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Home My WebLink About2006-03-22 STAFF REPORTS RA2 r ?ALM s.0 iy V N * k 'EOAi EO iE,' °Q`,FORN,P CRA Staff Report DATE: MARCH 22, 2006 NEW BUSINESS SUBJECT: APPROVAL OF A RESOLUTION 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"). 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 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"). 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 NO. <AZ. C:RA Staff Report March 22, 2006- Page 2 of 2 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 aind 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 50 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 after school day care, computer classes, and health, education, 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 Adopt Agency Resolution of Support March 2006 Approve OPA June 2006 Site plan and Design approvals August 2006 Submit MHP application to HCD October 2006 MHP Funds approved September 2006 Submit State HOME application August 2006 HOME Funds approved November 2006 Submit for Credits and Bonds March 2007 Credits awarded May 2007 Commence construction October 2007 Complete construction December 2008 This is an aggressive schedule, but Agency staff concurred with CVHC that the likelihood of being funded in the March 2006 Multi-Family Housing Program ("MHP") round was greater than applying later in the year, as the pool is potentially exhausted by the second round. 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) at MHP. The resolution does commit the Agency to the $1.2 million as part of the development project, but the project has to proceed first. CRA Staff Report March 22, 2006 - Page 3 of 3 CVHC Las Vegas Road Apartments FISCAL IMPACT: IFinance Director Review: The final financing stricture 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 others 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 $1,200,000 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 $24,000. J HN S. RAY ND D c of Com unity & onomic Development THOMAS J. MILSON Assistant City Manager, Development DAVID H. REA15Y City Manager Attachment: Resolution CVHC January 5, 2006 Request Letter 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 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. 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 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 Coachella Valley Housing Coalition 45-701 Monroe Street,Suite G,Plaza 1,Indio,CA 92201 TEL: (760)347-3157 FAX. (760)342-6466 January 5, 2006 John S. Raymond Director of Community & Economic Development City of Palm Springs "3200 Tahquitz Canyon Way Palm Springs, California 912262 RE: Proposed Desert Highlands Multi-Family Apartments Dear Mr. Raymond: On behalf of the Coachella Valley Housing Coalition, we are pleased to submit a proposal for another affordable housing project to be developed in collaboration with the City of Palm Springs on our 4.45 acre Las Vegas site in Desert Highlands. CVHC and the City of Palm Springs have a long and successful history of partnering on projects filling the need for affordable housing for families in Palm Springs. Coupled with the many exciting new projects and initiatives taking place in Desert Highlands, we are pleased to be able to contribute to the continued revitalization and growth of the neighborhood. At CVHC we are proud of our history, and of the national recognition that we have received, of providing attractive, service-enriched affordable housing for low-income households. As you know, in conjunction with the City of Palm Springs, CVHC has successfully completed 140 units in Coyote Run Phase One, and will be opening our 66 unit second phase in mid April. In addition, we have completed 40 single family units including the award winning Chuckwalla project in 2003. CVHC proposes developing approximately 50 units of family apartments on the Las Vegas Road Site. (See site plan previously provided) The project will be a mix of one, two, three and four bedroom units and will include our typical site amenities such as pool, community room, laundry, tot lots, etc. We will also supply our usual rich variety of community services modeled after Coyote Run, which shall include after school day care, computer classes, and health, education, 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 initial budget projections, we are requesting a City contribution of$1.2MM, or approximately 10% of the total development budget. roiviv.evhc.are Our proposed major schedule milestones are as follows: Submit initial site plan and budget to RDA January 2006 Adopt DDA March 2006 Site plan and Design approvals August 2006 Submit MHP application to HCD October 2006 MHP Funds approved September 2006 Submit State HOME application August 2006 HOME Funds approved November 2006 Submit for Credits and Bonds March 2007 Credits awarded May 2007 Commence construction October 2007 Complete construction December 2008 We realize this is an aggressive schedule. We would be safer applying in the March 2',006 MHP round if we had the DDA approved before the pool is potentially exhausted by the second round. Please do not hesitate to call if you should have questions. Let us know what our next steps should be. Sincerely, John Aguilar Director of Development Coachella Valley Housing Coalition WWW.CVhC.01$