HomeMy WebLinkAbout2014-11-20 HAC MinutesMINUTES OF THE
HOUSING ADVISORY COMMISSION
OF THE CITY OF CHULA VISTA
November.20, 2014 4:00 P.M.
A Special Meeting of the housing Advisory Commission of the City of Chula Vista was called to
order at 4:07 p.m. in Conference Room C101, located in Building A at 276 Fourth Avenue, Chula
Vista, California.
ROLL CALL
PRESENT: Commissioners Quero, Zaker, and Chair Uy
ABSENT: Commissioner Torre and Lisama
ALSO PRESENT: Stacey Kurz, Senior Project Coordinator
Leilani Hines, Housing Manager
Jose Dorado, Project Coordinator
Walter, Chelsea Investment Corp.
CONSENT CALENDAR
1. APPROVAL OF MINUTES FROM May 1, 2014
ACTION: Vice Chair Quero moved the approval of the minutes for May 1st. Commissioner
Zaker seconded the motion, and it carried, result of vote 3-0.
2. APPROVAL OF MINUTES FROM July 23, 2014
ACTION: Vice Chair Quero moved the approval of the minutes for May 1st. Chair Uy
seconded the motion, and it carried, result of vote 3-0.
PUBLIC COMMENTS
None.
ACTION ITEMS
3. ELECTION OF CHAIR AND VICE CHAIR FOR FISCAL YEAR 2014/2015
ACTION: Commissioner Quero nominated and moved to approve Chair Uy, whom accepted
the nomination. Commissioner Zaker seconded the motion, and it carried, result
of vote 2-0-1, with Chair Uy abstaining.
Page 1 I Housing Advisory Commission Minutes November 20, 2014
At 4:57 p.m., Commissioner Quero motioned to adjourn the meeting, with a second froze. Chair
Uy, to the regularly scheduled meeting on Wednesday, January 28, 2014 in Conference Room
Cl 01 at 4:00 p.m.
Lacey urz, Senior/Project Coordinator
Exhibits: 1. Millenia Affordable Housing Proposal Staff Report
2. Millenia Affordable Housing Proposal Presentation
Page 3 1 Housing Advisory Commission Minutes November 20, 2014
Exhibit 1
The City of Chula Vista Development Services Housing Division
A REPORT TO THE
Item No. 4
Staff: Leilani Hines, Housing Manager
Development Services Department, Housing Division
DATE: November 20, 2014
SUBJECT: MILLENIA AFFORDABLE HOUSING - RECOMMENDATION OF
APPROVAL TO THE HOUSING AUTHORITY AND THE CITY OF CHULA
VISTA CITY COUNCIL TO FINANCE A PROPOSED 210 RESIDENTIAL
PROJECT WITHIN OTAY RANCH MILLENIA
I. RECOMMENDATION
That the Housing Advisory Commission recommend APPROVAL to the Housing Authority and the
City of Chula Vista City Council of the proposed 210 affordable residential project within Otay
Ranch Millenia and to conditionally approve up to $3,000,000 from the available housing fund
balance for the project.
II. BACKGROUND
The City of Chula Vista and its Housing Authority has received a request from Chelsea Investment
Corporation ("Applicant") to consider issuance of up to $33 million in private activity bonds for
multi -family projects and a total financial assistance of $5.2 million to support the construction of
124 unit senior and 86 unit family rental housing development ("the Project") within Otay Ranch
Millenia (Exhibit 1 - Locator Map). The Project is proposed in satisfaction of Millenia's Balanced
Communities Affordable Housing obligation.
The Applicant is currently preparing an application to both the California Debt Limit Allocation
Committee (CDLAC) and the California Tax Credit Allocation Committee for bonds and Tax
Credits to substantially finance the Project. The CDLAC application must be submitted by March
2015.
