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HomeMy WebLinkAbout1997-05-08; Housing Commission; MinutesMinutes oE HOUSING COMMISSION Time of Meeting: 6:OO P.M. Date of Meeting: MAY 8,1997 Place of Meeting: CITY COUNCIL CHAMBERS CALL TO ORDER: Chairman Schlehuber called the Regular Meeting to order at 6:03 p.m. PLEDGE OF ALLEGIANCE: The pledge of allegiance was led by Commissioner Rose. ROLL CALL: Present: Chairman Schlehuber, Commissioners Calverley (left early), Escobedo, Latas, Noble, Rose, Scarpelli, Walker, and Wellman Absent: None Staff Present: Evan Becker, Housing and Redevelopment Director Debbie Fountain, Senior Management Analyst Leilani Hines, Management Analyst Craig Ruiz, Management Analyst APPROVAL OF MINUTES: ACTION: VOTE: 8-0- 1 AYES: NOES: None ABSTAIN: Wellman Motion by Commissioner Escobedo, and duly seconded, to approve the Minutes of the Regular Meeting of April 10, 1997, changing the word “what” to “want” on page 5, the sixth paragraph. Calverley, Escobedo, Latas, Noble, Rose, Scarpelli, Schlehuber, Walker COMMENTS FROM THE AUDIENCE ON ITEMS NOT LISTED ON THE AGENDA: There were no comments from the audience. NEW BUSINESS: 1. FINANCIAL ASSISTANCELA POSADA DE GUADALUPE - Request for recommendation to City Council of financial assistance in an amount not to exceed $200,000 from the City of Carlsbad’s Housing Trust Fund for the acquisition of property located at 2472-2478 Impala Drive for La Posada de Guadalupe Homeless Shelter. Leilani Hines reviewed the background of the request and stated that without site control (without the purchase of the property), Catholic Charities may face increased operating costs in the future and may lose the site for the homeless shelter. Ms. Hines stated that Staff is recommending providing $200,000 from the City’s Housing Trust Fund in a non- interest bearing deferred loan for a 10-year period. Catholic Charities will purchase the property for $362,500 (different from Staffs report by $500), and the leveraging would be $1 .OO of City assistance for 80 cent to $1 .OO of Catholic Charities’ resources. Ms. Hines stated that Staff is also recommending slight revisions to the Housing Resolution provided previously, which will specify more clearly the terms of the loan. The proposed changes involve paragraph 2 on page 2 of the Resolution. If Catholic Charities continues to operate the facility, Staff would llke to make a change to reflect that payment of the HOUSING COMMISSION MINUTES May 8,1997 Page 2 loan will be reduced by 10 percent for each complete year of operation of the facility rather than the language that previously stated that at the fifth year one-half of the principal amount would be due and at the 10-year period the loan would be completely forgiven. Ms. Hines stated that in return for the right of first refusal for the property and offering an option to purchase the property at the fifth year and every year thereafter, the City is willing to work cooperatively with Catholic Charities in determining alternative sites for a homeless shelter, and even try to provide relocation assistance for them, if necessary. Ms. Hines stated that Staff would also llke to change paragraph 3 on page 2 of the Resolution to include only the purchase of the property and not the purchase of the buildings. Catholic Charities will probably have need for those portable, mobile buildings for another site, if they so choose. Ms. Hines stated that Staff believes that by providing financial assistance in the form of an non-interest bearing deferred loan in the amount of $200,000 the City will help to continue a very beneficial program in the community serving the needs of the homeless. Additionally, the homeless shelter is consistent with the City’s Consolidated Plan, with a medium priority, and is consistent with the City’s Affordable Housing Policies and Priorities. Chairman Schlehuber asked if there were any questions of Staff. Commissioner Scarpelli asked if the property owners have been made aware of the proposed extension of the use of the property. Mr. Becker responded that notifications have been made along with the CUP notifying the property owners of the extension. Chairman Schlehuber opened the public testimony and issued the invitation to speak. Dr. Robert Moser, administrator with Catholic Charities, 349 Cedar Street, San Diego, CA 92101, addressed the Commission and stated that he is responsible for the operation of La Posada. Dr. Moser expressed his gratitude for the support the City has offered and for the responsiveness of the Housing Staff in addressing the issues and concerns in helping Catholic Charities. In response to Commissioner Scarpelli’s question about the Shelter being a temporary site, Dr. Moser stated that Catholic Charities met the challenge to meet a need; and given Catholic Charities’ ability to make the Shelter a success and the on-going need for homeless services in this particular region, it will be permanent as long as there is a need and Catholic Charities continues to meet all of the requirements of the CUP gaining the support of the community at large. Dr. Moser stated for the record that Catholic Charities and Caring Residents of Carlsbad have invested substantial moneys in the site acquisition and development phases of this project. He added that the on-going operation costs the agency and volunteers have invested in the program over the past five years will continue for the next ten years. Dr. Moser believes that since La Posada is a shelter providing a public benefit that all these dollars and resources are in fact part of the leveraging of the $200,000 request. According to Catholic Charities, it’s much more than the .81 or 81 cents presented in the Staff report. Dr. Moser said that the City of Carlsbad would be getting a good return on their investment by continuing their support for La Posada in this fashion. Sister Ray Monda DuVall, of Catholic Charities, 349 Cedar Street, San Diego, CA, 92 101, addressed the Commission and said that the partnership of the Caring Residents of Carlsbad and Catholic Charities has been a good partnership to meet an unmet need of housing in the northern corridor. Because of this partnership, Catholic Charities is considering additional partnerships of housing in North County, which they would never have considered without this experience. Sister DuVall stated she has been impressed by the commitment of the City and Caring Residents, and the willingness of the City Staff to talk with Catholic Charities about the importance of this project. Sister DuVall told the Commission that Catholic Charities guarantees that the City will continue to be proud of Catholic Charities and La Posada. HOUSING COMMISSION MINUTES May 8,1997 Page 3 Chairman Schlehuber asked if there were any questions of Catholic Charities. There being no other persons desiring to address the Commission on this topic, Chairman Schlehuber declared the public testimony closed and opened the item for discussion among the Commission members. Commissioner Wellman would like the record to reflect that the original EPS grant was for $345,000. Another $130,000 was put in by Caring Residents, In-Kind Commitments, and San Diego Community Foundation. Catholic Charities of San Diego put in $95,000 in 1992 to get the project up and running. Commissioner Wellman added that Catholic Charities foots the bill for 95 percent of the $100,000 annual operating costs--that’s $800,000 in operating costs in eight years. She added that the City and County will continue to receive payment of property taxes on this property, unlike other projects with tax credits. Lastly, she said that the property is still under a conditional use permit, and the property owner gave Catholic Charities the right of first refusal on the sale, which is not contingent upon getting a permanent change of zoning for the property. Commissioner Calverley expressed her concern with the loan and the expiration date, and made a recommendation to include a first trust deed. In ten years, according to Commissioner Calverley, the property is going to be surrounded by industrial parks and will need to be moved to serve its function. Commissioner Calverley stated that if the City had a first trust deed for the $200,000, and Catholic Charities decided to move out of town, the note would be due and payable to the City and the money would be available to work with others of the same need. Commissioner Escobedo said that she has been to La Posada on a few occasions and found it to be clean, well run, the only shelter in the City, and a good investment for the City. Commissioner Walker asked about the $46,000 that was approved through the Consolidated Plan. Ms. Hines responded that the $200,000 was for the land and the $46,000 was for rehabilitation efforts, capital improvements, etc. Commissioner Calverley again suggested putting a first trust deed on the land that is not payable as long as Catholic Charities remains at the site; and if they choose to move within the City of Carlsbad, the first trust deed moves with them. It is only repayable if they choose to sell the property, make a profit, and leave town. Chairman