HomeMy WebLinkAboutAgenda Statement 1975/05/20 Item 21AGENDA ITEM N0. [21 ]
CHULA VISTA. CITY COUNCIL MEETING OF: May 20, 1975
ITEM TITLE: Resolution - Approving tentative subdivision map for conversion of
Jay L Jay Apartments to condominiums
INITIATED BY: Director of Planning
BACKGROUND:
1. This matter was continued from the Council meeting of May 13, 1975 to permit the
issue of the cooperative housing project to be clarified.
2. The Planning Department received a letter on May 9, 1975 from the Mutual
Ownership Development Foundation (MOD), located in Millbrae, California. The
letter states that the owner of Jay L Jay (Mr. J. L. Johnston) has agreed to enter
into a purchase agreement for the sale of the apartments to the MOD Foundation for
the purpose of converting the apartments into a cooperative housing development
utilizing state financial assistance under new legislation. A copy of this letter
is enclosed. The agreement would give the MOD Foundation a 4 month option to
acquire the property, with a provision for a 1 month extension, if necessary.
3. As a condition of the agreement, Mr. Johnston has stipulated that the tentative
map be approved with the waiver of certain required improvements, so that he may
proceed with the conventional conversion without the cost of these improvements
in the event the MOD Foundation proposal is not consummated within the option
period.
B. ANALYSIS
1. The Council is being asked to approve the map and waive certain improvements
on the assumption that a cooperative housing project will result in selling prices
(or monthly payments) which the present residents can more easily afford. Central
to an analysis of this request are two questions:
(continued on supplemental page)
ATTACHED: Resolution [X] Ordinance [ ] Agreement [ ] Plat [ ]
See EXHIBITS [X] No. 1 - 5
Financial Statement:
Commission-Board Recommendation: The Planning Commission Voted 5-0 on August 14, 1974
to recommend that the City Council approve the Jay L Jay conversion tentative map,
subject to the conditions in the Planning Commission letter dated August 15, 1974
(attached).
Department Head Recommendation: Concur. In addition it is recommended that the
City Council waive the following improvements:
1) Undergrounding of utilities.
2) Installation of street lights
3) Replacement of street trees on Quintard Street.
4) Installation of Type "G" curbing in the parking lots.
(Please see paragraph C for conclusions supporting this recommendation.)
City Manager Recommendation: Concur with Department Head recommendations
AGENDA ITEM N0. 21
Supplemental Page No. 2
What are the prospects and timing of the State legislation which would
enable this cooperative to be formed?
What will be the size of the monthly payments under the cooperative
vis a vis the present rents?
a. Status of Legislation.
Two bills--AB 1X (formerly AB 116) and SB 2X (formerly SB 29)--are
parallel measures to create funding sources and a Housing Finance Corporation to
assist low and moderate income persons in purchasing housing through such devices
as a cooperative. As of May 13, 1975 both houses of the legislature had scheduled
extraordinary sessions to consider these bills, indicating there is a sense of
urgency to pass the legislation. According to Assemblyman Deddah's office, the
Governor supports both bills. There is a strong indication, therefore, that the
bills will be adopted and signed in the near future, and probably in time for the
MOD Foundation to determine whether it will receive State financial assistance for
the Jay L Jay project.
b. Anticipated Selling Price.
The enclosed letter from the MOD Foundation states that the anticipated
monthly payments will not exceed the rents now in effect, which are as follows:
Monthly payment without cooperative
Rent (Source: Applicant's letter of March 24,197!
1 Bedroom (Senior Citizens) $119.50 $146.16
1 Bedroom (Others) 139.50 146.16
2 Bedroom 164.50 184.93
Jay L Jay has recently announced that the above cited rents will be raised $10
effective June 1, 1975.
C. CONCLUSIONS
1. Based on statements made by the applicant and the MOD Foundation, the
cooperative housing program with State assistance would reduce the monthly payment
of the converted units by about $7.00 for the 1 bedroom and $20 for the 2 bedroom
units below the unsubsidized level.
2. There appears to be strong support in the Legislature and the Governor's
office for the enabling legislation which the cooperative would use; however, there
is no assurance at this time that the MOD Foundation will in fact receive State
assistance, should the bills pass.
