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HomeMy WebLinkAbout1999-01-27 HAC MIN CITY OF CHULA VISTA MINUTES HOUSING ADVISORY COMMISSION Wednesday January 27, 1999 Housing Conference Room 3:30 p.m. Legislative Building CALL TO ORDER/ROLL CALL - 3:37 p.m. PRESENT: Chair Madrid, Members Clayton, Dufresne, Ahamed, Worth ABSENT: Helton, Lopez-Gonzalez STAFF: Housing Coordinator Arroyo, Community Development Specialist II Atwood, Administrative Secretary Hernandez 1. MSC (Madrid/Clayton) to approve December 9, 1998 minutes (5-0-2 Helton, Lopez-Gonzalez absent). MSC(Madrid/Ahamed)to excuse Members Helton and Lopez-Gonzalez from January 27, 1999 meeting due to illness and other business commitments (5-0-2 Helton, Lopez-Gonzalez absent). 2. . PEARTREE APARTMENTS ACQUISITION/REHABILITATION PROPOSAL - Ms. Atwood gave a brief summary on the Peartree Apartments acquisition/rehabilitation proposal. She stated that the City received from California Statewide Communities Development Authority an application to the California Debt Limit Allocation Committee (CDLAC) for mortgage revenue bonds to purchase and rehabilitate the Peartree Apartments located at 1025 Broadway, Chula Vista. As part of the IRS regulations, the City of Chula Vista has to hold a TEFRA hearing. The California Statewide Communities Development Authority is to be the issuer of the bonds, not the City. However, since they are looking to issue bonds in-the City of Chula Vista for this project, the City Council has to hold this hearing. Mr. Arroyo mentioned that these are tax exempt bonds,that is why it requires local jurisdiction to hold this hearing even though the City is not the issuer. Ms. Atwood stated that the initial proposal outlined, of the 119 units, all 100% would be affordable to households earning at 60% of the area median income. Staff is negotiating with the developer to provide 10% of the 119 units at household income at 50% of the area median income. The 119 units will maintain an affordability period of 60 years. The multifamily housing revenue bonds will only provide tax credits at the 60% level of affordability,therefore leaving a gap of approximately $275,000 needed to provide the additional level of affordability for 10% of the units at 50% of area median income. Ms. Atwood stated that staff has come to a negotiation at approximately $150,000 that the City will be willing to loan Avalon Communities in order to get that level of affordability at 50% for 10% of the units. Ms: Atwood stated that Avalon Communities has estimated the,per unit cost of rehabilitating the 119 units including interior and exterior rehabilitation at $10,165 with land and acquisition costs at $53,571 per unit. . Other fees including contingencies, developer fees, and property tax fees will be approximately $8,767 per unit for a total per unit cost of $72,502. Staff supports this proposal 1 because it will help to improve a.large apartment complex and also increase affordability. Ms. Atwood also mentioned that the City approved ane'w program called Crime-Free Multi-Housing Program through the Chula Vista Police 'Department wich will assist in creating a safe environment for the Peartree residents. .This will be the first complex that would be integrate into this program. This program will work with the developer to create a'safe environment through-landscaping, interaction With police officers in the complex,and also with dead bolt locks,and other safety features that would be included into the project. Mr. Arroyo added that this particular site has been identified by the Police Department as having one of the highest calls for service'in the City. This program has been proven effective in other cities. Staff feels that this program will help this-project in reducing crime and stabilizing that.area. Mr. Arroyo indicated that this is a very unique opportunity-to get this program under way and the developer plans to conduct educational programs for the residents. - Mr. Arroyo stated that even if Council approves this proposal; the developer still has to compete for.CDLAC allocation of bond issue along with hundreds of other cities throughout the State. Member Worth asked if the current residents are going to be replaced. Mr. Arroyo responded no. "The developer's objective is to maintain and give priority to the current residents if they meet the income criteria. The developer does not expect any major turnover because the majority of current residents are within the income levels. Regarding.the rehabilitation; it will be phased with some tenants moving from one unit to another in order to do the rehabilitation and avoid relocation. Mr. Arroyo.indicated that there will be new management,in the complex. Chairman Madrid asked what kind of funds are going to.be used,for the $150,000 that the City is proposing to lend the developer. Mr.Arroyo responded that the source of funds will be coming out of the Redevelopment Low/Mod-fund since the project is in a redevelopment area (Southwest Redevelopment Area). Mr. Arroyo indicated.that Avalon Communities has a good track record and they plan to hire local contractors. Member Dufresne commented that it seems expensive to rehabilitate the project at a rate of $72,000 per unit. Mr. Arroyo responded that part of the reason related to that is the affordability level. It is not only buying the improvement of the project; but-it is also bringing the rents at below.the fair market level. Chairman- Madrid indicated that actually the price per unit is, reasonably. She indicated that she has seen projects come in at that price and higher. Ms. Atwood gave-the breakdown of the size of the units. She indicated that there are five one bedroom units;.109 two bedroom units, and five three bedroom units. Mr.Arroyo indicated that if this project receives CDLAC's approval, it won't be until then that staff will come back to Council with a,financial package which will involve the proposed $150,000 loan. The developer will come back to brief the Commission on more specific details of the project. Member Worth asked that when this developer comes in to give their summary on the project, could they bring in something like-charts-:or designs for the Commission Members to keep. 2 MSC (Madrid/Worth)the Housing Advisory Commission supports the Peartree Apartments Multi-family acquisition rehabilitation project (5-0-2 Helton, Lopez-Gonzalez absent). 3. STAFF REPORTS - None 4. MEMBERS COMMENTS - Member Worth mentioned that she would like an update on previous projects that the Commission approved, recommended and or supported along with their packets that they receive monthly. Mr. Arroyo responded that he will update the Commission monthly or every other month on the status on projects that the Commission has voted on. 5. ADJOURNMENT - 4:10 p.m. to the next scheduled meeting of February 24, 1999. ecorder, Alicia Hernandez 3