Schlehuber asked Mr. Becker to explain why the loan is forgivable. Mr. Becker responded that the loan is structured as a trust deed that will be subordinate to the primary financing. Catholic Charities would not be able to get a first trust deed from a bank without the City taking a subordinate position. It will be a second trust deed promissory note. The reason for the forgiveness feature serves the purpose of control of the site for a long-term period of time, which has a lot of meaning in terms of the facility being able to continue to function. Mr. Becker said the other purpose is recognizing that there is an on-going benefit in terms of the City’s programs by way of the annual operating subsidy. This is a capital expenditure on the City’s part to help Catholic Charities buy the land; but to run this facility is 100 percent subsidy. In recognition of this, Staff has built in the 10 percent forgiveness feature over 10 years. In other words, the City is buying 10 years of operation of the facility and all of the subsidy that goes along with it on an annual basis. There is also a first right of refusal for the City to purchase the site should it be put on the market at any time. In addition, at the fifth year and every year after that, the City will have the option to actually buy the site. This agreement will also entail cooperation in terms of helping the facility move somewhere else if necessary. Chairman Schlehuber invited Catholic Charities to respond. Sister DuVall stated that Catholic Charities is purchasing the property because the property owner wants to sell. Because Catholic Charities has first right of refusal, and because the City of Carlsbad would like the shelter to continue, Catholic Charities is willing to borrow the necessary money with some sort of help from the City to do the purchase. HOUSING COMMISSION MINUTES May 8,1997 Page 4 Catholic Charities has secured a bank loan. This in partnership with the loan is what Catholic Charities is going to pay the owners. Sister DuVall pointed out that it costs Catholic Charities $10,000 per year to operate La Posada, which is a tremendous benefit to the community. In addition, Catholic Charities is included in the City’s Consolidated Plan and fits in the services that have been outlined. Catholic Charities is currently carrying a $170,000 deficit in La Posada, according to Sister DuVall, and it is not financially possible for them to enter into a deal operating La Posada in a deficit for the City, and then have to repay the loan. Sister DuVall does not anticipate this to be a revenue-rich project and expects it to be revenue-negative. Sister DuVall pointed out this project is consistent with the Housing Trust Fund and access by non-profits. She added that Catholic Charities is willing to make the commitment and recognizes that it will have to do some serious fund raising and grant writing to operate this facility. She stated that Catholic Charities needs to have $10,000 forgiven and needs to have the loan forgiven in some period of time so not to add to its current deficit. ACTION: Motion by Commissioner Scarpelli, and duly seconded, to adopt Resolution No. 97-004 recommending approval of financial assistance for the purpose of acquiring property located at 2472-2478 Impala Drive for La Posada de Guadalupe Homeless Shelter. Escobedo, Latas, Noble, Rose, Scarpelli, Schlehuber, Walker, Wellman VOTE: 8-1-0 AYES: NOES: Calverley ABSTAIN: None ACTION: Minute Motion by Commissioner Calverley, and duly seconded, to amend condition #2 on page 2 of Resolution No. 97-004 deleting the forgiveness provision. VOTE: 2-7-0 AYES: Calverley, Latas NOES: ABSTAIN: None Escobedo, Noble, Rose, Scarpelli, Schlehuber, Walker, Wellman 2. LAUREL TREE APARTMENTS - Request for recommendation regarding options for proceeding with the development of the Laurel Tree Apartments Affordable Housing Project. Mr. Becker reviewed the background of the request and stated that the option on the site of the Laurel Tree property is expiring. It has been extended a number of times, but it is expiring May 28,1997, which puts the project in jeopardy. In order to proceed with any kind of strategy--tax credits, obtaining the financing to do the project, etc.--some action has to be taken to retain the site. Staff is recommending what the non-profit developer--the MAAC project--has proposed, which is to take action to acquire the site. With control of the site, MAAC can apply again for the tax credit financing, which would allow the project to go forward as the Commission had approved it and supported it in the past with Housing Trust Funds as well as tax increment financing. However, if getting the Low Income Tax Credit is unsuccessful, Staff is proposing a backup option, which is to process the project as a for-sale condominium project which would still meet the City’s Inclusionary requirements and would be feasible according to what analysis MAAC has done. For the benefit of the new Commissioners, Mr. Becker gave a review of the Laurel Tree Project. Mr. Becker stated that the three players involved in the Laurel Tree Project are MAAC project, which is the non-profit developer of the project, and two developers--Kaka Poinsettia Corporation and the Lennar Corporation--who are satisfying their affordable housing requirement through the Laurel Tree Project. They are doing that for their respective projects, which are Poinsettia Shores and Mariner’s Point--two projects located in the southwest quadrant. The developers are tied into the project through financial participation and have letters of credit posted with MAAC to provide $3.4 million of financing for the Laurel Tree Project. The agreement the City has with them acknowledges that agreements are in place that are satisfactory to MAAC to provide the money, and in return for providing support to the Laurel Tree Project, they will satisfy their affordable housing obligation. It is a three-party situation with the City mainly in an HOUSING COMMISSION MINUTES May 8,1997 Page 5 agreement regarding the Inclusionary obligations of the developers, and the developers in a relationship with MAAC helping the Laurel Tree Project to come about. In addition, there is other financing coming into the project by way of tax credits and other subsidy sources that are committed to the project. The Affordable Housing Program (HP) and Home Funds (a HUD program) have already committed over $1 million to the project. The City’s direct support that has been approved by the Commission and City Council for the project is $700,000; $500,000 from Low Income Housing Set Aside Funds from redevelopment and $200,000 from the Housing Trust Fund. Mr. Becker went over the range of options being presented by MAAC to the Commission. The MAAC proposal involves taking advantage of the developer payments or letters of credit that have been posted, and calling those in to buy the land to be in a position to apply for tax credits again in June. In addition, there is a backup option in the event that the tax credit support for the approved apartment project does not materialize. According to Mr. Becker, you cannot get money if you do not have site control. In addition, taking the opportunity to apply for tax credits again would allow the project to be financed as planned and approved as a department project. While this is the fourth round of tax credits, it is coming pretty quickly on the heels of the last one. It preserves a great deal of investment already committed to the project as approved, e.g., the million dollars in Affordable Housing Program money, HOME money, goes away if this project as approved goes away. The project as approved is rated as the City’s highest need priority. If this does not materialize, there is a legitimate, feasible backup that would be acceptable in the context of satisfying the developer’s Inclusionary Housing obligations at affordable purchases as a condo project. The project would have to go through processing and receive another set of development approvals. When the developers’ money is taken and the letters of credit are cashed, the City will not get their money unless they are released from their obligation; which is involved in all of these cases. If nothing happens on the Laurel Tree site, the only other option for the developers under the City-developer agreement is that they are forced to buy credits in the City’s Villa Loma Project. That would involve paying the going price, which is about $30,00O/unit, and that would mean that they would pay to the City $4 million. The City would in effect have a monetary solution to this. In other words, if Laurel Tree is abandoned, the City gets $4 million. The credits would be sold. The 135 credits would no longer be available to sell to anyone else. If the developer money is associated with Laurel Tree, the $3.4 million contribution, the City can also go ahead later and sell the credits and raise the additional $4 million for other affordable housing projects. On the range of alternatives, one that relates primarily to giving up in effect on the approved project and another attempt at the tax credit financing, is to go