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HomeMy WebLinkAbout2009-12-22 Item 2 CITY OF .. LASE LINOE % i TM DREAM EXTREME REPORT TO THE REDEVELOPMENT AGENCY TO: HONORABLE CHAIRMAN AND MEMBERS OF THE REDEVELOPMENT AGENCY FROM: ROBERT A. BRADY EXECUTIVE DIRECTOR DATE: DECEMBER 22, 2009 SUBJECT: APPROVAL OF MINUTES Discussion The following Redevelopment Agency Minutes are submitted for approval as follows: Recommendation: (a) Redevelopment Agency Special Study Session Meeting Minutes November 19, 2009 Recommendation Approve the Minutes as submitted. Prepared by: Debora Thomsen Agency Secretary Approved by: Robert A. Brady Executive Director RDA December 22, 2009 Item No. 2 Page 1 of 8 Page 1 of 7 CITY OF LAKE ELSINORE REDEVELOPMENT AGENCY SPECIAL MEETING MINUTES November 19 2009 CALL TO ORDER - 5:00 P.M. Chairman Buckley called the Special Meeting of the Lake Elsinore Redevelopment Agency held on Tuesday, November 19 2009 to order at 5:10 p.m. in the Cultural Center, located at 183 N. Main Street, Lake Elsinore, CA 92530. ROLL CALL. PRESENT: Chairman Buckley, Vice Chair Bhutta, Agency member Magee (5:37), Agency member Melendez. ABSENT: Agency member Hickman. Also present: Executive Director Brady, Agency Counsel Leibold, and Agency Secretary Thomsen. Staff members present included Acting Community Development Director Weiner, Public Works Director / City Engineer Seumalo, Director of Lake and Aquatics and Interim Parks and Recreation Director Kilroy, Treasurer Baldwin and Police Chief Cleary. PLEDGE OF ALLEGIANCE The Pledge of Allegiance was led by the City of Lake Elsinore Treasurer Baldwin. PUBLIC COMMENTS None. DISCUSSION ITEM Chairman Buckley gave an overview for the purpose of the Special Meeting noting multiple proposals had been received by the Agency regarding projects in relation to affordable housing. Chairman Buckley noted each proposal was RDA December 22, 2009 Item No. 2 Page 2 of 8 Lake Elsinore Redevelopment Agency Special Meeting Minutes of November 19, 2009 Page 2 of 7 unique in its own right; the purpose of the meeting was for each business to give an overview the Agency an overview of their proposal and receive direction, which would assist them in being able to further their planning process. It was noted 5 proposals were received from 4 affordable housing corporations: 1) Bridge Housing Corporation (The Avenues & Harbor Grand) 2) Veloce Partners 3) Central Valley Coalition 4) Fast Building Systems, LLC Chairman Buckley determined each company would present their proposal(s) to the Agency in the order they were listed on the Agenda. 1. RDA AFFORDABLE HOUSING SITE LOCATIONS The Avenues: Bridge Housing A general overview was given of the project. It was stated the proposed locations site was on 6.7 acres of vacant land on Lake Shore Drive. The site is currently zoned as General Commercial, (C -2). It noted in the future, for this plan to move forward, it would be necessary for a Zone Change and General Plan Amendment for a change from Commercial to Residential. The property they had chosen for this project would have to be purchased and estimated the price to be $4,000,000. Their proposal included two separate types of housing units, a 40 unit Senior Center in addition to an 85 unit of family residences. The total of affordable units would be 125 in total. Possible funding sources were discussed including HUD 202 funds, Redevelopment Agency (RDA) subsidy in addition to Tax Credit programs with different percentages depending upon the units. The analysis of scoring via tax credits was discussed. It was noted this property was competitive because of the location, it was in close proximity to accommodations, such as grocery stores, which was a tax - credit plus. The housing market is determined by the entities surrounding the location and noted rehabilitation opportunities in the area availability were also available. He noted the market is currently flexible, and entrepreneur for both mix - family and senior dwelling locations. It was further noted this location was scored as "IE" which is considered a competitive region. At this point, the negative possibilities of the location, funding, and project were addressed by Bridge Housing Corporation: RDA December 22, 2009 Item No. 2 Page 3 of 8 Lake Elsinore Redevelopment Agency Special Meeting Minutes of November 19, 2009 Page 3 of 7 It was noted the land was currently zoned for Commercial, and the