^> <-• . .
p-irjble to ihk" she s;iiiJ.
A(-(.or\ i- • ' ' : His for oiif-lx\lrooin uniix
in tnienild Terrace rim from S.M.s-v^O; two hetln«im
(499-$832i and three-bedroom residences
rent from SS7A-9961.
"ih,H 'o had (he higheM peaeniuge ot affordjble units
uithin their tacilitio-
Making ilmt possible, I luskey siid, is nut.
/<ming appnuais (..in prove fruitiest on low-income pmiecU
Then comes the chftHcngC of' competuig for scarce public
money: I'rojtxtN .ire judyeil on ^i set o(..nteria including arneiii-
liev on-siie programs ark) pn ivimny I--- s-h. * • • •
; i i iriiif( devetipmenb fa^ini; otTwith others in
ew are funded.
.vied to the Los Angdes !•<"• ngDepa
subsjdv — which was a -.onKM — ..*nd '.vt v.^n t}u t-.,i,K-si,"
)fi/;« Hiiskey. fmsitlenl rrf ~\\Kt l^A. -based Meta Heasing, af
ttnerahi Terrace, fltc catnpntty's $25 million project in Ol\ IHst The
dcirltrfmiartltmtsts J49atttfiteiaKi N.I children. It if otifoffoisr
\1eia project* in thr OTKU.
I'piial fo the «,;;<.
i;ix credits and won that. Ordinarily tliai'M-nou^ii.1'
Tor Emeraki Terrace, which liuskev ailted "js ^iosc to j
jierfivt MI< ' • •! . • iinji.ihoui
Si5.fi milikm In .slate ullocated ioan1- ;
i -':,;.! install -
mentofpu i
,!=(. liieprojc-ci n\.| itired noiiriv S JO million in public
subsidies ~ Hf*"-,. of its total , Angeks
Housing !>cpartment doled out more than !U million, i:
u.imt- from lour SOURCS th.U MeUi Housing had io apply for
•me ,mo rc.Miuri.rs.. Maneuvering
•:: n • tates "-kill: I'ur.ji)' . • - ha) on'r win.
•
As for whether Sow- income upartmentji ill:, •' \
the iuibii- i - !< Didn't b«,'
fooled imo thinking that afii>rdabfe hsm-i'ii; i-. -*xori<! iit-i <>i
SOUK- kind I-] handout
"The mwgc that whdi we're dom^, with .lilordabl ;
tig -.omestKl ofpeiTnaneni struct urt- i<ir.i;i (itidertLi-.s
: •-!•-'.' - . m*tre \xiu
know people who at some poini in iV1" v
. ; I ; i. . ;..ils dial we build- "he 'witti
'And they get up and out,"
Tiur-t ••
LOS ANGELES
DOWNTOWN
NEWS
Meta Housing Corporation
The "best of the best" in the seniors housing in-
dustry were honored by the National Association
..!' Home Builders (NAHB) during the 2004 Best of
Seniors Housing Design Awards ceremony held
January 19th in conjunction with the Interna-
tional Builders' Show in Las Vegas.
In receiving the Gold Award for senior Rental
dpartmentXt the ."VAHB judges noted -
This is living at its best! The overall envi-
ronment to the location if outstanding.
Mela Housing Corporation's
The Piedmont Senior Apartments
Wins 3 at the \AHB's
"The Best of Seniors Housing
Design Awards" - 2001
In honoring The Piedmont with the Platinum
Award for Active Adult Community—Small, t h<>
judges cited the development as ''strong and hold.'
This hip Hollywood hangout is a paradise
for active '"living- in -place." Public spaces
are grand with strong forms, bold color*,
and abundant natural light to maintain
that Hollywood tan. Outdoor spaces are
fully integrated with the .strong interior
form*. This community has strong visual
connection,* between indoor and outdoor
spaces.
Meta Housing is also proud to accept the Juror's
(rolii Medal for Design Innovation in the Active
Adult Caaunwiily • Small category.
gopv
r>
Meta Housing Corporation
THEJASMIM \T WINDERS VILLAGE
\>w Ufordable Apartments Part of
Fountain Valley's \PH 'Senior Campus'
Leaders of the City of Fountain \ aUev. the Foun-
tain Valley School District and other agencies
praised the completion of a new 156-unil afford-
able senior apartment community that U part of
the city's new Senior Campus.
Mayor Guy Carrozzo, said the project represented
'"an outstanding example of public/private partner-
ships and what they can achieve when everyone
work*- together to meet the needs of our people,
especially our seniors. The Jasmine serves as a
model for the type of housing we need and hope to
build more of/*
Founders Village is an exciting concept that brings
together high-quality senior housing arid a wide vari-
ety of programs and services designed for seniors, all
in a campus-like setting.
'[ h<* mazier plan developed 1*\ Meta Housing also
includes The Liberty, a 54-unit senior condominium
project separately developed; and an 18,000 square-
foot senior and Community Center, current!) under
construction. When it is completed in 2005, the cen-
ter will be open for the use and benefit of ail Fountain
V'allev seniors.
COPY
Meta Housing Corporation
Meta Housing Corporation's
Burbank Senior Artists Colony
wins 3 at the NAME'S
"The Best of Senior Design Awards" - 2006
Gold Award - Clubhouse - Small
"This clubhouse's unique "old
Hollywood" concept shows real
creativity. Its gorgeous exterior
will draw in visitors."
Gold Award - Overall Community -
Rental Apartments
"This great urban solution is colorful
and full of life. Skillful programming
of outdoor spaces mixes well with exte-
rior architectural details. This is an
exceptional use of space and design to
support unique residents and life-
styles."
Silver Award - Active Adult Residential
Community (any size)
"An innovative art theme distinguishes
this community. Excellent use of indoor/'
outdoor spaces and smart use of color
were highlights."
