HomeMy WebLinkAbout1999-06-10; Housing Commission; MinutesMinutes of: HOUSING COMMISSION
Time of Meeting: 6:OO P.M.
Date of Meeting: JUNE 10,1999
Place of Meeting: CITY COUNCIL CHAMBERS
CALL TO ORDER
Chaqerson Latas called the Regular Meeting to order at 6:06 p.m.
PLEDGE OF ALLEGIANCE:
Chairperson Latas led the pledge of allegiance.
ROLL CALL:
Present: Chairperson Latas, Commissioners McNeill, Rose, Scarpelli
Absent: None
Staff Present: Debbie Fountain, Housing and Redevelopment Director
Craig Ruiz, Management Analyst
APPROVAL OF MINUTES:
ACTION: Motion by Commissioner Scarpelli, and duly seconded, to approve the Minutes of the
Regular Meeting of May 13, 1999, as submitted.
VOTE: 4-0-0
AYES: Latas, McNeill, Rose, Scarpelli
NOES: None
ABSTAIN: None
COMMENTS FROM THE AUDIENCE ON ITEMS NOT LISTED ON THE AGENDA:
There were no comments from the audience.
NEW BUSINESS:
1. MARIAN0 AFFORDABLE APARTMENT PROJECT - RECOMMENDATION OF APPROVAL TO THE
CITY COUNCIL TO CONDITIONALLY PROVIDE UP TO $462,755 IN FINANCIAL ASSISTANCE FOR
SATISFY THE REQUIREMENTS OF THE INCLUSIONARY HOUSING ORDINANCE REQUIREMENTS
FOR THE MARIAN0 HOUSING DEVELOPMENT.
THE CONSTRUCTION OF TWENTY-SEVEN AFFORDABLE APARTMENT UNITS IN ORDER TO
Craig Ruiz reviewed the background of the request and stated that the Mariano project is now called the Vista Las
Flores project. He added that the Commission saw this project in 1997. At that time, the applicant had not requested
financial assistance.
Mr. Ruiz stated that there will be 28 apartment units, 27 of which will be affordable. The units will consist of 16 two-
bedroom units and 12 three-bedroom units. Eighteen units will be at 50 percent of the area median income; seven at 38
percent of the area median income; and two at 30 percent. The twenty-eighth unit will be a two-bedroom manager unit.
Mr. Ruiz described the project financing as explained in the Staff report (9 percent tax credits, conventional first loan,
and City subsidy). Mr. Ruiz added that this is in line with other projects the City has provided assistance for in the
past.
HOUSING COMMISSION MINUTES
JUNE 10,1999
PAGE 2
Mr. Ruiz specified how the City’s financial contribution would work as explained in the Staff report (residual receipts
secured by a note and deed of trust, 3 percent simple interest, up to a 55-year loan). The Proforma shows the loan
being paid off in 33 years even though it can go as long as 55 years.
Mr. Ruiz said that new 9 percent regulations are going into effect based on points according to several things, including
proximity to services, bedroom sizes, affordability, and sources of funding. The top “point getters” per region will get
the money and the lottery process has been eliminated, he said.
Mr. Ruiz stated that typically with affordable projects requesting assistance, at the time the amount of assistance is
approved, all the documents that go with it-the loan agreement, the regulation agreement, etc.-are approved as well.
Staff is looking for a commitment of financial assistance up to $16,700 a unit. If and when the applicant receives the
tax credits, Staff will come back to the Housing Commission for approval of the documents.
Mr. Ruiz added that there are some conditions to the City’s assistance to the project which include
(1) The applicant will need to get the tax credits.
(2) The applicant will need to apply for an A” loan from the Federal Home Loan Bank. Monies that the
(3) The applicant will need to apply for a refund from the State Department of Housing and Community
(4) If the developer receives an additional contribution from the tax credit investor, the amount of the City’s
applicant receives from the AHP loan would reduce the City’s contribution to the project.
Development for school fees paid to local school districts (Proposition 1A as explained in the Staff report).
assistance would be reduced.
The recommendation by Staff is that the Housing Commission recommend approval to the City Council the
commitment to provide $463,755 in financial assistance.
Staff provided the Housing Commission with an updated copy of Housing Commission Resolution No. 99-005. The
updated Resolution clarifies that there will be 27 affordable units, while the original Resolution referred to a 28-unit
affordable project. Under “General Conditions,” Staff deleted the following words from the first paragraph: “Prior to
the City entering into agreements to provide financial assistance.” The first sentence of the paragraph is “The
Developer shall make ...”
Staff deleted the following words from the second paragraph of the “General Conditions” section: “Prior to the City
providing financial assistance”; the paragraph to begin “The Developer shall make a good faith effort to pursue ...”
Chairperson Latas asked if there were any questions of Staff.
Commissioner Scarpelli asked if the “good faith effort” is making an application by a certain date.
Mr. Ruiz responded affirmatively. He said the deadline to apply for the AHP loan is October 1, 1999. The Prop 1A
money is somewhere down the line. The applicant would apply sometime after they pay the school district the money
and before the permanent loan. Because this is a new program, there is a limited amount of money available; so there
is no guarantee that by the time they apply that the money will even be there.
Chairperson Latas asked if the Prop 1A refund is only for affordable projects.
Mr. Ruiz responded that the refund is for affordable projects that are eligible to receive it.
Chairperson Latas invited the applicant to speak.
HOUSING COMMISSION MINUTES
JUNE 10,1999
PAGE 3
Steve Kuptz, Chairman of the Board, Wakeland Housing and Development Corporation, 225 Broadway, Suite 1700,
San Diego, CA 92101, addressed the Commission and said they are a newly-formed non-profit community
development corporation based in San Diego County. Mr. Kuptz said that there were preliminary site plans and
elevations set up and available for the Housing Commissioners to view.
Mr. Kuptz explained that Wakeland’s mission statement has three parts:
(1) Development projects that deliver the greatest affordability to the residents. He said that the average affordability
on this project would range from 30 percent up to 50 percent of median income.
(2) Deliver projects that are not only architecturally significant, but are also contextually significant. He said it is one
thing to design a pretty building, but that pretty building has to fit in its surroundings. He added that they have
spent a lot of time on the site plan in terms of laying out the units and the recreation center-really trying to create
a community where the homes interact with each other. Although it is an apartment project, the developer hopes
the end product looks like a townhouse project. There will be double entries in the front and back and porches
leading both out to the parking area and into the central courtyard focused around the recreation center. He said
they have gone to great lengths to situate the units so that residents in the single-family homes aren’t looking into
second story units, and visa versa.
(3) Make a difference in each of the communities they build in, whether it is day-care centers, whether it is after-
school programs, whether it is tutoring programs. All of these things are important in developing a community,
and is the most important part according to the developer.
Mr. Kuptz stated that although they are a newly formed non-profit, the Board of Directors, Agency Staff, and Project
Development Team are the most experienced in San Diego County. One of the Board members, Sylvia Martinez, and
Mr. Kuptz were responsible for bringing the Laurel Tree project through the City. In addition to Laurel Tree,
Mr. Kuptz explained his extensive experience with other affordable projects (local and statewide) he has been involved
in. Mr. Kuptz introduced the other Board members and explained their experience with local affordable projects.
Mr. Kuptz introduced Wakeland’s founding executive director, Ken Sauder, and explained Mr. Sauder’s experience
with local affordable projects. Wakeland’s Project Development Team is the same team that is involved in Laurel
Tree.
Mr. Kuptz stated that they would be acquiring the land from Standard Pacific after they receive an award of tax credits.
Mr. Kuptz said that they are committed to deliver the highest quality affordable housing in the City of Carlsbad. He
added that they have the Development Team in place to execute the vision. Mr. Kuptz pointed out that this is truly an
inclusionary project where they are working with Standard Pacific to deliver the affordability on-site.
Chairperson Latas asked if there were any questions of the applicant.
Commissioner McNeill asked about the projected 9 percent interest rate on the $500,000 loan.
Mr. Kuptz responded that the tax credits and debt shown on the Proforma have already been underwritten by Bank of
America (proposed lender) and California Equity Fund (proposed equity provider). The Proforma shows their
underwriting assumptions.
Commissioner McNeill asked the projection of the $10,000 payback to the City with the 3 percent interest rate
amortized over 55 years.
Mr. Kuptz responded that this is a residual receipt loan so the developer is making payments as cash flow is available;
and as the rents increase, the payments increase over the term.
Commissioner McNeill commented that it is a percentage of the actual cash flow.
HOUSING COMMISSION MINUTES
JUNE 10,1999
PAGE 4
Ken Sauder, Executive Director, Wakeland Housing and Development Corporation, said it is 75 percent of the residual
receipts.
Chairperson Latas commented that the Commission is pleased about the mix of affordability on this project and asked
for the motivation behind the mix.
Mr. Kuptz stated that the projects they are involved in are committed to families and seniors. He added that when they
are involved in a family project, three-bedroom units are very dear. The tax credit requirements are that 30 percent of
the units be three bedroom, while this project is at 43 percent. Most apartment projects are one- and two-bedroom
units, and they are generally overcrowded. It also worked out from a site-planning standpoint in terms of how the units
were configured.
Chairperson Latas asked how the application could “swing” the income mix, specifically the 30 percent incomes.
Mr. Kuptz responded by offsetting it by the 50 percent income. He added that the affordability of this project assures
the maximum points in the tax credit application process.
There being no other persons desiring to address the Commission on this topic, Chairperson Latas declared the public
testimony closed and opened the item for discussion among the Commission members.
ACTION: Motion by Commissioner Scarpelli, and duly seconded, that the Housing Commission
ADOPT Resolution No. 99-005, recommending APPROVAL to the City Council to
conditionally provide up to $462,755 in financial assistance from the City’s Housing Trust
Fund to Wakeland Housing and Development Corporation for construction of twenty-seven
affordable apartment units in order to satisfy the requirements of the Inclusionary Housing
Ordinance for the Mariano Housing Development.
VOTE: 4-0-0
AYES: Latas, McNeill, Rose, Scarpelli
NOES: None
ABSTAIN: None
INFORMATION ITEM:
REVISIONS TO INCLUSIONARY HOUSING ORDINANCE - STAFF WILL MAKE A VERBAL
PRESENTATION ON PROPOSED REVISIONS TO CHAPTER 21.85 OF THE CARLSBAD MUNICIPAL
CODE REGARDING THE CITY’S INCLUSIONARY HOUSING ORDINANCE.
Ms. Fountain went over some of the policy issues Staff has been trying to work through on the Inclusionary Housing
Ordinance. A Draft Inclusionary Housing Ordinance will be distributed in the future in a more formal process.
Since the City has been implementing the Inclusionary Housing Ordinance, Staff has run up against different types of
policy issues that either weren’t addressed in the Ordinance, or the way they were addressed were causing some
implementation problems. Staff has been meeting as a committee trying to figure out what changes to propose to the
Inclusionary Housing Ordinance. Second dwelling units have been an issue and will be addressed as part of the
revision process. Ms. Fountain stated that there are other issues that are related to the new process for potentially self-
certifymg the City’s own Housing Element.
Ms. Fountain passed out a handout entitled “Chapter 21.85 Inclusionary Housing Ordinance Key Proposed Revisions”
to the Housing Commission. Key revisions to include:
HOUSING COMMISSION MINUTES
JUNE 10,1999
PAGE 5
- Definition Additions - Applicability of Provisions - Affordable Housing Standards - - -
Incentive Credit Adjustment to the Inclusionary Requirement
Alternatives to Construction of Inclusionary Units
Offsets to the Cost of Affordable Housing Development
Definition Additions: Ms. Fountain said Staff wants to add a definition for extremely low income rental projects, which
is 30 percent of 35 percent of the area median income or county median income. Part of the self-certification process
for Housing Elements now has a new requirement for producing housing for the extremely low category.
Ms. Fountain defined the Affordable Housing Policy Team as a new Staff team including the Community Development
Director, the Finance Director, a representative from the City Attorney’s Office, the Administrative Services Director,
the Planning Director, Craig Ruiz, and Debbie Fountain. This entire team, rather than just the Housing and
Redevelopment Department, now makes recommendations to the Housing Commission. In some cases, the
Community Development Director can sign affordable housing agreements. Now that he is on the Affordable Housing
Policy Team, he will be more comfortable signing these agreements. Some of these agreements may come to the
Housing Commission if the project has some type of incentive of financial assistance related to them.
