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HomeMy WebLinkAbout25E - NEIGHBORHOOD STABILIZATION PROGRAMSREQUEST FOR COUNCIL ACTION CITY COUNCIL MEETING DATE: APRIL 6, 2009 TITLE: AGREEMENTS FOR THE IMPLEMENTATION OF NEIGHBORHOOD STABILIZATION PROGRAMS CI MANAGE RECOMMENDED ACTION Recommend that the City Council: CLERK OF COUNCIL USE ONLY: APPROVED ^ As Recommended ^ As Amended ^ Ordinance on 15t Reading ^ Ordinance on 2"d Reading ^ Implementing Resolution ^ Set Public Hearing For CONT{NUED TO FILE NUMBER 1. Authorize the City Manager and the Clerk of the Council to execute an agreement with ANR Homes, Inc. for implementation of the single family, condominium and historic components of the Neighborhood Stabilization Program in an amount not to exceed $2,715,636, subject to non-substantive changes approved by the City Manager and City Attorney. 2. Authorize the City Manager and the Clerk of the Council to execute an agreement with Orange Housing Development Corporation and C & C Development for implementation of the rental housing component of the Neighborhood Stabilization Program in an amount not to exceed $1,800,000, subject to non-substantive changes approved by the City Manager and City Attorney. COMMUNITY REDEVELOPMENT & HOUSING COMMISSION ACTION At its Regular Meeting of March 17, 2009, by a vote of 5:0, the Community Redevelopment and Housing Commission recommended that the City Council: (1) Direct the City Attorney t and the Clerk of the Council Inc. for implementation of the components of the Neighborhood exceed $2,715,636, subject to City Manager and City Attorney. o prepare and authorize the City Manager .o execute the agreement with ANR Homes, single family, condominium and historic Stabilization Program in an amount not to non-substantive changes approved by the (2) Direct the City Attorney to prepare and authorize the City Manager and the Clerk of the Council to execute the agreement with Orange Housing 25E-1 NSP Agreements April 6, 2009 Page 2 Development Corporation and C & C Development for implementation of the rental housing component of the Neighborhood Stabilization Program in an amount not to exceed $1,800,000, subject to non-substantive changes approved by the City Manager and City Attorney. DISCUSSION On January 15, 2009, we were notified that our application for the Neighborhood Stabilization Program (NSP) was approved by the U. S. Department of Housing and Urban Development (HUD) in the amount of $5,795,155. The application identifies the Priority Area (Exhibit 1) and explains the programs to be implemented with the NSP funds and has been available on the City's website since November 2008. In its application, the City proposed the creation of five separate programs and indicated that three of the five would be implemented by qualified intermediaries acting on the City's behalf. These three programs and their budgeted amounts are as follows: Program Budget Acquisition and Rehabilitation - $2,015,636 Single Family Homes Acquisition and Rehabilitation - $700,000 Condominium and Historic Program Acquisition and Rehabilitation - $1,800,000 Rental Housing On January 30, 2009, the City released a Request for Proposals (RFP) soliciting proposals for implementation of these three programs. Notice of the RFP's availability was mailed to 157 firms on the Housing Department's database. It was also noticed on the City's website, in the Orange County Register and through the Community Development Resource Network. A total of eleven proposals for all three programs were received from seven entities. Of these, ten were responsive. The proposals were reviewed by a team of three staff and a financial consultant. Proposals were scored in three primary areas: Lead and Team Experience, Proposed Budget and Timeline, and Developer Fee. Because of the strict timelines imposed by HUD, the greatest weight was placed on experience in purchasing, rehabilitating and selling foreclosed properties, and where applicable, on team member experience in working together. The table below lists the ten responsive applicants who submitted proposals and their scores. 