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Home My WebLink About12/20/2006 - STAFF REPORTS - RA.1. 5 ' ;o�pPLM gAR ry v` m ^C�41FOILO CRA Staff RePort DATE: DECEMBER 20, 2006 NEW BUSINESS SUBJECT: APPROVAL OF A RESOLUTION SUPPORTING AN APPLICATION BY COACHELLA VALLEY HOUSING COALITION TO THE CALIFORNIA HOUSING AND COMMUNITY DEVELOPMENT PROGRAMS (HCD) FOR PROJECT FINANCING OF THE DEVELOPMENT OF A 57-UNIT APARTMENT PROJECT Old A 4.45 ACRE ON LAS VEGAS ROAD IN THE DESERT HIGHLAND NEIGHBORHOOD, INCLUDING AGENCY FINANCIAL PARTICIPATION NOT TO EXCEED $1,200,000 IN GAP FINANCING; AND TO DIRECT STAFF TO DRAFT AN OWNER PARTICIPATION AGREEMENT ("OPA"). FROM: David H. Ready, Executive Director BY: Community & Economic Development Department SUMMARY RECOMMENDATION: Adopt Resolution No. ,, APPROVAL OF A RESOLUTION SUPPORTING AN APPLICATION BY COACHELLA VALLEY HOUSING COALITION TO THE HOUSING AND COMMUNITY DEVELOPMENT PROGRAMS (HCD) FOR PROJECT FINANCING OF THE DEVELOPMENT OF A 57-UNIT APARTMENT PROJECT ON A 4.45 ACRE ON LAS VEGAS ROAD IN THE DESERT HIGHLAND NEIGHBORHOOD, INCLUDING AGENCY FINANCIAL PARTICIPATION NOT TO EXCEED $1,200,000 IN GAP FINANCING; AND TO DIRECT STAFF TO DRAFT AN OWNER PARTICIPATION AGREEMENT ("OPA"). STAFF ANALYSIS: Coachella 'Valley Housing Coalition ("CVHC") has submitted a proposal for an affordable housing project to be developed in collaboration with the Community Redevelopment Agency on a 4.45 acre site owned by CVHC Las Vegas site in Desert Highland. CVHC and the Agency have a long and successful history of partnering on projects filling the need for affordable housing for families in Palm Springs. CVHC, which has owned the property for several years, wanted to make a contribution to the many exciting new projects and initiatives taking place in the Desert Highland neighborhood, including the City's proposal to the Desert Community College District Board for the West Valley Educational Center, and wanted to contribute to the continued revitalization and growth of the neighborhood. ' C2A Staff Report December 20, 2006- Page 2 of 3 CVHC Las Vegas Road Apartments CVHC has received national recognition for providing attractive, service-enriched affordable housing for low-income households. For example, in conjunction with the Agency, CVHC successfully completed 140 units in Coyote Run Phase One in 1993 and will be opening the second 66-unit phase in mid-April. In addition, CVHC and the Agency completed 40 single-family units including the award winning Cottonwood- Chuckwalla project in 2003. CVHC proposes developing approximately 57 units of family apartments on the Las Vegas Road Site. The project will be a mix of one, two, three and four bedroom units and will include their typical site amenities such as pool, community room, laundry, tot lots, etc. The project will also supply a rich variety of community services modeled after Coyote Run, which shall include, computer classes, after school programs, ESL classes, health education, and music and arts programs. Similar to Coyote Run 2, the financing structure will utilize 4% Tax Credits, MHP, HOME, with CALHFA Bonds for Construction Financing as well as City Funds. Based on the project's initial budget projections, CVHC is requesting an Agency contribution of $1.2 million, or approximately 10% of the total development budget. The proposed major schedule milestones are as follows: Submit initial site plan and budget to RDA January 2006 Submit State HOME application August 2006 HOME Funds approved November 2006 Adopt Agency Resolution of Support December 2006 Submit MHP application to HCD October 2007 MHP Funds approved December 2007 Approve OPA February 2007 Submit for Credits and Bonds July 2007 Site plan and Design approvals June 2007 Credits awarded September 2007 Commence construction February 2008 Complete construction April 2009 As with the approval of support for the Tahquitz Court Apartments in October, 2005, staff would commence preparing an Owner Participation Agreement with the details of the project, as well as the Agency's commitment, once an indication has been received that the project has been successful (or will be successful) for HOME funding. The resolution does commit the Agency to the $1.2 million as part of the development project, but the project has to proceed first. a .