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HomeMy WebLinkAbout11/8/2000 - STAFF REPORTS DATE: NOVEMBER 8, 2000 TO: CITY COUNCIL FROM: REDEVELOPMENT DIRECTOR AUTHORIZING THE SUBMITTAL OF AN APPLICATION TO THE CALIFORNIA STATE DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT FOR FUNDING UNDER THE HOME INVESTMENT PARTNERSHIPS PROGRAM; THE EXECUTION OF A STANDARD AGREEMENT IF SELECTED FOR SUCH FUNDING AND ANY AMENDMENTS THERETO; AND ANY RELATED DOCUMENTS NECESSARY TO PARTICIPATE IN THE HOME INVESTMENT PARTNERSHIPS PROGRAM. RECOMMENDATION: It is recommended that the City Council consider the application to the California Department of Housing and Community Development for funding of $1,000,000.00 (One Million Dollars) in State HOME funds for development and construction of a low-to-moderate income apartment complex, referred to as the Garden Springs Apartments, at the southeast corner of Indian Canyon Drive and San Rafael Road. BACKGROUND: The Council is familiar with the Garden Springs Apartments project, which it approved on January 19, 2000. On February 10, 2000 staff received a request for Community Redevelopment Agency assistance from CBM Group, the developer and general partner of the project. The request was specifically related to the cost of undergrounding the utility lines that surround the property. The undergrounding project was part of the Engineering Conditions of Approval when the City Council approved the project at its January meeting. The estimated cost of the undergrounding, as calculated by CBM's utility consultant, Ralph E. Hitchcock & Associates, was $650,300. CBM's initial request was for$500,000 in Agency assistance. In July, after considering the request for several months, staff recommended Agency assistance in the amount of $120,000, which represented the cost of undergrounding the lines at the southern edge of the property, crossing Simms Road, as well as undergrounding across Indian Canyon Drive at Simms Road. Had the ordinance been applied at the time of its construction, the developers of Sunny View Villas, another low-income apartment complex located across Simms Road, would have undergrounded those lines in the 1970's when they constructed those units. The project was delayed from February into April because of a citizen's petition asking to overturn the approval. The decision not to place the issue on a special election ballot, based on California law, was made by the Council in April, but project construction did not get underway until nearly the end of June. By early August, the general partner determined that because of the IRS't iA absolute December 31, 2000 completion deadline for receipt of their 9% ax credits it was more financially prudent to shut down the project and risk the $1,700,000 they'd already spent rather than risking the entire $6 million in tax credits. CBM is now trying to restructure the project financing in order to complete the project. They plan to apply for 9% credits during the next round (in February or March) but tax credit applications are extremely competitive and the project may be starting out with negative points because of its previous unused tax credit allocation. The 9% program is the most favorable form of affordable housing financing because it creates substantial equity in the project, thereby reducing the debt load. The tax credit investors receive their return on investment through a discount paid to the developer for the credits. Since the tax credit equity does not seek a return, the lower debt means the project can serve lower income households. The next most favorable form of financing is a 4% tax credit allocation combined with tax exempt bonds. However, not every project "pencils" under the 4% program, as is the case here. The City is eligible to apply for up to $1,000,000 in HOME funds through the State of California for a qualified rental project. The application deadline is November 13, 2000, and all attachments (including this resolution) need to be included. CBM's financing gap —the amount of funding necessary to build the project without an identifiable source of funds — is close to $2,000,000. The HOME grant, if successful, would cover half of the gap. The HOME funds require additional income restrictions on the units, over and above the regulatory agreement placed on the project by the tax credit application (which restricts all or nearly all of the units). There would be a total of 11 HOME-funded units, at a HOME subsidy of about $91,000 per unit, well under HUD's subsidy limits. The number of HOME-restricted units is relatively small because of Davis-Bacon limits: prevailing wages are required on the project if the federal subsidy reaches 12 units, which would further increase the financing gap. Staff is providing the Council an opportunity to consider applying for the HOME funds to assist the project. The HOME program does require a 25% local match, however, which could be accomplished through use of state tax credits. Staff has notified the developer that the City does not intend to commit Redevelopment Agency Housing Set-aside funds to the project over the $120,000 previously