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HomeMy WebLinkAbout2010-07-14 e-packetSo~T11 SAN A? o~ -~~. _~: yL ~ -~-- U p cqL 1 FOR~~P AGENDA REDEVELOPMENT AGENCY CITY OF SOUTH SAN FRANCISCO REGULAR MEETING MUNICII'AL SERVICES BUILDING COMMUNITY ROOM WEDNESDAY, JULY 14, 2010 6:30 P.M. PEOPLE OF SOUTH SAN FR~iNCISCO You are invited to offer your suggestions. In order that you may know our method of conducting Agency business, we proceed as follows: The regular meeting of the Redevelopment Agency is held on the second Wednesday of each month at 6:30 p.m. in the Municipal Services Building, Community Room, 33 Arroyo Drive, South San Francisco, California. Public Comment: For those wishing to address the Board on any Agenda or non-Agendized item, please complete a Speaker Card located at the entrance to the Community Room and submit it to the Clerk. Please be sure to indicate the Agenda Item # you wish to address or the topic of your public comment. California law prevents Redevelopment Agency from taking action on any item not on the Agenda (except in emergency circumstances). Your question or problem may be referred to staff for investigation andior action where appropriate or the matter may be placed on a future Agenda for more comprehensive action or a report. When your name is called, please come to the podium, state your name and address for the Minutes. COivlivlENTS ARE LIMITED TO THREE (3) MINUTES PER SPEAKER. Thank you for your cooperation. The Clerk vxrill read successively the items of business appearing on the Agenda. As she completes reading an item, it will be ready for Board action. MARK N. ADDIEGO Chair KEVIN MULLIN Vice Chair RICHARD A. GARBARINO Boardmember RICHARD BATTAGLIA Investment Officer BARRY M. NAGEL Executive Director PEDRO GONZALEZ Boardmember KARYL MATSUMOTO Boardmember KRISTA MARTINELLI-CARSON Clerk STEVEN T. MATTAS Counsel PLEASE SILENCE CELL PHONES AND PAGERS I I1:ARING ASSISTANCE EQUIPMENT IS AVAILABLE FOR USE BY THE HEARING-IMPAIRED AT REDEVELOPMENT AGENCY MEETINGS In accordance with California Government Code Section 54957.5, any writing or document that is a public record, relates to an opera session agenda item, and is distributed less than 72 hours prior to a regular meeting will be made available for public inspection in the City Clerk's Office located at Ciry Hall. If, however, the document or writing is not distributed until the regular meeting to which it a~elates, then the document or writing will be made available to the public at the location of the meeting, as listed on this agenda. The address of City Hall is 400 Crand Avenue, Soacth San Francisco, California 94080. CALL TO ORDER ROLL CALL AGENDA REVIEW PUBLIC COMMENTS CONSENT CALENDAR Motion to approve the minutes of June 9, 2010. 2. Motion to approve expense claims of July 14, 2010. PUBLIC HEARING 3. Resolution adopting the South San Francisco Redevelopment Agency's Five-Year Implementation Plan for the Downtown Central., Gateway, El Camino Corridor and US Steel/Shearwater Project Areas for FY 2009/10 - 2013/14. ADMINISTRATIVE BUSINESS 4. Resolution authorizing the expenditure of up to $300,000 from the Low -and Moderate - Income Housing Fund to subsidize the purchase of Below Market Rate ("BMR") units at City Lights, adopting findings in connection therewith, and aYproving an amendment to the Agency's Low -and Moderate -Income Housing Fund Operating Budget. ADJOU'~~TTMENT REGULAR REDEVELOPMENT AGENCY MEETING NLY 14, 2010 AGENDA PAGE 2 ~- - ~. - o ~~ ~'~ L I FORr'~~ i M~I~~JTE~ D~FTy; REDEVELOPMENT AGENCY ~A AGENDA ITEM CITY OF SOUTH SAN FRANCISCO REGUZ,AR MEETING i~1UNICIPAL SERVICES BUILDING COMMUNITY ROOM WEDNESDAY, JUNE 9, 2010 CALLED TO ORDER: ROLL CALL: AGENDA REVIEW 6:32 p.m. Present: Boardmembers Garbarino, Gonzalez and Matsumoto, Vice Chairman Mullin and Criainnan Addiego. Absent: None. Ttem No. 4 was pealed from the Agenda. PUBLIC COMMENTS Nome. CONSENT CALENDAR 1. Motion to approve the minutes of May 12, 2010 and May 26, 2010. 2. Motion to approve expense claims of June 9, 2010. 