3. Since the City cannot condition approval on stipulated selling prices,
the Council at this point must act on faith, based on the information provided by
the applicant and the MOD Foundation, that sincere efforts are being made to keep
the monthly payments at levels which the current residents can afford.
4. While there is an element of risk that the MOD Foundation may not receive
State funds with which to pursue the coop.proposal, staff still feels that those
conditions of approval which are in the nature of amenities should be waived as
part of the City's effort to retain existing low and moderate cost housing.
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DfUTUAL OWNERSIIIP DEVELOPMENT FOUNDATION ~/ '
231 E. MILLIIRAE.AVENUE
~MILLIIRAE, CALIFORNIA - -
62EG~(`JE~
May 8, 1975
', Y._._.____........
Mr. Norm Williams,
Assistant Director of Planning r `!`!^.'C (,`-..i1..'j ,.. .. - ~
E'Lr.io-:;l~e~i .: _i i.~i.~;~~k.
Chula Vista City Council J V, ,.)~;+~r~ ;~„~ii~n~~~~
Chula Vista City Hall -
Chula Vista, California
Re: Jay L. Jay Apartments
244 Palomar Street
Chula Vista, California
Gentlemen:
This is to confirm to you that subject to the conditions outlined below,
the Greater Western Real Estate Investment Trust, the owners of the
Jay L. Jay Apartments, through its President, Mr. J. L. Johnston has
agreed to enter into a Purchase Agreement for the sale of the Jay L. Jay
Apartments to P".. O.D. Foundation or its nominee for the purpose of convert-
ing this project into a cooperative housing development for persons of low
and moderate income subject to approval and funding under a proposed
housing and housing finance bill now under consideration by the State
Legislature.
At this writing bothhouses of the Legislature have approved separate
versions of this legislation. It is anticipated that conferees of both
houses will meet shortly with aresulting final bill acceptable to both
bodies.
The pending agreement between Greater Western and M.O.D Foundation provides
for a period of 120 days plus an option for an additional 30 days (approx.
5 months) for M.O.D. Foundation to obtain the required approvals and
funding subject to the pending State housing legislation.
Greater Western, however, as a condition for entering into such Agreement
with us, would like the City of Chula Vista to process the project tenta-
tive subdivision map with the Ci.ty's waiver of underground utilities, etc.
recommended by the Planning Department set forth on page ].. of the Agenda
report on this item dated for the April 15, 1975 City Council Meeting.
The purpose is to enable Greater Western to obtain a final subdivision map
approval with such waiver for its proposed conversion to a condominium,
without delap, i.f the t4.O.D. Foundation proposed cooperative development
is not approved or funded within the five month time period.
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Page 2.
Mr. Norm Williams
Assistant Director of Planning
Chula Vista City Council
We believe Greater Western's request is reasonable and equitable, in view
of the inherent rights of the Owners of such property and their cooperation
in this particular instance in tying themselves down to a time perio3 to
allow the lower cost cooperative program to be processed as outlined.
The preliminary evaluation of all factors involved in the conversion of
the Jay L. Jay Apartments to a cooperative housing development under the
contemplated. State housing funding program indicates that monthly carrying
charges (rent equivalent) for each type of dwelling unit would not exceed
the rentals in effect until April 30, 1975 (which are substantially less
than the new rents of May 1, 1975),, as follows:
Apt. Type
Eff - 1 BDRM (Senior Citizen)
Eff - 1 BDRM (Other)
2 BDRM
* Mo. Carrying charge Down Payment
$119.50
$250.00
139.50
164.50
300.00
375.00
The mo. carrying charges would include gas for heating, hot water and cooking,
as at present. In the event separate apt. gas meters become advisable, the
mo. charges would be adjusted downward accordingly.
These monthly charges are based on an estimated total project cost of
$5,993,316, including acquisition costs, rehabilitation, project financing,
legal and organizational and marketing charges. A 98$ mortgage in the sum
of $5,873,450 is anticipated at an interest rate of 6.5~ for 40 years, plus
'~~ for mortgage insurance premium. (Should the interest rate applied drop
to 6~ as originally contemplated, the monthly apt. charges would be adjusted
downward accordingly to reflect the drop indebt service.)
The rehabilitation program includes the on-site channel and drainage work
and parking lot repairs, etc. as recommended by the City Planning Dept. on
page 4 of the 4/15/75 Agenda for City Council meeting, plus refurbishing
of landscaping and planting of new trees as appropriate.
