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Home My WebLink About102511 - Agenda Packet 102511 Special Meeting SPECIAL JOINT MEETING Atascadero City Council Community Redevelopment Agency of Atascadero Study Session AGENDA Tuesday, October 25, 2011 (Immediately following the City Council Regular Session which starts at 6:00 p.m.) City Council Chambers 6907 EI Camino Real, Atascadero Roll Call: Roundtable Study Session: 1. Initial Review of Affordable Housing Proposals - Agency Low- and Moderate-Income Housing Fund ■ Fiscal Impact: None. ■ Recommendation: Council/Board review the affordable housing proposals that have been received and provide staff direction with respect to the proposals that should be further processed for potential future consideration. [Community Development] ADJOURNMENT: The City Council and Community Redevelopment Agency will adjourn to their next regularly scheduled meetings. STATE OF CALIFORNIA ) COUNTY OF SAN LUIS OBISPO ) CITY OF ATASCADERO ) MARCIA MCCLURE TORGERSON, C.M.C., being fully sworn, deposes, and says: That she is the duly elected City Clerk of the City of Atascadero and that on Tuesday, October 18, 2011, she caused the above Notice to be posted on the doors of the City's Administration Building, 6907 EI Camino Real in Atascadero, California. MARCIA MCCLURE TORGERSON, C.M.C. City Clerk, City of Atascadero ITEM NUMBER: Joint CC / RDA Study Session all V DATE: 10/25/11 Joint Study Session Atascadero City Council & Redevelopment Agency Staff Report — Community Development Department Initial Review of Affordable Housing Proposals Agency Low- and Moderate-Income Housing Fund RECOMMENDATION: Council/Board review the affordable housing proposals that have been received and provide staff direction with respect to the proposals that should be further processed for potential future consideration. DISCUSSION: Background: On March 29, 2011, the City Council and Redevelopment Agency Board held a joint study session to discuss affordable housing strategies and options. The City's consultant, Steven Dukett of Urban Futures, Inc. (UFI) presented a variety of options for use of the Low- and Moderate-Income (LMI) Housing Fund to provide affordable housing and meet the California Community Redevelopment Law (Health and Safety Code § 33000 et seq., "CCRL") requirements. The Council/Board identified the following priorities for the types of projects that would be appropriate for LMI Housing Funds. Council/Board Affordable Housing Priorities (March 29, 2011) 1. City/Agency should not own and manage multi-family housing projects. 2. "Very-low" and "Low" income affordable housing is the priority. 3. Large, low income projects are a concern. 4. Partnerships with sweat equity projects and local non-profits are preferable. 5. Rehabilitation assistance for existing low-income ownership housing is a priority. ITEM NUMBER: Joint CC / RDA Study Session DATE: 10/25/11 Analysis: Project Proposals As a follow-up to the Council's/Agency's March 29th meeting, affordable housing developers and non-profits that are active in Atascadero were invited to submit funding proposals for Agency Board consideration. As a result, the Agency received eight (8) proposals. Staff and UFI interviewed each applicant to ensure a full understanding of the applicant's proposal and to further discuss potential options for use of the LMI Housing Funds for affordable housing production that would be consistent with the Council's/Agency's priorities. Attachment No. 1, which was prepared by UFI, provides a summary of the project proposals received, an analysis of projects that qualify for Agency LMI Housing Funds, and an estimate of the Agency's costs per affordability covenant. A map showing the locations of the proposed projects is included as Attachment No. 2. The applicants' proposals are included as Attachment 3 through 9 of this report. The proposals received fall into three primary categories: 1. Multi-Family Rental Units (constructed & managed by either an affordable housing developer or acquired, renovated and managed by a non-profit agency; Agency receives affordability covenants) 2. Single-Family For Sale Units (constructed as mutual self-help units for homeownership; Agency receives affordability covenants) 3. Single-Family Owner-Occupied Housing Rehabilitation Programs (improve existing housing stock; ; Agency does not receive affordability covenants) 4. Emergency Shelter and Social Service Program Support (emergency shelters and social service programs are not eligible for LMI Housing funding, City's housing in-lieu fees may be utilized). Due to the current litigation between the State of California and The California Redevelopment Association/California League of Cities (CRA Lawsuit), the Agency cannot commit funding to new projects at this time. However, the California Supreme Court Stay does allow redevelopment agencies to fulfill their current obligations. The Court is expected to decide the case and lift the stay in January 2012. Consistent with the Supreme Court Stay, the recommended action only requests direction with respect to matters for potential future consideration. Therefore, it is recommended that the Council/Board review the affordable housing proposals that have been received and provide staff direction with respect to the proposals that should be further processed for potential future consideration. Once the Supreme Court issues a ruling on the CRA Lawsuit, staff will schedule a hearing during ITEM NUMBER: Joint CC/ RDA Study Session DATE: 10/25/11 which the formal prioritization and approval of LMI Housing Fund projects would be possible by the Council/Agency. The following table summarizes the housing proposals received. Housing Funds Requests/Proposals Applicant Project Funding Affordable Units / $ Request Units EI Camino Homeless Emergency Shelter Project—40 Not defined 0 units N/A Organization (ECHO) beds Habitat for Humanity 10-lot Atascadero Avenue Request 0 units N/A (HFH) project withdrawn Housing Authority of San San Palo Inn acquisition $925,000 12 units @ 50% $154,167 Luis Obispo (HASLO) credit North County Connection Property acquisition for social $100,000 0 units N/A (NCC) service program Pacific Companies Oakhaven—30 multi-family $3,180,000 30 units $106,000 residential townhouses People's Self-Help Down payment assistance for $1,000,000 24 units $42,000 Housing Corporation 24 single-family residential (PSHHC) units at Oak Grove II ROEM Development Acacias—40 multi-family $3,755,000 40 units $93,873 Corporation (ROEM) residential apartments Transitional Food & Emergency shelters—4 $599,000 0 units Shelter, Inc. (TFS) housing units. City Redevelopment Housing Rehabilitation $670,000 0 units Agency Programs (HRP) ITEM NUMBER: Joint CC / RDA Study Session DATE: 10/25/11 The table below compares the proposals to the Council's/Agency's priorities. Based only on a numerical comparison, the following is evident: i) the Housing Authority of San Luis Obispo (HASLO) proposal is consistent with four (4) of the Council's/Agency's priorities; ii) the People's Self Help Housing Corporation (PSHHC) proposal is consistent with three (3) of the Council's/Agency's priorities; and iii) the Pacific and ROEM proposals and the Agency's Housing Rehabilitation Program (HRP) are consistent with two (2) of the Council's/Agency's priorities. Since the balance of the proposals received are not eligible for assistance from the LMI Housing Fund or their proposals were incomplete, it was not possible for them to be consistent with the Council's/Agency's priorities for use of LMI Housing Funds. However, this circumstance in no way diminishes the importance of the services provided by these organizations. In addition and in fairness to the applicants, the diversity of the Council's/Agency's priorities are such (i.e., some relate to multi-family housing and some relate to single- family housing) that it is nearly "impossible" for any applicant to propose a project that is consistent with each of the Council's/Agency's priorities. Therefore, to be considered for funding from the LMI Housing Fund, an applicant's proposal must at a minimum be consistent with at least one of the Council's/Agency's priorities. Notwithstanding, any of the projects, especially those projects that are ineligible for funding from the LMI Housing Fund or are incomplete, could also be considered for funding from the City's In- Lieu Housing Fund, which has a current balance of approximately $450,000. Council Priorities Comparison to Housing Funds Requests Proposals Council Priorities (March 29, 2011) Consistent Projects 1. City should not own and manage multi-family housing Pacific, ROEM, HASLO, PSHHC, projects (applies to MFR proposals only) 2. "Very low"and "Low" income housing is the priority (applies Pacific, ROEM, HASLO, PSHHC, to all housing proposals) Agency Housing Rehab Program (HRP) 3. Large, low income projects are a concern HASLO 4. Partnerships with sweat equity projects and local non-profits HASLO, PSHHC, are preferable. 5. Rehabilitation assistance for existing low income housing is Agency HRP a priority (applies to SFR rehab projects only). ITEM NUMBER: Joint CC / RDA Study Session DATE: 10/25/11 Affordable Housing Funds LMI Housing Fund: The CCRL requires that 20% of the tax increment revenues received by the Redevelopment Agency be placed in its LMI Housing Fund. The funds are to be used to increase, improve and preserve the supply of low- and moderate- income housing in the Project Area and within City of Atascadero city limits (CCRL § 33334.2). The Agency had an approximately $4.15 million uncommitted cash balance in its LMI Housing Fund as of June 30, 2011. In addition, it is anticipated that the Agency will add another $694,000 in cash to its LMI Housing Fund during Fiscal Year 2011-2012. The Agency currently has what the CCRL defines as an "excess surplus" of LMI Housing Funds, and therefore the Agency is required to commit funds to create affordable housing in compliance with Redevelopment Law or potentially lose the funding. In-Lieu Housing Fund: In addition to the Agency's LMI Housing Fund, the City of Atascadero has also been collecting In-Lieu Housing Fund fees over the past several years in accordance with the Council's Inclusionary Housing Policy. When discretionary projects (such as Planned Developments) are approved by the Council, they are required to either provide a percentage of the project as affordable units, or contribute 5.0% of the construction value of the market-rate units to the City's In-Lieu Housing Fund at the time of building permit issuance. As of June 30, 2011, the City's In-Lieu Housing Fund had a balance of approximately $450,000. These funds are used to administer the City's existing affordable housing programs, including staff time to process documents at time of sale and ongoing verification of deed restricted units. The City uses about $16,000 per year to administer the affordable housing loan program. As housing construction has been relatively stagnant over the past several years, the City has not seen an increase in the In-Lieu Housing Fund in recent years, and staff does not expect this fund to increase in the near future. These funds may be used at the Council's sole discretion for any appropriate housing project. Number of LMI Units Required The CCRL's inclusionary housing rule requires that 15% of all housing constructed in the Redevelopment Area must be affordable to low- and moderate-income persons and families (CCRL § 33413(b)). There have been 183 market rate residential dwelling units constructed with in the Atascadero Redevelopment Area since the Redevelopment Plan was adopted in 1999, and therefore 28 affordable units must be provided (11 very-low- income units and 17 low/moderate-income units). The Agency has sponsored the production of four (4) very-low-income units in the Atascadero Redevelopment Area to date, which leaves a remaining obligation to produce 24 additional affordable housing units. As more market rate units are produced, there will be a future obligation to continue to produce additional low- and moderate-income units. The following table summarizes these obligations: ITEM NUMBER: Joint CC / RDA Study Session DATE: 10/25/11 ■ 183 market rate units constructed in RDA (1999-2011) ■ 28 ILMI affordable units required (15% of 183) Includes 6% very-low (11 units) & 9% low/moderate (17 units) ■ 4 very-low units produced by agency to date ■ 24 unit current deficient (7 very low & 17 low/moderate income units) ■ future obligation = 15% of any additional market rate units in Project Area State of California Income Level Definitions Very Low Income Lower Income Moderate Income Market Rate 50% of County 80% of County 120% of County Greater than 120% of Median Median Median County Median San Luis Obispo County Median Income for a Family of Four (4) is reported as $74,400 by the California Department of Housing and Community Development (HCD) as of June 23, 2011. See Exhibit`B"to the UFI Report(Attachment No. 1)for further details. Covenants for Affordability (Inclusionary Housing Program) In order to count affordable units towards the required 15% RDA inclusionary requirement, the units must be deed restricted with an affordability convent (i.e., in the form of a Regulatory Agreement) in accordance with CCRL. Convents for single-family affordable homes must be for a minimum 45 years, and multifamily projects must be deed restricted for a minimum of 55 years. Exceptions to the minimum affordability period are allowed for mutual self-help projects, wherein covenants for mutual self-help projects must remain affordable for at least 15 years. The Agency receives full credit for each covenant obtained within the Atascadero Redevelopment Area, and half (1/2) credit for convents obtained outside the Redevelopment Area. Through the City of Atascadero's inclusionary housing policy, there have been about 70 affordable units created throughout the City in the past 10 years; however, most of the convents on these units do not meet the timeframes for affordability required by the CCRL to count towards the Agency's Inclusionary Housing Program requirements. Therefore, while the City has made good progress with respect to the matter of ITEM NUMBER: Joint CC / RDA Study Session DATE: 10/25/11 affordable units, as required by HCD and the Regional Housing Need Allocation (RHNA), the Agency currently has a 24-unit shortfall in its Inclusionary Housing Program. ALTERNATIVES: Since the project funding requests almost equal 200% of the available funding, it is necessary that the Agency prioritize its funding decisions. Although there are a variety of ways to look at this matter, there are some options that seem to stand out as obvious possibilities. LMI Housing Funding Options 1. Option 1 : Select the PSHHC, HASLO and HRP proposals. Under this scenario, the maximum commitment the Agency could make would be $2,595,000, which would leave a fund balance of approximately $2.26 million in the LMI Housing Fund. This option appears to be the most consistent with the Councils priorities; or, 2. Option 2: Select either the Pacific project or the ROEM project, and select one additional proposal (PSHHC, HASLO or HRP). Under this scenario, the maximum commitment the Agency could make would be the combination of the ROEM and the PSHHC proposals, which would equal $4,755,000, and would leave a balance of approximately $95,000 in the LMI Housing Fund; or, 3. Option 3: Only select either the Pacific project or the ROEM project. Under this scenario, the maximum commitment the Agency could make would equal $3,755,000, which would leave a fund balance of approximately $1.1 million in the LMI Housing Fund; or, In addition to the foregoing, it may be possible that a portion of the proposal from ECHO could be eligible for funding from the LMI Housing Fund if the applicant prepares a viable business plan for their project. Therefore, if the Agency is interested in further considering ECHO's proposal, then the Agency may wish to work with ECHO to assist them in the preparation of a business plan for their project. The matter of considering funding for ECHO may be possible once a viable business plan has been prepared. Housing In-Lieu Funding Options 1. Option 1: Provide a matching grant for North County Connections' (NCC) purchase of a property at 8600 Atascadero Avenue. Purchase of ITEM NUMBER: Joint CC / RDA Study Session DATE: 10/25/11 the property would allow NCC to continue to operate in their current location. If the Council is amenable to this approach, staff would suggest a $35,000 grant to match San Luis Obispo County's grant. If the City Council agrees, then a formal funding recommendation would be placed on an upcoming agenda for consideration. 2. Option 2: Provide funding and technical support to ECHO to develop a relocation plan for the emergency shelter currently located at the Baptist Church. The costs and staff resource requirements would be developed if there is interest in this option. 