3. Resolution No. 8-2010 approving a contract and budget amendment with Dyett and Bhatia to prepare a Program EIR for El Camino Real/Chestnut Area Plan Project in the amount of $137,277. Motion-Boardmember Gonzalez/Second-Boardmember Garbarino: to approve Consent Calendar Items Nos. 1 and 2. Unanimously approved by voice vote. Item 3: Boardmember Matsumoto noted the EIR was comparing thresholds today with those of 1999 when the original General Plan was done. 1 Director of Economic and Community Development Van Duyn advised the base 1999 document was being used as a reference point and not for flexibility purposes. He confirmed the 1999 EIR still had validity. Motion- Boardmenlber Matsumoto/Second- Boardmember Garbarino: to approve Resolution No. 8-2010. Unanimously approved by voice vote. ADMINISTRANT IVE BUSINESS 4. Resolution approving an Owner Participation and Loan Agreement with Giffra Enterprises, LLC, for the provision of a loan for the rehabilitation of the property located at 226-2~8 Grand Avenue, in an amount not to exceed. $2.5 million, and authorizing the execution of all documents in connection with such financing. Item ~~ot heard. CLOSED SESSION 5. Pursuant to Government CodE; Section 54956.8 Real property negotiation related to 166 Harbor Road SSF. Company Negotiator: Caltrans Agency Negotiator: Marty Van D~ayn. Time entered Closed Session: 6:36 p.m. Gpen Session resumed: 6:55 p.m. Report out of Closed Session by Chairman Addiego: Direction given. ADJOURNMENT Being no further business, Chairman Addiego adjo~:rned the meeting at 6:56 p.m. tted b~: sta artinelli-parson, Cler v of South San Francisco Approved: Mark N. Addiego, Chairman City of South San Francisco REGULAR REDEVELOPMENT AGENCY MEETING MIN'tJTES JUNE 9, 2010 PAGE 2 Listing of RDA Payments for Council Review o v o c~LIFOR~~~ I certify that the payments shown on this payment register are accurate and sufficient funds were available for payment.* DATED; ~~-Gl -/p -~ ~= INANCE DIRECTOR *Note: Items below do not include payroll related payments Checks: Date 06/04/10 06/09/10 06/16/10 06/18/10 06/23/10 06/25/10 06/30/10 07/07/10 Electronic Payments: Date 06/04/10 Total Payments $ Amount 5,418.75 7,596.23 674,466.44 1,000.00 2,712.05 5, 787.48 208.75 3,989.81 Amount To 48,402.08 Deutsche Bank 749,581.59 RDA AGENDA ITEM # 2 Description Debt Service rn 0 N c~ a~ .~ a~ o ~~ 0 ~ N (B ti O ~ m ~ ~~ O ~ ~ .U ~ p ~ Q O ~.,rN c L.L ~ M c ~ co ~ o m ~~a~ ~ > .~ ~ ~ ~ ~~ O ~ ~ -~_ O ~ ~ ~ U ~~ c ~ ~_ ~ J ~ ~ ~, N ~ ~a ca a Y U W U W U_ O Z Z O F- a_ U W 0 w U O Z M 0 v 0 o~ r l(~ O 0 rn m Cn U J Z O c~ m 0 U U 2 ~ ~ `~' z ~ r . ~ ti o0 00 ~ O ~- ~ a ~ ~. ~ W U ~ O a > w z o W a c z N o Z o > N W 2 U Z Q 0 0 Z Q Q O Q. 0 ~~ ~W ~~ LLI ~a ~o UJ W ZD O W a d N c d a 0 0 N tC O a c m co a 0 O 0 N ca d v n 3 u ~o ~~ O L N O ~ m ~` >. ~ c O ~ ~ .U ~ p ~ Q N L a"I \ ~ o ~ ~~,~ >~ n~~ ..- °' ~ O ~ ~ ~_ O ~ w.- N U rnN C uJ ~ ~ J ~ >, ~ ~ ~ ~ a c~ Y U W U W U_ O Z Z a U N w W U 0 Z I-- Z Q W U_ O z W a o Z r ~ N O o Z w o > rn rn _rn ~ rn rn rn o~~ ti cfl u~ ~ o0 ~ N N N N N N N N N N N N N N 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 r r r r r r r r r r r r r r r p U Cp r O O I~ to M = N ~ ~ ~' tt d' ~ I` 00 ~t ~ ~ ~ d' ~ O N O O O O O O 00 M O M CO ~' ~f' ~ ~ ~ ~h O) O N N O ~ O O O O O O N CO CO M M E r 0 0 0 0 0 0 N lf') O M O r r ti r r r r r r ~' cf' Ln 00 d' M M E p 0 0 0 0 0 0 r 0 0 Cfl N U U O ~' N N N N N N~ r ~- r r U U r Z Z O O w ~ W U Q ~ ~ Q O ~ Z~ Z U U Z d v~ p°~ g ~~ o w Q~~~~ W ~ n Z Q o D.. 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U a v~ O Z J O f- O ~ h W W WQ y w W~ O W U G1 ~ `a ~ a ~ ~ O °°~x~~s=~~~ Redevelo lnent A en o ~ p g ~y Sta Re o~ c ff t '~LIF RlylA p RDA A GENDA ITEM # 3 0 DATE: July 14, 2010 TO: Redevelopment Agf;ncy Board FROM: Marty Van Duyn, Assistant Executive Director SUBJECT: PUBLIC HEARING ON RESOLUTION ADOPTING THE SOUTH SAN FRANCISCO REDEVELOPMENT AGENCY'S FIVE YEAR IMPLEMENTATION PLAN FOR THE DOWNTOWN CENTRAL, GATEWAY, EL CAMINO CORRIDOR AND US STEEL/SHEARWATER PROJECT AREAS FOR FY 2009/10 - 2013/14 RECOMMENDATION It is recommended that the Redevelopment Agency Board hold a public hearing and adopt a resolution approving the proposed Implementation Plan for the Downtown Central, El Camino Corridor, Gateway and U.S. SteeUShearwater project areas for fiscal years 2009/10 - 2013/14 BACKGROND/DISCUSSION The proposed Implementation Plan transmitted with this Staff Report provides a guide for the Agency in implementing its redevelopment programs over the next five years while providing flexibility so it may adjust to changing circumstance and new opportunities. The Plan outlines programs for revitalization, economic development and affordable housing activities during the period from FY 2009/10 through FY 2013/14. It includes goals, activities, estimates of revenues and expenditures, and a description of how the activities will alleviate