HomeMy WebLinkAbout80A - DISPOSITION-DEVELOPMENT-BUSH-BIRCH STREQUEST FOR COUNCIL/
AGENCY ACTION
MEETING DATE:
SEPTEMBER 7, 2010
TITLE:
JOINT PUBLIC HEARING -
DISPOSITION AND DEVELOPMENT AGREEMENT
AND LOAN AGREEMENTS - BUSH AND BIRCH
STREET PROPERTIES
CLERK OF COUNCIL USE ONLY:
APPROVED
? As Recommended
? As Amended
? Ordinance on 1st Reading
? Ordinance on 2nd Reading
? Implementing Resolution
? Set Public Hearing For
CONTINUED TO
FILE NUMBER
CITY ANAGER EXECUTIVE DIRECTOR
RECOMMENDED ACTION
CITY COUNCIL ACTION
1. Direct the City Attorney to prepare and authorize the Deputy City Manager and Clerk of the
Council to execute a loan agreement with Santa Ana WBBB, LP in an amount not to exceed
$500,000, subject to non-substantive changes approved by the Deputy City Manager and City
Attorney for 217-219 South Birch Street.
2. Direct the City Attorney to prepare and authorize the Deputy City Manager and Clerk of the
Council to execute a loan agreement with Santa Ana WBBB, LP in an amount not to exceed
$500,000, subject to non-substantive changes approved by the Deputy City Manager and City
Attorney for 435-437 South Birch Street.
3. Direct the City Attorney to prepare and authorize the Deputy City Manager and Clerk of the
Council to execute a loan agreement with Santa Ana WBBB, LP in an amount not to exceed
$500,000, subject to non-substantive changes approved by the Deputy City Manager and City
Attorney for 2034-2038 Bush Street.
COMMUNITY REDEVELOPMENT AGENCY ACTION
1. Adopt a resolution approving a Disposition and Development Agreement between the
Community Redevelopment Agency and Orange Housing Development Corporation and C&C
Development for the development of affordable, multi-family units at 217-219 South Birch, 435-
437 South Birch and 2034-2038 Bush Streets.
8OA-1
DDA and Loan Agreements - Bush and Birch Street Properties
September 7, 2010
Page 2
2. Direct the Agency General Counsel to prepare and authorize the Executive Director and Agency
Secretary to execute a loan agreement with Santa Ana WBBB, LP in an amount not to exceed
$303,667, subject to non-substantive changes approved by the Executive Director and Agency
General Counsel for 217-219 South Birch Street.
3. Direct the Agency General Counsel to prepare and authorize the Executive Director and Agency
Secretary to execute a loan agreement with Santa Ana WBBB, LP in an amount not to exceed
$303,667, subject to non-substantive changes approved by the Executive Director and Agency
General Counsel for 435-437 South Birch Street.
4. Direct the Agency General Counsel to prepare and authorize the Executive Director and Agency
Secretary to execute a loan agreement with Santa Ana WBBB, LP in an amount not to exceed
$303,667, subject to non-substantive changes approved by the Executive Director and Agency
General Counsel for 2034-2038 Bush Street.
COMMUNITY REDEVELOPMENT AND HOUSING COMMISSION ACTION
At its regular meeting on August 17, 2010, by a vote of 4:0, (Verino absent), the Community
Redevelopment and Housing Commission (Commission) recommended that the City Council
authorize execution of loan agreements with Santa Ana WBBB, LP for properties located at 217-219
South Birch Street, 435-437 South Birch Street, and 2034-2038 Bush Street. The Commission
also recommended that the Community Redevelopment Agency adopt a resolution approving a
Disposition and Development Agreement between the Community Redevelopment Agency and
Orange Housing Development Corporation and C&C Development (Developer) for the
development of affordable, multi-family units at 217-219 South Birch, 435-437 South Birch, and
2034-2038 Bush Streets and authorized execution of loan agreements with Santa Ana WBBB, LP
for properties located at 217-219 South Birch, 435-437 South Birch Street, and 2034-2038 Bush
Street as outlined in the attached staff report (Exhibit 6).
DISCUSSION
A key objective of the Redevelopment Agency is to expand and preserve affordable housing. Staff
were directed in December 2009 to negotiate a Disposition Development Agreement (DDA) with
the developers resulting from a Request for Qualifications for both single family and multi-family
residential units on properties owned by the Agency. Orange Housing Development Corporation
(OHDC), a non-profit 501(c)(3), and C&C Development (C&C), a for-profit developer, was selected
as developer for the multi-family housing parcels. They will form a Limited Partnership named
Santa Ana WBBB, LP for financing purposes.
