HomeMy WebLinkAbout010306 Birch Street Develop ProjectREQUEST FOR
AGENCY ACTION
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AGENCY BOARD MEETING DATE: AGENCY SECRETARY USE ONLY:
JANUARY 3, 2006
TITLE: APPROVED
BIRCH STREET DEVELOPMENT PROJECT
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EXECUTIVE DIRECTOR
RECOMMENDED ACTION
❑ As Recommended
❑ As Amended
❑ Ordinance on 18` Reading
❑ Ordinance on 2ntl Reading
❑ Implementing Resolution
❑ Set Public Hearing For_
CONTINUED TO
FILE NUMBER
1. Direct the Agency General Counsel to prepare and authorize the
Executive Director to execute an agreement with General Maintenance
Inc. for the construction of four single- family homes in the amount
of $1,880,950.
2. Approve a project budget not to exceed $2,160,950.
DISCUSSION
The Community Redevelopment Agency acquired the four lots located at 217,
219, 435, and 437 South Birch Street (Exhibit 1) in response to community
concerns regarding unimproved land and substandard, multi - family
apartments, which were the focus of code enforcement actions. Subsequent
to the Agency's acquisition of the sites, several development options
were considered. These options included special needs affordable
housing, which was determined to be economically infeasible. Since that
time, staff has worked closely with the Heninger Park Neighborhood to
reach an agreement on the development of four single- family homes.
The Heninger Park neighborhood has been recognized for their interest in
encouraging preservation of the areas single - family homes with bungalow
style architecture and support for new infill development consistent with
these local goals. The Agency previously contracted with Studio One
Eleven to prepare the architectural plans. The permit ready plans, which
feature bungalow architecture that range in size from 1,846 sq. ft to
2,385 sq. ft of livable space and contain three and four bedrooms
(Exhibit 2).
5 -5
Birch Street Development Project
January 3, 2006
Page 2
Over a period of a year, the Birch Street Homes were sent out to bid on
three separate occasions and deadlines for submission extended in an
effort to obtain competitive bids. Notices were published in the
newspaper, advertised on the Internet, and mailed to over 30 contractors
who are listed on a Contractor's interest list maintained by the Agency.
After the first attempt to bid the project was unsuccessful, staff
surveyed contractors who requested bid packets. The feedback indicated
that they were too busy and /or were not interested in working on a job
that required prevailing wages. The most recent request for bids was
published in the O.C. Register, advertised on the Internet and mailed to
an additional 20 contractors. The following is a summary of the bids
received:
General Maintenance, Inc. $1,880,950 Santa Ana
PCN3* $ 498,300 Long Beach
RAV Company $3,963,931 Laguna Niguel
Based on these results, General Maintenance, Inc. (GMI) a private general
contractor with a class B license is recommended to be awarded the
construction contract for the Birch Street project (Exhibit 3) . GMI has
proposed to construct the homes in two phases, with each phase taking
seven months to complete. Under this schedule, construction is expected
to commence at 435 -437 S. Birch Street in February 2006, to be followed
by the construction of the 217 -219 S. Birch Street homes in September
2006.
The homes will be sold at a moderate price affordable to households with
incomes at 1200 of the Area Median Income (AMI). The final sales prices
will be determined at the time the homes are available for sale. These
prices will be determined by the median income limits in effect at the
time of sale.
When the homes are sold to the affordable buyers, it is expected that
they will have a conventional first trust deed financing. The difference
between the appraised value of the home and the affordable purchase price
will be provided by the Agency in the form of a silent second trust deed.
Payments on this mortgage will be deferred but due and payable in the
event of a sale of the property to a non- qualified household or violation
of the Agency Deed Restrictions and Covenants. The period of
affordability will be for a term of 45 years.
* The bid from PCN3 was for the construction of only one home.
5 -6
Birch Street Development Project
January 3, 2006
Page 3
Given the pricing of these homes, there is expected to be significant
demand for these homeownership opportunities. In anticipation, staff is
recommending an Outreach and Marketing Plan (Exhibit 4). The plan
details the process that will be utilized to make members of the public
aware of the affordable homeownership opportunity. A lottery drawing is
planned to establish a list of priority purchasers and will give
preference to households that live or work in Santa Ana.
