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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~ ~{ft- ~..- . -- - 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 /-1 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. .;). -I 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. d)~';" 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 ~....i 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 ~-1 (- I J '--- ..:;-~ 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 ~-f- 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 &. ~ -v/" j:.. ¡"! 4:,,'1 /.! ~ ../ . v'&',;: ;',1!.-. - Chris Salomone John M. Kaheny Director of Community Development Agency Attorney .:2-K 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 ..3-/ PAGE 2, ITEM NO.: MEETING DATE: 02/20/01 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. 3-d- PAGE 3, ITEM NO.: MElliNG DATE: 02/20/01 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 3-3 PAGE 4, ITEM NO.: 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. 3 -Lj PAGE 5, ITEM NO.: MEETING DATE: 02/20/01 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 J-;;¡- PAGE 6, ITEM NO.: MEETING DATE: 02/20/01 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. .3 -~ PAGE 7, ITEM NO.: 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 3 -7 PAGE 8, ITEM NO.: 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. ,3-? PAGE 9, IIEM NO.: 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), .3 - '7 PAGE 10, ITEM NO.: 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 ...3~(O PAGE II, ITEM NO.: 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 ,3- (( PAGE 12, ITEM NO.: MEETING DATE: 02/20/01 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 "' I-;t"/'II -~h_:;¡_rl . ¡f¡.!,,¡,! r ¡¡¡,oj",::;,:: i5 ¡ ¡ - ¡ ". ,:;. , ¡, ,;1_1 I = , ., ",. i - E :-,--' ~ ," . ~,i ! ~ :;; "- ë ,ê '" '" .<:: (.) <> g "¡ij ~ ro Ü 8 a::::;; 1t E § ,~.s g -g 0(.) .5 ; ; ¡ ,.3. 3-023 ~- . i -3-oJ-Ý I !! ¡, II il II! i!! !¡ii! Illilliill I" I I ! ¡!WI I' ,llhl!hl :1 i:II:¡f/II' U¡fi¡¡r. I'~ .I, LI"!fU.!IIJI' i --.'.-.. , , J -« S- ' ~ - ..----- '" --