blight and meet affordable housing requirements. By Law, the Implementation Plan must; contain the following information: • Specific goals and objectives for the next five-years for both housing and non-housing activities. • Specific programs and expenditures for the next five-years for both housing and non- housing activities. • An explanation of how the goals, objectives, programs and expenditures will assist in the elimination of blight and in meeting affordable housing obligations. • Other information related to the provision of affordable housing. Staff Report Subject: RDA Five-Year Implementation Plan for FY 2009/10 - 2013/14 Page 2 The Plan is organized as follows: • Chapter I provides an overview of the California Redevelopment Law (CRL) requirements, a description of the Project Area and a summary of Agency accomplishments to date. • Chapter II describes five-year goals and objectives for the Project Area, the activities and related revenues and expenditures for the next five-years, and a description of the blighting conditions and how they will be alleviated by the activities. • Chapter III, the Housing Component, addresses affordable housing activities and expenditures and charts the Agency's progress in meeting its affordable housing obligations. Chapter III also includes the Affordable Housing Production Plan and a description of actions the Agency will undertake to fulfill its affordable housing obligations. As required by CRL, a public notice appeared four times in the San Mateo Times announcing the availability of the Plan and the public hearing on July 14, 2010. Notices were also posted in four locations in each project area for four weeks prior to the public hearing. FUNDING The Five-Year Implementation Plan serves as guide for future activities and no funding is being committed at this time. The Agency Board must individually approve the funding for any of the proposed projects identified in the Plan that move forward. CONCLUSION It is recommended that the Redevelopment Agency Board hear public comments on the proposed Five-Year Implementation Plan and adopt a Resolution adopting the Five-Year Implementation Plan for the Downtown Central, El Camino Corridor, Gateway and U.S. Steel/Shearwater project areas for fiscal years 2009/10 - 2013/14. By: (/~-_ Approved• ~ '7 Marty Van Duyn a M. agel Assistant Executive Director Executive Director Attachment: Resolution Five-Year Implementation Plan for FY 2009/10 - 2013/14 RESOLUTION NO. REDEVELOPMENT AGENCY, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA A RESOLUTION ADOPTING AFIVE-YEAR IMPLEMENTATION PLAN FOR THE DOWNTOWN/CENTRAL, GATEWAY, EL CAMINO CORRIDOR AND U.S. STEEL/SHEARWATER REDEVELOPMENT PROJECT AREAS FOR FISCAL YEARS 2009/10 THROUGH 2013/14 WHEREAS, pursuant to California Community Redevelopment Law, each redevelopment agency administering a redevelopment plan must adopt afive-year implementation plan setting forth specific redevelopment agency goals and objectives, outlining specific projects and expenditures for the coming five years, and explaining how the stated goals, objectives, projects and expenditures will eliminate blight and meet the affordable housing needs of the community; WHEREAS, Agency staff have prepared a proposed Five-Year Implementation Plan for the Downtown/Central Project Area, the El Camino Corridor Redevelopment Project Area, the Gateway Redevelopment Project Area and the U.S. Steel/Shearwater Redevelopment Project Area (collectively, the "Project Areas") for fiscal years 2009/10 through 2013/14 (the "Implementation Plan"}; WHEREAS, in accordance with Health and Safety Code Section 33490, the adoption of an implementation plan does not constitute a project within the meaning of the California Environmental Quality Act, and therefore, no environmental analysis was required or prepared for the Implementation Plan; and WHEREAS, following publication of notice as required by law, the Agency held a public hearing on July 14, 2010 to receive public comment on the proposed Implementation Plan. NOW, THEREFORE, BE IT RESOLVED by the Redevelopment Agency of the City of South San Francisco that the Implementation Plan presented to the Agency Board and on file with the City Clerk, is hereby accepted and adopted as the Implementation Plan to be used by the Agency for fiscal years 2009/10 through 2013/14. * * ~ I hereby certify that the foregoing Resolution was regularly introduced and adopted by the Redevelopment Agency of the City