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Home My WebLink About7/7/1999 - STAFF REPORTS (2) DATE: JULY 7, 1999 �=- TO: COMMUNITY REDEVELOPMENT AGENCY FROM: ECONOMIC PROGRAMS MANAGER VIA ASST. CITY MANAGER, ADMINISTRATION COTTONWOOD/CHUCKWALLA SINGLE FAMILY RESIDENTIAL PROJECT/PA 49B RECOMMENDATION: It is recommended that the Redevelopment Agency approve an Owner Participation and Loan Agreement with the Coachella Valley Housing Coalition for the development of an affordable family housing project in Project Area#913, specifically within the Cottonwood/Chuckwalla neighborhood. BACKGROUND: As a part of the City's Recapture Our Neighborhoods program, staff has worked with the Coachella Valley Housing Coalition on the revitalization of the Cottonwood/Chuckwalla neighborhood. Using Community Development Block Grant fiords, CVHC conducted a neighborhood study and determined that developing a single-family residential project would be a positive first step in rejuvenating the area. In 1998, CVHC proposed to build seven homes on three vacant lots located at the corner of Avenida Caballeros and Cottonwood and Chuckwalla. Notwithstanding some design concerns, initial discussions with the Planning Commission and the Redevelopment Agency were positive. CVHC then entered into escrow on the three lots and began the process of applying to the State for federal HOME funds in the fall of 1998. It was anticipated that project finding would be provided by HOME fiords, as well as other competitive grants awarded by the State and/or federal government. The Palm Springs Community Redevelopment Agency indicated that it would consider providing Housing Set Aside Funds to go towards permanent financing costs for the new low-income homeowners, as well as reimburse CVHC the land acquisition costs for the three lots. The HOME application was submitted in November, 1998, but unfortunately, was not successful. Meanwhile, CVHC completed the purchase of the three lots, and began negotiations to acquire an adjacent fourth lot. CVHC is still very much dedicated to this project, and intends to apply once again for HOME funds this fall, as well as apply to the Federal Home Loan Bank of San Francisco, Affordable Housing Program(AHP)for a low-interest loan. Other potential finding sources for low interest loans for this project may include the Rural Community Assistance Corp. (RCAC) and local financial institutions. Total development costs are projected at approximately $795,000. CVHC is attempting to secure financing from the following sources: RCAC, $420,000; HOME Funds and/or AHP $140,000;the Community Redevelopment Agency, $200,000; and the balance from local sources. Specific details on the terms of these funds will be negotiated as part of a Development Agreement once terms of the Owner Participation Agreement are met. The attached OPA sets forth items of commitment from both the Coachella Valley Housing Coalition and the Redevelopment Agency in regard to the development of this project: • The Agency will reimburse CVHC $86,454 for acquisition costs associated with the three aforementioned lots, and up to$30,200 for the costs associated with the acquisition of the fourth lot. Property will be transferred to the Agency in the event CVHC is unable to secure all necessary project financing by May 31, 2000. • Up to $25,000 will be paid to CVHC on a reimbursement basis in Oder for them to begin the tract map process on the respective lots. CVHC will repay the Agency should CVHC be unable to secure all necessary financing by May 31,2000. • In addition to the abovementioned items,the Agency agrees to provide up to $200,000 in Housing Set Aside fiords to assist with the project financing. Details to be negotiated through a Development Agreement. Staff also requests that the Agency approve a resolution amending the 1999-00 Community Redevelopment Agency budget to allow a transfer of $342,000 from the Agency's Housing Fund balance to a line-item allocation for this project. JOHNlYMOND / FRANCESCA T SCANO MERRITT Ecdnomi Programs i1Vf eager CDBG/Housing Coordinator DAL AS FLI � / Asst. City M Hager/Administrafroi APPROVED: Ex c ttive Director JUL-14-99 WED 9:35 C, V, HOUSING COALITION FAX N0, 7603426466 P, 01 FAx TRANSMISSION COACHELLA VALLEY HOUSING COALITION 49-701 MONaot STR., SUITt G, INb(o, CA 92201 (760) 347-3157 FAX: (760) 342.64e6 To: Fran Toscano Merritt Date: July 13, 1999 CDBGJ Housing Coordinator, City of Palm Springs Fax #: 322-8325 Pages: 1, including this cover sheet. From: Rebeca Bennis S F Housing Dir or, CVIIC Subject: Chuckwalla Single amily Project COMMENTS: Following are some notes relevant to the cost associated with the construction of C VHC's proposed 7 homes in Chuckwalla. Please take them in consideration when analyzing the total project and its per unit cost. * Comparable homes are selling for $110,000-120,000 * The HART) COST (construction cost only) for this project is about $45 per square foot, which is very reasonable cost for a modest house * Governmental fees are: Sewer and water connection $ 4,150 Water meter 1,850 Building Permit 3,300 School fees 2,800 Planning and engineering fees 4,300 Total governmental fees $16,400 * Permanent fencing. Block wall 3,800 * Closing costs 2,500 * The total project cost is based on estimates. Bids will be requested from contractors after the construction plans are completed. Estimated cost is based on similar homes. Call me if you have any,questions or need more information on our project. Thank you for your support. �� COACHELLA VALLEY HOUSING COALITION ALLA CITY SELF HELP PROJECT PROJECT c rq _ PROJECT PROPOSAL: GROUP 1 (7 SELF-HELP HOMES) DATE: 04/23/99 6%INTEREST RATE MORTGAGES Bedroom 7 Homes 7 