BEST
COPY
Meta Housing Corporation
Meta Housing Corporation's
Cortina D'Arroyo
Wins 2 Gold Achievement Awards
In NAHB's 50+ Housing Awards
Gold Award - Overall Community
''Money spent in all the right places! Surprisingly
beautiful interior courtyard that has interesting
opportunities for resident socialization (fire pit,
pool, landscaped walkways) .. Great job! Excel-
lent interiors. Appropriate for active, independ-
ent seniors."
Gold Award - Common Area
"The interior design is well-planned. The
furnishings exceed standard for afford-
able housing. Impressive and skillful use
of color and texture to enhance the inte-
rior architecture. Well thought-out in se-
lection of furnishings, furniture layouts
work well."
COPY
PAGE B4 i
BUSIN
C OVER A C,
A.G. senior apartments win raves
• Interior,
courtyard designs
praised by group
TPRSIalf
An affordable apartment
complex for low-income se-
niors in Arroyo Grande has
won two gold medals for out-
standing design, said a
spokeswoman for Meta Hous-
ing Corp.. the project's devel-
oper.
Cortina D'Arroyo. located
at 241 N. Courtland Ave,, re-
ceived the awards at the Na-
tional Association of Home
Builders' Best of 50+ Housing
Awards event in Denver.
The apartment complex
was recognized in the Overall
Community and Common
Area Design categories for in-
come-qualified rental apart-
ments.
That places Cortina D'Ar-
royo among the top afford-
able senior apartment com-
munities in the nation, the
spokeswoman said.
Judges acknowledged the
complex for its "surprisingly
beautiful interior courtyard
that has interesting opportu-
nities for resident socializa-
tion" as well as its "skillful
use of color and texture to en-
hance the interior architec-
ture."
The awards are considered
the nation's most prestigious
design honors for senior
housing, the spokeswoman
said.
John Huskey. president of
Meta Housing Corp.. said
Cortina D'Arroyo is the latest
The Cortina D'Arroyo complex in Airoyo Grande was recognized for its "beautiful interior courtyard," according to the
fudges, as well as its "skillful use of color and texture to enhance the interior architecture."
of the company's senior hous-
ing communities to have resi-
dent interaction engineered
into the design.
"By incorporating a mix of
large areas for gathering and
activities, along with smaller
spaces for observation, we've
been successful in actively
engaging a greater percent-
age of residents," he said.
General contractor Cobalt
Construction implemented
the design, he said.
Cortina D'Arroyo opened
in February 2006 on 3.2 acres
with a mixture of two- and
three-storv buildings served
by elevators.
In addition to the lushly
landscaped courtyard with
fountains and waterfalls, the
complex offers a common
room with a living-room am-
biance.
Other common area ameni-
ties include a pool and spa.
barbecue areas, a computer
room, a fitness center, a li-
brary and an outdoor fire pit.
Units have balconies that
overlook the courtyard as
well as nearby commercial
areas that offer shopping and
dining.
It is near healthcare ser-
vices, a church and a park
and has a public transit stop
at the site.
It's located within the city's
East Grand Avenue Redevel-
opment Area.
Residence is restricted to
seniors age 55 and older earn-
ing a maximum of 50 percent
of the median area income
for San Luis Obispo County
As a result of the develop-
ment's success. Meta Hous-
ing is seeking other Central
Coast sites to build innova-
tive developments. Huskey
said.
In addition to the two gold
medals. Meta Housing picked
up silver medals in the same
iwo categories for Dorado Se-nior Apartments it co-devel-
oped with Simpson Housing
Solutions LLC in Buena Park
Meta Housing Corp. is based
in West Los Angeles and has
developed more than JO.OOO
single-family and multifamily
residential units throughout
Southern California.
For more information on
the company, call (310)575
3543 or visit wvw.rretaiiciusing.cofn
COPY
^c\
Partino Shots
By Donna Kimura
The Piedmont recognized for innovative design
orth HoHvvuxxl' «tl>(
i Piedmont
bo live, the development
embraces a cU1: rturr new skills jmt
.:.»mty.
Developed b\ !
new rm* - .al awards, including
three honor-, hom th-
I
The S.T I'bpmera features a fitne*-
library, billiards room, compuirr lab, media rotwnArwrau-i and a
.tptunng (he benefas of the smalt ir
(ha* we've nude along the w^v" said Meta Houstng FVessdcnt
.John Htaitey, who ha- ;-i vcars
In the 1970s, there was the etnci^^cnce of the great room, w
large room wtw^r sfnuurs could j?wher for different even;-
,i! play, said Huskey refetrn^; to th. :
SKWi ^iou- Clwfrs \\1ieii ita chauitcr \orni walked
fur, everyone wekxime4 ton b>'cal!ir
^c»nw devek>prrw'Jii5. however, nevealrtl that the
concept was u i»d number oi nesuieTUs. bu;
all "Hwre wtre those who \^ <her reasons dui not
• r»e j^reat monis ~Thev didnt feel an ease t>i
rrade-ofi" ihat we didr
In ihf I<*OOs, Mela Hwsmg and ih^: !.>re Than
.niors kv&r^i ^iclp these r<
bet-cane morr engaged in tht • ; • idies have found thai
resident* >nd e\rn reduces dependent y on iradiEuma! medicines
The Piedmont Luxury Sen,
Hollywood. Cat.*
.1 Jttxary ;
The Piedmont, as WT|| as other recent Metj
;iS( *i(h thts r; i fue-a gnrat
i
10 help stimuUn
T>w deagrs includes a bofct;wi\
Aliening <^i the main floor And there are
ihicxi^out the ckvdopmeni \,
• .!•* !filom«il ii-
'»is mienKtk"
,iy frtmi large common group
> embraces tht ^ learn-
ing 'Then
thing nr*
^nputer tiasses and
rn<Mv lhar
provides a seache-r
.'• igjr from $99^ tc^ S1,250 per month for a one-bed-
room unit and from S3 .-* :<x>m «rm.
lUrniy perc-rnt of (He mh:
apartments start a about S680 per n
iC fev the pn^ett included tow-income ho.>
Credit? And tax-exempt bonds The tax crediis v^re pt
l-inanoai Group, Im
sates and were credH-mhancrd with FH*.