3. Option 3: Provide funding and technical support to Transitional Food and Shelter (TFS) to acquire four units to serve as an emergency shelter. The costs and staff resource requirements are would be developed if there is interest in this option. FISCAL IMPACT: At this time the Council Council/Agency Board will be reviewing proposals for consideration for possible future funding only; no formal action or allocation of LMI Housing Funds may be approved at this time due to the current Supreme Court Stay. Therefore, this agenda item does not have a fiscal impact. ATTACHMENTS: Attachment 1: UFI Report Attachment 2: Map of Proposed Project Locations Attachment 3: Proposal - EI Camino Homeless Organization (ECHO) Attachment 4: Proposal - Housing Authority of San Luis Obispo (HASLO) Attachment 5: Proposal - North County Connection Attachment 6: Proposal - Pacific Companies (Oakhaven) Attachment 7: Proposal - People's Self-Help Housing (Oak Grove ll) Attachment 8: Proposal - ROEM Development Corporation (Acacias) Attachment 9: Proposal - Transitional Food & Shelter, Inc. ITEM NUMBER: Joint CC / RDA Study Session DATE: 10/25/11 ATTACHMENT 1: UFI Report (Click here to access Report) Pacific mpanies ' 5311 1155 El Camino Real VM- Oakhaven■ UL *P ople's Self-Help Housing. X, 725 El Camino Real i Atalaya St. _ r., ti it \ ♦ ,�.� , 111Is ♦moi �►�;. �� +�:��ir[��,.1��.:.,\ �� . . %�,rf I�+f 111 1'+, "i��/\ VIN ♦♦ . �,: .rlJ, :.�•',,, •�� ;��' `��,, �/ tea. �� F►'.��i�/��r��a��1� �� ftr R EM Develop,imi 4711 El Camino Real Acacias •tom f1` ` �� .��. ` �= ' , 4900 San Palo M Currently San Palo Inn %TMA or HASLO ads .4 ECHO TranskionalFood 6320 Atascader Next door to current location 7860 Sinaloa Ave. tit IF Habitatfo 11.431 my lu WIL ku '763ngle MM Park"PO �.' �� i f t_�\1Y'::\'✓ a``�)aa Vii ', �� 4MA I -i�\aNa :: *f*00 .0 i,./�i f- ,.vi�I11;i MIN I �ON 211, �� IR MIAMI ,�j ._.ori _ ._ ` . , .1 d".. ♦....,.. �.: .i �,. ITEM NUMBER: Joint CC / RDA Study Session DATE: 10/25/11 ATTACHMENT 3: Proposal (page 1)-EI Camino Homeless Organization (ECHO) E C 0 EI Camino Homeless Organization P.U. Box 2077 Atascodero, CA 93423 (805) 462-3663 www.echoshelter.net September 15, 2011 Warren Frace Community Development Director City of Atascadero 6907 EI Camino Real Atascadero. CA 93422 Dear Mr. Frace: EI Camino Homeless Organization (ECHO) is a non-profit public service organization established in 2000 by a group of private citizens to provide meals and shelter to the hungry and homeless in north San Luis Obispo County. Over the years we have served 138.000 hot. home-cooked meals and provided 81,000 bed nights to the poorest people in our community. This has been accomplished primarily because of the hundreds of volunteers who cook and serve the meals, chaperone the clients at night. and provide the support services needed to operate the 35 bed shelter. Our Client Services team provides counseling and assistance to help clients become independent and self- sufficient, and to find affordable housing for themselves and.or their families. Through the generosity of the First Baptist Church in Atascadero, ECHO has operated from that location. rent free, for the past 5-6 years. It is now time for us to move on and the church to reclaim the space to develop ministries and grow their congregation. They have asked that we relocate to another facility by May, 2012. For the years 2008 through 2010. ECHO averaged approximately $168,000 in total income and $104.000 in expenses. Most of our income (520ro) has come from government and non- government grants, approximately 5%from fundraising activities and the remainder from private and corporate donations. Three paid staff members—shelter manager. case manager and volunteer coordinator—work part-time for ECHO. The majority of the remaining expenses are for shelter administration and operation and utilities. We are interested in acquiring the property adjacent to our current location which is owned by Atascadero Bible Church (ABC). At this time, there are several low-income housing units on the property, several of which are in need of renovation, and enough open space to build an overnight shelter. Even if we are successful in our negotiations with ABC. we are not in a unma rn,or Sa-Lu:St.po Gama pxTa A9�,;� ITEM NUMBER: Joint CC / RDA Study Session DATE: 10/25/11 ATTACHMENT 3: Proposal (page 2)-EI Camino Homeless Organization (ECHO) position to manage low-income housing units on a long-term basis. As the current tenants leave the units. we would like to use them for ancillary services and as temporary housing for our clients. EI Camino Homeless Organization requests to be considered for Redevelopment Agency Funds when they become available. providing our project can qualify for those funds. Thank you, �-' oL�1 Linda Doust ECHO Board President ITEM NUMBER: Joint CC / RDA Study Session DATE: 10/25/11 ATTACHMENT 4: Proposal (page 1) -Housing Authority of San Luis Obispo(HASLO) L gni � Housing Authority 487 Leif'Street Post Office Box 1289 San L u s Ob spo CA 93406-1289 of the City of (805) 543-4478 fax(805) 543-4992 San Luis Obispo Executive Director-Secretary Carol Hatley September 7, 2011 Ms. Callie Taylor Associate Planner City of Atascadero 6907 EI Camino Real Atascadero, California 93422 Re; Proposal for Housing Program Assistance—4900 San Palo Road Dear Callie, This letter is a follow-up to our recent meeting and follow-up communications regarding Atascadero's affordable housing program interests. Consistent with our discussions, this letter will also confirm HASLO's request to be considered for Agency financial assistance to acquire the existing 12-unit San Palo Inn, located at 4900 San Palo Road, just south of San Anselmo Road and east of the US 101 Freeway. The surrounding area is predominately a rural residential single-family neighborhood in good condition overall. The units are behind a defunct automobile sales lot that is slated to be redeveloped as a medical office facility in the near term. Although the San Palo Inn is a motel, it is effectively operating as and appears to outwardly be an apartment complex that serves somewhat transient lower income clientele. The units are arrayed in six duplex-style buildings in which each rentable unit has a kitchen and separate bedroom. The manager's unit has hvo bedrooms. Given the obvious lack of proper property management and tenant selection, the property appears to be headed toward decline. The property is currently listed for sale with an asking price of $925,000 by Aurignac & Associates of San Luis Obispo. As a general rule, listing amounts tend to set the upper limit of value/cost and are usually a starting point for negotiations that could result in a lower acquisition cost. Notwithstanding the foregoing, if the purchase and sale price was $925,000, then the Agency's cost per unit would be $77,834. Although I did not specify an affordability structure, HASLO would provide a mix of units affordable to lower and very-low-income families and would provide 55-year long affordability covenants consistent with the needs of the Agency. Therefore, subject to further negotiations, the San Palo Inn project could provide 11 lower and very-low-income units and 1 moderate income unit (i.e., the Manager's unit). HASLO proposes soft residual receipts-based financing from the Agency. ITEM NUMBER: Joint CC / RDA Study Session DATE: 10/25/11 ATTACHMENT 4: Proposal (page 2) -Housing Authority of San Luis Obispo(HASLO) I trust that this letter will be sufficient with respect to formally registering our interest in receiving funding from the Atascadero Redevelopment Agency. If we are selected for further consideration, we will be pleased to develop further details with respect to the project as a part of negotiating an Owner Participation Agreement. Thank you for your consideration of our proposal. If you have any questions, please contact me at (805) 543-4478. Sincerely, Carol Hatley Executive Director CH:rg ITEM NUMBER: Joint CC / RDA Study Session DATE: 10/25/11 ATTACHMENT 5: Proposal (page 1)-North County Connection July 28, 2011 To: Urban Futures, Inc. Mr. Steven H. Dukett NCC Funding Proposal to City of Atascadero Proposal: Request for $100,000 to put toward down for building and property located at 8600 Atascadero Avenue. The property is currently on the market for$555,000. The discounted sales price to North County Connection is $455,000 for the 2.7 acre property, including the approx. 1,700 sq. foot structure, currently in use daily by NCC. The detached garage, not currently in use by NCC, will allow us room for support services. The package currently offered to NCC by Jim and Darlene Watson, is to come up with the down payment of $185,000 to pay off a balloon payment coming due on a loan against the property. The remaining portion is to be paid off monthly at the same current rental rate of$2,000 per month, with the Watson's carrying back the paper for NCC. $ 35,000 Unallocated CDBG funds secured from SLO County Board of Supervisors $ 2,200 Private Donations Secured to date. $100,000 City of Atascadero funding support request toward the down payment $ 47,800 The NCC Board and staff are working with local banks: i.e. $185,000 Rabobank, Coast National Bank, Mission Community Bank, and Heritage Oaks Bank and donors to secure the remaining down payment funds. The $270,000 of the remaining $455,000 sales price to NCC is the focus of a county wide capital campaign, once the property is secured. NCC will also be writing for grants to secure the remainder needed to complete the property acquisition As a non-profit property owner, we can then apply for various grants and programs of foundations, corporations, utilities, retailers and government agencies for plant cost efficiencies such as solar power, water upgrades and the facility renovations. NCC will be soliciting donations or reductions in cost from local contractors and businesses in exchange for their tax deduction to a 501c3 non-profit,North County Connection. Why NCC: The need for sustainability of our program speaks for itself with our ever growing number of participants. California's realignment (particularly the rehabilitation of low level drug offenders) is going to have a huge impact on our county, because we have so few rehabilitation resources available in our county now. Our residents have always been referred to other counties. The other counties are not going to accept SLO County residents as they do now. They will need all of their beds for their own residents. SLO County currently has ITEM NUMBER: Joint CC / RDA Study Session DATE: 10/25/11 ATTACHMENT 5: Proposal (page 2)-North County Connection no residential treatment center. Our detoxification is available for those only with good health insurance. We have far too few beds in sober living residences. These beds are usually filled with parolees who get three months room paid upfront by the state to get their life back together and by law can not be made to participate in 12-step programs. This leaves very few recovery focused beds for our community members needing that safe haven to get well. The transitional house for 3 women, in SLO, is for Child Welfare Services referred mothers and their children. The two outpatient programs are only through SLO County's Drug and Alcohol Services, which is already impacted with mandated clients with wait lists, and Cottage Care Outpatient, the after care for the Santa Barbara based inpatient detox. and residential treatment program funded only by private pay or health insurance. With the addition of prisoners from the realignment and county jail, the county services will be greatly impacted with even fewer options for our community members seeking help. With less than 12% of the NCC participants sent by the courts, community based resources for the general public are going to be an even more vital but scarce resource in SLO County. Currently underway in Health Care Reform are substance abuse and mental health parity and the addition of the SBIRT process. This (SBIRT) process is the screening, brief intervention and referral to treatment as a part of all primary care and emergency room physician's intakes This SBIRT is mandated and piloted through all federally funded Health Care Clinics (Community Health Care Clinics of the Central Coast) and E.R. physicians before going mainstream. SBIRT has already been added to the curriculum at medical schools. Parity means that the treatment coverage for addictions and mental health issues will now be covered by insurance lust as any other disease is. This lack of rehabilitation resources in SLO County leaves the families where parents have temporarily lost custody of their children due to drug offenses in a very scary and precarious position. The parents are put on a quick federal timeline (16 months) to meet their required treatment plan before their children are adopted out. D.S.S. places the children with other family members where appropriate, then refer to the few local foster care homes. This means many more people (schools, etc.) are affected than just the children and their immediate family. Research shows that it is far better and much less expensive for the child and for society to help their family become more functional than to shuffle the children around in the foster care system that creates its own trauma. This trauma affects delinquency, drop-out rates, increases prison populations, continues the cycle of addiction in families, and costs society millions of dollars in additional services. NCC is currently working with the San Luis Obispo Council for Child Abuse Prevention through a grant to provide parenting classes, a resource library and our parent leadership academy. In the fall NCC will be providing an "evidence based" (required by state and federal funds)parent support group through our training and affiliation with Parents Anonymous, Inc. NCC is currently piloting both Nar-Anon and Families ITEM NUMBER: Joint CC / RDA Study Session DATE: 10/25/11 ATTACHMENT 5: Proposal (page 3)-North County Connection Anonymous groups this year to encourage the friends, employers and family members to become more knowledgeable about addiction as a family disease and how they can best help. As a community based recovery resource center,we are better able to rapidly adapt to the needs of our facility participants. Fifteen years ago there were only 3 Narcotics Anonymous meetings in all of north SLO County, now we have 13 at NCC alone. We are seeing many more people coming into recovery at a younger age today,before they have children or while their children are still young. That is why we have moved in the direction of providing parenting support, children's programs, family strengthening activities and increased social support as these are big factors for maintaining stability in recovery, relapse prevention, enhancing life skills, eliminating child abuse and having healthier families and individuals in our communities. With our move to our current facility we gained the children's playroom, outdoor space for contemplation and relaxation, and room for the older children to play. In the future we want to add meditation areas, gardens and fruit trees to focus on stress reduction and nutrition. Sober socialization is a big part of recovery also and with our kitchen facility and patio areas we are able to provide dinners before meetings, snacks and board games, etc. after meetings. This is for the whole family, to socialize with other families in a new healthy way. Individuals without family automatically become part of this larger group of NCC families through these varied activities. Their subsequent healing and feeling of belonging often results in being reunited with their own estranged family members. The neighborhood location, grounds and home at the 8600 Atascadero Avenue site has become the cornerstone for our unique recovery community,which like any other family, blossoms over time. On occasion,we have three generations of the same family in an activity together, living a new healthy way of life. ITEM NUMBER: Joint CC/ RDA Study Session DATE: 10/25/11 ATTACHMENT 5: Proposal (page 4)-North County Connection Why is this property so important to North County Connection: • NCC has been in Atascadero for 21 years. The first 10 years were co-located with DAS in storefronts in two local malls. Since we have been at the 8600 Atascadero site,we experienced not only in increase in participants, but they continue to come back after they have relapsed, and usually sooner than they might have otherwise. "They state that they missed their recovery family and home." We always strive to provide a warm welcome back, again and again, if necessary. We help them to learn why they relapsed each time. • This facility has become their "home" a safe place, especially in the very difficult first six months of recovery, where people may hang out all day for the safety of a non-drinking or using, accepting and stress free environment. • We often have people just sitting outside, even when the facility is closed because of the calming influence and natural serene environment which is so necessary to the maintenance of one's recovery. • The facility is open every day of the year, particularly on holidays. We don't do any decorating, gift giving, etc. We become a 24 hour sanctuary during Thanksgiving and Christmas, providing peer support, healthy meals and family for those who don't have family, are estranged or just need a respite. • We try to provide the atmosphere of a warm and loving home. Many of our folks have never really had that growing up or it deteriorated as the using escalated. They are comfortable here, accepted and they all learn that we are here to help each other and take responsibility for our "home and family". This special sense of belonging will not happen in a church, where addicts will find little understanding from the church about addictions. Our center and environment is also very different from the