to the condominium option and begin processing that right away. In terms of actions, that still requires calling the developer payments in, releasing them from their obligation, using that to preserve the site, and process the condo alternative right away. It does have the advantage of preserving the site for a project. It looks to be a feasible alternative and MAAC has used the City’s acceptable purchase price limits at approximately 70 to 80 percent of medium levels. Given that level of income being served, and it being homeownership, it is certainly a Housing Element objective and it satisfies Inclusionary obligations, but it is a lesser priority in terms of the Housing Element and the Comprehensive Plan. It would take additional processing, meaning additional time. There would be lost investment and subsidy in the condo project, and MAAC and their partners have significant dollars invested in the apartment design that would be lost. This has been a special project from the standpoint of who has undertaken or shouldered the burden of pre-development expenses. The City has made a commitment of money that goes in if the project happens: $300,000 or more has been invested by a combination of MAAC, the local initiative support corporation (non-profit that provides seed money and pre-development expenses to non-profit developers), and Bank of America. That is essentially money that would be lost in this in addition to the other subsidies already mentioned. The release of the developer obligations would happen under this alternative; and since this does develop a project on the site using the developer’s $3.4 million, the City still is not selling affordable housing credits. Those are still preserved to sell to someone else. Mr. Becker said that the last alternative is to abandon the project, because if nothing is done and the option lapses, as it does automatically on the day the announcement is made that the City is not getting credit, then there will be no project HOUSING COMMISSION MINUTES May 8,1997 Page 6 on the site. The only alternative the City has then is to force the developers under the agreement to buy the affordable housing credits. In that case, the financial plus is that the City gets $4 million, but the credits are no longer available to sell to others. More importantly, no units are constructed, and the issue that is companioned with this is that the City is “chasing” another project somewhere and going through all this again to try to find a good site, a good developer, and put all those ingredients together again to do an affordable project. The net loss of potential income means that instead of selling credits to somebody else for the 4 million over a period of time and having 3.4 million in subsidy put into the Laurel Tree Project, the City is just getting $4 million. That’s 4 million versus potentially 7.4 million. Staff feels that the MAAC proposal is a reasonable one. The thing in particular that it does is to preserve the opportunity for the City to keep the project that has been approved with its large amount of subsidy and which has been deemed very desirable by the Commission and the Council. Mr. Becker reported that HUD has chosen to take the Laurel Tree Project and advertise it on their WWW home page as one of the best practices/projects of any city in the country (HUD also mentioned the Villa Loma Project). In their minds, having the private folks tied into the project with the developers, and using the different funding sources the City is using, is a pretty strong and creative thing for a City to be able to do. Chairman Schlehuber asked if there were any questions of Staff. Commissioner Walker asked if the project does not get the tax credits in June, does it automatically go to the condo option. Mr. Becker responded that yes, it would go to the condominium alternative. If at that point, given that the City will own the site, if there was a desire on the part of the Housing Commission and the City Council to discuss another alternative, that would certainly be possible. If the City takes the money from the developers and releases them from their obligation, there is a risk the City will not get a project done. The worst case is that the City still has their 3.4 million and Laurel Tree just didn’t happen, and the City can still sell affordable housing credits, which is not a bad outcome. Even if the tax credits are not forthcoming, there is a good alternative that has a high degree of certainty. Commissioner Latas asked if the MAAC project would be renewed after it expires on May 28. Mr. Becker responded that the renewal is doubtful; but the alternative is to buy the property, which is the prime element in the recommendation. In terms of the mechanics, MAAC would buy the property. Previously approved as a part of this is the City having title to the property, similar to the way Villa Loma was done with a long-term ground lease to the project. There would ultimately be a transfer of the property to the City; however, MAAC holds the option, therefore, they are the ones who would execute it with the money that they call in with the developers. Commissioner Calverley commented that the estimated finished lot cost with no fees is $47,633, which is more than twice the viable market price. She asked what the chances were of allowing the developer to come in, put money in a pot, work with MAAC to find another piece of property that is being sold at market value, and be able to put this product up for less money. Commissioner Calverley feels the property is overpriced. Mr. Becker said that Sylvia (MAAC) will address the costs. In terms of the overall total costs, generally, those are in line with the City’s prototype costs used for the size of units involved. Mr. Becker said it is the costs that are in there that take you from the unimproved site to the figure of $47,633. The $10,000 per unit is simply the approximate per unit cost for the land. Commissioner Calverley asked if the City can pull the letters of credit, continue to work with MAAC, and work at a different site. HOUSING COMMISSION MINUTES May a, 1997 Page 7 Mr. Becker responded that it is possible to work with a different site. All the developer needs is a release, and they are counting on investing $3.4 million to get that. The money is not necessarily tied to the Laurel Tree site, although it is the approved project. If the issue is a cost issue in their proforma, they will address that. Commissioner Latas asked if the City can apply for tax credits without blue prints. Mr. Becker responded that the program requires all local approvals of a project. Chairman Schlehuber opened the public testimony and invited the applicant to speak. Ms. Sylvia Martinez, MAAC Project, 1770 Fourth Avenue, San Diego, CA 92101 addressed the Commission about some of the issues brought up by the Commissioners. Ms. Martinez described the project as a service-enhanced project with 138 units for small and large families in Carlsbad. It will have an on-site subsidized child care center that will serve 40 to 50 children, as well as a service center with things llke a computer learning center, on-site counseling, recreational activities for children, and other social services for adults and children. Regarding the tax credit program, Ms. Martinez stated that the next application opportunity will be some time in December of 1997 or January 1998. MAAC is willing to keep working on the project; however, the two developers, Kaiza and Bramalea have made their financial commitment in the form of letters of credit, and their annual letters of credit; so every year they need to be renewed. Constantly renewing these obligations has become part of the obstacle. The City’s obligation has held strong; but there is no guarantee these other obligations (the HP, the HOME) can be renewed in perpetuity because everyone wants to see their money go to the purpose for which it is served. MAAC is committed to doing the project, and as a non-profit, MAAC’s priority is to do this kind of affordable rental project that serves the under-served population of working low-income families. Ms. Martinez said that with the condo option, MAAC would maintain the number of units to be fair to the developers who paid per unit to participate in this program. The City is looking at getting approximately 138 units of affordable housing and MAAC feels an obligation to meet the City’s requirements and the developers’ requirements. In terms of potentially looking at another site, Ms. Martinez said that there are a couple of issues involved. One is that the Inclusionary Housing Program that the City of Carlsbad has put in place is quadrant-based; so MAAC would be trying to find a piece of property within the existing quadrant. To site the project completely different woule destroy the element of integration that is an important part of the City’s Inclusionary Housing Plan. This particular quadrant is seeing a lot of building right now, so availability on the same size and scale could be a problem. In terms of the costs, Ms. Martinez stated that the proforma shows MAAC is meeting the affordability requirements for