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HomeMy WebLinkAboutcc min 1995/12/05 RDA MINUTES OF A JOINT MEETING OF THE REDEVELOPMENT AGENCY/ CITY COUNCIL OF THE CITY OF CHULA VISTA Tuesday, December 5, 1995 Council Chambers 6:20 p.m. Public Services Building CALL TO ORDER 1. ROLL CALL: PRESENT: Agency/Council Members Alevy, Moot, Padilia, Rindone, and Chair/Mayor Horton ALSO PRESENT: John D. Goss, Director/City Manager; Bruce M. Boogaard, Agency/City Attorney; and Beverly A. Authelet, City Clerk 2. APPROVAL OF M1NUTES: November 14, 1995 and November 21, 1995 MSUC CRindone/Padilla) to approve the minutes of November 14, 1995 and November 21, 1995 as presented. Chair/Mayor Horton abstained on the minutes of November 14, 1995. ORAL COMMUNICATIONS None ACTION ITEMS 3. RESOLUTION 1478 WAIVING THE CONSULTANT SELECTION PROCESS AND AUTHORIZING THE EXECUTIVE DIRECTOR TO EXECUTE A TWO-PARTY AGREEMENT BETWEEN THE CITY OF CHULA VISTA AND WOODWARD-CLYDE CONSULTANTS FOR SOIL TESTING AND REMEDIATION CONSULTING SERVICES AT 760 BROADWAY AND APPROPRIATING FUNDS THEREFOR-The Agency approved demolition of pavement and structures on 11/14/95 under condition the developers of the Broadway Business Homes deposit funds to cover their share of the soil remediation costs. A contract will be executed only if demolition proceeded in accordance with all conditions previously stipulated by the Agency. Soil remediation work must begin concurrent with site demolition to maximize cost efficiency. Staff recommends approval of the resolution. (Community Development Director) (4/5ths Vote Required) Chris Salomone, Director of Community Development, stated the applicant had requested the option of staffing the demolition sooner in the process than the close of escrow. In anticipation of that staff wanted to make sure that Woodward-Clyde was on board to dispose of hazardous materials as the demolition occurred. Member Moot stated that he had recently learned that the law firm in which he was a parmer had represented the consulting firm. He did not yet know under the FPPC guidelines as to whether that would preclude him from voting on the matter, but until he was able to obtain more of the historical information concerning that representation he would abstain from participation in order to avoid a potential conflict of interest. Member Alevy questioned who would be responsible for costs over $50,000. Joseph Monaco, Environmental Projects Manager, responded that the $52,000-$59,000 included the predemolition testing costs, i.e. $17,100 and those costs were not included in the agreement with the Citron's on the splitting of costs. Those were costs incurred solely by the City. The amount of the total contract of $41,297 was the amount that was agreed upon to be split. The City would pay $20,000 and the Citron's would pay $20,000. Mr. Boogaard stated there was a provision in the agreement that both sides had a walk-a-way right over $40,000, but ther~ was also a duty to meet and confer to discuss how to split the excess. He questioned if there had been agreement on how to handle the excess. Mr. Monaco responded that was correct. It was his understanding that the walk-a-way applied to the $40,000 figure which was the remediation costs from the present time onward and did not include the predemolition soils testing Minutes December 5, 1995 Page 2 costs. The total amount of the contract included in the appropriation was $41,297 and it was not anticipated that the costs would go beyond that. Mr. Salemone stated that the City had done the preliminary analysis of the site to determine if them was hazardous material on the site. It was determined that there was hazardous materials but not the extent or quantity. The $17,000 was spent on the assumption that the City had to deliver a clean site. The City entered into the $40,000 split agreement after the City had already spent the $17,000. Mr. Monaco stated it was staff's intent to divide the contract into two phases, i.e. to identify and stockpile contaminated soils as demolition occurred which was estimated at approximately $20,297. At the end of that phase staff would have a better understanding of what the total quantity was of contaminated soil and a hard number on what the disposal costs would be. Staff would return to the Agency at that time with a report. Member Rindone questioned if them was an advantage to negotiate terms in excess of $40,000 at the present time. Mr. Monaco responded that the cost estimates were conservative on the high side and staff did not expect to exceed that amount. Therefore, staff did not feel there would be any particular advantage at the present time. RESOLUTION 1478 OFk'ERED BY MEMBER RINDONE, reading of the text was waived, passed and approved 4-0-0-1 with Moot abstaining. Mr. Salemone informed the Agency that the materials were a non-hazardous type of material. Staff felt all of the costs were potentially recoverable from Fuller Ford because the site was given to the City with a full indemnity for contamination. 