county offices or agencies with whom many of our participants have had very negative experiences, currently or in the past. NCC is also far more accessible for the community. • Our children's playroom is very important to our parents. Many of them have lost custody of their children at some point and are reluctant to leave them with others to attend a meeting. At NCC, they bring their children with them to the facility and can hang out and visit or work with their sponsor while the children are safe in the playroom. It is not unusual to find them coming early or staying late, bringing their dinner, having a picnic on the lawn before a meeting. The children encourage new children to join in. ITEM NUMBER: Joint CC / RDA Study Session DATE: 10/25/11 ATTACHMENT 5: Proposal (page 5)-North County Connection In closing, this particular facility allows us to provide a unique experience in the life of the addict in order to move them closer to a stabile recovery. Our goal is to help them to lead a life as a better human being, becoming a productive member of their community and society. Then as we each go out into the community we model a better way to live for those who have not yet found a path to recovery and can refer them to North County Connection at 8600 Atascadero Avenue in Atascadero. Through our affiliation and programs with SLOCAP,NCC has been showcased at four different statewide conferences for our Parent Leadership Programs. Our graduates have presented trainings for both northern and southern California family resource centers. North County Connection is very unique in the new and growing field of family resource centers because we have brought in and embraced recovery in a way that makes it more palatable for folks. We are also participating in the statewide pilot program of data collection on family resource centers to prove the efficacy in their ability to help families in such a cost effective way. This "Matrix" data collection system is being sponsored by both the Department of Social Services and the California Office of Child Abuse Prevention. Though we have been in operation for over 20 years, begun as a pilot program by SLO County Drug &Alcohol Services to provide community based recovery resource centers as a cost efficient means of providing services, this whole concept of family resource centers has only recently taken hold in the state. We hold a very special place and opportunity for NCC and the City of Atascadero to showcase what we know and can prove is a cost effective, community based means of helping create healthier individuals, families and communities. This will save local and state taxpayers millions of dollars in public safety, school, indigent health care, hospital/E.R costs, social services,jails and prison costs. As we help people rehabilitate, they will get out of these systems and back into the workforce, even if on disability, still contributing to the housing market, the economy and by paying taxes as productive members of their community. The acquisition of the property at 8600 Atascadero Avenue will also help us to reach our long term goal of providing transitional housing on site for men,who may be fathers, veterans, or homeless and need the extra care of transitional housing. The site is zoned for this addition and the ancillary services for their recovery would be provided for them at the NCC center on site. We look forward to a long and fruitful partnership with the city as we both help our citizens and their families renew their health and become treasured members of the north county communities. ITEM NUMBER: Joint CC / RDA Study Session DATE: 10/25/11 ATTACHMENT 6: Proposal (page 1)-Pacific Companies(Oakhaven) *"* Additional information provided by Pacific Companies is available for review at City Hall. Project proposal package includes Pacific Companies project examples and references. 430 East State Street.Suite 100 E.tgle,Idaho 83616 PACIFIC i W E S T l Office;(goa)461-0022 Fax: (208)461-3267 July 18,2011 Mr.Warren Frace Atascadero Community Redevelopment Agency 6907[I Camino Real Atascadero,CA 93422 Re: Request for Financial Assistance The Village at Oakhaven-1155 EI Camino Real 30-Unit Affordable Housing Community [Dear Nr. Frace, Thank you for the opportunity to meet with you and your staff regarding the potential support of our revised affordable housing development referenced above.Please allow this correspondence to serve as a request of the Atascadero Community Redevelopment Agency to make a preliminary loan commitment to the proposed 30 unit development for working families. We believe the Village at Oakhaven will provide much needed affordable housing to families in Atascadero as well as provide a valuable asset the community can be proud of for many years to come. The Pacific Companies: The Pacific Companies(TPC)is a group of firms specializing in the development,design, construction and operation of affordable housing throughout the state.TPC uses a variety of financing tools to provide aesthetically beautiful developments that meet the needs and expectations of the community for years to come.Our philosophy is that the successful development of affordable housing requires a"partnership approach"with each community we work in,and throughout the process we will view the City of Atascadero as an important partner-that is how we continually develop affordable housing. TPC has developed and owns over 90 affordable housing developments for families and seniors. Some of our recent projects in Coastal Califomia include: • Tresor Apartments in Salinas,81 units for families located at 1041 Buckhorn Drive. • Rancho Hermosa in Santa Maria,47 units for individuals and families with special needs(homeless,substance abuse problems,mental illness)located at 215-245 East Inger Drive. • Pacifica Apartments in Watsonville,20 units for families located at 201 Pacifica Boulevard. Project Descri tion: We have secured a purchase agreement for a 2.6-acre portion of the vacant located at 1155 EI Camino Real which was previously designed as a market-rate town home development. Our plan is to largely preserve the existing land use approvals,the basic 1 ITEM NUMBER: Joint CC / RDA Study Session DATE: 10/25/11 ATTACHMENT 6: Proposal (page 2)-Pacific Companies(Oakhaven) *"* Additional information provided by Pacific Companies is available for review at City Hall. Project proposal package includes Pacific Companies project examples and references architectural design, the open space and the density. In an effort to decrease the project size we are only proposing to develop the portion of the site fronting EI Camino Real; the back portion of the parcel will remain vacant. A future phase of affordable rental housing, condominiums or a market rate project would fit nicely in the remainder of the property in the future. Development Details: • 30 units(Twenty 2-bedroom units,Ten 3-bedroom units) • An on-site full time resident manager • 2,000 s.f.community space,with a laundry room,computer center,gathering space, leasing office and maintenance facilities. • Green and sustainable design • Rents kept affordable for working families earning at or below 50%and 60%of the San Luis Obispo County Area Median Income(AMI). for example,60%AMI is about$44,640 annually for a family of four. Sources and Uses: The project's total budget is$8,655,515,which includes the following sources and uses. OURC 5 4%Tax Credit Financing $2,925,515 Perm Loan(bonds) $2,300,000 Atascadero CRA $3,180,000 Deferred Developer Fee $250,000 TOTAL $8,655,515 USE land $555,000 New Construction $3,860,496 Construction Contingency $250,000 Financing Costs $798,312 Architecture&Engineering $475,000 Soft Costs&Contingency $392,262- Est. 392262Est. Local Impact&Permit $1,249,424 Developer Overhead&Profit 1 $1,006,136 Reserves $68,885 TOTAL $8,655,515 CRA's Commitment Details: We are requesting a loan from the Agency in the amount of$3,180,000 or$106,000 per affordable unit. Unlike a grant,the terms of this loan are a 3%simple interest rate and a 30 year term with repayment based on residual receipts(the property's annual cash flow). Annual repayments would be made based upon an independent audit of cash flow and would begin upon the first complete year of operations after the development's completion. ITEM NUMBER: Joint CC / RDA Study Session DATE: 10/25/11 ATTACHMENT 6: Proposal (page 3)-Pacific Companies(Oakhaven) *"* Additional information provided by Pacific Companies is available for review at City Hall. Project proposal package includes Pacific Companies project examples and references The Agency would hold a recorded deed restriction on the property which would allow the City to maintain a certain level of control and interest in the property for the life of the loan. This structure allows the City to get paid back over time during the term of the loan while maintaining a controlling interest in the long term maintenance and operation of the property. We understand this is a substantial request for your community, but as we move forward with this project,we pledge to continue researching other sources of funds that we may be able to use to back-fill the Agency loan. !f,for example,we were awarded another source of funds we may be able to use that to alleviate a portion of the Agency's loan. At this time we cannot make any guarantees, but we are committed to trying and have had success in the past. Lastly, because 29 of the 30 units will be long term affordable housing,the units will meet and exceed the Agency's current housing requirements-allowing the City further flexibility over the next few years. Enclosed please find architectural renderings of the Village at Oakhaven, photos of recently opened TPC developments, renderings of developments currently underway and a list of references we urge you to contact. We appreciate your consideration of this request and we are excited about the possibility of bringing a quality housing development to Atascadero's workforce. Please feel free to contact me should you have any questions, (208)461-0022 ext. 3015. Sincerely, aIC eb Roope P President/C.E.O. ITEM NUMBER: Joint CC / RDA Study Session DATE: 10/25/11 ATTACHMENT 6: Proposal (page 4)-Pacific Companies(Oakhaven) *"* Additional information provided by Pacific Companies is available for review at City Hall. Project proposal package includes Pacific Companies project examples and references ,nwe an.l:�ak>YJ n��1 1]4 i!•f�"•+ N •WoJ9eJ•waptomv �ll��ilj� f N w 4.,111•'J II U1w•II.'I•Y'v 1 Y UZ)AugjrO .DL 1.�.�1 atttl A[Y41 �t�F 37��Y�}II��IF all s uv:lY•.Y W a7-C ll :rna >.Y.M aura j�fi J�4�f1� �LiriF w rn 1.4nm•� nnl arv.n ;;-f j� i;�jM7il�;j�{��t n uq e.wr�:spoJwo)qu9daA5 auu iu,•�. +YI i.Y�r.6it17FNU� O m O O C v o ^l� O r x y W a LL :tip u 6L n ✓ ` l� r®b ITEM NUMBER: Joint CC/ RDA Study Session DATE: 10/25/11 ATTACHMENT 6: Proposal (page 5)-Pacific Companies(Oakhaven) *** Additional information provided by Pacific Companies is available for review at City Hall.Project proposal package includes Pacific Companies project examples and references taros u.�1,3ux, �!f lel)�]��!•�':�� T N .., elulo)9cJ'olapaos¢ly1�� It, ll Val 11 Ji 7N, euxPaq urn; xuu Linn aK�.'�i=fi�lii7fi�1�� .. CVQI � I V • - I � V � U V � l_ O la �s I eV z J � AlO � e_ bbo o is ITEM NUMBER: Joint CC / RDA Study Session DATE: 10/25/11 ATTACHMENT 6: Proposal (page 6)-Pacific Companies(Oakhaven) *"* Additional information provided by Pacific Companies is available for review at City Hall. Project proposal package includes Pacific Companies project examples and references Iowa osr��oou n+;1 1 f�•(1e•(;+� � v ��ea.;,+':",.y nwol9�'a�ex�tl coacro 1't�i j•#�4��ji � � m .i. uaALq��paniiau 'I� i11 It'll ORLO4?;vV) suu iaan iKl:��i�ItU1��I7n IS! 9 dpg o � Cn 0 t'aC 0 r •�' I km W Fn S I d L Le _ �3 — c IY 9a !I EG J �c tYi3 S a Q a a L ITEM NUMBER: Joint CC/ RDA Study Session DATE: 10/25/11 ATTACHMENT 6: Proposal (page 7)-Pacific Companies(Oakhaven) *** Additional information provided by Pacific Companies is available for review at City Hall.Project proposal package includes Pacific Companies project examples and references larva vnnyow +a�;1�11�:�!'4:�' � vl eryaM4rJ'aapaxgtl �Iro }�13 il�F.�-�E��#i ; L w WAL114JU0 —V-1 WO lam y�1 we yn lew�u,xM nt + ��a tiil?A auI .1i 1 i I� P'.1-p/t-491 f1VJy �#O++�+1)'1 S#L l � Q � ml 0 � G x � .°! 1 V =,� -- — — ❑ -- c —� m I I '?P I �� t n g 0 ❑ t, c L a li 7 I I 6e I V SDueA _— �O —— _ Ir iii ili i 5 [5 4 —V) I _o-zl L J ry — - - -- $8v ITEM NUMBER: Joint CC / RDA Study Session DATE: 10/25/11 ATTACHMENT 7: Proposal (page 1)-People's Self-Help Housing (Oak Grove II) Peoples' Self-Help Housing July 29,2011 Warren Frace City of Atascadero 6907 EI Camino Real Atascadero CA 93422 Re:Redevelopment Agency Funding Dear Mr.Frace: We are please to inform you.Peoples'Self-Help Housing Corporation closed escrow on the purchase of the 24 lot Tract 2640 in mid-July after many months of research and negotiation. We have contracted with Michael Fredericks Paving to complete the site work. We have begun outreach to the community to seek low income families who are interested in working hard to achieve the goal of successful homeownership through our Mutual Self-I lelp Program. PSHHC works with the families to help them apply and qualify for the home loans and conducts a Home Buyer Education Program. Then PSHHC trains the families to work in groups to build their homes. PSHHC has assisted over 1,500 families to build their own home on the central coast through this program.We anticipate starting the first group of twe've homes in October,followed by a second group of twelve later in the fall or in early 2012. Each self-help family purchases their lot before construction begins. The families and their friends will perform about 75% of the work to build their homes. Certain trades such as plumbing, electrical, drywall, stucco are performed by subcontractors.It generally takes the families about 12 months to complete they homes. USDA mortgages typically fund the purchase and the construction costs. Many low and especially very low income families will need dawn payment assistance loans,also referred to as silent seconds,in order to qualify for the USDA mortgage. We have garnered some down payment assistance from the Stale CalHome Program to help families qualify, however more assistance will be needed especially if the City loses its eligibility as a "rural"for USDA loans. I have expressed concern in prior conversations that the City may lose their eligibility when USDA adopts the 2010 Census numbers,unless Congress renews the current exemption which has alloyed the City to remain eligible since 2000. Should the city lose its USDA eligibility,the low income families will need higher levels of down payment assistance to qualify for conventionally structured loans. Although PSHHC has not utilized Redevelopment Funds for our self-help homeownership developments in the past, we are aware of several non-profits who develop self-help housing that have utilized Redevelopment Agency funds as down payment assistance for home ownership developments. We understand that the 45 year resale restriction generally required is not acceptable USDA. We understand however, that there are some exceptions in the code that are compatible with USDA. 1) Per 33334.3 (fxC) of the California Health and Safety Code allows a 15 year resale restriction for mutual self-help housing. However, only one-third of a credit shall count with a 15 year resale restriction,so few jurisdictions choose this option. 