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HomeMy WebLinkAboutRDA Packet 1998/11/24 Notice is hereby given that the Chairman of the Redevelopment Agency has called and will convene a special joint meeting of the Redevelopment Agency/City Council on November 24, 1998, at 6:00 p.m., immediately following the regular City Council meeting, in Council Chambers, located in the Public Services Building, 276 Fourth Avenue, Chula Vista, California to consider, deliberate and act upon the following: ~an Tuesday, November 24, 1998 Council Chambers 6:00 p.m. Public Services Building (immediately following the City Council meeting) Special Joint Meetine of the RedeveloDment Aeencv / CitY Council of the Citv of Chula Vista CALL TO ORDER I. ROLL CALL: Agency/Council Members Moot -, Padilla -, Rindone -' Salas -, and Chair/Mayor Horton - CONSENT ITEMS ( Items 2 and 3 ) (Will be voted on immediately following the Council Consent Calendar during the City Council meeting) The staff recommendations regarding the following item listed under the Consent Calendar will be enacted by the Agency by one motion without discussion unless an Agency member, a member of the public or City staff requests that the item be pulled for discussion. If you wish to speak on one of these items, please fill out a "Request to Speak Form" available in the lobby and submit it to the Secretary of the Redevelopment Agency or the City Gerk prior to the meeting. Items pulled from the Consent Calendar will be discussed after Action Items. Items pulled by the public will be the first items of business. 2. APPROVAL OF MINUTES: November 3, 1998 3. COUNCIL AUTHORIZING PARTICll'ATION BY TIIE CITY OF CHULA VISTA RESOLUTION 19283 WITH THE COUNTY OF SAN DIEGO IN TIIE SAN DIEGO AGENCY REGIONAL MORTGAGE CREDIT CERTIFICATE PROGRAM--The RESOLUTION 1611 Mortgage Credit Certificate (MCC) Program was created as an alternative to mortgage revenue bond-backed financing to provide home ownership assistance to lower income bouseholds. MCC allocations to local jurisdictions have decreased in recent years. Chula Vista's allocation was reduced 43 percent in 1998 from the 1997 allocation. In 1994, the San Diego Regional MCC Program was established to allow other jurisdictions to participate in issuing MCCs without creating their own program. Chula Vista and two other cities operate their own MCC programs while Coronado, Santee, National City, Escondido, Poway, Vista, Encinitas, La Mesa, El Cajon and Carls bad have partnered with the County of San Diego and the San Diego Regional MCC Program. Staff feels the downward trend will continue and recommends approval of the resolution to join the San Diego Regional MCC Program in applying for 1999 MCC funds. (Community Development Director) i If Agenda -2- November 24, 1998 ITEMS Pill.LED FROM TIIE CONSENT CALENDAR This is the time the Redevelopment Agency will discuss items which have been removed from the Consent Calendar. Agenda items pulled at the request of the public will be considered prior to those pulled by Agency Members. ORAL COMMUNICATIONS This is an opportunity for the general public to address the Redevelopment Agency on any subject matter within the Agency's jurisdiction that is not an item on this agenda. (State law, however, generally prohibits the Redevelopment Agency from taking action on any issues not included on the posted agenda.) If you wish to address the Agency on such a subject, please complete the "Request to Speak Under Oral Communications Form" available in the lobby and submit it to the Secretary to the Redevelopment Agency or City Clerk prior to the meeting. Those who wish to speak, please give your name and address for record purposes and follow up action. OTIIER BUSINESS 4. DIRECTOR/CITY MANAGER'S REPORTrs) 5. CHAIR/MAYOR'S REPORTfS) 6. AGENCY/COUNCIL MEMBER COMMENTS ADJOURNMENT The meeting will adjourn to a closed session and then to the Regular Redevelopment Agency Meeting on December 15, 1998 at 6:00 p.m., immediately following the City Council meeting, in the City Council Chambers. - -- -- MINUTES OF A JOINT MEETING OF THE REDEVELOPMENT AGENCY/CITY COUNCIL OF THE CITY OF CHULA VISTA Tuesday, November 3, 1998 Council Chambers 4:28 p.m. Public Services Building CALL TO ORDER 1. ROLL CALL: PRESENT: Agency/Council Members: Moot, Padilla, Rindone, Salas, and Chair/Mayor Horton ABSENT: Members: None ALSO PRESENT: Executive Director/City Manager, David D. Rowlands; Legal Counsel/City Attorney, John M. Kaheny; City Clerk, Beverly A. Authelet; and Deputy City Clerk, Charline Long. CONSENT CALENDAR (Item pulled: 3) Member Padilla stated he will abstain on the September 22 minutes; Member Rindone stated he will abstain on the October 6 minutes; and Member Salas stated she will abstain on the October 20 minutes. Member Rindone requested that Item No.3 be pulled. BALANCE OF CONSENT CALENDAR OFFERED BY MAYOR HORTON, headings read, texts waived, passed and approved unanimously 5-0. 