HomeMy WebLinkAboutRDA Packet 2001/02/20
Notice is hereby given that the Chair of the Chula Vista Housing Authority has called and will
convene a special meeting of the Housing Authority, Tuesday, February 20, 2001 at 6:00 p.m.,
immediately following the City Council meeting in the Council Chambers, located in the Public
Services Building, 276 Fourth Avenue, Chula Vista, California to consider, deliberate and act upon
the following:
ShirleYH~
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CllY OF
CHUlA VISTA
TUESDAY, FEBRUARY 20, 2001 COUNCIL CHAMBERS
6:00 P.M. PUBLIC SERVICES BUILDING
(immediately following the City Council meeting)
JOINT MEETING OF THE
REDEVELOPMENT AGENCY J CITY COUNCIL AND
HOUSING AUTHORITY (SPECIAL MEETING)
OF THE CITY OF CHULA VISTA
CALL TO ORDER
ROLL CALL
Agency /Council/ Authority Members Davis, Padilla, Rindone, Salas; Chair/Mayor
Horton
CONSENT CALENDAR
The staff recommendations regarding the following item!s) listed under the Consent Calendar will be enacted
by the Agency/Council by one motion without discussion unless an Agency/Council 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 Clerk 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.
1. APPROVAL OF MINUTES Staff recommends the Redevelopment
Agency/City Council approve the minutes of the adjourned meeting of the
City Council and regular meeting of the Redevelopment Agency for February
6,2001.
"
2. AGENCY RESOLUTION 1714 AMENDING RESOLUTION NO. 1673
REGARDING CONDITIONAL APPROVAL OF A RESIDUAL RECEIPTS LOAN
FROM THE LOW/MODERATE INCOME HOUSING FUND NOT-TO-EXCEED
$1,060,000 TO AVALON COMMUNITIES LLC, FOR THE DEVELOPMENT OF
A MIXED USE PROJECT, INCLUDING 106 AFFORDABLE HOUSING UNITS-
On June 13, 2000, the Agency conditionally approved financial assistance in
support of "Main Plaza", a mixed use residential/commercial project
involving 106 affordable units. The developer, Avalon Communities, is
requesting amendments to the terms and conditions of the proposed Agency
loan. [Community Development Director]
STAFF RECOMMENDATION: Redevelopment Agency adopt the resolution.
ORAL COMMUNICATIONS
This is an opportunity for the general public to address the Redevelopment Agency/City Council on any subject
matter within the Agency/Council's jurisdiction that is not an item on this agenda. (State law, however,
generally prohibits the Redevelopment Agency/City Council from taking action on any issues not included on
the posted agenda.) If you wish to address the Agency/Council 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.
ACTION ITEMS
The items listed in this section of the agenda are expected to elicit substantial discussions and deliberations by
the Agency, staff, or members of the general public. The items will be considered individually by the Agency
and staff recommendation may in certain cases be presented in the alternative. Those who wish to speak,
please fill out a Request to Speak form available in the lobby and submit it to the Secretary to the
Redevelopment Agency or City Clerk prior to the meeting.
3. a. HOUSING AUTHORITY RESOLUTION HA-17 REGARDING ITS INTENTION
TO ISSUE TAX EXEMPT OBLIGATIONS FOR A PROPOSED AFFORDABLE
SENIOR AND MULTIFAMILY HOUSING PROJECT KNOWN AS HERITAGE
TOWN CENTER WITHIN THE OTAY RANCH MASTER PLANNED
COMMUNITY-The City of Chula Vista has received a request from South Bay
Community Villas, loP., a partnership between the Otay Ranch Company and
South Bay Community Services, to consider the issuance of tax exempt
obligations to finance the development of a 271 unit complex for low and
moderate income households, 91 units for seniors and 180 units of multi-
family housing, within the Otay Ranch master planned community. The
project is to be known as "Heritage Town Center" located on 9.3 acres of
vacant land in the Otay Ranch Village 1 tentative map R47 and C1 sites, on
East Palomar Street between Santa Rita Avenue and Santa Andrea Avenue
in the City of Chula Vista. Additionally, the Redevelopment Agency has
received a request for financial assistance for the project and the City is
being asked to waive certain City fees and to grant additional credits for
Redevelopment Agency, February 20, 2001 Page 2
units based upon afford ability levels and large bedroom sizes. [Community
Development Director]
b. AGENCY RESOLUTION 1715 CONDITIONALLY APPROVING FINANCIAL
ASSISTANCE, SUBJECT TO FUTURE APPROPRIATION, IN THE FORM OF A
RESIDUAL RECEIPTS LOAN FROM THE LOW AND MODERATE INCOME
HOUSING FUND IN AN AMOUNT NOT-TO-EXCEED $4,330,000 TO SOUTH
BAY COMMUNITY VILLAS, loP. FOR THE DEVELOPMENT OF THE
PROPOSED 271 UNIT HERITAGE TOWN CENTER
OTHER BUSINESS
4. DIRECTOR'S REPORT(S)
5. CHAIR/MAYOR REPORTlS)
6. AGENCY/COUNCIL COMMENTS
ADJOURNMENT
The meeting will adjourn a closed session and thence to the regular meeting of the
Redevelopment Agency on March 6, 2001 at 4:00 p.m., immediately following the
City Council meeting in the City Council Chambers.
CLOSED SESSION
Unless Agency Counsel, the Executive Director, City Councilor the Redevelopment Agency states otherwise at
this time, the Agency/Council will discuss and deliberate on the following item(sl of business which are
permitted by law to be the subject of a closed session discussion, and which the Agency/Council is advised
should be discussed in closed session to best protect the interests of the City. The Agency/Council is required
by law to return to open session, issue any reports of final action taken in closed session, and the votes taken.
However, due to the typical length of time taken up by closed sessions, the videotaping will be terminated at
this point in order to save costs so that the Agency/Council's return from closed session, reports of final action
taken, and adjournment will not be videotaped. Nevertheless, the report of final action taken will be recorded
in the minutes which will be available in the Office of the Secretary to the Redevelopment Agency and the City
Clerk's Office.
Redevelopment Agency, February 20, 2001 Page 3
7. CONFERENCE WITH REAL PROPERTY NEGOTIATOR --Pursuant to Government
Code Section 54956.8
a. Property: Assessor Parcel Nos. 568-270-03; 568-270-11
(approximately 2.85 acres located at the southeast
corner of Fourth Avenue and F Street)
Negotiating Parties: City Council / Redevelopment Agency (Sid Morris/
Chris Salomone) and Chula Vista Center (Robert
Caplan)
Under Negotiations: Price and terms for acquisition
b. Property: Assessor Parcel Nos. 568-270-30; 344 "F" Street
(approximately .25 acres located at the southeast
corner of Fourth Avenue and Garrett)
Negotiating Parties: City Council/Redevelopment Agency (Sid Morris /
Chris Salomone) and Park Centre (Richard Zogob)
Under Negotiations: Price and terms for acquisition
Redevelopment Agency, February 20, 2001 Page 4
MINUTES OF AN ADJOURNED REGULAR MEETING OF THE CITY COUNCIL AND A
REGULAR MEETING OF THE REDEVELOPMENT AGENCY
OF THE CITY OF CHULA VISTA
February 6, 2001 4:00 p.m.
An Adjourned Regular Meeting of the City Council and a Regular Meeting of the
Redevelopment Agency of the City of Chula Vista were called to order at 5:16 p.m. in the
Council Chambers, located in the Public Services Building, 276 Fourth Avenue, Chula Vista,
California.
ROLL CALL
PRESENT: Agency/Councilmembers: Davis, Padilla, Rindone, and Chair/
Mayor Horton
ABSENT: Agency/Councilmembers: Salas
ALSO PRESENT: Executive Director/City Manager Rowlands, Agency/City
Attorney Kaheny, City Clerk Bigelow
CONSENT CALENDAR (Items I through 4)
1. APPROVAL OF MINUTES ofJanuary 16, 2001.
Staff recommendation: Agency and Council approve the minutes.
2. AGENCY RESOLUTION NO. 1712, RESOLUTION OF THE REDEVELOPMENT
AGENCY OF THE CITY OF CHULA VISTA AUTHORIZING THE RELEASE OF
CONSULTANT REQUEST FOR QUALIFICATIONS TO EVALUATE POSSIBLE
AMENDMENT OF THE TOWN CENTRE I, TOWN CENTRE II, SOUTHWEST AND
OTAY VALLEY ROAD REDEVELOPMENT PLANS TO INCLUDE ADDITIONAL
BLIGHTED PROPERTIES
Agency staff routinely reacts to community concerns regarding areas of the City currently
outside of the adopted Redevelopment Project Areas. Inadequate inftastructure and
physical blight negatively affect development opportunities and re-investment. Without
the revitalization tools that state redevelopment law provide, staff has been unable to
proactively respond to many of these challenges. (Community Development Director)
Staff recommendation: Agency adopt the resolution.