the Carlsbad project and MAAC is trying to maintain as much as possible some of the design approvals and scale already received for the apartments. Ms. Martinez stated that MAAC has competed three times under three different criteria for the tax credit option. The first time MAAC scored too low; the second time MAAC was on the waiting list; and the third time MAAC received an unfavorable lottery number in a lottery system. What is different about June 30? The rules are not changing this time. Ms. Martinez explained that five out of the seven San Diego projects did receive funding this round. MAAC analyzed and found two reasons why those projects received funding, even if they had lottery numbers not as good as Laurel Tree’s. First, there is now a geographic allocation that gives San Diego County access to a set of money. Seven applications from San Diego County were put in during the last round, and in the next round, MAAC anticipates that only three applications will be put in; therefore, the odds are even better at accessing that San Diego County allocation. Second, the five projects were all similar in that they did not request State tax credits as well as Federal tax credits. The two that did not receive funding, including Laurel Tree, requested State and Federal tax credits. It appears that the State tax credits were a real barrier to getting funded. A much larger project than Laurel Tree in San Marcos with a c HOUSING COMMISSION MINUTES May 8,1997 Page 8 worse lottery number than Laurel Tree is getting funding because there was a provision made not to use State tax credits. MAAC is committed to removing those State tax credits in two ways: (1) MAAC is reassessing its developer fee and taking some of it out; (2) MAAC is being more aggressive in terms of the investment into the tax credits. Recalling Villa Loma, Ms. Martinez mentioned that Edison Capital invested in the tax credits. MAAC is getting the word out that it needs a lot of money for the tax credits because it needs to make up the deficit that has resulted from not having the State tax credits. MAAC feels it will be successful with this. Ms. Martinez said that MAAC is working with the land owner and thinks that if he sees commitment from the Housing Commission and the City Council to look at some of these long-term options, that he will work with MAAC on extending to meet the June 30 deadline. The owner has had the option open with no money down for two and one-half years and it is time to make a commitment. Ms. Martinez added that the condo backup plan gives some certainty in the event that the tax credits do not come through. It tries to provide an alternative that meets the participating developers’ requirements, meets the City’s requirements, and also makes a creative use of the property. Chairman Schlehuber asked if there were questions of Ms. Martinez. Commissioner Wellman asked if MAAC would be the developer of the condominium option. Ms. Martinez responded that yes, and that MAAC has done both attached and detached affordable homeownership products. MAAC has been working with Catellus Residential Group, and they would probably stay in as well. Commissioner Wellman asked if there was anything the citizens of Carlsbad could do to help with the coming round of tax credits to be successful. She also asked if MAAC would try again in December for the tax credits if they are unsuccessful in June; or would this Resolution automatically force MAAC to do the condominium development. Ms. Martinez responded that the most important thing is to stabilize the property because without the property there are no options. It’s a matter of being able to have the opportunity to go forward. In response to the second question, Ms. Martinez said the Commission could take this up again in July, and MAAC would be open to keep trying because it is their priority also to create the affordable rental project. Commissioner Scarpelli asked if the other social aspects would remain with the condo option. Ms. Martinez responded that because of the additional requirements to provide certain amenities for the condominium project, including splitting the lots and adding garages, the child care center would be lost. Some of the funding would also be lost that is internal to the project. With a rental project, there is operating income every year that helps sustain those services including the child care center. With the sale of a product, there is some loss of control. In addition, Ms. Martinez said the on-site service center would have to be looked at because, again, there would not be an on-going operating stream. Commissioner Calverley asked if there has been an appraisal on the property and a layout on the condominium option. Ms. Martinez responded that there has not been an appraisal of the property. MAAC has done a density study and the condos will probably be stack flats, not town homes, which is a marketing issue rather than a feasibility issue. There being no other persons desiring to address the Commission on this topic, Chairman Schlehuber declared the public testimony closed and opened the item for discussion among the Commission members. Chairman Schlehuber and Commissioners Scarpelli, Escobedo, Noble, and Wellman expressed their support for the project with all its amenities. HOUSl NG COMM ISSlON MINUTES May a, 1997 Page 9 ACTION: Motion by Commissioner Noble and duly seconded, to adopt Resolution No. 97-005 recommending to the City Council the approval of an option to allow the Laurel Tree Development Team/MAAC Project to receive payments of approximately $3.4 million from the private developers participating in the combined Inclusionary Housing Project known as the Laurel Tree Apartment Project in order to acquire property and continue efforts to obtain project financing and to release the developers (Kaiza and Lennar) from further Inclusionary Housing obligations. Escobedo, Latas, Noble, Rose, Scarpelli, Schlehuber, Walker, Wellman VOTE: 8-0-0 AYES: NOES: None ABSTAIN: None 3. HOUSING COMMISSION GUIDELINES ON SECOND DWELLING UNITS - Approve final guidelines of the Housing Commission on development of Second Dwelling Units, when used to satisfy the Inclusionary Housing Requirements of Housing Developers. Evan Becker stated that the guidelines Staff has put together reflect what the Housing Commission approved at the workshop in April. Mr. Becker said the City Attorney does not want anybody to think that there is any right created by the guidelines, and the City Attorney’s office commented that the Commission can recommend to the City Council that they adopt the guidelines. Regarding the guideline that sets up the guiding limits for who can build second dwelling units, the City Attorney has asked that mention be made that ultimately it is the decision of the Council to accept second dwelling units as an alternative for purposes of the Inclusionary obligation. Lastly, Mr. Becker said the City Attorney’s office wanted it to be made clear, especially with respect to the size of the units, that there is some flexibility with guidelines. The City Attorney wants to see everyhng the Commission does in terms of recommendations to the City Council. In addition, Mr. Becker stated that it is important that the Commission knows how the Council feels about the guidelines so they do not get applied unnecessarily. Chairman Schlehuber asked if there were any questions of Staff. There was some discussion regarding Mr. Becker’s comments. There being no other persons desiring to address the Commission on this topic, Chairman Schlehuber declared the public testimony closed and opened the item for discussion among the Commission members. Commenting on the monitoring guideline, Commissioner Wellman said that she would like Staff to monitor a representative sample rather than just 20 percent of the units in order to obtain enough useful information. ACTION: Motion by Commissioner Latas and duly seconded, to adopt Resolution No. 97-006 recommending approval of an option for action to the City of Carlsbad, California to approve Housing Commission guidelines for the development of second dwelling units within the City of Carlsbad as related to satisfaction of the Inclusionary Housing requirement for housing developers. Escobedo, Latas, Noble, Rose, Scarpelli, Schlehuber, Walker, Wellman VOTE: 8-0-0 AYES: NOES: None ABSTAIN: None ANNOUNCEMENTS: None HOUSING COMMISSION MINUTES May a, 1997 Page 10 NEXT SCHEDULED MEETING: June 12,1997 ADJOURNMENT: By proper motion, the Regular meeting of May 8,1997, was adjourned at 759 p.m. Respectfully submitted, 2625-G EVAN BECKER Housing and Redevelopment Director KATHY VAN PELT Minutes Clerk MINUTES ARE ALSO TAPED AND KEPT ON FILE UNTIL THE WRIlTEN MINUTES ARE APPROVED. nte Cify of mdsbad Housing & Redevelopment DepaHment I Staff Leilani Hines Management Analyst 1 A REPORT TO THE HOUSING COMMISSION I Item No. 1 I DATE: May 8, 1997 SUBJECT: REQUEST FOR FINANCIAL ASSISTANCEILA POSADA DE GUADALUPE - Request for recommendation of financial assistance in an amount not to exceed $200,000 from the City of Carlsbad Housing Trust Fund for the acquisition of property located at 