2) further in the same paragraph, "the agency may permit sales Of Owner occupied units prior to the expiration of the 45-year period ... for a price in excess of that otherwise permitted ... pursuant to an adopted program that protects the agency's investment of moneys frorn the Low and Moderate Income Housing Fund, including, but not limited to, an equity sharing program that establishes schedule of equity sharing that permits retention by the seller of a portion of those excess proceeds based on the length of occupancy. The remainder of excess proceeds of the sale shall be allocated to the agency, and deposited into Low and Moderate Income Housing Fund. The agency shall, within three years ITEM NUMBER: Joint CC / RDA Study Session DATE: 10/25/11 ATTACHMENT 7: Proposal (page 2)-People's Self-Help Housing (Oak Grove II) • Page 2 July 30.2011 from the date of sale pursuant to this paragraph of each home ownership or mutual self-help unit sub;ect to a 45 year restriction, ... expend funds to make affordable an equal number of units at the same or lowest income level as the unit or units sold pursuant to this paragraph, for a period not less than the duration of the original deed restrictions' I have samples of the Resale Restriction Agreements which have been approved by USDA and utilized by the Town of Windsor Redevelopment Agency and the Community Development Agency of Sebastopol, which you may want to review should you consider allocation Redevelopment Funds to this mutual self-help project. It is recommended that the down payment assistance be offered as a deferred loan, not a grant. When the family subsequently sells the home, or chooses not to live there anymore, the note becomes due. The funds could be relent on the same home or another home to a family at the same income level, thus preserving the affordability. A law rate of interest or shared equity would help ensure that the funds repaid would be productive far into the future. If a shared equity program is advocated.we suggest that the terms be get as simple as possible.as the agreements are notorously difficult for homebuyers to fully understand. Also, a shared equity provision would need to protect the "sweat-equity' our self-help families will earn during the construction period. The "sweat- equity'is the difference between the initial appraised value of the completed home and the total cash cost and can easily be documented. Most lenders require that payments of a silent loan be deferred for at least 15 years to avoid including the payments in the PITI and TD ratios However, all the loans made to assist PSHHC clients to date have been deferred for at least 30 years, with the assumption that the household could begin making payments of the deferred note when the first mortgage has been repaid in full. have attached a worksheet with examples of how redevelopment funds may be used to assist LMI's to qualify. look forward to working with you to help 24 law-income families achieve their dream of homeownership. /y, r. Sheryl Flore9� Homeownership Department Director ITEM NUMBER: Joint CC / RDA Study Session DATE: 10/25/11 ATTACHMENT 7: Proposal (page 3)-People's Self-Help Housing (Oak Grove II) Examples of how Atascadero Redevelopment Funds May Assist Low and Moderate Income Households to Qualify for Loans to Bulld Homes through PSHHC's Mutuai Self•Ifelp Program USDA Example 1 Homo Cast P$ 55 50 CCC Afonthly Income Silent 2rxf 000InCO'rle Farri:y o'4 Regi,red at 50"7,USDA Los) 95,CC0 Torm yowl 33 Intorest 1 OC96 USDA Pmt. $578.34 Term mos: 396 Taxes 315.09 Appraised Value 280 000 Insurarxc 32.00 HOA 80.00 Ptd: PITI S1,005.43 $3,016 3,021 USDA Example 2 Home Cost $ 285,000 Monthly Income S,Ient 2nd S 25.000 Income Family of 6 Required a!W,/. USDA Loan S 240.000 Term years: 33 Interest 1 OQ'7o USDA Pml $711.80 Term mos' 398 Taxes 328.85 Appraised Value295 000 Insurance 35.00 HOA 80.00 Phil PITI $1,155.65 $3.467 3,504 CaIHFA FHA Example 1 Home Cost S 265 000 h1oithly Income Silent 2nd S 85,000 tncome Family of 4 2nd Term yes Required at 801k fAX*gago S 180,000 1st Term years 301 Interest 5.594 Cal HFA Pmt $1,022 02 1s!Term mos: 300 Taxes 326.85 Appraised Vat a 295.000 Insurance 35.00 HOA 80.00 PM1 127.50 PM $1,593.37 54.780 4,833 Ca1HFA F11A Example 2 Home Cost $ 250 000 Si!ent 2nd $ 105.000 Fancily of 5 2nd Term years at 50N Mortgage $ 145.000 1st Term years 30 Interest5% Cal HFA Pmt. $734.69 1s!Term mos 380 Taxes 315.09 Appraaed Value 280.000 Insurance 32.03 39,150 HOA 80.00 PMI 102.71 PITI $1,081.79 $3,245 3,263 ITEM NUMBER: Joint CC / RDA Study Session DATE: 10/25/11 ATTACHMENT 7: Proposal (page 4)-People's Self-Help Housing (Oak Grove II) 0 Peoples' Self-Help Housing n f October 4,2011 Warren Frace Cfij of Atascadero 6907 El Camino Real Atascadero CA 93422 Re:Redevelopment Agency Funding Dear Mr.Frace: This letter is written to provide you and the Redevelopment Agency Board with additional information not included in my prior letter written in July. When we fast began talking with the City about the potential availability of down payment assistance from the Redevelopment Agency, we were very concerned that the City of Atascadero was at risk of losing its USDA eligibi'ity before we could process mortgage loans for the self-help families %,ft hope to build their affordable homes. Recently we heard that Atascadero will remain eligible for USDA mortgages unb!9130112. The USDA 502 mortgages have much lmver payments than conventional mortgages, thus less down payment assistarce is required V USDA mortgages are available. Also, subsequent to our initial conversations, PSI IHC has secured down payment assistance from the State of California which can be uti;ized for the Atascadero s1te as well as for other PSHHC developments. As long as Atascadero rernains elgible for USDA funding, the Redeve'opment funds are not absolutely essential, but will make it easier for very-low income and smaller households of one to three persons to qual'fy. The Redevelopment funds would also allow the families to have lover thar the 41% maximum PITI al'o%ved by the lender. A lov.,er PITI allows the family to save a little for unexpected costs or a subsoquent loss of employment:or to maintain and beautify their home and landscape. The chart attached to my prior letter indicated that typical households may need $25,000 to $55,000 down payment assistance to qualify for USDA mortgages. Some families may qualify without any assistance, other may need more assistance depending upon their household income, the number of persons in the household and their other debt obligations. Should USDA mortgages not be available, per tl�e chart submitted with my last letter,households would need a much greatw amount of da:n payment assistance to qua ify for conventional mortgages, most likely from $85,000 to S100,000. In this scenario,we would need at least$60,000 per household from the Redevelopment Agency in addition to other down payment sources. Timing of the availability of the Redevelopment Funding will play a large role in determining how much fund ng we can utilize It is my understanding that the Redevelopment Funds will not be available until sometime after the first of the year and could be delayed substantially. Without certainty of how much or when the dawn payment assistance will be available, we will likely move forA-drd to obtain loan approvals for the first group of hvolve affordable homebuyers using other sources of davn payment assistance. Those families that require greater assistance can be held for the second group in anticipation that the Redevelopment Funds may be available then. With all the unknown factors, it is very difficult to estimate exactly how much funding is needed to assist the 24 low income self-help builders. We estimate Plat we could well utilize approximately $40,000 per unit or S1 miilion. ITEM NUMBER: Joint CC / RDA Study Session DATE: 10/25/11 ATTACHMENT 7: Proposal (page 5)-People's Self-Help Housing (Oak Grove II) • Page 2 October 5,2011 You also inquired whether PSHHC would remain involved with the development after the homes were completed. PSHHC,as recipient of down payment assistance grant funds from the state Trill be a beneficiary of down payment assistance loans, just as Wil be the Redevelopment Agency, and as a beneficiary will have a vested interest in maintaining property values in the development The development will also be governed by a Homeavners Association which v.111 have responsibil-y and funds to enforce the CC&R's. None of our p,ior developments have been governed by HOA's. We generally develop strict CC&R's. The Architectural Review Committee established in the CC&R's generally has at least one PSHHC staff member. Wher•, PSHHC becomes aware of a violation of the CC&R's . we contact the violator and ask them to correct the situation, ,,vhich they generally promptly do. The HOA funding will give the HOA greater power to enforce the rules. Admittedly, it is a greater challenge to keep home ownership properties well maintained than the rental properties awned and managed by PSHHC, Nevertheless, PSHHC takes pride in all our deve'opments and desires that they remain attractive far into the future, so we do what ve can without funding to encourage the households to keep up their homes and yards. We find that most of the self-help families take tremendous pride in the homes that they have built,and maintain them at least as well as the average homeowner. I look forward to working with you to help 24 low-income families achieve their dream of homeownership. Sircere)y, \ ' i Y Sher(Flores',) Homeowne,ship Department Director ITEM NUMBER: Joint CC / RDA Study Session DATE: 10/25/11 ATTACHMENT 8: Proposal (page 1)- ROEM Development Corporation (Acacias) *"* Additional information provided by ROEM is available for review at City Hall. Project proposal package includes ROEM Development Corporation resumes,project examples,and references x EXQUISITE DETAIL ON A SOLID FOUNDATION O June 8,2011 Mr.James Lewis Assistant City Manager 6907 EI Camino Real OAtascadero,California 93422 "tel Mr.Warren Frace Community Development Director 6907 EI Camino Real rOl Atascadero,California 93422 v Re: Affordable Housing Opportunity—40 unit family community Gentlemen. ROEM Development Corporation (ROEM) would like to thank you for the opportunity to work with the City of Atascadero and its Redevelopment Agency in providing a quality affordable housing community within the City of Atascadero. ROEM Development Corporation and its affiliated entities are a full service construction and development organization that has been specializing in the new construction and renovation of affordable housing for families and seniors throughout the State of California for over 30 years. As a model developer and proven industry leader in the production of affordable housing, ROEM maintains its commitment to providing high quality housing through its collaboration with the public and private sector and communities alike. We are excited about a potential public-private partnership with the City and respectfully submit this request for funding to you. As we have discussed with you prior to today's meeting, ROEM has identified an approved multifamily site and entitled project located within the City of Atascadero Redevelopment Area, which the City of Atascadero has shown interest in developing to provide quality affordable housing for their community. The Site is located at 4711 El Camino Real. The City of Atascadero has approved a 40 unit multifamily mixed use project on this property. It is the intention of ROEM to move forward under the existing Conditions of Approval for this 40 unit affordable housing community if the City decides they would want to move forward with this site. Per our recent correspondence, I have created two project preliminary proformas for this proposed project. The first proforma is utilizing the 9% Federal Tax Credit Program that is administered by the California Tax Credit Allocation Committee and the second proforma is utilizing the 4% Federal Tax Credit Program and the Tax Exempt Bond Program which is administered by the California Debt Allocation Committee. ITEM NUMBER: Joint CC / RDA Study Session DATE: 10/25/11 ATTACHMENT 8: Proposal (page 2)- ROEM Development Corporation (Acacias) *"* Additional information provided by ROEM is available for review at City Hall. Project proposal package includes ROEM Development Corporation resumes,project examples,and references 9% Tax Credit Model Uses/Sources Uses: Land $ 1,800,000.00 Construction Cost $ 5,367,916.00 Financing Cost $ 782,549.00 Soft Cost $ 2,708,679.00 Operating Reserves $ 87,426.00 Total Uses $ 10,746,570.00 Sources: Tax Credit Financing $ 5,071,270.00 1"Mortgage(perm loan) $ 2,154,263.00 Deferred Developer Fee $ 424,961.00 AHP Grant $ 400,000.00 City of Atascadero RDA(soft) $ 2,696,076.00 Total Sources $ 10,746,570.00 Rental Affordability Matrix Bedroom Size Number of Units AMI Rent Level Net Rent I Bedroom 1 30% $384.00 I Bedroom 1 40% $524.00 1 Bedroom 4 50% $664.00 1 Bedroom 2 60% $803.00 2 Bedroom 1 30% $423.00 2 Bedroom 1 40% $591.00 2 Bedroom 6 50% $758.00 2 Bedroom 3 60% $926.00 2 Bedroom I Manager Unit $ 0.00 3 Bedroom 2 30% $484.00 3 Bedroom 2 40% $678.00 3 Bedroom 16 50% $871.00 ITEM NUMBER: Joint CC / RDA Study Session DATE: 10/25/11 ATTACHMENT 8: Proposal (page 3)- ROEM Development Corporation (Acacias) *"* Additional information provided by ROEM is available for review at City Hall. Project proposal package includes ROEM Development Corporation resumes,project examples,and references 4% Tax Credit and Tax Exempt Bond Mode! Uses/Sources Uses: Land $ 1,800,000.00 Construction Cost $ 5,367,916.00 Financing Cost $ 614,998.00 Soft Cost $ 2,697,585.00 Operating Reserves $ 105,832.00 Total Uses $ 10,586,331.00 Sources: Tax Credit Financing $ 2,355,790.00 I` Mortgage(perm loan) $ 3,777,305.00 Deferred Developer Fee $ 698,477.00 City of Atascadero RDA (soft) $ 3,754,759.00 Total Sources $ 10,586,331.00 Rental Affordability Matrix Bedroom Size Number of Units AMI Rent Level Net Rent I Bedroom 1 50% $ 664.00 1 Bedroom 7 60% $ 803.00 2 Bedroom 1 50% $ 758.00 2 Bedroom 10 60% $ 926.00 2 Bedroom 1 Manager Unit $ 0.00 3 Bedroom 2 50% $ 871.00 3 Bedroom 18 60% $1,064.00 ITEM NUMBER: Joint CC / RDA Study Session DATE: 10/25/11 ATTACHMENT 8: Proposal (page 4)- ROEM Development Corporation (Acacias) *"* Additional information provided by ROEM is available for review at City Hall. Project proposal package includes ROEM Development Corporation resumes,project examples,and references As you are aware, the California Tax Credit Allocation Committee has formal competition rounds throughout the calendar year. The 9% Federal Credit application deadline for the second and final round for 2011 is schedule for July 13, 2011 and the application deadline for the 4% Federal Credit and Tax Exempt Bond application happens every 60 days with the next deadline schedule for July 17, 2011. We look forward to the opportunity to meet with you to discuss this request further. If you have any questions or need additional information please feel free to contact me at 408-786-6139. We would also like to encourage you to visit our website at %%%k%k.roenicorp.coni to learn more about our organization and commitment to quality affordable housing. Sincerely, Chuck Treatch Land Acquisition Manger ITEM NUMBER: Joint CC / RDA Study Session DATE: 10/25/11 ATTACHMENT 8: Proposal (page 5)- ROEM Development Corporation (Acacias) *"* Additional information provided by ROEM is available for review at City Hall. Project proposal package includes ROEM Development Corporation resumes,project examples,and references The Acacias Affordable Housing Community Atascadero, California Project Summary 1. Project Unit Mix a. 8—One-Bedroom Units—750 sq. ft. (average) b. 12—Two Bedroom Units—875 sq. ft. (average) c. 20—Three Bedroom Units— 1,050 sq. ft. (average) d. Community Room—Approx.2,000 sq.ft. e. Commercial Rental Space—Approx. 6,000 sq. ft. 2. Sustainable Building Methods a. Design will exceeds Title 24 Energy Standards by at least 10% b. Use of water saving fixtures or flow restrictors in the kitchen(2gpm or less)and bathrooms(1.5 gpm or less) c. Use of no—VOC interior paint(5 g/1 or less) d. Use of at least one High Efficiency Toilet(1.3 gpf)or dual—flush toilet per unit. e. Use of formaldehyde-free insulation 3. Site Location/Project Design/Neighborhood Consistency a. Project was designed with the assistance of the City of Atascadero Planning Staff. The architectural design of this project was created to enhance the surrounding Neighborhood. b. Project is consistence with General Plan c. City has completed Environmental review and project has no significant environmental issue. d. Through the Public Hearing Process there was no major rejections or concerns from the Neighborhood. e. The architecture of the buildings are of high quality f. The landscaping has been design to enhance the oak tree in the center of the property with a high quality design of draught tolerant plant material g. Project is a mixed-use project allowing for approx.6,000 sq.ft.of commercial rental space along El Camino Ave. h. Project is located in the Redevelopment Project Area of the City 4. Project Entitlements a. This project has been approved by the City of Atascadero on February 14, 2006 and is currently in the plan check process for the engineering and architectural drawings for this project. b. City of Atascadero on March 3,2009 approved the time extension of the approved Vesting Tentative Tract Map and Conditional Use Permit. ' • - • ••• •. .•- -t•- D- - •• • • • • - • • - - • - • - - well oil .1 �► ffd C._;�� ill �� 11 - =1 --, _ _ .■ �__ Imo.., ff •� ITEM NUMBER: Joint CC / RDA Study Session DATE: 10/25/11 ATTACHMENT 8: Proposal (page 7)- ROEM Development Corporation (Acacias) *"* Additional information provided by ROEM is available for review at City Hall. Project proposal package includes ROEM Development Corporation resumes,project examples,and references 'sU I iv ISI I r i } i ' �� jl yll III .L2�10� <<'�, i;�}ill 1 ! as ^ I NE 1L V D la �; o j I ! �I� , . 1 itE�3tt if Goo 0 0 9 eo o CVC ee 0 0 0 0 MO © o©o ©�© .aq t rpwt` tQ ti h 11h gi cif/ .i •■ �O 716y/�� 7 • a ww• f r 1 s f .. ...... d u � 6 ...... 