3. AGENCY RESOLUTION NO. 1713, RESOLUTION OF THE REDEVELOPMENT
AGENCY OF THE CITY OF CHULA VISTA AUTHORIZING EXPENDITURE OF
$12,132 OF LOW AND MODERATE INCOME HOUSING FUNDS BUDGETED IN
THE FISCAL YEAR 2000-01 HOUSING DIVISION OPERATING BUDGET FOR
PARTICIPATION IN THE REGIONAL SHELTER VOUCHER PROGRAM
ADMINISTERED BY THE COUNTY OF SAN DIEGO
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CONSENT CALENDAR (Continued)
The Cold Weather Shelter Voucher Program, administered by the County of San Diego,
is an annual program. This year will mark the fourth year Chula Vista has financially
participated in the regional program. The County is requesting support in the amount of
$12,132, which is based on a current budget of $550,000, with $256,787 being funded by
the County and the remaining $293,213 through participating jurisdictions and
unexpended 1999-00 shelter funds. Although funds are available in the current Housing
Division professional services operating budget, the item is presented for Agency
approval since this expenditure is not specifically authorized. (Community Development
Director)
Staff recommendation: Agency adopt the resolution.
4. AUDITED FINANCIAL STATEMENTS FOR FISCAL YEAR ENDED JUNE 30, 2000
The Audited Financial Statements for the fiscal year ended June 30, 2000, as prepared by
the independent audit firm of Calderon, J aham & Osborn, were presented for information
and acceptance. The Annual Financial Reports for both the City and the Agency received
unqualified opinions ftom the independent audit firm. (Deputy City Manager Powell)
Staff recommendation: Agency and Council accept the Statements.
ACTION: Councilmember Rindone moved to approve staff recommendations and offered
the Consent Calendar, headings read, texts waived. The motion carried 4-0.
ORAL COMMUNICATIONS
There were none.
OTHER BUSINESS
5. DIRECTOR'S REPORTS
There were none.
6. CHAIR/MAYOR'S REPORTS
a. Request for reconsideration of 5-year term for Jack-in-the-Box pole sign at the
northeast corner of Bay Boulevard and J Street.
ACTION: Mayor Horton announced that she wished to table the request.
7. AGENCY/COUNCIL COMMENTS
There were none.
Page 2 CC/RDA Minutes 1- 2.. 02/06/2001
CLOSED SESSION
8. CONFERENCE WITH REAL PROPERTY NEGOTIATOR PURSUANT TO
GOVERNMENT CODE SECTION 54956.8
Property: Assessor Parcel Nos. 571-200-13, 14, 15, 36 and Parcel
Map 17701 (approximately 2.555 acres located at 760
Broadway)
Negotiating Parties: Redevelopment Agency (Chris Salomone) and George Ray;
Chris Bitterlin and Tom Carter
Under Negotiation: Price and terms for disposition
No action was taken.
ADJOURNMENT
At 6:20 p.m., Mayor Horton adjourned the meeting to an Adjourned Regular Redevelopment
Agency meeting to be held on February 13, 2001 at 6:00 p.m., immediately following the City
Council meeting.
Respectfully submitted,
~~~
Susan Bigelow, CMC/AAE, City Clerk
Page 3 CC/RDA Minutes / -..3 02/06/2001
REDEVELOPMENT AGENCY AGENDA STATEMENT
ITEM NO.: ~
MEETING DATE: 2/20/01
ITEM TITLE: RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF
CHULA VISTA AMENDING RESOLUTION NO. 1673 REGARDING
CONDITIONAL APPROVAL OF A RESIDUAL RECEIPTS LOAN FROM THE
LOW/ MODERATE INCOME HOUSING FUND NOT TO EXCEED
$1,060,000 TO AVALON COMMUNITIES LLC, FOR THE DEVELOPMENT
OF A MIXED USE PROJECT, INCLUDING 106 AFFORDABLE HOUSING
UNITS
SUBMlnED BY: CTOR ~.ttì c.s
REVIEWED BY: CITY MANAGER
4/5TH5 VOTE: YE5DNO 0
BACKGROUND
On June 13, 2000, the Agency by woy of Resolution No. 1673 conditionally opproved finoncial
assistonce in the form of a loan not to exceed $1,060,000 to Avalon Communities llC, for the
development of a mixed-use project comprised of 106 offordable multifomily units and 15,000 square
feet of retoil commercial spoce. The project referred to os "Moin Plaza" is proposed to be located on the
northeast corner of Main Street and Broodwoy within the Southwest Redevelopment Project orea ond the
Montgomery Specific Pion oreo. (Exhibit 1)
The finonciol ossistance was to provide gop financing required as port of 0 low-income housing tax credit
finoncing application, which wos submitted to the State Tax Credit Allocation Committee (TCAC) in June
2000. Unfortunately due to 0 very competitive funding round the project did not receive 0 tax credit
ollocotion. Only one project out of 13 were funded in Son Diego County during the June 2000 cycle.
Since then the developer has been actively seeking other sources of funds to finance the project which
include the State of Colifornia Multifamily Housing Program (MHP), and The Farmworker Gront. In
addifion the developer will be opplying for a tox credif/bond ollocation from the next funding round of
The Californio Debt limit Allocation Committee (CDLAC). In order to be more competitive ond to
increose funding opportunity the developer is requesting that the Agency modify certoin terms and
conditions of the previously opproved loan.
The conditional funding opproved was not to exceed $1,060,000 for the project and was subject to 0
loan ogreement based on certain conditions. The modification of these conditions will moke the
proposed project more competitive for funding ond increose the likelihood that it will be built.
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PAGE 2, ITEM NO.:
MEETING DATE: 02/20/01
RECOMMENDATION
If is recommended fhat the Redevelopmenf Agency opprove fhe amended resolufion.
BOARDS/COMMISSIONS RECOMMENDATION
Not applicoble.
DISCUSSION
Proiect Description
The project will include 106 affordoble housing units and 15,000 squore feet of retail cammerciol
space with 180 residential and 73 commerciol porking spaces. The mixed-use building will contain
15,000 squore feet of ground-level commercial space, with residentiol garages in the back and 2-
levels of residentiol above the garages. There ore seven exclusively residentiol building throughout the
site.
There will be 106 total housing units, consisting of 60 two-bedroom units, 30 three-bedroom units,
and 16 four-bedroom units. The proposed project will also offer a swimming pool, community room,
go rages, ond social services provided by a locol sociol ogency, Coso Familiar.
Need to Amend Resolution
In June 2000, the developer applied for 0 tox credit allocotion from the State Tax Credit Allocation
Committee (TCAC) to finance the project, but was unsuccessful due to intense competition. Since
then, the developer hos been diligently exploring every source of funding opportunity to help finonce
the proposed project.
In order for the project to be more competitive in the next CDLAC bond/tox credit round, the
developer is requesting thot the Agency amend Resolution No. 1673 which was opproved on June 24,
2000. The specific amendments requested ore os follows:
1) Amend resolution to reflect thot a minimum of 11 units will be affordable to households ot
50% of the AMI ond 95 units to be affordable to households at or below 120% of AMI.
Current resolution ollows for 51 units to be ot 45% of AMI ond 55 units to be offordoble to
households ot or below 120% of AMI.
21 Amend resolution to appropriotely identify CDLAC as the funding source.
3) Reduce Agency loon interest rote from 6% to 3% per annum; and
4) Reduce payment of principol ond interest on the Agency loon from 90% to 50% of residuol
receipts.
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PAGE 3, ITEM NO.:
MEETING DATE: 02/20/01
Staff is comfortable is recommending the proposed amendments in order to moke this desirable
project more competitive for funding and increase fhe likelihood fhaf fhe desperafely-needed
offordable units will be built.
FISCAL IMPACT
The Agency loan is only expected to be repaid offer debt service, the poyment of deferred developer
fee ond reasonoble operating expenses. The proposed Amendments include the reduction of the
Agency loan interest rate from 6% to 3% per onnum ond the reduction of payment of principol and
interest on the Agency loon from 90% to 50% of residuol receipts. The proposed chonges ore
consistent with current stondards of this type of loon.
H: \HOME\COMMDEV\ST AFF .REP\02 .20.0 1 \Ma;n Plaza.dac
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RESOLUTION NO.
RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF
CHULA VISTA AMENDING RESOLUTION NO. 1673 REGARDING
CONDITIONAL APPROVAL OF A RESIDUAL RECEIPTS LOAN FROM THE
LOW/MODERATE INCOME HOUSING FUND NOT-TO-EXCEED $1,060,000
TO AVALON COMMUNITIES LLC, FOR THE DEVELOPMENT OF A MIXED
USE PROJECT, INCLUDING 106 AFFORDABLE HOUSING UNITS
WHEREAS, on June 13, 2000, the Agency passed Resolution No. 1673 conditionally approving
financial assistance in the form of a residual receipts loan not-to-exceed $1,060,000 to Avalon Communities,
LLC for the development of a mixed-use project comprised of 106 affordable multi-family units and 15,000
sq. ft. of retail commercial space; and
WHEREAS, the proposed funding was subject to a Loan Agreement based on certain terms and
conditions; and
WHEREAS, it is necessary to modify some of these terms and conditions to make the proposed
project more competitive for funding and increase the likelihood that it will be built; and
NOW, THEREFORE, BE IT RESOLVED the Redevelopment Agency of the City of Chula Vista does
hereby amend Resolution No. 1673 regarding the conditional approval of a residual receipts loan to Avalon
Communities, LLC to reflect the following modifications:
1. Amend the recitals to modify the project description as follows:
"WHEREAS, Developer now proposes to construct a mixed use project of 15,000 sq. ft. of
commercial retail and 106 apartment units, with 11 units affordable to very low households at or
below 50% of AMI and 95 units affordable to moderate income households at or below 120% of AMI,
at the northeast corner of Broadway and Main Street in the City of Chula Vista ("Project")": and
2. Amend the recitals to modify the potential funding source as follows:
"WHEREAS, Developer is to apply for a tax credit/bond allocation from California Debt Limit
Allocation Committee (CDLAC)"; and
3. Amend the terms and conditions under which conditional loan approval was granted to
reflect a reduction in interest rate from 6% to 3% per annum and reduce payment of principal
and interest on the Agency loan from 90% to 50% of residual receipts.
