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HomeMy WebLinkAbout2005-06-09; Housing Commission; MinutesMinutes of: Time of Meeting: Date of Meeting: Place of Meeting: HOUSING COMMISSION 6:OO P.M. June 9,2005 HOUSING AND REDEVELOPMENT OFFICE CALL TO ORDER Chairperson Scarpelli called the Meeting to order at 6:07 p.m. PLEDGE OF ALLEGIANCE The Pledge of Allegiance was waived due to the lack of a flag at the Housing and Redevelopment Office. ROLL CALL Present: Absent: Commissioners: Edward Scarpelli Margaret Schraml Bobbie Smith Renee Huston Dons Ritchie Staff Present: Housing and Redevelopment Director: Debbie Fountain APPROVAL, OF MINUTES Minutes of May 12,2005, were approved as written. VOTE: 3-0 AYES: 3 -0 NOES: None ABSTAIN: None NEW BUSINESS Mr. Wally Dieckman, Chief Financial Officer for Chelsea Investment Corporation, gave a brief overview of the project. The location is on the far eastern edge of the City of Carlsbad. It is in an area called the La Costa Oaks, which is part of the Villages of La Costa. The master developer is Morrow Development Company. The site is on a challenging piece of property to develop. It is bordered with San Marcos. Mr. Dieckman pointed out the site on a map he showed to the Commission. There is a new road called Avenida Soledad, which will go up the hdl off of Santa Fe Road. There will be single- family lots and homes that will be built on this side. Chairperson Scarpelli asked if there will be a traffic signal there? Mr. Dieckman said yes there will be a signal light intersection. He pointed out where the entrance is and the other exit on the north end of the property on the San Elijo Hills Road with a right turn only. Chairperson Scarpelli asked if there was a median in that area? Mr. Dieckman said yes there is a median up into San Elijo Hills Road. There will be a lot of fill work being done on the property. In the final configuration, the track would meander through the parking lot and down a sloping hill. There are nine buildings. Three of the buildings have sixteen units. The balance of the buildings are twenty unit HOUSING COMMISSION MINUTES JUNE 9,2005 PAGE 2 of 12 buildings. They are three stories in the middle and then two story configurations on the ends. All of the parking is surface parking. There are 38 parkmg spaces under one building. Chairperson Scarpelli asked if the three-story buildings have elevators? Mr. Dieckman answered no. As for the motif, the style is Craftsman, which is consistent with La Costa Oaks. Chairperson Scarpelli asked if the only parking under a building is that one building? Mr. Dieckman said correct. Chairperson Scarpelli asked if the parking for all of the other buildings is surface parking? Mr. Dieckman answered yes. He fiu-ther said there is a “theme wall” also serves as a sound wall. So there is a significant amount of sound attenuation. Many of the balcony areas will be enclosed with plexiglass to not permit the sound to reach the interior units. Chairperson Scarpelli expressed his concern that people would use those as storage spaces for recreational vehicles like bicycles. I’m sure there will be restrictive rules and regulations as to what can and cannot happen on those balconies? Mr. Dieckman said generally his company is very tough on their tenants because they can be selective since there will be a lot of demand for these units. Because of the rent differentials, rent that is 50% of the market rents in the area, the tenants generally are very well behaved. Debbie Fountain, Director of Housing and Redevelopment, stated what the Commission has before them is a request for financial assistance for the Hunter’s Pointe Project. The Council has already approved this project in April of 2005. It is a 168-unit project. This is the second phase of the Villages of La Costa affordable housing. Their first project was La Paloma, which you have the invitation in fiont of you to their grand opening at the end of this month. Community Housing Works did that project. That project was 180 units. Chelsea Investment Corporation will actually be doing this project. Again, this project will be targeting those lower income groups down to 35% of AMI. Chelsea has a lot of experience because the Calavera Hills Project is also similar in how it was funded and also targeting the lower income groups. It is a 15.84-acre site and is within the Villages of La Costa master plan area. Chairperson Scarpelli asked about the 35% of AMI, is there any chance that the people going into the three- bedrooms would also fall into that category? Ms. Fountain said that would be in the proforma. Chairperson Scarpelli was concerned about larger families. Ms. Fountain said there will be 34 three-bedroom units that will be affordable to people at 35% and below of the area median income. There will be one-, two- and three-bedroom units. They will have amenities. Chelsea Investment Corporation will develop, own and operate the housing. They are experienced in affordable housing, both in the county of San Diego and outside of California, in Arizona. All of their staff are experienced in getting hnding for projects and developing the projects. We felt very comfortable with the development team experience that Chelsea brings to the table with this project. They have done quite a bit of work in the City of Chula Vista. We also have Mariposa Apartments in Carlsbad that was developed by Chelsea. HOUSING COMMISSION MINUTES JUNE 9,2005 PAGE 3 of 12 The proforma was updated recently so I will talk about the most updated one. In terms of the sources, the low income tax credit went up from $11,634,000 to $15,077,000. The land donation and the master developer contributions are about the same. Their permanent loan has also gone up from $7,669,000 to $9,348,000. Overall, the cost you are seeing has gone from the original proforma from $41,345,476 to $46,588,182, so it is about a 5.2 million dollar increase. This is not surprising because when proformas are completed, things are constantly in action so we have to take a moment in time and look at the proforma and make decisions, but they will actually change a little more after this. What we typically do is look at what our city subsidy is. We don’t always increase our subsidy just because these numbers are changing. They had actually requested $2,352,000 from the city and we agreed to $1,932,000, whch is $11,500 per unit. That meant that funding had to come from other sources. They have adjusted the proforma to deal with some changing situations. In terms of the uses, there has been a change in the grading and on-site costs. The land and off-site costs have stayed the same. Grading and on-site has gone up a little bit from 5.8 million to about 6 million. The structure’s cost has gone up about 14.5 million to 16.9 million. Contractor overhead is typically going to go up with your cost of construction going up. That has gone from 2.8 to 3.2 million. Probably the biggest increase you will see is the 2.5 million dollars in developer overhead, which is their developer fee. One of the reasons this has happened is when their original proforma came in, 1.2 million dollars was the maximum that was allowed by the tax credit financing. They recently loosened up their allowance and will allow it to go to the 2.5 million. If you look at it in terms of percentages of what that is in total costs, it went from 3% to 5%. Now 5% is still pretty low compared to what YOU have seen in other projects. In the past, we have typically agreed to go up to 10%. We not only regulate what we will allow in terms of developer fee, but the other financing authorities will regulate what they will allow. Where we might allow something a little bit higher, these other financing agencies have said that is the maximum they will allow. I gave you information on how this project