2472-2478 Impala Drive for La Posada de Guadalupe Homeless Shelter. I. RECOMMENDATION That the Housing Commission ADOPT Housing Commission Resolution No. 97-004, recommending APPROVAL of financial assistance in an amount not to exceed $200,000 from the City of Carlsbad Housing Trust Fund for the purpose of assisting Catholic Charities, San Diego to acquire property located at 2472-2478 Impala Drive for the continual operation of La Posada de Guadalupe Homeless Shelter for single men. 11. PROJECT BACKGROUND The City has received a request for financial assistance in the amount of $200,000 to assist Catholic Charities, San Diego with the acquisition of property for La Posada de Guadalupe. Currently, Catholic Charities leases the property located at 2472-2478 Impala Drive on a year to year basis to provide La Posada de Guadalupe Homeless Shelter. Notwithstanding the success of La Posada, the lack of long term site control has negatively impacted Catholic Charities’ ability to provide a cost effective shelter and service program. Catholic Charities has continually applied for funding grants to support operation of the shelter but has been unable to obtain these significant sources of revenue due to the lack of site control over the applicable grant period. To this point, Catholic Charities has been able to absorb the construction and operating deficits of La Posada. However, the continuing loss of significant operating revenues from grants and rising costs would cause the shelter to operate at a level of loss beyond Catholic Charities’ ability to sustain. The property owners have informed Catholic Charities of their interest and intent to sell the property. The property owners, strong supporters of the shelter, have agreed to provide Catholic Charities an opportunity to purchase this property for $362,000. Catholic Charities would be able to provide $162,000 of its own financial resources for the acquisition of the property and is requesting assistance with the remaining balance of the purchase price. - FINANCIAL ASSISTAN -LA POSADA MAY 8,1997 ' PAGE2 The acquisition of this property would help in resolving issues of long term site control and, consequently, positively impact Catholic Charities ability to secure funding for the operation of the La Posada. If Catholic Charities were unable to acquire the property, significant additional expense could be expected from a rent increase by new owners or possibly expenses associated with relocating to another site. III. PROJECT DESCRIPTION La Posada provides transitional housing for a maximum of 50 homeless men. This shelter assists in meeting the great need in Carlsbad for housing single homeless men and is devoted to improving the quality of life for its participants by encouraging and enabling employment and the acquisition of permanent housing. Residents are able to maintain shelter for up to 90 days, receive food and hygiene services, and participate in other supportive service programs. La Posada is the only homeless shelter located within Carlsbad offering shelter and services to the community's homeless population. The facility is located at 2472-2478 Impala Drive, adjacent to the City of Carlsbad Safety Center. The property is approximately 3.62 acres. IV. APPLICANT A. New Property Owner - Catholic Charities, San Diego Catholic Charities, San Diego has been providing social services to the community since 1919 and incorporated as a social service agency in 1974. La Posada de Guadalupe opened in November 1992 and is operated by Catholic Charities, San Diego in partnership with Caring Residents of Carlsbad. V. LOAN TERMS AND CONDITIONS Financial assistance provided to Catholic Charities, San Diego for the acquisition of property for La Posada de Guadalupe Homeless Shelter will be subject to the following terms and conditions: A. Source of Financial Assistance Financial assistance in the amount of $200,000 from the City of Carlsbad Housing Trust Fund will be made available as a non interest bearing deferred loan for the acquisition of property located at 2472-2478 Impala Drive for La Posada de Guadalupe Homeless Shelter. This loan will be secured by a Trust Deed and Promissory Note for the property on behalf of the City. FINANCIAL MAY 8,1997 PAGE 3 B. ASSISTAT ,-. E-LA POSADA Use of Real Property _- Catholic Charities, San Diego will be required to operate the facility as a homeless shelter consistent with the requirements of the Conditional Use Permit for the facility and the application for financial assistance. If Catholic Charities, San Diego continues to operate a homeless shelter on this property for a period of not less than five years, repayment of the loan will be reduced to one half (Yi) of the principal amount. No repayment of the loan will be required if Catholic Charities, San Diego continues to operate a homeless shelter on this property for a ten year period. C. Right of First Refusal and Option to Purchase Catholic Charities, San Diego will grant the City a right to purchase the real property and any improvements thereon should it at any time be made available for purchase. Additionally, the City will be offered an option to purchase the property upon the fifth year of the loan term and every year thereafter. The purchase price for the property will be the fair market value of the property at the time of purchase. VI. ANALYSIS Catholic Charities, San Diego has made a request for financial assistance to assist with the acquisition of the property for the continued operation of La Posada de Guadalupe. Staff is recommending that assistance be provided in the amount of $2OO,OOO. The following factors were considered in arriving at this recommendation. A. Applicant It is important that the applicant have the capacity to successfully implement the project. Catholic Charities, San Diego has had significant experience in the provision of social services and shelters for the homeless. B. Project Quality Catholic Charities, in cooperation with Caring residents of Carlsbad and other social service providers, has operated the facility as the a homeless shelter since November 1994. As a result of the cooperative relationship between Caring Residents, Catholic Charities, other contributing social service agencies, and the City of Carlsbad, La Posada de Guadalupe has been able to serve 1,576 unduplicated individuals, with 61,061 bed nights and 174,791 meals in its four years of operation. Continued support and operation of this shelter will assist the City’s homeless population and create a supportive community environment with enhanced supportive services and facilities. c FINANCIAL ASSISTAh ;-LA POSADA MAY 8,1997 PAGE 4 C. Financial Staff believes that the requested financial assistance is acceptable based upon an appraisal of the property and the leveraging of other financial resources. An appraisal of the value of the property conducted in February 1997 substantiates the purchase price. Additionally, for every $1 the City is contributing to the purchase price of the property, Catholic Charities is providing $0.81 of their own financial resources. While this may not meet the leveraging goal the City would seek with other affordable housing projects, subsidy funds for homeless shelters, particularly for land and capital improvements , are very scarce. Purchase Price !§ 362,000 Catholic Charities' Resources !§ 162,000 Leveraging 0.8 1 Requested Financial Assistance $ 200,000 A total undesignated balance of approximately $2,260,000 currently exists in the Housing Trust Fund. Appropriation of the $200,000 recommended to assist Catholic Charities with the purchase of the property for La Posada de Guadalupe will not substantially impact the fund balance. D. Housing Needs and Goals As detailed within the City's Consolidated Plan and consistent with the housing need of homeless persons in the General Plan Housing Element, there are an estimated 1 ,OOO to 1,213 homeless persons in Carlsbad. Nearly all of those homeless may be farm workers and day laborers living alone. It is assumed that families comprise a relatively small percentage of the total homeless population. Based upon the significant number of homeless individuals in Carlsbad, the limited supply of affordable housing in Carlsbad, and the need to provide supportive services for the homeless, as well as shelter, the development and operation of transitional shelters for the homeless is assigned the highest priority in the City's Consolidated Plan. The Housing Trust Fund shall be used only for the purpose of providing funding assistance for the provision of affordable housing and reasonable costs of administration consistent with the policies and programs contained in the Housing Element of the City's General Plan. This shelter and the supportive services offered supports Housing Element Objective 3.3 to provide shelter and assistance for the homeless. VII. SUMMARY It is the role of the Housing Commission to make recommendations to the City Council based on several considerations with respect to affordable housing projects. These are: FINANCIAL ASSISTANLGLA POSADA MAY 8,1997 PAGE 5 The proposal’s effectiveness in serving the