Two other definitions that have been added to the proposed ordinance are offsets and incentives related to self-
certification. Offsets are any concessions or assistance the City gives to a project to help it be affordable or to provide
a more desirable product, such as a first-time homebuyer product. Offsets will be referred to as financial assistance or
density increases, or standards modification-anything that will help an affordable housing project make financial
sense.
Staff is considering an incentive concept where Staff would reduce the overall inclusionary housing requirement if the
development gave the City a very desirable type of product or a very low-income project-something that Staff has
considered in great need but hasn’t been provided within the community. Currently the Inclusionary Housing
Ordinance says that a developer has to provide 15 percent of its total housing units affordable to low income, which is
at 80 percent. In a lot of cases, 80 percent may be the market rate. The City may be willing to give someone credit for
providing something more affordable or providing a product that is hard to produce or implement, such as transitional
housing for homeless folks. Under the new self-certification program, the City would actually get extra credit for
doing these types of projects. If the City gets extra credit in meeting its Housing Element requirements, perhaps the
City should in tum give the extra credit to the developer. So, instead of a 15 percent requirement, they may have a 13
percent or 10 percent requirement, depending on what they are providing. This would be discretionary and would be
subject to review by the City Council and the Housing Commission. This would be a new concept for the City. Right
now the City does not reward the developer for providing extremely low-income units.
Commissioner McNeill asked who established the 15 percent. He also asked if low-cost housing is a federal regulation.
Ms. Fountain responded that the City establish this percentage in 1993 when the Ordinance was established. This
number can be any number depending on what the City is trying to accomplish by the policy. Ms. Fountain said that
the City is required by State law to have a Housing Element as part of the General Plan. The Housing Element
identifies the City’s needs. The City works with SANDAG to identify fair share needs in terms of affordable housing
at ALL income levels. Generally the market tends to take care of the high-income group. Groups that cities generally
have to focus on are the low-income groups. In Carlsbad’s case, the moderate income needs to be addressed as well.
When the City creates its Housing Element, it needs to come up with programs as to how they will meet their
affordable housing need. The City had met its affordable housing need for a number of years; so, when the City
submitted its Housing Element, it initially did not include the Inclusionary Housing Ordinance. The State mandated
that the City do more to provide affordable housing; so the City developed the Inclusionary Housing Ordinance. Ms.
Fountain added that it is sometimes a misunderstanding that the City is required to provide inclusionary housing. The
HOUSING COMMISSION MINUTES
JUNE 10,1999
PAGE 6
City set up inclusionary housing to meet its affordable housing needs. The City is required to provide affordable
housing.
Commissioner Scarpelli commented that the incentive programs should deal with the affordability rather than any other
criteria.
Ms. Fountain discussed the issue of setting low-income rent at 30 percent of 70 percent instead of 30 percent of 80
percent to help with the affordability. For-sale products would remain at 80 percent.
Amlicabilitv of Provisions: Ms. Fountain stated that the Staff Team is considering recommending an increased on-site
construction requirement to residential development with 50 units or more. She discussed the problem that developers
have meeting their affordable housing requirement with small projects and the use of second dwelling units to help
meet this need.
Commissioner Scarpelli suggested bringing in representatives of the Building Industry Association to help with this
issue.
Affordable Housing Standards: The Staff would like to change the Ordinance to state that inclusionary rental units must
remain restricted and affordable for the 55 years (the useful life of the project) rather than 35 years, which it currently
states.
Ms. Fountain said limitations on assets may also be used as a factor in determining eligibility for renal or for-sale units
and mentioned the possibility of the City doing an “asset test” to help determine eligibility.
There was some discussion about limitations on assets and the fact that people could shift their assets around to meet
the asset test. Ms. Fountain stated that the City does asset testing for Section 8 and CHAP, but it is not part of the
Inclusionary Housing Ordinance.
Commissioner Scarpelli asked if there is a need for asset testing.
Ms. Fountain responded that the City has heard criticism about people who have qualified for a certain program while
they own “tons of property” and have several cars, etc., while there are others that depend on public transportation who
cannot qualify for an affordable unit.
Mr. Ruiz stated that out of the 42 affordable units at Cherry Tree Walk, 38 of them would meet the asset test that is
similar to the Section 8 asset test. The seller carry-back of the financing of the project was $30,000 to $40,000, and
there were some people asking if they could pay this off right away. A lot of people were selling houses and had
limited income with lots of assets, which made Staff think about the asset test issue. There were some people who
could have paid off the assistance and bought those projects.
There was some discussion about anticipated income off of equity. Ms. Fountain stated that the City does not estimate
future income.
Commissioner Scarpelli pointed out that seniors might depend on their equity and social security to live on.
Ms. Fountain brought up the question of whether the City wants these projects to be for people who cannot afford to
purchase a home without this assistance. Because they have other assets, they may be able to sell those assets and go
buy a home under current situations. Staff is concerned about this and the possible criticism that goes along with it.
HOUSING COMMISSION MINUTES
JUNE IO, 1999
PAGE 7
Ms. Fountain went on to the next issue and explained that there have been times when market-rate units have rented for
less than rent-restricted units. She added that some bond agreements have language that states that affordable rents can
never be more than 90 percent of the market-rate rents so that they stay below the market-rate rents.
Incentive Credit Adiustment to the Inclusionarv Reauirement: Ms. Fountain stated that the self-certification program
outlines all the credits the City gets; so Staff will show how this relates under the self-certification program. The City
gets extra credit for large bedroom units, for example, four or five bedrooms. The longer the affordability is, you get
more credits. These things are already built into the program, she said. If somebody went the extra mile and did some
special housing needs, like housing for the disabled, for example, the City might want to consider an incentive. This
will be open to discussion so the projects can be brought forward on a case-by-case basis.
Alternatives to Construction of Inclusionarv Units: One of the things mentioned during the Housing Element Workshop
was that the only way the City currently gets credit for its regional housing needs is new construction. The City does
not get credit for acquisition and rehab or some other type of creative program like buying down rents on a project, etc.
What the self-certification did, which the City is not eligible for in this Housing Element cycle, is to give credit for
those types of alternative or creative ways of providing affordable housing. Staff wants to incorporate this into the
Inclusionary Housing Ordinance where it is clear that the City will consider alternatives to new construction. It would
be in cases where a project did not work on-site because of its size. Here the City would encourage the developer to
buy existing stock and rent-restrict the units. One of the things the City is looking at right now is possibly acquiring
some units, rehabbing them, and rent restricting them. The City would not get credit for this now, but it would get
credit in the future with the self-certification plan. This will not count for meeting regional housing needs, but would
help in the future with the City’s self-certification.
Ms. Fountain added that the alternatives might include acquisition and rehab or conversion of existing units and
construction of second dwelling units. To include second dwelling units for self-certification, the City has to income-
qualify the tenants and rent-restrict the units. Currently the City does not require income qualifying the tenants; but if
the units are rented, the City requires that they be rented at an affordable rate. The homeowner currently has the right
to choose whether or not the unit is rented. Both the Planning and Housing Commissions agree that the units should be
income-qualified. The policy issue now is whether or not the City wants to require income qualifying the tenants and
rent restricting the units. Or, does the City want to keep things the way they are by still letting the units count for
inclusionary housing but not count for self-certification purposes and most likely not meet regional need. Ms. Fountain
stated that a policy decision needs to be made on this issue.
There was some discussion on the use of second dwelling units, the problem of monitoring their affordability, and
alternatives to second dwelling units.
Ms. Fountain said that developers in the NE or NW quadrants do not have the option to buy into a project like Laurel
Tree. These developers have said that second dwelling units are all they can provide. This is one of the reasons Staff is
considering increasing the on-site construction requirement. If the City builds in some other alternative, these
developers may not be limited to just second dwelling units. Perhaps they can put money into the Section 8 Rental
Assistance Program and assist one person for so many years, for example. Under the current system, to count toward
meeting the City’s regional housing needs, it has to be a newly constructed unit. In some cases, the only option is
second dwelling units. Ms. Fountain added that the City could choose to not allow second dwelling units as an
alternative because of the difficulty of regulating them. Ms. Fountain added that second dwelling units probably meet
an affordable housing need at some level.
There was some discussion about the problems that go along with monitoring second dwelling units.
Commissioner Rose commented that the City needs to help those who cannot afford to rent an apartment and those who
work minimum wage and need housing.
HOUSING COMMISSION MINUTES
JUNE 10,1999
PAGE 8
Ms. Fountain responded that the Inclusionary Housing Ordinance is doing a good job of getting the housing, but it just
takes time to build it. Now it is time to fine-tune the Ordinance. She added that Staff wants to open this discussion to
the Housing Commission, Planning Commission, and the developers to come up with some creative ideas and
alternative to make things work a little better.
Ms. Fountain added that the City’s first choice would be to construct new units. A developer would have to justify to
the City why they could not build on-site. La Costa Glen (the retirement community) came forward and said they could
not build on-site for a number of reasons and asked to buy credits in Villa Loma. That was the best alternative for them
because they were not the type of organization that knew how to buy an apartment complex and manage it.
Ms. Fountain raised the question of what will happen will when there are no more credits to sell in Villa Lorna. Does
the City pursue some of these alternatives?
There was some discussion about the expense of new construction in Carlsbad, the benefits of rehabilitation of existing
stock, and the lack of Section 8 stock.
Ms. Fountain said that the City could establish their own rental assistance program that is not tied to Federal
regulations. The Federal regulations are what limit the rents so low. Ms. Fountain briefly explained the Section 8
voucher program. She said that with this program, one could actually pay more than the fair market rent for a unit.
The City could pay the additional amount, but it may be too difficult to match the two.
Ms. Fountain commented that constructing additional product is probably better use of the City’s money; however, the
City may get to the point where they need to combine programs to make them better. Using the CHAP program as an
example, Ms. Fountain said that the City is requiring developers to build new product and they can also use the CHAP
program to get into the units. So the City is requiring the developers to subsidize the units plus the City is providing
some of their own subsidy. Possibly a similar combined system could be used for rental assistance.
Commissioner Scarpelli mentioned that people are currently living in units that would not pass health and safety
inspections and said that it would be nice to get some redevelopment out of the housing.
Ms. Fountain responded that if there is an incentive set up, a developer might be more likely to get involved in
something like this.
There was discussion about code enforcement and people living in substandard housing.
Ms. Fountain commented that some developers have no problem providing money for redevelopment, but the City
needs the developer to stay in the deal to do the work. It is built into the Inclusionary Housing Ordinance that the City
can accept land or money to do some type of special needs housing. The City needs to determine the types of
alternatives they would like to provide for undeveloped areas and urbanized built-out areas. It is difficult, she said, in
the NW to require a developer to build new units.
Offsets to the Cost of Affordable Housing Development: Ms. Fountain explained that the Staff Team would like to
define the roles and responsibilities of the Housing Commission in the Ordinance. She said that the Planning
Commission would focus on anything that is regulated by land use ordinances like density increases or modifications of
standards. The Housing Commission would review anything related to financial assistance, an actual request for
money, or if somebody requests an exemption from fees. The Housing Commission would also review anything
having to do with incentives.
Ms. Fountain said that Staff is processing the Ordinance concurrently with the Housing Element. A draft of the
Housing Element has gone to the State for some preliminary comments. Ms. Fountain mentioned the meeting where
the Planning Commission raised the issue of not having the numbers from SANDAG about what the City’s regional
share needs were going to be. Apparently there has been a big debate over what those numbers should be in terms of
HOUSING COMMISSION MINUTES
JUNE 10,1999
PAGE 9
what the affordable housing requirements are going to be. Carlsbad’s needs were not being properly noted within the
document, she said. According to El Cajon and Chula Vista, Carlsbad was not doing enough to meet the affordable
housing needs. As a result of this, the Carlsbad numbers all went up. Those may be the City’s needs, but what are the
goals going to be? The self-certification document set the requirements for each City for what they needed to do for
the extremely low, very low, and low; and it is based on what is considered to be the resources for providing affordable
housing. The State said they would accept those as the goals-they will recognize the need being a certain number, but
will accept a goal much less than that. The City would be encouraged to do as much as they could to reach the number,
but it will not be held against the City if they do not reach that number. This is a different position than the State has
taken from previous years. There are a lot of legislative changes going on with affordable housing this year, she said.