challenge was convincing the land owner to sell for Residential use instead of Commercial. The influx of residential use of the property was brought forward, since this property was at the end of the "Lake Elsinore Auto Retail Row." In addition, the impact of the percentage of the tax - credit was addressed, Commercial vs. Residential. The Redevelopment Agency then brought the discussion to the Dias. Agency Member Melendez noted she was not inclined to consider a zone change, noting Commercial zoning is just as valuable as Residential. She noted however important Commercial zoning is, residential is just as valuable, especially for Senior Citizens. Vice Chair Bhutta agreed, stating she was not inclined to agree with the specific location. Chairman Buckley addressed the proposed Master Plan stating downtown Lake Elsinore on Main Street would be competitive. Agency Counsel Leibold stating in the first meeting in December, Senior Housing funds must equal available fund, noting Lake Elsinore does not have that many Senior developments. Bridge stated the smaller the units were the better; they were for qualifying for HUD 202 funds. Harbor Grand Bridge Housing A general overview was given of the project was given. It was noted the project consisted of an existing apartment complex located at 15120 Grand Avenue consisting of 192 apartment units near Riverside Drive. The complex was built in 1986 and remains in good condition. Originally the asking price was over $18 million and Bridge Housing Corporation is considered the site. Currently, the property has gone into foreclosure and is for sale at $65,000. per unit. Currently the site is zoned as is High Density Resolution (R -3) and has a General Plan designation of Medium High Density (MHD). Due to the drop in economy and property sales, the current selling price is $12.5 million, which is below the replacement cost of refurbishing the property. If purchased, then a formal income qualification process can begin for all existing and future residents. A qualification process to determine rent qualifications can RDA December 22, 2009 Item No. 2 Page 4 of 8 Lake Elsinore Redevelopment Agency Special Meeting Minutes of November 19, 2009 Page 4 of 7 then begin establishing income qualifications of the affordable rental rates. Bridge has determined they will not ask current residents to move, however, when they do, the units will be rented to an income qualified tenant. The Redevelopment Agency then brought the discussion to the Dias. Discussion was held and questions were asked regarding the cost to rehabilitate the units. It was noted the improvements would be made as tenants moved out. The estimated cost per unit is $10,000. and it was noted with rent being low and kept stable, there would be little turnover, renters would want to stay. Bridge stated they did not want to force tenants out, nor did they want to be responsible for relocation costs. It was noted rent may increase for some after their current lease expired, it would be a case -by -cases basis. Questions were asked about the housing credit. Agency Counsel Leibold stated the apartments were within the boundaries of the low income project area and the majority of the cash flow would be returned to the Agency. It was also discussed the situation depended upon many factors such as do you relocate tenants or allow attrition and what do the existing tenants qualify for. It is almost impossible to give a definite answer with so many variables. Agency Member Magee noted this complex has many problems including crime. He suggested rather than subsidize $46,000. to rehabilitate each unit, it would be better to tear them down and start over. Lakeview Apartments Bridge noted the property is two separate parcels, each owned by a limited partnership. The existing financing is expiring making acquisition attractive. Several Agencies such as USDA, CaIHFA, HUD and others were interested in the complex continue to qualify as affordable housing. The plan is to purchase the property and renovate. Bonds could be sold and a 4 percent tax credit would be received. The units would receive a new kitchen and bathroom, and the apartment complex would receive complete landscaping. The units are fully occupied and the rent would be based upon 25 to 30 percent of their income. The funding options were discussed stating the average cost to upgrade each unit is expected to exceed $30,000. The