2. APPROVAL OF MINUTES: September 15, 1998, September 22, 1998, October 6, 1998 and October 20, 1998. Minutes of September 15, 1998 were approved unanimously 5-0; minutes of September 22, 1998 were approved 4-0-0-1 (Padilla abstaining since he was not at the meeting); minutes of October 6, 1998 were approved 4-0-0-1 (Rindone abstaining since he was not at the meeting); minutes of October 20,1998 were approved 4-0-0-1 (Salas abstaining since she was not at the meeting). 3. RESOLUTION 1604 APPROVING AN AGREEMENT WITH ONSTAGE PLAYHOUSE A.K.A. ONSTAGE PRODUCTIONS AND APPROPRIATING $10,000 FROM BAYFRONT/TOWN CENTRE I FUND BALANCE FOR THE BENEFIT OF TOWN CENTRE I REDEVELOPMENT PROJECT AREA-Onstage Playhouse aka Onstage Productions has been operating in the Town Centre I Redevelopment Project Area as a nonprofit corporation since 1985. The playhouse has been a successful endeavor and it continues to bring people into the Downtown area to enjoy the theater and patronize local restaurants and merchants. Recently, they renewed Onstage's lease at a much high rental rate than previous years. The Board of Directors evaluated the fiscal impact of the rent increase and found that a budget deficit will result in 1998-99. Onstage has requested assistance from the City to keep the organization solvent while they can devise a plan to resolve financial and space needs. As per staff's recommendation, the resolution with two amendments was approved 5-0. (Community Development Director) 4/5ths Vote ReQuired Member Rindone, asked what the previous rental rate was for Onstage Productions. ~-( _. .. RDA Minutes November 3, 1998 Page 2 . Anisa Cox, Treasurer, Onstage Productions, 392 Nova Place, Chula Vista, stated that the previous rental rate, before July 1, 1998, was $1,123.71 per month and the new rate is $1,708.30 per month, a $584.59 per month increase. Member Rindone asked why the request was for $10,000 if the increase in rent only amounts to around $7,000 per year. Ms. Cox replied that they have operated on a negative budget for some time, incurring a $9,041 production loss and an expense of $4,000 for a grant writer. However, the rent increase is what really hurt them. Member Rindone stated that the rent is a major debilitating factor, but is not the exclusive factor for the request of $10,000. Executive Director Rowlands stated that this was his proposal. He had attended a program two months ago, and the folks at Onstage had indicated to him they needed help if they were to stay downtown. These folks are a major factor in bringing people downtown which is one of our goals. After talking to staff, regarding possible funding, staff indicated that there was money available to do so. This proposal is designed to assist Onstage Productions in staying downtown and to keep the program alive. Member Rindone responded that he agreed that keeping the program alive was important, he just wanted to know the difference in the rent increase and money requested. Pam Buchan, Principal Community Development Specialist, replied that her report only showed a one year's increase in rent when in actuality On stage wishes to extend their lease for a total of eighteen months. During this time, they hope to reevaluate their situation so they can stay downtown. Member Rindone stated that the playhouse provided a viable cultural activity and bringing people downtown is one objective of the Redevelopment Agency. He suggested that the City develop some creative ideas to publicize and market this very worthwhile community cultural experience. Some suggestions would be the SDG&E Newsletter, newspaper articles, or flyers; a community of nearly 160,000 can do a lot to solicit community awareness. Ms. Cox replied that if they do not receive some assistance they will go dark. Member Rindone responded that the Council understood their concerns and felt that with a vigorous effort over the next eighteen months they could turn circumstances around. Additionally, staff's recommendation that the Coors Amphitheater Performing Arts Fund might be a viable source of funding was very well received. It was the Council's intent when they envisioned the Amphitheater that it would bring first-class entertainment to the City and provide funding for the arts. The two most important factors are how to enhance attendance through publicity and not use redevelopment funds. Losing this community activity would be a great loss. We need to do what we can to support this group. Member Moot asked whom the principals and property managers were, and what plans existed for the building that caused them to raise the rent. Ms. Buchan replied Hadad & Hadad out of Los Angeles were the principals and that there was a strong possibility that the property was in transition. c:J-~ - .. RDA Minutes November 3, 1998 Page 3 Ms. Cox stated that when they contacted the owner, they replied that they were in the business of making money not supporting a charity. Member Moot replied that this is problematic from a basic public policy point-of- view. Subsidizing a private business who wants more money with no explanation is a slippery slope we need to avoid. We