The rehabilitation work also includes the following:
Complete painting of all apts, repainting of exterior of all structures,
replacement of all gas ranges and refrigerators with new equipment, con-
version of. two apartments into additional laundry rooms completely
equipped for the non-senior citizen occupants, replacement of all floor
covering with new carpeting or floor the as appropriate, selective
counter top and cabinet replacement and repairs as needed, replacement
* The monthly charges also include all maintenance and operating costs, taxes
a replacement reserve as well as mortgage debt service.
775
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Page 3.
Mr. Norm S9illiams
Assistant Director of Planning
Chula Vista City Council
of gas piping as needed and other miscellaneous repairs and replacements.
With respect to Senior Citizens over age 62 and within the income limits
prescribed by State law, they may be exempt from all real estate taxes,
resulting in a reduction of approximately $9-10 per month in mo. carrying
charges, in these instances (just as in a condominium).
With respect to the down payments, each occupant who becomes a cooperative
owner will receive a $50 credit toward such down payment from the apt. deposit
he paid to Jay L. Jay Apartments which will be turned over to the new
cooperative project.
Occupants who are not able to pay all or part of the balance of the down
payment will be able to borrow the amount needed and pay backmonthly over
a reasonable period of time with reasonable interest from a fund made
available to M.O.D Foundation for that purpose.
Very truly yours,
Mutual O>wnership D/e~velo ment Foundation
M. Michael Saslow, gent
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May 7, 1975
TD: Honorable Mayor and City Council
VIA: Lane F. Cole, City Manager 4'~
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FROM: Paul G. Desrochers, Community Development Director
SUBJECT: Liaison for Cooperative Housing -Jay L. Jay Status Report
As directed, I have discussed the proposed cooperative housing for the Jay L. Jay
Apartments with Mrs. Dorothy Rudolph. It appears that the owner of the apartments
and the MOD Foundation are in agreement relative to the conversion of the apartments.
The MOD Foundation however does not have financing and is awaiting State legislation
which is fairly well assured. It is apparent that no final agreement will be reached
for at least six months. Mr. Johnston, owner of the complex, apparently realizes
this fact and we believe he is prepared to wait while the MDD Foundation obtains the
financing. An option agreement between two parties relative to the above is being
prepared for execution.
It would appear that the City Council should take action on the pending subdivision
map in order to protect the City. Should the MDD Foundation's efforts fail, then
the owner will most likely proceed with his plans for condominium conversion in
accordance with the terms of the subdivision map.
PGD:rg
cc: Director of Planning
~ 77~
To: '"he rionorable Mayor and City Council
:From: berothy t:udolph
~/
EXH~~IT
2 ~.~
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.subject: Jay i. Jay apartnr+nts ,; ~5 P~
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CIT'ti GLL`r~tr~ uFrif
7 wish to thank the C~t-> Counci.l for the consideratior. it gave to the concept
of a cooperative for tt,e Jay L Jay apartments. 'fhe continuation has given the
i~tutual Ownership Development '+.ou;:daiioa the opportunity to contact the owner of
Greater Western 4eal ilstate Investment Trust, and the time required to pursue the
other arranFeslents needed.
Nr. '~'~ichael Gaslow is confident, based on the initial neeoti_a*.ions, that
sati factory arrantcemenis can ;e made.
T21is 'plan will assure that the units will be available at substantially
lower cost tt~.an otherwise by the households whici, need lower cast housing, most
especially '.he present tenants, :some of the: units may also he available for the
lea!ed hrusirg program.
Tic cooperative form of ownersk;ip under non-profit sponsorship, public, private
r:on-profit organizations, ~:.r `r~e tenants themselves, has been highly successful.
Nlany problems are solved internally t'c.at otY~erwise wr.~,i,d be the responsibility oP
rublic agencies, ~r that: would ~:;ot bt solved at al'1.
Jay L Jay as a cooperative will. he an asset to the city, and will serve a
critical need.
'i'he ~ouncil is to be congradulated for its awarenes~~ o: the prohJems, its
concern, find its for!rard looking approach toward those prcblems.
I woad hope that tl^r--, (:hula Jista City i;ouncil would be ar, example for other
a,genci.es t~ follow.
"~~ anic you.
:~1nCf: r'E ly,
o~tl y c~h
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