The Housing Commission will get a report on any concerns the State has about the City’s programs or goals and
objectives in the Housing Element. Ms. Fountain added that the Housing Commission would be dealing with a lot of
policy issues in the next several months.
Chairperson Latas commented about the article in the Blade Citizen about the growth in North County. The article said
that Carlsbad would be growing about 70 percent.
Ms. Fountain said that Carlsbad has had a lot of developable land and now many projects are moving forward. The
projections right now are that the population at build-out would increase to 110,000 in Carlsbad from 79,000 currently.
ADJOURNMENT:
By proper motion, the Regular meeting of June 10, 1999 was adjourned at 7:37 p.m.
Respectfully submitted,
,,
\ ‘1 &
~EBBIE FOUNTAIN
Housing and Redevelopment Director
KATHY VAN PELT
Minutes Clerk
MINUTES ARE ALSO TAPED AND KEPT ON FILE UNTIL THE WRITTEN MINUTES ARE APPROVED.
TkE CiTy of CARkbad HousiNc, AN^ REdwElopMm DEPARTMENT A REPORT TO T~E HousiNc COMMiSSiON
STaff: CRnic, Ruiz
MANAC~EMEM ANA~YST
ITEM NO. 1
DATE: JUNE 10,1999
SUBJECT: MARIAN0 AFFORDABLE APARTMENT PROTECT - RECOMMENDATION
OF APPROVAL TO THE CITY COUNCIL TO COMMIT UP TO $462,755 IN
FINANCIAL ASSISTANCE WITH CONDITIONS FOR THE CONSTRUCTION
SATISFY THE REQUIREMENTS OF THE INCLUSIONARY HOUSING
ORDINANCE FOR THE MARIAN0 HOUSING DEVELOPMENT.
OF TWENTY-EIGHT AFFORDABLE APARTMENT UNITS IN ORDER TO
I.
11.
111.
RECOMMENDATION
That the Housing Commission ADOIT Resolution No. 99-005, recommending
APPROVAL to the City Council to conditionally provide up to $462,755 in financial
assistance from the City’s Housing Trust Fund to Wakeland Housing and Development
Corporation for construction of twenty-eight affordable apartment units in order to
satisfy the requirements of the Inclusionary Housing Ordinance for the Mariano
Housing Development.
PROJECT BACKGROUND
The Mariano Housing Development allows for the development of up to 150 single
family homes and a 27 unit affordable apartment development on 54 acres. In October
of 1997, the Housing Commission reviewed and recommended approval of a Site
Development Plan and the related Affordable Housing for the construction of the 27
unit affordable apartment project. At the October meeting, the applicant did not
request financial assistance for the project.
PROTECT DESCRIPTION
The oripl project called for the development of 27 units. The odd number of units
has posed some difficulties in the design and development of the project. To alleviate
these problems, the developer is proposing to construct 28 units. The addition of one
unit will require the Developer to receive approval of a Substantial Conformance
Application, which is currently being processed by the Planning Department.
The affordable apartment project will be located at the southeast corner of the future
extension of Aviara Parkway and Cobblestone Road. The proposal includes 16 two
bedroom units (57%) and 12 three bedroom units (43%). The project will also feature an
approximately 1,500 square foot recreation building and laundry facilities.
SDP 97-16 - MARIAN0 AFFORDABLE APARTMENT PROJECT
JUNE 10,1999
PAGE 2
In terms of affordability, the developer proposes to restrict the rents within the project
as follows: 1 unit at market rate; 18 units at 50% of Area Median Income (AMI); 7 units
at 38% of AMI and 2 units at 30% of AMI. This project will, therefore, represent a very
low income affordable project.
The Developer is proposing to finance the project, in part, with proceeds from the 9%
tax credit program. In order to be eligible to receive the credits, the Developer must
submit an application with the California Tax Credit Allocation Committee (TCAC) by
July 1,1999. As part of the TCAC application, the Developer must show evidence of
City financial participation. To satisfy this requirement, staff is recommending
conditional approval of the provision of financial assistance. Once the Developer has
received the tax credits from TCAC, staff will return with the loan agreement and
related documents for the review and action by the Housing Commission.
IV. DEVELOPMENT TEAM
The developer of the affordable project is Wakeland Housing and Development
Corporation, a non-prof& developer. Wakeland is a newly formed non-profit
corporation and the Mariano project will be their first project. While Wakeland itself
has not developed an affordable housing project, the principals of the corporation have
developed several similar projects. Steve Kuptz, Chairman of Wakeland, previously
managed development of the Laurel Tree Apartments in the City of Carlsbad. Ken
Sauder, Wakeland’s Executive Director, managed the development of Cordova Village
Apartments, a 40 unit affordable housing development in the City of Chula Vista. The
architect for the project, Carlos Rodriguez of Rodriguez + Simon, was the architect for
the Laurel Tree and Rancho Carrillo Apartment projects. The builder and property
manager will be the Quatro Corporation. Quatro is currently the builder of the Laurel
Tree Apartments and will manage the project upon its completion.
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 $3.6 million, not including the cost of land, the average
unit cost of $128,000 is somewhat higher than with previous affordable multi-family
developments within the City. The higher cost per unit can mainly be attributed to the
fact that because this is a small development, there are fewer units in which to spread
the cost of development. When considered in this context, the higher cost per unit is not
out of line with previously approved projects in the City of Carlsbad.
SDP 97-16 - MARIAN0 AFFORDABLE APARTMENT PROJECT
JUNE 10,1999
PAGE 3
Tax Credit Investor Equity
Conventional First Loan
City Contribution
Total Sources
B. UndueGain
$2,627,119 $93,825
503,510 17,982
462,755 16,527
$3,593,384 - $128,333
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 $300,000, or approximately 8.3%of the project cost, absent the cost of
land. Staff feels that the developer fee is within acceptable limits for a project of this size
and affordability.
C. Subsidy Analysis
The Developer is proposing to finance the project with a combination of 9% tax credits,
a conventional first loan and a second loan funded by the City of Carlsbad. Under this
scenario, the developer would receive approximately $2.67 million in revenue through
the sale of the tax credits, $503,000 from a conventional loan, and City assistance
totaling a maximum of $462,755.
The developer of the market rate component of the Mariano Project, Standard Pacific
Housing, will be providing a graded site of approximately two acres. The subject site
has not been appraised and thus a value has not yet been established.
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:
SDP 97-16 - MARIAN0 AFFORDABLE APARTMENT PROJECT
JUNE 10,1999
PAGE 4
D. Form of Assistance
As with previous assisted projects, the City’s financial contribution will be in the form of
a residual receipts loan secured by a note and deed of trust. The loan will begin
accruing interest during construction of the Improvements. The outstanding principal
and accrued interest on the City loan will be amortized up-to fifty-five years and repaid
from cash surplus in equal annual installments of principal and interest. Cash surplus
will be divided among the City and the Developer, with 75% to the City and 25% to the
Developer. 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 City
may also receive repayment of its loan through any savings
between the amount budgeted for construction and the actual construction cost. These
savings will be split 50% to the City and 50% to the developer.
The proposed financial assistance will be provided from the City of Carlsbad’s Housing
Trust Fund. The Fund currently has a balance of approximately $2.3 million.
E. Security
As stated above, the City will take a security interest in the property for the affordable
housing project. In addition, the Developer will be required to provide Completion
Bonds to both the City and the permanent lender to insure that construction is
completed.
F. Risk
In its role as a lender to the project, the City 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 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. By its
nature, affordable housing presents some, but very limited market risk because of
deeply discounted rents. Finally, the vulnerable position of City and other
subordinated financing is a feature which helps attract the necessary private financing.
SDP 97-16 - MARIAN0 AFFORDABLE APARTMENT PROJECT
JUNE 10,1999
PAGE 5
VI. AFFORDABLE HOUSING AGREEMENT
The Housing Commission has previously reviewed and recommended approval of the
Affordable Housing Agreement for this project. Prior to final map, the developer will be
required to execute the agreement. The Agreement with the City will bind the Developer and
subsequent owners to the specifics of the affordable housing project SDP including affordable
rental rates, household income limits; a construction schedule; amount and form of City
assistance; compliance reporting requirements and implementation agreements (e.g. loan
agreements, regulatory agreements, trust deed, etc.).
VII. CONDITIONAL FINANCIAL ASSISTANCE
As stated above, the Developer is proposing to finance the project, in part, with
proceeds from the 9% tax credit program. Staff is recommending that the City’s
financial assistance be conditionally approved at this time, subject to the applicant
receiving said tax credits. In addition to the requirement for receiving tax credits, staff
is also recommending that the applicant be required to seek the additional funding
sources described below which will potentially reduce the City’s commitment to the
project.
First, as stated in the Developer’s letter in Exhibit No. 3, the project will be eligible to
receive an AHP loan from the Federal Home Loan Bank. The maximum AHP loan
anticipated is $5,000 per unit. Second, the recent passage of Proposition 1A allows for
Developer’s to receive a refund from the State Department of Housing and Community
Development for school fees paid to local school districts. Such a refund may
potentially decrease the amount of tax credits the project may receive. However, staff
will require the developer to investigate this possibility to see if the overall impact will
have a positive or negative impact on the financial viability of the project. Finally,
should the developer receive additional tax credits, either in the form of an additional
contribution from the tax credit investor, or should the current draft TCAC regulations
be revised which allow for additional tax credits, the amount of the City’s assistance
shall be reduced accordingly. The attached resolution incorporates these staff
recommendations.
Typically, when reviewing requests for financial assistance, the Housing Commission
would also review the loan agreement and related documents. However, because the
Commission is being asked to recommend conditional approval of the financial
assistance, the loan documents will be returned to the Commission for their review and
approval once the project has received other necessary financial commitments.
VIII. 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:
_-
SDP 97-16 - MARIAN0 AFFORDABLE APARTMENT PROJECT
JUNE 10,1999
PAGE 6
The proposal's effectiveness in serving the City'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, Inclusionary Housing
Ordinance, Density Bonus Ordinance, etc.
The proposal's development and operating feasibility, emphasizing the
development team capacity, financing sources and the role of the City in
providing financial assistance or incentives.
The Mariano affordable apartment project is proposed by a capable development team
led by a credible non-profit developer that is committed to affordable housing. The
financing structure of the project is sound. The proposed City assistance meets the
City'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
housing goals are supported by the project's unit mix and affordability. The fact that
all of the affordable units will benefit very low income households is highly desirable.
It is the Affordable Housing Policy Team's (staff) recommendation that the Housing
Commission approve the resolution of support recommending conditional approval of
the proposed City financial assistance.
VIII. EXHIBITS
1. Housing Commission Resolution No. 99-005
2. Proforma
3. Developer's request for financial assistance
,
1
1
f
1
t
s
1c
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
HOUSING COMMISSION RESOLUTION NO. 99-005
THAT THE HOUSING COMMISSION RECOMMEND APPROVAL
TO THE CITY COUNCIL A COMMITMENT TO PROVIDE UP TO
$462,755 IN FINANCIAL ASSISTANCE WITH CONDITIONS FROM
THE CITY’S HOUSING TRUST FUND TO WAKELAND HOUSING
AND DEVELOPMENT CORPORATION FOR CONSTRUCTION OF
TO SATISFY THE REQUIREMENTS OF THE INCLUSIONARY
HOUSING ORDINANCE FOR THE MARIAN0 HOUSING
DEVELOPMENT.