4.A. RESOLUTION 1479 APPROVING A RATIFICATION OF A FUNDING COMMITMENT FROM THE LOW AND MODERATE INCOME HOUSING FUND ($378,280) FOR AN AFFORDABLE HOUSING PROJECT PROPOSED TO BE DEVELOPED IN RANCHO DEL REY SPA III--McMillin Companies entered into an agreement on 3/7/95 with the City. To satisfy their affordable housing requirement for SPA III McMillin created a joint ventuse with Sares-Regis, Orange Housing Development Corporation, and South Bay Community Services. In order to m-apply for tax credits the developer is requesting an extension of time which will require the performance dates of the Agreements be amended. Staff recommends approval of the resolution. (Community Development Director) B. RESOLUTION 18134 APPROVING A RATIFICATION OF LAND DONATION AND FUNDING COMMITMENT FROM HOME PROGRAM FUNDS ($160,000) FOR AN AFFORDABLE HOUSING PROJECT PROPOSED TO BE DEVELOPED IN RANCHO DEL REY SPA III C. RESOLUTION 18135 APPROVING (1) AN AMENDED AND RESTATED CONVEYANCE AGREEMENT AND ESCROW INSTRUCTIONS WITH RANCHO DEL REY INVESTORS; (2) AN AMENDED AND RESTATED ASSIGNMENT OF CONVEYANCE AGREEMENT AND ESCROW INSTRUCTIONS WITH CORDOVA VENTURES; AND (3) AN AMENDED AND RESTATED LOW INCOME HOUSING AGREEMENT BETWEEN RANCHO DEL REY INVESTORS AND CORDOVA VENTURES ALL WITH RESPECT TO 2.97 ACRES OF PROPERTY WITHIN SPA III PROPOSED FOR DEVELOPMENT INTO A 40 UNIT LOW INCOME HOUSING COMPLEX AND AUTHORIZING THE MAYOR TO EXECUTE THE AMENDED AND RESTATED CONVEYANCE AGREEMENT AND ESCROW INSTRUCTIONS AND THE AMENDED AND RESTATED ASSIGNMENT OF CONVEYANCE AGREEMENT AND ESCROW INSTRUCTIONS Member Moot stated that due to the representation of McMillin by his law firm he would abstain from participation in order to avoid a potential conflict. Dave Gustafson, Deputy Director of Community Development, gave a brief report on the purpose of the recommended actions, their relationship to Rancho del Rey's affordable housing obligation, and the forward process. A neighborhood forum had been held and attendees of the forum and all property of owners of record had been informed of the present meeting. If the Agency/Council approved the recommended action the property tramfen and loans contemplated in the agreements would occur conditioned on the joint venture successfully obtaining tax credits. If they did not receive the tax credit award the deal would be off. If approved staff would hold an Minutes December 5, 1995 Page 3 informational conunity forum in Rancho del Rey at the point at which the tax credits were awarded and more specific project plans would be available to share with the community. Juan Arroyo, Housing Coordinator, reviewed implications of recent housing element legislation and concerns raised at the community forum. It was staff's opinion that the City could not afford to lose out on the housing opportunity and, thesefore, recommended approval of the resolutions. Chair/Mayor Hotton stated the staff report indicated that the Agency/City could be paid back from residuals of the project. It was her understanding that it was a not-for-profit developer handling the project. Mr. Gustafson responded that in March 1995, the Agency adopted a threshold of $10,000/unit in assistance from the City. McMillin and Rancho del Rey only owed the City 23 units, but because economies of scale they had to build 40 units to get the tax credits. The difference of 17 units would be available to sell, i.e. a market where other developers who needed to satisfy a housing obligation to the City enuld have the opportunity to buy those credits for a value. The difference between the $10,(XX) the City felt was an appropriate threshold par unit to subsidize and the $13,500 represented by the two loans, the City would recoup from the sale of the tax credits. For every housing credit that was sold the City would receive $8,100 and staff felt it would probably be worth $20,000- $25,000. A portion of the money being loaned would be repaid which would bring the City's expenditure down to $400,000. If revenues were produced by a non-profit venture the City would have access to those revenues to repay the City's loan. It would