Negotiations are now concluded and we are prepared to move forward with the DDA. Under the
proposed DDA, the Agency will convey three of the four multi-family sites. The proposed project
includes 217-219 South Birch (Exhibit 1), 435-437 South Birch (Exhibit 2) and 2034-2038 Bush
(Exhibit 3). The units will all be affordable to very low-income households (50% AMI). The
8OA-2
DDA and Loan Agreements - Bush and Birch Street Properties
September 7, 2010
Page 3
beginning rents will be $989 for two-bedrooms and $1,125 for three bedrooms. Site plans and
elevations for the three sites are attached as Exhibit 4.
The fourth multi-family site is a freeway widening remnant parcel at the corner of 22nd and
Spurgeon. The developer is still exploring options for this site. Once the development is
determined, staff will bring it before the Agency for approval.
In accordance with redevelopment law, a Summary of Sale has been prepared by Keyser Marston
Associates, which outlines in detail the financial terms of the proposed transaction. A summary of
the terms and conditions contained in the proposed Disposition and Development Agreement are
as follows:
The Agreement requires the Developer to construct a total of 15 apartment units, as follows:
• 2034-2038 North Bush Street: The Developer must construct two 2-bedroom units and three
3-bedroom units for a total of five units;
• 217-219 South Birch Street: The Developer must construct two 2-bedroom units and three
3-bedroom units for a total of five units; and
• 435-437 South Birch Street: The Developer must construct two 2-bedroom units and three
3-bedroom units for a total of five units.
The income and affordability restrictions are defined as follows:
• All 15 units must be reserved for very low income (50% Area Median Income) households;
and
• The income and affordability covenants must remain in place for at least 55 years.
Terms of Loans:
• Two loans per property ( Agency Loan and City Loan);
• Repayable from the cash flow (Residual Receipts) generated by the Project;
• Each Agency Loan will accrue .5% (one half percent) simple interest annually; and
• Loans are 55 years.
In order to fund the construction, the partnership will apply for tax exempt bonds and tax credits.
The Mortgage Revenue Bond Inducement is on the agenda as a separate item for approval. The
bond application will combine these projects with the proposed development on 605-611 East
Washington. In addition to these funds, the project will require both City and Redevelopment
Agency funds. Below is a summary of the sources and uses of the project funds.
8OA-3
DDA and Loan Agreements - Bush and Birch Street Properties
September 7, 2010
Page 4
Sources 217-219 S. Birch 435-437 S. Birch 2034-2038 Bush
Permanent Lender $ 287,438 $ 287,438 $ 287,438
HOME $ 500,000 $ 500,000 $ 500,000
Tax-Increment $303,667 $303,667 $303,667
General Partner Equity $ 11 $ 11 $ 11
Limited Partner Equity $ 765,341 $ 765,341 $ 765,341
Total $1,856,457 $1,856,457 $1,856,457
Uses 217-299 S. Birch 435-437 S. Birch 2034-2038 Bush
Construction $ 1,100,327 $ 1,100,327 $ 1,100,327
Soft Costs $ 666,416 $ 666,416 $ 666,416
Costs Deferred Until
Conversion
$ 35,140
$ 35,140
$ 35,140
Financing Costs $ 54,574 $ 54,574 $ 54,574
Total $1,856,457 $1,856,457 $1,856,457
The projects are currently in the site plan review process. Once this process is completed, the
Developer will submit its application to the various state funding agencies. The Developer
proposes to submit for tax credits and bonds in November 2010 assuming the properties have all
completed the site plan review process.
Construction of these units will assist the City and Agency in meeting the Regional Housing Needs
Assessment (RHNA) goals identified in the Housing Element, Consolidated Plan and the
Implementation Plan.
ENVIRONMENTAL COMPLIANCE
In accordance with the California Environmental Quality Act, the proposed project is exempt from
further review.
8OA-4
DDA and Loan Agreements - Bush and Birch Street Properties
September 7, 2010
Page 5
FISCAL IMPACT
Funds are available in the Tax Increment Housing Set-Aside account (no. 50718830-66220) and
HOME account (no. 13018780-69151).