.jrmiy Cjtpul (iormerly TRi Capiul Co '
Mezzanine finaxTng was prowled rn
.<.iiiy from Me;.^ I
More than Shelter I.
•uiger Thr
•-ill tht- fnnidt;
•
Meta Completes $16M Apartment Project
By BoK riowaid
LOS ANGELES-Meta Housing Corp. of West Los Angeles has completed its 71-unit Pico-Gramercy Family
Apartments, a $16.4-million project that it developed in partnership with Century Affordable
Development Inc., an affiliate of Century Housing. The new apartment complex, at 3201 W. Pico Blvd.,
features 52 units of two and three bedrooms that are designed to "address the tremendous demand for
larger apartments to serve the needs of growing families," according to the developers.
Occupancy of the new complex is restricted to residents earning a maximum of 50% of the area
median income for Los Angeles County as established by the US Department of Housing and Urban
Development. Rents will range from $390 to $773, well below prevailing market rates.
The Pico-Gramercy, which lies within a federally designated community redevelopment zone, also
features 11,000 sf of open space and common areas. These include a large community center with
computers, a children's playground and play equipment, barbeques and sitting areas.
The development site is adjacent to Country Club Park, which features a mix of housing types and
prices, but generally older. Little if any new construction has been completed in the area in some time.
Construction financing included an $8.5-million loan from Wells Fargo, $3 million from the City of Los
Angeles Housing Department's HOME funds and $2.4 million in tax credit equity, along with grants from
the Los Angeles Community Redevelopment Agency and from the Affordable Housing Program at the
Federal Home Loan Bank of San Francisco.
Kasey Burke, Meta Housing's manager of the Pico-Gramercy project, notes that the new units join a
number of other Meta projects that the company has developed "to help alleviate the city's severe
shortage of affordable housing for working families." Burke points out that Meta Housing developed
housing for seniors and families throughout Southern California, with most of its projects 100%
affordable through the company's use of a variety of tax credit, bond financing and other government
financing programs.
COPY
EXHIBIT 4
San Diego-Carlsbad-San Marcos, CA Metropolitan Statistical Area (MSA)
Household Income Limits HUD Method
Note: The following household income limits are adjusted for a high cost area as
per the Federal Housing Act of 1937 and calculated using HCD methodology to
comply with Health and Safety Code Sections 60052.5 and 50093.
San Diego-Carlsbad-San Marcos, CA MSA
U.S. Department of Housing and Urban Development
March 19, 2009
2009
$ 74,900
Family
Size
ONE
TWO
THREE
FOUR
FIVE
SIX
SEVEN
EIGHT
30%
Annual Monthly
Income Income
$17,350 $1,446
$19,850 $1,654
$22,300 $1,858
$24,800 $2,067
$26,800 $2,233
$28,750 $2,396
$30,750 $2,563
$32,750 $2,729
35%
Annual Monthly
Income Income
$20,250 $1,688
$23,100 $1,925
$26,000 $2,167
$28,900 $2,408
$31,200 $2,600
$33,500 $2,792
$35,850 $2,988
$38,150 $3,179
40%
Annual Monthly
Income Income
$23,150 $1,929
$26,450 $2,204
$29,750 $2,479
$33,050 $2,754
$35,700 $2,975
$38,350 $3,196
$41,000 $3,417
$43,650 $3,638
Very Low Income
50%
Annual Monthly
Income Income
$28,900 $2,408
$33,050 $2,754
$37,150 $3,096
$41,300 $3,442
$44,600 $3,717
$47,900 $3,992
$51,200 $4,267
$54,500 $4,542
Family
Size
ONE
TWO
THREE
FOUR
FIVE
SIX
SEVEN
EIGHT
60%
Annual Monthly
Income Income
$34,700 $2,892
$39,650 $3,304
$44,600 $3,717
$49,550 $4,129
$53,500 $4,458
$57,500 $4,792
$61,450 $5,121
$65,400 $5,450
65%
Annual Monthly
Income Income
$37,600 $3,133
$42,950 $3,579
$48,350 $4,029
$53,700 $4,475
$58,000 $4,833
$62,300 $5,192
$66,600 $5,550
$70,900 $5,908
70%
Annual Monthly
Income Income
$40,450 $3,371
$46,250 $3,854
$52,000 $4,333
$57,800 $4.817
$62,400 $5,200
$67,050 $5,588
$71,650 $5,971
$76,300 $6.358
Low Income
80%
Annual Monthly
Income Income
$46,250 $3,854
$52,900 $4.408
$59,500 $4,958
$66,100 $5.508
$71,400 $5,950
$76,700 $6,392
$81,950 $6,829
$87,250 $7,271
Family
Size
ONE
TWO
THREE
FOUR
FIVE
SIX
SEVEN
EIGHT
100%
Annual Monthly
Income Income
$52,450 $4,371
$59,900 $4,992
$67,400 $5,617
$74,900 $6,242
$80,900 $6,742
$86,900 $7,242
$92,900 $7,742
$98,850 $8,238
115%
Annual Monthly
Income Income
$60,300 $5,025
$68,900 $5,742
$77,550 $6,463
$86,150 $7,179
$93,050 $7,754
$99,950 $8,329
$106,850 $8,904
$113,700 $9,475
Moderate Income
120%
Annual Monthly
Income Income
$62,950 $5,246
$71,900 $5,992
$80,900 $6,742
$89,900 $7,492
$97,100 $8,092
$104,300 $8,692
$111,500 $9,292
$118,650 $9,888
140%
Annual Monthly
Income Income
$73,400 $6,117
$83,900 $6,992
$94,350 $7,863
$104,850 $8,738
$113,250 $9,438
$121,650 $10,138
$130,000 $10,833
$138,400 $11,533
Note: Income levels 80% and below are adjusted by a HUD high cost area allowance.
This general income information is calculated from the U.S. Department of Housing and Urban Development (HUD) Income figures.
Specific program requirements may vary.
32.
O j^
EXHIBITS
Minutes of: HOUSING COMMISSION
Time of Meeting: 6:00 P.M.