housing needs and priorities as expressed in the Housing Element of the General Plan and the HUD Consolidated Plan. The proposal’s development and operating feasibility, emphasizing the developer’s capacity, the financial feasibility and the appropriate role of the City in providing financial assistance. This shelter and supportive services proposal represents a desirable addition to the City’s efforts of creating and maintaining affordable housing for persons of all economic segments of the community. To this point, the City has made considerable progress in creating both affordable rental and home ownership opportunities for lower and moderate income households. La Posada de Guadalupe is the only homeless shelter located within Carlsbad offering shelter and services to the comunity’s homeless population. Additionally, the preservation of this homeless shelter is consistent with the City’s affordable housing policies and priorities and staff believes that the proposed acquisition of the property for La Posada de Guadalupe is deserving of City financial assistance. This shelter and the supportive services offered provides a beneficial program for addressing the needs of the homeless. Staff is, therefore, recommending financial assistance in an amount of $200,000 from the City’s Housing Trust Fund to assist Catholic Charities, San Diego with the acquisition of this property to continue to provide shelter and services to the homeless within the Carlsbad. VIII. EXHIBITS 1. 2. Housing Commission Review Application Housing Commission Resolution No. 97-004 1 2 3 4 5 6 7 8 9 10 I1 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HOUSING COMMISSION RESOLUTION NO. 97-004 I I A RESOLUTION OF THE HOUSING COMMISSION OF THE CITY OF CARLSBAD, CALIFORNIA TO RECOMMEND APPROVAL OF FINANCIAL ASSISTANCE FOR THE PURPOSE OF AQUlRlNG PROPERTY LOCATED AT 2472-2478 IMPALA DRIVE FOR LA POSADA DE GUADALUPE HOMELESS SHELTER APPLICANT: CATHOLIC CHARITIES WHEREAS, a request for financial assistance has been submitted to the City of Carlsbad's Housing Commission for review and consideration by the applicant; and WHEREAS, the applicant has expressed a need to receive financial assistance in the amount of $200,000 from the City of Carlsbad Housing Trust Fund for the purpose of acquiring property located at 2472-2478 Impala Drive for La Posada de Guadalupe Homeless Shelter; and WHEREAS, said Housing Commission did, on the 8'h day of May, 1997, hold a public meeting to consider said application with the request for financial assistance; and WHEREAS, as said public meeting, upon hearing and considering all testimony, if any, of all persons desiring to be heard, said Commission considered all factors relating to the application and request for financial assistance. NOW, THEREFORE, BE IT HEREBY RESOLVED by the Housing Commission of the City of Carlsbad, California, as follows: 1. 2. 3. 4. 5. 6. The above recitations are true and correct. The project is consistent with the goals and objectives of the City of Carlsbad's Housing Element and Consolidated Plan. La Posada de Guadalupe will provide transitional housing for a maximum of 50 single men which meets a "medium" priority as outlined within the City of Carlsbad's Consolidated Plan. The homeless shelter has the ability to effectively serve the City's Housing needs and priorities as expressed in the Housing Element and the Consolidated Plan. The acquisition of the subject property appears to be cost effective based on the appraised value of the property and the leveraging of the financial assistance recommended. That based on the information provided within the application and testimony presented during the public meeting of the Housing Commission on May 8, 1997 the Commission recommends APPROVAL of financial assistance requested by the applicant for the acquisition of property located at 2472-2478 Impala Drive for the La Posada de Guadalupe Homeless Shelter in the amount of $200,000 in the form of a non interest bearing deferred loan from the City of Carlsbad's Housing Trust Fund. That the City Manager or his designee is authorized to enter into additional agreements with the applicant, execute such other documents, or take other actions as may be 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 2i 21 necessary or appropriate to assist the applicant with the acquisition of the subject property. ! ;enera1 Conditions: ?. 3. 4. Financial assistance in the amount of $200,000 from the City of Carlsbad Housing Trust Fund will be made available as a non interest bearing deferred loan. This loan will be secured by a Trust Deed and Promissory Note for the property on behalf of the City of Carlsbad. Catholic Charities, San Diego will be required to operate the facility as a homeless shelter consistent with the requirements of the Conditional Use Permit for the facility and the application for financial assistance. If Catholic Charities, San Diego continues to operate a homeless shelter on this property for a period of not less than five years, repayment of the loan will be reduced to one half (%) of the principal amount. No repayment of the loan will be required if Catholic Charities, San Diego continues to operate a homeless shelter on this property for a ten year period. Financial assistance shall be subject to granting the City of Carlsbad a right of first refusal to purchase the property and any improvements thereon should it at any time be made available for purchase. Additionally, the City will be offered an option to purchase the property upon the fifth year of the loan term and every year thereafter. The purchase price for the property will be the fair market value of the property at the time of purchase. Upon final approval of financial assistance by the City Council, the applicant shall enter into a loan agreement with the City of Carlsbad. The loan agreement shall include all terms and conditions of said project approval; the amount and form of the City's financial assistance; compliance reporting requirements and implementation agreements. PASSED, APPROVED, AND ADOPTED at a regular meeting of the Housing Commission of the City of Carlsbad, California, held on the 8'h day of May, 1997, by the following vote, to wit: AYES: NOES: ABSENT: ABSTAIN : MICHAEL SCHLEHUBER, Chairperson Housing Commission EVAN E. BECKER Housing and Redevelopment Director HC RES0 NO. 97-004 2 EXHIBIT 2 HOUSING COMMISSION REVIEW APPLICATION CPHOLIC CWIES February 28,1997 Ms. Leilani Hines Department of Housing and Redevelopment City of Carlsbad 2965 Roosevelt St., Suite B Carlsbad, CA 92008-2389 Dear Ms. Hines, Catholic Charities, Diocese of San Diego seeks the assistance of the City of Carlsbad to ensure the continued operation of La Posada de Guadalupe as a shelter benefitting homeless men in the Carlsbad area. Specifically, we request financial support from the Kousing Trust Fund in the amount of $200,000 to purchase the property at 2472-2478 Impala Drive from the current owners who are strongly desirous of selling the land in the very near future. With this level of assistance, Catholic Charities will be able to secure the remaining resources needed to affect a timely transfer of Deed. In its absence, CCSD could lose this opportunity to obtain the site control required to receive significant operational funds from the federal government as well as risk our ability to remain at this location, Catholic Charities requests that you utilize the attached amended Project Description which was contained in our application to the City of Carlsbad for capital costs under the CDBG Program. We are also prepared to provide any additional information that you may require and request. Thank you for your assistance in processing this request. Sincerely, Robert J. Maser, Pb.D. Department Director catholic .b charities AWMMUNblY~~ Urn Diocese of Sin Diego PROJECT DESCRIPTION I. SUMMARY Capital funds in the amount of $ 200,000 are requested to purchase the property upon which is located the unique and successful shelter facility and program known as La Posada de Guadalupe de Carlsbad. Commenced in 1992 and operated by Catholic Charities of San Diego (CCSD) in partnership with the Caring Residents of Carlsbad (CRC), La Posada is an important asset for and component of the City of Carlsbad's response to the perennial problem of homelessness among farm workers and day laborers. Safety Center on Impala Drive, La Posada represents a physical plant and communal environment unlike any other in San Diego County. of this grant application. 