compares to the other projects. They are right in line with their costs where we have seen other projects. The revised proforma increased the per unit cost from $246,104 to $277,311. That is in your information in the comparison chart. Staff has used these types of comparisons quite a bit to see what is happening with the project. Since 2002, what we have seen is costs have started to increase fairly significantly in both construction and other lunds of financing costs. If you compare 2002, you can see we started to move up on that per unit cost. In 2002, La Paloma, the other affordable housing project, was at $183,997 per unit. Now we are at $277,3 11. It is not a situation where the developer is coming in and padding any of their costs. We are just seeing the gradual increase in different types of costs and materials. The dates on the chart indicate when financial assistance was approved because sometimes the project can be approved almost a year before, but the financial assistance doesn’t come until afterwards. We want to make sure the project is approved before we come to the Commission and ask for financial assistance. Again, our contribution is not changing. We are still recommending to assist with the $1.9 million. That is what your action would be if you approve this. It would be a recommendation to the City Council to approve that. The second page on your sumfnary sheet shows you the comparisons for subsidy purposes. La Paloma, which is the other project, had received $1 1,500 per unit and this one is recommended for $1 1,500 per unit. You have seen some at $10,000 and some a little higher, such as $15,000, which was Las Flores, and then there is the Roosevelt Street apartments the Housing Commission reviewed previously. Affirmed Housing was not an inclusionary project, so it didn’t have the master developer contribution, which is the reason they received a little higher. We try to be consistent but try to recognize that costs are going up. Sometimes, as you saw in the letter that came from the developer, they might ask for more money because the site is difficult to work with. We won’t always recommend as staff that we will give more money because sometimes that is the developer’s choice on what site they selected for the project. If a developer selects a more difficult site, then they have to bear some of the additional costs. Chairperson Scarpelli had a question with regard to the risk factor on page 4. What is written into the contract that would penalize the developer for not being able to perform? HOUSING COMMISSION MINUTES JUNE 9,2005 PAGE 4 of 12 Mr. Dieckman said the master developer, in this case Marrow Development, has a million dollar investment in land out in that area and the Housing Commission has a hammer over him in that they won’t allow him to pull building permits for their market rate housing without making significant progress with completion of this affordable project. Ms. Fountain agreed. She said it is not so much written into these contracts, but as Mr. Dieckman mentioned, when we have an affordable housing agreement with a master developer, the schedule they get their market rate building permits released is based on the success of building the affordable. So they are only going to get a certain number of market rate permits until they have the foundations done on the affordable buildings. The third release doesn’t come until you actually get to see the affordable building. There is a lot of pressure because the developer wants to get the market rate units released, and we won’t release the building permits until there is success. We did have one project where it started to get stalled because of fmancing, they didn’t project well enough, so they came to the city and said, you need to solve our problem for us, and we said no, your master developer will solve your problem for you and provide more money because they are the ones with the obligation. Mr. Dieckman said on a project level, it is the parties that are in the financing, the tax credit equity partner and in this case, for $15 million at the end of this project. They will have about 50 to 60% of that 15 million dollars into this project as it is built. For instance, before a spade of dirt is turned, they will have 20 to 25% of that $15 million into the project. Once they put that money in to protect their invest, they are going to keep putting the money in to get the project done. There are so many checks and balances in one of these affordable projects. Chairperson Scarpelli commented the developer is a major player. I am satisfied with the answers I received. The other question is dealing with the developer partnering with a contractor with a proven history of success. Do you know who that is yet? Mr. Dieckman said we plan on using our own contracting firm, Emerson Construction. Chairperson Scarpelli said okay, so it’s an in-house fum, Emerson Construction? Mr. Dieckman said yes. Chairperson Scarpelli commented that both the city and the developer will monitor the project. Who monitors for the city? Ms. Fountain answered that it is the Housing and Redevelopment Office. We do the monitoring so we are the ones releasing the funds and monitoring it. Chairperson Scarpelli asked how we do that? Does someone go out and do an actual physical inspection? Ms. Fountain answered that sometimes we do. We are always involved with the city from a building inspection standpoint. If we ever reach a problem, we will hear about it through building inspection. Chairperson Scarpelli asked if that conduit is always open? Do they know they need to contact this office? Ms. Fountain answered right. We have actually developed a very good relationship because so many affordable housing projects have been done. We are notified if a project is having problems. We usually have the builder coming to us if they are having problem on our side so it is a good communication we have. We find out quickly if there are any problem with the project. Chauperson Scarpelli questioned do we actually have a staff member go on site to do these inspections before the release of the next requested funds? HOUSING COMMISSION MINUTES JUNE 9,2005 PAGE 5 of 12 Ms. Fountain said yes. Chairperson Scarpelli asked who is that? Ms. Fountain said it is her right now. Mr. Dieckman added that every month they have a construction draw on site and both the construction lender and the equity investor are represented at those meetings. They have engineering firms they have hired to do those inspections and to check to make sure the percentage of completion is correct. Chairperson Scarpelli said he understands that procedure. Redevelopment office, who actually goes out and does the inspections. He was just wondering in the Housing and Commissioner Smith asked if all of Hunter’s Pointe is going to be low and very low income? Ms. Fountain answered that it will be all low and very low. So it will be 35 to 50%. Almost to extremely low. Commissioner Smith said her concern was that the property would be taken care of Mr. Dieckman suggested she stop by and see Mariposa sometime. Commissioner Smith said she was there. Mr. Dieckman suggested she go back again and see how it is looking. Mariposa has the same income as this project will have. One of our major sources of financing that allows us to do that is a special program from the State of California called the Multifamily Housing Program. It has gotten to be pretty competitive. They were about 150% oversubscribed this last round. That is the money at 3% interest that allows us to bring those rents down to 35%. Ms. Fountain said we have been very happy with the management they have. Whenever we have a question, they are very quick to respond and to take care of any issue that might be raised. Ms. Socorro Anderson commented about Mr. Dieckman