of South San Francisco at a meeting held on the day of , 2010 by the following vote: 1477044.1 AYES: NOES: ABSTAIN: ABSENT: ATTEST: Agency Secretary 1477044. l FINAL Five-Year Implementation Plan FY 2009/10-FY 2013/14 PREPARED FOR: South San Francisco Redevelopment Agency JUNE 18, 2010 ^ e~ e CONSULTING INC. 221 Main Street Suite 420 San Francisco CA 94105 415.618.0700 faz 415.618.0107 www.seifel.com Table of Contents South San Francisco Redevelopment Agency Five-Year Implementation Plan FY 2009110-FY 2013114 I. Introduction ...................................................................................I-1 A. Organization .......................................................................................................................................... I-] B. Interpretation .........................................................................................................................................1-1 C. Description of Project Areas ................................................................................................................1-2 D. Agency Accomplishments FY 2004/OS-FY 2008/09 .........................................................................1-5 E. Five-Year Goals and Objectives .......................................................................................................... I-5 II. Non-Housing Redevelopment Program ...................................... II-1 A. Non-Housing Redevelopment Program FY 2009/]0-FY 2013/14 ...................................................II-l B. Linkage Between Program and Elimination of Blighting Influences ....................... .........................11-4 C. Five-Year Implementation Plan Revenues ............................................................... .........................II-6 III. Housing Component ...................................................... .............III-1 A. Overview of Affordable Housing and Agency Responsibilities ............................... ........................I11-] B. Affordable Housing Program ..................................................................................... ........................III-2 C. Low and Moderate Income Housing Fund ................................................................ ........................111-4 D. Affordable Housing Production Plan ......................................................................... ........................Ill-9 E. Replacement Housing ................................................................................................. ..................... 111-l4 F. Completion of Housing Obligations ......................................................................... ...................... Ill-14 South San Francisco Redevelopment Agency i Seifel Consulting Inc. Five-Year Implementation Plan FY 2009/10-FY 2013/14 June 2010 Table of Contents South San Francisco Redevelopment Agency Five-Year Implementation Plan FY 2009110-FY 2013114 Table of Figures Figure I-l Boundaries of the Merged Project Areas .......................................................................................... I-4 Table of Tables Table 1-1 Time and Financial Limits .................................................................................................................. l-3 Table II-] Five-Year Implementation Plan Non-Housing Projects. Activities and Projected Expenditures .........................................................................................................11-3 Table II-2 Projected Resources Available for Non-Housing Programs ........................................................ ...ll-8 Table III-l Projected Revenues Available for Housing Program FY 2009/]0 to FY 2013/]4 (Future Dollars) .................................................................................................................. ..Ill-6 Table II1-2 Affordable Housing to be Produced with Agency Assistance/Housing Fund Expenditures FY 2009/l0 to FY 2013/14 (Future Dollars) ............................................. ..I11-7 Table III-3 Low and Moderate-income Housing Fund Expenditures Targeted by ]ncome 1 / 1 /2002-6/30/2014 ....................................................•------....-•------..........................