BE IT FURTHER RESOLVED that the REDEVELOPMENT AGENCY of the City of Chula Vista does
hereby approve the listed amendments.
PRESENTED BY APPROVED AS TO FORM BY
Jkff
Chris Salomone
Director of Community Development
H:\HOME\COMMDEV\RESOSIAVALON COMMUNITIES.doc
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lCSR :~¿~: AVALON COMMUNITIES, LLC PROJECT DESCRIP'T1ON:
INITIAL STUDY
.:~~: 1689 Broadway Request Proposed construction of a 15,000 sq.fl mixed-use
t/j commercial bußding and 106 affordable housing units
SCALE: I ALE NUMBER: .:f" with 181 residential and 75 commercial parking
NORTH No Scale IS - OG-47 spaces provided.
RESOLUTION NO. 1673
RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY
OF CHULA VISTA CONDITIONALLY APPROVING FINANCIAL
ASSISTANCE NOT TO EXCEED $1,060,000 TO AVALON
COMMUNITIES FOR THE DEVELOPMENT OF A MIXED USE
PROJECT, INCLUDING 106 AFFORDABLE UNITS
WHEREAS, California Health and Safety Code Sections 33334.2 and 33334.6 authorize and
direct the Redevelopment Agency of the City of Chula Vista (the "Agency") to expend a certain
percentage of all taxes which are allocated to the Agency pursuant to Section 33670 for the purposes of
increasing, improving and preserving the community's supply of low and moderate income housing
available at affordable housing cost to persons and families of low- and moderate-income, lower
income, and very low income; and
WHEREAS, pursuant to applicable law the Agency has established a Low and Moderate Income
Housing Fund (the "Housing Fund"); and
WHEREAS, pursuant to Health and Safety Code Section 33334.2(e), in carrying out its
affordable housing activities, the Agency is authorized to provide subsidies to or for the benefit of very
low income and lower income households, or persons and families of low or moderate income, to the
extent those households cannot obtain housing at affordable costs on the open market, and to provide
financial assistance for the construction and rehabilitation of housing which will be made available at an
affordable housing cost to such persons; and
WHEREAS, pursuant to Health and Safety Code Section 33413(b), the Agency is required to
ensure that at least 15 percent of all new and substantially rehabilitated dwelling units developed within
a project area under the jurisdiction of the Agency by private or public entities or persons other than the
Agency shall be available at affordable housing costto persons and families of low or moderate income:
and
WHEREAS, the Avalon Communities ("Developer") proposes to construct a mixed use project of
15,000 square feet of commercial retail and 106 apartment units, with 51 units affordable to very low
households at45 percent of the Area Median Income (AMI) and 55 units affordable to moderate-income
households at or below 120 percent of AMI, atthe north east corner of Broadway and Main Street in the
City of Chula ("Project"); and
WHEREAS, Developer is applying for nine percent (9%) tax credits from the Tax Credit
Allocation Committee (TCAC); and
WHEREAS, additional financing is necessary in order to make the residential use ofthe Project
feasible; and
WHEREAS, the provision of affordable housing units like the Project is consistent with and
called for by the City's General Plan Housing Element, Consolidated Plan, and California Health and
Safety Code; and
WHEREAS, the Agency wishes to provide Developer with a development loan of one million
sixty thousand dollars ($1,060,000) to assist with the financing gap for the construction ofthe residential
units of the Project; and
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Resolution No. 1673
Page 2
WHEREAS, the Agency's provision of funds to the residential use of the Project will directly
improve the City's supply of very low and moderate-income housing; and
WHEREAS, in accordance with California Health and Safety Code Section 33334.2 (g), staff is
recommending that the Agency find and determine that even though the Project is to be located outside
the City's redevelopment project areas, those areas will benefit through the creation of jobs in the
project area and elsewhere in the City, and through the policies served by dispersing affordable housing
throughout the jurisdiction rather than clustering it all in one area; and
WHEREAS, the Agency has adopted an Implementation Plan pursuant to Health and Safety
Code Section 33490, which sets forth the objective of providing housing to satisfy the needs and desires
of various age, income and ethnic groups of the community, and which specifically provides for the
construction of new affordable rental housing units through Agency assistance; and
WHEREAS, the residential use of the Project furthers the goals of the Agency set forth in the
Implementation Plan as it will facilitate the creation of affordable housing which will serve the residents
of the neighborhood and the City; and
WHEREAS, the City's Housing Advisory Commission did, on the 7th day of June, 2000, hold a
public meeting to consider said request for financial assistance; and
WHEREAS, the Housing Advisory Commission, upon hearing and considering all testimony, if
any, of all persons desiring to be heard, and considering all factors relating to the request for financial
assistance, has recommended to the Redevelopment Agency that the appropriation be approved
because the Commission believes that the Agency's financial participation in the development of the
Project will be a sound investment based upon Developer's ability to effectively serve the City's housing
needs and priorities as expressed in the Housing Element and the Consolidated Plan and the cost
effectiveness of the Agency's financial assistance based upon the leveraging of such resources; and
WHEREAS, in accordance with the requirements of CEQA, the Environmental Review
Coordinator has determined that the Project requires the preparation of an Initial Study, such study (IS
00-47) was prepared, and based on such study a Negative Declaration was adopted in connection with
the Special Use Permit for the Project at said hearing for this request for financial assistance.
NOW, THEREFORE, BE IT RESOLVED the Redevelopment Agency ofthe City of Chula Vista
does hereby conditionally approve a loan in the maximum amount of $1 ,060,000 from the Agency's Low
and Moderate Income Housing Set-Aside fund to Developer for the construction of the residential units
of the Project subject to the following terms and conditions:
1. Funds shall be used only for those costs directly related to the residential units of the Project.
2. The loan repayment will be secured by a Deed of Trust recorded against the Project property.
3. The term of the loan shall be fifty-five (55) years.
07-7
Resolution No. 1673
Page 3
4. The outstanding balance shall accrue with simple interest at 6 percent per annum.
5. Payment of principal and interest on the Agency loan shall be made. on an annual basis, out of a
fund equal to ninety percent (90%) of the "Residual Receipts", rental income from the Project minus
debt service on the bonds, payment of the deferred developer fee. and reasonable operating
expenses.
6. Developer will be required to operate the Project consistent with the Regulatory Agreement required
by the Project's tax credit financing, the convenants imposed by the Agreement, and the
requirements of the Special Use Permit for the Project.
7. Developer shall enter into a loan agreement with the Agency consistent with the terms set forth
above and with such other terms as shall be required or approved by the Agency Attorney,
8. This conditional approval remains subject to final approval by the Agency in its sole discretion.
BE IT FURTHER RESOLVED in accordance with California Heaith and Safety Code Section
33334.2 (g), the Agency finds and determines that even though the Project is to be located outside the
City's redevelopment project areas, those areas will benefit through the creation of jobs in the project
area and elsewhere in the City, and through the policies served by dispersing affordable housing
throughout the jurisdiction rather than clustering it all in one area.
PRESENTED BY APPROVED AS TO FORM BY
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Chris Salomone John M. Kaheny
Director of Community Development Agency Attorney
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Resolution No. 1673
Page 4
PASSED, APPROVED and ADOPTED BY THE REDEVELOPMENT AGENCY OF THE CITY OF CHULA
VISTA, CALIFORNIA this 13th day of June, 2000 by the following vote:
AYES:
Members Davis, Moot, Padilla, Salas, and Chair/Mayor Horton
NOES:
None
ABSENT:
None
ABSTENTIONS:
None
A:".! /,
Shirley Horton
Chairman
ATTEST:
~~~
Chris Salomone
Executive Secretary
STATE OF CALIFORNIA)
COUNTY OF SAN DIEGO) ss:
CITY OF CHULA VISTA)
I, Chris Salomone, Executive Secretary to the RedevelopmenlAgency ofthe City ofChula Vista, California
DO HEREBY CERTIFY that the foregoing is a full, true and correct copy of Resolution No. 1673 and that
the same has not been amended or repealed.