saying they are very selective of the tenants. For someone like me, I don’t like to hear that. Selective in what way? These are very low income. Are we assuming they are not good tenants? How do we monitor that the tenants going in are actually residents of this area? With the La Paloma development, we sat down with the people and made sure that some of the families that live here in Carlsbad got applications in. We actually had one of the ladies from La Paloma come into Saint Patrick’s where we had a Housing Workshop and take applications from a lot of our families. Some of our families are living there now. How do we make sure that other affordable housing developments are doing the same? Chaqerson Scarpelli wanted to answer the first part of her question. In context, the question and the concern that this Commissioner had was the balconies that were visible to Rancho Santa Fe Road. The question was dealing with what kind of rules or regulations would the management have that would prevent those balconies fi-om getting loaded up with bicycles and surfboards, etc., because it would be an eyesore and would be a concern. That was the question. I thmk the response to that was the selection of the tenants would be the kmd of tenants that would respect the rights of the neighbors around them. That was the context of that particular question. And the second question? Mr. Dieckman said she was asking if we have an outreach program to reach specific groups of families in Carlsbad. Ms. Fountain asked if Mr. Dieclanan knew what his selection process is going to be? Maybe you could share what you did with Mariposa? HOUSING COMMISSION MINUTES JUNE 9,2005 PAGE 6 of 12 Mr. Dieckman said he is not in the management side of the business. We comply with the Fair Housing Act religiously. We have an incredible mix of families as well as disabled people. Ms. Fountain said typically we can’t restrict it to Carlsbad residents only because of the Fair Housing Law, but we do try to ask the developer, for marketing purposes, to give first preference to Carlsbad residents. That would be where you were saying that information could go out to the churches and to Ms. Anderson a little bit ahead of doing the other marketing. Ms. Anderson said a lot of the participants at the churches in Carlsbad don’t live in Carlsbad because they can’t afford to live here. But because they were here at some point and developed a relationship with the church they belong to, they still keep coming back. They would like to live here at some point. That is why we had La Paloma come in. A lot of Oceanside residents that come into St. Patrick’s are now living there. There are people that work here that live outside of Carlsbad. Ms. Fountain said that is generally what we try to do. We ask them to give preference in marketing to people who live or work in Carlsbad. We are always looking for ways to get the information out to the right organization. If that worked well in La Paloma, it is something we can share with Chelsea that we will try to get this type of publicity out there so people know about the opportunity. Ms. Anderson commented another thing they do is hold tenant landlord responsibilities meetings,and the majority of our families are given a lecture on it working both ways. You are also a tenant and you have responsibilities as well. I also had a question. Since some of the buildings are three stories, what will people with disabilities do? Mr. Dieckman said they will be on the fist floor. Chairperson Scarpelli commented that without elevators, disabled people wouldn’t be able to use the stairs. Mr. Dieclanan commented under the Disabilities Act, every unit on the ground floor is handicapped adaptable. I think 5% of the units have to be handicapped accessible. That means that 5% of the units on the ground floor are already set up for the handicapped. The rest of the units on the ground floor, with minimal amount of adjustments, can be made handicapped accessible. Chairperson Scarpelli said in addition to the developer for the non-profit management fm marketing the units, do we do any of the marketing in the city itself, directly out of the Housing and Redevelopment office? Ms. Fountain answered staff will not do any paid marketing, but staff does share the mformation. We have an interest list where people can request to be put on that list and then we share the information with the developer. We also provide information in our office. Chairperson Scarpelli asked if staff could do something to get the word out to organizations that deal with people in this income group. Ms. Fountain said that is required of the developer to do. They have to give us their marketing plan, and we would share the things we would want as part of the marketing. Chairperson Scarpelli commented that the developer may not be aware of all of the organizations with the city. Ms. Fountain agreed but said we can give that to them. Chairperson Scarpelli asked if staff will share that with the developer? Ms. Fountain answered right. We really think it is the developer’s responsibility. HOUSING COMMISSION MINUTES JUNE 9,2005 PAGE 7 of 12 Chairperson Scarpelli commented that staff is making every effort to notify people within our community. Ms. Fountain said right, but we axe always open to different organizations such as St. Patrick’s. We require the developer to get that information out such as by sending flyers. We keep copies of the developer’s preliminary application in our office also. We have that contact information on our website as well. Chairperson Scarpelli asked if the project is targeting people at 35%, shouldn’t the Section 8 people be able to be in that 35% category? Ms. Fountain said yes. Chairperson Scarpelli asked if they are notified as well? Ms. Fountain answered yes. If people have a voucher, we have a list in our office that is available for them. They would be able to go and look at hs project and decide if that is where they want to live. Most of our people we are helping now on the program are below 30% of the area median income. They are even going to still have a portion, even with rent at 35%, that we pay. So they wouldn’t be in a situation they wouldn’t have to pay anything because they are so extremely low. Chairperson Scarpelli said his thoughts are more of dwindling that list down because we have such a long waiting period. A year now? Ms. Fountain said it does help definitely because it gets more people in units. Chairperson Scarpelli asked if we will screen that list as well? Ms. Fountain answered right. Commissioner Smith asked if that means Section 8 participants will be given first preference? Ms. Fountain said they are not given first preference. They are treated like any tenant where they still have to qualify and they have to go through the process, but they will have their voucher they can use there. Commissioner Schrd asked if Section 8 participants will be notified well in advance so they do have the opportunity to get their application in? Ms. Fountain said we don’t notify people that are in existing units that there is a new project available. Most of the people we are dealing with have new vouchers, which will not be happening much in the future because we have lost funding. Currently, we don’t have funding to bring new people on the program, but there are people out there right now with vouchers. Plus if someone comes in and says they want to move because their current residence isn’t working for them, then we would let them know that these units are available. Chairperson Scarpelli said he was thinking more of a waiting list. Ms. Fountain said we use that waiting list as part of our interest list for developers. We let the developers know who is lookmg for housing. Ms. Anderson asked what the rents will be in these units? Ms. Fountain