discussed with them in July. Applying for this round of HOME funds could boost the project toward financial viability and, ultimately, a successful completion. J HN . RAYMO Re evelopment Director APPROVED_ —,, I City Manager ATTACHMENTS: 1. Resolution RESOLUTION NO. OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA AUTHORIZING THE SUBMITTAL OF AN APPLICATION TO THE CALIFORNIA STATE DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT FOR FUNDING UNDER THE HOME INVESTMENT PARTNERSHIPS PROGRAM; THE EXECUTION OF STANDARD AGREEMENT IF SELECTED FOR SUCH FUNDING AND ANYAMENDMENTS THERETO; AND ANY RELATED DOCUMENTS NECESSARY TO PARTICIPATE IN THE HOME INVESTMENT P A R T N E R S H I P S P R O G R A M . WHEREAS, the City of Palm Springs, a political subdivision of the State of California, wishes to apply for and receive an allocation of funds through the HOME Investment Partnerships Program (hereinafter referred to as "HOME") ; and WHEREAS, the California Department of Housing and Community Development (hereinafter referred to as the "Department") has issued a Notice of Funding Availability (NOFA) for the "HOME" program and is authorized to approve funding allocations which will be made available directly through the U.S. Department of Housing and Urban Development (HUD) to be used for the purposes set forth in Title II of the Cranston- Gonzalez National Affordable Housing Act of 1990, the implementing regulations setforth in Title 24 of the Code of Federal Regulations, part 92, and Title 25 of the California Code of Regulations commencing 8200; and WHEREAS, The City of Palm Springs wishes to submit an application to obtain from the Department an allocation of "HOME" funds; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL of the City of Palm Springs, California, that: SECTION 1. The City of Palm Springs shall submit to the Department an application to participate in the "HOME" program in response to the NOFA issued on August 28, 2000, which will request a funding allocation for the development and construction of a low-to-moderate income apartment complex, referred to as Garden Springs Apartments, in the amount of $1,000,000.00 ( One Million Dollars.) SECTION 2. If the application for funding is approved, The City of Palm Springs hereby agrees to use"HOME"funds for eligible activities in the manner presented in the application as approved by the"Department"and in accordance with regulations cited above. The City also may execute any and all other instruments necessary or required by the "Department" or the U.S. Department of Housing and Urban Development for participation in the "HOME" program. is SECTION 3. The City Council authorizes the City Manager or his designee to execute in the name of the City of Palm Springs the application, the Standard Agreement and all other documents required by the Department for participation in the "HOME" program, and any amendments thereto. ADOPTED this day of , 2000. AYES: NOES: ABSENT: ABSTAIN: ATTEST: CITY OF PALM SPRINGS BY City Clerk City Manager REVIEWED &APPROVED 16 I am writing in regards to the "Garden Springs Apartments" housing project. I am very disturbed that this project may become a reality after an entire neighborhood opposed the project and collected over 3,000 signatures to put the issue on the ballot. I am also very disturbed to find out that after the developer decided not to participate in the project, was told that the Palm Spring City government would help him secure additional public funding. Where did this idea come from and why is it happening in such a manipulative way? To shove another low income project down our neighborhood throats is completely unfair. If this project is at all needed, put it in another part of the city, for God's sakes. I fully oppose this. PLEASE RECONSIDER. What happened to the idea of upscale housing to bring up our neighborhood, which as we all know is suffering from abandoned stores and vacant property?????? Remember what the Mayor said at the public hearing??? Respectfully,/J vnv -z z000 9) Joseph A McCormack RECEIVE[) Resident CLEE� 27D 1 21 2sz 11/07/2000 13: 50 7608649979 JOSEPH CONTE PAGE 01 �7P-rWLc� LA HCf;F�1/I_I0 / A � . a AY" 5 �,�✓-� w,�.,.,lh� 1�0"re � 000 rA- c� AW NOV-08-2000 08 :20 AN dean. and. ken. Diuine 359 3341 P. 01 617, II ' j /;7 4Q JF_IV'= / l�nn a 1 I FROM ISERMANH BLONSTER PHONE NO. 310 450 5042 NOV. 07 2000 06: 12PM P2 530 East Molino Road palm springs California 92262 I M 760 416 3061 November 7, 2000 Councilwoman-Deyna--Hodges \c City of Palm Springs 3200 EastiTahquitz Canyon Way Palm Springs CA 92262 i 760 323 8207 1 page Dear Cei�ei4vver�au Hodes I own one of one of the Donald Wexler designed Steel Houses located directly behind the proposed Garden Springs Apartments. I want to be clear that I am writing as a concerned homeowner and not as a member of the Historic Site Preservation Board. I oppose the City of Palm Springs putting any money into the resurrection of the Garden Springs Apartments- The United Neighbors have worked very hard to protect our neighborhood. I can appreciate your difficult legal position in approving the initial proposal. I was relieved when