need more facts about why this landlord is raising the rent and what they propose to do with this building. They are part of the Redevelopment Agency, and as such is a cooperative partner in the downtown redevelopment. If we have an uncooperative partner, we should find Onstage Production some place else downtown and work with a cooperative landlord. A landlord who is going to help these people promote their long-term viability on downtown Third Avenue rather than give $10,000 to an uncaring property owner. We should find a property owner who wants to support these activities. Staff was directed to report why the landlord raised the rent and what plans exist for this building. Ms. Buchan stated that staff is helping Onstage in publicizing and creating more recognition among the city entities plus finding a long-term location downtown. The Onstage board has just recently met and reevaluated their mission, goals, and objectives. They are also looking at additional funding sources, such as grants in order to help themselves. They hope to find a home in the downtown area, because they would like to stay and we would like them to stay. Member Moot stated that as per Counci1member Rindone's suggestion, the ultimate source of money is the Performing Arts Fund and with the commitment of the Redevelopment Agency to contact the landlord/owner, he would support the item. Chris Salomone, Director Community Development, replied they would follow-up with a report on the activity turnover, rental increases, and ownership changes. Coors Amphitheater will deposit funds into the Performing Arts Fund in February. Staff will come to Council at that time with a policy that will involve what has been talked about. MEMBER RINDONE OFFERED RESOLUTION 1604, WITH TWO AMENDMENTS; 1) That staff come back to Council, on or before, July 31, 1999, with a report; 2) That Coors Amphitheater Performing Arts Fund is set-up so the Redevelopment Agency is paid back in full for any monies expended on this item, heading read, text waived, passed and approved unanimously 5-0. FRIENDLY AMENDMENT Member Moot offered, as a friendly amendment, that staff return with a report as to the landlord's intentions and what they hope to accomplish in our Redevelopment Agency. 4. RESOLUTION 1605 APPROPRIATING $20,000 FROM BAYFRONT/TOWN CENTRE I FUND BALANCE TO THE DOWNTOWN BUSINESS ASSOCIATION FOR 1998-99 PROMOTIONAL AND ADVERTISING ACTIVITIES-On 3/17/98, the City Council approved the Downtown Business Association's 1998 budget and directed staff to submit the DBA's request for $20,000 from the Parking Meter Fund for promotional activities to be considered in the FY 1998-99 city budget. Subsequently, during the 1998-99 budget sessions, a report was submitted with the Finance Department's Parking Meter Fund budget recommending that the Downtown Business Association's $20,000 request instead be included in the Town Centre I budget. As per staff's recommendation, the resolution was approved 5-0. (Community Development Director) 4/5ths Vote ReQuired END OF CONSENT CALENDAR 02-3 - RDA Minutes November 3, 1998 Page 4 ITEMS PULLED FROM THE CONSENT CALENDAR (Item 3 was pulled, however, the minutes will reflect the original published agenda order.) ORAL COMMUNICATIONS There were none. OTHER BUSINESS 6. DIRECTOR/CITY MANAGER'S REPORTIS) - None. 7. CHAIR/MAYOR'S REPORTISI - None. 8. AGENCY/COUNCIL MEMBER COMMENTS - None. ADJOURNMENT The meeting adjourned at 4:50 p.m. Respectfully submitted, BEVERLY A. AUTHELET, CMC/AAE, City Clerk By Charline Long, Deputy City Clerk c2-4 - JOINT REDEVELOPMENT AGENCY/COUNCIL AGENDA STATEMENT Item~ a!~ ~~ /~/I MeetingDate 11/24/98 ITEM TITLE: ~RESOLUTION 11 J, I? 3 AUTHORIZING PARTICIPATION BY THE CITY OF CHULA VISTA WITH THE COUNTY OF SAN DIEGD IN THE SAN DIEGO REGIONAL MORTGAGE CREDIT CERTIFICATE PROGRAM SUBMITTED BY: 'omm""'" D,..'opm,. o;.""~ ' REVIEWED BY: Executive Director:I:f- ~ ~ (4/5ths Vote: Yes- Noll) BACKGROUND: The Mortgage Credit Certificate Program (MCC Program) was authorized by Congress in the Tax Reform Act of 1984, as an alternative to mortgage revenue bond.backed financing for providing home ownership assistance to lower income households. Mortgage Credit Certificates are issued to local agencies from the California Debt Limit Allocation Committee (COLA C). MCCs are an allocation of Private Activity Bonds which are converted to Mortgage Credit Certificates according to a federal conversion ratio of 4 to 1 as required by the Tax Reform Act of 1986. Since the inception of the MCC program in 1991, the City has received approximately $30,844,333 in Private Activity Bonds, which converted into approximately 372 MCCs. For the past few years the allocation of MCCs to local jurisdictions has diminished significantly. The 1998 MCC allocation for Chula Vista in the amount of $666,450 was reduced by 43 percent over the $1,187,540 allocation received in 1997. In 1998. $400 million in Single Family Housing Bonds was available for allocation. CDLAC awarded $200 million to the California Housing Financing