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HomeMy WebLinkAbout2009-04-28 RDA Item No. 6CITY OF %� LADE LSIHOPE DREAM EXTREME. REPORT TO REDEVELOPMENT AGENCY TO: HONORABLE CHAIRMAN AND MEMBERS OF THE REDEVELOPMENT AGENCY FROM: ROBERT A. BRADY EXECUTIVE DIRECTOR DATE: APRIL 28, 2009 SUBJECT: REPLACEMENT HOUSING PLAN — POTTERY COURT AFFORDABLE HOUSING PROJECT BACKGROUND The Agency has moved forward with the acquisition of 14 properties relating to the proposed affordable housing project known as Pottery Court (the "Project "). The proposed Project will involve the acquisition and assembly of 23 parcels comprising approximately 4.29 acres in the Redevelopment Agency's Project Area No. I and the City of Lake Elsinore's historic downtown area (the "Project Site ") and the construction of approximately 111 very low income dwelling units and two (2) manager units. The Agency is negotiating a Disposition and Development Agreement and related documents with BRIDGE Housing Corporation ( "BRIDGE ") for the disposition of the Project Site and the development and operation of the Project. The Agency is proposing to provide financial assistance to BRIDGE for predevelopment, land acquisition and construction costs associated with the Project. The acquisition and demolition phase of the proposed Project will involve the demolition of the existing improvements on the Project Site which includes 11 residential units. These residential units are either occupied by low and moderate income households or vacant, but considered a part of the Lake Elsinore low and moderate income housing market. DISCUSSION Pursuant to the California Community Redevelopment Law (CRL), whenever a redevelopment agency demolishes a housing unit occupied by a low- to moderate- Agenda Item No. 6 Page 1 of 12 Report to Redevelopment Agency — Replacement Housing Plan April 28, 2009 Page 2 income occupant, the agency must replace the unit with another unit comparable in size and affordability within four years after the original unit is demolished. To ensure compliance with the replacement housing requirement, Section 33413.5 of the CRL requires that at least 30 days before a redevelopment agency can execute a Disposition and Development Agreement or other agreement leading to the destruction or removal of housing units occupied by low- and moderate - income households, including a contract for the demolition of such housing units, the Agency must adopt a Replacement Housing Plan A proposed Replacement Housing Plan for the Pottery Court Affordable Housing Project is attached for consideration by the Agency Board. In accordance with Section 33413.5 of the CRL, the proposed Replacement Housing Plan includes: 1) the general location of the replacement housing; 2) means of financing the replacement housing; 3) a finding that the replacement housing either does not require the approval of the voters pursuant to Article XXXIV, or that such approval has been obtained; 4) the number of replacement housing units planned; and 5) the timetable for the replacement housing. Fiscal Impact None. Because the replacement units will be included as part of the Pottery Court Project, there are no additional costs associated with adoption and implementation of the Replacement Housing Plan. Recommendation Approve the Resolution of the Redevelopment Agency of the City of Lake Elsinore, California, Adopting A Replacement Housing Plan For The Pottery Court Affordable Housing Project Prepared by: Barbara Leibold Agency Counsel Approved by: Robert A. Brady Executive Director Attachment: Replacement Housing Plan Agenda Item No. 6 Page 2 of 12 RESOLUTION NO. 2009- A RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF LAKE ELSINORE, CALIFORNIA, ADOPTING A REPLACEMENT HOUSING PLAN FOR THE POTTERY COURT AFFORDABLE HOUSING PROJECT WHEREAS, the California Community Redevelopment Law (Health & Safety Code Sections 33000 et seq.) requires a redevelopment agency to adopt by resolution a replacement housing plan prior to the execution of (i) an agreement for acquisition of real property, (ii) an agreement for the disposition and development of property, or (iii) an owner participation agreement when such agreement will lead to the destruction or removal of dwelling units from the low and moderate income housing market; and WHEREAS, the Redevelopment Agency of the City of Lake Elsinore (the "Agency ") is proposing to enter into a Disposition and Development Agreement and related documents with BRIDGE Housing