-----..... ..111-8 Table Ill-4 Low and Moderate-Income Housing Fund Expenditures Targeted by Non-Age Restricted Housing 1/l/2002-b/30/2014 .......................................................................... ..ill-8 Table Ill-5 Housing Production and Affordable Housing Obligation, Historical and Projected Agency Developed ............................................................................................................ Ill-1 I Table 111-6 Housing Production and Affordable Housing Obligation. Historical and Projected Non-Agency Developed ................................................................................................... 111-I3 Table ]li-7 Replacement Housing Obligation ............................................................................................... 111-15 Appendices Appendix A. CRL Requirements for Affordable Housing Appendix B. Detailed Expenditure Tables South San Francisco Redevelopment Agency ii Seifel Consulting Inc. Five-Year Implementation Plan FY 2009/10-FY 2013/14 June 2010 I. Introduction This document is the Five-Year Implementation Plan for the Project Areas administered by the South San Francisco Redevelopment Agency (Agency). The California Community Redevelopment Law (CRL) requires each redevelopment agency administering a redevelopment plan to prepare and adopt a Five Year Implementation Plan. A public hearing must be held on the lmplementation Plan prior to its adoption by the Agency. The principal goal of this document is to guide the Agency in implementing its redevelopment programs over the next five-years while providing flexibility so it may adjust to changing circumstances and new opportunities. This document outlines the proposed program for revitalization, economic development and affordable housing activities of the Agency for the Implementation Plan period from FY 2009/10 through FY 2013/] 4. It includes goals, activities, estimates of revenues and expenditures, and a description of how the activities will alleviate blight and meet affordable housing requirements. A. Organization Generally, the lmplementation Plan must contain the following information: • Specific goals and objectives for the next five-years for both housing and non-housing activities. • Specific programs and expenditures for the next five-years for both housing and non-housing activities. • An explanation of how the goals, objectives, programs and expenditures will assist in the elimination of blight and in meeting affordable housing obligations. • Other information related. to the provision of affordable housing. Chapter 1 provides an overview of the CRL requirements, a description of the Project Area and a summary of Agency accomplishments to date. Chapter I1 includes five-year goals and objectives for the Project Area, the activities and related revenues and expenditures for the next five-years, and a description of the blighting conditions and how they will be alleviated by the activities. Chapter Ill, the Housing Component, addresses affordable housing activities and expenditures and charts the Agency's progress in meeting its affordable housing obligations. Chapter ]ll also includes the Affordable Housing Production Plan and a description of actions the Agency will undertake to fulfill its affordable housing obligations. Appendix A presents detailed information on the CRL affordable housing requirements and Appendix B contains detailed tables reporting on Agency housing activities for reference. B. Interpretation The Implementation Plan is intended to provide general guidance for the implementation of the Agency's programs and activities. The Agency expects that particular constraints and opportunities, not fully predictable at this time, will arise over the next five-years. Therefore, the Agency intends to use and interpret this lmplementation Plan as a flexible guide. The Agency acknowledges that specific projects and activities as actually implemented over the next five-years may vary in their precise timing, location, cost, expenditure, scope and content from those set forth in this document. South San Francisco Redevelopment Agency I-1 Seifel Consulting Inc. Five-Year Implementation Plan FY 2009/10-FY 2013114 June 2010 C. Description of Project Areas The South San Francisco Redevelopment Agency manages the following four Project Areas: • Downtown/Central (adopted duly l 2, 1989, amended to add area May 25, 2005) • El Camino Corridor (adopted July 14, 1993, amended to add area June 28, 2000) • Gateway (adopted June l 7, ] 981) • Shearwater (adopted January 8, 1986) Together these Project Areas consist of approximately 1,260 acres of commercial, industrial and residential uses. Figure I-l shows