be a long term process. Chair/Mayor Hotton questioned what assurances were in place to ensure that the project would be available for low income families for 55 years. Mr. Gustafson stated the City had absolute certainty because the tax credit investors only received the tax credit if the project was sustained as affordable. Member Rindone questioned what would have to be modified to have an owner occupied low income project. Mr. Gustarson responded that it would require a much greater subsidy. The Housing Element and agreement would look to Rancho del Rey to provide that additional money. It had been very difficult to find any feasible low income affordable for sale projects. One had been done in Salt Creek Ranch which required a very substantial subsidy and the only way the developer could provide it was put a surcharge on all the market rate units. The other problem was that it was fight at the top of the low income affordability and did not go into the lower income categories which had been identified as the greatest need in the Housing Needs Statements. Member Rindone questioned if there were federal funds available for owner occupied low income projects. Mr. Gustafson responded that the Mortgage Income Credit program was available but only worked for people in the moderate income category or at the top of the low income category. Mr. Arroyo stated the HOME funds could, on a limited level, be used to create assistance with a second mortgage or closing costs. Staff was looking at an out of state source, Begin funds, to increase the City's first time home buyer efforts. Member Rindone stated it was not a new issue and had been addressed by previous councils. He wanted to see a more aggressive legislative program for first time home buyers. Chair/Mayor Horton questioned if there were comparable projects in the City that were successful. Mr. Arroyo replied that Park Village Apartments was opened approximately one year ago. That project had on-site child care and outside job training. The tenants were also involved in the decision making process of the complex. Chair/Mayor Horton stated she had visited the project and there was a deep sense of pride and caring among the residents. Minutes December 5, 1995 Page 4 Member Rindone stated he was aware of a number of projects in the City of San Diego and one of the things they had done to mitigate the development of social problems was to ensure that there were commnRity facilities near the project. The Palomsr Apartments were highly successful. Mr. Gustarson replied that staff felt that essential and they would look at those issues during the design stage. Member Padilla stated all the Agency/Council was being asked to do was to amend existing housing agreements to allow performance deadlines to be extended to compete for tax credits. The City already had a conditional agreement regarding the financial arrangements. He felt there was some misunderstanding about what the Agency/Council was being asked to do. Nothing would be changed. · Ken Sander, 315 Fourth Avenue, Chula Vista, CA, Community Development Director, South Bay Community Services, requested the Agency/Council support of the Cordova project in Rancho del Rey. The extension would allow the developers to apply for another round of tax credits. The project would offer 40 rental units at affordable rates and was consistent with the City's inclusionary housing policies. The property would be managed by a professional property manager. South Bay Community Services had no desire to have a project that was poorly nm or badly managed. Tenants would be screened and rules would be strictly adhered to. They would meet all zoning requirements and their structures would conform with the other housing in the area. · W. A. Smell, 8912 Calle Candelero, Chula Vista, CA, was not present when called to the dais. ·Mitch Thompson, 5110 Glen Verde Drive, Chula Vista, CA, commercial real estate broker for Bank of America stated he was not the account officer for the project, but B of A was considering the project as a lender. He supperted the project because such projects tended to have adequate reserves, were well maintained, and did not blight communities. Homeowner versus rental required a much larger subsidy. There were many home ownership opportunities in that area but very few rentals. With low rents residents had a tendency to stay a very long time and, therefore, took pride in the property. Because of the involvement of South Bay Community Services he felt the project would be well managed. · Lin Walton, 3123 Casa Bonita