the developers walked away from the project. Please do not ignore the will of the people to bring the project back from the dead. I oppose the concentration of low and moderate-income housing projects in our neighborhood, 'rho residents of the City of Palm Springs deserve a more progressive approach. I believe the money would be better spent putting low and moderate-income families into home ownership programs,' I bought my Steel House three and one-half years ago and spent more than two years restoring it. The revitalization of our neighborhood and the adjacent neighborhoods of Alexander Homes is nothing short of amazing. Please respect all of our hard work and do not revive the Garden Springs Apartments. Sincerely, AA STUDIO 0 P. 1 r.: r. 93E�=l17�;3� TO: RON-ODEN, Council Member n= „ November 7, 2000 3200 East Tahquitz Way Pahn Springs, CA 92263 Re: GARDEN SPRINGS APARTMENTS Dear-MT—Oden: We are strongly opposed to any proposed plans to support the low-income housing project in North Palm Springs. More than 3000 of us put our signatures on a petition to put this issue on the ballot because we feel such a development will negatively impact the entire neighborhood and the city, as well. The development would also be a detriment to the historical "case study houses" that are adjacent to this property in North Palm Springs. The height and scope of this project will impact the visual views of the mountains for the entire community. Please reject any plans for Garden Springs Apartments. They should not be built. Cordially yours, Douglas Keeve 3165 Sunny view Drive,Palm Springs phone: (760) 322-7732. Ail I it 11/08/2000 IYED 13:25 FAX 212 286 7779 GQ MAGAZINE Q 002 - 1A JIM MOORE - CREATIVE DIRECTOR � November 8, 2000 Mayor William Kleindienst 3200 East Tahquitz Canyon Way Palm Springs, CA 92263 via fax: 760-323-8207 Dear Mayor Kleindienst, Please allow me to introduce myself. I am perhaps the biggest supporter of Palm Springs and one of the pioneers of the movement to reestablish Palm Springs as a Twenty First century city embracing and preserving mad-century modern architecture. You have never heard from me before, until now. I live and work full-time in New York, but reside part time in Palm Springs. As Creative Director for GQ magazine, I have the opportunity to travel the world. Palm Springs is my favorite spot on earth. This letter at times may sound boasting, forgive me, I am proud of this town and I need the truth to be told. Here is my story. My Palm Springs residence is 3100 Sunnyview drive. You may know the house...it is the cornerstone of Don Wexler's seven steel homes, built in 1962 in the north end of town. This house is perhaps his best residential work to date. The house has become one of the most photographed and visited homes, in the world and a great advertisement for a revived community. Ten years ago, I visited the town for a fashion photo shoot and I instantly fell in love with it's charm, but mostly it's architecture. I have always loved mid-twentieth century architecture, and Palm Springs was Camelot for me. I saw it as a city where great residential and commercial properties hark back to the days of the great International Style architects. I particularly loved the fact that these structures were still intact and looking as timeless and modern as ever. In those days, contemporaries of mine felt that I was on to something, but the great California recession of the mid-nineties scared them. They saw the town abandoned and destined for doom. I did not agree with them. in 1993, 1 bought my house on Sunnyview drive and worked for two years to restore it to perfection. Slowly others followed, given my encouragement. The boom in restoring this community and bringing in a new breed of respectful newcomers was brought about by myself and Brad Dunning. Brad, who I met through a mutual friend, at the same time was having his own love affair with Palm Springs. GENTLEMEN'S QUARTERLY �, 1 THE CONDE NAST PUBLICATIONS INC. 4 TIMES SQUARE NEW YORK, NY 10036 TEL 212 286-8, 73 1 FAR 212 286.7779 EMAIL Jlm_mooreCgq com 11/08/2000 WED 13:25 FAX 212 286 7779 GQ MAGAZINE [a]003 We became fast friends. No one in our age group loved PS more. We encouraged photo shoots, house tours, and turned people from the fashion and film industries on to the best real estate agents. The revival began. As time went by, homes started to sell to young people in the creative industries from New York and Los Angeles. Flash forward to the year 2000 and the debate over the low income housing project at Indian Avenue and Simms. Why would you ever want to build such a monstrosity in a neighborhood that we have worked so hard to preserve. vehemently oppose the building of this apartment building. It would be catastrophic to the community. Why put low income housing in the north end of town? If you need to build these projects, sprinkle these residences around the city, not next to another one of it's kind. More importantly would be to get a builder who respects the neighborhood and pays homage to the Wexler seven steel houses instead of a design that looks like a "bad Taco Bell ". My fellow neighbor, Jim Isserman