1.4 i • Q T � 'i I I�LIJ -8 2 y J b 1 —W I 3 ] 3 01 S 3 8 I9 NI 119 1 X 3 I t _c ITEM NUMBER: Joint CC / RDA Study Session DATE: 10/25/11 ATTACHMENT 9: Proposal (page 1)-Transitional Food & Shelter, Inc. July 27, 2011 UPDATE ON PROPOSAL OF TRANSITIONAL FOOD AND SHELTER, INC. FOR REDEVELOPMENT FUNDS TO PURCHASE PROPERTY AT 7860 SINALOA AVENUE FOR USE AS TRANSITIONAL HOUSING FOR DISABLED HOMELESS PERSONS Purpose of the proposal: to provide transitional housing for "Medically Fragile" (disabled) homeless persons whose medical condition requires shelter 24-hours/day. Such persons are not suitable for a temporary, emergency shelter in an overnight shelter. ECHO, hospitals and other social service agencies refer such clients to Transitional Food and Shelter. Each referral is by a third party agency which has screened the client for income and health, and includes a doctor's letter certifying the need. Examples of those needing 24-hour/day shelter include: persons prescribed bed rest, including At-Risk pregnancies where the mother needs bed rest to carry the baby to term, persons recuperating from operations or severe traumatic injuries, persons with a contagious condition requiring isolation, persons made weak by chemotherapy treatments for cancer, generally weak and frail, degenerative diseases and terminal illness. Temporarily disabled persons who will get well will be served for as long as the doctor recommends, then released to go to an overnight shelter. Many will never get any better, and most often will get progressively worse. These persons are helped to maximize their income and get permanent housing. Persons on SSI, for example, receive only $830 per month and need subsidized housing. If the client is expected to pass away within six months, we keep until he passes away. We receive referrals from Hospice Partners of homeless clients. Type of facility: this facility would be a Residential Care Home, or, technically an ARF as defined by state regulations (Adult Residential Facility) and would not require a conditional use permit. The site: the property consists of 2 duplexes (4 units), 4592 sq. ft. of buildings, with 8 bedrooms and 8 baths, 4 kitchens, 4 living rooms, 4 laundry rooms, 4 garages and a back yard, on a single lot of 12,153 sq. ft. or .279 acres. One bedroom, one bath, one living room, one kitchen and one garage will be occupied by a resident manager who will enforce program requirements, make inspections, make repairs, maintain the landscape and facility, communicate with TFS officers and volunteers, and call an ambulance if necessary. Clients are required to keep their areas clean, but he will also clean if needed. He will serve for free rent only. The buildings were built in 1979 and have been maintained in excellent condition. The neighborhood is one of modest single-family homes and modest small apartment buildings. No ITEM NUMBER: Joint CC/ RDA Study Session DATE: 10/25/11 ATTACHMENT 9: Proposal (page 2)-Transitional Food &Shelter, Inc. major modifications are needed. Any minor modifications and all cost of furniture and household goods will be donated. The applicant (TFS) is a 5010(3) nonprofit operating since 1998, funded by donations fund- raising activities and grants. TFS has 12 years experience in operating this program or similar programs. TFS keeps its expenses to a minimum by staffing all programs with unpaid volunteers only. The volunteers work from their homes, so there is no expense for an office. TFS is now renting five studio apartments at the corner of EI Camino Real and Rosario and providing the same services, with the same resident manager. Clients are allowed to occupy the apartments temporarily while in the program. The apartments are much cheaper than a motel voucher program. The facility's operating expenses are $17,520 per year for utilities, insurance and maintenance. The cost of renting the five apartments (utilities included) is $3,140/month or $37,680/year. The facility is also larger and more modern and has more units. The primary goal of the purchase is to reduce the costs of operating, in this time of skyrocketing caseloads of homeless persons and ever-shrinking resources. Some $5,000-6,000 of the savings would go to pay gasoline and phone expenses for volunteer caseworkers who are low income and cannot afford to donate these expenses. Caseworkers are much needed. The ECHO caseworker will casework clients he refers, but not those referred by hospitals or others. Hospital social workers only make a discharge plan when the patient leaves the hospital. CAPSLO rarely provides casework now. Caseworkers are needed to help clients maximize their income and find affordable housing so that clients can exit the program successfully. Financing the operating costs: TFS now has sufficient funds to pay the rent, so it will be able to pay the operating costs of the site, which are less. The rentals will be terminated as the apartments become vacant and available for clients, and TFS will assume the utilities and maintenance of the units occupied by clients. TFS receives donations and fund-raising proceeds of about 25,000-30,000 per year, and grant of CDBG funds from Paso Robles of about $10,000 per year (approved for this year) and a grant from the County of$20,000 per year in Community Based Organizations/Public Health Grants (CBO/PHG funds, which come from the proceeds of the settlement of the County's lawsuit against tobacco companies). The County grant has already been approved for this year and the contract signed. Last year, for the first time, TFS received $5,000 from the Paso Robles Wine Growers Assn. and $5,000 from MUST, another wine growers group. TFS has been receiving $8,000-9,000 per year from French Hospital (CHW) to be used for cancer patients only, but some of this must go for our SLO and ITEM NUMBER: Joint CC / RDA Study Session DATE: 10/25/11 ATTACHMENT 9: Proposal (page 3)-Transitional Food &Shelter, Inc. South County clients. Funds from San Luis Obispo, Arroyo Grande and Grover Beach cannot be used in the North County. TFS rents 5 more apartments South of the Cuesta Grade. Some of the County grant must go to the SLO and South County expenses. We also have been getting another county grant of$7,000-8,000 in County Coalition for the Homeless funds. Clients pay 20% of their income, but this varies a lot, and this income is included under "donations". Financing the property acquisition: The asking price is $599,000. The proposal is that the City of Atascadero or the Atascadero Redevelopment Agency become the owner, and rent the facility to Transitional Food and Shelter, Inc. at a nominal fee plus administrative costs. The City or RDA would serve as the interim buyer until TFS can purchase the property through applications for capital grants, including HOME, California Endowment, EHAPCD, and Kresge Foundation (Kresge applications available 9-1-11). An interim buyer is needed because if TFS was the buyer, it would be disqualified from applying for capital grants. That is because capital grants are offered for purchase, not for re-financing. TFS does not now have a capital grant or sufficient funds to pay a mortgage, unless the payments were very small. It is possible the Housing Trust Fund could help. Purchase of the property by TFS would free Redevelopment funds to be used for other purposes, including funding of some of the projects now pending approval. The four units are now rented for $951/mo. each, utilities not included, on month-to- month agreements, and the City or RDA could collect the rents. The City's recommendation and the proposed arrangement would help a great deal in acquiring outside grants for TFS to purchase the property. In the alternative, TFS could be the buyer and the RDA could arrange a mortgage with very low payments or TFS could make its payments as rent. ® URBAN FUTURES I Incorporated M E M O R A N D U M DATE: October 17, 2011 TO: Warren Frace, Community Development Director Callie Taylor, Associate Planner FROM: Steven H. Dukett, Managing Principal SUBJECT: Affordable Housing Projects and Programs Analysis This report summarizes the results of the affordable housing meetings we recently conducted with interested affordable housing agencies and community based organizations. It also summarizes the results of separate discussions among the 'City's Working Group" with respect to the potential of the City/Agency establishing certain single-family rehabilitation programs. The 'City's Working Group" consisted of staff of the City and Urban Futures, Inc. ("UFI"). This report consists of five (5) sections and two (2) exhibits. The report's sections include: i) a synopsis of proposals; ii) an analyses of the Agency's funding capacity in its Low- and Moderate-Income ("LMI") Housing Fund; iii) an analysis of the Agency's funding prioritization options; iv) recommendations for eligible proposals; and v) an analysis of funding alternatives for incomplete or ineligible proposals. For the purpose of consistency, a more expansive description of each proposal along with applicable site photographs, site plans and project elevations as well as a project location map are included within Exhibit "A". In addition and for quick reference purposes, a copy of the 2011 San Luis Obispo County Affordable Housing Worksheet is included as Exhibit "B". I. SYNOPSIS OF PROPOSALS EI Camino Homeless Organization (ECHO): ECHO is requesting an 'undefined" amount of Agency assistance to help them through the acquisition and development process required for their proposed homeless shelter, which is located outside of the Atascadero Redevelopment Area. ECHO has not yet prepared a business plan for their project. Consequently, they have not requested a specific funding amount from the Crestview Corporate Center-3111 N.Tustin Street,Suite 230,Orange,CA 92865-1753 Tel: (714) 283-9334 www.urbanfuturesinc.com Fax: (714)283-5465 Page 2 Agency and, as such, their proposal is considered incomplete. The matter of considering funding for ECHO may be possible once a viable business plan has been prepared. Habitat for Humanity: Habitat initially requested assistance to acquire a bank-owned site that could be developed as a 10-lot subdivision that could also include a neighborhood park. The site is surrounded by Atascadero, Navajoa and San Andres Avenues and is commonly known as the "Gerhart Site". However, due to uncertainties associated with the current owner, the amount of assistance could not be defined. As a consequence, during July 2011, Habitat advised Atascadero staff that the Gerhardt Site remains unavailable and, as such, Habitat would not be able to proceed with a project on that site at this time. As a result, Habitat withdrew their proposal from consideration during the current funding round. Housing Authority of San Luis Obispo (HASLO): HASLO is requesting $925,000 of Agency financial assistance to acquire the existing 12-unit San Palo Inn, which is located outside of the Atascadero Redevelopment Area. . Although the San Palo Inn is a motel, it is effectively operating as and appears to outwardly be an apartment complex that serves somewhat transient lower income clientele. Given the risk that the San Palo Inn could ultimately become an eyesore and a magnet for public safety calls (i.e., police and fire), this proposal deserves consideration. North County Connection (NCC): NCC is requesting a $100,000 grant to help them acquire the property they currently lease so that they can continue to operate their social services programs on the site. NCC's proposal does not involve the creation of affordable housing units and consequently is not eligible for funding from the LMI Housing Fund. If the City is interested in assisting the NCC, then it may be that matching SLO County's $35,000 Community Development Block Grant ("CDBG") allocation would be a reasonable starting point for consideration. The Council may also wish to consider using a portion of the City's In-Lieu Affordable Housing funds for this request. Pacific Companies: Pacific is requesting a $3,180,000 loan to provide gap financing for the development of Phase I of the Village at Oakhaven, which is a 30 unit multi- family affordable housing project located at the northern end of the Atascadero Redevelopment Area. To the extent that the Agency wishes to assist the development of this project by providing gap financing in tandem with Low Income Housing Tax Credits ("LIHTC"), then the Oakhaven project is worthy of further consideration. However, given the $3,180,000 price tag, the Agency can only afford to assist one such project at this time. Therefore, the merits of the Pacific proposal must be contrasted against the ROEM proposal. People's Self-Help Housing Corporation (PSHHC): PSHHC is requesting $1 million-worth of assistance to provide down payment assistance loans to 24 low- and Page 3 moderate-income home buyers. PSHHC has acquired the Oak Gove II 24-lot subdivision (Tract 2640) from a bankruptcy trustee and will use their Mutual Self-Help Program to develop the property. To the extent that the Agency wishes to assist with the development of new affordable single-family homes, then consideration should be give to the PSHHC proposal. ROEM Development Corporation (ROEM): ROEM is requesting a $3,755,000 loan to provide gap financing for the development of the Acacias apartment complex, which is a 40 unit multi-family affordable housing project located within the Atascadero Redevelopment Area. To the extent that the Agency wishes to assist the development of this project by providing gap financing in tandem with funding made available with LIHTCs and private activity bonds, then the Acacias project is worthy of further consideration. However, given the $3,755,000 price tag, the Agency can only afford to assist one such project at this time. Therefore, the merits of the ROEM proposal must be contrasted against the Pacific proposal. Transitional Food & Shelter, Inc. (TFS): TFS is proposing that the Agency acquire for $599,000 and then lease with an option to purchase two duplexes located at 7860 Sinaloa Avenue for their future use as a special client homeless shelter. The property is within the Atascadero Redevelopment Area. However, the TFS proposal is not eligible for funding from the Agency's LMI Housing Fund. The City and TFS should work together in an effort to identify and obtain alternative funding. Further, TFS has not yet prepared a business plan and funding strategy for the relocation and rehabilitation components of their project. Consequently, that component of their proposal is considered incomplete. The matter of considering funding for TFS may be possible once a viable business plan and funding strategy has been prepared for the relocation and rehabilitation components of their project. Housing Rehabilitation Programs: In addition to the consideration of the proposals received from the interested affordable housing agencies and community based organizations as described above, the City's Working Group also considered the possibility of establishment of several City/Agency operated single-family rehabilitation programs. Three program concepts are presented below: • An Emergency Repairs Program (a small scale grant program -- $10,000 maximum); • A Home Beautification Program (a mid-scale grant program -- $25,000 maximum); and • A Housing Improvement Program (a larger scale loan program -- $50,000 maximum). In keeping with the foregoing, if the establishment of the housing rehabilitation programs is desired, then it is recommended that the Agency consider allocating a first- year budget for the programs in the amount of $670,000. Page 4 II. ANALYSIS OF THE AGENCY'S FUNDING CAPACITY IN ITS LMI HOUSING FUND Based on financial data obtained from the City needed for the preparation of a Fiscal Impact Analysis that compared the effects of ABX1 26 and ABX1 27, UFI has estimated that the Agency had an approximately $4.15 million uncommitted cash balance in its LMI Housing Fund as of June 30, 2011. This estimated was derived as follows: Source Amount June 30, 2010 Fund Balance' $3,445,975 June 30, 2010 Interest Earned' 121111 Estimated FY 2010-11 Tax Increment2 678,000 Estimated FY 2010-11 Interest Earnings2 16,000 TOTAL: $4,152,086 Notes: 1. From FY 2009-10 Agency Financial Statements; and 2. UFI estimate. In addition, it is anticipated that the Agency will add another $694,000 in cash to its LMI Housing Fund during FY 2011-12 (i.e., $678,000 from tax increment and $16,000 from interest earnings). Therefore and for planning purposes, the Agency should have approximately $4.85 million available for worthy LMI Housing projects and/or programs during FY 2011-12. The above is contrasted against $9,530,000-worth of funding requests for projects or programs that are eligible for LMI Housing Fund assistance (the projects that are not eligible for LMI Housing Fund assistance, have an incomplete proposal or the proposal was withdrawn are not included within that total). These funding requests are compared, as follows: Funding Assisted New Cost/ Covenants Cost/ Applicants' Requested Units Units Unit Obtained Covenant Pacific (new MFR units) $3,180,000 30 30 $106,000 30 $106,000 ROEM (new MFR units) 3,755,000 42 42 $93,875 42 $93,875 HASLO (converted MFR units) 925,000 12 0 $77,834 6 $154,167 PSHHC (new SFR units) 1,000,000 24 24 $42,000 24 $42,000 HRP (rehabed SFR units)2 670,000 24 0 $21,7003 N/A Totals: $9,530,000 132 96 N/A 102 N/A Notes: 1. ECHO, Habitat, NCC&TFS are not included due to the reasons described above. 2. HRP is a multi-year program. 