Drive, Bonita, CA, member of South Bay Community Services Board of Directors, stated he had lived at 17 Fourth Avenue as an Ensign in the Navy because that was all he could afford at the time and it was in a good area. He now had a son in the Naval Academy that wanted to live in Chula Vista and his daughter was also moving back to Chula Vista and they could not afford to purchase homes. There was a need for well managed low income housing in good and safe areas of the City. · Anthony Ciotti, 1338 Santa Cruz Ct., Chula Vista, CA, stated he lived in the proposed area of the project and the proposed site was all condominiums. AB1715 included a provision that permitted the county and it's cities to use existing housing, not just new structures, to meet the affordable guidelines. A large portion of the eastern edge of Rancho del Rey lot #8 was a green belt, but unfortunately the west side of the walkway had been taken over by the McMillin Company. That was to have been a flat green belt area for children to play in. The area presently had a lot of problems end he had been told that the police could not respond to calls because there were only two policemen east of I-805 per shift. He expressed his concerns with social problems associated with low income projects. He felt he could rally 200-300 people to sign a petition against the project. He bad not been notified about the public meeting and when calls were made to the Planning Department no information was available. He requested that Council not approve the staff recommendations. · Alfredo Ybarra, 264 Surrey Drive, Bonita, CA, expressed his support for the Cordova project. It was an opportunity for the City to provide affordable housing for working families and would promote community balance by placing affordable housing where such housing had not been traditionally located. The Mayor's Blue Ribbon Housing Committee had emphasized the need for special attention to ensure full and equitable neighborhood integration for low income affordable housing units within the City's new eastern territories. The project was consistent with Chula Vista's Housing Policy which required developers of 50 + units to provide 5 % of their units for low income households and 5 % to moderate income households. The inability to develop needed affordable housing bad and would continue to have a negative impact on local jobs and economic growth. · Linda Boone, 217 E. Chapman Avenue, Onmge, CA, Executive Director of Orange Housing Development Corporation, stated they were formed for the single purpose of developing housing for working families. The tax credit program was private monies and the number of credits and the expenses or deductions they had to sell depended upon how much they spent. Therefore, they had incentive to build places that had all the amenities that were needed and wanted in the community. There was a tremendous amount of regulation involved for Minutes December 5, 1995 Page 5 management. They would have agreements with the city, the lender, the private investors to obtain the tax credits, and McMillin company. The City would have far more power over the projeet than they would over any other type of project. Tenants would be selected very carefully and they currently had a large waiting list of people. She agreed that there should be more government programs to assist home ownership. They had been informed that there might be a way to turn the project into a homeowner property after the tax benefits were completed for the investors. She stated South Bay Community Services and OHDC would be open to that possibility. · Robert H. Cardenas, 1061 Las Rosas Ct., Chula Vista, CA, stated he was concerned that those speaking on behalf of the project did not live in Chula Vista or the proposed area. He was familiar with other low income projects and the associated crime and drug activity. He requested that Council consider the people living in the area before making a decision. Chair/Mayor Herton stated it was her understanding that the state mandated housing policy referred to new units only. It was felt that the rehabilitation aspect of SB1715 would provide credits to cities that were rehabed, but it was her understanding that was not true. Mr. Gustarson replied that there was a process underway to fully define the legislation as there was ambiguity in some areas. The self certification process at the San Diego regional level really responded just to the certification and the City would be able to count some of it's fair share performance in areas such as housing rehabilitation