APPLICANT: WAKELAND HOUSING & DEVELOPMENT
TWENTY-EIGHT AFFORDABLE APARTMENT UNITS IN ORDER
CORPORATION
CASE NO: SDP 97-16
~
WHEREAS, Standard Pacific Homes proposes to construct up to150 market rate single family
omes in a development commonly know as the Mariano Project; and
WHEREAS, the development of 150 market rate single family homes will require the
evelopment of 27 housing units affordable to low income households as required by the City’s
nclusionary Housing Ordinance, Chapter 21.85 of the Carlsbad Municipal Code, and;
WHEREAS, Wakeland Housing and Development Corporation has entered into an
greement with Standard Pacific Homes to provide 28 apartment units affordable to lower
ncome households as a means of satisfying the Inclusionary Housing Ordinance requirements
or the Mariano Project: and
WHEREAS, Wakeland Housing and Development Corporation has submitted a proposal
equesting the City provide financial assistance for the development of 28 apartment units affordable to
Jwer income households; and
WHEREAS, said Housing Cornmission did, on the 10* day of June, 1999, hold a public meeting
3 consider said request for financial assistance; and
WHEREAS, upon hearing and considering all testimony, if any, of all persons desiring to be
eard, said Commission considered all factors relating to the request for financial assistance;
NOW, THEREFORE, BE IT HEREBY RESOLVED by the Housing Commission of the City of
:arlsbad, California, as follows:
1
!
t
1
E
E
1C
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
1.
2.
3.
4.
The above recitations are true and correct.
The request for City financial assistance for the Mariano Apartment Project is consistent
with the goals and objectives of the City of Carlsbad’s Housing Element, Consolidated
Plan, the Inclusionary Housing Ordinance, and the Carlsbad General Plan.
The request for City financial assistance will assist the affordable housing developer to
construct a total of 28, two and three bedroom 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.
That based on the information provided within the Housing Commission Staff Report
and testimony presented during the public meeting of the Housing Commission on June
10, 1999, and subject to conditions listed below, the Housing Commission hereby
ADOPTS Resolution No. 99-005, recommending APPROVAL to the City Council to
commit to provide up $462,755 in financial assistance with conditions from the City of
Carlsbad’s Housing Trust Fund to Wakeland Housing and Development Corporation for
the construction of twenty-eight (28) affordable apartment units to help satisfy the
requirements of the Inclusionary Housing Ordinance for the Mariano Project.
;ENERAL CONDITIONS:
Prior to the City entering into agreements to provide financial assistance, the Developer shall make
good faith effort to pursue and receive an Affordable Housing Project (AHP) loan from the Federal
Home Loan Bank. The City’s financial assistance would be rescinded if the developer does make a
good faith effort to obtain the AHP loan. The receipt of such AHP funds, however, shall reduce the
amount of the City’s financial assistance in an equal amount.
Prior to the City providing financial assistance, the Developer shall make a good faith effort to
pursue and receive a refund of school fees from the California Department of Housing and
Community Development as provided for in Proposition 1A. If it is adequately demonstrated to the
City that the refind would have a negative impact on the financing of the project, the City shall not
require the applicant to receive such funding. The receipt of any such funds, however, shall reduce
the amount of the City’s financial assistance in an equal amount.
:C RESO. NO. 99-005
AGE 2
, 1
I b
1
C
€ - I
E
s
1c
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
I. If the developer receives additional tax credits or additional tax credit equity over and above
that stated with Exhibit 3 of the June 10, 1999, Housing Commission staff report, the amount of
the City's financial assistance shall be reduced by an equal amount.
PASSED, APPROVED, AND ADOPTED at a meeting of the Housing Commission of the City
If Carlsbad, California, held on the 10'" of June, 1999, by the following vote, to wit:
AYES:
NOES:
ABSENT:
ABSTAIN:
ROY LATAS, CHAIRPERSON
CARLSBAD HOUSING COMMISSION
IEBORAH K. FOUNTAIN
IOUSING AND REDEVELOPMENT DIRECTOR
C RESO. NO. 99-005
AGE 3
loEvoaPmENl SCHEDULE 1
2.7 1
211
-98
kCOQ
10
W-QO 28 w+J 1
NwMl
14
1.30 Awes ' 21.51
lSOURcEs AVO USES OF FUNDS I 100.00% O.W%
USES:
lo 7.828
9,500
16.500
0
0
86,708
1432
1.250
10.714
5.462
so
219.180 eo.wo sia.000
0
0
I.W7,647 A02.704
3s.m
joo.ooo 161,859
SOURCES:
Tax Mu Equity Se9.m $2,627,110 so ~2.a27.11~
AHP Fhanang 0 0 0 0
Dehnsa~op6rFee 0 0 0 0
CL)BG Fwdr 0 0 0 0 HOME Funtk 0 0 0 0
RsdaWOpmsnl sol wde 16.327 482.155 0 482,755
COnVeraynel Permanent Loan 17.982 503.510 0 603,610
Mgr. um zBB1288388uBB 2REmAm8QBA4BE!2&IaaLLMs
30.00% 0 0 1 1 2
7 5B.cQx 0 0 4 3
50.00% 0 0 10 1 m.M% 0 0 0 0 0
IlrumL
ia
9.m%
1 .wok
0.oOx
9.7W
2.00% 1.15
30
llO.W%
6.00%
688.859
1Oo.ooYa
55,809 7205%
s03.SlO
48.~1
Rrswrlnan- 3.m 0.oo.h
O.OOQH O.OW% 56 0
~OTnWAssVMrmONS
1.10%
0
0 0.oOx
2.50% 3.!%
Maw 1 0 0 0 01 1 0.a Foe Sm Dboo Cacntj
45.23%
Td Unb 1 0 1s 12 0 B unb
31, 3.0% 0.0% 55.0% 43.0% O.O%l
a. flNM 843 650 443 1,OEO 0
ToIaIResidSqFt 64.9
Relaled Rasldenlid Sq. Ft
Communly Center Llbrary Oma
MjinSnoocd Porches
Tagl sauan FesC
0 12.a 12.m 0 78,440
1.500
0
RENTAL REVENUES: Gross Potential Rent uunary/Olher Staff Rantal Units
Interst Earnings on Operating Res.
Vacancy Allowance
Nat Ranral Income
PROPERTY OPERATING COSTS
Adminirtritiw Gprnwr: Office Supplies 0 Equipment Program Sorvicas Payroll Services
Van Seruices telephone/Annswerrng Service Auto Expense Training 6 Travel
MISC. Adminis:raIwe Crwnse Mirbtlng Erpense:
Advertising
Propnrty Mandgnmnnr Fees
Leasing L Commissions .
Legal Fm Auditing Expense
Eloctricily (units) Gas (units)
Water and Sewer (Units) PayrolVPayrdl Tams; Salaries-Mnnagnr SalariesAssistant Manager Salarier-Administrat ive Salarias.Maintenanco Supervisor Salarie+Mainlenance Personnel
Employee Aorrtments Payroll Tuar
Wormers Campensation
Health Insurancelother Benefits Contract Services: btermimling
Triah Removal Security Patrol BuildinglGrounds Maintenance
Janitorial Conlract Repair Contracts Elevatof I Other Eqdipvent
Cleaninc L Decorating: Painting Supplier
Grounds Supplies Repairs 6 Miimenance: Repairs 1 htaintcnance General Facilities &ices
TOTAL VARIABLE COSTS
Profe=rional FM:
Utilities:
Tar- 6 Insurance: Red Property Tax Assessment Oirectots & OFficWs Insurance Mix Tar.s/Lwanrer/Pum~fr Property Insurancn Fidnlity bad Insurance Ground Lease Payment
TOTAL FIXED COSTS
TOTAL OPERATING COSTf
NET OPERATING INCOME:
CASH FLOW FROM OPERATIONS: Not Operatin# Income
Replacement Reserve
DeM Service. Fin; Trust Deed Cash Flow AhW Debt Service
CASH FLOW AVAIL4Bl.E VOR DLm SERVICE
170.976 175.250 179.631 55.00 1.680 1.722 1.765 0 0 3 0 0 0
5.00% (8.633) (8.869) (9.070L
$lCO fmo SO /ma. $25 /ma 50 /ma. $100 Imo. $50 :mo.
525 Imo.
$15 /ma.
$15 /no.
$3000 luimo $0 /no. 150 /no. I300 /mo.
$4.33 lulmo
50.56 /u/mo
$16.67 /wmo
$1.600 /mo. SO ima. Io lmo. $0 /ma. SO /ma.
50 /ma. 9.320% 8.824% $250 /mo.
SM /mo. S14.B Idmc $0 110. s10.00 ldmo $5.00 luim $15.00 /u/mo M /avo.
$5.00 /u/mo
$4.00 /u/m3
$10.00 /u:mo
164.023
1.200 0 330 0
1.200 600
300 180
180
10,080 0 600 3,600
1,455 195 5.601
19,x)O 0 0 0 0 0 1.732 1.694
3.000
600 5,000 0 3.360 1.680 5.040 0
1.680 1.344
3,360
168.123
1.242 0 31 1 0 1.242 621 31 I 186
186
i0.433 3 62 1 3,726
1,SCk 2c2
5.797
19.872 0 0 0 C 0 1,792 1,912 3.105
621 5.175 0 3,478 1,739 5,216 0
1.739 1.391
3.478
172.326
1.285
0 322 0 1,285 643 322 193
193
10.798 0 643 3,856
1,559 209 6.000
20.568 0 0 0 0 0 1,855 1,979 3.214
643 5,356 0 3,600 1.800 5.399 0
1.800 1,dW
3.m SO imo. 0 0 0
$2.61& Ani1 73.181 75.902 78.562
$9 furit 3,150 3.260 3.374 I50 /ma. 600 621 643 $8 imo. 100 104 108
5250 /mt 7.000 7,2G 7499 $17 lmo. 200 207 214 0 0 0 0
11,050 : 1 A37 ii.a3a
$3,008 /unit 80,23: 87.399 90.400
79,792 00.7a4 81.926
79.792 80.784 81.926
72,792 73,784 74.926
25.176 25.168 26.310
1250 7.000 7.000 7.000
503,510 (48.6 16) (48.616! (48.616L
Operatin2 RerrNe 2.00% (3,200) (3.362) <3;447) General Partner Asset Mgt Fee loOD0 per yr. (lC.000) (10.000) (10.000)
RDA Loan Payment 75.00% (8.172) :8.850) (9.647) CASH FLOW AVAIUBLE FOR DISTRIBUTION 2,724 2.95: 3.216
RED-
Beginning Principal Amount Current Year Interest Current Year Payment
Ending Balancr Ealancn aher 32 yean
5% 462,774 13.683 (8.172) 468,485 0
468.485 14.055
(8.H) 473,686
473.- 14.211 (9.647) t70.249
RENTAL REVENUES:
Gross Potential Rent LsundryIOther Staff Rentrl Units Interest Earnings on Oporating Res. Vacancy Allowance
Ne1 Rental Income
PROPERTY opmnffi COSTS: Administratire E=p.nrar: Office Supplias & Equipment Program Sarviws Payroll Services
Van Services TolrphOna/AnsworinE Service Auto Expense Training b Tfavcl Mix. Administrative Expmse
MarkctinE Gpcn.c: Advenislng
Professional Fees: Property Manafiemenl fees Lnaring I Commissions Legal Feu Auditing Eapense
Electricity (umts)
Gas (units)
Water and Sewer (Units) PayroWPayroll Tares: Salaries.Manager Salaries-Assistant Manager Salaries.Administrative
SalsrlesMaintenance Supcrviscf Salaries-Maintsnance Personnel Employee Apdrtments Payroll Tares
Workers Cempcnsahon Health Insurance/Gther Benents Contract Serricms
Enarminaling Trash Removal
Security Patrol BuildinglGrourds Maintenaice Janitorial Contract Repair Contracts Elewator & Other Equipment Uernlng I Dosontini: Painting Supplies Grounds SLpplics Rcpalrr I Maintenance: Repairs & Maintenance General Facil;tcs Services
TOTAL VARIABLE COSTS
Utililier:
Taxes L Inrurrncc: Real Properly Tax Assessment Director's & Officmr't Insurance
Mire Taxr~LicenseslPermits Property Insurance Fidelity Bond Insurance
Ground Laare Paymmt
TOTAL FIXED COSTS
TOTAL OPLRATlNG COSTS
NET OPERATING INCOME:
CASH FLOW FROM OPERATIONS! Net Oleratinn Income
184.122 188,725 193.443 198.279 55.00 1,809 1,ew 1.900 1.948 0 0 0 0 0 0 0 2.624 5.W% (9.297) (9.529) (9.767) clo.oll~
si00 rmo. $0 /mo. 525 lmo. SO Imo. $100 /no.
