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HomeMy WebLinkAbout2002-05-09; Housing Commission; MinutesMinutes of: HOUSING COMMISSION Time of Meeting: 6:OO P.M. Date of meeting: May 9,2002 Place of Meeting: HOUSING AND REDEVELOPMENT DEPARTMENT OFFICE CALL TO ORDER Vice-chairman Scarpelli called the Regular Meeting to order at 6:lO p.m. PLEDGE OF ALLEGIANCE Board Member Ritchie led the pledge of allegiance. ROLL CALL Present: Absent Commissioners: C. Charles Griffin Renee Huston Doris Ritchie Edward Scarpelli Chairperson: Roy Latas Staff Present: Housing and Redevelopment Director: Debbie Fountain Management Analyst: Craig Ruiz APPROVAL OF MINUTES Minutes not available for last meeting. COMMENTS FROM THE AUDIENCE ON ITEMS NOT LISTED ON THE AGENDA There was no audience in attendance, which wished to speak at this time. NEW BUSINESS Vice-chairman Scarpelli announced the agenda item on Villages of La Costa and requested the staff presentation. Mr. Ruiz stated that the project before the Commission is the Villages of La Costa Affordable Project, and more specifically the city’s financial assistance for the project. Mr. Ruiz described the location of the proposed project with use of a map as part of staffs slide presentation. Mr. Ruiz continued that this project is going to consist of 180 units, 32 one-bedrooms, 39 two- bedrooms, 79 three-bedrooms and 30 four-bedroom units. The inclusionary housing ordinance requires that 10% of the project have at least three-bedrooms units that would be 18 units in the project. The project clearly exceeds that requirement, over 60% of the project being large bedroom units, which is the greatest need of the city. It exceeds it by roughly six times. The rent levels in this project: 30% of the project is going to be 50% of the area median or 54 of the units and 126 or 70% of the project is going to be at 60% of the area median. For example: a one- bedroom unit at 50% of median income is going to be roughly $535.00 a month; the two-bedroom at 60% of AMI would be about $820; a three-bedroom unit at 50% would be about $800 a month and then the four-bedroom at 60% would be about $1100 a month. This is based on the 2002 income limits. They have about an 18-month construction schedule so this project will be complete in July 2004. He stated that the income figures will be higher at that time, therefore, the rents will probably be anywhere from 3 to 5 percent higher, based on what has happened in the past. This is just to give you an idea of what the rents are going to be in this project. Commissioner Ritchie asked Mr. Ruiz: What median income are we looking at? HOUSING COMMISSION MINUTES PAGE 2 of 7 MAY 9,2002 Mr. Ruiz answered, we use the San Diego county median so if you take the one-bedroom example, then the household there is going to earn half the county median or 50% of the area median. Mr. Ruiz continued, in terms of the project financing, this project is going to cost about $25 million dollars, and that doesn’t include the cost of the land. The bonds for the project are going to provide 10.6 million roughly. Tax credit financing is going to be about 7 % million dollars. The developer is contributing the land and that has an estimated value of approximately 8 million dollars. There is going to be a cash contribution of 4.3 million dollars from the Master Developer. City staff is recommending that the City’s contribution be $2,070,000. The bond amount, as you noticed in your staff report, says it is going to be in an amount not to exceed $17,000,000. Initially, the bond amount will be somewhere less then $17,000,000. It won’t exceed that amount, and that amount will be outstanding for maybe 18 months during the period of construction. Depending on what type of construction financing, that number could come down even lower. As the project completes construction, there will be an infusion of cash into this project so the permanent loan amount, which will be over 30 years outstanding, will start out at 10.6 million. As far as the city’s contribution, the 2 million dollars works out to $11,500 a unit. For those commissioners who have been on the Commission for a while, what we have seen in the past is about $10,000 a unit, so this will be a little bit higher then we have recommended in the past. The reason we are recommending the higher amount is based on the fact that they are putting in so many large bedroom units. As we said, 60% of the project is going to be three- and four-bedroom units. We feel the higher amount is warranted based on the project. Mr. Ruiz continued, the developer fee is going to be 1.2 million dollars. That is going to be 5% of the project cost. $300,000 of that is going to be deferred during construction. The developer will actually receive that money back during the first ten years in operation of the project. The 1.2 million works out to roughly 5% of the project cost. In previous projects, we have seen the developer’s fee set at about 7 to 8% of the total project cost. 1.2 million is the maximum that they can receive through the tax credit program and is acceptable to the City. Commissioner Huston asked what the point of the developer fee is. Mr. Ruiz answered that he’ll let the applicant answer that, but generally it is the profit they (the developer) make. The fee also covers any cost overruns or anything like that over and above what the proforma says. Vice-chairman Scarpelli stated he thinks it‘s more overhead and supervision then