III. PROJECT DESCRIPTION
The Applicant
Chelsea Investment Corporation (CIC) has developed several projects in Chula Vista, primarily in
eastern Chula Vista, to satisfy developer inclusionary housing requirements (Teresina Apartments,
Rancho Buena Vista Apartments, Villa Serena and The Landings I and II). CIC has over 6,300
housing units in its portfolio. The company has a strong and experienced team of professionals. CIC
has successfully managed low income housing units for over 30 years. CIC is qualified and has
demonstrated an ongoing desire and commitment to partner with the City in the development of
another affordable housing project.
November 20, 2014
Millenia Affordable Housing
PaLye 2
The Property
Millenia Affordable Housing development will be built within the Otay Ranch Millenia subdivision
of eastern Chula Vista and located near the southwest corner of Birch Road and Eastlake Parkway
(see Attachment 1). As the urban heart of Otay Ranch, Millenia will contain the largest
concentration of retail, employment, residential, civic and cultural uses. The Project site provides an
ideal location, with easy access to employment and education opportunities, and neighborhood
services within Millenia and the other adjacent neighborhoods. The site is located along the proposed
Bus Rapid Transit line and within walking distance to neighborhood services and facilities, less than
a 113 mile is Otay Ranch Town Center, across the street is a grocery store, and within 113 mile are
Chula Vista High Tech High and the University/Innovation District.
The Proposal
All 210 units will be
available on a rent restricted
basis to households whose
income is at or below 50-60
percent (%) of the Area
Median Income (AMI) as
determined by HUD. The
project will be affordable for
55 -years and guarantees the
availability of such housing
and services for the long
term.
The Project will consist a 5 -story building with wrap around parking. The 210 affordable units are
configured as stack flat units. 124 units will be offered as one and two-bedroom units for seniors and
86 one -three bedroom units for families.
This project will provide a balance of housing opportunities and fulfill a need in Chula Vista for
rental housing for seniors and families, particularly in the neighborhoods east of Interstate 805, as
outlined in the City of Chula Vista 2013-2020 Housing Element.
Income and Rent Restrictions
For both the tax credit and affordable housing funding, units are required to be restricted and
available for occupancy by persons or families whose income does not exceed 30 to 60 percent of the
area median income (AMI) for the San Diego Primary Metropolitan Statistical Area. The most
restrictive rent and income limits of the applicable funding source is applied for the Project for a
period not less than fifty-five (55) years and ensures long term affordability. The income and rent
restrictions are to be incorporated into the Regulatory Agreement, which will be recorded against the
property (Exhibit 2 —Income Limits and Rents).
November 20, 2014
Millenia Affordable Housing
Paee 3
Compliance with the income and rent restrictions will be subject annually to a regulatory audit and
annual tax credit certification. Compliance with strict property management policies and procedures
will ensure that income and rent restrictions will be maintained for the full 55 -year compliance
period.
IV. FINANCIAL ASSISTANCE
Form of Assistance
Financing and development of the Project is proposed as a joint private -public partnership. With
rents restricted at the affordable levels for the 55 -year time period, the net operating income is
insufficient to support a loan large enough to cover all the project costs.
CIC has requested that the Housing Authority of the City of Chula Vista consider the issuance of
private placement bonds to support the maj ority of the estimated $58 million ($275,778 per unit) cost
of constructing the project (see Exhibit 3). The permanent bond loan is estimated at approximately
$15.2 million. CIC will apply for approximately $24.1 million in Low Income Housing Tax Credits.
The permanent bonds and Tax Credits would cover over 68 percent of the estimated cost.
To close the financing gap, CIC has requested direct financial assistance of $3,000,000 from the
City's and Housing Authority's available Housing Fund balance. These funds would be used to
restrict all 210 units. This equates to a per unit subsidy of $14,286 per unit. To further assist the
Project, the City Council will be asked to consider the deferral and/or waiver of development impact
fees in the approximate amount of $2,175,000 (see Exhibit 4).
The leveraging of local dollars is necessary to obtain the bonds and tax credits for the project. As
proposed, the project would be able to leverage $11 in private investment for each $1 of our local
resources. Financial assistance for the residential units will be subject to obtaining the bonds and tax
credits, negotiation of satisfactory terms of the Regulatory Agreement and Loan Agreement and the
approval of such terms and documents by the City Council at a later date.
