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HomeMy WebLinkAboutrda min 1992/03/26 Thursday, March 26, 1992 Council Conference Room 4:10 p.m. City Hall Building CALL TO ORDER 1. ROLL CALL: PRESENT: Membem Grasser Herren, Malcolm, Moore and Rindone ABSENT: Chairman Nader ALSO PRESENT: John D. Goss, Executive Director; Chris Salomone, Executive Secretary; Brace M. Boogaard, Agency General Counsel; and Berlin Bosworth, Secretary to the Redevelopment Agency 2. APPROVAL OF MINUTES: None submitted. CONSENT CALENDAR None submitted. END OF CONSENT CALENDAR PUBUC HEARINGS None submitted. OPAL COMMUNICATIONS None submitted. ACTION ITEMS 5. RESOLUTION 1244 APPROVINGASUBORDINATIONAGREEMENTW1THCMCCENTER BARRIO HOUSING CORPORATION ("CORPORATION"), AND A LOAN ASSIGNMENT AND ASSUMPTION AGREEMENT WrrH CORPORATION AND PARK VILLAGE APARTMENTS LIMITED pARTNERSHIP AI.L IN FURTHERANCE OF A DEVELOPMENT AGREEMENT HERETOFORE ENTERED INTO BETWEEN AGENCY AND CORPORATION - On June 4, 1991 the Agency approved a loan to Civic Center Barrio Homing Corporation to build 28 family units for low-'income households. The developer is requesting subordination of the Agency loan to a construction loan from Security Pacific Bank. Staff recommends the Agency adopt the resolution approving the Subordination Agreement with CCBHC; approving the Loan Assignment and Assumption Agreement with CCBHC and Park Village Apartments Limited Partnership; and authorize the Executive Director to execute these agreements and related documents. [Continued from meeting of 3124/92] Commtluity Development Specialist David Harris presented a brief overview of the staff report. Mr. Harris pointed out that Civic Center Barrio Housing Corporation, who has a substantial record in producing very low and low- income housing, is not only asking the Agency to subordinate the City's loan but also to assign to a new entity, the Park Village Limited Partnership which was set up to take advantage of the tax credit. Staff believes the risks involved with subordinating the loan have been minimized. MINUTES Page -2- March 26, 1992 Member Moore asked how staff verified Civic Center Battle's record as being substantial. Mr. Harris responded that he had traveled to Santa Aha where Civic Center Barrio Housing Corporation is based and that he visited each and every project that they hav~ developed. Additionally, they manage units for the Coastal Commission under their Affordable Housing Program and they received very favorable recommendations from many of the non-profit funding som-e2~. Vice-Chair Malcolm wanted to know why the Agency should enter into a loan with non-recourse. Mr. Harris stated the purpose of having the non-recourse loan is to allow the California Equity Fund, who is providing the equity investment, to take advantage of the greater depreciation base: Ms. Ann Wilson, Sma Diego LISK Office, associated with the California Equity Fund, re4ponded that as a non-profit corporation they have created a fund to flnanc, e low4ncome development deals and make use of the loan from the income tax credits. The corporation's purpose is public benefit; utili~ng a private part of the tax law to increase the amount of money that can go into creating affordable housing while at the same time limiting the amount of receipts investors can expect. This is a systematic, standardized format for putting low income non-profit affordable housing deals together. Vice-Chair Malcolm asked the mix of units and why is the project costing so much. Mr. Harris stated there would be six 1-bedroom units renting at between $250-$420; thirteen 2-bedroom units renting at between $280-$507; and, nine 3-bedroom units renting at between $301-$538. Mr. Andy Sanderson, developer, stated the contractor has bid $1.4 million, the revisions to the plans to meet the financing structure have added an additional $30,000. The City loan fees and other required fees, which include the School District, total about $210,000. Vice-Chair Malcolm asked if the project had been put out to bid. Mr. Sanderson responded there was a negotiated contract with Munderson Brothers of Santa Ama who have completed numerous projects for Civic Center Barrio Housing Corporation but that all subcontractors will be from the South Bay area. Vice-Chair Malcolm stated his concern that no general contractor in the South Bay had an opportunity to bid on the project. He stated his desire that the project be reopened to bid to include San Diego County and South Bay firms. Mr. Sanderson stated, due to timing at this juncture, re-bid was not feasible. Additionally, the costs are such because of requirements by the State, e.g., the Child Care Program. These are monies that were not initially planned for. Vice-Chair Malcolm asked how the loan is going to be repaid. Agency General Counsel Boogaard responded the loan has a 30-year amortization, all due and payable in 16 years at an interest rate of 8.0 percent. Interest will accrue, but payments are deferred for four years; at the fifth year they will begin payment based on a 30-year amortization of $450,000. At the end of 16 yearn they will owe $300,000, which will be a balloon payment. Member Riudone asked what the guarantees on deed restrictions do we have that ~hese units will be maintained as low income. Agency General Counsel Booganrd noted the Agency has restrictive covenants that have not been asked to be subordinated which then will remain in priority position for 30 yeats. Minutes Page -3- March 26, 1992 Assistant Community Development Director Gnstafson also noted that in o,4,~;tion to the 30-year restdetive covenants, the Agency low income housing set-aside funds odd on restrictions that go out to 55 years. Member Rindone stated he wants to ascertain if the City is exceeding, in comparison to comparable cities the