550 /no. $25 /no. $15 /no.
$15 lmo.
$3000 IuIno 50 /mo. 550 Imo. IS00 Imo.
SL.33 iulmo 50.58 iUlrn0 516.67 /dmo
51.6W /mo. $0 /mo. SO Imo. SO lrno. so Imo. so lmc.
1250 m.0.
$50 /.no. 514.88 Idmo 50 Imc. $10.00 /&no $5.00 /dmo $15.00 Idmo SO Imo.
5500 luimo f4.00 /u/mo
510.00 /u/rro
9.020% 8.824%
SO imo.
$2,614 iunit
29 /unit 550 imo. $8 Imo. $250 /unit $17 Imo. 0
53,008 (unit
176,631
1,330 0 333 0 1,330
666 333 200
200
1:.176 0 666 3.991
1.614 216 6.210
21,288 0 0 0 0 0 1,920 2.048 3.320
666 5,543 0 3.726 1,863 5.588 0
1.863 1,490
3,726
161.050
1.377 0 Jag 0 1,377
683 345 2C7
207
11.567 0 689 4.131
i.670 226 6.427
22,033 0 0 0 0 c 1.987 2.120 3,442
689 5,737 0 3.856
1.928 5,704 0
1.928 1.542
3.856
185.576
1,425 0 357
0
713 357
1.425
214
214
1 1,972 0 713 4,276
1,728 232 6.652
22.804 0 0 0 0
0 2.057 2,194 3.562
713 5.938 0 3,991 1.995
5,986 0
1.995 1.5%
3.991
192,840
1.475 0 369 0
1.475 738
369 221
221
12.391 0 738 4.426
1.788 240 6,885
23.602 0 0 0 0
0 2.129 2.270 3.68?
738 6.146 0 4.131 2,065
6.1% 0
2.065
1,652
4.131 0 0 0 0
81,312 84.157 87,100 90.14
3,492 3.614 3,740 3.871 666 689 713 738 112 116 120 124 7.761 8,033 8.514 8.605 221 229 237 245
12.252 12681 13 124 13.583
93.564 96,838 100.224 103,731
83.070 e4 212 85,352 89.109
Cash ROW After Deb1 Service 27.45 Operating Resarve 2 W% (3.533) (3.621) (3.712) 0 General Partner Assf Mgl Fee 10000 per yr. (:o.ooo) (lO.OO0) (10000) (1 0.000)
CASH FLOW AVAILABLE FOR DISTRIBUTION 3,480 3.744 4.006 5.873 RDA Loan Payment 75 00% (10.4al) (11,231) (12.018) (17.62Ol
Besinninp Principal Amount Current Year Interest Curreit Year Payment Endinn Balance Balance after 32 years
478,249 482,156 485.389 487.933
(10.441) (11,231) (12.018) (17,620) 482.156 485.389 487.933 484.951
3% 15.347 1C.4663 14.562 14,638
RENTAL REVENUES Gross Potential Rent
Laundry/Othw Srarf Rental Units
Interest Earnings on Operating Res. Vacancy Allowancs
Net Rental Income
PROPERTY OPERATING COSTS: Adrninlctrrlhe Expen-: Office Supplies h Equipment
Program Services Payroll Services Van Services Telephone/Answenng Service Auto Exprnw Training S Travel Misc. Administrative Erpense Marketing Eapenio: Adwrlitin# Prolmsrional Fees:
Prwerty Managnmonr Fees
Leasing L Comrnissi~is
Legal Fees Auditing Expense
Electricity (units)
Gas (units)
Water and Sewer (Units) PayrolllPayroll Taxes: Salrrics.Manager
Salsriss.Arsistinl Manager Sali)riesAdministrat~~a
SaPriar-Maintcnance SJmviscr Sa:aries.Maintenance Prsonne. Employee Apartments Payrod Taxus Workers Compensation Health Insurancc/Otbr Binelits Conhact Servicas: Erlerminatinz Trash Removal Security Patrol BuildinglGrwnds Maintenance
Janitorial Contract Reoair Contracts Elevator 6 Other Equipmen1 Cleaning & Dacarating: Painting Scpplies Gracnds Supplies Repairs 6 Maintenawn:
Repairs & Maintenance General
Facilities Services
TOTAL VARIABLE COSTS
Utilities:
Taxes h Inrumcm: Real Property Tax Assessment . Director's a Officer's Insuranca Misc Taxes/Licenses/Perrn,lr Property Insuranc~~ Fidelity Bond Insurame Qround Leare Payment
TOTAL FIXED COSTS
TOTAL OPERATING COSTS
NET OPERATING INCOME:
I YEAR 1 e 9 10 11
203,236 208.317 213.S25 218.863 15.00 1,997 2.047 2.098 2,154 0 0 0 0 2,62A 2,624 2,624 2.624
5 00% 00.262) (10.518) (10,781) ( 1 1.05lY
$:DO imo.
SO Irno. $25 Imo. $0 Irno. SlOO Imo. 150 :mo.
$25 Imo. 515 Irno.
515 Imo.
S30.00 /uimo SO Imo f50 /rno 5300 imo.
so 33 'u:mo $0.58 /u/mo $16.67 lulmo
$1.600 /no. SO 1mo. SO Imo, SO .'no.
$0 /no. $0 Imo. 9.020% 8 82Ls 5250 Imo
$50 imo. 114.88 /u/mo
SO Imo. $10.00 iulmo SS00 iuimo $?5.00 /L/1110 $0 /no.
$500 :dmo $400 IuImo
$10.00 iulmo $0 Imo.
$2.614 /unit
$9 /unit $50 imo. $8 imo. $250 /unit 517 Imo. 0
S3.Do8 /unit
197,595
1.527 0 382 0 1,527 76A 382 229
229
12,825 0 764 4, 58 1
1,851 248
7.126
24,428 0
0 0 0 0 2,203 2.350 3.816
764 6.361 0 S.276 2,137 6.413 0
2,137 L.710
0.276
202.470
1,580 0 395 0 1.580 79: 395 237
237
13.274
0 791 4.74:
1,916 257 7,375
25.283 0 0 0
0 0 2,281 2.432 3.950
791 6.584 0 4,426 2,212 6,637
0
2,212 1.770
4,&26
207.66
1,635 0
409 0 1.635 819 409 245
245
13.739
0 819 4.907
1,983 266 7,633
26.168 0 0 0
0 0 2.360 2.517 4.088
819 6 814 0 4.581 2.289 6.869 0
2,289 1,832
4,581 n
212.586
1,692 0 423 0 i.692 848
423 254
254
14.220 0 848 5,074
2.052 275 7.900
27.004 0 0 0 0 0 2.443 2.605 4.231
848
7,052 0 4,741 2.369 7,109 0
2.369
1.896
4,741
0 0 0
93.306 96,573 99.951 103,M8
4.006 4,146 4.291 4,441
128 132 137 I42 764 79: 81 9 848
8.906 9.218 9,541 9.875 254 263 272 282 0 0 0 0
14,058 14.550 15,060 15.588
107.364 111.123 115.01 1 119.036
90,230 9!,347 92.055 92.550
CASH FLOW FROM OPERATIONS: Net Ooeratina Income 90,230 91.347 52,455 93.550 ReDlacemencResetve $250 7.000 7.000 7.m 7.000 83.230 84.347 85.455 86.550 &St Service. First rust Deed Cash Flow After Debt Service
CASH FLOW AVAlUBLf FOR DEBT SERVICE
503.510 (48.616) (48.616) (48,616) (48.616) 3A.614 >5.7;1 36 810 32,934
90,230 91.347 52,455 93.550 ReDlacemencResetve $250 7.000 7.000 7.m 7.000 83.230 84.347 85.455 86.550 &St Service. First rust Deed CASH FLOW AVAlUBLf FOR DEBT SERVICE
503.510 (48.616) (48.616) (48,616) (48.616)
Cash Flow After Debt Service 3A.614 35.731 36,83! 32,932 Ooeratina Reserve 2 one n n
General 6artner Assel Mgf Fee IC000 pw;;..'" (10.000) (10,000) (10.000) (10.000)
75.00% (18,461) (19.298) (20.129) (20.9502 ROA Loan Payment
6.154 6.433 6.7:O 6.983 CASH FLOW AVAILABLE FOR DISTRIBUTION
-.- --
LOAN ANALYSIS
Beginning Principal Amount Current Year Interest Currant Year Payment Ending Balance Balance aiter 32 yea=
484.951 481,039 476,171 470,328 3% 14.549 14.431 14,285 14.110 (18.41) (19.298) (20,129) (20.950) 581.039 476.171 470,328 463.487
'MARIANO APARTMENTS -Fdaral re 111 CrEdltS
PROJECT CASH FLOW
RENTAL REVENUES: Gross Potential Rent bund y/O:her Staff Rmhl Units Intrreil Earnmgs on 0parat.ng Res Vacancy Allowance
Net RenW Income
PROPERTl OPERATING COSTS: Adrninirtntive Expenses: Office Supplies & Cquipment Program Servicos Payroll Services Van Services Telephone/Ansrermg Ssrvnce
AU:Q Expense Train:ng .4 Travel Mix. Admiiiiolrative Erpenae Marketing Gpense:
Advertising Professional Teas: Propeny Managemcnt Fees Leasing & Commissnons
Legal Fees Auditinq Empento
Electricity (units) Gal (units) Watet and Sewer (Units)
PayrofllPayolI Taxer: $alariEs.Manag@r Sdlaries.Afsistant Manager Salarier*Administrative Salarier.Maintcnence Swerviscr
Sa:ariesMaintenawe Persome. Employee npannmntr
Payro.1 Tam Workers Compensation Health Insuranse/OVlrr Bms!its
Conrran Senlces: Extermina:ing Trash Removal
SecLrity Patrol BuildtngIGroundr Maintenance Janitorial Contract
Repair Contracts Elevator & Other Equipment Cleaning & Dacarrting: Painling Supplies Grounds Sk.pplier
Repairs P Maintenance: Repairs 6 Maintmance General Faciiitiea Services
TOTAL VARIABLE COWS
Ulilitia:
Tun I Insurance:
Real PropeCy Tax Assessment Diractar s & OLcer's Insurance Misc Taxes/Licenws/Permi!5 Propem insurance Fidslity Bond Insurance Ground Leare Paymnr
TOTAL FIXED COSTS
TOTAL OPERATING COSTS
NET OPERATING INCOME
CASH FLOW FROM OPERATIONS: Net Operating income
220,335 229,943 235,692 241.584 $5.00 2.204 2.259 2,315 2.373 a 0 0 0 2.62; 2.62A 2.626 2 624 500% (1 :.327) (1 1.61 0) (11.900) (12.198y
1:oo IWK. so 'fro. 525 Irc. so /ro. SI00 /mo
550 /mo. 525 :TO. $15 /.nc.
$15 Imo.
530.00 ;u/mo SO Imo. SEX Imo. 1300 :mo.
$033 /r;/rno $0.58 /u:rno 616.67 Iulmo
$1.600 /mo SO /no. SO /no. so irno. so /no. SO /ma. 9.02w e.8~4~. 5250 /me.
S50 /rr.c. $14.88 /.drno SO /me. s10.00 :u/Cp.c 55.00 /u/.po 515.CO IU/TO 30 lmo.
1500 ldro 1440 /u/vo
510.00 /uho
217,836
1.751 0 438 0 1751
8'8 a38 263
263
14.7i8 0 875 5.257
2.124 215
8.177
28,032 0 0
0
0 0 2.528 2.697 4,279
678 7.299 0 0,907 2.552 7,358 0
2.452 1 962
4.007
223,216
1.812 0 453 0 1,812 909 453 272
272
15.233 0 909 5,bll
2.198 295 8.463
29.013 0 0 0 0 C 2.617 2,791 4.532
909 7,554 0 5.079 2.538 7,616 0
2.538 2.031
5.c79
228,731
1.875 0 469 0 1.875 94i 469 282
282
15.766 0 Wl 5.631
2.275 305 8.759
30.028 0 0 0 0 0 2,709 2.889 6,691
9C1 7,818 0 5,257 2,627 7,883 0
2.627 2.102
5.25!