Dated: June 14, 2000
~~ ~~
Chris Salomone
Executive Secretary
~ -,
CITY COUNCIL/REDEVELOPMENT AGENCY/HOUSING
AUTHORITY AGENDA STATEMENT
ITEM NO.: 3
MEETING DATE: 02/20/01
ITEM TIlLE: A) HOUSING AUTHORITY RESOLUTION REGARDING ITS
INTENTION TO ISSUE TAX EXEMPT OBLIGATIONS FOR A
PROPOSED AFFORDABLE SENIOR AND MULTIFAMILY
HOUSING PROJECT KNOWN AS HERITAGE TOWN
CENTER WITHIN THE OTAY RANCH MASTER PLANNED
COMMUNITY
B) AGENCY RESOLUTION CONDITIONALLY APPROVING
FINANCIAL ASSISTANCE, SUBJECT TO FUTURE
APPROPRIATION, IN THE FORM OF A RESIDUAL RECEIPTS
LOAN FROM THE LOW AND MODERATE INCOME
HOUSING FUND IN AN AMOUNT NOT -TO-EXCEED
$4,330,000 TO SOUTH BAY COMMUNITY VILLAS, L.P. FOR
THE DEVELOPMENT OF THE PROPOSED 271 UNIT
HERITAGE TOWN CENTER
SUBMITTED BY:
REVIEWED BY: EXECUTIVE DIRECTO
YESDNO0
BACKGROUND
The City of Chulo Vista has received a request from Sauth Bay Community Villos, loP., a
porfnership between The Otoy Ronch Compony ond South Boy Community Services, to consider
the issuance of tax exempt obligations to finonce the development of 0 271 unit affordoble
housing complex, consisting of 91 units for seniors and 180 units of multifamily housing, within
the Otoy Ranch moster planned community. The proposed "Heritage Town Center" project is
locoted on 9.3 ocres of vacont lond in the Otay Ronch Village 1 tentotive map R47 & C1 sites, on
East Palomor Street between Sonta Rito Avenue ond Santa Andrea Avenue in the City of Chulo
Vista (Exhibit 1). Additionolly, the Redevelopment Agency has received a request for finonciol
assistance for the project ond the City is being asked to waive cerfoin City fees ond to gront
odditional credits for units based upon affordobility levels ond large bedroom sizes.
The developer is requesting thot the Chula Visto Housing Authority be the vehicle for opplying for
opproximotely $25 million in private activity bonds from the Colifornio Debt limit Allocation
Committee (CDLAC). The issuance of the bonds is in the public interest due to the reservation of
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a minimum of 40 percent of the units within the project as affordable housing for low-income
households ot 60 percent of the Areo Medion Income (AMI).
The developer is in the process of preporing an opplication for on allocation of the 2001 stote
ceiling on private octivity bonds for multi-fomily projects from the Californio Debt limit Allocotion
Committee (CDLAC) which must be submitted by February 21,2001. The opplicotion process is 0
very competitive one. The applicant needs to demonstrate reodiness to complete the project ond
strong support from the community. The bond ollocation will be used to substantially finance the
estimated $31.3 million project.
Additionally, concerns have been raised regarding the potentiol concentrotion of low income
affordoble units in this locotion. An alternotive proposol has been discussed which would ollow
for Otoy Ranch to provide some of its offordable housing obligotion on the west side of the City.
Since this proposal deviotes from existing policy, Council is being asked to discuss this possibility
and provide staff wifh further policy direction.
At this time, it is requested that the Housing Authority adopt a resolution expressing its preliminary
intention to issue bonds. The requested action is preliminary ond does not commit the Authority
to issue the bonds. These preliminary octions are necessory in order to ollow the project
developer to submit on opplicotion to the State bonding outhority ond to allow the developer to
receive reimbursement out of bond proceeds for costs it incurs leoding up to the actual sale of
bonds.
Section 147(f) of the Internol Revenue Code requires the private octivity bonds to be approved by
a governmentol unit having jurisdiction over the area in which the project is located following a
public heoring. A nofice of the public hearing must be published 0 minimum of fourteen days
prior to the hearing ond this hearing must toke ploce no later thon thirty doys from the
opplication submittol dote. City Council will be osked to hold a public heoring at a loter date to
consider the issuonce by the Housing Authority of the tax-exempt bonds for the finoncing of the
project and will be asked to approve the issuance, sale, ond delivery of multi-family housing
revenue bonds by the Housing Authority ot the time a bond allocotion is received. If successful in
obtaining a bond commitment from CDLAC, the developer plans to come back to the Authority to
request final approval for the issuonce of the bonds.
In accordonce with the requirements of CEQA, the Environmentol Review Coordinator hos
determined that the proposed project has had odequate prior review ond is in complionce with
the previously certified environmentol documents for the Otoy Ronch Sectionol Plonning Area
(SPA) One (EIR-97-03), ond no further oction by the City Council is necessory. Any project
contemplated on the west side of the City would be subject to further environmentol
consideration.
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RECOMMENDATION
It is recommended that the Housing Authority, Redevelopment Agency, ond the City Council take the
following actions:
1. Provide stoff policy direction on the "Bolonced Communities Affordoble Housing Program"
which is designed to achieve 0 balonced residentiol community through integration of low
income housing throughout the City. In this case, does the concentration of low income
units warrant on offsite mitigation of 011 or port of these units.
2. Thot the Authority odopt the resolution regarding its intention to issue tox-exempt
obligations for the proposed Heritoge Town Center within the Otoy Ranch Moster Plonned
Community.
3. Thot the Agency odopt the resolution conditionolly approving finoncial assistance of
$4,330,000 to South Boy Community Villas, loP for the development of the proposed 271
unit Heritage Town Center project.
BOARDS/COMMISSIONS RECOMMENDATION
On February 7, 2001, the Housing Advisory Commission voted to recommend the development
of the proposed affordoble housing project and the use of tax exempt bonds and Low and
Moderote Income Housing Set-oside funds to finonce the project.
On Januory 22, 2001, the Design Review Committee reviewed the proposed pions ond
recommended approvol of the project.
DISCUSSION
Policy Issues
Otay Ronch has to provide 242 units of low income housing to meet its obligotion under the City's
Generol Pion Housing Element.
Otay Ranch is currently proposing 0 271 unit affordable housing project in Villoge 1. This project is
composed of 91 senior units ond 180 family units. Concerns have been raised os to the
concentration of affordable units at this location. One ideo proposed is to mitigote the
concentration issue by providing only the senior units in Otay Ranch ond the fomily units in western
Chula Visto. City Council discussion on the following policy issues would be appropriate ot this time.
Housinq Element Requirements
The City's State-mandoted Housing Element which was odopted by Council in December 2000,
requires the provision of housing for 011 economic groups ond distribution of offardoble housing
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MEETING DATE: 02/20101
developments throughout the City's jurisdiction. The City's strategy to implement this mandate is to
require 10 percent of any new subdivision in excess of fifty (50) units to be made offordable for low
ond moderate-income families (5% low ond 5% moderote) ond to bolonce affordable housing
development throughout the City. The primary objective of this policy is to increose affordable
housing opportunities in the new planned communities in the eostern port of the City.
The Housing Element further stipulates that, os 0 priority, the development of offordoble units be
sotisfied within the Master Planned Community itself. However, in order to respond to the unique
conditions of eoch development, the City, ot the sole discretion of the City Council, moy consider
olternative methods, other thon fhe octual on-sife development. These olternofive mefhods, which
include off-site location mitigation, moy be considered only when the City, ot its discretion, hos made
a number of determinations and findings. Generally, the City must find that using the olternative
method supports specific Housing Element policies and goo Is; assists the City in complying with Stote
law for the provision of offordable housing; will not be significantly defrimenfal to ochieving
balanced residential communities; and will provide ot 0 minimum on equivolent number of required
offordoble units, with comporable rent and occuponcy restrictions. Additionolly, it must be found
thot the new construction within the project creates an unreasonoble hardship' upon fhe developer.
Concentration Issue
In the originol SPA Plan, Otay Ranch hod fargeted a number of affordable housing sites within
Villoge One. However, due to Otay Ronch's past financial difficulties, the developer opted to defer
the development of offordoble units on those sites and instead build morket rote units. This
eventuolly leod the developer to meet its entire SPA One offordable housing obligation within Villoge
One. Per the Affordoble Housing Agreemenf between the City ond Otay Ronch, the developer is
required to have in production 50% of its low income housing obligation ot a certoin building permit
threshold estimated to be reached by August 2001.
The proposed Heritage Town Center development of 271 offordable units hos raised concern as to
whether the concentrotion of this number of low income units should be reconsidered. Staffs
perspective on this issue is that the proposed development in fact will provide the housing bolonce
needed within Villoge One, since the rest of the Otoy Ranch development will be providing housing
to moderote and high income households. In foct, approximotely 1,100 market rote luxury
opartments ore to be built odiacent to the proposed affordable units.
The proposed site is ideal for offordoble housing since it is transit oriented and in close proximity to
0 park, school, community center ond a medicol facility. Large scole affordoble housing projects
hove been built within high income oreas in Son Diego County and other regions. The 350 unit Alto
Loma Apartments and the 200 unit Rancho Corrillo Aportments in Corlsbod are examples of how
this hos worked well.