Corporation ( "BRIDGE ") forthe disposition of 23 parcels comprising approximately 4.29 acres in the Redevelopment Agency's Project Area No. I and the City of Lake Elsinore's historic downtown area (the "Project Site ") and the development and operation of a proposed affordable housing project known as Pottery Court consisting of approximately 111 very low income dwelling units and two (2) manager units (the "Project "); and WHEREAS, the Project will result to the destruction or removal of 11 dwelling units from the low and moderate income housing market; and WHEREAS, the Agency has prepared a replacement housing plan for the Project (the "Replacement Housing Plan ") pursuant to the requirements of Section 33413.5 of the California Community Redevelopment Law which plan is on file with the Agency Secretary and incorporated by reference herein; and WHEREAS, the Replacement Housing Plan was available for public review prior to the timely and properly noticed public meeting at which the Agency considered the Replacement Housing Plan. NOW, THEREFORE, THE REDEVELOPMENT AGENCY OF THE CITY OF LAKE ELSINORE DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: SECTION 1. The Redevelopment Agency hereby approves and adopts the Replacement Housing Plan. SECTION 2. The Executive Director of the Agency is authorized to implement the Replacement Housing Plan and to execute any documents and take any other action necessary or convenient for the proper accomplishment of its purposes. Agenda Item No. 6 Page 3 of 12 SECTION 3. This Resolution shall take effect from and after the date of its passage and adoption. PASSED, APPROVED AND ADOPTED this 28th day of April 2009. ATTEST: DEBORA THOMSEN AGENCY SECRETARY APPROVED AS TO FORM: BARBARA LEIBOLD AGENCY COUNSEL THOMAS BUCKLEY, CHAIRMAN Agenda Item No. 6 Page 4 of 12 STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF LAKE ELSINORE ) I, DEBORA THOMSEN, Agency Secretary of the Redevelopment Agency of the City of Lake Elsinore, California, hereby certify that Resolution No. 2009- was adopted by the Redevelopment Agency Board of the Redevelopment Agency of the City of Lake Elsinore at a regular meeting held on the 28th day of April 2009, and that the same was adopted by the following vote: AYES: NOES: ABSTAIN: ABSENT: DEBORA THOMSEN AGENCY SECRETARY Agenda Item No. 6 Page 5 of 12 REPLACEMENT HOUSING PLAN For the Pottery Court Affordable Housing Project INTRODUCTION AND STATEMENT OF PURPOSE The Redevelopment Agency of the City of Lake Elsinore ( "Agency ") has moved forward with the acquisition of 14 properties relating to the proposed affordable housing project known as Pottery Court ( "Project "). The proposed Project will involve the acquisition and assembly of 23 parcels comprising approximately 4.29 acres in the Redevelopment Agency's Project Area No. I and the City of Lake Elsinore's historic downtown area (the "Project Site ") and the construction of approximately 111 dwelling units restricted to occupancy by very low income tenants at affordable rent and two (2) manager units. The Agency anticipates that the acquisition of the remaining 9 parcels will be completed within three to six months, The Agency is negotiating a Disposition and Development Agreement and related documents with BRIDGE Housing Corporation ( "BRIDGE ") for the disposition of the Project Site and the development and operation of the Project. The Agency is proposing to provide financial assistance to BRIDGE for predevelopment, land acquisition and construction costs associated with the Project. The acquisition and demolition phase of the proposed Project will involve the demolition of the existing improvements on the Project Site which include demolition of 11 residential units. These residential units are either occupied by low and moderate income households or vacant, but considered a part of the Lake Elsinore low and moderate income housing market. Section 33413.5 of the California Community Redevelopment Law (Health and Safety Code, Section 33000 et seq.) requires the Agency to adopt a replacement housing plan when it enters into certain agreements that would lead to the destruction or removal of dwelling units from the low and moderate income housing market. Section 33413(a) requires that whenever dwelling units occupied by low and moderate income households are destroyed or removed from the low and moderate income housing market as part of a redevelopment project, the agency shall within four years of the destruction or