Date of Meeting: JULY 9, 2009
Place of Meeting: CITY COUNCIL CHAMBERS
CALL TO ORDER
Chairperson Smith called the Meeting to order at 6:01 p.m.
PLEDGE OF ALLEGIANCE
Commissioner Bradwell led with the Pledge of Allegiance.
ROLL CALL
Present: Commissioners: Emelda Bradwell
Craig Kirk
Doris Ritchie
Bobbie Smith
Absent: Hope Wrisley
Staff Present: Housing and Redevelopment Director: Debbie Fountain
APPROVAL OF MINUTES
Minutes of March 12, 2009, meeting were approved as written.
VOTE: 3-0
AYES: Kirk, Ritchie, and Smith
NOES: None
ABSTAIN: Bradwell (absent from March 12, 2009, meeting)
ABSENT: Wrisley
ITEM NOT ON AGENDA
There were no items that were not on the agenda.
NEW BUSINESS
Debbie Fountain, Director of Housing and Redevelopment, presented the item on the agenda which is for
an affordable housing project financial assistance. We have a presentation and we also have the
applicant here who will share information about their company and more about the project itself. I am
going to primarily focus on the financial assistance request.
The project is known as the Tavarua Senior Affordable Apartments, and as I mentioned, it is for a financial
assistance request from the city. As background, back in June of 2008, the Planning Commission
approved a project known as the Harding Street Senior Condominium Project on this same site. It is
located at 3574 Harding Street. I will give you more information on that site as we go along. A 50-unit
development was approved for the site. It is a little under an acre site. It has approval for a condominium
project. What is being proposed by the applicant tonight will actually be an apartment project, but we will
go into more detail on that. It does already have approval as a senior project.
The site is an existing site that has a 35-bed senior care facility located on it. It is adjacent to I-5,
surrounded by all residential, the Pine Avenue Park and the Senior Center is a very close walking
distance. It is outside the Village Redevelopment boundaries, but it is in the area that is commonly
referred to as the Village. The proposed project is a 50-unit senior restricted apartment project with one-
and two-bedroom units and is 100% affordable. The project that was approved by the Planning
Commission last year was not 100% affordable. It had low-income affordable and moderate income, but
HOUSING COMMISSION MINUTES
JULY 9, 2009
PAGE 2 of 9
this would be a change in that it will be 100% affordable, and it is intended to be a high quality design
project.
It is proposed to be a three-story building with all underground parking. There will be 40 one-bedroom
units, nine two-bedroom units and one manager unit. The rent levels that are proposed will range from 30
to 60%, which is a very affordable category; five units at 30%, five units at 40%, 25 units at 50%, and 14
units at the highest level of 60%. They are all substantially lower than what we actually require by our
inclusionary ordinance. I included within the Housing Commission's report an income chart that gives you
an idea of what type of income levels and rents we are discussing here. The applicant will actually go into
a little more specifics on their rent structure.
As noted in the report, Western Community Housing and Meta Housing are partnering on this project.
They are affordable housing developers based in Orange and Los Angeles counties. We have not yet
worked with this development team in Carlsbad, but they are a very experienced team. They are
recognized within the industry for their expertise in developing senior housing specifically. This is their first
affordable housing development in Carlsbad, but as I mentioned, they are well established in the
affordable housing industry so this is not their first project for affordable housing.
In terms of project financing, it is estimated the project will have a total cost, including land, of about $18.4
million dollars. They are proposing right now to finance that through four sources., One is a conventional
loan of about $2.8 million dollars; they also have an application in for tax credits for tax credit equity of
about $10.9 million dollars to the project (f approved. The city contribution that is being' requested is $3.7
million dollars, and other contributions are about $1 million dollars.
Every project we have come in that requests financial assistance, we look at it in a comprehensive review
to look at its cost reasonableness and how it relates to other projects we have seen constructed in
Carlsbad; how might it be similar, how might it be different. On this particular project, the average total
cost per unit with the land cost is about $368,000. That is actually high in comparison with other projects
assisted by the city, but when we look at it from a reasonableness standpoint and we consider that during
the project construction they will have to pay state prevailing wage rates for the project, which are typically
higher, continuing high cost of land in the coastal area, even with the economy, we are still seeing land
cost hold in the coastal area so we don't see.substantial reductions, and that substantial added cost of
going completely underground with their parking is a big difference. We haven't had that yet in any of our
affordable housing projects, and that is a substantial cost.
We also look at the money put into a project, so there is not undue gain to the developer. We want them
to earn a reasonable return in terms of a developer fee. We want to make sure our money is being put in
appropriately. One of the areas we look at is specifically the developer fee. In this particular case, the
developer fee is about $1.8 million dollars. That is approximately about 10% of total project costs,
including land. We have determined it is an acceptable developer fee. We have ranges in the developer
fee from about 6 to 10%, sometimes as low as 3%, but 10% is considered a reasonable developer fee
when you look at the size of the project and the complexity of the financing for it.
In terms of the subsidy analysis, the direct financial assistance from the city is equal to about $75,000 per
unit. That is higher than other affordable rental developments in Carlsbad, but again this is the first 100%
affordable rental project built by a developer in the Village area specifically. We have had some small
projects with Habitat that we have worked with, but that was a for-sale product so it is a different product.
Also the city purchased the Tyler Court Senior Apartments a number of years ago as an acquisition and
rehabilitation. To actually have a new project of this size developed in the Village is the first of its kind. So
it warrants a little bit higher subsidy. Some of the added costs warrant this higher financial assistance per
unit as well. Also as a final note, it is not being built specifically as an inclusionary project. Many of our
developments in Carlsbad have been done because of our inclusionary housing ordinance where a
master developer has a requirement, they find an affordable developer and partner with the affordable
developer, and then they build it within their market rate development. This is a case where the developer
actually went and found a property and decided he wanted to build 100% affordable product. The project
itself has its own inclusionary requirement because it is housing, but the fact that it is 100% makes it
HOUSING COMMISSION MINUTES
JULY 9, 2009
PAGE 3 of 9
eligible to serve as a combined project, which as you may remember means that other developers could
potentially contribute money to the project to satisfy some of their inclusionary requirements, if there was
development going on.