it is profit. Mr. Ruiz continued his presentation by indicating that the City’s assistance will be provided in the form of a residual receipts loan. What that means is that the City’s loan will be paid with net cash flow from the project. When the revenues exceed the expenses, there is net cash flow. Per the terms of the loan, 70% of the net cash flow money is going to pay the city back and 30% will go to the development team. That is standard with what we’ve done with all of the previous projects. The security will be in the form of a note and a deed of trust. Mr. Ruiz explained that there are actually four documents that the commission is going to be recommending on: 1) the loan agreement, 2) the note, 3) the deed of trust, and 4) the regulatory agreement. Just for a quick review: The loan agreement, as you see in the packet, spells out the term of the loan. The note is the developer’s pledge to repay the loan. The deed of trust is recording our security against the improvement in the property. Then the regulatory agreement ensures the affordability requirements are maintained for the required 55-year period of the project. HOUSING COMMISSION MINUTES MAY 9,2002 PAGE 3 of 7 Mr. Ruiz continued, our recommendation to you tonight is that you recommend to the City Council three things. The financial assistance in the amount of $2,070,000. Recommend approval of the loan documents, specifically the loan agreement, the note, the deed of trust and the regulatory agreement. Lastly, recommend approval for the City to issue tax-exempt bonds in an amount not to exceed $17,050,000. The applicant is here and is going to do a presentation and talk more about the development team and their history and experience as well as go into a little more of the design. That concludes my portion. Do you have any questions? Vice-chairman Scarpelli indicated that there were no questions and to go ahead and proceed with developer presentation. Let me introduce myself, I am Ann Wilson, and I am the Director of Housing Development for Community Housing of North County. Behind me is Dave Ricker, the Project Manager, on this project in La Costa. I am here today to talk on behalf of the developer/future owner of the project. Ms. Wilson states the history of this development is that it started with the Villages at La Costa, which is a large master planned community. As required by Carlsbad's inclusionary housing ordinance, the master developer has set aside certain parcels of land for affordable housing. This is the first phase of their development and the first phase of the affordable housing. The developer selected a partnership, which consists of community housing of North County and Mercy Housing California as the affordable housing developer. The site is located at the corner just off of El Camino Real and Alga Road. Ms. Wilson continues, Community Housing and Mercy Housing have come together as a partnership to build, own and operate this project. We have 54 years of combined development experience. We are very experienced at obtaining tax credits, city and local and other funding, and in devising partnership structures to own and manage properties like these. Mercy Housing has it's own property management entity that is quite substantial and is going to manage the property. Both organizations have national and statewide reputations as amongst the top affordable housing developers in the State of California and have won many national and statewide awards for both our designs and our programming and the way we manage the property. Community housing itself has fourteen years of history. We are based in north county San Diego. Our offices are in Escondido. We have done developments from Oceanside, now Carlsbad, Fallbrook down to San Diego proper, Lakeside, so we developed and owned properties all over the county. We have over 700 units in our portfolio now, and 500 more units in what we call the development pipeline in some form of development right now. Vice-chairman Scarpelli asked if the noted unit counts are inclusive of these noted tonight? Ms. Wilson answered, yes. Both organizations are mission-based organizations. We are known for our commitment to operate safe and high quality housing for lower income families and working families. We have strong resident services components. We are well known for having programming in our developments, after school study groups, and other supports on our properties. Vice-chairman Scarpelli asked if that is anticipated in this particular project. Ms. Wilson said yes. Dave will speak more on that. She continued that to give a sense of some of the other developments they have done, she will show slides of various projects completed by Community Housing. Ms. Wilson proceeded with a slide show of projects and described each to the Commision. HOUSING COMMISSION MINUTES MAY 9,2002 PAGE 4 of 7 Ms. Wilson said Mercy Housing California is a California based portion of a national organization. It has four offices in the city of Orange, San Francisco, Santa Cruz, and Sacramento. The city of Orange is where the partnership is coming from, and they own about 4,000 units of rental property and they manage them throughout California. They’ve got 40 properties, about 2,000 units in their pipeline, and they have also done over 2,000 units of for sale homes for home ownership in northern California. Mercy is also a mission-based organization. They were formed by eight orders of the sisters of mercy, which