HOMES Use of Funds 3 BR/2BA TOTAL PERHOME 7HOMES Hard Costs $58,050 $406,350 $406,350 Lot Cost $21,000 $147,000 $147,000 Overhead&Super. $5,650 $39,550 $39,550 School Fees $2,800 $19,600 $19,600 Architectural&Engineering $7,000 $493000 $49,000 City Permits/Other Fees $12,000 $84,000 $84,000 Interest Expense $2,500 $17,500 $173500 _ Construction Loan:Fees/Points $1,500 $10,500 $103500 Closing/Escrow Costs $2,500 $17,500 $17,500 Total Construction Costs $1133000 $791,000 $791,000 Buyer Sweat Equity $0 $0 Total Technical Assistance $0 $0 Total Project Costs Sources of Funds RCAC $60,000 $420,000 $420,000 HOME Funds and/or AHP $203000 $140,000 $140,000 City RDA Funds $25,000 $175,000 $175,000 CVHC LOC $83000 $56,000 $56,000 Total Total Project Costs $791,000 $791,000 PERMANENT FINANCING Permanent Mortgages $68,000 $476,000 $4763000 HOME Funds and/or AHP $20,000 $140,000 $140,000 City RDA Funds $25,000 $175,000 $175,000 Sales Price(Appraisal) NOTES: Mortgage Amount Based on: 50%Med 50%Med Family Size 4 6 100%County Median Income $46500 $53950 - Family Median Income $23250 $26975 Monthly Housing Costs(30%) $581 $674 Less Property Taxes $118 $118 Lesslnsurance $40 $40 Mortgage Insurance $47 $48 Buyer Repayment Ability $376 $468 Required Mortgage Payment $408 $408 Excess/ (Subsidy) -$32 $60 Interest Rate 6.00% 6.00% Term 30 Years 30 Years Mortgage Amount $683000 $68,000 SUDI.XLS&[Date12:45 PM i • RESOLUTION NO OF THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, CALIFORNIA, APPROVING AN OWNER PARTICIPATION AND LOAN AGREEMENT WITH THE COACHELLA VALLEY HOUSING COALITION FOR THE DEVELOPMENT OF SEVEN SINGLE-FAMILY HOMES IN REDEVELOPMENT PROJECT AREA#913. WHEREAS,the Community Redevelopment Agency of the City of Palm Springs(the"Agency")has established an affordable housing setaside fund in accordance with Section 33000 et. seq. of the California Health and Safety Code;and WHEREAS, the funds are earmarked for the acquisition, construction,rehabilitation of affordable housing to benefit the community; and WHEREAS, the Coachella Valley Housing Coalition("CVHC")desires to participate with the Agency in its affordable housing program by constructing seven single-family homes for low income families in the Cottonwood/Chuckwalla neighborhood which is within Redevelopment Project Area 9913; and WHEREAS, CVHC has studied the neighborhood and has determined that the Project Area would benefit from the new residential construction and new family homeownership; and WHEREAS,CVHC has acquired three lots in the Project Area, specifically APN's 507-042-011, 507-042- 022,and 507-042-010, for the development of this project,and are negotiating on a fourth lot; and WHEREAS, CVHC will submit an application for federal HOME funds to the State of California in the fall of 1999 to assist with development costs of the project;funding will also be sought from the Federal Home Loan Bank of San Francisco Affordable Housing Program,the Rural Community Assistance Corp., local financing institutions, and the Palm Springs Community Redevelopment Agency;and WHEREAS, subdivision of the respective lots needs to occur for the development of the project and commencement of that process will provide positive credits to CVHC's HOME application; and WHEREAS, once the appropriate development funds have been secured,the Agency and CVHC will negotiate a Development Agreement for the specific project development points. NOW, THEREFORE, BE IT RESOLVED by the Community Redevelopment Agency of the City of Palm Springs, as follows. SECTION I. An Owner Participation Agreement with CVHC for the development of 7 affordable single-family homes in the Cottonwood/Chuckwalla neighborhood, which is within Redevelopment Project Area#913, is approved. SECTION 2. CVHC and the Agency agree to enter into negotiations of a Development Agreement on the project development and financing upon CVHC's acquiring the appropriate funding sources for the project or prior to May 31,2000. SECTION 3. The Executive Director, or his designee, is hereby authorized to execute on behalf of the Agency the Owner Participation Agreement and all other documents necessary to effectuate the Agreement, and make minor changes as may be deemed necessary in a form approved by the Agency's legal counsel. ADOPTED this day of , 1999. AYES: NOES: ABSENT: ATTEST: COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, CALIFORNIA By: - Assistant Secretary -- -- — - - - -- — — Chairman --- Reviewed and Approved:_ • RESOLUTION NO. • OF THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, CALIFORNIA, AMENDING THE BUDGET FOR THE 1999_00 FISCAL YEAR. WHEREAS Resolution 1066 approving the budget for the fiscal year 1999-00 was adopted on June 9, 1999; and WHEREAS the Executive Director has recommended, and the Agency desires to approve, certain amendments to said budget; NOW THEREFORE BE IT RESOLVED that the Director of Finance is authorized to record inter-fund cash transfers as required in accordance with this Resolution, and that Resolution 1066, adopting the budget for the 1999-00 fiscal year is hereby amended as follows: SECTION 1. ADDITIONS rNo. 882 ND Activity Account Amount 8382new $342,000.00 (to be assigned) Low & Moderate Tahquitz Andreas Income Housing et al Purpose: To provide funds for Cottonwood/Chuckwalla Single Family residential housing construction project. SECTION 2 . SOURCE The remaining cash balace in the Housing Fund exceeds $2 million. FUND Activity Account Amount No. 882 301 $342,000.00 Title: Low & Moderate Fund Balance Income Housing Adopted this day of 1999 . AYES: NOES: ABSENT: ATTEST: COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS By Assistant Secretary Chairman REVIEWED AND APPROVED AS TO FORM