is working to designate the steel homes as landmark properties so that whatever gets built on that lot is done with the utmost respect architecturally to the neighborhood. I agree with Jim and support this impending amendment. In closing, I would have to say that my love for Palm Springs has been tainted by this project and the haphazard way that it has been handled. With projects like this, Palm Springs loses and so does our community. My contemporaries will lose interest in this town and I can no longer support it. Thank you for listening and please make a strong case tonight to end this nightmare. With much respect, Jim Moore cc: David Ready, City Manager 2999 91 :57 Pf+l Fj T2G ER RLDS 769 4169565 "' - P. 01 / co Is, ILI 7,4 i e AAP 20g0 o1 ;58 hM FI7ZGERRLDS 760 4Y6v565 09/ I II I I i I STUDIO 0 P. 2 Jeanne-Reller-Spurgen Palm Springs City Council November 8, 2000 3200 East Tahquitz Way Palm.Springs, CA 92263 !L q Re: GARDEN SPRINGS APARTMENTS c Ld Vq,� Dear Councilwoman Reller-Spurgen: ,y We are opposed to the proposed Garden Springs Apartments in North Palm Springs. Over 3000 residents signed a petition to pert this on the ballot because of their position, which has also been expressed at many meetings. . You must realize that your constituents feel that this development is neither needed nor wanted. The wonderful, rare case-study houses that lie adjacent to the acreage on which the development would rise high and massive, would be impacted by this development. The height and scope of this project will impact the visual views of the mountains for the entire community. Urge the City Council to stop this project from going forward. Sincerely, Mary Ann Webster Sunnyview Drive, Palm Springs phone: (760) 322-7732. A1 4� Plov-08-2000 04:11pm Franr T-488 P.001/001 F-281 CUco po y 1 � F yU (� A� HOV-09700 FRY 12 .56 RN WEST 760 325 232S P. 01 The honorable Will Kieindienst.Mayor City Council Member,Aeyna Hodges p/,Lng City Council Member,Jeanne Reller Spurgin �O' ° d City Council Member,Ron Olen --' City Council Member, Jim,Jones City of palm Springs / PO Box 2743 Palm Springs, CA 92263-2743 ""- Re: ORJYC'I'ION TO `GARDEN SPRINGS APARTMENTS' Low Incorne housing Dear Mayor Kleindienst and City Council Members- Consider this my formal letter of opposition to to above referenced LOW INCOME HOUSING "PROD);!CT"_ I have lived in my home for thirty years. My neighbors and I have our fair share of low income housing at the intersection of Simms Road and Indian Canyon North. I have witnessed the building of that low income housing apartment complex built across the sweet from the proposed Garden Springs Apartments.I have witnessed how that addition changed our quiet neighborhood forever. WE HAVE ENOUGH. I can't tell you how pleased I was when the builder pulled out.Let it be. Currently cats for Su inyview Apartments (Low Income Housing)parts on Sumiyview Ave. It is lined from one end to the other. The parking lot for the amount of cars generated by these units is hiadequam The street is narrow and dangerous with so many children always out and playing. Do you know how many drug busts are shown on your police blotters for that complex??Many, I see the police cars. I have to drive by to get to my home;it is the ONLY way I can go. Do you know that after thirty years, instead of feeling safer in my home, I ant feeling trapped.? There is only one way in and one way out to get to my street,Molino Road. You have created this.The Council approved a housing development at the east end of Simms Road several years ago creating a dead-end. The only way inn or out of my street is on Sunnyview and Simms Rd. right past the existing LOW INCOME HOUSING. With an additional development at the same intersection,along with the extra cars and population,heaven help us if there is an emergency back here. Now let's do the math....... 64 units, some with four bedrooms some with throe bedrooms, let's say tr'e average four people to a unit,wow,that would be merely be another V5 pppplg(and a lot more cars)at my corner remember—it's the only entrance/exit to my street)I How in the world will Vista Del Monte School be able to handle that many children when it is already too crowded. Let's face it; I am also concerned about my property value. Please don't create a ghetto here in my backyard so that it doesn't have to be in yours. Don't get me wrong, I believe in low income housing, but we(my neighbors and 1)have ours already,�let's spread it out a little more equitably. PLEASE. There has got to be.an area in The south, west or east part of town Ilia can accorurriodate this 'project' not just the north! Also.I will highly protest if the City of Palm Springs considers funding or loaning[Honey to abuilder for this project. Let us not forget the"Marie Callendar's Fiasco", need I say more. If you looking for public funding that's fine,just move the project somewhere else. Becaus0he meeting was changed from Wednesday niglit to Friday at 3 p.m.,when working residents cannot attend,I am f,ming this letter to you as my formal OBJECTION TO THE 0GARD$N SPRINGS APARTMENTS." Respectfully, Susan M. West 490 Molino Road Palm Springs,CA 92262