234.383
1.941 0 485 0 1.961 970 4.85 292
292
26.3:s 0 974
5.823
2.355 316 9,066
3i.079
0 0 0 0 0 2.803 2.990 4,355
974 8.092 0 5,441 2.719 8.159 0
2.719 2.176
5,441 SO /mo. 0 0 U 0
$2,614 lvnit 107.072 1i0.819 114,699 116.715
$9 /unit 4,596 A.757 4.923 5,095 $50 /no. 878 909 941 974
S8 /ma 167 152 157 162 1250 /unit 10,221 10,579 10.949 11,332 117 Imo. 292 302 313 324 0 C 0 0 0
16.134 16,699 17.283 17.887
0.008 /unit 123.206 127,518 131,982 136.602
94.629 93.698 96.7e9 97.781
94,629 95.638 96,749 97.782 Replacement Reierve s254
Debt Service. First Trust Deed EO 3.5 10 Cash Flow After Deb! Service
General Partner Asset ME! Fee
CASH CLOW AVAILABLE FOR DEBT SERVICE
Operating Reserve 2.00% 10000 per yr. RDA Laan Payment i5.00%
CASH FLOW AVAILABLE FOR DISTRIBUTION
7.000 7.000 7,000 7.000 87,629 88.698 89,749 30,761 f48.6 16) (48 616) (48.616) (48,6161 39.015 40.082 41,132 42.165 3 0 0 0 (10,000) :lo.ooo) (lO.000) ~10.000) !Z 1 .?EO) (22.561: (23.350) (24.1232 7.253 7,520 7.783 8,04:
Beginning Principal Amount Current Year Interest turrenl Year Payment Ending Balance Balance after 32 years
4~33~067 455,632 446,739 436,791 3% 13.905 i3,669 13.402 13,104 (21.760: (22.561) (23.350) (25.123) 435,632 46,739 436.791 425,772
- -
MARIANO APARTMENTS -federal Le Tal CrediLr
PROJECT usn rmw
L. YEAR I 16 17 18 19
RENTAL REVENUES: Gross Potential Rent
LaundylOther Stdl Rnntrl Units
Interest Earnmgr on Opuabng RP~ Vacancy Allowance
Net Rental Income
PROPERN OPERATING COSTS: Administntiw Qpensar:
Olfice Supplier L Eauipment Program Services Payroll Services Van Services
Te:ephone/Answering Semcc Auto Erpensc Training & Travel Misc. Administratwe Expenre MorketinE Expenre: Advertising Prohssional faas: Property Management Fees
Leasing b Commissions
Auditing Expense
Electricity (units) Gas (units) Water and Smr (Units) Piiyroll/Payroll Tares:
Salaries.Manager Salarier.Assislanr Manager Salaries.Administrative
SalrricsMaintenance Supervisor Saluies.Maintenance Personnel Employco Apartments Payroll Taxer Worws Compensation Health lnrurance/Other Benefits Contram Scwkes: Ertsrrnimting Trash Removal
Security Patrol Brrilding/Grounds Maintenance Janitorial Contract
Repair Contracts
Eleva:or & Mher Equipment Cluniw 6 OccoratinK:
Painting Supplies
Grounds Suoplics Repairs P Maintenance: Ripairs & Maintsnanca @mrd Facilitm Services
TOTAL VARIABLE COSTS
Legai Fees
Utilities:
Tams L Insurinco: Real Property Tax Assenment Director's & OfLcsrs Insurance Misc Taxos/Licenses/Permits Pmpcrty Insurance Fidelity Bond Insurance Ground bare Payment
TOTAL FIXCO cosrs
TOTAL OPERATING COSTS
NET OPERATING INCOME:
uisn FLOW FROM OPERATIONS: Net 02eraling Income Rcplactmant Rsscrue
Debt Service. First Trust Deed Cash Flow After Debt Service Operatinr Reserve
CASH FLOW AVAILABLE FOR DEBT SERVICE
247.624 233,815 260.140 266.664 55.00 2,02 2,493 2,555 2.619 0 0 0 0 2,624 2.624 2,624 2.624 5 Qo% (12.503) (12.815) (13 136) (1 3,4641
5:OO Irno. SO /mo. 525 Imc. $0 i?'C. SlOO IIPC.
$25 /ma. $15 /rno.
S15 Irno.
f30.00 /u/ma
SO Imo.
$50 Irno. S30C :ma.
54.33 /u:rno 30.58 luho $16.67 /u/no
$1,600 Irno. so Imo. so Imo. so /n;o. SO /mc.
SO Imo.
150 /MO.
9.020% 8.824% 1250 lmo.
$50 Irno. $14.88 ldmc SO Imo. $10.00 /u/mo 55.00 /dmo
S:S.OO Limo so /ma
55.00 Iurrno 14.00 /ulmo
$10.00 /uirno
200,177
2.009 0
502 0 2,009
1.038 502 302
302
16.889
0 1.008 6,032
2.437 327 9.383
32,167 0 0 0
0 0 2.931 3.094 5.025
1,008 8.3:s 0 5631 2.814 8,445
0
2.BlC 2,252
5.631
206.117
2.079 0 520 0 2.079 1.w3 520 313
3: 3
17.080 0 1.043 6.243
2.522
9,71.
33,293 0 0 0 0 0 3,003 3.203 5.201
1,043
8,668 0 5.828 2,912 8.7C1 0
2.912 2.33:
33:
5.82:
252.203
2,152 0 539
0 2.152 1,080 538 324
32d
18.092 0 1.080 6.462
2.610 350 10.051
wsa
0 0 0 0 0 3.108 335 5.383
1,080 6.971 0 6,032 3.014 9,047 0
3.014 2.013
6.032
258.4A3
2.227 0
557 0 2.227 1.119 357 33
335
18.725 0 1.128 6.688
2.701 362 10,403
35,664 0
0 0 0 0 3.217 3.051 5.571
1.118
9,285 0 6.2L3 3,119 9,364 0
3.119 2.497
6.243 $0 /mo 0 " 0 0
$2.616 /unit 122,867 127,167 13 1,620 136.224
$9 /unit 5.273 5.458 5.649 5247 a50 I~C. 1 ,008 1.063 1.om 1.118
3250 /unit 11.729 12.140 12.565 I8O 1s.ms tB /mo. -68 110 186 .- SI7 Imo 355 347 359 372 0 0 0 0 0
16.513 Z9.162 19.833 20 528
$3,008 hit 141.380 146.329 151,453 156.752
98.796 99.788 100.750 101.691
98.796 99.788 100.750 101.691 $250 7.000 7.WO 7,000 7.000 91.796 92.788 93,750 94,691 503,510 (48.616) (48.616) (L6.6161 (48.6 161 43.180 A4.172 45.1% A6.075 2.00% n n n n Y Geicraf Partner Asset Mgt Fee 10000 per yr. (10.000) (1O.poO) (IO.ao0) (10.0W) 75.00% (24.885) (25.629) (26,350) (27.0561 RDA Loan Payment
8.295 8.543 8.783 9.010 CASH FLOW AVAIUBLE FOR DlSTRlBUTlON
CY LOAN ANA-
Beginning Principal Amount 225.772 Ai3,660 000.440 3f6.103 3% 12.773 12.410 12,013 -1.583 Current Year Interat
Current Year Payment (24.865) (25,629) (26,350) (27,056) Ending Balance 413,660 400.4aO 386,103 370.650 Balance alter 32 years
PROJECT CASH FLOW
RENTAL RMNUES: Gross Potential Rent bundry/Mher Staff Rental Units Intererr Earninga on Operating Res.
Vacancy Alnowance
Net Rental Income
PROPERIY OWRATING COSTS:
Admlnlctrative Erpmnrmr: Oflice Suuplier 6 Equipant Pwrrm Sorvicas
Payroll Services Van Senices Te'ephone/Answafing Sowice Auto Erpnnri Trainin# &Travel
Mi% Adminlstrative Expense MarketiN Gpense; Adrerliring Prnfosslonal Tws: Ploperty Managcmsnt Fees hating & Commissions Legal Fees
Auditing Experse
Elwtricity (untts) Gss (mts) Water and hwnr (Units) Payroll/Payroll Taxer: Salerier.Mansger Salariar.Arristant Manager Silafi.a.Adminiilrativo
SaliriesMaintenmce Supervisor Salarin.Ma:ntennce Personnel Employec Apartments Payroll Taxer
Workers Compensa:ion
Health Insurancr/Orher Bendits Contract Serrlcsr: Exterminating Trash Removal Security Patrol Building/Grounds Mstntenance
Jsnitwlal Contract Repair Contracts
Elevator d, Other Equipment Cleaning (I Dwontinm: Printma Supplins
Grounds Supplies Repairs & Mainlenance: Repairs 6 Maintenance Gencrnl Facilirrei Services
TOTAL VARIAELE COSTS
Utililies:
Taxer I Insurance: Real Property Tax bsement
Director's d, Onicer's hsurance Misc TaxeslLicenses/Permits Property Inswancn
Fidelity Bond Inswance Ground Lcue Payment
TOTAL WED COSTS
TOTAL OPLMTING COST3
Nl8 OPERATING INCOME:
273.331 280,150 287,168 29L.347 S5.CO 2.684 2.751 2,820 2,891
0 0 0 a 2.6s 2.624 2,624 2,024
5.00% (13.801) (14.145) (14.499) (14.862)
SlDo Imo. SO /mo. 125 /ma. $0 /ma. SIC0 /mo. $50 imo. 125 /ma. $15 lmo.
115 /mo.
530.00 /u/?.o 40 Imo. $50 /mo. $300 /TS.
14.33 lulmc $0.58 /~imc 516.67 /uho
51.600 Imo. $0 Imo.
SO /mo. SO Imo. SO /mo. 50 Imo.
2250 /mo.
$50 Imo 514.88 /u/m 50 Imo. 110.00 /u/mo 55.00 /u/mo 515.00 /u/mo $0 lmo.
15.00 /u/mo 54.00 lu/mo
9.020% 8 624%
$10.00 /u/mo 7,164
SO Imo. 0 0 C 0
52.614 /unit 143.991 145.923 151.034 156.3M
264.838
2.305 0 576 0 2.305 1,:57 576 347
347
19.380 0 1.157 6.922
2.796
375 10.767
36 912 0 0 0 0 0 3.329 3.551 5,766
1.157 9.610 0 6.G2 3,228 9,692 0
3,228
2.5W
6.462
271.393
2.386 0
596 0 2.386 1.297 596 359
359
20,058 0 1,197 7, I64
2.894
388 11,144
38.204 0 0 0
0 0 3.u 3.675 5,568
1.197
9,946 0 6.688 3.341 10,031 0
3.341
2.614
6.688
278.113
2,470 0 61 7 0
2.470 1.239 617
372
372
20,760 0 1,239 7,415
2.995 402 11,534
39,541 0
0 0 0 3.567 3,804
6,177
1,239 10.294 0 6.922 3,458 10,382 0
3.458 2.768
6.922
a
283.000
2.556 0
639 0 2.556 1.282 639 385
385
21.087 0 1,282 7,675
3.100 416 11,938
40,925 0 0 0
0
0 3.691 3.937 0.393
1.282 10.654 0 7.164 3.579 10,745 0
3,579 2.865
$9 /unit 6,052 6.264 6.43 6,710
$8 imo. 193 200 207 214
$17 /ma. 285 3% 412 426
$50 Imo. 1.157 . 1,197 1.239 1,282
1250 /unit 13.w 13.931 14.419 14.924
0 0 0 0 0
21.247 21.990 22.760 23.556
$3,008 lcnit 162.238 167,913 173.794 179.870
102,599 103,480 100.119 105,125
CASH FLOW FROM OPERATIONJ:
Net Operating Income 102,599 103.480 104,319 105,125 Reulacement Reserve $250 7.000 7,000 7,000 7.000
Debt Service. First Trust Deed 503,510 (48.616) (48.6 16) (48,616) (48.61Q Carh Flow After Debt Sswicn
General Parmer &$e: Vgt Fee
RDA Loan Payment 75.00% (27.73a) (26.398) (29.027) (29.6321
CASH FLOW AVAILABLE FOR DEBT SERVICE 95,595 96.480 97,319 98.125
Operaling Rasorva 2 0% 0 0 0 0
(~0.000) (10.000) f10.000) (10.000:
9.246 9.466 9,676 9.877
46.983 47,86r 48,703 49,509
10000 Der yr.
CASH FLOW AVAIIABLE FOR DISTRIBWION
Beginning Principal Awount 37C.630 354,012 326,234 317,294 Current Year lntersst 3% 11.119 10.620 10,087 9,519 Current Year Payment (27.7W (28.398) (29.027). (29,632) Ending Balance 354,012 336,234 317.294 297.180 Balance after 52 years
RENTAL REVENUES: Gross Potential Rent
bundryI0thrr Sbfl Rental Unit$
lntsretl Earnings on Olerating Res. Vacancy Allowance
he1 Rantal Income
PROPERTY OPERATING COSTS Mminirtnliw Lpanras:
Office Supolies h Equipment Program Services Payroll Seruicas Van Services
Telaphono/Anwrring Service
Aula Erpsnro
Traiqiw h Travel Mise. Administrative Expense Markbling Bpansa:
Advertising Pmle8rlonrl Fen: Property Management Fees
Leasing 81 Commissions
Leaal Fees
Auditing Expense
Electricity (un8ts) Gas (urits) Water and Sewer (Units) PayralI/Papll Taxa*: Salaries.Msnager Salaries-Assistant Managu Sal arier-Aaministrative
Salaria.Maintenance Supervisor Solarin. Maintenance Pmoncei Employaa Apartments Payrol: Taxer
Workers Comcensat;on Health Ins;lrance/Other Becefits
Exterminating Trash Removal
Smcunty Patrol Wlilainp/troundr Maintenance Janitorial Contract Repair Contraas
Elevator & Other Equipment Cleaning 4 Decorating: Paintinp Supplies
Grouncs Supplies Repairs 4 Maintenance: Repairs 8 Maintenance Gemral Facilitiar Sarvicor
TOTAL VARIABLE COSTS
Ulilitiw
bnlfilcS SeNiUS:
Tares L Insurance: Real Prooe’ly Tax Assessment Director’s & Oflicer’s Insurancs Mise Tixit/Licansas/Pwmi~s Property Insurance Fidelity Bond Insurance
Ground Lars. Paymant
TOTIL FIXED COSTS
TOTAL OPERATING COSTS
NET OPERATING INCOME:
CASH FLOW FROM OPERATIONS:
Net OoeratlnE Income
301.706 309.249 316.980 324,905
$5.00 2,963 3,037 3,113 3.191 0 0 0 0 . 2.624 2.624 2,624 2,624 5 00% (15.233) (15.614) (16,005) (16.4052
$100 /mi. SO Imo. 525 /MZ. SO Imc. 1100 /ma.
S25 lm3. $:5 /mo
515 imo.
630.00 him3
$0 lmo. $50 !mo. 1300 IMO.
54.33 ILho ~0.5~ /L/rno $16.67 Iulmo
S:.600 Imo. 50 /ma. 50 Imo.
SO /no. so /mo. SO Imo.
s50 /Me
9.0208
8.8ZLG $250 /ma.
$50 imo. 9lL.88 /u?mo SO /ma.
t10.00 IUIrnO 55.00 lulmo $15.00 Iuho SO /mo.
f5.00 /U/MO $4.00 /u/mo
$10.00 !u/mo
292.060
2.645
0 66 1 0
1.327 661 399
398
22.239 0 1,327 7.9u
3.209 431 12.356
a2.357 0
0 0 0 0 3.82: 4.075 6.617
327 1:.027 0 7.415 3,704 11.121 0
3 704 2.965
7 415
2.645
299.296
2.738 0 €84 0 2.738 1,373 684 412
412
23.017 0
1.373 8.222
3.321 4c6 :2.7aa
4833 0
0 0 0 0 3.954 4,217 6.W9
1,373 11.413 0 7,675 3.834 11,510 0
3,834 3,069
7.675 n
306.712
2.834 0 708 0 2,834 1,421 708 426
426
23.923 0 1,42: 8,510
3.437
462 13.236
45,373 0
0 0 0 0 4.093 4,365 7.089
1,421 11,812 0 7.944 3.968 11.913
0
3.468
3#176
7,944
314.315
2.933 0 733 0 2.933 1.471 733 441
441
24.657 0 1,471 8.808
3.557 478 13,699
46.961 0
0 0 0 0 4.236 4.518 7.337
1,471 12,225
0 8.222 4,107 12.330 0
4.107 3.287
8.222 . ~~ 50 Imo. 0 0 0
12.614 luni: 161.789 167,450 173.312 179.378
$9 hmt 6.945 7,188 7,440 7,700 $50 /ma. 1.327 1,373 1.421 1,171 $8 /no. 251 229 237 245 SZSO lun,! 15,- 15,987 16,5A7 17,:26 f17 imo. 441 456 472 489 0 0 0 0 0
24.380 25,233 26,117 27.031
S3.OOa /unit 186.169 192.683 193.429 206.409
105.89 1 106,613 107.263 107.906
Raplaccmsn~Rerowa $250
Debt Sewice. First Trust Oosd 503,510 Cash Flow AHer Deb1 Sewice
General partner Asset Mgt Fee RDA Loan Payment 75.00%
usn FLOW AVAILABLE FOR DEBT SERVICE
Operating Reserve 2.00% 1OCOO per yr.
usn FLOW AVAILABLE FOR OISTRIBUTION
105.891 166.613 107.283 107,906 7.000 7.000 7,000 7.000 98,891 99,613 100.283 100,906 (cB,6 16: (48,616) (48.6 16) (48,6161 50,275 50,997 51.667 52.290 0 0 0 0 (:o,oco) (lO.000) (10,000) (?O.OOO) (50,206) (30.747) 31.250) (31.71 71 10.249 10.069 10.417 10,572
Beginnipg Principbl Amount Current Year Intcres: Current Year Payment Ending Balance Bulaiu after 32 years
297,180 275,889 253.419 229.77: 3% 8.915 8,277 7.603 6.893 (30.206) (30,747) (31.250) (31.717) 275,889 253,419 229.771 204,946
- -
PROJECT CASH FLOW
RENTAL REVENUES: Qross Polontial Rent
Laundry/Other
Staff Rental Urits Interest Earnings on Operating Res. Vacarcy Allowance
Net Rwtal Income
PRQPERTV OPERATING COSTS: Administratire Expanses: Offico Supplies & Eqdipwnt Program Services Payroll Semcn Van Sonices
Telephone/Answuq Service Auto Expense
Trainiw b Travd
MIX. Adminislstive Expense Marketing Expense: Aovertising Prala8clonal Fnr: Property Hanagernen: Fees Leasing 6 Commissions Legal Fees Auditins Espensa
Electricity (units) Gas (units) Water and Sewer (Units) Payral\IPayr011 Taxes: Sahrics.Manager S?darleS.AsSistant Manager Salaries-Administrative SaIari.s.Maintenar.cs Supervisor
Salaries-Maintunance Penorne< Employee Aoa*erts Pamll lares Workarr Compensation Health InsurandOther Benefits Contract Services: Erterminati ng
Trash Removal
Security Patrol 0~ilding/Grounds Yainlanance Janitorial Contract Repair Contracts
Elevator h Other Equiornont CIcaning L Dranling:
Painting Supplin Ground, Scoplies Repairs 6 Msintmrunse; Repairs & Maintenance Genera, Facilitk Services
TOTAL VARIABLE COSTS
UuiIIi~:
Tales L Inswanc.:
Roal Prcperty Tax Assessment Oirc:!cr's d. Cfficer's Insurance Hi5c Tares/LIcenseuf'errnits Propriy Insurancn Fidelity Bond lnscrsnce
Ground L*rm Payment
TOTAL FIXED COSTS
TOTAL OPERATING COSTS
NET OPERATING INCOME:
I YEAR I 26 29 30 1 31
333.028 54.354 349.888 358.635 $5.00 3.271 3,353 3.437 3,523 0 0 0 0
2.624 2.624 2,624 2.624 5.00% (16,815) (17.2351 (1 7,666) (18 108)
$100 Imo.
$0 /ma. $25 Imo. SO /mo. 5100 Imo.
$25 1110. $15 Irno.
$15 /no.
1'000 /Ll/rno SO /mo. $50 /mo. $300 /mo.
$6.33 Iuirno IC.58 /u/mo $16.67 lufrno
11.600 /&no. $0 /mo.
$0 Irno. SO /Ino. IO /me. $0 /mo.
$50 /PW.
9.020% 8.5240. $250 /TO.
$53 IrrO. 514.88 Idno SO :mo. $10.00 /u/ro $5.00 /U/TC 215.00 /U/TO $0 /mo.
$5.00 /u/mc 14-00 /u/me
flO.OO :u/rro
322108
3.035 0 759 0 3,036 1,522 759 456
456
25.520 0 1,522 9 116
3,681 495 14.178
48.605 0 0 0 0 0 4.384 4,676 7.594
1,522 12.653 0 8.510 4.251 12,762 0
4.251 3,M2
8.510
330.0%
3.142 0 786 0 3.142 1,575 786 472
472
26.413 0 1,575 9.435
3.810 512 12.674
50.306 0 0 0 0 0 4.538
4.539 7,860
1.95 13.3% 0 8.808 4,400 13.109 0
4.400 3,521
8.800
338,283
3.252 0 814 0 3,252 1.630 814 489
489
27.37 0 1,630 9.765
3.9a3
530 15.188
52.067 0 0 0 0 0 4.696 5.009 8.135
1.630 !3.554 0 9.116 4,554
13,671 0
4.554 3.644
9,116
346,670
3.366 0 w2 Q 3.366 1.687
506
SO6
28.294 0 1,687 10,107
4.GEl 549 15.720
53.889 0 0 0 0 0 4.861
5.164 8,420
1.687 14,028 0 9.435 4,713 14,149 0
4,713 3,772
9.435
a42
SO Irno 0 0 0 0
12,614 Iumt i85,656 :92.154 198.879 235,039
$9 lunit 7.970 8.249 8.538 8.837
$8 /mo. 254 263 272 282
0 0 0 0 0
S50 Irno. 1,522 1.575 1.630 1,687
$250 lunit 17,725 18,345 18.987 19.652 $17 Imo. 506 524 542 561
27.977 28.956 29.969 3!.019
$3.008 /unit 2 13.633 22:.110 228.&48 236.858
2475 108.986 109.634 109,816
CASH FLOW FROM OPERATIONS:
Net Operating income 10 8,4 7 5 108.986 109,434 109,816 $250 7.000 7.000 7.000 7.000 101.475 101.986 102,434 102,916
52.859 53.370 53.818 102.816
Replacement Reaervc
Debt Servtce . First Trus: Deed
Casn Flow After Deot Service
CASH FLOW AVAILABLE COR DEW SERVICE
503,510 (48.616) (48.616) (4S.616) 0
Operating Reserve 2 00% 0 0 0 0 Qenerai Panner Asseer Mgt Fee 10000 per yr. ~~0,000) (10,000) (i0,OW) (10,000)
RDA Loan Payment 75.004; 132,144) (32.528) (32.864) (69,6 1 a 10.715 10,843 10,955 23 204 CASH FLOW AVAILABLE FOR DlSTRlWTlON
~PMENTAGCNCY LOAN ANALm
BegiPnilrE Principal Amounr zoa.sa6 :7a.951 151,792 123,482 Current Year Interest 3% 6.148 5.369 4.554 3.704 (32*:44) (32,528) (32,860) (69.612) Current Year Paymcr.1
Ending Baiancs L78.951 51.792 123,482 57,574 Bslance after 32 years
RENTAL RMNUES:
Gross Potential Rent LaundrylOther Stan Rental Units Internt Earninp on Operating Res. Vacancy Allwsnce
Net Rental Income
PROPERn OPERATING COST% Administrative bpenrer: Cff~co Suwlin & Equipment Program Services Payroll Services
Van SerYices
TeleDhOne/AnswerinE Service
Training 6 Trawl Mi%. Administrative Expense Marketinc Llpeme: Advertising Prohrslonal Fees:
Property Management Fees Leasing b Commisctorr Legal Fees Auditing Expense
Electricity (units) Gas (units)
Water and Sewer (Units) PayrolllPaymll Taxes: Salaries-Mamper SalanosAssisant Manager Salarios.Administratie Salaries.Maintenance Supervisor
Salaries-Maintenanca Personnel Employee ApartmmtS Payroll Tares Workers Compensation Heb:th Inwnnce/OIher Benefits contract Sewices: ttorminaring Trash Removal Security Patrol BuildinglGrorrndr Maintenance Janitorial Contract Repair Contracts Elevator b Other Equipment Cleaning k Dewrating:
Painting Supplies Grounds Supplies Rvalrr 1. Maintenance: Repairs & Maintenance General Facilitiar Sarvicer
TOTAL VARIABU COSTS
&JtQ bpmSe
Utillties:
Tares 6 Inwrnnce: Real Properly Tax Assessment Director's & Officer's Insurance Mise Taxn/Lice%es/Permits
Property Insurance
Fidelity Bond Insurance Ground Leue Payment
TOTAL FIXED COSTS
TOTAL OPLRLTING COSTS
NEr OPERATING INCOME:
367.601 376,791 386.21 L 395.866 f5.CO 3,611 3,701 3.794 3.889
0 0 0 0 2.620 2.624 2,624 2.624 5.mz (18.5611 (19.025) (1 9.500) (19.98Bl
SlCO ho. 40 ho $25 lmo. SO /mo. $1'20 /ma. $50 im% S25 imo. $15 /ma
115 Imo.
S30.W lulno so /mc. I50 ITC. 5300 /mo.