removal, rehabilitate, develop, construct or cause to be rehabilitated, developed or constructed, for rental or sale to persons and families of low or moderate income at an affordable housing cost an equal number of replacement dwelling units containing an equal or greater number of bedrooms as the destroyed units. Section 33413(f) permits the agency to satisfy its replacement housing obligation with fewer units so long as (i) the total number of bedrooms in the replacement units equals or exceeds the number of bedrooms in the destroyed units, and (ii) the replacement units are affordable to and occupied by the same income level of households as the Agenda Item No. 6 Page 6 of 12 destroyed units. Replacement housing units can be developed anywhere within the agency's jurisdiction. This Plan has been prepared to satisfy the requirements for replacement housing under California Health and Safety Code Sections 33413 and 33413.5. This Plan describes the following: 1. Proposed project 2. Project location 3. Development of the replacement housing 4. Financing the replacement housing 5. Schedule for the construction of the replacement housing 6. Period for which the replacement units will remain affordable 7. Article XXXIV Compliance 8. Availability of the Plan for public review PROPOSED PROJECT The proposed site is approximately 4.3 acres generally bounded by Pottery Street and Sumner Avenue between the outflow channel and Langstaff Street. In all, 23 parcels comprise the proposed site. The Agency has acquired 14 parcels and BRIDGE and the Agency are diligently negotiating for the acquisition and assembly of the remaining parcels. The proposed Project would consist of approximately 111 units restricted to occupancy by eligible very low income households at an affordable rent and two manager units. These units will assist the Agency in fulfilling its inclusionary housing obligations for very low income households and will satisfy the replacement housing requirement triggered by the demolition of 11 residential units on the Project Site. The Agency will require that appropriate restrictions on occupancy, rents and operations and maintenance be recorded against the Pottery Court Project pursuant to Redevelopment Law requirements. PROJECT LOCATION The proposed Project Site is approximately 4.29 acres generally bounded by Pottery Street and Sumner Avenue between the outflow channel and Langstaff Street located in the Redevelopment Agency's Project Area No. I and the City of Lake Elsinore's historic downtown area (the "Project Site "). The Project Site is comprised of 23 parcels that will assembled into a developable site. A map of the Project Site is provided in Exhibit 1. Agenda Item No. 6 Page 7 of 12 REPLACEMENT HOUSING UNITS There are 11 existing dwelling units with a total of 18 bedrooms on the Project Site. The existing units either are currently occupied or were most recently rented to households at or below moderate income. This Replacement Housing Plan describes the measures that the Agency will take to ensure the production of 11 replacement dwelling units within four years after the removal of the units from the low- and moderate- income housing market as part of Project. One hundred percent (100 %) of the replacement dwelling units must be available at affordable housing cost to, and occupied by, persons in the same or lower income category as the very low, low or moderate income persons displaced from the 11 original units. The units demolished on the Project Site will be replaced with the housing units /bedrooms to be constructed in the Pottery Court Project on the Project Site. Exhibit 2 describes the income categories and number of dwelling units, with the corresponding number of bedrooms, that will be demolished and which will constitute the Agency's replacement housing requirements under the Community Redevelopment Law. FUNDING SOURCES The Redevelopment Plans for the three redevelopment project areas authorize the Agency to finance its activities with assistance from various sources, including the City of Lake Elsinore, State of California, United States Government, property tax increment funds, interest income, Agency bonds, or other available sources. The replacement housing units are anticipated to be financed in part with Redevelopment Low and Moderate Housing Funds. By Resolution No. 2008 -04, the Agency committed $4,039,000 of Low and Moderate Income Housing Funds to the Project. In addition to the Agency's Low and Moderate