• CRA Staff Report December 20, 2006- Page 3 of 3 CVHC Las Vegas Road Apartments FISCAL IMPACT: Finance Director Review: The final financing structure for the project will be included in the OPA, though the Developer has asked for a commitment of up to $1.2 million for the gap financing_ Previous housing projects with CVHC and other developers have allowed the Agency to spread payments over several years — Coyote Run, Vista Sunrise, and the proposed commitment to Tahquitz Court. The Agency's current annual Housing set-aside funds is approximately $2,100,000 and is growing at about $100,000 per year. Since all of the units currently are, and would continue to be, restricted to low- and very-low income residents, the Agency per-unit subsidy would be about $21,000. JOHN S. RAYMOND Director of Community & Economic Development THOMAS J. WILSON Assistant City Manager, Development DAVID H. READY City Manager Attachment: Resolution CVHC January 5, 2006 Request Letter Y Resolution No. OF THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, CALIFORNIA SUPPORTING AN APPLICATION BY COACHELLA VALLEY HOUSING COALITION TO THE CALIFORNIA MULTI-FAMILY HOUSING PROGRAM FOR PROJECT FINANCING OF THE DEVELOPMENT OF A 50-UNIT APARTMENT PROJECT ON A 4.45 ACRE ON LAS VEGAS ROAD IN THE DESERT HIGHLAND NEIGHBORHOOD, INCLUDING AGENCY FINANCIAL PARTICIPATION NOT TO EXCEED $1,200,000 IN GAP FINANCING; AND TO DIRECT STAFF TO DRAFT AN OWNER PARTICIPATION AGREEMENT ("OPA") 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, or rehabilitation of affordable housing to benefit the community; and WHEREAS, Coachella Valley Housing Coalition ("CVHC") has submitted a proposal for an affordable housing project to be developed in collaboration with the Community Redevelopment Agency on a 4.45 acre site owned by CVHC Las Vegas site in Desert Highland; and WHEREAS, the Developers will submit a Low Income Housing Tax Credit (LIHTC) application to the California Tax Credit Allocation Committee for the July, 2007 application, and shall apply in the October, 2007 state Multifamily Housing Program (MHP) funding round for the development of the project and HOME funds through Riverside County; and WHEREAS, the owners will agree to restrict, though a Regulatory Agreement approved as an attachment to the OPA, the rents on 100% of the units to levels affordable to families with incomes no more than 60% of Area Median Income (AMI) for a period of 55 years; and WHEREAS, the Owner Participation Agreement between the Agency and Developer shall be drafted after the Project has received a commitment of HOME funds, and return to the Agency for approval; it shall provide for assistance by the Agency to the Project in the form of subordinated loans to be repaid from Project revenues. NOW, THEREFORE, BE IT RESOLVED, by the Community Development Agency of the City of Palm Springs, as follows: 1. The Agency hereby approves of the Developer' Application for a 4% Low Income Housing Tax Credit allocation through the California Tax Credit Allocation Committee. 2_ The Agency offers its approval of a Note to the Developer on behalf of the Project, subject to the successful negotiation of an Owner Participation Agreement, in the amount of $1,200,000 under terms to be specified in the Owner Participation Agreement. The note provides the Agency security for the Regulatory Agreement which contains the affordability provisions and other performance requirements; the interest on the Agency note shall be 1% simple interest, payable from residual receipts on the project; and the note shall be for a period of 55 years. 3. Agency staff is directed to bring an Owner Participation Agreement to the Agency containing the above terms upon a successful allocation of HOME funds to the Developer. 4, The Executive Director is hereby authorized and directed, on behalf of the Agency, to execute all documents, including applications or letters of intent or commitment, related to the Project and the purposes of this Resolution. 