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Westside Mitiaotion
The mitigotion of the Otay Ronch obligation on the west side of the City presents on opportunity to
further revitolize the Broadway Corridor and other locations that ore in need of improvement. Such
opportunities include the potenfiol to convert some of the existing poorly mointained motels on
Broodway ond other less desirable uses into affordoble housing projects thot could also include
mixed uses. In this way, a project or projects of quolity affordable housing could further the CounciJ
gool of improving the Broodway corridor or other selected oreos. In addition, certoin development
impact fees would not opply. However, this olternotive also presents chollenging issues which
include the further concentrotion of low income housing in the orea, potential relocotion impacts ond
lond use / zoning constraints. The transfer of 0 portion of the Otoy Ranch low income housing
obligotion will require amendments to the Otay Ranch General Development Plan, SPA One Plan
ond the SPA One offordable housing plan.
Within the last five years there has been a marked increase in improvement activity in the western
part of the City which is expected to continue. Examples of this trend include the Goteway Plazo, the
Peartree Apartments Acquisition Rehabilitotion Project, ond the proposed Moin Plaza Mixed Use
Project on Broodway and Main. Stoff is currently working on exponding the Community Home
Improvement Program (CHIP) thot will olso increase the amount of new investment in the housing
stock on the west side of the City.
Other Mitiaotion Opoortunities
There may be other opportunities for the Otay Ranch Compony to provide affordoble housing in
their remaining ownership within the Otoy Ranch. This potential option could result in the developer
not hoving to shift the bolonce of their obligation to western Chula Visto ond avoid hoving to omend
the various Otoy Ranch pions thot would be necessary. Stoff hos identified potential mitigotion
opportunities in Villages 5 and 6 of Otay Ronch which moy be more feasible to develop than in
western Chula Visto. A Ronch-wide Housing Pion amendment would be necessory, however, to
tronsfer SPA One obligotion to onother villoge.
Conclusion
Upon City Council direction, stoff can analyze and explore the feasibility of the alternotive proposal
which would involve 0 low-income senior housing development ot the proposed site and to ollow
Otay Ronch to mitigate its remoining obligation on the west side of the City or ot other sites within
Otay Ranch. However, since this onalysis will require additionol time to complete, staff recommends
that the proposed 271 unit multi-family/senior proiect os currently contemplated should proceed in
order to compete for the next fundina cycle due on February 21. 2001. This would enoble the
developer and staff to keep both options open.
THE PROPOSED PROJECT
Heritoge Town Center will be located on Eost Palomar Street between Sonta Rita Avenue ond
Sonta Andrea Avenue within a multi-family and commercial area identified in the Otay Ranch
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Village 1 tentative map as R47 & C1. This site is directly adjacent to the Sharp Rees Stealy Medical
Clinic ond ocross the street from an elementory school ond on eleven-ocre neighborhood park. The
site is locafed olong 0 transif corridor (Eosf Palomar bus stop ond future lighf rail).
The entire development site is approximately 9.3 acres. The site consists of a 3.4 acre site for a
commercial mixed-use development including ground floor retoil, commercial, ond office uses ond
91 second ond fhird floor affordable residenfiol units for seniors; 1.5 acres for a doy core facility;
ond 0 4.4 ocre site for the 180 affordable multi-fomily residentiol aportments (Exhibit 2). The
commerciol component will occupy approximately 30,000 square feet of first floor spoce ond
includes opproximately 2,400 square feet for a convenience morket/gosoline stotion.
The senior units propose one bedroom (546 square feet) floor plans. Units will have access to two
elevotors. Amenities will include 0 library/compufer room, 0 centralized recreofion/octivity room
wifh 0 kitchen, loundry focilities, and storage oreos. Occupancy will be restricted to senior cifizens.
The 180 units of multifamily residentiol oportments is locoted ot the reor of the development site ond
is incorporated into the project utilizing a strong pedestrian linkage to the heart of the mixed-use
development. It consisfs of 0 mixture of two, three and four bedroom units ranging from 670 square
feet to 1,213 squore feet. Each building will feature three stories ond include direct entries to several
of the first floor units. Large orchways ond window ownings will be some of the design elements
used, which will compliment the odjacenf mixed use development. Amenities will include a 2,800
squore foot community center with on open space recreotional orea feoturing 0 tot lot, barbeque
ond play oreo.
PROPOSED FINANCING OF PROJECT
Finoncing ond development of this project is a joint privote-public partnership. The developer is
proposing to use Tax Exempt Multifamily Revenue Bonds and low income tax credit financing to
support the estimafed $31,357,060 cost of constructing the project.
The applicont has requested direct financial assistance of approximately $4,500,000 or $16,605
per unit from the Redevelopment Agency to make the project financiolly feasible. Staff supports
providing a Redevelopment Agency loan of $4,330,000 (as discussed below) to assist in
financing the residentiol portion of the project. Financial assistonce for the residentiol units will
be subject to negotiation of satisfactory terms of the Regulotory Agreement ond Loon Agreement
ond the opprovol of such terms and documents by the Agency at 0 later date.
Stoff is recommending thot the Agency conditionolly opprove finoncial ossistonce (subject to
future appropriation) in the form of a residuol receipts loan in on amount not to exceed
$4,330,000 ($15,978 per unit). Staff recommends that the Agency's subsidy range from
$10,000 for a one-bedroom unit ond increasing to $30,000 for a four-bedroom unit. The
provision of large bedroom units (three ond four bedroom units) is very difficult to provide
because of higher development costs and because they ore the most scarce in the rentol housing
morket. This omount is reasonable given the debt service coveroge ratio of the project ond a
maximum tox credit ollocotion omount.
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MEETING DATE: 02/20/01
Additionally, the developer had requested the woiver of approximately $989,939 in City fees.
Specificolly, the public facilities development impact fee (PDIF) ($709,478), residential
construction tox ($73,075), reserve fund fee ($33,604), ond fhe pork fee ($173,781). The
provision of City porks and of her public focilities ore poid by impact fees. These facilities ore
necessory and the costs of providing such focilities ore poid by those developments directly
impacting these focilities.
Staff ond the developer have reoched agreement to defer the PDIF for 10 yeors, ond waive the
Residential Construction T ox. The Reserve Fund Fee connot be woived ond will be paid by the
developer. Stoff hos ogreed to waive the park fee in exchonge for the developer dedicating an
odditionol 1.8 acres for a future community park. The developer has not yet responded to the
proposol.
AFFORDABLE HOUSING CREDITS
The developer is also requesting odditionol credits for two, three, and four bedroom units bosed
upon offordobility levels and lorge bedroom size. Based upon the developer's methodology,
Otay Ranch would receive 0 424 unit credit towards their 242 minimum requirement for Otoy
Ranch SPA One. Therefore, their request would result in 0 182 unit credit to be used towords the
offordable housing obligations of other Otoy Ronch developments.
The City hos allowed the credit of units built in excess of the minimum affordable housing
obligation on 0 unit for unit bosis. Therefore, the City would normally consider allowing the 29
of the 271 proiect units built in excess of the required 242-unit obligation to be used os credit for
other offordable housing obligotions.
The developer's request goes beyond credit for surplus units on 0 unit for unit bosis regordless of
unit size. Stoff recommends providing exfro credit for those large units, three or more bedrooms
only. Based upon a combination of 0 SANDAG formula for Housing Element self certification,
CDLAC applicotion requirements, ond the proposed project benefits, staff would recommend that
three bedroom units receive on odditionol 0.5 unit credit. Staff does not recommend ony
odditionol credit beyond the 0.5 credit since the developer is required to provide the three
bedroom units in order to qualify for CDLAC funding consideration.
The scorcity and demand for lorge bedroom units, particulorly four bedroom units, worrant
greater credit. While TCAC, CDLAC, and the executed Affordable Housing Agreement have
guidelines for the provision of three bedroom units, no guidelines or requirements exist for the
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MEETING DATE: 02/20/01
provision of four bedroom units. Therefore, the developer is not obligoted or required to provide
four bedroom units and could provide these units as one bedroom units rother than four
bedroom units. Stoff recommends ollowing on odditionol 3-unit credit (0 credit for eoch
additionol bedroom provided) for four bedroom units to encourage the provision of this much
needed unit size.
Based upon stoff's proposal, Otoy Ranch would be allowed a 92-unit low income credit, which is
comprised of 0 29 surplus unit credit and on odditionol credit of 63 unifs for large bedroom
sizes. This n-unit credit could then be used by The Otay Ranch Compony to satisfy its other
affordoble housing obligations for other developments.
Bedroom City Proposed City Proposed
Size Credit Factor Credit
Studio 1.0
1 91 1.0
2 114 1.0
3 54 1.5
4 12 4.0
TOTAL 271
At this point in time, staff and the developer have not reoched an ogreement on the credits for
this project. As previously indicoted, the developer is requesting a 182 unit credit based upon
their own rationale for odditional bedrooms. The offordoble housing credits can be further
negotioted at such time os an omendment to the Affordoble Housing Agreement is executed.
OUTSTANDING DEAL POINTS
Due to time constraints faced by staff and the developer, it wos not possible to come to finol
agreement on the finonciol assistance or affordoble housing unit credits.