In addition to the subsidy analysis, staff did review the cost and related requests for the subsidy. We did
compare it to our other affordable housing developments that we have financed to date and/or are
pending and found that we could support the subsidy requested. As I mentioned, the subsidy cost is a
little bit higher, but we felt that it was appropriate. Currently there are no other funding sources available
to fill this gap so they really need the assistance from the city to help. Why should we assist the project?
The city needs more affordable housing in Carlsbad. We know thaj, is a given and that we need it for
seniors, as well. There is a desire for senior-restricted projects. It is not our number one priority as family
housing is our number one priority, but when you look at the fact that we have not been able yet to build
any senior-restricted 100% affordable properties, I think it rises to tile point of being a priority. The project
can't produce adequate income to make it financially feasible without the city's assistance, and the most
important point is that the project needs to have city assistance so it can obtain its other financing. When
it goes in for its tax credit application, if they didn't have some city financing in it, they wouldn't be able to
compete well for those tax credits and that tax credit equity. So it is very important that the city partner
with these affordable housing developers when they submit these applications so they can obtain that
equity. As you notice from the previous chart that I prepared, almost 60% of the equity is coming from the
tax credit program so that tax credit equity is very important and the fact that our participation helps them
in getting that equity is really important.
The bottom line is the project will produce 50 new residential units, provide for an attractive redevelopment
of a deteriorating site, and it is an ideal location for a senior project. In terms of what will happen is we
issue all of our financial assistance in the form of a loan. You have seen this before. It has been
consistent with how the city does these deals. These are the types of loan documents that will be
prepared and ultimately get approved for the project. Over time the money gets paid back to the city. We
also look at the development risk that is involved. When we put our money in, a lot of times our money
goes in first so there are the normal development risks that go along with any type of financing of a
project. You could put your money in and you get through all the predevelopment and the project doesn't
get built for some reason; you could be in construction and the project doesn't finish construction. You
might be operating and there is not enough revenue for operations and so those are all risks. We also
have a risk in that we typically have to subordinate to conventional financing. All that is said just to
highlight that we look at those risks, we know that there are risks out there, but we feel in the way we
structure our financing to these projects and all of the other agencies that are involved in monitoring that
these risks are really reduced substantially in that there is a lot of auditing that goes on to insure that
before you get to a problem where you would have to cancel a project, we would know that far enough in
advance that you wouldn't risk too much of your financing.
Our recommendation is to approve the financial cash assistance in the total amount of $3,750,000. You
would be making this recommendation to the City Council and/or most likely the Housing and
Redevelopment Commission because our intent as staff at this point is to recommend that this project be
financed with Redevelopment Agency low and moderate income housing monies. We do have monies
that we need to spend, and we continue to get revenue into that pot. I know in the past there have been
some questions about what happens because the Redevelopment Plan is expiring for the Village area, is
that money still being set aside? The answer is, yes, we will still be setting aside money for affordable
housing so the fact that we have a balance of money that we need to spend and the fact that will continue
to have it grow, it is a very good source of financing for this project so we will be recommending that
source of financing.
The applicant is also here and has a presentation as well. If I didn't answer some of your questions,
hopefully the applicant can answer them.
Commissioner Kirk said as he understands it, the city is assuming all risks of the risks you were talking
about, and these risks are confined to the $3,750,000 or are there additional risks that are being
assumed?
HOUSING COMMISSION MINUTES
JULY 9, 2009
PAGE 4 of 9
Ms. Fountain answered our risk is just our money that goes into the project. If for some reason, say we
put our money in for predevelopment or we put our money in at the beginning of the project and
something happens and the project doesn't get completed, then obviously there is a concern that we
might not get paid back at some point. I think it is a very small risk quite honestly. If they get all of their
other financing, this project will proceed. We won't be providing any money until we are assured that all
the financing is in place for the project. We would not just start writing checks not knowing that they have
all their financing in place. I think it is very unlikely they would start a project without all their financing in
place.
Chairperson Smith thanked Ms. Fountain for her presentation. It is really overdue for a senior citizen
condominium so I am sold.
Commissioner Kirk asked if the facility that exists there today is an active facility.
Ms. Fountain said the applicant may know more information on this. My understanding is that over the
years, they have been reducing the number of residents they have and not been adding new residents to
the location. There may still be one or two people living there, but it is only a 35 bed facility. I know when
we originally started talking with the property owner a number of years ago on this site, he had said that
their goal is as people pass away, they are not putting new people back in. The applicant might have
more information on what the current status is.
Commissioner Kirk said he is interested in hearing what the plan is for those residents who remain at the
facility.
Ms. Fountain said it has come up before and that was a concern when the Planning Commission was
approving the condominium project and the question came up at that point as to what happens and we
need to be sensitive to,the;people that are living there. I think the owners, even though they have been
reducing the number of people that live there, I think they have a plan for how they would relocate any of
those that are living there.
With that I am going to invite up the representatives that we have here from Western Housing and Meta
Housing and they will introduce themselves and give you a presentation, and then we will all come back
together to answer any more questions you might have.
My name is Chris Maffris, and f am with; Meta Housing Corporation. We are the joint prospective project
developers with Western Community Housing. We are extremely excited about the prospects of working
with the City of Carlsbad and about the opportunity to hopefully take advantage of a stalled condo project
and build some high quality affordable senior housing. We have submitted a tax credit application to the
tax credit allocation committee for an award of 9% tax credits, and we are hoping today to get the Housing
Commission's support on the $3,750,000 loan, which will allow us to move to the next step which is getting
a commitment from the city to keep us competitive in this current application process. It is good to note
there is actually on a single round this year so this is the one opportunity we have to get the tax credit
finding this year. If we can't get the commitment letter, it will just get pushed off until next year. We are
here today to introduce ourselves and to provide some background information on Meta Housing
Corporation as well as Western Community Housing. Hopefully we will be able to answer any questions
you have on either one of our companies and any questions you have on the financing of the project.