Agency (CHFA) leaving $200 million fot allocating to MCC programs throughout California. In 1998, the San Diego Regional MCC program applied for an allocation $75 million and received $15 million. As the decline in MCC allocations continues, staff recommends partnering with the County of San Diego and joining the San Diego Regional MCC program in applying for MCC funding for 1999. The San Diego Regional MCC program was established in 1994 in an attempt for other jurisdictions to participate in issuing MCCs without having to create their own program. Currently, the cities of Coronado, Santee, National City, Escondido, Poway, Vista, Encinitas, La Mesa, EI Cajon, and Carlsbad participate in the San Diego Regional MCC program. Other than Chula Vista, only the City of San Diego and Oceanside operate their own MCC programs. However. Oceanside may join the San Diego Regional MCC program. RECOMMENDATION: That the City Council and Redevelopment Agency approve the resolution authorizing the City of Chula Vista to participate with the County of San Diego in the San Diego Regional MCC program. .J - ( ~. ,. Page 2, Item ~ Meeting Date 11/24/98 BOARDS/COMMISSIONS RECOMMENDATION: This item will be reviewed by the Housing Advisory Commission at the meeting scheduled for December 9, 1998. DISCUSSION: A Mortgage Credit Certificate (MCC) is a document awarded to a home buyer whose income is below 110% of the area median income, or $55,880, which allows the buyer a credit each year on his/her federal income tax in an amount equal to 20% of the mortgage interest paid for that year. The MCC reduces, through a direct credit, the borrower's federal income tax liability, thus increasing the income available to qualify for a mortgage loan. The City of Chula Vista, along with other participating jurisdictions in California have experienced a decline in the amount of MCC allocation awarded. The California Debt limit Allocation Committee (CDLAC), the MCC issuing authority, has devised a formula to distribute the Private Activity Bonds to participating jurisdictions through a "fair share" allocation. The "fair share" is based on a jurisdiction's population. As the amount of Private Activity Bonds decreases, Chula Vista's "fair share" also decreases. As an example, in 1997, Chula Vista received an allocation of $1,187,540 which converted into 15 MCC certificates. In January 1998, the Redevelopment Agency received $666,408 in Private Activity Bonds and converted into 8 MCC certificates. In order to continue to offer Chula Vista residents an opportunity to participate in the MCC program, staff recommends joining the other participating cities in applying with the San Diego Regional MCC Program for MCC funds in 1999. According to the MCC guidelines, an application can be submitted to CDLAC by a Redevelopment Agency or other public agency. In 1994 the County of San Diego was interested in participating in the MCC program and recruited other cities to join the County in applying for MCC funding. This allowed the smaller cities to have access to MCCs without the out-of-pocket start.up costs associated with implementing a new MCC program. Since the County took the lead in starting the regional program, it was agreed by the other cities that the County would be the issuing authority and apply for MCC funding. The participating cities agree that the allocation received by the County of San Diego for the San Diego Regional MCC program will be distributed based on the "fair share" calculation. However, certain cities participating in the MCC program have difficulty using their entire MCC allocation. Such cities include Coronado, Encinitas, Carlsbad, and Po way. This is due to the high cost of housing within these cities. Cities that have difficulty using their MCC have agreed to "pool" the MCCs and make them available to other cities on a first-come first.serve basis. These pooled MCCs allow other cities to increase their "fair share" allocation and offer additional MCCs to their community. For instance, under the San Diego Regional MCC program, Chula Vista would receive an allocation based on our "fair share" or approximately 8 MCCs. Knowing that other cities cannot utilize all their awarded MCCs, the unused portion is pooled and available on a first.come first-serve basis. The MCC program is a successful program in Chula Vista and this additional pool of MCCs could be used in our community. Currently, the City of Vista has taken advantage of these pooled MCCs and have been able to offer additional first-time home buyers the opportunity to participate in this program. J -d.. _. .. Page 3. Item .3 Meeting Date 11/24/98 In addition to the opportunity to access additional MCC's, another advantage is administrative staff cost savings. Currently, the County of San Diego contracts with Affordable Housing Applications (AHA) to administer the San Diego Regional MCC program. AHA is responsible for all aspects of the MCC program, including lender training and all reporting requirements to the Internal Revenue Service. The