The following is 0 tabular summary of these outstonding deal points previously discussed:
AGENCY OTAY RANCH DIFFERENCE
Finonciol Assistance $4,330,000 $4,500,000 $170,000
Housing Unif Credit 92 182 90
'Park Fee (Improvements Only) $173,781 0 $173,781
'Proposal pending. Cify may waive if developer dedicates 1.8 acres of lond.
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MEETING DAlE: 02/20/01
LEVERAGING OF AGENCY FUNDS
The degree of leveraging of Agency Low Income Housing funds is on important foctor which stoff
tokes into occount in the evoluatian of affordoble housing proposols. In evaluoting 0 proposal,
staff reviews the developer's trock record, success in securing public and privote finoncing, obility
to complete projects on time and on budget and demonstrated obility to highly leverage Agency
funds.
The proposed Agency's ossistonce to this project equates to an averoge of $15,978 per unit and
omounts to a leveraging of $7.24 to $1 of Agency funds. This leveroging ratio is calculated by
dividing the total project cost of $31,357,060 by the amount of the Redevelopment Agency loon
of $4,330,000.
Undue Gain
It is important thot any financiol assistance provided has the effect of making the units more
offordoble and not creoting undue goin for any party. The developer will receive a "Developer
Fee" estimoted at $1,200,000 or approximotely 4% of tatol praject costs ond consists of profit
ond overheod for developing the project. Otay Ronch hos ogreed to defer all of their developer
fee in order to fill some of the finoncing gop of the project. Poyments of the deferred developer
fee will be paid out of the project's cash flow offer debt service and operating expenses. Due to
the minimol residual cosh flow to be reolized from this project, it is anticipated thot it will take a
minimum of ten years to reolize payment on the deferred developer fee. Staff hos confirmed thot
the developer fee is within acceptable standords odopted by the State Tax Credit Allocation
Committee and the Federal Home Loon Bank's Affordable Housing Progrom for 0 project of this
size and affordability.
Form of Assistance
Agency ossistance will be provided strictly for the development of the residential units and will be
in the form of a residuol receipts loon secured by a promissory note ond deed of trust.
Repoyment of the loan will be deferred during construction. Once the City hos issued 0 certificate
of occupancy for 011 the units, the outstonding principal ond interest on the loon will be repaid
over fifty-five years. The outstanding balance shall accrue with simple interest at 3 percent per
annum. Payment of principal ond interest, or portions thereof, on the Agency loon sholl be mode
on an onnuol basis, out of a fund equal to fifty (50%) percent of the net cash flow of the project
(Residuol Receipts) affer debt service on bonds, payment of deferred developer fee, ond
reosonoble operating expenses have been poid.
More specific terms of the loan will be further negotiated. The required loan ogreement and
associated documents will be negotioted and presented to the Agency at a later time.
Risks
In its role as lender to the project, the Agency is exposed to three risks inherent to real estate
development. These risks generolly include: 1) predevelopment (project does not get to
construction), 2) construction (project cannot be completed, cost oyerruns, contractor problems),
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MEETING DATE: 02/20/01
and 3) operation (revenues do not coyer expenses). Adding to these risks, the Agency's finonciol
ossistonce will be subordinoted to conventionol finoncing.
A number of factors mitigate these risks. First, 0 component of the development teom hos a
track record with other offordoble housing projects. The presence of other major finoncial
commitments, such os the tax credit investments, meons that other stakeholders depend on the
short and long-term success of the project. By its noture, offordoble housing presents some, but
very limited morket risk becouse of the deeply discounted rents. Finolly, while the Agency is
vulnerable due to its subordinated finoncing, it helps to ottroct the necessary private financing.
Assuming all financiol commitments are secured, construction is expected to begin Summer 2001
with completion of the project estimoted by Winfer 2002.
ARTICLE XXXIV
The Authority's and the Agency's offordobility ond low-income restrictions (described below in
Income and Rent Restrictions section) will be limited to not more than 49 percent of the units so
that the project is exempt from Article XXXIV of the Stote Constitution, which would require a
public vote of opproval for the development ond construction of low rent housing projects by a
public body. Requirements of the other funding sources will result in the bolance of the units
being restricted to low income. A Housing Authority or Redevelopment Agency is a "state public
body" for purposes of Article XXXIV, and as 0 result, if the Authority or Agency porticipofes in
development of a "low rent housing project" and that porticipation rises to the level of
development, construction, or acquisition of the project by the Authority, approval by the
electorate pursuont to Article XXXIV is required for the project.
On April 11, 1978 under Proposition C, the voters of Chulo Visto authorized the development,
construction, or acquisition of 400 units of "low rent housing" by the Agency. Of the 400
ollowoble credits, Chulo Vista has utilized 293 units ond has a bolonce of 107 units remoining.
Therefore, it is proposed that the City and the Agency limit its low-income restrictions to 49
percent of the toto I units in the project. Projects, which are less than 49 percent restricted, are not
considered "low rent housing projects" for purposes of Article XXXIV.
Although Heritage Town Center is exempt from the provisions of Article XXXIV, the loon
agreement will time the disbursemenf of funds to occur offer the 60-day period to challenge 0
project has elopsed, thereby providing an odditional layer of protection to the Agency. The
ogreement will olso provide thot if the developer requests an eorlier disbursement dote, the
developer shall indemnify the Agency from an Article XXXIV challenge, and stoff may then
consider an eorlier disbursement date.
INCOME AND RENT RESTRICTIONS
Section 142 (d) of the Internal Revenue Code, requires a minimum of twenty percent of the rentol
units in the Project to be ovailable for occupancy by persons or families whose income does not
exceed 50 percent of the medion income for the San Diego Primory Metropoliton Statistical Area,
or olternotively, ot leost 40 percent of the rental units ore required to be ovoilable for occuponcy
by persons or families whose income does not exceed 60 percent of the medion income for the
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MEETING DATE: 02/20/01
Area. In each case, the units ore to be made avoilable at affordable rents established by the
opplicoble Stote law.
It is proposed thot the income, rent, ond oge restrictions for Heritage Town Center will be
maintoined for a period not less thon fifty-five years, exceeding the 30-year term of the bonds.
The income ond rent resfrictions ouflined above are fo be incorporofed into fhe Regulafory and
Loon Agreements for both the bonds ond the Agency Loan, which will be recorded ogainst the
property. The offordable housing commitment will bind 011 subsequent owners of Heritage Town
Center, so thot the commitment remoins in force regardless of ownership, except in limited
circumsfances following 0 defoult ond foreclosure on the project. Such agreements will be
presented to the Agency ond Authority ot 0 loter dote.
The Regulatory Agreement between the Housing Authority ond the developer for the bond
finoncing will restrict 49 percent of the toto I units (132 units) for occuponcy by low-income
households at 60 percenf or less of AMI. The Tox Credit finoncing will also require an
independent regulotory ogreement, the terms ond conditions of which ore to be determined at a
later dote.
It is proposed thot the Loan Agreement ond Related Restrictive Covenonts for the Agency's
financiol ossistonce will restrict rents and occupancy of 49 percent of the 271 units (132 units) for
lower income households, with 31 units for very low and 101 units for low income households.
Requirements of the other funding sources will result in the remaining 139 units being offordoble
for households at 60 percent of AMI.
Compliance with the income and rent restrictions will be subject annually to a regulotory oudit
ond onnuol tox credit certificotion. South Bay Community Services hos successfully monaged low-
income housing units for three years. Complionce with strict property management policies and
procedures will ensure thot income and rent restrictions will be maintained for the full 55-year
compliance period.
SENIOR HOUSING RESTRICTIONS
Of the 271 toto I units, 91 units will be restricted for occupancy by senior citizens. The age
restriction will be incorporated into the Agency Loan Agreement. Complionce with these
restrictions will be subject onnually to a regulotory oudit by the Agency.
As will be specified in the Agreement, leasing to tenants who ore not income or age quolified is 0
breach of the Agreement and the City ond Agency shall require that such leose be lawfully
terminated. Additionolly, it is onticipated thot the oge restrictions will be self-enforcing in that
leosing of units in 0 senior housing development to other thon quolified tenonts would disquolify
such development from its exemption from Stote ond Federol Foir Housing Laws.
CHULA VISTA CRIME FREE MULTI-HOUSING PROGRAM
This proiect will participate in the City of Chulo Visto's Crime Free Multi-Housing Program. This
Progrom wos designed to help tenonts, owners, ond monagers of rental property keep drugs ond
other illegal activity off their property. Manogers attend on eight-hour seminar presented by the
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police department and rental experts. The City inspects the property and certifies whether or not
the rentol property has meet fhe program's requiremenfs for fhe tenont's sofety, such os locks,
lighting, windows, peep holes, opplicont screening, ond general oppearonce. Lostly, a tenant
crime preyention meeting is held. It is anticipated thot the project's porticipation in this Program
will facilifote strong property monagemenf, screening of oppliconts, ond mainfenonce of fhe
property.
CONCLUSION
In light of the short time frame for opplication to CDLAC for bond allocation, staff recommends
opproval of the Housing Authority resolution regarding its intent to issue tax-exempt obligations
for Heritoge Town Center within Otay Ronch. Approvol of this resolution does not constitute 0
commitment of the Authority to issue such bonds. This resolution merely provides the opportunity
for the developer to apply to CDLAC by the February 21" submittal deadline. If successful in
obtoining 0 tax credit ollocotion, the developer moy elect nof to accept fhot funding if the other
olternotive becomes more desiroble.
