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HomeMy WebLinkAbout02 052013 JT CC-HA DEPOT AT SANTIAGOMAY 20, 2013 LOAN AGREEMENT AND PROJECT-BASED VOUCHERS AGREEMENTS WITH DEPOT AT SANTIAGO, LP ,~ CITY COUNCIL ACTION Authorize the City Manager and the Clerk of the Council to execute a loan agreement with Depot at Santiago, LP in the amount of $3,000,000, subject to non-substantive changes approved by the Acting Executive Director and City Attorney. HOUSING AUTHORITY ACTION Authorize the Executive Director of the Housing Authority or designee, contingent upon approval by the U.S. Department of Housing and Urban Development, to complete and execute the Project- Based Vouchers (PBV) Agreement to Enter into Housing Assistance Payments Contract and, after construction of the Depot at Santiago project, to complete and execute the PBV Housing Assistance Payments Contract between the Housing Authority of the City of Santa Ana and Depot at Santiago, LP for up to eight PBV's, and other necessary documents, for the implementation of project-based vouchers for the Depot at Santiago project. COMMUNITY REDEVELOPMENT AND HOUSING COMMISSION RECOMMENDATION At its special meeting on May 14, 2013, by a vote of 5:0 (Bist, Garcia absent) the Community Redevelopment and Housing Commission recommended that the City Council and Housing Authority approve the recommended actions stated above. DISCUSSION After receiving City Council approval on February 19, 2013, staff distributed a notice on February 20, 2013 announcing the availability of a Request for Proposals (RFP) soliciting proposals for development of an affordable rental housing project. The RFP indicated that the City would ~~ Depot at Santiago Loan Agreement & Vouchers May 20, 2013 Page 2 consider proposals for new construction or acquisition and rehabilitation projects. It also identified a number of criteria that would be used to evaluate proposals, including the experience and track record of the development team in both developing and managing affordable projects, project readiness, proposed levels of affordability, the location of the proposed project, and leveraging of City funds with outside sources. The RFP was published on the City's website, and letters announcing its availability were sent to 153 individuals and firms who had previously requested to be informed of development opportunities. Two developers submitted questions regarding the RFP. A third developer submitted the only proposal that was received. The City's review team was made up of senior staff members from the City's Planning and Building Agency, and from the Community Development Agency's Administrative/Successor Agency and Housing Development Divisions. The team met on April 3, 2013 to review the proposal. It was determined that the proposal met and/or exceeded the submission requirements of the RFP, and unanimously recommended that it be submitted to City Council for approval. The proposal was submitted by a partnership composed of Orange Housing Development Corporation, Magis Realty, and C&C Development. They have tentatively chosen to name their partnership the Depot at Santiago, LP. Over the past twenty years, Orange Housing Development and C&C Development have partnered with each other and with the City and other municipalities on many successful affordable housing projects. Their most recently completed project is Terraces at Santiago, a 36- unit new construction project located at 605-611 E. Washington. Magic Realty is a real estate development and consulting firm focused on mixed use, multifamily and hospitality developments. The proposed mixed use project will be known as the Depot at Santiago, and is located within the Station District at the Northeast corner of Santa Ana Blvd. and Santiago Street (Exhibit 1). The developer has control of the site which is currently occupied by a collection of small, single tenant industrial units and a contractor's yard. The developer will be required to work with a qualified relocation consultant. When completed, the project will be comprised of 70 one, two and three bedroom rental units, 8,500 square feet of retail space, and a 3,000 square foot community room. The project will be designed to meet the Transit Zoning Code's "California Contemporary" architecture standard, and to achieve a LEED Gold certification, and adhere to all development and processing requirements. The developer has already held several meetings with surrounding community members, and will be conducting additional outreach throughout the planning process. The proposed unit mix and levels of affordability are as follows: Bedroom Size Square Feet 30% AMI 40% AMI 50% AMI 60% AMI Total 1 Bedroom 875 2 3 6 3 14 2 Bedroom 1,085 2 6 11 10 29 3 Bedroom 1,350 3 5 11 7 26 Totals 7 14 28 20 69 Depot at Santiago Loan Agreement & Vouchers May 20, 2013 Page 3 The remaining unit will be a 3-bedroom unit reserved for the onsite manager. The total project development cost is estimated to be $26.8 million. The tables below show the anticipated funding sources and their uses: Funding Source Amount Conventional Permanent Loan $4,191,910 Section 8 Loan (8 Project Based Vouchers) $ 710,460 City of Santa Ana HOME Program $2,634,566 City of Santa Ana CDBG Funds $ 365,434 Deferred Developer Fee $ 787,193 General Partner Equity $ 100 Limited Partner Equity (Tax Credits) $18,096,845 TOTAL $26,786,508 Funding Use Amount Acquisition/Demolition $ 3,280,000 Construction $16,298,340 Soft Costs $ 6,370,134 Costs Deferred Until Conversion $ 494,190 Financing Costs $ 343,844 TOTAL $26,786,508 The HOME and CDBG funds will be provided by means of a 55-year City loan carrying a 3 percent interest rate and payable by residual receipts. The budget proposal requests eight project based vouchers (PBVs). Unlike conventional housing choice vouchers, PBVs are attached to a specific residential facility. The rental assistance is tied to the unit versus the household. The U.S. Department of Housing and Urban Development (HUD) regulations require that the Housing Authority enter into a PBV Agreement to Enter into Housing Assistance Payments Contract (Exhibit 3) prior to the start of construction, and a PBV Housing Assistance Payments Contract (Exhibit 4) after the completion of construction. Execution of these documents will be contingent upon completion of the National Environmental Policy Act (NEPA) and California Environmental Quality Act (CEQA) requirements, approval of the developer's application for a tax credit allocation, and completion of a subsidy layering analysis by the California Tax Credit Allocation Committee. Depot at Santiago Loan Agreement & Vouchers May 20, 2013 Page 4 FISCAL IMPACT Funds will be available in the HOME Program account (account no. 13018780-69152), and CDBG funds will be transferred from single family housing activities to loans for acquisition purposes (account no. 13518783-69152). APPROVED AS TO FUNDS AND ACCOUNTS: Sandra D. Gottlieb Acting Executive Director Community Development Agency SDG/SLB/kg EXHIBITS: 1. Site Map 2. Loan Agreement 3. PBV Agreement 4. PBV Contract _. :tix~ Francisco Gutierrez Executive Director Finance and Management Services Agency a'