11. NEED Located on a 3.62 acre parcel adjacent to the City's To preserve the benefits of this resource is the purpose La Posada was originally conceived and constructed as a temporary shelter. of 90 days, the physical and programmatic character of the shelter was planned as a test of its capacity and capability to contribute to a meaningful response to homelessness and its compatibility with the community's will and willingness to share in that solution. Fortunately the outcomes have all been positive for all concerned - CCSD, CRC, the City of Carlsbad and the homeless themselves. Unfortunately, the temporary character has had some negative consequences for the program. Designed with mobile units and a maximum stay First, although the tenure of occupancy has always been uncertain, the prospects of losing the ability to remain at the current site are now real. The land's owners, strong supporters of the shelter since its inception, have indicated their decision to act on their investment by placing the property for sale. Should another buyer have alternative use for the space, the ability of CCSD to identify a suitable substitute is unlikely. Based on the experience of establishing La Posada at its present premise, the costs of locating a comparable tract plus preparing the site and moving the mobile units would also be prohibitive absent sufficient funding. The likely level of needed assistance would nearly match the sale price being asked by the owners, and the loss of service time and community support would be great. Second, the lack of site control beyond a year-to-year lease has resulted in the loss of significant operating revenues. 1996 application for a two-year, $ 200,000 federal emergency shelter grant (FESG) was not even evaluated because it lacked sufficient site control over the course of the grant period. The 1997 round of FESG funding is currently in process, and without ownership of the site, our ability to demonstrate sufficient site control to qualify for these needed operating monies is negated. Our Conversely, if we are able to attain ownership, then the level of funds we could receive would go a long way to making the shelter able to operate in the black. Third, the lack of long-term or permanent site control has The Planning Commission was willing to The cost in application fees for renewing the CUP also adversely affected the site's ability to secure a long-term Conditional Use Permit. grant such a permit before it learned of the tentative nature of our tenancy. is another savings to be realized if ownership is secured. Fourth, the single largest expense besides personnel is space. with the same rental rate as we currently experience. Additional costs could cause the shelter to operate at a level of loss beyond its ability to sustain. In fact, Catholic Charities has already absorbed significant sums of deficit (nearly $ 200,000) in both the original construction costs and operating expenses over the past three years. The City of Carlsbad has been able to contribute only a fraction of this amount through annual awards of CDBG Public Service funds. By approving this request, the City can make a significant contribution to maintain a program that has been beneficial from its beginning. It is unlikely that a new landlord would provide CCSD 111. METHODS Catholic Charities has already held discussions with the current owners who are willing to work out a deal for the sale of the property to Catholic Charities. Representatives from the City of Carlsbad's Planning and Housing Departments have also been involved. The asking price is $ 362,000 and a formal appraisal will be completed by March 5 to assess its market value. A funding package that includes significant Housing Fund support would go a long way to assuring the acquisition of this property. The Allied Irish Bank, which has financed several other property purchases for Catholic Charities, has indicated its agreement to provide credit for the remaining amount. Negotiations for the land will include the authorized agents of the agency, the Executive Director and members of the Corporate Board. All legal and fiscal requirements would be handled in accordance within standard procedures and mechanisms, including those established for HUD-funded projects. IV. EENEFITS 1. Acquisition of permanent site control 2. Continuance of program operations 3. 4. Realization of savings in space costs 5. Availability of site for future services 6. Enhancement of opportunities for operating funds Location of Catholic Charities as a long-term resource within Carlsbad CITY OF CARLSBAD COMMUNITY DEVELOPMENT BLOCK GRANT/HOME PROGRAM FUNDING PROPOSAL APPLICATION 1997-98 - The following informa tion must be completed by each person/agency/organuation interesled in being considered for CDBG/HOME funding. All information requested g& be provided 01 the application will be considered incomplete and will not be further evaluated for funding consideration. Please type or print cleatly. Atlach additional sheets or infamation as necessaly. The application must not exceed a Iota1 of fen (lo] pages, not including the required attachments as listed in the Checklist of Required Documents. ADMINISTRATING AGENCY Name of Agew. Address: Catholic Charities, Diocese of San Diego 349 Cedar Street, San Diego, CA 92101 Federal lax ID Number: 23-7334012 IIIIF: yi r IU~IUIII~I IUJGGI. OSada de Guadalupe Location of Program/Projedt: d Contact Person: Requested Funding Amount: $ 300,000 Brief Description of Program/Project (Describe the work to be performed. including the oclivifies to be undertaken or the services to be provided, the goals and objectives of the program/project. etc.): La Posada is a unique 50-bed facility serving homeless male fan workers and day laborers with basic services of shelter and food and with case management assistance directed at employment and pecnane:it housing. Funds wilt be used to purchase the property thereby assuring site control and the continuity of the facility and its services, plus enhancing the ability to . secure operating funds . r.., ". - -. _- - - 1997-98 COBGIHOME funcding Applicolion Poge 2 1. ORGANIZATIONAL ABILKY/CAPACIT'I A. fhir agency 'n: 1[1 Non-profit 0 Forgofit 0 Locolpubbcogency 0 $!ole public agency 0 Other (Pleose specify.) 6. mot is the se/missionof the agency? A cmunity service ministry that exists to T wi ness actively on behalf of the scriptural values of mercy and justice, to acknowledge the sacredness of the human person, to enhance the quality of life for all, to advocate for h just society, to call men and women to action on behalf of the poor, and to promote self -determination for a 1 1. C. How long has Ihis agency been in operotion? Pleose include fhe date of incorporoiiin? Since 1919 as the social service agency of the Roman Catholic Diocese; officially inforporated as 501 (C) (3) in February, 1974. How long hos this agency been providing the proposed programlproject? Since November 1. 1992 0. E. Please submit an organkationol chad for the ogency cs Attochrnent A. F. Please descni the agency's ekling staff posiliors &recity responsible for the proposed program/project and ihei 'quaCfcofm and experience in such a progrom/prqect. (Resumes may ob be rubmiffed as Attochmenl 6.) 0ept.Director:Li a i son with city , budgeting, program development, program evaluation - Ph.0. ; 15 years administrative experience. Program Hanager: Daily program operation, staff supervision, maintain site and services, Liaison with other agencies. Caremanagers: Direct service delivery, client supervision, intake, assessment, case planning, referral follow-Up. Cook: Prepare meals, plan menu, supervise kitchen, food storage. We 'Mcote your agencfs level of experience with the COBGMOME pcogrom and/or other Slate or Federol Funding 3ources. G. CDBGIHOME M 0 0 0 No or titlie- experience. up to 1 year of wing COBG/HOME funds. Some experience, 2 to 3 yeon of mbg COBGIHOME funds. Moderote experience, 4 to 5 yeon of wing COBGMOME funds, Consideroble experience, mae than 5 yean of using CDBG/HOME funds. Other Sfate/Federal Fundina Sowcef: 0 0 0 Ip No or little experience, up to 1 yeor of using other Stote/Federol funds. Some experience, 2 to 3 yean of wing o?her Stote/Federal funds. Moderate experience. 4 to 5 yeon of wing other Stote/Federol funds: Consideroble experience. mae thon 5 yeon of using olher Slotefiederol Iwrds. -''I "' -- ---- 1997-98 CDBG/HOME Funding Applicalion - Poge 3 H. II you hove received federal funds. inCludhg CDBG/HOME funds, in previous yean. hove program vidafion findings ever been mode ogoiut you ogencvlffgOnirO~Orr? tf yes, pleose explain nafwe of Rnding(s) and how finding($) has been addressed byyourocganizo~ li . FIN ANClAl CAPACITYISTABILIW A. Please submit ihe proposed budget for the pogrornlproject, ifemizing revenues ond expenses, to this application as Attachment C. Indicate how ihe requested COBG/HOME funds would relate to ihe overon proposed Sudget. B. Please submit o copy of the orgon'uoiion's finonciol audit report for ihe losl focol year as A:tochment 0. C. Did you receive ony of fhe followhg sources of funding from the Cify cf Corlsbad wilhin the last hvo years (1995.96 and 199697) for the poposed programlprojec 13 ces of Funcf~nq CDBG CommVnity AcfivitieS (General Fund monies) k!Q &s 0 w w 0 I yes, please .Micote amount and siatus of previovsly awarded funds [fdy expended, funds remainlng, progrom/project discontinued). &mount Received Sktvs. CDBG/HOME funds 10,000 (95-96) fully expended (operating) 30,000 (95-96) project complete (capital) Community Acfivitiet 9,790 (96-97) 1/2 funds remaining (operating) 0. Did you receive any federal funds, 'ncludurg CDBG/HOME funding kom other cities, lost yeor (Jdy 1996 - June 1997)? 