boundaries of the Project Areas. In 2005, the Project Areas were fiscally merged. This fiscal merger provides the flexibility to combine revenues from the respective Project Areas to focus on the needs of a particular Project Area, and to adjust that focus over time, so that the community's overall redevelopment needs can be addressed in a more efficient and effective manner. Table I-1 summarizes the time and fiscal limits of the Merged Project Areas. South San Francisco Redevelopment Agency I-2 Seifel Consulting Inc. Five-Year Implementation Plan FY 2009!10-FY 2013114 June 2010 Table I-1 Time and Financial Limits South San Francisco Redevelopment Project Areas Downtown/Central" El Camino Corridor` Gateway Shearwater Added Area Original Area Added Area Original Area Acres 97.1 558 79.6 175 176.2 174.5 Adopted 5/25/05 7/12/89 6/28/00 7/14/93 6/17/81 1/8/86 Eminent Domain 5125/17 5/25/2017' 6/28/12 5/25/2017' Expired Expired Base Year FY 2004/05 FY 1988/89 FY 1999/00 FY 1992/93r FY 1980/81 FY 1985/86 Time Limit for Incurring Debt" 5/25/25 Repealed 6/28/20 Repealed Repealed Repealed Time Limit for Project Activities" 5/25/35 7/12/30 6/28/31 7/14/34 6/17/22 1/8/27 Time Limit for Tax Increment Recei t'' 5/25/50 7/12/40 6/28/46 7/14/44 6/30/20'' 1/8/37 Fiscal Limit for Tax Increment Collection` None $796,000.000 Outstandin ]ndebtedness Limit` $15 000 000 $232 650 000 a 1n March 2004, the City repealed the original time limit for incurring debt in Gateway and Shearwater, as provided by SB 21 1. As a result. the obligation for statutory pass through payments began in FY 2004/05 in Gateway and will begin in FY 2006/07 in Shearwater (for Gateway. the year following the year of repeal and, in Shearwater, after the original time limit would have been reached) for taxing entities without contractual pass through payments. Actual payments will begin in Gateway if and when assessed value levels exceed those in the year that the time limit was repealed. ]n the summer of 2009. the Agency repealed these limits for the original Downtown/Central and EI Camino areas, pursuant to SB 211. b 1n March 2004, the City extended the redevelopment activity and tax increment collection deadline by one year in all four Project Areas. as authorized by SB 1045. Statutory pass through payments are not triggered by SB 1045 amendments. c ]n May 2005, the City passed a fiscal merger that combined the fiscal limit for tax increment collection and the amount of outstanding indebtedness for the existing Gateway. Shearwafer, EI Camino Corridor and Downtown/Central Project Areas. 'The definitions of these fiscal limits difTer in the individual redevelopment plans. d. In the original Downtown/Central Project Area, statutory pass through payments will begin for taxing entities without contractual pass through payments in the fiscal year following the fiscal year when the tax increment collection for the Project Area exceeds $248 million. e ]n the EI Camino Corridor Original Project Area, statutory pass through payments will begin for affected taxing entities without contractual pass through payments in the fiscal year following the fiscal year when the tax increment collection for both the original EI Camino Corridor Project Area and the EI Camino Corridor Added Area exceeds $300 m Ilion. f In May 2005. the City extended the timeframe for eminent domain in the Downtown/Central Original and EI Camino Corridor Original Protect Areas through June 24. 2017. twelve vears from the effective date of the May 25, 2005 ordinance. g Although the Downtown/Central Original and EI Camino Corridor Original plans were adopted in fiscal years 1989/90 and 1993/94 respectively, the plans became effective before August 20th, qualifying them for the prior year base year and base year assessed value. h Per agreement made with the County of San Mateo before the 2005 Amendment and Fiscal Merger, the Gateway Project Area will stop receiving tax increment at the end of FY 2019/20_ Source: South San Francisco Redevelopment Agency, Meyers Nave Riback Silver R Wilson. South San Francisco Redevelopment Agency I-3 Seifel Consulting Inc. Five-Year Implementation Plan FY 2009/10-FY 2013/14 June 2010 -~'z W a \"~~ •~o V J ~j O ~o ~ N C Q~ +~ C ~ ~ fn ~ C O U a~ a~ N i Q V O L Q~ Q~ Q. NN~ 4 0 '~ V p ~ J N .~ L ~..L N r..r O T U v CJJ ,--+ ~_ v r ,~ m O c~ '~ v ~_ Q ~ ~-• 'p v y •~ ti ~ ~o' ° ~ ~ c 4. ~ ~* v ..~ v Q ~~ •^. C.J ~~ ~'- i' cr_6 .°~~ 0. V? ~ - ~ ~ .r- ~ cJ ''--' r r G ~i y ~ Cr U ® ^ !