is a Catholic order of nuns and that order is based in Colorado, and they decided that housing was just more and more a problem for the people that they served in their communities and they actually established quite a real estate division, so you’ve got to admire the sisters who founded Mercy Housing. It is a very well recognized and very solid organization. Ms. Wilson proceeded with a slide show of housing projects completed by Mercy Housing. Ms. Wilson indicated that the slide show represented just some examples. I am going to turn it over to Dave Ricker, the project manager who has been working with Fred Arbuckle and the other folks on this proposed project. Dave Ricker thanked the commissioners for the opportunity to present their project. This is a real asset to the City of Carlsbad. Mr. Ricker is a resident of the City of Carlsbad, and is very happy to see that this city is foresighted enough to have an inclusionary ordinance. As noted before, the project is located at El Camino and Alga, but it seems the best description is behind the Crazy Burro. It is a pad that will be 12.7 acres in size, so the density on the site is right in the neighborhood of 18 units per acre, 180 units altogether. We have got a mixture of sizes. There are 32 one-bedrooms, and as you can see, they are fairly good size units. 750 to 850 square feet. 39 two-bedrooms that are 896 to over 1,000 square feet for a two-bedroom unit. 79 three-bedroom units that range from over 1,000 to nearly 1,100 square feet and 30 four-bedroom units at 1,354 square feet. Mr. Ricker continued, when we first started to plan this, we talked to Debbie and Craig and got their input that this was the biggest need in the community was for large bedroom rental units. We then went out and did a market study that proved it was the biggest need. There are no four- bedroom units on the market. The only four-bedroom units that are out there are in Laurel Tree and a few in some of the other affordable housing, but with huge waiting lists. He presented the elevations. All of these buildings are U-shaped. He showed different views. This will house all the three and four-bedroom units. They are three stories; they are not elevator serviced. They are all stairways. These are basically for young families. They bring to the communities a sense of community and a lot of resident services. In the community service facility they will have space for upwards to 16 computers for the learning center. Kids will come in there after school and get after school-enhanced programs to help them with their homework. There will be access to the internet for the kids and the adults. There will also be an exercise facility. This will look in all respects like a market rate project. The project is very close to schools; it is less then a half mile to Aviara Oaks and the Aviara Middle School, which right now are the school boundaries, but the tenants will sign an acknowledgement that the school district determines where their kids go to school. It is a good opportunity to go to a Carlsbad Unified School District school. Obviously the project is very close to shopping and very close to transportation. Commissioner Ritchie asked about the schools. There are a lot of young families in these units. With the impact on the schools, are the students going to be going to other areas? HOUSMG COMMISSION MINUTES MAY 9,2002 PAGE 5 of 7 Mr. Ricker said they are working with the school facility director to assure that the school within the Villages of La Costa development will be on-line or will be on-line in a short period of time. Commission Ritchie asked if the two will come together Mr. Ricker answered, yes the two are intended to come together. There is a new school being negotiated in the greens. Another elementary school so the attendance boundaries will change. There will be two solid years before there is an impact. The impact will start during the summer unless it is year-round school, and I don’t think we have year-round schools in Carlsbad. It will be actually the fall of the subsequent years, and there is almost three building years for them to get that ready. As far as he knows, this is the only new development that is going to be coming on- line in about this time. Vice-chairman Scarpelli said that the other concern would be the children crossing El Camino Real, which is quite broad at that point. Has that been addressed in any way? Mr. Ricker answered that it is a controlled intersection, and we would have to find some way to deal with the traffic folks on that, but it is a separate issue. Because of their closeness to the school, they do not warrant busing which would be the first choice. Vice-chairman Scarpelli said he was thinking the foot traffic specifically of the children. Wouldn’t they be crossing the light at El Camino and Alga? Mr. Richter said they would either be crossing there or up at El Camino Real and Dove. Commission Scarpelli said okay. Mr. Ricker said that he appreciated Commission Scarpelli bringing that concern up because it is something that can be addressed in discussions with the school district. Mr. Ricker continued his slide show presentation. He showed the community facility. There is a huge green area space here about 15,000 square feet of open green space so it will facilitate a lot of internal activity. These two designs that you will see here are little courtyards that are in each one of the building sections that also act as small