I would like to introduce Graham Espley-Jones, who is the founder and president of Western Community
Housing. Graham is extremely well respected in the affordable housing community. We have done about
15 projects with Graham serving different capacities on all those projects. We are excited to be working
with them on this project and looking forward to hopefully getting this thing built.
I am Graham Espley-Jones, President of the Western Community Housing. My role tonight is to tell you a
little bit about our company, what we do, and the other two will tell you all about the project and the details.
Western Community Housing is a 501C3 corporation, and we have two missions. Our first mission is to
HOUSING COMMISSION MINUTES
JULY 9, 2009
PAGE 5 of 9
provide affordable housing. The second mission is to provide social services at those affordable housing
communities. Chris and Ms. Fountain talked a little earlier about this partnership aspect of this industry.
These are truly public, private partnerships. We partner with a full profit developer like Meta Housing that
has a lot of horsepower and financial backing. We partner with the State of California because we get
these tax credits. We partner with local cities or counties like the City of Carlsbad here in these
applications. For affordable housing to work, these all have to go together. We have to get the tax
credits, we have to have non-profit involvement, and we have to have support from the local city. This
happens in almost every one of our communities. This is a partnership of a lot of different groups all
working towards one common goal, and that is to provide affordable housing. Our organization was
founded in Burbank in 1999. We initially got a large grant to develop a social service program, which we
did, initially called More Than Shelter for Seniors. Now there is a separate non-profit organization called
Engage that I am now director of. It is anticipated they will be the social service provider at this
community. We moved the offices to Costa Mesa in 2004. The California Tax Credit Allocation
Committee has now prequalified us as an experienced affordable housing developer. Usually every year
when you apply for those points, you have to provide your experience. We have done that so many times
for a certain group of affordable housing developers we have proven ourselves.
Mr. Espley-Jones showed slides of some of the communities his company has provided. Systematically
every year we add anywhere from two to sometimes as many as 10 new affordable communities to our
portfolio. The vast majority have been new construction like this. Some have been acquisition rehab. In
fact, we are involved in acquisition rehab right now in the City of Oceanside where we have a $4 million
dollar grant from them to do that community. We have other communities down in San Diego. Our 58
communities are spread out throughout the State of California. We have a mixture between senior, family
and special-needs projects. Our social service organization is now doing services in about 22
communities.
Mr. Maffris said Meta was founded in 1993. Meta has a long successful track record building affordable
senior housing projects similar to the one that has been proposed. We have done over 2,300 units with
total development costs of over $280,000,000. Our real strength, I think, is our ability to secure financing
and federal and state funds for these projects. We have had a great track record at the Tax Credit
Allocation Committee, which is the most critical funding piece of the puzzle. We have actually won 13 of
our last 14 applications and hope to continue the success with this project. We have a lot experience
developing similar senior products. Our specialty is two to five-story apartment buildings over a parking
garage, typically subterranean. We have completed 31 projects in California under the Meta flag. Our
President, John Huskey, in a former life was the President of Calamar Properties and he has done over
10,000 units separately from Meta. A lot of people have a misconception about affordable housing.
Affordable housing conjures up the pictures of the old HUD projects, Cabrini Greens and things like that. I
think affordable hpusing has changed significantly over the past decade and we pride ourselves on
projects that look like high end market rate developments. We have done:
* Burbank Senior Artist Colony - built with Western Community Housing involvement. It has
a heavy focus on social services. It is 141 units above a single level of subterranean
parking. Engage runs its social service programs out of this project. The concept is to
get seniors actively engaged out of their apartments and more involved in the community.
*The Grove Senior Apartment Project - completed in 2007. It won project of the year. This
is the same architect that we are using on Tavarua.
*The Piedmont Senior Apartments - very similar to the Artist Colony. This is another award
winning project.
*Park Plaza Senior Apartments - directly adjacent to the Piedmont and very similar. It was
the first phase of the total 400 units.
*Cortina D'Arroyo in Arroyo Grande - similar in density to what we have proposed here.
* Dorado Senior Apartments project in Buena Park - this is also a project that won project of
the year. It was completed in 2006 and Engage is operating out of this project as well.
*The Jasmine at Founders Village in Fountain Valley - worked closely on this project with the
city. We actually designed an adjacent senior center. The city was extremely happy and
HOUSING COMMISSION MINUTES
JULY 9, 2009
PAGE 6 of 9
the senior center is very active and the community uses it all the time. This project also
won several awards.
*Yorba Linda Palms Family Apartments.
*Pico/Gramercy Family Apartments - we also did a community center with the city. It is a
similar density to what we have proposed. It has a level of subterranean parking. It is 71
units in the City of Los Angeles.
* Adams/Central Mixed Use - under construction right now. It should be completed in March
2010. We worked closely with the CRA and the City of Los Angeles to bring a Fresh and
Easy Supermarket to South Los Angeles. This is 80 apartment units, 100% affordable as
well.
*The Fountain Valley Senior Center.
Scott Geyner, the Project Manager, said it is currently approved for a 50 unit senior condominium project
with some affordability aspect. We are going to keep the entitlements in place, and we have created a
somewhat similar design pattern to the original design in that it will be kind of a donut over a courtyard.
What is great about our product type is that we don't need 2,000 square foot units. Our units on the one-
and two-bedrooms are much smaller so it will decrease the massing and allow for greater open space and
amenities such as that. This is 100% affordable for-rent, not for-sale, it is not a condominium, so the
affordability factor is 55 years. We will be watchdogs, which is what we do as a nonprofit. The
affordability factor is hopefully going to be in perpetuity even past 55 years. The ultimate design is going
to be very similar to what was previously approved, it is just going to be a better design. We think we can
improve on the architectural aspects of it and bring in that Carlsbad Village cottage look. We are working
on that right now. I did meet with Gail Lynn and am very impressed with the Senior Center, probably the
best senior center I have ever seen. She was already talking about how we could interface with our
residents as opposed to being built as a for-sale senior project, the majority of those people might not
want to even use the Senior Center. Whereas I would say, the majority of our tenants would love to use
the Senior Center.