3. $21,700 is the approximate average cost per unit only if the funding limits are reached for each project. Page 5 It is important to mention that another possible source of funding for some of the proposals received could be the City's Affordable Housing In-Lieu fund, which has a current available balance of approximately $480,000. III. ANALYSIS OF THE AGENCY'S FUNDING PRIORITIZATION OPTIONS Since the above is almost equal to 200% of the available funding, it is necessary that the Agency prioritize its funding decisions. Although there are a variety of ways to look at this matter, there are three (3) options that seem to stand out as obvious possibilities. They are: Option 1: Only select the PSHHC, HASLO and HRP proposals. Under this scenario, the maximum commitment the Agency could make would be $2,595,000, which would leave a fund balance of approximately $2.26 million in the LMI Housing Fund. Option 2: Select either the Pacific project or the ROEM project for the development of new multi-family residential units and select one additional proposal (i.e., PSHHC, HASLO or HRP). Under this scenario, the maximum commitment the Agency could make would be the combination of the ROEM and the PSHHC proposals, which would equal $4,755,000, and would leave a balance of approximately $95,000 in the LMI Housing Fund.; or Option 3: Only select either the Pacific project or the ROEM project for the development of new multi-family residential units. Under this scenario, the maximum commitment the Agency could make would equal $3,755,000, which would leave a fund balance of approximately $1.1 million in the LMI Housing Fund; or In addition to the foregoing, it may be possible that a portion of the proposal from ECHO could be eligible for funding from the LMI Housing Fund if the applicant prepares a viable business plan for their project. Therefore, if the Agency is interested in further considering ECHO's proposal, then the Agency may wish to work with ECHO to assist them in the preparation of a business plan for their project. The matter of considering funding for ECHO may be possible once a viable business plan has been prepared. IV. RECOMMENDATIONS FOR ELIGIBLE PROPOSALS It is recommended that the Agency Board consider the projects and programs described in this report and provide staff direction with respective to the merits, priority, funding levels, follow-up actions, etc., as may be appropriate, for each. Page 6 To the extent that the Agency Board wishes to consider entering into a binding agreement for any of the projects or programs described above in the future, the consideration of such agreements may only occur after the matter of the CRA/League of California Cities lawsuit with respect to the Redevelopment Restructuring Acts (i.e., ABX1 26 & ABX1 27) has been adjudicated by the California Supreme Court. As of the date of this report, the Supreme Court has indicated that it is their intent to rule on the matter by January 15, 2012. V. FUNDING ALTERNATIVES FOR INCOMPLETE OR INELIGIBLE PROPOSALS As noted above, several of the proposals received were either incomplete (i.e., lacking a specific request and a business plan) or are by their very nature ineligible for Agency LMI Housing Funds. Nevertheless and in each case, the applicants provide significant and valuable services to their client base and by inference the community as a whole. Therefore, it is beneficial to review the possibility of funding alternatives for such proposals. ECHO: As described above and within Exhibit "A", the ECHO proposal is incomplete. Therefore, if the Agency is interested in investigating ECHO's proposal, there are at least four (4) approaches that may be explored to enable ECHO to complete a business plan: 1. The Agency (via staff and consultants) could take an active role by providing technical assistance to help ECHO develop a viable business plan and funding strategy; or 2. ECHO could joint venture with another organization to help develop a viable business plan and funding strategy; or 3. The City could provide ECHO with a small technical assistance grant from available City/Agency resources to enable ECHO to hire its own experts to develop a viable business plan and funding strategy; or 4. The Agency could recommend that ECHO use a small portion of its $300,000 reserves to hire its own experts to develop a viable business plan and funding strategy. The matter of considering funding for ECHO may be possible once a viable business plan has been prepared. NCC: As described above and within Exhibit"A", if the City is interested in assisting the NCC, then there are at least two options to consider: i) the City could consider equally matching the SLO County $35,000 CDBG contribution (i.e., $35,000); and ii) another Page 7 possible source of funding could be the City's Affordable Housing In-Lieu Fund, which has a current available balance of approximately $480,000. TFS: As described above and within Exhibit "A", the TFS proposal is incomplete. As the narrative above describes, if the City is interested in assisting the TFS, then there are at least three funding options to consider: • The City and TFS could work together in an effort to identify and obtain alternative funding, such as Emergency Shelter Grant ("ESG") funding (provided by HUD); • Since the project site is within the Atascadero Redevelopment Area, the Agency could consider the use of non-LMI Housing Fund resources; and • Another possible source of funding could be the City's Affordable Housing In-Lieu fund, which has a current available balance of approximately $480,000. However, funding should be contingent upon TFS completing a business plan for the relocation of existing tenants and the remodeling of the existing facilities. Given the foregoing, if the Agency is interested in investigating TFS's proposal, there are at least three (3) approaches that may be explored to enable TFS to complete a business plan: 1. The Agency (via staff and consultants) could take an active role by providing technical assistance to help TFS develop a viable business plan and funding strategy for the relocation and rehabilitation components of their project; or 2. TFS could joint venture with another organization to help develop a viable business plan and funding strategy for the relocation and rehabilitation components of their project; or 3. The City could provide TFS with a small technical assistance grant from available City/Agency resources to enable TFS to hire its own experts to develop a viable business plan and funding strategy for the relocation and rehabilitation components of their project. The matter of considering funding for TFS may be possible once a viable business plan and funding strategy for the relocation and rehabilitation components of their project has been prepared. Epilogue: The process of seeking out affordable housing projects and programs for consideration by the Agency has been very rewarding and productive endeavor. Atascadero is very fortunate to be the focal point of interest and service delivery for so many exceptionally qualified community-based organizations and housing entities. It is no surprise that the Agency is over-subscribed with respect to funding requests. Although the process of prioritization and allocation will undoubtedly be a difficult one, Page 8 the outcome is sure to be of benefit to the City as a whole and to the low- and moderate-income target population in particular. It is our firm's fervent wish that the information is this report is not only useful to the Agency, but engages an on-going process dedicated to improving, creating and/or preserving decent, safe and affordable housing within Atascadero. In addition, without your involvement, support and encouragement, this report would not have been possible. SHD:ntm Attachments Page 9 EXHIBIT "A" DESCRIPTION OF PROPOSALS For the purpose of consistency, the following narrative provides a more expansive description of each the affordable housing-related proposals described in the foregoing report. As applicable, project site photographs, site plans and/or renderings are also included. Further, the last page of this Exhibit is a project location map. ECHO: ECHO is a non-profit public service organization established in 2000 by a group of private citizens to provide meals and shelter to the hungry and homeless in north San Luis Obispo County. Over the last 11 years, ECHO has served approximately 138,000 hot home-cooked meals and provided 81,000 bed nights to the poorest people in the community. These services were provided primarily through hundreds of volunteers who cooked and served the meals, chaperoned the clients at night, and provided the support services needed to operate the 35 bed shelter. ECHO's Client Services team provides counseling and assistance to help clients become independent and self-sufficient and to find affordable housing for themselves and/or their families. For the past 5-6 years, ECHO has operated from facilities provided rent free by the First Baptist Church of Atascadero, which is located at 6370 Atascadero Mall next to the Atascadero High School and Atascadero Bible Church. The First Baptist Church has advised ECHO that due to growth in their congregation and the needs of their ministries for more space, it is necessary the ECHO relocate to another facility by May, 2012. For the years 2008 through 2010, ECHO averaged approximately $168,000 in total income versus about $104,000 in expenses. Approximately 52% of ECHO's income comes from government and private grants. Approximately 5% of their income comes from fundraising activities and the remainder comes from private and corporate donations. ECHO uses its resources to compensate its three part-time staff members, i.e., a shelter manager, case manager and volunteer coordinator and to pay expenses for shelter administration, operations and utilities. Over the last several years, ECHO has saved about $300,000 that could be used for the homeless shelter project. ECHO is interested in acquiring a 0.95-acre parcel located at 6320 Atascadero Mall (APN 030-191-011) ("Site's from the Atascadero Bible Church (ABC), which is adjacent to ECHO's current facilities. ECHO has advised that ABC will sell the Site to them for its secured debt, which is estimated at $300,000. The Site includes four (4) residential multi-family housing buildings with a total of eight (8) dwelling units. These units are rented to low- and moderate-income persons. ECHO reports that several of the units are in need of renovation; however, they have not prepared a rehabilitation cost estimate. In addition, there is an undeveloped portion of the Site that ECHO believes is sufficient in size to build an approximately 4,000 square foot homeless shelter and Page 10 administrative office. ECHO is researching the suitability and economic feasibility of developing a pre-manufactured, modular building on the Site; however, they have not prepared a development budget or an operating pro forma for the project. ECHO has indicated that if they are successful in reaching an agreement with ABC, they do not believe they are in a position to manage the housing units on a long-term basis. Their vision is to ultimately use the existing units for ancillary services and for temporary housing for their clients once the existing tenants relocate in the future on their own accord. Given the limited availability of affordable housing units in the community, the voluntary relocation of existing tenants could take a period of years to complete. ECHO has not forecasted the economic effect of the transition of the residential units. On an overall basis, ECHO has not yet prepared a business plan for their project. Consequently, they have not requested a specific funding amount from the Agency. Without a business plan, ECHO may not yet be ready to tackle a development project or take on property management responsibilities at this time. However, if the Agency wishes to consider ECHO for funding, it is likely that the Agency will need to guide ECHO through the entire process, from conceptualization and business plan development through project completion. This type of City involvement would be very time intensive, and the Agency would need to dedicate City staff or hire a consultant to develop, construct, and manage the project. Other possibilities might include ECHO joint venturing with another organization that would have experience with project development and property management matters or ECHO could hire technical experts to help them through this process. In addition, the California Community Redevelopment Law ("CCRL") does not provide general authority to redevelopment agencies to use Low- and Moderate-Income ("LMI") Housing funds for homeless shelters (see CCRL §33334.2(e)). Homeless shelters are typically built or acquired with alternative funding (e.g., non-housing redevelopment funding for projects located within a redevelopment area [or are of direct benefit to a redevelopment area] could be used. In this case, the Site is outside of the Atascadero Redevelopment Area. However, costs associated with acquiring and renovating the existing units, providing site and frontage improvements, and that would otherwise bring the property up to standard (if conditions of development require it) can be funded wholly or partially from the LMI Housing Fund. Unfortunately, the potential impact on LMI funds cannot be established without a project business plan. Given the above, if the Agency is interested in investigating ECHO's proposal, there are at least four (4) approaches that may be explored: 1. The Agency (via staff and consultants) could take an active role by providing technical assistance to help ECHO develop a viable business plan and funding strategy; o Page 11 2. ECHO could joint venture with another organization to help develop a viable business plan and funding strategy; or 3. The City could provide ECHO with a small technical assistance grant from available City/Agency resources to enable ECHO to hire its own experts to develop a viable business plan and funding strategy; o 4. The Agency could recommend that ECHO use a small portion of its $300,000 reserves to hire its own experts to develop a viable business plan and funding strategy. The matter of considering funding for ECHO may be possible once a viable business plan has been prepared. Photos of the site are provided on the following page. Page 12 EI Camino Homeless Organization (ECHO): 1 Atascadero door to their current location) Site Location Aerial 5> . itl At Site P r. Location NOW Site Location • ti _M= Page 13 Habitat for Humanity: During the interview, Habitat's Executive Director explained the Neighborhood Revitalization Initiative ("NRI") that, among other things, includes the Brush With Kindness ("BWK") Program. The BWK Program is viewed as an enhancement to Habitat's core mission of creating more single-family units for very-low- income homebuyers. Basically, the BWK Program provides assistance to lower-income homeowners who need help sprucing up their properties that are located within a neighborhood in which Habitat is developing a new home. Habitat is actively looking for single-family home sites along the Central Coast, including Atascadero. Habitat initially requested assistance to acquire a bank-owned site that could be developed as a 10-lot subdivision that could also include a neighborhood park. The site is surrounded by Atascadero, Navajoa and San Andres Avenues and is commonly known as the 'Gerhart Site". However, due to uncertainties associated with the current owner, the amount of assistance could not be defined. Several other potential sites in Atascadero were also mentioned as well as a general interest in any others that may become available. Habitat needs assistance in acquiring buildable lots and needs soft financing from the Agency to make such acquisitions feasible. Habitat estimates that the construction of a typical 3-bedroom home will cost between $120,000 and $140,000. Habitat effectively fills an important affordable housing niche. During July 2011, Habitat advised Atascadero staff that the Gerhardt Site remains unavailable and, as such, Habitat would not be able to proceed with a project on that site at this time. As a result, Habitat withdrew their proposal from consideration during the current funding round. A site plan and elevations are on the following page. Page 14 Habitat for Humanity: Atascadero Avenue("Triangle Park" PD) Site Plan View: MASTER PLAN OF DEVELOPMENT FOR TRACT 2959 UES 1 t [uur t. corWAMDick MIT law /' r/ \, 1.071. Elevations: ®Ix6Spaced 1 _ - -- - With Scn BehindehiehitM 0 i xR Trim--- 0 1x6 Trim - 0 Pained 6x6 O Columna Stucco Siding Eq Applied Wood 0 Stuccoed Bases Trim(Typ.)0 0 Oration B - Front Elevation 0 0 O Y., Le Page 15 HASLO: HASLO is requesting Agency financial assistance to acquire the existing 12- unit San Palo Inn, located at 4900 San Palo Road, just south of San Anselmo Road and east of the US 101 Freeway. The site is located outside of the Atascadero Redevelopment Area. The surrounding area is predominately a rural residential single- family neighborhood in good overall condition. The units are behind a defunct automobile sales lot that is slated to be redeveloped as a medical office facility in the near term. Although the San Palo Inn is a motel located in the Commercial Tourist zone, it is effectively operating as and appears to outwardly be an apartment complex that serves somewhat transient lower income clientele. The units are arrayed in six duplex-style buildings in which each rentable unit has a kitchen and separate bedroom. The manager's unit has two bedrooms. Given the obvious lack of proper property management and tenant selection, the property appears to be headed toward decline. The property is currently listed for sale with an asking price of $925,000. As a general rule, listing amounts tend to set the upper limit of value/cost and are usually a starting point for negotiations that could result in a lower acquisition cost. Notwithstanding the foregoing, if the purchase and sale price was $925,000, then the Agency's cost per unit would be $77,834. However, since the San Palo Inn is located outside of the Atascadero Redevelopment Area, the CCRL limits the inclusionary housing credits the Agency could receive to 50% of affordability covenants obtained. As a result, the Agency would earn 6 inclusionary housing credits if all 12 of the units were restricted as to occupancy and affordability. On this basis, the Agency's cost per countable affordability covenant would be $154,167. Additional funding may be