little ancillary places for people to gather and This is another view of the residential buildings. Mr. Ricker asked if anyone had any questions. Play Vice-chairman Scarpelli asked about the density for building. Do you have any numbers on that as far as individual buildings? Mr. Ricker answered: Per building, no he doesn’t have that. There are a total of 467 bedrooms. Vice-chairman Scarpelli commented that they appear to be quite large size buildings. He was just wondering how many people were in there. Mr. Ricker introduced Mr. Rodriguez, the architect for the project. Mr. Rodriguez said they are U-shaped buildings. Actually there are three buildings that are linked with a walkway system and a bridge system. So this building, even though we are calling it one building, is one structure and this is another structure, and then we have the bridge that ties them together. This U-shaped building has 33 units. Then we have two smaller buildings here, and this one has 7 units and this one has 6 units. HOUSING COMMISSION MINUTES MAY 9,2002 PAGE 6 of 7 Vice-chairman Scarpelli thanked Mr. Rodriguez. Vice-chairman Scarpelli asked the Commissioners if they had any questions that they would like to ask or anything to discuss in particular. Commissioner Ritchie commented that she felt the presentation was very well done. It answered all my questions. Vice-chairman Scarpelli said okay if there are no further questions, 1’11 ask for a motion on the resolution. ACTION: Motion by Commissioner Ritchie that the Housing Commission adopt resolution 2002-02 recommending approval to the City Council to provide $2, 070,000 in financial assistance from the Housing Trust Fund, to issue tax exempt bonds in the amount not to exceed $17,050,000 and approval of the financial assistance agreement and related documents with Dove Family Housing Associates LP for construction of 180 affordable apartment units to satisfy the inclusionary housing ordinance requirement for the Villages of La Costa master plan. VOTE: 4-0-0 AYES: NOES: None ABSTAIN: None ABSENT: Latas Huston, Ritchie, Griffith and Scarpelli DIRECTOR REPORT: Debbie Fountain shared information on other affordable projects. We have another project coming forward that will have a financial assistance request. It is the Calavera Hills project. Not too long ago there was a project approved by the City Council, the Thompson Tabata project which is going to be a for sale town home project. This project will probably be asking for financial assistance as well. There are quite a few projects in the planning stages. Sunny Creek was an apartment approved several years ago, and it is under construction right now, and they are expecting to be completed by this summer and start having people move in. That was a 50 apartment unit project. Commissioner Griffin inquired as to where it is located. Debbie Fountain answered it is right off of El Camino Real, just past College; the intersection on the east side of El Camino Real. Commissioner Scarpelli stated that it is just south of Rancho Carlsbad. Debbie Fountain agreed. That project is moving forward which his pretty exciting. Actually, that project is not requesting any financial assistance so the commissioners will probably just be invited to the grand opening. Commissioner Scarpelli inquired as to who is managing the project. Debbie Fountain answered it is actually a partnership; we are not quite sure yet who the manager is going to be, but the developer of the Sunny Creek project is actually going to be the owner. HOUSING COMMISSION MINUTES MAY 9,2002 PAGE 7 of 7 Also Kelly Ranch project is moving forward, that is going to have affordable housing apartments in it as well Vice-chairman Scarpelli asked who the developer is. Debbie Fountain said it is Archstone Communities that is the owner of the property now. Shea Homes will actually be buying the single-family homes, but Archstone will be developing the apartment project and owning and managing it. Even though not as many projects are being brought to you, a lot of the past projects that have been already approved are moving forward, which is pretty exciting to see. Commissioner Ritchie said that is very exciting. Vice-chairman Scarpelli said the only issue of concern on this project again is the foot traffic of children crossing El Camino Real. Commissioner Huston said you know they will be using it with the activities with children. Vice-Chairperson Scarpelli agreed. Aviara Oaks and the middle school are both on the west side of El Camino Real, obviously, so that is something I’m sure will be addressed, but it is a concern of mine. That is such a wide intersection with all those turn lanes and everything. So I’m sure City Council will be looking into that as well as the school district. Commissioner Ritchie asked if the new school would be built by the time this opens? Vice-chairman Scarpelli said not for at least another couple of years. Commissioner Ritchie commented that maybe we won’t have to worry about that. Let‘s be optimistic. Vice-chairman Scarpelli commented he did not want to detract from the project. The safety issue may be a concern to those in power. The director has already made the report. ADJOURNMENT By proper motion, the Regular meeting of May 9,2002 was adjourned at 6:45 p.m. Respectfully submitted, Debbie Fountain Housing and Redevelopment Director PATRICIA CRESCENT1 Minutes Clerk MINUTES ARE ALSO TAPED AND KEPT ON FILE UNTIL THE WRITTEN MINUTES ARE APPROVED.