and acquisition, but it did not relieve the City from the regional share obligation to provide new affordable units. It might help to reduce that requirements somewhat. The current target that the City was obliga~l to pursue was 15 % of the total need and the statistics showed that the City had done as well as any jurisdiction, but had only accomplished 18~,~ % of the total goal. Staff did not feel it would be sufficient to remove the need to provide new affordable housing opportunities balanced throughout the community and balanced throughout tenancy types. It would probably be a year before the performance goals were defined. Member Alevy stated it was an emotional issue. It was important to make it clear to the community that if the Agency/Council did not approve the resolutions the project would fall by the wayside. He had attended the community meeting as he lived in the area and met with the neighborhood, staff, and applicant. The Agency/Council needed to listen ~ the residents of the area when they stated there was a need for affordable housing, but they wanted to see the pride of ownership versus renting. He understood the City's obligation to provide all levels of housing within the community but he wanted to see the ambiguities of AB1715 investigated before taking final action as he was not convinced that it had to be within each planning area. He would insist that any affordable housing project in any area include residents within 1,000 ft. for the architectural design review. The City in it's notification process should not just notify the owners, but also the residents within a certain perimeter. When EastLake was developed the developer was able to notify potential home buyers that was a probable part of their community. The people in the neighborhood were not given that opportunity. He wanted to see projects sighted in new or similar demographic neighborhoods. Member Padilia agreed that it was a controversial issue and felt the entire Agency/Council took the concerns expressed by the community to heart. The action taken would be only to amend existing agreements that had previously been approved to allow the extension of deadlines. RESOLUTIONS 1479, 18134, AND 18135 OFI~ERED BY MEMBER PADILLA, reading of the text was waived. Member Rindone stated Member Alevy had summarized the feelings of the majority of the Agency/Council. The vote was not the approval of the project, but the extension to allow the developer to reapply for tax credits. All Agency/Council members were concerned for the residents in the area, but all aspects would be fully ex~mlned before final approval. The area of owner occupied projects had not been fully explored and he knew the Agency/Council would be committed to researching that issue fully. Chair/Mayor Herton stated it was not one of her goals to make Chula Vista the low end capital of San Diego County. However, she did recognize that the City needed to provide a balance of housing types. Low income housing projects always created controversy in neighborhoods. She had visited some of the projects that she had been involved in since being on the Council and felt very confident in stating that the low income projects were very well maintained and monitored and it was a healthy living environment. Even though it would not be a for sale ! T Minutes D~w,~mb~r 5, 1995 Page 6 7 project they could create an environment that would give tenants a pride of ownership and she felt they would make very good neighbors. The project would be well monitorot and the tenants screened. VOTE ON MOTION: approved 3-1-0-1 with Alevy opposed and Moot abstaining. OTHER BUSINESS 5. DIRECTOR'S/CITY MANAGER'S REPORT(S) - None 6. CHAIR'S/MAYOR'S REPORTfS) - None 7. AGENCY/COUNCIL MEMBER COMMENTS Member Rindone · Member Rindone hoped that the spirit of the holiday season would be maintained all year around. Member Alevv · Member Alevy thanked Chris Sahimone, Ken Larsen, and their staff for helping him address a problem brought to him by a 14 year old boy. A lot in one of the redevelopment districts had become overgrown which resulted in spiders, rodents, and other insects which the boy felt impacted his home. Staff was able to contact the property owner and have the problem taken care of within several days. ADJOURNMENT ADJOURNMENT AT 7:44 P.M. W the Regular Re, development Agency Meeting on December 19, 1995 at 6:00 p.m., imme~tiately following the City Council meeting, in the City Council Chambers. Respectfully submitted, BEVERLY A. AUTHELET, CMC/AAE, City Clerk by: Vicki C. Seder~uist, ~M~uty City Clerk