Mr. Chris Maffris said they feel very strongly about working with the city as a partner as opposed to a
lender. We want to work close and get as much input as possible on design and build something that
everyone is proud of. Our goal is to get this done and the next time you need senior housing, we want you
to call Meta and Western Community Housing first.
Commissioner Ritchie thanked the presenters for being here tonight. The presentation was beautiful.
Your projects are gorgeous. I am ready to move in. Can you describe the social services that you
provide?
Mr. Graham Espley-Jones said there is a gentleman named Tim Carpenter who is President of our
Engage social service division and is very passionate about the program. His philosophy is that aging is
really a beginning. There will be a physical aspect to the services and a people's aspect. The physical
aspect starts with the construction of the building. A typical building will have a lot of facilities there free of
charge for the residents to use; a computer room, sometimes an exercise room, a community room where
they can have functions, and they can invite family to the kitchen. It also provides a venue to provide
services, and we'll have different types of people coming to the community to provide educational classes,
literacy classes, and exercise classes. We have a number of senior communities that you can have
intergenerational activities. One of the duties of the social service director of the community is to make an
assessment of the residents and the local community and what really fits there. An intergenerational
activity would be if you are close to a school where you may have latch key children who can come to the
facility afterwards in the community, sit down, do their homework, and maybe be mentored by a senior
resident. Every community is a little bit different because they are unique; it depends what is in the local
area. We typically have a very active program. The state requires we set funds aside to pay for that.
Commissioner Ritchie asked, will you be doing that in this project?
Mr. Espley-Jones answered yes. We typically start the services shortly after the community opens. No
later than six months after. They continue on for long term.
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JULY 9, 2009
PAGE 7 of 9
Commissioner Ritchie asked, how is that billed?
Mr. Espley-Jones asked if she meant from an invoice.
Commissioner Ritchie said yes.
Mr. Espley-Jones said when we structure the profit and loss statement of the community, we have our
revenue which is the rents we receive, and out of the normal operating expenses there is an allocation
made to pay for those services.
Mr. Maffris said those costs are underwritten into the project as an operating expense.
Commissioner Ritchie said she saw one or two projects that,had stairs. Do you have elevators in all
buildings, even three-story?
Mr. Maffris said yes, absolutely.
Commissioner Ritchie said she has been on this Commission for seven years and for seven years I have
said why aren't we getting some senior housing.
Mr. Espley-Jones said when we were looking at the competitive, environment and the tax credit allocation,
Ms. Fountain said the focus was multifamily, and the last seven developments have all been multifamily so
we are ready for a senior community.
Commissioner Ritchie said definitely. I think this will be very well received in the community. I am very
hopeful this will indeed get built.
Chairperson Smith said She would also like to make a comment. Thank you for coming. I enjoyed your
presentation. How long will this projectitake to build?
Mr. Maffris said it is estimated 18 months construction schedule. We can hopefully pick up on that and
get it down to 16 or 17 months. It depends on availability of the subcontractors and things are slow right
now so we have actually had projects built more quickly because everyone is hungry for work and we can
get the manpower out there, Eighteen months is in the typical economic environment.
Commissioner Ritchie asked why they chose this name.
Mr. Espley-Jones said I am a golfer and I would like them to name projects after golf courses, but the
tradition in a lot of the communities we have worked have been named after Spanish villages. A
gentleman who was supposed to join us this evening but had a family emergency is the Senior Project
Manager of Meta, Kasey Burke. He is an avid surfer. There is an island in Fiji called Tavarua, which is a
well known surfing spot, so he was the one who named it. We think we will have such a demand for the
units that we don't really need to have the catchiest name in the world.
Commissioner Kirk asked with the 50 unit proposal, can you talk a little bit more about the types of
common space we would expect to see in this project.
Mr. Maffris said we typically have a community room, a computer room, and hoping once we open up and
shrink the units we will be able to fit in an exercise room. We like doing that on our senior developments
so we can run exercise classes. There will be a manager's office and typically an assistant manager's
office as well. Also general sitting areas we will design throughout the project for people to meet if they
want to be outside of their apartment and want to read a book or chat with friends in the community.
Mr. Geyner said one of the unique dynamics of what might go on because the Senior Center is so
incredible, but we don't have a cafeteria. I think a lot of people will gravitate at lunch time over to the
HOUSING COMMISSION MINUTES
JULY 9, 2009
PAGE 8 of 9
Senior Center. Then again if they want to stay on site, we have plenty of things going on in the common
area.
Commissioner Kirk said as far as social service programs and the access to the existing Senior Center, I
would assume that Engage would in fact be reaching out.
Mr. Espley-Jones answered, very much so. We spend a lot of time out in the local community, not only at
the Senior Center, but also local businesses. Most of the communities are very rich in organizations that
are just looking for space where they can come and provide services to residents. They will reach out to
those people and invite them in. One of the things that had come up earlier was the cost of the
community on a per unit basis. One of the things we talked about als6 is the partnership, and one of the
partners is the State of California and they, as part of their tax credit application, have a lot of
requirements in terms of space such as community rooms you have to make, and the size of the units
have to be a certain size. While those things do add to the cost a little, they also improve the living
experience for the residents.
Commissioner Kirk asked if that would be the same as for parking.
Mr. Maffris said right now our plan is to maintain the current parking unit count that the condominiums
have, which is significantly higher than most state codes for senior housing. Seniors typically get only %
parking space per unit, but this has 70 or so spaces.
Mr. Geyner said actually this is something we need to work out with Planning. They have allocated a
certain few visitor spots along the cul-de-sac, because it is not very well traveled.
Mr. Espley-Jones said the issue with parking, based on the work we do with Engage, we get a lot of data
back from the residents. Statistically across the communities wetwork with only about half of the residents
still drive. Here we are looking at 50 units and I think about 60 parking spaces so this most likely will have
many more parking spaces than we'll need.