gave Ms. Anderson a listing of the rents. HOUSING COMMISSION MINUTES JUNE 9,2005 PAGE 8 of 12 Chairperson Scarpelli asked Ms. Fountain where that information was. Ms. Fountain gave Chairperson Scarpelli the dormation also. Chairperson Scarpelli said then if you are in the 35% AMI, for a one bedroom, one bathroom, it could be gross rent at $452 and a monthly net rent at $419. Ms. Fountain added you would take a utility allowance out so that would give you what the actual rent would be. Chairperson Scarpelli added that the three bedroom, two bathroom, would be at $988, so that is still pretty tough for low income. Ms. Fountain said that is a three bedroom at 60%. The three bedroom at 35% is $556. Mr. Dieckman said that is about a third of the cost of a market rate apartment. Commissioner Smith asked who selects the manager? Mr. Dieckman said hs management firm will select the manager. Chairperson Scarpelli added that is the on-site manager. Commissioner Schraml asked if there are any requirements as to how many bedrooms you have according to how many people are occupying the unit? Mr. Dieckman said he can’t site those verbatim. Ms. Fountain asked if she was asking how many people could be in a unit? Commissioner Schraml agreed. Ms. Fountain said the general rule of thumb is two people per bedroom or living space. Most living projects don’t get to those kind of levels very often. Yes with a three-bedroom you could technically have maybe eight people living there because you could count the living room as a living space. But not too many of these projects ever get those kind of levels in them because that gets difficult for the unit to be manageable. Commissioner Schraml said so there is no regulation as far as adults and children? What I am tlmking of is parking spaces. Ms. Fountain said no there aren’t any limits. They will all have to be related in some way so they aren’t all moving in with roommate situations. You could have a large family that size living in that unit, but it is pretty unusual. Mr. Dieckman said with these low rents, llke the 35% of AMI, we will typically have single mothers with one or two children and seniors. Commissioner Schraml commented that not all seniors are disabled. Ms. Fountain said if they are disabled, they most likely will have to be on that first floor if they are not able to use the stairs. Mr. Dieckman said seniors are a good addition to these projects because they are typically there most of the day. They are the eyes and ears of management and help maintain order. HOUSING COMMISSION MINUTES JUNE 9,2005 PAGE 9 of 12 chairperson Scarpelli asked Mr. Dieckman if there are any recreational facilities there for the children? Mr. Dieckman said there are tot lots. There is also half of a basketball court. Chairperson Scarpelli commented that it is fairly limited for on-site recreation. Mr. Dieckman added there is also a large lawn area. This is a very open area. Chairperson Scarpelli asked where the clubhouse is? Mr. Dieckman pointed out the clubhouse. He added this is 15.6 acres for 168 units, which is a lot of open space. Ms. Fountain commented that it doesn’t have a pool. That was an issue in a past project. Ms. Anderson asked where the surface parking will be? Mr. Dieckman pointed out the outdoor parking lot. Ms. Fountain just said it is not in a structure. It is across the street on the surface. Commissioner Schraml moved that the Housing Commission adopt Resolution 2005-004 recommending approval to the City Council to provide a total of $1,932,000 in financial assistance from the City of Carlsbad Housing Trust Fund to Chelsea Investment Corporation for construction of one hundred sixty eight (168) affordable apartment units in the Villages of La Costa Development. Commissioner Smith seconded the motion. VOTE: 3-0-0 AYES: Scarpelli, Schraml, and Smith NOES: None ABSTAIN: None The Director showed a video from the Access Center. At the last Housing Element Workshop, Lee Price of the Access Center asked you to take a look at this video. The Commission viewed the Universal Design Video provided by Lee Price of the Access Center of San Diego on Universal Design to provide access to residential housing for persons with disabilities. Chairperson Scarpelli commented this is a volunteer program and maybe it is something we should be looking into with trying to get donors on board; especially with the affordable housing element here. How much are we taking into consideration the options available to a handicapped person? Here there are a 168 units, there may be some people who need three-foot hallways, three-foot doors into the bathrooms, which are usually 2’4” or 2’6”, or 30 inches at the most. What happens in our programs if someone who is eligible for the 35% of AMI is in a wheelchair? If the structure is built according to typical plans, that person would be disqualified because they are disabled because the facility wouldn’t facilitate their needs. I am wondering if we ought to be contacting the city and getting data from them to see what their program is. Especially from the Housing Commission’s perspective, maybe th~s is one place we can have the developers look into the possibility of giving ths option to these people. Basically what I saw on the video was the typical, working in a chair at the kitchen table, using the bathroom sink and of course the switches are all at chair height. It is not a lot that has to be done to the building to make it more accessible. Why don’t we get that program and see if we might not want to give it some consideration, at least at our level, and then maybe the city can look at it as a whole. HOUSING COMMISSION MINUTES JUNE 9,2005 PAGE 10 of 12 Ms. Fountain said she will. Ms. Anderson said there is an article in today’s paper about a development in San Diego of a handicapped person in a wheelchair that went to the department because he couldn’t fit through the doors. Ms. Fountain said it sounds like they didn’t even meet minimum accommodation requirements. Champerson Scarpelli said it is usually the passage door openings and it is getting in and out of showers, which needs to be without a step. I thmk this is worth us taking a serious look at and seeing if we can get the developers to come on board with us. Commissioner Schraml asked if Ms. Fountain would let the Commission know of any new developments with all of the funding cuts that have been made? Ms. Fountain asked if she meant the Section 8 Program? Commissioner Schraml agreed. Ms. Fountain said there isn’t anythmg new. What we shared with you before was that we took a $408,000 cut in funding which is equal to one month of our rental assistance payments. We are taking actions right now to try and reduce our monthly costs. Some of those have started to be implemented. We are reducing the payment standard for some of the tenants. We had some changes for medical purposes. If a Section 8 participant is a one-person household and we gave a two-bedroom voucher for equipment, we have had to withdraw that allowance. That person can still have the two-bedroom unit, but they will have to pay the additional rent. We have had to reduce our program by about $34,000 a month so that is what some of these changes are intended to do. Commissioner Schraml asked if staff has started to reduce the amount of assistance? Ms. Fountain said right. Commissioner Schraml said she hadn’t heard that. Ms. Fountain commented it does not affect everybody. It affects about a hundred and fifty people on our program that will actually get those notices. If you haven’t received one, you probably will not have your rent structure changed. Commissioner Smith asked if that means the rent has been increased? Ms. Fountain answered the tenants portion of the rent will increase. Commissioner Schraml asked when the date will be effective