~ d' r M O N T LL U C p N Q rn p ~ p ~ N E ~- a ~ o ~ a~ ~ > a m ~O C ~ O C6 O ~ N N v E C ~ !6 Q C f6 ~ } L ~ ~ j (n L.L D. Agency Accomplishments FY 2004105-FY 2008109 This section describes the Agency's accomplishments over the previous five-years (FY 2004/OS-FY 2008/09). The Agency undertook many projects and activities in the Project Areas over the last Implementation Plan period. Agency efforts focused on the alleviation of blight through the following activities: • Infrastructure improvements to facilitate transportation and improve parking, along with improvements to the City's water quality plan and the Bay Trail. These activities included landscaping, street, circulation and public utility improvements:, parking development and meter upgrades. • Business attraction and retention activities to eliminate blighting conditions and provide additional employment opportunities for South San Francisco residents. Projects and programs included facade improvement, seismic retrofit and other building rehabilitation to support new and existing businesses in the Project Areas. • Construction and rehabilitation of public facilities such as parks and recreational facilities. Agency projects created new parks and improved existing parks and supported the development of the Historical Society Museum and other facilities. • Redevelopment of existing vacant and underutilized land to eliminate blighting conditions and provide South San Francisco residents with additional housing, employment and recreational opportunities. Agency activities included property acquisition and disposition, site preparation, and development assistance. • Housing activities to provide new affordable housing opportunities for households at all income levels and to improve the City's existing housing stock, including both rental housing and affordable homeownership opportunities for low and moderate-income households. The Agency's housing activities are discussed in detail in Chapter 111. E. Five-Year Goals and Objectives The CRL requires the Agency to establish goals and objectives for the Project Areas for the five-year implementation Plan period. The following goals and objectives, intended to eliminate physical and economic blighting conditions, were established when the existing Redevelopment Plans were adopted and amended, and have been refined to reflect the Agency's specific goals and objectives for the current five-year Implementation Plan period. These goals and objectives will to guide the direction of future development within the Project Areas. 1. DowntownlCentral The Agency will pursue the following goals and objectives in the Downtown/Central Project Area: Expand the retail component of the Downtown, provide diversification of offerings and encourage major outlets as a draw to new shoppers. Continue support of the various cultural and civic uses that provide major anchors, stressing special events that draw new attendees. South San Francisco Redevelopment Agency I-5 Seifel Consulting Inc. Five-Year Implementation Plan FY 2009/10-FY 2013114 June 2010 • Promote the Downtown area as the financial hub of South San Francisco, encouraging existing institutions to expand both physically and with related services. • Eliminate blight through abatement or code compliance, reconstruction and assembly of parcels into developable sites for desirable uses. • Improve public parking, other public facilities, services, utility lines, lighting, public safety and public transportation. • Create a pedestrian environment to encourage multiple stops by visitors and more frequent visits to the Downtown. • Emphasize and highlight the existing architectural style and scale through rehabilitation and renovation of historic structures and encouraging infill development that relates to existing structures. • Expand and upgrade the housing opportunities in the community to eliminate blight and improve housing stock and standards for the present population. • Promote new and continuing private sector investment within the Project Area to prevent the loss of and to facilitate commercial and industrial activity. • Achieve an environment reflecting a high level of concern for architectural, landscape, and urban design and land use principles appropriate to attainment of the objectives of the Redevelopment Plan. • Retain and expand as many existing businesses as possible by means of redevelopment and rehabilitation activities and by encouraging and assisting the cooperation