0 No pd Yes (Please fist funds below.) Proarom Source Amount Received FEMA $ 25,000 $ $ E. oddiiionol CDBG/HOME funds be reqvked in future yean for the project? ON0 Po Yes City of Coflrbod - Poge 4 1997-98 COBGIHOME fun( , Applicotion I I 111. BENEFITS 6 BENEFICIARIES A. How accessible or convenient 'a the proposed pogromlproject lo Cabod residenist (Please be specifc such as direct sefvices to c6ent's horns, fraruporfal*bn provided lo and from fmfy. w relalion to pubk tronspuiaflon.) * Project located within Carlsbad, near migrant camps, adjacent to safety center, near El Camino Real, and less than 1 mile from bus stop. 8. Whot is the opproximte percentage Ot your CGents lhat have cmnuol low 'ncomes in each of the.following ronges: (Percenloges should odd lo 1m Pleose see the 1994-95 Income Limits for the CDBG/HOME Program) 80 20 W of clients are at 30 percent or betow of the ore0 median income W of cGenls ore between 31 ond 50 percent of lhe area median income 74 of cGenls ore between 51 ond 80 percenf of the Ore0 median income X of clients are above 80 percent of the are0 median income C. Please descn'be how low ond moderate income perrons will benefit from lhe proposed progrom/project. Include lhe need or oroblem to be oddresred in relotion lo Consolidoied Plon housing and community develcpmenl priorities. of well OS the populolion lo be served o( lhe area to be benefited. (See Consolidofed Plan Pnodies) By providing a safe, sanitary and sober shelter environment for homeless men within which they are encouraged and enabled through casemanagement and support services to obtain employment, permanent housing and social assimilation; transitions men from unsafe migrant camps to an effective shelter program to affordable rental hous i ng . 0. Pkose 'hdiiate the number of clients. by howehdds or'hdiiuob. benetifin0 from the proposed activity ond the percentoge !hat ore Cabbad residents. Households or 475 Persons of which 100% ore Codsbod residents E. Does your ogency focus its activities on popdotions with special needs? 0 No 111 Yes IPteose specify) Please specify which special needs popuialions. (Homeless individuals/fomilies, Persons wi!h diobilifies. Persons w3h subdonce abuse problems, Veterans. Farm workers & doy loboren. Elderty, Children. elc.) Homeless male farm workers and day laborers. .- City of Carlsbad 1997-98 CDBG/HOME Func*- J Application Page 5 IV. IMPLEMENTATION OF ACTIVITY A. Please submit a schedule for impl,.nentation of ihe proposeG construction, rehabilitation, properly acquisition. other construction related 01 new public/community service programlproject as A tfachment E. The agency must ensure the expenditure of all CDBG/HOME funds awarded within the program year. 1, the undersigned, do hereby attest that the above information is true and correct to the best of my knowledge. Executive Director 12/4/96 Signdture Title Date Date Received: I2 - 04 -4b Date Reviewed: 12- \o-qu Staff Person Completing Review: National Objective: L/PI 1J-t @ -17- local Objective: kM)-I&. Eligibility Determination: &+e el4 1 %d(ikA) - 970. zol (-4) ! 970.z73ld PROJECT DESCRIPTION I. SUMMARY Capital funds in the amount of $ 300,000 are requested to purchase the property upon which is located the unique and successful shelter facility and program known as La Posada de Guadalupe de Carlsbad. Commenced in 1992 and operated by Catholic Charities of San Diego (CCSD) in partnership with the Caring Residents of Carlsbad (CRC), La Posada is an important asset for and component of the City of Carlsbad's response to the perennial problem of homelessness among farm workers and day laborers. Located on a 3.62 acre parcel adjacent to the City's Safety Center on Impala Drive, La Posada represents a physical plant and communal environment unlike any other in San Diego County. To preserve the benefits of this resource is the purpose of this grant application. 11. NEED La Posada was originally conceived and constructed as a temporary shelter. Designed with mobile units and a maximum stay of 90 days, the physical and programmatic character of the shelter was planned as a test of its capacity and capability to contribute to a meaningful response to homelessness and its compatibility with the community's will and willingness to share in that solution. Fortunately the outcomes have all been positive for all concerned - CCSD, CRC, the City of Carlsbad and the homeless themselves. Unfortunately, the temporary character has had some negative consequences for the program. First, although the tenure of occupancy has always been uncertain, the prospects of losing the ability to remain at the current site are now real. The land's owners, strong supporters of the shelter since its inception, have expressed an interest and intent to act on their investment by placing the property for sale. Should another buyer have alternative use for the space, the ability of CCSD to identify a suitable substitute is unlikely. Based on the experience of establishing La Posada at its present premise, the costs of locating a comparable tract plus preparing the site and moving the mobile units would also be prohibitive absent sufficient funding. The likely level of needed assistance would nearly match the sale price being asked by the owners, and the loss of service time and community support would be great. Second, the lack of site control beyond a year-to-year lease has resulted in the loss of significant operating revenues. Our recent competitive application for a two-year, $ 200,000 federal emergency shelter grant (FESG) was not even evaluated because it lacked sufficient site control over the course of the grant period. Another round of FESG funding is coming in the Spring of 1997, and without ownership of the site, our ability to apply for and acquire these needed operating monies is next to nil. Conversely, if we are able to attain ownership, then the level of .funds we could receive would go a long way to making the shelter able to operate in the black. Third, the lack of long-term or permanent site control has The Planning Commission was willing to The cost in application fees for renewing the CUP also adversely affected the site's ability to secure a long-term Conditional Use Permit. grant such a permit before it learned of the tentative nature of our tenancy. is another savings that could be realized if ownership was secured. Fourth, the single largest expense besides personnel is space. with the same rental rate as we currently experience. Additional costs could cause the shelter to operate at a level of loss beyond its ability to sustain. In fact, Catholic Charities has already absorbed significant sums of deficit (nearly $ 200,000) in both the original construction costs and operating expenses over the past three years. The City of Carlsbad has been able to contribute only a fraction of this amount through annual awards of CDBG Public Service funds. By approving all or part of this capital request, the City can make a significant contribution with federal funds to maintain a program that has been beneficial from its beginning. It is unlikely that a new landlord would provide CCSD 111. METHODS Catholic Charities has already held discussions with the current owners who are willing to work out a deal for the sale of the property to Catholic Charities. Representatives from the City of Carlsbad's Planning and Housing Departments have also been involved. The actual asking price is still under review but it will likely rest in the $ 300,000 - $ 375,000 range. A funding package that included significant CDBG support would go a long way to assuring the acquisition of this property. Negotiations for the land would include the authorized agents of the agency, the Executive Director and members of the Corporate Board. All legal and fiscal requirements would be handled in accordance within standard procedures and mechanisms, including those established for HUD-funded projects. IV. BENEFITS 1. Acquisition of permanent site control 2. Continuance of program operations 3. Enhancement of opportunities for operating funds 4. 5. Availability of site for future services 6. Realization of savings in space costs Location of Catholic Charities as a long-term resource within Carlsbad - ATTb. .WNT E: IMPLEMENTATION SCh-JJLE A meeting between representatives of Catholic Charities, the City of Carlsbad and the property owners is scheduled for December 12, just three days after the due date of this application. Pending the outcome of that and subsequent discussions, plus the decision of the CDBG Review Panel and the City Council, the amount available through CDBG should be known in early 1997. sale in a timely manner during the first quarter of the '97-'98 fiscal year should be highly probable and desirable. No expenses covered by CDBG will be incurred, however, until and unless authorization from the City is provided. Since the steps needed to be taken to implement this project do not require any intermediary (e.g. real estate broker) or physical alteration of the site prior to sale, the involved fiscal and legal activities should not pose any delays or difficulties. If favorable, then the ability to execute the .