for this change? Ms. Fountain said it will go into effect August 1,2005, so we are giving 60 days notice. Commissioner Schraml added that as far as the leases go, she had heard that housing was no longer going to accept month-to-month payments. Is that correct? Ms. Fountain said we will still accept month-to-month. We haven’t changed that policy yet. Ms. Anderson asked if Ms. Fountain had heard anythmg of the HOTC credit? She just got back from D.C. with her organization and the mformation that was given to her was that it is called the American Dream Act. President Bush HOUSING COMMISSION MINUTES JUNE 9,2005 PAGE 1 1 of 12 embraced the home ownership tax credit. It is actually being pushed by Representative Reynolds from New York. It has 74 co-sponsors of the bill, which is HR1549, and it is called Renewing the American Dream Act. President Bush is pushing hs through the senate. It targets low-income families into buying homes as opposed to being renters. We are keeping an eye on it to make sure that some of those funds, if it goes through the senate and gets approved, comes into OUT communities. We are trying to find out how that will affect us. Ms. Fountain said that is a good thing to keep watch on. Chairperson Scarpelli commented with revenues outpacing expenditures by a considerable amount, is there any chance you can have an emergency budget request for the shortfall you are having on your Section 8 Program? Ms. Fountain answered the typical position has been that we don’t move general fund money into that because we don’t know what will happen with that funding. We could continually need to use those finds each year. We didn’t want to bring new people on with that funding. Chairperson Scarpelli said he isn’t talking about bringing new people on to the program. He was talking about not having to cut their support payment. Ms. Fountain said we actually made it an issue statement with the Council. It would be up to the City Council if they wanted to put additional funding into it. Chairperson Scarpelli said he is thinking of a proactive approach by the Housing Commission here to the City Council with a request for those funds. Ms. Fountain said he could take a minute motion action to do that. Chairperson Scarpelli asked Ms. Fountain how much the amount of shortfall was? Ms. Fountain answered it is $408,000 total. Chairperson Scarpelli asked if that would take us one more year? Ms. Fountain said correct. That would be without having to make cuts. It will probably be an on-going issue. I thmk there will be regular cuts. Ms. Anderson asked Ms. Fountain what the percentage of the elderly are affected? Ms. Fountain said we do not have it in percentages of how many are elderly versus other. We could probably get that. We have the statistics, but I just don’t have them off the top of my head. A large percentage of our rental assistance clients are seniors so it probably goes to reason that a large percentage of them will be affected. Chairperson Scarpelli redirected the Commission to the wording on the order. We want a request for the Section 8 shortfall due to the funding cuts for a twelve-month period to be reviewed at the end of the twelve months. “Requesting City Council provide general fund monies in the amount of $408,000 to fund shortfall Section 8 Assistance Program funding for one year.” Commissioner Smith made a motion to request the City Council to provide general fund monies in the amount of $408,000 to fund shortfall of the Section 8 Rental Assistance Program funding for a period of one year. HOUSING COMMISSION MINUTES JUNE 9,2005 PAGE 12 of 12 Commissioner Schraml seconded the motion. VOTE: 3-0-0 AYES Scarpelli, Schraml, and Smith NOES: None ABSTAIN: None ADJOURNMENT By proper motion, the meeting of June 9,2005 was adjourned at 7:20 p.m. Respectfully submitted, n Debbie Fountain Housing and Redevelopment Director PATRICIA CRESCENT1 Minutes Clerk MINUTES ARE ALSO TAPED AND KEPT ON FILE UNTIL THE WRITTEN MINUTES ARE APPROVED. me Cdtyof Carlrbsd Rouaing Bt Redeudopment Department AREPORTTO THE I HOUSXNG (3O-SmXON I Staff': Debbie FountiaAn S€ousing and Redewelopment Direator Xtem No. 1 DATE: JUNE 9,2005 SUBJECT: HUNTERS POINTE APARTMENTS - RECOMMENDATION OF APPROVAL TO THE CITY COUNCIL TO PROVIDE A TOTAL OF $1,932,000 IN FINANCIAL ASSISTANCE FOR CONSTRUCTION OF ONE THE VILLAGES OF LA COSTA DEVELOPMENT. "DRED SIXTY-EIGHT (168) AFFORDABLE APARTMENT UNITS IN I. 11. 111. RECOMMENDATION That the Housing Commission ADOPT Resolution No. 2005-004, recommending APPROVAL to the City Council to provide $1,932,000 in financial assistance from the City of Carlsbad's Housing Trust Fund to Chelsea Investment Corporation for construction of one hundred sixty-eight (1 68) affordable apartment units in the Villages of La Costa Development. PROJECT BACKGROUND In April 5, 2005, the City Council approved the site development plan permit for the Hunters Pointe Affordable Apartments development. It is a one hundred sixty-eight (1 68) unit housing project which will be affordable to lower income households (35% to 60% of AMI). This project represents Phase II of the affordable housing requirement for the Villages of La Costa Master Plan development. The first project was one hundred eighty (180) apartment units. It just recently completed construction and is 100% leased as of this date. The first project was completed by Community Housing Works with financial assistance from the City of Carlsbad. This second project will be completed by Chelsea Investment Corporation and is also requesting financial assistance from the City. PROJECT DESCRIPTION The subject project will be located on a 15.84 acre parcel that is currently referred to as La Costa Oaks Village 3.6 of the Villages of La Costa Master Plan. The site is oriented north to south and is contiguous to the east side of realigned Rancho Santa Fe Road. It lies south of San Elijo Road (old Questhaven Road) and west of the city limit for the City of San Marcos. Hunter Pointe HC Report June 9,2005 Page 2 IV. V. The proposed 168-unit affordable apartment project consists of nine residential three- story buildings with surface level parking. There will be 36 one bedroom (798sf),60 two bedroom (1,006sf) and 72 three bedroom (1,247~9 units. A total of 43% of the units will be provided with 3 bedrooms. The project will include three picnic areas, two tot lots, a half basketball court and a 2700 square foot community building. The community building will include a lobby, a community room and kitchen, a computerhomework room, bathrooms, two office for the management/leasing staff, a laundry facility, and storage. DEVELOPMENT TEAM Chelsea Investment Corporation will develop, own, and operate the affordable housing project. Chelsea is a for-profit corporation based in Encinitas. The corporation has developed several affordable housing projects in the cities of San Diego and Chula Vista, and also has experience in Imperial County and Yuma County, Arizona. Their developments also include the Mariposa affordable housing development (1 06 units) in Calavera Hills of Carlsbad. The development team has extensive experience in all major areas of residential development. 