5. Paragraph #5 taken out. ADOPTED this day of , 2006. AYES: NOES: ABSENT: ATTEST: COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, CALIFORNIA By Assistant Secretary Chairman REVIEWED &APPROVED AS TO FORM �o pPLMgp� iy w Y O °"•°Anv. CRA„ Staff Report DATE: DECEMBER 20, 2006 NEW BUSINESS SUBJECT: APPROVAL OF A RESOLUTION SUPPORTING AN APPLICATION BY COACHELLA VALLEY HOUSING COALITION TO THE CALIFORNIA HOUSING AND COMMUNITY DEVELOPMENT PROGRAMS (HCD) FOR PROJECT FINANCING OF THE DEVELOPMENT OF A 57-UNIT APARTMENT PROJECT ON A 4.45 ACRE ON LAS VEGAS ROAD IN THE DESERT HIGHLAND NEIGHBORHOOD, INCLUDING AGENCY FINANCIAL PARTICIPATION NOT TO EXCEED $1,200,000 IN GAP FINANCING; AND TO DIRECT STAFF TO DRAFT AN OWNER PARTICIPATION AGREEMENT ("OPA"). FROM: David H. Ready, Executive Director BY: Community & Economic Development Department SUMMARY RECOMMENDATION: Adopt Resolution No. _, APPROVAL OF A RESOLUTION SUPPORTING AN APPLICATION BY COACHELLA VALLEY HOUSING COALITION TO THE HOUSING AND COMMUNITY DEVELOPMENT PROGRAMS (HCD) FOR PROJECT FINANCING OF THE DEVELOPMENT OF A 57-UNIT APARTMENT PROJECT ON A 4.45 ACRE ON LAS VEGAS ROAD IN THE DESERT HIGHLAND NEIGHBORHOOD, INCLUDING AGENCY FINANCIAL PARTICIPATION NOT TO EXCEED $1,200,000 IN GAP FINANCING; AND TO DIRECT STAFF TO DRAFT AN OWNER PARTICIPATION AGREEMENT ("OPA"). STAFF ANALYSIS: Coachella Valley Housing Coalition ("CVHC") has submitted a proposal for an affordable housing project to be developed in collaboration with the Community Redevelopment Agency on a 4.45 acre site owned by CVHC Las Vegas site in Desert Highland. CVHC and the Agency have a long and successful history of partnering on projects filling the need for affordable housing for families in Palm Springs. CVHC, which has owned the property for several years, wanted to make a contribution to the many exciting new projects and initiatives taking place in the Desert Highland neighborhood, including the City's proposal to the Desert Community College District Board for the West Valley Educational Center, and wanted to contribute to the continued revitalization and growth of the neighborhood- Item RA1 . CRA Staff Report December 20, 2006- Page 2 of 3 CVHC Las Vegas Road Apartments CVHC has received national recognition for providing attractive, service-enriched affordable housing for low-income households. For example, in conjunction with the Agency, CVHC successfully completed 140 units in Coyote Run Phase One in 1993 and will be opening the second 66-unit phase in mid-April. In addition, CVHC and the Agency completed 40 single-family units including the award winning Cottonwood- Chuckwalla project in 2003. CVHC proposes developing approximately 57 units of family apartments on the Las Vegas Road Site. The project will be a mix of one, two, three and four bedroom units and will include their typical site amenities such as pool, community room, laundry, tot lots, etc. The project will also supply a rich variety of community services modeled after Coyote Run, which shall include, computer classes, after school programs, ESL classes, health education, and music and arts programs. Similar to Coyote Run 2, the financing structure will utilize 4% Tax Credits, MHP, HOME, with CALHFA Bonds for Construction Financing as well as City Funds. Based on the project's initial budget projections, CVHC is requesting an Agency contribution of $1.2 million, or approximately 10% of the total development budget. The proposed major schedule milestones are as follows: Submit initial site plan and budget to RDA January 2006 Submit State HOME application August 2006 HOME Funds approved November 2006 Adopt Agency Resolution of Support December 2006 Submit MHP application to HCD January 2007 MHP Funds approved March 2007 Approve OPA March 2007 Submit for Credits and Bonds March 2007 Site plan and Design approvals June 2007 Credits awarded June 2007 Commence construction August 2007 Complete construction October 2008 As with the approval of support for the Tahquitz Court Apartments in October, 2005, staff would commence preparing an Owner Participation Agreement with the details of the project, as well as the Agency's commitment, once an indication has been received that the project has been successful (or will be successful) for HOME funding. The resolution does commit the Agency to the $1.2 million as part of the development project, but the project has to proceed first. CPA Staff Report December 20, 2006- Page 3 of 3 CVHC Las Vegas Road Apartments FISCAL IMPACT: Finance Director Review: The final financing structure for the project will be included in the OPA, though the Developer has asked for a commitment of up to $1.2 million for the gap financing. Previous housing projects with CVHC and other developers have allowed the Agency to spread payments over several years — Coyote Run, Vista Sunrise, and the proposed commitment to Tahquitz Court. The Agency's current annual Housing set-aside funds is approximately $2,100,000 and is growing at about $100,000 per year. Since all of the units currently are, and would continue to be, restricted to low- and