25E-2 NSP Agreements April 6, 2009 Page 3 Acquisition/Rehabilitation - Single Family Program ANR Homes, Inc. 88.00 Mayans Development 67.75 Home Again Collaborative 63.75 Santa Ana Redevelopment Group, L.P. 59.25 K.T.K. Construction, Inc. 54.75 Tierra Concepts Inc. 33.25 Acquisition/Rehabilitation - Condominium and Historic Program Home Again Collaborative 57.25 Santa Ana Redevelopment Group, L.P. 56.75 Acquisition/Rehabilitation - Rental Program Orange Housing Development Corporation 94.00 Santa Ana Redevelopment Group, L.P. 57.25 Applicants with a score of 60 and above were invited to an interview. The top three applicants for the Single Family Program were interviewed on February 23, 2009. Given that no applicants in the Condominium and Historic Program ranked above 60, each of the top three respondents were asked and agreed to also implement the Condominium and Historic Program. For the Rental Program, only Orange Housing Development Corporation (OHDC) in partnership with C & C Development (C & C) rated above 60. Based on their proposal rating and affordable rental project history in the City, an interview was deemed not necessary. Single Family Program Intermediary Based on the rating of its proposal, the interview and reference calls, ANR Homes, Inc. (ANR) is recommended for implementation of both the Single Family and Condominium and Historic Program. ANR has been acquiring, rehabilitating and selling foreclosed properties since 1995. Working with many different local government agencies and nonprofit corporations, they have rehabilitated more than 3,000 properties throughout Southern California. The list of local agencies and nonprofit corporations they have partnered with includes the Enterprise Community Partner, City of Los Angeles Community Redevelopment Agency, the County of Los Angeles Community Development Commission, and Habitat for Humanity. None of the other applicants had a comparable record of experience and performance. As part of its proposal, ANR provided commitment letters from two financial institutions totaling $3.6 million dollars to leverage funds. With these funds, ANR has the capacity to finance up to 80 percent of costs with its own acquisition/construction lender. This leveraging will allow the City to meet and possibly exceed its goals which were 25E-3 NSP Agreements April 6, 2009 Page 4 identified in the application as 40 Single Family and 10 Condominium and Historic homes. The NSP funds will be used for acquisition and rehabilitation costs. Tax increment funds previously committed to this program will be used to create deeper affordability and assist the Agency in meeting its housing production goals. Given the desire to recycle funds and stabilize communities as quickly as possible, ANR will be selecting local real estate brokers that are most knowledgeable of the market and have a successful track record. Their selection will be based on volume of sales, days on the market, and comparison of listing price vs. sales price, excluding foreclosed properties. The NSP guidelines also encourage the use of energy efficient products in the rehabilitation of the homes. ANR has a history of using energy efficient features in its rehabilitation and new construction projects. These include the following features: low-flush toilets, insulation, high efficiency systems, and tankless water heaters. In addition, yards will be landscaped with low-maintenance and drought tolerant plants. Rental Program Intermediar NSP regulations require that at least 25 percent of the City's award be spent on units that will assist families with household incomes at or below 50 percent of the Area Median. To satisfy this requirement, the City will commit $1.8 million of its allocation to the acquisition and rehabilitation of rental units to be owned and managed by an experienced nonprofit intermediary. OHDC owns and manages more than 2,600 units located throughout California. More than 600 of these units are in Santa Ana. Other cities they have partnered with include the Cities of Orange, Indio, Anaheim, and San Diego. C & C has many years of residential development and management experience, and previously partnered with OHDC in the Santiago Villas, Ross-Durant, and Wilshire-Minnie projects. ENVIRONMENTAL COMPLIANCE In accordance with the California Environmental Quality Act and the National Environmental Policy Act, the proposed project is exempt from further review. 25E-4 NSP Agreements April 6, 2009 Page 5 FISCAL IMPACT Funds will be available in the FY 2008-09 Neighborhood Stabilization Program Grant fund (account no. 142-148-various). APPROVED AS TO FUNDS AND ACCOUNTS: Cynthia J. N lson Deputy City Manager for Development Services Community Development Agency CJN/SLB/JPH/mlr Francisco Gutierrez Executive Director Finance & Management Services Agency 25E-5 NSP Priority Area Copyright 2008. All Rights Reserved 25E-6 Exhibit 1 J~~T1ON f,~q !V~" ~A N / _~ :1 0.00 0.50 1.00 ~ ` Miles '-~~-