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 $41.3 million, including the cost of the land, the average unit cost of $246,104 is reasonable with significant consideration of the requirement to pay prevailing wage rates and the current costs of construction. In staffs review of the various requests for financial assistance for affordable housing developments, we compare the project costs and financing to other affordable housing projects developed in Carlsbad. Attached is a copy of the comparison uses and sources summaries that we use in our review. These summaries include all of the affordable rental projects assisted (or pending assistance) by the City to date. As demonstrated in the attached spreadsheets, Hunters Pointe is comparable to other recently proposed projects in terms of development costs. Therefore, staff believes that the projected costs are reasonable and acceptable. B. Undue Gain It is important that any financial assistance have the effect of making the units more affordable and not creating undue gain for any party. The Developer will receive a “Developer Fee” of $1.2 million, or approximately 3% of total project costs (including land). The Developer is proposing that they receive 100% of the developer fee during the development of the project. The developer fee is appropriate for the size of the project Hunter Pointe HC Report June 9,2005 Page 3 SOURCES Master Developer (land & cash) MHP Loan LIH Tax Credits and level of complexity of the financing for, or development of, the project. It is also the maximum fee permitted under the tax credit financing program. TOTAL PER UNIT $63,048 $10,592,058 $93 18,418 $56,657 3 1 1 -634.000 $69.250 C. Subsidy Analysis Cal HFA Permanent Loan City Contribution (cash assistance) The total projected cost for the project is $41,345,476. The Developer is proposing to finance the project with loans from the Multi Family Housing State Funding Program (MHP), private bank (construction loan) and Cal HFA (permanent loan) in the total amount of $17,187,418. They also will provide equity to the project through the low income housing tax credit program in the amount of $1 1,634,000. The Master Plan Developer, Morrow Development, will donate the land (estimated at $8,400,000) and cash assistance of $2,192,058. Staff is recommending that the City of Carlsbad provide a total of $1,932,000. The City Assistance will amount to $11,500 per unit. This is consistent with previous contributions to affordable housing projects in Carlsbad and the City’s funding is being well leveraged with other outside sources including the private master plan developer. $1 1,500 $7,669,000 $1,932,000 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: Total Sonrces USES Land $41,345,476 $246,1& ~ $8,400,000 $50,000 TOTAL PER UNIT Consultants Permit Fees Construction Development $1,273,600 $7,580 $2,401,706 $14,296 $23,202,414 $138,110 $3,308,466 $19,693 Developer Fee Total Sources D. Form of Assistance $1,200,000 $7,142 $41,345,476 $246,10L City cash assistance will be in the form of a residual receipts loan secured by a note and deed of trust. The loan will begin accruing after the completion of construction of the improvements. The outstanding principal and accrued interest on the City loan will be amortized over fifty-five years and repaid from cash surplus, as cash is available or Hunter Pointe HC Report June 9,2005 Page 4 E. F. VI. VI1 becomes available. 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 financial assistance will be provided from the City of Carlsbad’s Housing Trust Fund. Security The Developer will be required to provide completion bonds to both the City and the permanent lender to insure that construction is completed. 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 and has been successful to date in all of its efforts to construct and operate those projects in a financially sound manner. The reasonable terms of the City loan allow the developer to lower its financing costs which help to ensure that expenses will not exceed revenues generated by the project. The developer will partner with a contractor with a proven history of success. Both the City and the developer will closely monitor the costs of the project and work with the contractor to address project issues in a timely manner to reduce cost impacts. The financial assistance fiom the City helps the developer to obtain the other funding sources set forth above. FINANCIAL ASSISTANCE AGREEMENT With a recommendation from the Housing Commission and approval of the City Council, appropriate documents, including a Financial Assistance Agreement, Regulatory Agreement, Promissory Note and Deed of Trust, will be prepared and executed to set forth the terms of the financial assistance and its repayment. SUMMARY AND STAFF RECOMMENDATION It is the role of the Housing Commission to make financial assistance recommendations to the City Council based on several considerations with respect to affordable housing projects. These are: Hunter Pointe HC Report June 9,2005 Page 5 o 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. o The proposal's consistency with the City's affordable housing policies and ordinances as expressed in the Housing Element and Inclusionary Housing Ordinance. o 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 Hunters Pointe Affordable Apartment development is proposed by a capable development team that is committed to affordable housing. The proposed City assistance meets the City's three key underwriting goals of a strong borrower, reasonable project costs based on the project size and requirements and an acceptable level of leveraging. The project quality includes good design and location. City housing goals are supported by the project's affordability. It is the Affordable Housing Policy Team's (staff) recommendation that the Housing Commission approve the resolution of support recommending to the City Council that the City provide a total of $1,932,000 ($11,500 per unit) in financial cash assistance to Chelsea Investment Corporation Housing for the Hunters Pointe Affordable Apartment development. VIII. EXHIBITS 1. Housing Commission Resolution No. 2005-004. 2. Proforma 3. Affordable Housing Costs Comparison Chart 4. Affordable Housing Funding Comparison Chart 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HOUSING COMMISSION RESOLUTION NO. 2005-004 THAT THE HOUSING COMMISSION RECOMMEND APPROVAL TO THE CITY COUNCIL OF $1,932,000 IN FINANCIAL CASH ASSISTANCE FROM THE CITY OF CARLSBAD’S HOUSING TRUST FUND TO CHELSEA INVESTMENT (168) AFFORDABLE APARTMENT UNITS TO BE LOCATED IN THE VILLAGE OF LA COSTA MASTER PLAN DEVELOPMENT OF THE CITY OF CARLSBAD. APPLICANT: HUNTERS POINTE APARTMENTS CORPORATION FOR CONSTRUCTION OF ONE HUNDRED SIXTY-EIGHT WHEREAS, the Chelsea Investment Corporation has proposed to construct 168 apartment units affordable to low and very low income households within the City of Carlsbad and has requested financial assistance from the City of Carlsbad to assist in the financing of said affordable housing project; and, WHEREAS, the request for financial assist to construct said units has been submitted to the City of Carlsbad’s Housing Commission for review and consideration; and WHEREAS, said Housing Commission did, on the 9th day of June, 2005, hold a public meeting to consider the request for City financial assistance for the construction of said 168 affordable housing apartment units by the affordable housing developer, Chelsea Investment Corporation; and WHEREAS, upon hearing and considering all testimony, if any, of all persons desiring to be heard, said Commission considered all factors relating to the proposal to construct said affordable housing units. NOW, THEREFORE, BE IT HEREBY RESOLVED by the Housing Commission of the City of Carlsbad, California, as follows: 1. The above recitations are true and correct. 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HC RESOLUTION NO. 2005-04 PAGE 2 2. 3. 4. ‘Ill ‘Ill ‘//I The request for City financial assistance 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 168, one, two and three bedroom affordable apartment units which will be affordable to households earning 35% to 60% of area median income for San Diego County or less. 