Income Housing Fund loan, the Pottery Court Project is anticipated to be financed in part with a HOPE VI Funds to be loaned by the City of Lake Elsinore, HOME funds to be loaned by the County of Riverside, Low Income Housing Tax Credits, conventional loans and developer equity. TIMELINE FOR REPLACEMENT HOUSING Demolition of the improvements is anticipated to take place as early as the last quarter of 2009, but not later than the second quarter of 2010. All of the replacement units will be available for occupancy before a date that is four years after commencement of demolition. Notwithstanding the 4 -year time period permitted by the Community Redevelopment Law to replace the demolished dwelling units, the construction of the Pottery Court Project and the replacement units are anticipated to be completed by September 2011. 3 Agenda Item No. 6 Page 8 of 12 LOW /MODERATE INCOME ASSURANCE The Agency's agreement with BRIDGE for the replacement units will require the recordation of a covenant against the Project Site requiring at least 55 years of affordability, as required by Community Redevelopment Law. All of the units on the Project Site occupied by very low, low or moderate income tenants will be replaced by units affordable to and restricted for occupancy by very low income tenants whose gross household income does not exceed 50 percent of the area median income adjusted for family size as more specifically defined in Section 50105 of the California Health and Safety Code. Moreover, the Agency, in accordance with California Health and Safety Code Section 33418, monitors on an ongoing basis, any housing affordable to persons and families of low or moderate income developed or otherwise made available pursuant to agreements with the Agency. ARTICLE XXXIV COMPLIANCE The Agency determined that the replacement housing to be developed and constructed under this replacement housing plan does not require approval of the voters of the City of Lake Elsinore pursuant to Article XXXIV of the California Constitution. The Project will consist of the replacement of and addition to a project previously or currently occupied by lower income households as defined in Health & Safety Code Section 50079.5 and is therefore exempt from Article XXXIV requirements by Health & Safety Code Section 37001(f). In addition, the Agency will not "develop, construct, or acquire" housing as described in Section 1 of Article XXXIV of the California Constitution, as it will only provide assistance to the Project and monitor construction of the Project and compliance with conditions of such assistance to the extent of: (1) carrying out routine governmental functions; (2) performing conventional activities of a lender; and (3) imposing constitutionally mandated or statutorily authorized conditions accepted by BRIDGE, the developer and grantee of the assistance, as described by Section 37001.5(e) of the California Health & Safety Code. AVAILABILITY OF PLAN FOR REVIEW In accordance with Community Redevelopment Law, a copy of this Replacement Housing Plan will be available for review by any interest persons or agencies and the general public at the Redevelopment Agency of the City of Lake Elsinore, 130 S. Main Street, Lake Elsinore, CA 92530. 4 Agenda Item No. 6 Page 9 of 12 EXHIBIT 1 !1M [Attached] Agenda Item No. 6 Page 10 of 12 Agenda Item No. 6 Page 11 of 12 EXHIBIT 2 Housing Units To Be Removed And Agency Replacement Housing Obligation Project will involve demolition of 11 residential units consisting of 22 bedrooms Property Address # of Existing total # of # of bedrooms # of bedrooms # of bedrooms occupied Residential bedrooms occupied by occupied by by moderate income units very low low income households income households households 312 %s N. Langstaff 1 2 0 2 0 323 N. Riley 1 3 3 0 0 304 W. Pottery 1 4 0 4 0 317 N. Riley 2 4 4 0 0 307 N. Riley 5 6 5 0 0 (Unit #3 vacant) 312 N. Langstaff 1 3 0 0 0 (vacant) TOTAL 16* 6 0 Bedrooms to be Replaced (12 occupied and 4 vacant 22 bedrooms) Per Section 33413(f)(1) of the California Health and Safety Code, "destroyed or removed units having one or no bedroom are deemed for this purpose to have one bedroom." *Where income certification or verifiable income information was not available for certain households, those households are treated as very low income for purposes of this Replacement Housing Plan. Similarly, the vacant units are assumed to have been occupied by very low income households. M Agenda Item No. 6 Page 12 of 12