needed to make necessary improvements or to correct deferred maintenance on the units or the site. It is anticipated that all or a portion of such work could be funded from the project's cash flow. A General Plan Amendment, Zone Change, and CUP Amendment would be required to be processed in order to permit the change from motel to residential units. HASLO did not specify an affordability structure, other than they tend to gravitate to the very-low- income population and would provide 55-year long affordability covenants consistent with the needs of the Agency. Therefore, subject to further negotiations, the San Palo Inn project could provide 11 very-low-income units and 1 moderate income unit (i.e., the Manager's unit). HASLO proposes soft residual receipts-based financing from the Agency. Given the risk that the San Palo Inn could ultimately become an eyesore and a magnet for public safety calls (i.e., police and fire), this proposal deserves consideration. Site photos are on the following pages. Page • Housing Authority of San Luis Obispo (HASLO): AL •0• San Palo(Currently San Palo Inn) Site Location 4T' Site y Location ,7 Site Location 7' �/ l Page 17 North County Connection: The NCC is a non-profit corporation that provides specialized social services and resources targeted at assisting individuals and families prevent or recover from substance abuse, other addictions and related problems. NCC is currently located at 8600 Atascadero Avenue, which is an approximately two-acre site located in a rural residential single-family neighborhood. The site was formerly used as a church, a pre-school and for residential purposes. NCC is currently renting the property. The site is located outside of the Atascadero Redevelopment Area. The property owner has offered to sell the site to NCC for $450,000 (the assumed appraised value). The site is currently encumbered with one secured loan with a balance of $185,000. The seller is willing provide NCC with a seller's purchase money loan in the amount of $265,000, which is the difference between the $450,000 purchase price and the $185,000 remaining balance on the existing loan. NCC has obtained a commitment from SLO County for $35,000 of CDBG funding to contribute toward the $185,000 gap. NCC is seeking funding from other entities to fund the $150,000 remaining gap. They have requested that the Agency provide $100,000 of this amount. NCC felt confident that they could raise $50,000 from small donors. If NCC is able to purchase the site, they intend to ultimately remodel the existing building so that a few transitional housing units could be provided to their clientele. NCC estimates that an additional $50,000 would be needed for this purpose. The site at 8600 Atascadero is a 2.14-acre SFR-X (1/2 acre minimum) zoned property. Based on the lot size and zoning, there is potential to subdivide the existing lot to create additional lots that could be further developed with housing opportunities for NCC. If the property is subdivided, some lots could be sold off to create profits for construction of housing on the remaining lots. They have also considered buying the adjoining residential property located at 8400 Atascadero, Avenue (same owner) for the purpose of providing additional transitional housing units. The acquisition of the property and the continued operation of their social services program will not require any new Planning entitlements. A Conditional Use Permit Amendment would be required in order to begin to provide overnight use of the property for clients. A Parcel Map or Planned Development overlay would be needed in order to subdivide the property or develop it with additional housing units in the future. The residential component of their ultimate concept is currently not before the Agency for consideration at this time. With that as a given, NCC's proposal to acquire the 8600 Atascadero Avenue property is solely for the purpose of continuing their ability to offer social services to their clients on the site. As such, NCC's proposal is not eligible for LMI Housing Fund consideration. Therefore, alternative funding would need to be identified. Federal CDBG funding may be a reasonable place to start a search. In addition, because the site is not within a redevelopment area, it would be difficult, but not necessarily impossible to use non-housing redevelopment funding. In any event, it seems that if the City is interested in assisting the NCC, then it may be that equally matching the SLO County CDBG contribution (i.e., $35,000) would be a reasonable Page 18 starting point for consideration. Another possible source of funding could be the City's Affordable Housing In-Lieu Fund. Site photos are on the following page. Page 19 IIINorth iluloi Wm:ionnection .0• Atascadero Avenue(Existing NCC site) Site Location k f Site 1 r Location • - � n i �� p yttt: s i ~� •iM,n +,fir.��y� r • ,;:j�.,,yam. .. �'��. Page 20 Pacific Companies: Pacific is a competent and proven developer with extensive experience with California Tax Credit Allocation Committee ("CTCAC") and California Debt Limit Allocation Committee ("CDLAC") funding mechanisms. Pacific is proposing to develop Phase I of the Village at Oakhaven, an entitled 62 townhome development site located on the east side of EI Camino Real, south of Santa Cruz Road, between the Hilltop Mobile and RV Park and the Camino Del Roble Mobile Estates. The site consists of 5.65 acres at the northern end of the City. Phase I is proposed to consist of 30 units within the western half of the property. The proposed density is approximately 11 dwelling units per acre, which appears to be compatible with the adjoining mobilehome parks, but reflects a somewhat greater density than most of the rural residential single- family housing within close proximity to the site. As proposed, Phase I will require approximately $8.7 million to develop. Pacific proposes to fund the project with 4% LIHTCs (from CTCAC), a commercial first loan, gap financing from the Agency and deferred developer fees. The proposed affordability restrictions would be 30% at 50% and 70% at 60% (i.e., 9 very-low-income (50%) units, 20 low-income (60%) and one manager unit (120%, assumed)). The Agency would receive 55-year long covenants on all units. Pacific projects the financing gap for their project to be $3,180,000, for which they are requesting soft residual receipts- based financing from the Agency. Pacific proposes a 30-year term with 3% simple interest. Under this scenario, the Agency's cost per unit would be $106,000. It is unknown when Phase II would be feasible. Notwithstanding Pacific's expertise, the Oakhaven project is designed for townhomes, not apartments. In that regard, townhome developments usually are less dense than apartment projects and tend to be more expensive to develop due to the less efficient use of the land. For comparison purposes, the Oakhaven project has a density of about 11 dwelling units per acre as compared to the ROEM project (which is designed as an apartment project, as further described below) that has more than twice the density at about 23.5 dwelling units per acre. To the extent that the Agency wishes to assist the development of new multi-family affordable units by providing gap financing in tandem with LIHTCs, then the Oakhaven project is worthy of further consideration. However, given the price tag, the Agency can only afford to assist one such project at this time. Therefore, the merits of the Pacific proposal must be contrasted against the ROEM proposal. A site plan and elevations are on the following page. Page 21 IF Pacific Companies: 1155 EI Camino Real (Oakhaven PD) Site Plan View: RMF 16 B al �sr uww Cal Rhif-iu 7 Pt A e2 !s FUTURE PHASE ooh.. �-�♦ �,�� !� •/� � ~� � ... B Site Plan/ Master Plan of Development Evaluations: Composite Elevation Page 22 PSHHC: PSHHC, is a non-profit corporation dedicated to providing affordable housing and programs leading to self-sufficiency for low-income families, seniors, and other special needs groups along California's Central Coast. PSHHC offers a variety of affordable single-family and multi-family housing programs. One of their core programs is the Mutual Self-Help Program, which assists lower income families finance and build their own homes. Over the years, they have assisted over 1,500 families reach this goal within the Central Coast Region. The Mutual Self-Help Program is similar to Habitat's single-family housing program, but PSHHC does it on steroids! The primary difference between the two approaches is that the PSHHC Mutual Self-Help Program is oriented at producing single-family residences in large batches, not one or two at a time that is more typical of Habitat. PSHHC has acquired the Oak Gove II 24-lot subdivision (Tract 2640) from a bankruptcy trustee and will use their Mutual Self-Help Program to develop the property. They anticipate obtaining primary 'first-lien" financing for this project from the U. S. Department of Agriculture ('USDA") Rural Development Administration. PSHHC has requested $1 million of Agency assistance to create a fund from which land acquisition financing may be provided to income-eligible homebuyers. PSHHC envisions the amount of each loan could vary depending on need; however, on an overall basis the loans are expected to average about $42,000 per family. The concept is that the Agency loan would be structured as a soft second lien loan for the homebuyers. The term of this type of loan would generally track with the first loan's term, and in some instances, may take longer to repay. In addition, each family would be credited with equity consistent with their contributed home construction labor. Consistent with CCRL § 33334.3(f)(1)(C), the minimum term of the Agency's affordability covenant for a "self-help" housing project must be 15 years. However, with respect to the PSHHC proposal, if the Agency were to fund self-help program silent second down payment assistance loans, then the term of the affordability covenant would be 15 years or the date that the Agency's loan is fully repaid, whichever is longer. It is important to note that since the Oak Gove II 24-lot subdivision is located within the Atascadero Redevelopment Area, the Agency will incur a four (4) unit inclusionary housing obligation (i.e., 15% of the 24 unit project when rounded equals 4). Given that the project is intended to be 100% affordable, it is in the Agency's best interests to provide PSHHC enough funding for at least four (4) silent second down payment assistance loans (i.e., $168,000) in order to avoid the occurrence of a four (4) unit inclusionary housing deficit. A site plan and elevations are on the following page. Page 23 CorporationPeople's Self-Help Housing 1225 EI Camino Real/Atalaya St. (Oak Grove II PD) Site Plan View: E '© 24 Y3 i 22 21 19 1 1 15 .t 14 �13 < 12 1 t - 7 8 ._ t0 11 Evaluations: r PIAN TWO PLAN TWO DEAN ONE AMERICAN FARMHOUSE CRAFTSMAN BUNGALOW NEO-CLASSICAL Page 24 ROEM: ROEM is a competent and proven developer with extensive experience with CTCAC and CDLAC funding mechanisms. ROEM is proposing to develop a 40-unit multi- family apartment project on an approximately 1.7-acre site located at 4711 EI Camino Real, which is between San Anselmo Road and San Jacinto Avenue on the east side of the street. The project is known as the Acacias Development. The site is just north of downtown and is within the EI Camino Real commercial corridor. The residential neighborhoods located easterly of the site are typical of smaller lot urban developments. The project is designed to take public access from EI Camino Real and will not contribute to local residential traffic patterns. The 40-unit project is fully entitled, with an approved density of about 23.5 dwelling units per acre. ROEM has also informed staff that they are open to discussing a redesign of the project if the Agency would like to see any changes in design or density to make the project more feasible. They have recently completed construction of a similar low- and moderate- income apartment development in San Luis Obispo, known as "The Village at Broad Street." ROEM estimates that the project will require approximately $10.8 million to develop. They propose to fund the project with 4% LIHTCs (CTCAC), private activity bonds (CDLAC) and gap financing from the Agency. The proposed affordability restrictions would be 10% at 50% and 90% at 60% (i.e., 4 very-low-income (50%) units, 35 low- income (60%) units and one manager unit (120%, assumed)). The Agency would receive 55-year long covenants on all units. ROEM projects the financing gap for their project to be $3,755,000, for which they are requesting soft residual receipts-based financing from the Agency. Under this scenario, the Agency's cost per unit would be $93,875. To the extent that the Agency wishes to assist the development of new multi-family affordable units by providing gap financing in tandem with funding made available with LIHTCs and private activity bonds, then the Acacias Apartments project is worthy of further consideration. However, given the price tag, the Agency can only afford to assist one such project at this time. Therefore, the merits of the ROEM proposal must be contrasted against the Pacific proposal. A site plan and elevations are on the following page. ROEM Development Corporation: LIS ■� I of I >- =K _ R f 1 ris tt � fel wil is r'641 MA MI • a,rss�+�caar��F�.�r��_s�cea�w�.'y�esZ-�c'�• =�...�-,��.v.crn+....n,n I • 1 I I • I I I I I ' • Page 26 Transitional Food & Shelter, Inc.: TFS, a 100% volunteer non-profit organization, currently rents five apartments located at 5455 EI Camino Real and rents motel rooms from time-to-time as client needs require and their resources will allow. The TFS rental units are used to provide temporary shelter to extremely-low income persons who are homeless, have a severe disability or medical condition and need short-term shelter to recover from a medical calamity or until otherwise transitioned into more permanent housing. Although TFS temporarily houses their clients within their leased and rented facilities, their core purpose is to provide social services, either directly or through referral, to their clients. TFS is proposing that the Agency acquire and then lease with an option to purchase two duplexes located at 7860 Sinaloa Avenue to TFS. The property is within the boundaries of the Atascadero Redevelopment Project Area. The property is currently listed for $599,000 and is occupied. The use of the property by TFS would ultimately require the relocation of the existing tenants. Subsequent to relocating existing tenants, TFS would transition their clients from the EI Camino Real location to the Sinaloa Avenue location. Experience suggests that implementing a relocation program for low- and moderate- income tenants would be a sensitive, lengthy and expensive undertaking. In addition, certain physical modification must be made to the property so that it may accommodate the operations of TFS. TFS has not yet developed a scope of work for their renovation plan or a funding strategy for their required improvements. Although TFS has acknowledged that costs for relocation and physical modifications would be incurred, they have not yet prepared a business plan for these portions of their project. Further analysis would be required to determine what such costs could be and how TFS would fund them. As noted previously, the CCRL does not provide general authority to redevelopment agencies to use Low- and Moderate-Income ("LMI") Housing funds for homeless shelters (see CCRL §33334.2(e)). Homeless shelters are typically built or acquired with alternative funding (e.g., non-housing redevelopment funding for projects located within a redevelopment area [or are of direct benefit to a redevelopment area] could be used. In this case, the property identified is within the Atascadero Redevelopment Area. TFS has confirmed that they are willing to work with the City in an effort to identify and obtain alternative funding. Therefore, if the City is interested in assisting the TFS, then there are at least three (3) funding options to consider: • The City and TFS could work together in an effort to identify and obtain alternative funding, such as Emergency Shelter Grant ("ESG") funding (provided by HUD); • Since the project site is within the Atascadero Redevelopment Area, the Agency could consider the use of non-LMI Housing Fund resources; and • Another possible source of funding could be the City's Affordable Housing In-Lieu fund, which has a current available balance of approximately $480,000. Page 27 Further, funding should be contingent upon TFS completing a business plan for the relocation of existing tenants and the remodeling of the existing facilities. Given the foregoing, if the Agency is interested in investigating TFS's proposal, there are at least three (3) approaches that may be explored: 1. The Agency (via staff and consultants) could take an active role by providing technical assistance to help TFS develop a viable business plan and funding strategy for the relocation and rehabilitation components of their project; or 2. TFS could joint venture with another organization to help develop a viable business plan and funding strategy for the relocation and rehabilitation components of their project; or 3. The City could provide TFS with a small technical assistance grant from available City/Agency resources to enable TFS to hire its own experts to develop a viable business plan and funding strategy for the relocation and rehabilitation components of their project. The matter of considering funding for TFS may be possible once a viable business plan and funding strategy has been prepared for the relocation and rehabilitation components of their project. Site photos are on the following page. Page 28 Transitional .. . . 