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 9, 2005, the Housing Commission hereby ADOPTS Resolution No. 2005-04, recommending APPROVAL to the City Council to provide up $1,932,000 in financial cash assistance from the City of Carlsbad’s Housing Trust fund to Chelsea Investment Corporation for the construction of one hundred sixty-eight (168) affordable apartment units to be located in the La Costa Oaks Village 3.6 of the Villages of La Costa Master Plan Development within the City of Carlsbad. 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 HC RESOLUTION NO. 2005-004 PAGE 3 5. That the Housing Commission recommends that the City Manager or his or her designee be authorized by the City Council to prepare and execute all documents related to provision of the City assistance, including but not limited to a Financial Assistance Loan Agreement, Note, Deed of Trust and Regulatory Agreement, subject to review and approval by the City Attorney. PASSED, APPROVED, AND ADOPTED at a meeting of the Housing Commission of the City of Carlsbad, California, held on the gth of June, 2005, by the following vote, to wit: AYES: NOES: ABSENT: ABSTAIN: EDWARD SCARPELLI, CHAIRPERSON CARLSBAD HOUSING COMMISSION DEBORAH K. FOUNTAIN HOUSING AND REDEVELOPMENT DIRECTOR 3 EXHIBIT 2 FINANCIAL PROFORMA CHELSEA INVESTEMENT CORPORATION FOR HUNTERS POINTE APARTMENTS January 7,2005 WALLACE C. DIECKMANN CHELSEA INVESTMENT CORPORATION 725 SOUTH COAST HIGHWAY 101 ENCINITAS, CA. 92024 RE: FINANCIAL ASSISTANCE FOR HUNTERS POINTE APARTMENTS Dear Wally: On January 6, 2005, the Housing Policy Staff Team for the City of Carlsbad reviewed your request for financial assistance for the 168 unit Hunters Pointe Affordable Apartment project proposed for the Villages of La Costa development. Per your request, the team considered an increase in the City subsidy for the project from $lO,O00 per unit to $14,000 per unit. The team is willing to recommend financial assistance for the subject project and an increase in our per unit subsidy amount. However, your request for $14,000 per unit was not supported. The team is willing to recommend a subsidy amount of $1 1,500 per unit, or a total amount of $1,932,000 for the proposed project. While the team agreed that increases in cost of materials and prevailing wage requirements over time have resulted in higher construction costs to warrant the increased subsidy from the City, the team was not willing to support a higher subsidy (in excess of $11,500 per unit) due to inordinate costs related to grading and on-site infrastructure requirements, or other physical constraints of the site. The team felt that selection of an appropriate site for the affordable housing project is the responsibility of the Master Developer for the project. Therefore, the team felt that the Master Developer should increase its cash contribution to the project in an amount of $420,000, which would result in a total cash contribution of $2,192,058 for the developer. Staff will begin to prepare the appropriate paperwork and reports to move this matter forward to the Housing Commission and then the City Council. Please note, however, that the financial assistance request will not ultimately be presented to the City Council until your Site Development Plan for the affordable has been approved by the Planning Commission and/or City Council. If you have any questions regarding this correspondence or the Housing Policy Team's review of your financial assistance request, please contact my office at (760) 434-2935. DEBBIE FOUNTAIN Housing and Redevelopment Director 2965 Roosevelt St., Ste. B Carlsbad, CA 92008-2389 (760) 434-2810/2811 FAX (760) 720-2037 Finance Development Management fl ++ t 725 south Coast Highway 101 Encinitas, CA m4 -$ Fax (760) 4566001 - ‘ TcI (760) 456-6000 Ltl CHELSEA Odyi3 INVESTMENT CORPORATION December 2, 2004 Debbie Fountain Director Housing and Redevelopment Department City of Carlsbad 2965 Roosevelt Street, Suite B Carlsbad, CA 92008 Re: Hunters Pointe Affordable Apartments, a 168-unit affordable multifamily community in La Costa Oaks Dear Debbie: Chelsea Investment Corporation has been appointed by Morrow Development Company to design, finance and construct a 168-unit affordable housing development to fulfill the affordable housing requirement for the Villages of La Costa. Proi ect DescriD tion Hunters Pointe will be located on a 15.84-acre site, which is referred to as La Costa Oaks Village 3.6. The site is oriented north south and is contiguous to the eastside of realigned Rancho Santa Fe Road. The site lies south of San Elijo Road (old Questhaven Road) and west of the city limit with the City of San Marcos. A new street, Avenida Soledad, bisects the southern portion of the site. Hunters Pointe will include 168 units in nine residential thrcm-story buildings. The unit mix consists of 36 one-badroonn units, 60 two-bedrmrn unia ad 72 three-bedroom units. With 43% three bedroom units, Hunters Pointe is a “large family” development. The one- bedroom unit is approximately 798 square feet, the two-bedroom unit is approximately 1,006 square feet and the three-bedroom unit is approximately 1,247 square feet. The project’s total residential square footage is estimated at 178,872 square feet. The linear site provides for a total of 38 1 parking spaces, three picnic areas, two tot lots, a half basketball court and a 2,705 square foot community building. The community building will include a lobby, a community room and kitchen, a computer/homework room, bathrooms, two offices for the management/leasing staff, a laundry facility and storage. Hunters Pointe design will follow the Craftsman style prevalent throughout the La Costa Oaks planning area and will make extensive use of a variety of window treatments and stone accents to evoke the arts and crafts tone. The community building will include a tower element that will provide a focal point and an identity for the affordable community. Plan of Financing Chelsea plans to file an application with the State’s Housing and Community Development for MHP subsidy for the Hunters Pointe development during the first quarter, 2005 Chelsea has received MHP loan commitments for five inclusionary multifamily developments in the cities of Carlsbad and San Diego. We believe that Hunters Pointe will be a very attractive candidate for MHP financing and is assured of receiving a loan commitment. The MHP loan subsidizes rents for approximately 46% of the units below tax-exempt band maximuma of 50 and 6Eh of Annual Median Income (AMI) to 35% of AMI. The M€€P financing allows for net rents ranging &om $417 per moath for a one-bedroom unit to $550 for a thrce-bedroom unit for the ME.Ep subsidized &. , Following receipt of the MHP commitment, an over-the-counter application for bond allocation will be made to the California Debt Limit Allocation Committee. A bond allocation can be expected in September 2005 and the financial closing would follow before year-end. A recent inclusionary housing project developed by Chelsea has been financed by California Housin~ Finance Agency (CdHFA). An dtemative would be to m It ?