fees associated with partnering with the County of San Diego in the San Diego Regional MCC program would be based on $300.DO per $100,000 of MCC allocation. Based on Chula Vista's 1998 allocation of $666.408, it is expected the Administrative fee for 1999 would be approximately $2,100 to participate in the San Diego Regional MCC program. The current cost for staff to administer the MCC program is approximately $13,500 per year. Staff spends considerable time preparing and mailing MCC information packets, responding to lender inquiries, preparation of MCC Applicant information to lenders for completion of their IRS reporting requirements, and continued lender training. As the household income and purchase price limits change, lenders must be kept informed. AHA currently administers Chula Vista's Reissued Mortgage Credit Certificate (RMCC) program recently approved by the City Council and Redevelopment Agency. By participating in the San Diego Regional MCC program, AHA would continue to notify MCC holders of Chula Vista's Reissued MCC program. In summary, the major benefits of participating in the San Diego Regional MCC program would be the availability of additional MCCs in excess of our allotted "fair share" amounts and savings in staff costs in administering our current MCC program. In the event the Private Activity Bond allocation to local issuers should increase in the future, the City of Chula Vista is not obligated to be included in the San Diego Regional MCC program and can apply for MCC funding in its own behalf. FISCAL IMPACT: Approval of the resolution would not have a fiscal impact at this time. Upon approval of the resolution, staff will return to the City Council and Redevelopment Agency for approval of a Cooperative Agreement between the County of San Diego and the City of Chula Vista for Chula Vista's participation in the San Diego Regional MCC program and to appropriate funds for the administrative fee. It is estimated that a savings in staff administration costs of approximately $11 ,OOO/yr. will result from this action. IJAI H,IHOMEICOMMOEVISTAfF.REPIII.24.98IHCOMCC.113 IN."mb" 12, 1998 19,340mll .3-3 - .. AGENCY RESOLUTION NO. ~ and COUNCIL RESOLUTION NO. _1...:1....2.:63 JOINT RESOLUTION OF THE CITY COUNCIL AND THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA AUTHORIZING THE PARTICIPATION BY THE CITY OF CHULA VISTA WITH THE COUNTY OF SAN DIEGO IN THE SAN DIEGO REGIONAL MORTGAGE CREDIT CERTIFICATE PROGRAM WHEREAS, there is a continued need for affordable home ownership opportunities in the City of Chula Vista (the "City") and the County of San Diego (the "County") for qualified first-time home buyers; and WHEREAS, the Tax Reform Act of 1984 established Mortgage Credit Certificates ("MCC") as a means of assisting qualified first-time home buyers with the acquisition of new and existing single family housing; and WHEREAS, Division 31, Part 1, Chapter 35, Article 4 of the California Health and Safety Code Sections 50197 et seq (the "Act") authorizes counties, cities, and redevelopment agencies to create and participate in MCC programs; and WHEREAS, the County of San Diego has heretofore determined to engage in an MCC program pursuant to the Act in order to assist individual home purchasers in the City and the County to afford both new and existing homes within the statutory limits as provided for in said Act; and WHEREAS, the City requests that Mortgage Credit Certificates be available to eligible first-time home buyers within the corporate limits of the City when the City participates with the County in receiving an MCC allocation; and WHEREAS, the County and City wish to cooperate with one another pursuant to the Act in the exercise of their powers under the Act for the purposes of an MCC program. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL AND REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA Section 1. The City hereby adopts the San Diego County Regional Mortgage Credit Certificate Program (the "Program") for the purpose of increasing home ownership opportunities for first-time home buyers and consents to the operation of said Program within the geographical boundaries of the City. Section 2. The City with the advice and consent of the City Attorney, is authorized to enter into agreements with the County, execute such other documents, or take such other actions as may be necessary or appropriate to carry out the purposes and intent of the Program or to cooperate in the implementation of the Program. Section 3. This resolution shall take effect from and after its adoption. 3-tf . ,. NOW, THEREFORE, BE IT RESOLVED, the City Council and Redevelopment Agency of the City of Chula Vista do hereby find, order, determine, and resolve to authorize participation by the City of Chula Vista with the County of San Diego in the San Diego Regional Mortgage Credit Certificate Program Presented by Approved as to form by ~ ~ Chris Salomone Director of Community Development IJEAI M,\HOMEICOMMOEV\RESOS\HCOMCC.RES IN",mb.. 12. 1998 19,36,mll 3-S- ? .. . -