APPROVED AS TO FUNDS AND ACCOUNTS:
L QVtk4l ?? -
h II Landry-Bayle
Ho Wing Manager
Community Development Agency
Francisco Gutierrez
Executive Director Q
Finance & Management Services Agency
CJN/SLB/mlr
Exhibits: 1. Map of 217-219 S. Birch Street
2. Map of 435-437 South Birch
3. Map of 2034-2038 Bush
4. Site Plans
5. Resolution
6. Commission Staff Report
8OA-5
8OA-6
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Exhibit 1
8OA-7
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Exhibit 2
8OA-9
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Exhibit 3
8OA-11
8OA-12
RESOLUTION NO. 2010-
A RESOLUTION OF THE COMMUNITY
REDEVELOPMENT AGENCY OF THE CITY OF
SANTA ANA APPROVING A DISPOSITION AND
DEVELOPMENT AGREEMENT BETWEEN THE
AGENCY AND ORANGE HOUSING
DEVELOPMENT CORPORATION AND C&C
DEVELOPMENT
BE IT RESOLVED BY THE COMMUNITY REDEVELOPMENT AGENCY OF THE
CITY OF SANTA ANA, AS FOLLOWS:
Section 1: The Board of the Community Redevelopment Agency of the City of
Santa Ana hereby finds, determines and declares as follows:
A. The Community Redevelopment Agency of the City of Santa Ana
(hereinafter referred to as the "Agency") is engaged in activities necessary
to execute and implement the Redevelopment Plan for the Merged
Redevelopment Project Areas (the "Redevelopment Plan"), including
strengthening of public-private partnerships to provide more affordable
housing, and particularly to provide decent, safe, sanitary, and affordable
housing to the lower income citizens of the City of Santa Ana.
B. In order to implement the Redevelopment Plan, the Agency has
agreed, subject to the approval of the City Council, to sell certain real
property located at 217-219 S. Birch Street, 435-437 S. Birch Street, and
2034-2038 N. Bush Street (the "Property") pursuant to the terms and
provisions of a Disposition and Development Agreement (hereinafter
referred to as the "Agreement") between the Agency and Orange Housing
Development Corporation (OHDC) and C&C Development (C&C) which is
on file in the office of the Executive Director of the Agency, in which said
real property is described.
C. OHDC & C&C propose to construct five (5) multi-family residential
units on each parcel to rent to qualified Very Low Income Households for
the affordability term of fifty-five years.
D. The Agreement contains all of the provisions, terms, conditions and
obligations required by the state and local laws.
EXHIBIT 5
1
8OA-13
E. OHDC and C&C possess the qualifications and financial resources
necessary to acquire and insure development of the Property, in
accordance with the purpose and objectives of the Redevelopment Plan.
F. Pursuant to the provisions of the California Redevelopment Law, the
Agency and the City Council have held a duly noticed joint public hearing on
the proposed sale of the Property.
Section 2. The Disposition and Development Agreement is hereby approved,
and the Executive Director of the Agency is hereby authorized to execute the Agreement,
with such non-substantive changes as may be approved by Agency's General Counsel.
Section 3. The Executive Director of the Agency is hereby authorized to take all
steps, and to sign all documents and instruments necessary to implement and carry out
the Agreement on behalf of the Agency.
EXHIBIT 5
2
80A-14
ADOPTED this day of 12010.
Miguel A. Pulido
Chair
APPROVED AS TO FORM:
Joseph W. Fletcher, General Counsel
By:
Lisa E. Storck
Assistant Counsel
AYES: Boardmembers:
NOES: Boardmembers:
ABSTAIN: Boardmembers:
NOT PRESENT: Boardmembers:
CERTIFICATION OF ATTESTATION AND ORIGINALITY
I, MARIA D. HUIZAR, Secretary of the Agency, do hereby attest to and certify the
attached Resolution No. to be the original resolution adopted by the
Community Redevelopment Agency of the City of Santa Ana on 12010.
Date:
Secretary
Community Redevelopment Agency
of the City of Santa Ana
EXHIBIT 5
3
8OA-15
8OA-16
REQUEST FOR COMMUNITY
REDEVELOPMENT AND
HOUSING COMMISSION ACTION
MEETING DATE:
RECORDING SECRETARY USE ONLY:
AUGUST 17, 2010
TITLE:
DISPOSITION AND DEVELOPMENT
AGREEMENT AND LOAN
AGREEMENTS - BUSH AND BIRCH
STREET PROPERTIES
DEPUTY CIT ANAGER FOR
DEVELOPMENT SERVICES
RECOMMENDED ACTION
Recommend that the City Council:
APPROVED
? As Recommended
? As Amended
CONTINUED TO
1. Authorize the Deputy City Manager and Clerk of the Council to execute a loan agreement with
Santa Ana WBBB, LP in an amount not to exceed $500,000, subject to non-substantive
changes approved by the Deputy City Manager and City Attorney for 215-217 South Birch
Street.
2. Authorize the Deputy City Manager and Clerk of the Council to execute a loan agreement with
Santa Ana WBBB, LP in an amount not to exceed $500,000, subject to non-substantive
changes approved by the Deputy City Manager and City Attorney for 435-437 South Birch
Street.