Based on the foregoing, stoff recommends opproval of the Agency resolution conditionally
approving finoncial ossistance, subject to future oppropriation, in on amount not-to-exceed
$4,330,000 (plus fee waivers) from the Agency's Low/Moderate Income Housing fund. Staff's
recommendotion is bosed upon the following:
. The proposal's effectiveness in serving the City's housing needs and priorities os expressed in
the Housing Element of the General Pion ond the HUD Consolidoted Pion.
. The proposol's development ond operoting feasibility, financing sources ond the role of the
City ond the Agency in providing financiol assistonce or incentives.
. It is the intent of the City to ottempt to provide offordoble housing opportunities to households
earning at or below 50% of AMI in order to receive future credits os outlined in the Housing
Element of the General Plan.
The Heritoge Town Center development as proposed by South Boy Community Villos, L.P., is
finoncially sound. The recommended Agency assistance meets the Agency's underwriting goals
of reosonable project costs and leveroging of Agency resources. The project's unit mix ond
offordability support the Agency housing goals.
FISCAL IMPACT
Approval of this resolution only indicates an intention by the Authority to issue tax-exempt
obligations and does not commit the Authority to issue bonds ot this time. All costs reloted to the
issuonce of the bonds will be paid from bond proceeds or profits. The bonds will be secured by
the project ond will not constitute 0 liability or obligation to the Authority. Some staff costs will be
associated with monitoring compliance with the Regulotory Agreement. Those costs will be
J-I:2-
PAGE 13, ITEM NO.:
MEETING DATE: 02/20/01
reimbursed from on annual odministrotive and originotion fee to be poid by Developer to the
Aufhority, which will be negotiofed before the Aufhority opproves the octual issuance of the bond.
If the proposed deal points are finalized in Agreement form, the loan amount of $4,330,000 will
be appropriated at the time of execution of the Loon Agreement from the unopproprioted
balance in fhe Low/Moderate fund which has a currenf balance of opproximately $6.5 million.
Additionolly, the City will be committed to the PDIF deferrol (unspecified fiscol impact amount),
Pork Fee waiver ($173,781) ond RCT woiver ($73,075). Funds for stoff services are budgeted in
the stoff services portion of the Housing Division budget.
ATTACHMENTS
1. Locator Mop
2. Site Pion
(HINES) H,\HOME\COMMDEV\STAFF.REP\02-13-01\A 113 Otay Ranch Inducement & F;nancial.dac [2/16/01 4,08 PM)
3 - /3
RESOLUTION NO.
RESOLUTION OF THE HOUSING AUTHORITY OF THE CITY OF CHULA VISTA
REGARDING ITS INTENTION TO ISSUE TAX-EXEMPT OBLIGATIONS FORA PROPOSED
AFFORDABLE SENIOR AND MUL TlF AMlL Y HOUSING PROJECT KNOWN AS HERITAGE
TOWN CENTER WITHIN THE OT A Y RANCH MASTER PLANNED COMMUNITY
WHEREAS, the Housing Authority of the City of Chula Vista (the "Issuer") desires to assist
South Bay Community Villas, LP. (the "Applicant") in financing the costs of constructing and
acquiring a multifamily rental housing project, as described Exhibit A attached hereto and
incorporated herein (the "Project");
WHEREAS, the Issuer intends to assist in the financing of the acquisition and construction of
the Project or portions of the Project with the proceeds of the sale of obligations the interest upon
which is excluded from gross income for federal income tax purposes (the "Obligations"), which
Obligations are expected to be issued pursuant to Chapter I of Part 2 of Division 24 the Health and
Safety Code of the State of California; provided, however, that this Resolution shall not authorize the
issuance of the Obligations and provided further that neither the faith and credit nor the taxing power
of the Issuer shall be pledged to repay such Obligations if, and when, authorized; and
WHEREAS, prior to the issuance 'of the Obligations the Applicant expects to incur certain
expenditures with respect to the Project from its own available monies which expenditures it desires
to have reimbursed from a portion of the proceeds of the sale of the Obligations if, and when, issued;
and
WHEREAS, Section 146 of the Internal Revenue Code of 1986, as amended (the "Code")
limits the amount of multifamily housing revenue bonds that may be issued in any calendar year by
entities within a state and authorizes the governor or the legislature of a state to provide the method
of allocation within the state; and
WHEREAS, Chapter 11.8 of Division I of Title 2 of the Government Code of the State of
California (the "Government Code") governs the allocation ofthe state ceiling among governmental
units in the State of California having the authority to issue multifamily housing revenue bonds; and
WHEREAS, Section 8869.85 of the Government Code requires a local agency to file an
application with the California Debt Limit Allocation Committee ("CDLAC") prior to the issuance of
multifamily housing revenue bonds; and
WHEREAS, the Issuer desires to apply to CDLAC for an allocation for the Project;
NOW, THEREFORE, the BOARD OF COMMISSIONERS of the HOUSING AUTHORITY
OF THE CITY OF CHULA VISTA DOES HEREBY RESOLVE, ORDER AND DETERMINE AS
FOLLOWS:
SECTION I. The Issuer has received an application for the financing of the Project on
behalf of the Applicant (the "Application"). The Applicant will incur costs with respect to the
Project prior to the issuance of the Obligations. The Issuer hereby states its intention and reasonably
expects to reimburse to the Applicant for such costs with proceeds of the Obligations; provided,
however, that nothing herein obligates the Issuer to issue the Obligations or provides the Applicant
I
DOCSOC\797875vI124036.0013 .,$ -1<-1
with any legal right to compel the issuance of the Obligations, which decision remains in the final
discretion of the Issuer. Exhibit A describes the general character, type, purpose, and function of the
Project.
SECTION 2. The reasonably expected maximum principal amount of the Obligations is
$25,000,000. This Resolution is being adopted no later than sixty (60) days after the date (the
"Expenditure Date or Dates") that the Applicant will expend moneys for the portion of Project costs
to be reimbursed from proceeds of the Bonds.
The expected date of issue of the Bonds is within eighteen (18) months of the later of the
Expenditure Date or Dates and the first date the Project is placed in service and, in no event, later
than three years after the Expenditure Date or Dates.
SECTION 3. Proceeds of the Bonds to be used to reimburse for Project costs are not
expected to be used directly or indirectly to pay debt service with respect to any obligation or to be
held as a reasonably required reserve or replacement fund with respect to an obligation of the Issuer
or any entity related in any manner to the Issuer, or to reimburse any expenditure that was originally
paid with the proceeds of any obligation, or to replace (unds that are or will be used in such manner.
SECTION 4. This Resolution is consistent with the budgetary and financial circumstances
of the Issuer, as of the date hereof. No monies from sources other than the Obligations are, or are
reasonably expected to be reserved, allocated on a long-term basis, or otherwise set aside by the
Issuer (or any related party) pursuant to their budget or financial policies with respect to the portion
of the Project costs to be financed with the Obligations. This Board of Commissioners is not aware
of any previous adoption of official intents by the Issuer that have been made as a matter of course
for the purpose of reimbursing expenditures relating to the Project and for which tax-exempt
obligations have not been issued.
SECTION 5. This Resolution is adopted as official action of the Issuer in order to comply
with Treasury Regulation § 1.1 03-8(a)(5) and Treasury Regulation § I. I 50-2 and any other
regulations of the Internal Revenue Service relating to the qualification for reimbursement of
expenditures incurred prior to the date of issue of the Obligations, is part of the Issuer's official
proceedings, and will be available for inspection by the general public at the main administrative
office of the Issuer.
SECTION 6. The officers and employees of the Authority are hereby authorized and
directed to apply to CDLAC for a portion of the private activity bond allocation set aside for the
calendar year 200 I for the Project in an aggregate amount not to exceed $25,000,000, to collect from
the Applicant and hold pursuant to CDLAC requirements the required CDLAC deposit for the
requested allocation, and to certify to CDLAC that such amount has been placed on deposit in an
account in a financial institution. Because the amount of private activity bond allocation is limited,
such officers are also authorized to resubmit the application to CDLAC one or more times during the
calendar year 2001 in the event the application is denied by CDLAC.
SECTION 7. The officers and employees of the Issuer are hereby authorized and directed,
jointly and severally, to take any actions and execute and deliver any and all documents which any of
them deem necessary or advisable, with the advice of City Attorney, in order to effectuate the
purposes of this Resolution, and such actions previously taken by such officers and employees are
hereby ratified and confirmed; provided that the terms and conditions under which the Bonds are to
:2
DOCSOC\797875v 1 \24036.0013 .;l - IS-
be issued and sold must be approved by this Board in the manner provided by law prior to the sale of
the Bonds.
SECTION 8. All the recitals in this Resolution are true and correct.
SECTION 9. This Resolution shall take effect immediately upon its adoption.
Presented by Approved as to fonn by
Chris Salomone
Director of Community Development
The foregoing Resolution was passed and adopted by the Board of Commissioners of the
Housing Authority of the City ofChula Vista, California, this 20th day of February, 2001, by the
following vote, to wit:
AYES:
NOES:
ABSENT:
Mayor
ATTEST:
Secretary
3
DOCSOC\797875vl \24036.00 I 3 J-(Co
STATE OF CALIFORNIA )
) ss.