-- private placement basis to a financial institution like US Bd. A decision between a CalHFA financing or a private placement of tax-exempt bonds to a major financial institution will be made prior to submission of the bond cap allocation application to the California Debt Limit Allocation Committee. The decision, in large part, will depend on the direction of interest rates during the coming months. Following grading of the site by Real Estate Collateral Management Company during the fourth quarter, 2005, coastruction would begln in January 2006 with completion of construction expected before the end of 2006. phea$awxmq& bonds issued by the Housing Authority 0f.tht.eftPdT Request for Citv Loan We respectfully request the City of Carlsbad’s Housing Policy Team consider and approve a City loan of$14,000 per una or a total of$2,352,000 for the Hunters Pointe development. We believe the City’s subsidy is warranted for the following reasons. First, this project will bring greater affordability than most rent restricted projects in the City. While not assured, we are confident that Hunters Pointe development will receive a subsidy of $9.5 million (approximately $56,600 per unit) from the MHP program, which will allow 46% of the units (78 units) to be leased at 35% of Annual Median Income (net rents ranging fkom $417 for a one-bedroom unit to $550 for a three-bedroom unit). The MHP subsidy will assure housing to very, very low-income families of Carlsbad. As you may recall, we made use of MHP financing at our Mariposa project at Calavera Hills, where the MHP subsidized units serve very low-income families and were very well received. Second, the grading and on-site infiagtructure costs for the Hunters Pointe site are significantly higher than those typically incurred in preparing an affordable housing project site for cunstmction. The grading and on-site infrastructure budget is $5.& million, which reflects the inordinate costs relating to grading the site and constructing an internal road parallel to Rancho Santa Fe Road the length of the site. The site has significant grade changes that require numerous retaining wails that contribute to the unusually high cost of preparing the site for construction. Third, the physical constraints of the site require that one of the buildings have underground parking. The added cost of a below grade parking garage is estimated at approximately $250,000. The Mariposa project was recently completed at a cost of $10 1 per square foot. We are about to complete construction of a comparable 1 19 unit inclusionsuy project at Santa Luz where the construction costs will be $1 18 per square foot. The difference in costs is largely attributable to material cost increases. * ofthe projact wifl raqulre the paymeat of state prevailing wages. inGtease Bot& thb mJltdf&fs &lld w c#ms€nlw costs Fifth, mw@wc&m PPcwdkqgW~~ skaemw,hiedew&- arswiifimgtobid oatbe job, nquirb the owner aad coattnctorsto iaeur axn@hceCo(Ffd, incrmse insuraace costsad increasG the time requird to comtmd (L project. We are constructing or have recently completed construction of affordable projects with and without prevailing wage requirements and believe that prcVaiikg wage r-a increaOe totd project CQdtd by approximttdy 25%. I In summary, Hunters Pointe warrants a loan of $14,000 per unit, if for no other reason than the affordable development will be of the highest quality, providing superior rental housing to many of Carlsbad families with incomes at 35% of AMI. Proiect Status Hunters Pointe was resubmitted to the Planning Department, City of Carlsbad, on November 24 for Site Development Plan approval. This is the second submittal in response to comments received fiom the Planning Staff The SDP approval is expected prior to the deadline for submittal of an MHP application to Housing and Community Development. For a successfid MHP application, in addition to a fblly entitled site, a commitment for all financing is required. Therefore, it is important to consider this request for financial support recognizing the MHP application deadline. Jim Schmid and I are available to discuss our second new construction affordable development for the City of Carlsbad at your convenience. Please do not hesitate to call. Sincerely, f7 Wallace C. Dieckmann Chief Financial Oficer h N a. - - N $- I Villages of La Costa Carlsbad, CA 2004 TCACMHP Rents !Total Expenses $ 3.600 Per Unit (TCAC Min $2.600) 604.800 0 CFD Spcial Tax 0 PerULJ -- - koperstmg Income ___- $782,671 Cal HFA Underwrites zero misc incc (9.072) Cal HFA NO1 686,388 J (Net Income Available for Debt Service Perm Loan : Debt Service Coverage Interest Amorti tion Reserves: ( )peratin& Expense Reserve Replacement Reserves Cbnstruction Defect Insurance Reserve Marketing Account Kent Up Account Funding Source Letter ofcredit Cash Villages ofLa Costa Cal HFA Required Reserves Covered By MtIP Varies - using underwriting assumption S430;unit 87.2 I I .i 2.5% Hard Costs held I2 months post conversion I year Earthquake 8i Hazard 10% ofciross Income - not funded by Cal HFA I 504 Gross Rents - not hnded by Cal HFA Covered by MHP LXK Fees Calculated as Follows: Administrative & Application Fees (estimated) Operating Expense Reserve Construction Defect Release no earlier than 2 yrs - 2 yrs @ 1 %/yea Release 1 2 months after conversion - I ?hiyear 580.060 Ni A N/’A Ni A 725,203 87,2 I I (145,142) (87,21 1) 580,060 1,000 N/A 5.801 6,80 I NO1 Assumed Bond Rate Total Rate 30 yr Amortization Ikbt Service Coverage Ratio Max Debt Undemriting OX6.2YH b.WI'' .I 6.500% 7.585% 1.18 7.669.000.00 Villages of La Costa EXHIBIT 6 - DEVELOPMENT BUDGET 8 CALCULATION OF TAX CREDIT EQUITY 02-Dec-04 02:08 PM LAND COSTS: LAND COSTS LEGAL\ BROKERS FEES\TITLE OFF-SITE IMPROVEMENTS DEMOLITION WPENSE TOTAL LAND COSTS 8.400,OOO XXXXXXXXXXXXX XXXMXXXXXXXX 25.000 XXXXxXXXXXXXX XXXXXXXXxxM( 1.71 3,600 XXXXXXXXXXXXX XXXMXXXXMXX $0 xxxxxxxxxxxxx XXxxXXXXXXXXX $10,138,600 XXXXXXXxXXXXX XXXxXXXXxXXXX I 1 TOTAL ACQUISITION COST I xxxxxxxxxxxxx I $0 NEW CONS TRUC TlON SITE WORK STRUCTURES GENERAL REQUIREMENTS CONTRACTOR OVERHEAD CONTRACTOR PROFIT TOTAL CONSTRUCTION $5.817.859 $5,817,859 14,535.136 $14,535,136 $1,187,258 $1,187,258 $474,903 $474,903 $1,187,258 $1,187,258 $23.202.414 $73 703 A9A I I I I --I ARCHITECTURAL FE€S DESIGN SUPERVISION TOTAL ARCHITECTURAL COSTS ~ REHABlLlTA TI0 N I SITE WORK ad $0 STRUCTURES rar4 $0 GENERAL REQUIREMENTS $4 $0 $570,000 $570,000 $1 90,000 $1 90,000 $760,000 $760,000 ITOTAL REHABILITATION COSTS I PERMANENT FINANCING PERM LOAN FEES & COSTS APPLICATION FEE TITLE a RECORDING OTHER: LEGAL, MISC. TOTAL PERM FINANCING COSTS 38,345 xxxxxxxxxxxxx xxxxxxxxxxIoo( 500 XXXXXXMXXXXX XXXXXXXXXXXXX $0 xxxxxxxxxxxxx XXXMxxxxxxXx 130,000 XXXXXXMXXXXX XXXXXXMXXXM $168 845 xxxxxxxxxxxxx xxxxxxxxxxxxx EXHIBIT 6. PAGE 2 I ACTUALOREST. I 70% I 30% 7 LEGAL FEES LENDER LEGAL DESCRIPTION OF COSTS 1 OFCOSTS I ELIGIBLE BASIS 1 ELIGIBLE BASIS I I $1 00,000 xxxxxxxxxxxxx OTHER (Including CPA Opinions 8 Acctg.) TOTAL LEGAL (NOT INC. SYNDICATION) $100,000 $100,000 $200.000 $100,000 MARKET/APPRAISAL MARKET STUDY $10,000 $10,000 I I I RESERVES I I I I APPRAISAL TOTAL MARKETIAPPRAISAL $10,000 $10,000 $20,000 $20,000 OPERATING 8 REPLACEMENT RESERVES OTHER - LOC FEES FOR CALHFA RESERVES TOTAL RESERVE COSTS $q TOTAL RESIDENTIAL COSTS $41,345,476 ~ ~ ~~ $270,208 XXXXXXXXXXXXX XXXXXXXXXXXXX 6,801 XXXMXXXXXXXX XXXXXXXXXXXXX $277,008 XXXXXXXXXXXXX XXXXXXXXXXXXX Rounded 11,634,000 SUBTOTAL RESIDENTIAL COSTS ! $40,145,476 $28,906,411 EXHIBIT 3 AFFORDABLE HOUSING COSTS COMPARISON CHART c I I 1 EXHIBIT 4 AFFORDABLE HOUSING FUNDING COMPARISON CHART n "I 1. I I .The CifyofCax-l~bd ZXourw db Redevelopment DepaFtment I AREPORT TO THE I HOUSXN- aO-SSXON I I Btaff': Debbie Fountahx Houohxg and Redewelopment Di~emtor I =tern No. 8 DATE: JUNE 9,2005 SUBJECT: UNIVERSAL DESIGN VIDEO - VIEW VIDEO PROVIDED BY LEE PRICE OF THE ACCESS CENTER OF SAN DIEGO ON UNIVERSAL DESIGN TO PROVIDE ACCESS TO RESIDENTIAL HOUSING FOR PERSONS WITH DISABLLITIES. I. RECOMMENDATION No action required. Video is provided for viewing and discussion only. 11. PROJECT BACKGROUND At the final workshop on the Housing Element held on May 12, 2005, Lee Price of the Access Center of San Diego provided the Housing Commission with a video on universal design as related to accessibility to residential units for persons with disabilities. Mr. Price asked that the Housing Commission view the video and discuss the concept of universal design for persons with disabilities. The video will be presented for viewing during the meeting. There is no additional report on this item, and there is no action required. The video is provided for viewing and discussion only.