size of Chula Vista and its economy, in building low- and very low-income housing. Community Development Director Chris Salomone noted that the City of Chula Vista is performing, based upon data from a year ago, first of ail cities in San Diego County in addressing the need; however, the City is not coming anywhere near meeting the need as determined by the Regional Housing Needs Survey. Member Rindone concurred with staffs concern to ~utdress this issue with as many projects as can be brought forward; he also wanted to illustrate that if, for other reasons, and that is what Vice-Chair Malcolm indicated, there are a number of concerns that had not been satisfied, then those are valid arguments as well. Member Rindone asked staff to state again why they came forward with their recommendation that the Agency approve the request. Mr. Salomene noted that in these type projects the risk is there and while he did not want to diminish it, that the opportunity matched to the risk is a factor that must be considered. However, this project comes as a package where the City does not have to manage or bear the responsibility of maintenance for 55 years. Ms. Wilson added the City of Chula Vista has this opportunity to be a leader in San Diego County in becoming involved in private affordable housing development-which this project is. She pointed out that if this project were a County project is would cost considerably more as the project would have to be bid under the rules of Davis- Bacon and have many more government regulations atlached to the project. Agency General Counsel Boogaard stated that these projects are difficult to arrange, package, and get financing for and the Agency is so close to allowing it to come to fiafition, it is his office's recommendation, despite the risks identified, to go forward. Member Rindone stated a concern of both he and Vice-Chair Malcolm is the lateness with which the members receive the materials which allows little time to review. His concern is that a project may not be planned properly or that s project will not get approved that should get approved. RESOLUTION 1244 Ol0'10'gRED BY VICE-CHAIR MALCOLM, reading of the text was waived, passed and approved 4-0-1, with Chair Nader absent. Agency recessed at 4:50 and reconvened at 4:58 p.m. 4. RESOLUTION 1242 APPROVING A CONTRACT WITH CINTI AND ASSOCIATES FOR PLANNING SERVICES AND ASSISTANCE IN ~ PREPARATION OF PLANS AND DOCUMENTS FOR TIlE MIDBAYFRONT, AND APPROPRIATING PLANNING AND DEVELOPMENT FUNDS THEREFOR - The City Council approved the Conceptual Plan for development of the Midbayfront. To carry out this Plan it is necessary to amend the City's Local Coastal Plan, prepare a Development Agreement, amend the Bay~ont Redevelopment Plan, and prepare a General Plan amendment. Council indicated that these activities move forward quickly. Plan~i,~g consulting services will be necessary to establish planning guidelines, standards and controls, assist in preparation of an amended LCP, and to ensure that all relevant documents are properly coordinated. Staff is recommending retention of Cinfi and Associates based upon their past experience end familiarity with the Midbayfront project, and performance on past Agency contracts. Staff recommends that the Redevelopment Agency adopt the resolution entering into a contract with Cinti and Aasoeiates. [Continued from meeting of 3/24/92] MINUTES Page -4- March 26, 1992 Mr. Salomone presented a brief staff report. Mr. Salomone further stated that two issues arose, one involved using the expertise of a specialist who had worked with the Coastal Commission and secondly, one who is experienced in preparing documents and making presentations. Staffis incorporating Ms. Nancy Lucas, a coastal specialist, into the existing contract at no additional fee. Ms. Lucas' Scope of Work is to work as a subcontractor to Cinti & Associates in the preparation of Agency documents and review them prior to submission to the Coastal Commission. The contract with Cinti & Associates only covers preparation of documents and submitting them to the City Council for approval. The eentraet does not cover consulting servieea for the next step which would be the submission to the Coastal Commission. Staff intends, at the point of approval of the Local Coastal Plan by the City Council, to consult with the City Council, Member Malcolm, Executive Director Goss and be very deliberate as to how we stage our presentation and make a decision at that time how the Agency proceeds to the Coastal Commission. Vice-Chaff Malcolm noted that Ms. Lucas was formerly the Director in the Region for the Coastal Commission and has worked for the City in the past and has performed admirably. RESOLUTION 1242 OF/(ERED BY VICE-CHAIR MALCOLM, reading of the text was waived, passed and approved 4-0-1, with Chair Nader absent. Member Rindone pointed out that when the stage is reached, he looks to staff to come up with a recommendation of a specialist as this is a different art and skill, and a different political arena. It is in everyone's best interest to have our Local Coastal Plan presented well and understood with the interests of the members of ~he Coastal Commission Board. Viee-Ctmir Maleelm's concern is well directed and he wants to reinforce that position. This is a specialty and unique skills are required, an unusual circumstance where a consultant will be needed. OTHER BUSINESS 8. DIRECTOR'S REPORT - None 9. CHAIRMAN'S REPORT - None 10. MEMBERS' COMMENTS - None ADJOURNMENT AT 5:14 P.M. to the next regular Agency meeting on Tuesday, April 7, 1992 at 4:00 p.m., immediately following the City Council meeting, Council Chambers, Public Services Building. Respectfully submitted, Berlin D. Bosworth Secretary to the Redevelopment Agency [C :\WP51 ~AGENCY~MINUTE~ \03 -26-92 .MIN]