$4.33 /U;T.O $0.58 /u:mo $16.67 /uho
$1.600 /mc. 40 img. $0 lmo.
$0 /mo. so /?no. so ino. 9.0zO% 8.824% 1250 /TO.
$50 1x0
$14.88 /dmo
$10.00 Idmo
$15.00 /&+no
$0 1x0.
65.00 /J/mO
$0 /TO.
$5.00 Wmo Sb.00 :u/mo
$10.00 lulmo so /IT.@.
$2,614 /Jl!t
$9 /m:
950 ho. 18 Imo. $250 /dq':
$17 /mo.
0
$3,008 /VI!!
355.275
3.w' 0 87 1 0 3.484 1.746
524
524
29,m 0 1.746 lO.Cel
4.224 568 16,270
55.775 0 0 0 0 0 5.031 5,366 8.715
1,746 14.519 0 9.765 4.878 14.644 0
0.878 3,904
9,765
a71
364.091
3.606 0 901
0 3.606
901 542
542
30,309 0
10.827
4.372 588 16.839
57-72) 0 0 0 0 0 5.207 5.553 9.020
1.807 15.027 0 10.107 5.049 15,357 0
5.049 4.041
10.107
~a07
1.807
373.129
3:732 0 933 0 3.732 1,870 933 56 1
561
31,370 0 1.870 11 LO6
4,525 609 17.428
s9.7r7 0 0 0 0 0 5,389 5,748 9.336
1.870 15 553 0 10,461
5.226 15.687 0
5.226 4.:82
10.461
32.391
3.863 0 966 0 3.863 1.935 966 581
581
32,468 0 1,935 11.598
4.683 630 18.038
61.838 0
0 0 0
0 5,578 5.949 9.663
1.935 16.097 0 10,827 5,409 16,236 0
5,009 4328
10.827
213.043 220.498 228.216 236.203
9.146 9,466 9.797 10,140 1,746 1,807 i,a70 1,935 292 302 313 324 20,340 2:,052 21.789 22,552 581 601 622 64.4 0 0 0 0
32.105 33,228 34.391 35.595
245.14 253.726 262.607 271.798
110,127 110,365 110,522 110,593
CASH FLOW FROM OPERATIONS: Net Operatins Income 110.127 110,365 110.522 110.593 Replacemant Reserve $290 7.000 7.000 7.000 7.000 CASH FLOW AVAILABLE FOR DEBT SERVICE 103.127 103.365 L 03.522 103.593
Cam Flew After Debt Service 103.127 103.365 i03.522 103,593
Debt Service. First Trust Deed 503.510 0 0 0 0
Operating Reserve 2.00% 0 0 0 0 General Partner Asset Mqt Fee 10000 3er yr. (10.000) (10.000) [10.000) (10.000)
CASH FLOW AVAILABLE IOR DISTRIBUTION 23.282 23.341 23.380 23.398 RDA Loan Payment ?J.OC% (69.845) (70,024) (7O.ICI) no. 195)-
Begiiniryl Principal Amount Current Year Interest Current Year Payment Ending Balance 8alann: alter 32 years
3% 57,574 1.727 (59.30:)
C 0 a
0 0 0
0 0 0 Q. 0 0 0
Jun. 2. 199: 2:13?M SEHTRS F$.BTNEP,S -
Exhibit 3
WAKELAND
Hausing and Devefopnienr Corporation 225 Broadway, Suitc 1700
SUI Diqo. CA 97- I U I
Telephone (6 19) 235-2206 Facsimilc (6 19) 234-79 I7
June 2,1999
Ms. Deborah Fountain Housing bd Redevelopment Director
City of Carlsbad
Housing and Redevelopment Department
2965 Roosevelt St., Suite B
Carlsbad, CA 92008-2389
Dear Ms. Fountain:
Thank you for the mceting yesterday to discuss thc Mariano Apartments. Tlus 28
unit affordable housing development will contribute towards the inclusionary housing
requirement of Standard Pacific Homes. Since this is an affordable housing project with
rents below market, the developer, Wakeland Housing and Devctopment is requesting a
loan from the Redevcloprnent Agency. I understand that historically the Agency has
made commitments in the S10,OOO - $1 1,000 per-unit range.
Since our meeting yesterday, I have revised the pro-forma. The conventional loan
is projected to yield $17,659, and the tax credit investor is expected to contribute another
$94,663 per-unit. The total subsidy request from the Agency is $462,774, which equates
to $16,528 per unit.
There are numerous reasons why Mariano Apartments needs additional subsidy
beyond the $1 1,000 amount. There are also several. actions we plan to implement to lower
the Agency loan amount per-unit. First, the reasons why we are requesting $16,528 per
unit for Mariano Apartments:
1. ‘ This is a small project. Design, engmecring, and legal costs are a fixed amount
that would be incurred whether we are building a 28-unit or 128-unit project.
These costs spread over 28 units yield a higher per unit cost than a larger project.
2. The devclopment has a large 1,500 square foot community room. This is
important ‘ccomunity space” where families can hold meetings, and congregate,
and where wc can also set-up after school programs, training programs, etc. for
the residents. Nonetheless this community room does add additional costs to be
spread out over only 28 units.
l
Jun. 2. 199:
3.
4.
5.
2 : 13?M SENTI?: PARTNERS -
Given the location, the project will have a significant retaining wall around most
of the perimeter. The initial estimates are that this retaining wall will cost
approximately $50,000 to build.
Under the California Tax Credit Allocation Committees gasl regulations, projects
like Mariano that had linkages to public transportation, were allowed to increase
their Threshold Basis Limit by 15%. Thus resulted in additional basis that could bc
claimed for tax credits, and additional funds for the project. If we were able to
claim the additional 15% basis for the Mariano Apartments, we would need to ask
the Agency for $4,943 per unit. Because the new regulations do no1 allow us to
increase our Threshold Basis by 1S%, wc need to substantially increase the
amount of subsidy.
The development has a mix of affordable units. As indicated on the attached pro-
forma, the average affordability is 45% of area median income (AMI) with 10
units below 40% AMI. Two units are 30% AMI, and eight units are 38% AMI.
As units are leased at below 50% AMI, the subsidy amounts will increase
significantly.
Following are some ways that Wakeland Housing and Development will work
with the City to bring dow the per-unit Redevelopment Agency costs:
1. We will apply for AHP funds for this project later this year. We'will request
$5,000 per-unit. Given the trend in the way AHP allocates funds, we will
probably receive $3,000 to $4,000 per unit.
2. We are applying to the California Equity Fund for the equity funds. Currently, out pro-forma shows CEF paying %.79 per tax credit dollar. Recentiy on another
development CEF offered S.795, and another invcstor offered %.go. We will work
aggressively with CEF (or if need be another investor) lo maximize our tax credit
yield, again lowering the loan amount from the City of Carlsbad.
3. Wc are at the beginning of this project, and have not finalized in detail all the
construction costs, As we continue through this process, we will look for ways to
do value engineering. We will work with the Archjtect (Rodriguez + Simon
Design Associates) and Contractor (Cuatro Corporation) to look for way to cut
expensc (but not quality), and thus reduce the City per-unit contribution.
!lo. 3029 P. 4/4 - Jun. 2. 199: 2: 14PM SENTRS FAETNEP,:
If you have any additional questions, or need additional information, please do not
hesitate to call. I look forward to working with you and the City of Carlsbad in the
development of Mariano Apartments.
Sincerely,
Kenneth L, Sauder
Executive Director
Attachment: Revised Pro-forma for Mariano Apartments
cc: Craig Ruiz, City of Carlsbad
Gregg Linhoff, Standard Pacific Homes
Jack Henthorn, Jack Henthorn & Associates
Steve Kuptz, Chairman of the Board, Wakeland
ITEM NO. 2
DATE: JUNE10, 1999
SUBJECT INCLUSIONARY HOUSING ORDINANCE - STAFF PRESENTATION ON
EFFORTS TO REVIEW AND REVISE CHAPTER 21.85 OF THE CARLSBAD
MUNICIPAL CODE, THE INCLUSIONARY HOUSING ORDINANCE.
I. RECOMMENDATION
No formal action is being requested on this matter at this time. Staff will be providing a
verbal presentation on the status of staff‘s efforts to review and revise the City of
Carlsbad’s Inclusionary Housing Ordinance. The Commission will be asked to provide
feedback to staff on issues of concern related to the Ordinance or its implementation to
date. A copy of the staff proposed revisions to the Ordinance will be distributed at the
meeting for discussions purposes only.
11. PROJECT BACKGROUND
On May 21, 1993, the adopted Inclusionary Housing Ordinance became effective to
implement the City of Carlsbad’s Inclusionary Housing Program. The City’s
Inclusionary Housing Program requires that 15 percent of all residential units
developed within Carlsbad be affordable to lower income households, specifically those
households with gross household incomes equal to or less than 80% of the San Diego
County Area Median Income.
In implementing the Inclusionary Housing Ordinance over the past six years, staff has
discovered that there are some aspects of the Ordinance which require revision for
better implementation of the City’s Inclusionary Housing Program. In addition to
implementing difficulties due to some language within the original Ordinance, there are
other reasons for considering revisions to the Ordinance. First, a Housing Element Self-
Certification Pilot Program was recently established for San Diego County. The
Carlsbad City Council has authorized staff to proceed with efforts to qualify for self-
certification during the next Housing Element cycle (1999-2004). Revisions to the
Inclusionary Housing Ordinance are necessary to assist in the City’s effort to qualify for
self-certification. Second, some policies for providing affordable housing have been the
subject of much debate and require resolution. For example, the issue of whether or not
second dwelling units should be allowed for the purposes of satisfying a developer’s
Inclusionary Housing requirement has been a hot topic of debate for the last couple of
HC Report
June 10, 1999
Page 2
years by both the Housing Commission and the Planning Commission. This issue can be
resolved through revisions to the Inclusionary Housing Ordinance.
111. STAFF RECOMMENDATION
At this time, it is staff's intent to make a verbal presentation to the Housing Commission
on revisions to the Inclusionary Housing Ordinance which are being recommended by
the City's Housing Policy Team. As a reminder, this team consists of City Staff members
including the Community Development Director, Housing and Redevelopment
Director, Assistant City Attorney, Administrative Services Director, Planning Director,
Finance Director and Management Analyst Ruiz. The Housing Commission will be
asked to provide feedback on the proposed revisions and share any additional concerns
the Commission members may have regarding the Inclusionary Housing Ordinance
and/or its implementation. No action will be requested on the proposed revisions to
the Ordinance. At a later date, the Ordinance will be returned to the Housing
Commission for discussion during a public hearing or public workshop. This future
public hearing/workshop will provide the housing development community with an
opportunity to share their comments on the proposed revisions to the Ordinance
and/or other comments they may have on implementation of the Ordinance.