This action was placed on the December 20, 2005, agenda for
recommendation by the Community Redevelopment and Housing Commission. No
action was taken due to a lack of quorum.
FISCAL IMPACT
Funding for the Birch Street Project is available in account number (507-
936- 6223).
99 e V, 4 z
Patricia C. Whitaker
Executive Director
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APPROVED AS TO FUNDS AND ACCOUNTS:
Francisco Gutierrez
Executive Director i
Finance & Management Services Agency
5 -7
H
EM 217, 219 S. Birch Street M 435, 437 S. Birch Street
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5-22
PROJECT BUDGET
217,2199 435 AND 437 SOUTH BIRCH STREET
Contract Amount: $198809950
Contingency: $280,000
Total Contract Authority: $291603950
EXHIBIT 3
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THIS PAGE LEFT INTENTIONALLY BLANK
5 -24
Marketing and Outreach Plan
The goal of the Community Redevelopment Agency of the City of Santa Ana
(Agency) Marketing and Outreach Plan is to ensure that the marketing of
affordable for -sale housing be as broad and inclusive as possible in order to
inform and attract as many prospective buyers as possible. The Outreach and
Marketing Plan and the associated Applicant Selection Procedures will be
targeted to purchasers regardless of race, color, religion, sex, disability status,
family status or national origin.
ADVERTISEMENT
The homeownership opportunity home will be marketed during construction
through media outlets including, but not limited to, the Orange County Register,
Excelsior, Miniondes, Nguoi Viet and Cityl-ine newspapers. In addition, the
Agency will also inform existing Homeownership Centers serving Santa Ana
including, but not limited to, Neighborhood Housing Services, Civic Center Barrio
Housing, Consumer Credit Counseling, the Affordable Housing Clearinghouse
and ACORN. Promotion through the Santa Ana website, City cable channel,
Community Development Resource Network Newsletter, Resource Network "e"
mail Newslist and neighborhood associations will also be initiated.
ELIGIBILITY AND PREFERENCE
These homes will be sold at below market prices to households earning 120% of
the area median income (AMI). The current median income figures are shown
below. These figures will be updated if the Department of Housing and Urban
Development (HUD) publishes new AMI limits.
Family Size Annual Household Income May Not Exceed
1 $63,600
2 $72,700
3 $81,750
4 $90,850
5 $98,100
In order to encourage successful homeownership, the Agency will require pre-
purchase and post - purchase counseling provided by a HUD certified
homeownership counseling center.
In addition, a preference will be given to households who live or work in Santa
Ana.
EXHIBIT 4
5 -25
PROCESS
The Agency intends to adopt the process outlined below.
• Interested applicants may attend informational meetings.
• Lottery packets will be available at the meetings, at the Housing Division
office, or by mail.
• Applicants are to submit completed lottery forms with self certifications of
eligibility (income, family size and pre - purchase counseling).
• Lottery forms must be received by June 9, 2006, for the first phase and
tentatively January 19 for the second phase. Forms may be mailed or
hand delivered.
LOTTERY
Agency staff will schedule, organize, and coordinate the lottery drawing, which
will be open to the public. The lottery for the first phase will take place June 20,
2006, and tentatively February 1, 2007, for the second phase.
Preference will be given to households who live or work in Santa Ana. For the
purpose of the lottery drawing, lottery ticket forms will be divided by those who
have claimed a preference and those who do not. Those with a preference will
be drawn first.
Agency staff will provide written notification to lottery participants informing them
of the results and their priority number. This priority number represents the order
with which prospective buyers will be reviewed by the Agency for final
determination of eligibility. If a household who was selected claimed a
preference but could not verify such, they will be deemed ineligible and the next
selected participant will be notified. All lottery forms will be drawn and numbered
to create a complete list of alternate applicants.
EXHIBIT 4
5 -26