Housing Successor Agency
MEETING DATE: 6/13/2018
TITLE:
Title
Disposition and Development Agreement with Urban Housing Communities
End
FROM:
Tami E. Scott, Administrative Services Director
RECOMMENDATION:
Recommendation
It is recommended that the City Council acting in its capacity as the Housing Successor Agency authorize the execution of a Disposition and Development Agreement with Urban Housing Communities ("UHC") for development of a 60-Unit Veteran's Affordable Housing Project on Landau between Vega Road and Elizabeth Road consisting of approximating 9 acres (APN's: 678-060-001 through 005 and 678-060-049 through 053
Body
BACKGROUND:
The Housing Successor Agency owns ten parcels of vacant land located on Landau Boulevard between Vega Road and Corta Road that are approximately nine acres in size, rectangular in shape and easily accessible from Landau. This is the most readily developable larger site owned by the Housing Successor Agency. The Housing Successor had previously entered into an Exclusive Right to Negotiate Agreement with Urban Housing Communities ("UHC") in August 2016 to explore the feasibility of such a development on this site. At that time, it was fully recognized that financing for this project, as with most affordable housing projects, would be extremely complex and require layering numerous funding sources.
During the term of the Exclusive Negotiations, UHC has developed a project budget, a conceptual financing plan and a site plan and is working with the City's Planning Department to obtain development entitlements. The proposed project will consist of 60-units, to include a mix of one- and two-bedroom units and an on-site manager's unit, as well as an approximate 3,000 square foot community center. The proposed project budget is approximately $27 million to be derived from multiple funding sources, many of which are competitive. As with most affordable housing projects, UHC is required to secure some of its financing to even be eligible to apply for other sources and project readiness is a major component of the scoring system. At this point, UHC is attempting to secure its largest funding source, $9,950,000 in financing, through VHHP (Veteran's Housing and Homelessness Prevention Program) funding, with an application deadline of July 9, 2018.
DISCUSSION:
Throughout the term of the Exclusive Right to Negotiate, it became clear that local assistance would be required for this project to be feasible. As such, staff recommends that the City Council authorize entering into a Disposition and Development Agreement with UHC to be prepared by our City Attorney, to include the following major provisions:
1. Housing Successor commits to selling its land to UHC for its fair reuse value, which has been determined to be $1.00, with escrow to close only after UHC has obtained all financing required for the project and all required development entitlements to the extent that project is ready for issuance of building permits In the event it is determined that UHC does not require all ten parcels of real property in order to obtain development entitlements, UHC will deed any unrequired parcels to the City for a $1.
2. Housing Successor provides a grant, in the amount of $1,000,000 from Housing Successor funds, to UHC or to a non-profit partner created or named by UHC, with the stipulation that these funds be used solely for the benefit of the project. The grant shall be a source of permanent project financing.
3. UHC will develop a project to contain a minimum of 60 multi-family units to consist of a mix of one- and two-bedroom units to include an on-site manager's unit, an approximate 3,000 square foot community room, and common areas, including laundry facilities, a garden and BBQ area.
4. All units other than one manager's unit will be restricted via an Affordable Housing Regulatory Agreement and Declaration of Restrictive Covenants to occupants of very-low income (50% of County median income or below) for a term of not less than fifty-five years.
5. Term of the DDA will be adequate to provide UHC the opportunity to apply for two rounds of funding applications through the Community Development Debt Limitation Allocation Committee ("CDLAC"), California Tax Credit Allocation Committee ("CTCAC"), and the California Department of Housing and Community Development ("HCD") to secure allocations of tax-exempt bonds, 4% federal tax credits and Veterans Housing and Homeless Prevention Program ("VHHP") (anticipated to be through June 30, 2019). The DDA would also provide the City Manager with the authority to extend the DDA twice, in increments of one calendar year, if UHC provides adequate evidence that it has diligently pursued project financing.
FISCAL IMPACT:
Up to 10 parcels (approximately 9 acres) of Housing Successor Agency land that must be used for Low to Moderate income housing within the City; and, $1.0 million dollars of Housing Funds that if not used or encumbered for a qualified housing project within the next two years would have to be sent to the State.
ATTACHMENTS:
Project Site Plan