Mr. Geyner said he would like to mention one thing before we conclude. We live in this world of
competitiveness trying to get these projects done and the list came out related to the other cities that are
competing for tax,credits. We are looking really good. There is one other project we will watch, but there
could be multiple senior projects approved as tax credit projects. This is a very unique year in that two
rounds have been combined in one and everyone scrambled to put their applications in. I think Chris has
done a really good job packaging up numbers wise to compete and if you don't know our business, it is
almost like you have to score 100% on everything and then you get to these tie breakers and just because
of the fact you are conning to the table with a significant subsidy amount, I think we score well. If we don't
make it this year, we do have another bite of the apple. We put that in our contract so we could apply
again next year.
Mr. Espley-Jones said we are competitive and we want to win this year.
Chairperson Smith opened for anyone in the audience who would like to speak. No one stepped forward.
Commissioner Ritchie recommends approval to the City Council and the Housing and Redevelopment
Commission to provide $3,750,000 in financial assistance for construction of 50 affordable apartment
units restricted for seniors only in the northwest quadrant of the city.
Commissioner Bradwell seconded the motion.
VOTE: 4-0
AYES: Bradwell, Kirk, Ritchie, and Smith
NOES: None
ABSTAIN: None
ABSENT: Wrisley
HOUSING COMMISSION MINUTES
JULY 9, 2009
PAGE 9 of 9
DIRECTOR'S REPORT
Ms. Fountain said we do not have any other items on the agenda tonight. I did want to mention to the
Housing Commission that I was presented with an award at the City Council on Tuesday from the San
Diego Housing Federation for the work that I have done in affordable housing, but as I shared with the
Council that night, it really has been a community effort in providing affordable housing. There are so
many people that are involved in this, the Housing Commission, the City Council with their policies, my
staff in my office that work on these so I was a little bit embarrassed to accept an award just for me when
there are so many people involved in it. It did feel good because it got recognition for the city's programs
and all that has been done up to this date with affordable housing that actually can surprise people with
what we are doing in Carlsbad and what we have been able to accomplish even with the high cost of land
and all of our other challenges that we face. I thought it was a nice recognition of the city as a whole in
receiving that award. The award itself is given in the name of John Craven who was a long-time housing
official for the County of San Diego, and his family in memory of him has set up this memorial award for
other officials within government that have done what they believe are significant efforts in producing
affordable housing. It was a nice honor and I appreciated receiving it.
ADJOURNMENT
By proper motion, the meeting of July 9, 2009, was iadjQurned at 6:53 p.m.
Respectfully submitted,
Deborah Fountain
Housing and Redevelopment Director
PATRICIA CRESCENTI
Minutes Clerk
MINUTES ARE ALSO TAPED AND KEPT ON FILE UNTIL THE WRITTEN MINUTES ARE APPROVED.
Tavarua Senior Affordable
Apartments
Financial Assistance
Background
Harding Street Senior Condominium
Development approved by Planning
Commission in June of 2008 (portion
affordable) –3574 Harding Street
50 unit development on .90 acre site
Current developer under contract to
purchase property for a 50 unit Senior
Apartment development (affordable)
.
Current Site:
•35 bed senior care facility
•Adjacent to I-5; surrounded by residential
•Within walking distance/close drive distance of:
•Senior Center
•Pine and Holiday Parks
•Shopping
•Medical Services
•City Library/Learning Center
Proposed Project:
•50 units
•Senior Restricted Apartments
•1 & 2 bedroom units
•100% affordable to low income
•High Quality design
Senior Apt Project Details
50 Units
Three story building
Subterranean Garage
40 one bedroom units
9 two bedroom units
1 manager unit
Rent Levels
5 units at 30% of AMI
5 units at 40% of AMI
25 Units at 50% of AMI
14 units at 60% of AMI
Western Community Housing
and Meta Housing
Affordable housing developers; based in
Orange and Los Angeles Counties
Experienced team with recognized
expertise in developing senior housing
First affordable housing development in
Carlsbad
Well established in the affordable
housing industry
Project Financing
$18.4 Million Total Project Cost (w/
land)
Conventional Loan -$ 2.8 million (15%)
Tax Credit Equity -$ 10.9 million (60%)
City Contribution -$3.7 million (20%)
Other Contributions -$ 1 million (5%)
Cost Reasonableness
Avg. total cost per unit (w/land) is $368,454.
High in Comparison with other projects
assisted by the City, but reasonable with
consideration for:
State prevailing wage rates
Continuing high cost of land in the coastal area
Added cost of building underground parking
Undue Gain
$1,820,000 developer fee
Approx. 10% of Total Project Cost (incl.
land)
Appropriate for size of project and level
of complexity.
Subsidy Analysis
Direct financial assistance from City is
equal to $75,000 per unit.
Higher than other affordable rental
developments in Carlsbad, but this is
also the first 100% affordable rental
project built by a developer in the
Village Area.
Not built as an inclusionary project; will
be able to serve as a combined project
Subsidy Analysis
Staff review of costs and related
request for subsidy.
Comparison of costs to other affordable
housing developments financed to date,
and/or pending.
Subsidy Analysis
Determination made that some costs
are higher than other developments,
but do not appear to be inconsistent
with construction requirements of
building a more dense project.
No other funding sources available to
assist with construction.
Why should we Assist?
Need for more affordable housing in Carlsbad
for Seniors.
Project can’t produce adequate income to
make it financially feasible without city
assistance.
Project needs City assistance to obtain other
funding for the project (i.e., tax credit
equity); funding available from City
Project will produce 50 new residential units
and provide for attractive redevelopment of a
deteriorating site; ideal site location
Loan Documents
Residual Receipts Loan Agreement
Note
Deed of Trust
Regulatory Agreement
Development Risk
Pre-development
Construction
Operation
City assistance subordinated to
conventional financing.
Recommendation
DRB recommended approval of Financial Cash Assistance in the total amount of $3,750,000 by Housing and Redevelopment Commission.