Redevelopment Agency then brought the discussion to the Dias. Discussion was held regarding the $30,000. cost per unit being too high. Questions were raised about who would manage the complex and the Agency was informed they would use the existing company. It was noted the complex RDA December 22, 2009 Item No. 2 Page 5 of 8 Lake Elsinore Redevelopment Agency Special Meeting Minutes of November 19, 2009 Page 5 of 7 receives consistent calls regarding crime and problems. The consensus was why spend $30,000. per unit to inherit the existing problems. The Agency discussed the funding, stating it may be possible to barrow for longer than 50 years. Agency Counsel noted the RDA has terms that are currently for 40 years. Discussion was held regarding the lending being unreliable, the rents are restrictive there is not enough cash flow. Agency Counsel stated only 50 percent can be purchased, HUD phase is for a capital improvement project area of "A2." Lakeshore Village The applicant is Central Valley Coalition, and are proposing to construct 128 affordable apartments located on Lakeshore Drive between Viscaya and Machado Streets. Finances and costs were not discussed and it was noted there are existing car theft problems in the area. Pottery Street Affordable Homes The applicant, William Kipp owner of Fast Building Systems, LLC is proposing to construct approximately 15 to 23 single family dwelling units at Rupard and East Pottery Street. The current zoning is R -1 for single family residential. It was noted the General Plan designates the area to be Medium Density (MD). The applicant spoke stating his plan is to build the houses to be 100 percent green. The house would have no wood except the doors and cabinet framing. They would be bug free, fire and bullet roof. The material keeps the interior cool, there is no need for air conditioning or heating. He noted he has built these exact houses all over the world and they consistently do not have interior or exterior problems, including no cracks from earthquakes, they have stood firm. Currently he can build a house in 30 days. Mr. Kipp noted the sale price of the homes is dependent upon how many homes are built; therefore he pre -sells them before construction. Factors of the selling price are dependent upon the existing price of the materials, the price of the property and grading costs. Average price is $125,000 to $145,000. per home. It was noted the material he uses is proprietory. The Redevelopment Agency then brought the discussion to the Dias. Discussion was held regarding the materials and the Agency was informed the units were not modular or prefabricated, they were built on -site. Agency Counsel RDA December 22, 2009 Item No. 2 Page 6 of 8 Lake Elsinore Redevelopment Agency Special Meeting Minutes of November 19, 2009 Page 6 of 7 stated his selling price was too high to be considered low income housing, yet he would qualify as moderate. REDEVELOPMENT AGENCY COMMENTS) The Agency clarified their preferences for the proposed projects: The Avenues This project was not acceptable to the Agency, due to the location and the zoning. Harbor Grand The Agency is interested in receiving further details regarding the project. Lakeview Apartments This project was not acceptable to the Agency. Although the project qualifies as low income, it needs new management and the cost of $30,000 to rehabilitate each unit is too much. Lakeshore Village The Agency is interested in receiving further details regarding the project, noting the location and plans would fit. Pottery Street Affordable Homes The Agency is interested in receiving further details regarding the project. The Agency expressed their concerns regarding the size of the houses and prepriority materials may be a future issue. ADJOURNMENT There being no further business to come before the Redevelopment Agency (RDA) Chairman Buckley adjourned the Redevelopment Agency Special Meeting at 6:22 p.m. RDA December 22, 2009 Item No. 2 Page 7 of 8 Lake Elsinore Redevelopment Agency Special Meeting Minutes of November 19, 2009 Page 7of7 The Lake Elsinore Redevelopment Agency adjourned to the next regular meeting to be held on Tuesday, November 24, 2009, at 5:00 p.m. to be held in the Cultural Center located at 183 N. Main Street, Lake Elsinore, CA 92530. Debora l"homsen Debora Thomsen, CMC Redevelopment Agency Secretary City of Lake Elsinore, California RDA December 22, 2009 Item No. 2 Page 8 of 8