COUNTY OF SAN DIEGO )
I, , Secretary of the Housing Authority of the City ofChula Vista,
California, hereby certify that the above and foregoing Resolution was duly and regularly adopted by
the Board of Commissioners at a regular meeting thereof held on the 20th day of February, 200 I.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this - day of February,
2001.
Secretary of the Housing Authority of the City of
Chula Yjsta, California
K HO~IE\COMMDEV\RESOSIINDUCEMENT RESOLUTION FOR CHULA VISTA (HERITAGE TO\'lN CENTERSOUTH BAY
CO\IMUNITY VILLAS)I.DOC
4
DOCSOC\797875vl\24036.00 13 -.3-/7
EXHIBIT A
DESCRIPTION OF PROJECT
A proposed multifamily rental housing project of approximately 271 units to be known as
"Heritage Town Center" and to be located on 9.3 acres of vacant land in the Otay Ranch Village on
East Palomar Street between Santa Rita and Santa Andrea in the City of Chula Vista, California.
1
DOCSOC\797875vl\240J6.001 J .3- If:
RESOLUTION NO.
RESOLUTION OF THE REOEVELOPMENT AGENCY OF THE CITY
OF CHULA VISTA CONDITIONALLY APPROVING FINANCIAL
ASSISTANCE, SUBJECT TO FUTURE APPROPRIATION, IN THE
FORM OF A RESIDUAL RECEIPTS LOAN FROM THE LOW AND
MODERATE INCOME HOUSING FUND IN AN AMOUNT NOT-TO-
EXCEED $4,330,000 TO SOUTH BAY COMMUNITY VILLAS, loP.
FOR THE DEVELOPMENT OF THE PROPOSED 271 UNIT
HERITAGE TOWN CENTER
WHEREAS, California Health and Safety Code Sections 33334.2 and 33334.6 authorize
and direct the Redevelopment Agency of the City of Chula Vista (the "Agency") to expend a
certain percentage of all taxes which are allocated to the Agency pursuant to Section 33670 for
the purposes of increasing, improving and preserving the community's supply of low and moderate
income housing available at affordable housing cost to persons and families of low- and
moderate-income, lower income, and very low income; and
WHEREAS, pursuant to applicable law the Agency has established a Low and Moderate
Income Housing Fund (the "Housing Fund"): and
WHEREAS, pursuant to Health and Safety Code Section 33334.2(e), in carrying out its
affordable housing activities, the Agency is authorized to provide subsidies to or for the benefit of
very low income and lower income households, or persons and families of low or moderate
income, to the extent those households cannot obtain housing at affordable costs on the open
market, and to provide financial assistance for the construction and rehabilitation of housing which
will be made available at an affordable housing cost to such persons; and
WHEREAS, pursuant to Health and Safety Code Section 33413(b), the Agency is required
to ensure that at least 15 percent of all new and substantially rehabilitated dwelling units
developed within a project area under the jurisdiction of the Agency by private or public entities or
persons other than the Agency shall be available at affordable housing cost to persons and families
of low or moderate income; and
WHEREAS, South Bay Community Villas, L.P. ("Developer") proposes to construct a mixed
use project of 30,000 square feet of commercial retail and 91 senior apartment units and a 180
unit multifamily rental development, with 30 units affordable to very low households at 50 percent
of the Area Median Income (AMI), 102 units affordable to low households at 60 percent of the
Area Median Income (AMI) and 149 units affordable to moderate-income households at or below
120 percent of AMI, known as Heritage Town Center within the Otay Ranch Master Planned
Community ("Project"); and
WHEREAS, Developer is applying for an allocation of Multifamily Housing Revenue Bonds
from the California Debt Limit Allocation Committee (CDLAC); and
WHEREAS, Developer is applying for four percent (4%) tax credits from the Tax Credit
Allocation Committee (TCAC); and
WHEREAS, additional financing is necessary in order to make the residential use of the
Project feasible; and
J -19
WHEREAS, the provision of affordable housing units like the Project is consistent with and
called for by the City's General Plan Housing Element, Consolidated Plan, and California Health and
Safety Code; and
WHEREAS, the Agency wishes to provide Developer with a development loan of four million
three hundred thirty thousand dollars ($4,330,000) to assist with the financing gap for the
construction of the residential units of the Project; and
WHEREAS, the Agency's provision of funds to the residential use of the Project will directly
improve the City's supply of very low and moderate-income housing; and
WHEREAS, in accordance with California Health and Safety Code Section 33334.2 (g),
staff is recommending that the Agency find and determine that even though the Project is to be
located outside the City's redevelopment project areas, those areas will benefit through the
creation of jobs in the project area and elsewhere in the City by providing housing for persons who
work within the City's redevelopment project areas, and through the policies served by dispersing
affordable housing throughout the jurisdiction rather than clustering it all in one area: and
WHEREAS, the Agency has adopted an Implementation Plan pursuant to Health and Safety
Code Section 33490, which sets forth the objective of providing housing to satisfy the needs and
desires of various age, income and ethnic groups of the community, and which specifically
provides for the construction of new affordable rental housing units through Agency assistance;
and
WHEREAS, the residential use of the Project furthers the goals of the Agency set forth in
the Implementation Plan as it will facilitate the creation of affordable housing which will serve the
residents of the neighborhood and the City; and
WHEREAS, the City's Housing Advisory Commission did, on the 7th day of February, 2001,
hold a public meeting to consider said request for financial assistance; and
WHEREAS, the Housing Advisory Commission, upon hearing and considering all testimony,
if any, of all persons desiring to be heard, and considering all factors relating to the request for
financial assistance, has recommended to the Redevelopment Agency that the appropriation be
approved because the Commission believes that the Agency's financial participation in the
development of the Project will be a sound investment based upon Developer's ability to effectively
serve the City's housing needs and priorities as expressed in the Housing Element and the
Consolidated Plan and the cost effectiveness of the Agency's financial assistance based upon the
leveraging of such resources; and
WHEREAS, in accordance with the requirements of CEQA, the Environmental Review
Coordinator has determined that the proposed project has had adequate prior review and is in
compliance with the previously certified environmental documents for the Otay Ranch
Sectional Planning Area (SPA) One (EIR-97-03), and no further action by the City Council is
necessary.
NOW, THEREFORE, BE IT RESOLVED the Redevelopment Agency of the City of Chula Vista
does hereby conditionally approve a residual receipts loan subject to future appropriation in an
amount not-to-exceed $4,330,000 from the Agency's Low and Moderate Income Housing Set-
Aside fund to Developer for the construction of the residential units of the Project subject to the
J -dO
Agency's approvals of an affordable housing and loan agreement which shall include, at a
minimum, the following terms and conditions:
1. Funds shall be used only for those costs directly related to the residential units of the Project.
2. The loan repayment will be secured by a Deed of Trust and Promissory note for the property on
behalf of the Redevelopment Agency of the City of Chula Vista and recorded against the
Project property.
3. The term of the loan shall be fifty-five (55) years.
4. The outstanding balance shall accrue with simple interest at 3 percent per annum.
5. Payment of principal and interest on the Agency loan shall be made, on an annual basis, out of
a fund equal to fifty percent (50%) of the "Residual Receipts", rental income from the Project
minus debt service on the bonds, payment of the deferred developer fee, and reasonable
operating expenses.
6. Developer will be required to operate the Project consistent with the Regulatory Agreement
required by the Project's tax credit financing, the covenants imposed by the Agreement, and
any other project requirements.
7. Developer shall enter into a loan agreement with the Agency consistent with the terms set
forth above and with such other terms as shall be required or approved by the Agency
Attorney.
8. This conditional approval remains subject to final approval by the Agency in its sole discretion.
BE IT FURTHER RESOLVED in accordance with California Health and Safety Code Section
33334.2 (g), the Agency finds and determines that even though the Project is to be located
outside the City's redevelopment project areas, those areas will benefit through the creation of jobs
in the project area and elsewhere in the City by providing housing for persons who work within the
City's redevelopment project areas, and through the policies served by dispersing affordable
housing throughout the jurisdiction rather than clustering it all in one area.
Presented by Approved as to form by
~~drJ£u
Chris Salomone Joh M. Kaheny
Director of Community Development Agency Attorney
H : \S HA R ED \ OtayRa nc h \ He ritag e- Fi n a nce. res. doc
J-~/
PROJECT lOCATION
J-;L~
C HULA VISTA PLANNING AND BUILDING DEPARTMENT
~ OTAY PROJECT lP. PROJECTDESCRIP1l0N:
CONDITIONAL USE PERMIT
PROJECT Sou(h of East Palomar Street
ADORESS: and Santa Rita Request P1"oposed construction of 1) a 18O-unit affordable
housing residential community and 2) a mixed use
LOCATOR FIlE NUMBER; project offering commercial. office and day care facilities
ORC - 01-23 and approximately 91seniors oriented additional units.
C;VT1yfi1es~oca'ors\ORCO123.cdr 12/12100 ATTACHMENT "'
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