7860 Sinaloa Avenue(existing apartments) Site Location Aerial View: n , Y IV A Site Location Street Level View r.. Page 29 Housing Rehabilitation Programs: In addition to the consideration of the proposals received from the interested affordable housing agencies and community based organizations described above, the City's Working Group also considered the possibility of the establishment of a City/Agency operated single-family housing rehabilitation program ("HRP"). The goal of these programs is to help and induce homeowners to repair their houses, who otherwise could not afford to do so, and to beautify the neighborhoods in which those homes exist. The HRP concepts that were reviewed by the City's Working Group are summarized below. It is important to note that these program concepts would require the preparation of detailed policy guidelines and operational "desk manuals" prior to their implementation. In each case, an applicant would have to prove both "economic" and "physical" need to be eligible. Emergency Repairs Program (City-Wide) The purpose of the Emergency Repairs Program ("ERP") would be to assist very-low- income Atascadero homeowners whose income does not exceed 50% of the County median income (see Exhibit "B"), as adjusted by family size by providing grants for emergency repairs to structural, mechanical, plumbing or electrical components of their home. It is suggested that the grant maximum limit be $10,000. It is recommended that the cost of installing smoke detectors, water heater strapping, and "low flow" toilets be granted as an addition to the $10,000 limit. Home Beautification Program (City-Wide at 80% and RDA at 120%) The purpose of the Home Beautification Program ("HBP") would be to assist low- to moderate-income Atascadero homeowners by providing grants to correct any exterior physical deficiency that is visible from a public right-of-way. The HBP would have two income eligibility tiers. It would be available City-wide to low-income homeowners whose income does not exceed 80% of the County median income (see Exhibit "B"), as adjusted by family size. It would be available within the redevelopment project area to moderate-income homeowners whose income does not exceed 120% of the County median income (see Exhibit "B"), as adjusted by family size. The purpose of the eligibility tiers is to place emphasis on improving homes that are located within the redevelopment area (i.e., to assist in alleviating conditions of physical deterioration). It is suggested that the grant maximum limit be $25,000. It is recommended that the cost of installing smoke detectors, water heater strapping, and "low flow" toilets be granted as an addition to the $25,000 limit. Page 30 Housing Improvement Program (City-Wide at 80% and RDA at 120%) The purpose of the Housing Improvement Program ('SHIP") would be to assist low- to moderate-income homeowners by providing low- and no-interest deferred loans to rehabilitate their single-family owner-occupied residences in the City of Atascadero. The HIP would fund general rehabilitation with a priority on health and safety related renovations. Room additions and the initial construction of luxury items would be ineligible. The HIP would have two income eligibility tiers. It would be available City- wide to low-income homeowners whose income does not exceed 80% of the County median income (see Exhibit "B"), as adjusted by family size. It would be available within the redevelopment project area to moderate-income homeowners whose income does not exceed 120% of the County median income (see Exhibit "B"), as adjusted by family size. The purpose of the eligibility tiers is to place emphasis on improving homes that are located within the redevelopment area (i.e., to assist in alleviating conditions of physical deterioration). It is suggested that the loan maximum limit be $50,000. It is recommended that the cost of installing smoke detectors, water heater strapping, and "low flow" toilets be granted as an addition to the $50,000 limit. It is suggested that all Program deferred loans have a term of 30 years and bear simple interest (i.e., non-compounding) at the rates as noted below. Family Income Interest Rate Term 80% or less of County median 0% Deferred for 30 years More than 80%, but not more that 100% 1% Deferred for 30 years More that 100%, but not more than 120% 2% Deferred for 30 years Deferred loans are due on the earliest event of sale, transfer or expiration of 30 years. It is suggested that HIP loans not be in a junior position beyond a third trust deed. Further, it is suggested that the combination of all indebtedness secured by the assisted property (including the HIP loan) not exceed 100% of the assisted property's post rehabilitation estimated value. Regulatory Agreement for HBP and HIP It is suggested that as a prerequisite to funding, eligible applicants agree to enter into a Regulatory Agreement with the Agency that requires the home owner to maintain the exterior improvements financed by either the HBP and/or HIP for 10 years (which is the theoretical economic life of the improvements) from the date that the certificate of completion is executed. The Regulatory Agreement would be recorded with the County of San Luis Obispo and would run with the land. Pursuant to the Regulatory Agreement, if after a 30-day notice to cure the home owner remains in default (i.e., fails to maintain or initiate the maintenance of the improvements), then the Agency will Page 31 have the right, but not the obligation, to perform the needed maintenance and may lien the property for the cost of such work. Coordination of Housing Program Components It is recommended that the Agency's Housing Programs be coordinated, meaning that subject to applicant income eligibility, they could be used in conjunction with one another. The coordination of the Programs would ensure the highest possible community impact. Housing Program Funding If the Agency desires to establish the housing rehabilitation programs described above, it is recommended that the budget for these programs be established in incremental units with the idea of setting a goal for the number of projects per category to be funded and then multiplying those numbers by the maximum funding limits per category. In other words, if the Agency wished to fund 12 ERPs, then the capital budget for the ERP would be $120,000 (i.e., 12 x $10,000 = $120,000). In addition, the Agency will need to fund the operating costs for managing the housing rehabilitation programs. Because of the labor-intensive nature of assisting home- owners who typically are not experts at assessing rehabilitation needs and/or contracting for home improvements, it is recommended that the Agency fund the operating costs of its housing rehabilitation programs at a ratio of approximately 1 to 4 as compared to the capital portion of the housing rehabilitation programs. For example, if the capital portion of the housing rehabilitation programs was $400,000, then the operating budget should be at least $100,000. In this example, the total budget for the housing rehabilitation programs would be $500,000. In addition, given the need for specialized skills to operate housing rehabilitation programs, it is recommended that the Agency consider performing the bulk of its program operations though a professional services agreement with a qualified vendor or vendors. The first year budget for the housing rehabilitation programs should also include an allocation for establishing program policies and procedures (i.e., a complete desk manual for each of the programs). UFI believes an allocation of $20,000 should be sufficient to cover these expenses. In keeping with the foregoing, if the establishment of the housing rehabilitation programs described above is desired, then UFI recommends that the Agency consider allocating a first-year budget for the programs in the amount of $670,000. This recommendation is based on the following: Page 32 Program Unit Goals Unit Max Total ERP 12 $10,000 $120,000 HBP 8 $25,000 200,000 HIP 4 $50,000 200,000 Operations 1 25% of above 130,000 Establishment 1 LS 20,000 TOTAL: $670,000 Further, the above total amount is slightly less than the tax increment that is projected to accrue to the LMI Housing Fund during FY 2011-12 and therefore the funding level should be sustainable over time. LOCATION MAP A location map for the site-based proposals is provided on the following page. W!�= Pacific Companies 0111101 _" ;155 El Camino Real Oakhaven ► �� . i People's Self-Help Housing `' •� ♦.1 Oak Grove 11 Eta test .`�.ft 4�ft�\\!fir\r {' r +`�� ♦ ��,r�l !�Iltt�r�t►r�:_�\ iii•':'• ,� 111111 . .,��itNM MA Lw wa 0_W 00'It .•,111 \a !/ /i,, •�� ►\tltt�� .,:...— AMA NZA 4,11 ./4711 El Camino Real f - OEM Developmen 'IRSAcacias 151 Al HASLO 4900 San Flalo Currently S3r, Palo Inn ' 11f162b 0�.;�%��i•��tl��f ECHOTranskionalFood 4" Shetter 6320 Atascadero Mall Next door to current loostion 7860 Sinaloa Ave. lwjW 4r IN Tl,.-b"q I WE r ;r �,� �!►� �.�� : � ,=_. ;° �;.,:..Ake... Habitat for Humanky 'Triangle Park"PD ♦,`�I��,E: —G� ivdi&�� I� venue � r•,, r r e► ' fir '�f:��ij��`V� ./ ■■ � � ��.III___ / ��• i. \ I /`fig Page 34 EXHIBIT "B" 2011 SAN LUIS OBISPO COUNTY AFFORDABLE HOUSING WORKSHEET A copy of the 2011 San Luis Obispo County Affordable Housing Worksheet is included on the following page. URBAN FUTURES I Incorporated 2011 San Luis Obispo County Affordable Housing Worksheet 1 The first step in determining eligibility for an affordable housing program is determining whether the family which will be purchasing or renting the housing unit meets the following Income Eligibility income standards applicable to San Luis Obispo County,based upon the size of the family: Income Level 1 Person 2 Person 3 Person 4 Person 5 Person 6 Person 7 Person 8 Person Household Household Household Household Household Household Household Household Extremely Low $15,650 $17,850 $20,100 $22,300 $24,100 $25,900 $27,700 $29,450 Very Low $26,050 $29,800 $33,500 $37,200 $40,200 $43,200 $46,150 $49,150 Lower $41,650 $47,600 $53,550 $59,500 $64,300 $69,050 $73,800 $78,550 Median $52,100 $59,500 $66,950 $74,400 $80,350 $86,300 $92,250 $98,200 Moderate $62,500 $71,450 $80,350 $89,300 $96,450 $103,600 $110,750 $117,900 Determining Affordable For ownership housing,the second step in determining compliance with affordable housing requirements is determining whetherthe total housing costs payable bythe buyer are Housing Cost within the allowable amounts. Income Level 0 Bedroom 1 Bedroom 2 Bedroom 3 Bedroom 4 Bedroom 5 Bedroom Extremely Low' $391.25 $446.25 $502.50 $557.50 $602.50 $647.50 Very Low a $651.25 $745.00 $837.50 $930.00 $1,005.00 $1,080.00 Lower $911.75 $1,041.25 $1,171.63 $1,302.00 $1,406.13 $1,510.25 Moderates $1,671.54 $1,908.96 $2,147.98 $2,387.00 $2,577.90 $2,768.79 For any Lower Income Household whose income falls within the following guidelines,it is optional for the agency to require that affordable housing cost not exceed 30 percent of the gross income of the household.6 In addition,for any Moderate Income Household whose income falls within the following guidelines,it is optional for the agency to require that affordable housing cost not exceed 35 percent of the gross income of the household.' Income Level 1 Person 2 Person 3 Person 4 Person 5 Person 6 Person 7 Person 8 Person Household Household Household Household Household Household Household Household Lower $36,470 to $41,650 $41,650 to $47,600 $46,865 to $53,550 $52,080 to $59,500 $56,245 to $64,300 $60,410 to $69,050 $64,575 to $73,800 $68,740 to $78,550 Moderate $57,310 to $62,500 $65,450 to $71,450 $73,645 to $80,350 $81,840 to $89,300 $88,385 to $96,450 $94,930 to $103,600 $101,475 to $110,750 $108,020 to $117,900 For purposes of determining Affordable Housing Cost,"Monthly Housing Payments"include an estimate of the following costs for the upcoming twelve months:e -principal and interest payments on the mortgage loan,including rehabilitation loans -mortgage loan insurance fees -property taxes and assessments -fire and casualty insurance -property maintenance and repairs -a reasonable allowance for utilities(including garbage collection,sewer,water,electricity,gas,and other fuels,but not telephone service).Such an allowance shall take into consideration the cost of an adequate level of service -homeowner association fees -space rent,if the housing unit is on rented land ' Based on currently effective median income of San Luis Obispo County,as set forth in 25 Cal.Code Regs.Section 6932,operative as of lune 23,2011.The median income numbers are revised annually. ' Affordable Housing Cost for Extremely Low Income Households is the product of 30 percent times 30 percent of the area median income adjusted for family size appropriate to the unit. Health and Safety Code Section 50052.5(b)(1). ' Affordable Housing Cost for Very Low Income Households is the product of 30 percent times 50 percent of the area median income adjusted for family size appropriate to the unit.Health and Safety Code Section 50052.5(b)(2). ° Affordable Housing Cost for Lower Income Households is the product of 30 percent times 70 percent of the area median income adjusted for family size appropriate to the unit.Health and Safety Code Section 50052.5(b)(3). ' Affordable Housing Cost for Moderate Income Households in not less than 28 percent of the gross income of the household,and not more than the product of 35 percent times 110 percent of the area median income adjusted for family size appropriate for the unit.Health and Safety Code Section 5005: Health and Safety Code Section 50052.5(b)(3) ' Health and Safety Code Section 50052.5(b)(4) s 25 California Code of Regulations Section 6920. 1 of 2 URBAN FUTURES I Incorporated 2011 San Luis Obispo County Affordable Housing Worksheet Determining Affordable For rental housing,the second step in determining compliance with affordable housing requirements is determining whether the total rent costs payable by the tenant are within Rent allowable amounts. Income Level 0 Bedroom 1 Bedroom 2 Bedroom 3 Bedroom 4 Bedroom 5 Bedroom Extremely Low° $391.25 $446.25 $502.50 $557.50 $602.50 $647.50 Very Low 10 $651.25 $745.00 $837.50 $930.00 $1,005.00 $1,080.00 Lower 11 $781.50 $892.50 $1,004.25 $1,116.00 $1,205.25 $1,294.50 Moderate $1,432.75 $1,636.25 $1,841.13 $2,046.00 $2,209.63 $2,373.25 For any Lower Income Household whose income falls within the following guidelines,it is optional for the agency to require that affordable rent not exceed 30 percent of the gross income of the household.13 In addition,for any Moderate Income Household whose income falls within the following guidelines,it is optional for the agency to require that affordable rent not exceed 35 percent of the gross income of the household.14 Income Level 1 Person 2 Person 3 Person 4 Person 5 Person 6 Person 7 Person 8 Person Household Household Household Household Household Household Household Household Lower $31,260 to $41,650 $35,700 to $47,600 $40,170 to $53,550 $44,640 to $59,500 $48,210 to $64,300 $51,780 to $69,050 $55,350 to $73,800 $58,920 to $78,550 Moderate $57,310 to $62,500 $65,450 $71,450 $73,645 to $80,350 $81,840 to $89,300 $88,385 to $96,450 $94,930 to $103,600 $121,825 to $110,750 $129,690 to $117,900 For purposes of determining Affordable Rent,'Rent"is an average of estimated housing costs for the next twelve months. "Rent'includes the total of monthly payments for all of the following:1s -Use and occupancy of a housing unit and land and facilities associated therewith. -Any separately charged fees or service charges assessed by the lessor which are required of all tenants,other than security deposits -A reasonable allowance for utilities not included in the above costs,including garbage collection,sewer,water, electricity,gas and other heating,cooking,and refrigeration fuels.Utilities does not include telephone service.Such an allowance shall take into consideration the cost of an adequate level of service. -Possessory interest taxes or other fees or charges assessed for use of the land and facilities associated therewith by a public or private entity other than the lessor. s Affordable Rent for Extremely Low Income Households is the produce of 30 percent times 30 percent of the area median income adjusted for family size appropriate to the unit.Health and Safety Code Section 50053(b)(1) 10 Affordable Rent for Very Low Income Households is the produce of 30 percent times 50 percent of the area median income adjusted for family size appropriate to the unit. Health and Safety Code Section 50053(b)(2) 'i Affordable Rent for Lower Income Households is the produce of 30 percent times 60 percent of the area median income adjusted for family size appropriate to the unit.Health and Safety Code Section 50053(b)(3) 13 Affordable Rent for Moderate Income Households is the produce of 30 percent times 110 percent of the area median income adjusted for family size appropriate to the unit. Health and Safety Code Section 50053(b)(4) 13 Health and Safety Code Section 50053(b)(3) 14 Health and Safety Code Section 50053(b)(4) rs 25 California Code of Regulations Section 6918. 2 of 2