very low income residents, the Agency per-unit subsidy would be about $21,000. I JIC HN . RAY ND Di ec r of Co nity & Economic Development THOMAS J. VqLSON Assistant City Manager, Development DAVID H. READY City Manager Attachment: Resolution CVHC January 5, 2006 Request Letter RESOLUTION NO. A RESOLUTION OF THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, CALIFORNIA SUPPORTING AN APPLICATION BY COACHELLA VALLEY HOUSING COALITION TO THE CALIFORNIA MULTI-FAMILY HOUSING PROGRAM FOR PROJECT FINANCING OF THE DEVELOPMENT OF A 50-UNIT APARTMENT PROJECT ON A 4.45 ACRE ON LAS VEGAS ROAD IN THE DESERT HIGHLAND NEIGHBORHOOD, INCLUDING AGENCY FINANCIAL PARTICIPATION NOT TO EXCEED $1,200,000 IN GAP FINANCING; AND TO DIRECT STAFF TO DRAFT AN OWNER PARTICIPATION AGREEMENT ("OPA") 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, or rehabilitation of affordable housing to benefit the community; and WHEREAS, Coachella Valley Housing Coalition ("CVHC") has submitted a proposal for an affordable housing project to be developed in collaboration with the Community Redevelopment Agency on a 4.45 acre site owned by CVHC Las Vegas site in Desert Highland; and WHEREAS, the Developers will submit a Low Income Housing Tax Credit (LIHTC) application to the California Tax Credit Allocation Committee for the March, 2007 application, and shall apply in the April, 2006 state Multifamily Housing Program (MHP) funding round for the development of the project and HOME funds through Riverside County; and WHEREAS, the owners will agree to restrict, though a Regulatory Agreement approved as an attachment to the OPA, the rents on 100% of the units to levels affordable to families with incomes no more than 60% of Area Median Income (AMI) for a period of 55 years; and WHEREAS, the Owner Participation Agreement between the Agency and Developer shall be drafted after the Project has received a commitment of MHP funds, and return to the Agency for approval; it shall provide for assistance by the Agency to the Project in the form of subordinated loans to be repaid from Project revenues. NOW, THEREFORE, BE IT RESOLVED, by the Community Development Agency of the City of Palm Springs, as follows: 1. The Agency hereby approves of the Developer' Application for a 4% Low Income Housing Tax Credit allocation through the California Tax Credit Allocation Committee. Resolution No. Page 2 2. The Agency offers its approval of a Note to the Developer on behalf of the Project, subject to the successful negotiation of an Owner Participation Agreement, in the amount of $1,200,000 under terms to be specified in the Owner Participation Agreement. The note provides the Agency security for the Regulatory Agreement which contains the affordability provisions and other performance requirements; the interest on the Agency note shall be 1% simple interest, payable from residual receipts on the project; and the note shall be for a period of 55 years. 3. Agency staff is directed to bring an Owner Participation Agreement to the Agency containing the above terms upon a successful allocation of MHP funds to the Developer. 4. The Executive Director is hereby authorized and directed, on behalf of the Agency, to execute all documents, including applications or letters of intent or commitment, related to the Project and the purposes of this Resolution. 5. The adoption of this Resolution shall not obligate (i) the City to provide financing to the Developer for the acquisition or development of the Project or to issue the Bonds for purposes of such financing; (ii) the City, Agency, or any department thereof, or the City, or any department thereof, to approve any application or request for, or take any other action in connection with, any environmental, General Plan, zoning, or any other permit or other action necessary to effectuate the Project. ADOPTED THIS 20'" DAY OF DECEMBER, 2006, David H. Ready, Executive Director ATTEST: James Thompson, Assistant Secretary Resolution No. Page 3 CERTIFICATION STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF PALM SPRINGS ) I, JAMES THOMPSON, Assistant Secretary of the City of Palm Springs, hereby certify that Resolution No. is a full, true and correct copy, and was duly adopted at a regular meeting of the City Council of the City of Palm Springs on the 20th day of December, 2006 by the following vote: AYES: NOES: ABSENT: ABSTAIN: James Thompson, Assistant Secretary Community Redevelopment Agency City of Palm Springs, California