3. Authorize the Deputy City Manager and Clerk of the Council to execute a loan agreement with
Santa Ana WBBB, LP in an amount not to exceed $500,000, subject to non-substantive
changes approved by the Deputy City Manager and City Attorney for 2034-2038 Bush Street.
Recommend that the Community Redevelopment Agency:
1. Adopt a resolution approving a Disposition and Development Agreement between the
Community Redevelopment Agency and Orange Housing Development Corporation and C&C
Development for the development of affordable, multi-family units at 215-217 South Birch, 435-
437 South Birch and 2034-2038 Bush Streets.
2. Authorize the Executive Director and Agency Secretary to execute a loan agreement with Santa
Ana WBBB, LP in an amount not to exceed $530,000, subject to non-substantive changes
approved by the Executive Director and Agency General Counsel for 215-217 South Birch
Street. EXHIBIT 6
8OA-17
Disposition and Development Agreement and Loan Agreements
August 17, 2010
Page 2
3. Authorize the Executive Director and Agency Secretary to execute a loan agreement with Santa
Ana WBBB, LP in an amount not to exceed $530,000, subject to non-substantive changes
approved by the Executive Director and Agency General Counsel for 435-437 South Birch
Street.
4. Authorize the Executive Director and Agency Secretary to execute a loan agreement with Santa
Ana WBBB, LP in an amount not to exceed $530,000, subject to non-substantive changes
approved by the Executive Director and Agency General Counsel for 2034-2038 Bush Street.
DISCUSSION
A key objective of the Redevelopment Agency is to expand and preserve affordable housing. To
that end, in December 2009 the Agency selected developers resulting from a Request for
Qualifications for both single family and multi-family residential units on properties owned by the
Agency. Orange Housing Development Corporation (OHDC), a non-profit 501(c)(3), and C&C
Development (C&C), a for-profit developer, was selected as developer for the multi-family housing
parcels. They will form a Limited Partnership named Santa Ana WBBB, LP for financing purposes.
The proposed project includes 215-217 South Birch, 435-437 South Birch and 2034-2038 Bush.
The developers are proposing to merge the adjoining parcels (Exhibit 1) for each project site into
one parcel and construct five units on each combined parcel. Each site will contain 2 two-
bedrooms and 3 three-bedrooms. The units will be affordable to very low-income households
(50% AMI). The beginning rents will be $989 for two-bedrooms and $1,125 for three bedrooms.
In order to fund the construction, the partnership will apply for tax exempt bonds and tax credits.
In addition, the project will need additional funds that will be provided by the City and
Redevelopment Agency. The following table summarizes the sources and uses:
Sources 215-217 S. Birch 435-437 S. Birch 2034-2038 Bush
Permanent Lender $ 325,347 $ 325,347 $ 325,347
HOME $ 500,000 $ 500,000 $ 500,000
Tax-Increment $ 530,000 $ 530,000 $ 530,000
General Partner Equity $ 11 $ 11 $ 11
Limited Partner Equity $ 503,143 $ 503,143 $ 503,143
Total $1,858,501 $1,858,501 $1,858,501
Uses 215-217 S. Birch 435-437 S. Birch 2034-2038 Bush
Construction $ 1,100,327 $ 1,100,327 $ 1,100,327
Soft Costs $ 666,421 $ 666,421 $ 666,421
Costs Deferred Until
Conversion $ 36,799 $ 36,799 $ 36,799
Financing Costs $ 54,954 $ 54,954 $ 54,954
Total $ 1,858,501 $ 1,858,501 $ 1,858,501
8OA-18
Disposition and Development Agreement and Loan Agreements
August 17, 2010
Page 3
Construction of these units will assist the City and Agency in meeting the Regional Housing Needs
Assessment (RHNA) goals identified in the Housing Element, Consolidated Plan and the
Implementation Plan.
ENVIRONMENTAL COMPLIANCE
In accordance with the California Environmental Quality Act, the proposed project is exempt from
further review.
FISCAL IMPACT
Funds are available in the Tax Increment Housing Set-Aside account (no. 5071883066220
06863601079) and HOME account (no. 1301878069152 06734001001).
APPROVED AS TO FUNDS AND ACCOUNTS:
?v Shelly La ry-Bayle
U Housing vision Manager
Community Development Agency
1
Francisco Gutierrez
Executive Director
Finance & Management Services Agency
4?
CJN/SLB/mlr
PREPARED BY: Vicki Uehli
Exhibits: 1. Map
8OA-19
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3 2034 N. Bush Street
219 S. Birch Street 2038 N. Bush Street
2 435 S, Birch Street
437 S. Birch Street
Exhibit 1
8OA-20