Article XXXIV:
Article XXXIV of the California Constitution (Article 34) requires that voter approval be obtained
before any "state public body" develops, constructs or acquires a "low rent housing project". The
City of Chula obtained voter approval on April 11, 1978 and subsequently on November 6, 2006
with the passage of Proposition C, which authorizes the development, construction and acquisition of
housing for persons of low-income. With the addition of these 210 -units, this leaves 1,375 units
under the City's current authority to facilitate these activities.
V. Exhibits
1. Locator Map
2. Income Limits and Rents
3. Proforma
4. City and Housing Authority Financial Assistance
EXHIBIT I
NIILLENIA AFFORDABLE HOUSING
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EXHIBIT 2
MILLENIA AFFORDABLE HOUSING
Income & Rent Restrictions
1 Bd/1 Ba
99
50%
$ 31,600
$ 857
1 Bd/1 Ba
11
60%
$ 37,920
709
2 Bd/1 Ba
11
50%
$ 35,550
$1,027
2 Bd/1 Ba
2
60%
$ 42,660
849
MGR
1
NIA
NIA
N/A
Subtotal
124
1 Bd/1 Ba
17
50%
$ 31,600
$ 857
1 Bd/1 Ba
2
60%
$ 37,920
$ 709
2 Bd/1 Ba
34
50%
$ 35,550
$1,027
2 Bd/1 Ba
4
60%
$ 42,660
$ S49
3 Bd/2 Ba
25
50%
$ 39,450
$ 978
3 Bd/2 Ba
3
60%
$ 47,340
$1,183
MGR
1
N/A
N/A
N/A
Subtotal
86 ,,;
Total
210.
MILLENIA AFFORDABLE HOUSING
PROFORMA SUBSIDY ANALYSIS
Project Cost:
Acquisition
Construction
Design/Engineering
Contingency
Permits & Fees
Fees, Financing Costs
Reserves, Legal, Other
Developer Fees
Subtotal $
Sources of Funds
EXHIBIT 3
Cost Funds Financing Gap
10,189,331
28,985,480
1,000,000
1,521,293
10,025,301
2,528,110
1,164,049
2,500,000
57,913,564
Tax Credit Equity
$24,078,415
Tax Exempt Bonds-Perrnanent Loan
$15,231,000
Subtotal
$
39,309,415 $ (14,604,149)
Subsidies
Master Developer Contribution (Land & Improvements)
$
10,179,330
Deferred Developer Fee
$1,250,000
C Bond
$2,000,000
City Development Fee Deferral/Waiver
$2,174,819
City Loan (TIOAI E)
$1,000,000
City Loan (In Lieu)
$
372,660
Housing Authority SA Loan (LowlMod Repay)
$
1,627,340
Subtotal
$
18,604,149
TOTAL $ 57,913,564
$
57,913,564 $
Project Dus
Project Cost
Cost per Unit
City HOME Subsidy per Unit @ 11 Units
City/Housing Authority Subsidy per Unit
210
$ 57,913,564
$ 275,778.88 per unit
$ 90,909 per unit
$ 24,642 per unit
City HOME Leveraging $1 to $58
Housing Authority Leveraging $1 to $36
TOTAL City/RDA Leveraging $1 to $11
EXHIBIT 4
MILLENIA AFFORDABLE HOUSING
CITYIHOUSING AUTHORITY FINANCIAL ASSISTANCE
500,000 FY 15 HOME funds
500,000
FY 16 HOME fiends (precommittment)
1,630,000
Low/Moderate Income Housing Funds
370,000
Balanced Communities In Lieu Funds
1,259,410 Transportation DIF (Deferred)
885,340 Parr Acquisition and Development Fee (Deferred)
55,250 Residential Construction Tax (Waived)
EXHIBIT 2 11/20/2015
EXHIBIT 2 11/20/2015
EXHIBIT 2 11/20/2015
EXHIBIT 2
11/20/2015
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