and participation of owners, businesses and public agencies in the revitalization of the Project Area. • Provide for increased sales. business license, and other fees, taxes and revenues to the City of South San Francisco. • Encourage maximum participation of residents, business persons, property owners, and community organizations in the redevelopment of the Project Area. • Create and develop local job opportunities and preserve the area's existing employment base. • Replan, redesign and develop areas that are stagnant or improperly used. • Reduce the City's annual costs of providing local services to and within the Project Area. • Promote Downtown's vitality and economic well being, and its presence as the City's center. • Encourage development of Downtown as a mixed use activity center with retail and visitor- oriented uses, business and personal services, government and professional offices, civic uses, and a variety of residential types and densities. • Provide incentives for infill development, intensification and reuse of currently underutilized sites. • Enhance linkages between Downtown and transit centers, and increase street connectivity with the surrounding neighborhoods. • Promote infill development and the intensification and reuse of underutilized sites. • Provide new or improved parks, open spaces, and recreational facilities. • Facilitate development of the Ferry Terminal at Oyster Point. South San Francisco Redevelopment Agency I-6 Seifel Consulting Inc. Five-Year Implementation Plan FY 2009/10-FY 2013!14 June 2010 2. EI Camino Corridor The Agency will pursue the following major goals and objectives in the E1 Camino Corridor Project Area: • Eliminate and prevent the spread of blight, non-conforming uses and deterioration and conserve, rehabilitate and redevelop the Project Area in accordance with the General Plan, future specific plans, the Plan and local codes and ordinances. • Achieve an environment reflecting a higher level of concern for architectural, landscape, urban design and land use principles appropriate for attainment of the objectives of the Plan and the General Plan. • Control unplanned growth by guiding revitalization, rehabilitation and new development in such fashion as to meet the needs of the Project, the City and its citizens. • Reduce the City's annual costs for the' provision of local services to and within the Project Area. • Increase sales tax, business licenses and other fees, taxes and revenues for the City. • Promote new and continuing private sector investment within the Project Area to prevent the loss of and to facilitate the increase of commercial sales activity. • Create and develop local job opportunities and preserve the area's existing employment base. • Develop a spectrum of housing types affordable to various segments of the community in a manner consistent with the Housing Element of the General Plan and the provisions of the Redevelopment Law. • Eliminate or ameliorate existing substandard conditions, including substandard vehicular circulation and parking systems, inadequate infrastructure, insufficient off-street parking, and other similar public deficiencies adversely affecting the Project Area. • Present and create civic, cultural and educational facilities and amenities as catalysts for area revitalization. • Upgrade and expand recreational areas and open space. • Assist in the revitalization of the Willow Gardens neighborhood. • Develop more east-west crossings on E1 Camino Real that connect the City's neighborhoods, and a continuous parallel street on the eastside to provide alternative travel routes. • Develop El Camino Real as a boulevard that accommodates its role as a regional corridor but with streetscape and development that provide identity to the street. • Encourage development of a mix of uses, with pockets of concentrated activity that provide focus and identity to the different parts of EI Camino Real. • Develop the South San Francisco BART station area as a vital pedestrian-oriented center, with an intensity and mix of uses that complement the area's new role as a regional center. • Complete the E1 Camino Real/Chestnut Area Plan to help guide development of the area. • Ensure the E1 Camino Real streetscape improvements are consistent with the Grand Boulevard Initiative. • Identify possible location for a public library that builds on synergies with other public uses. • Explore opportunities to provide one major grocery store • Increase opportunities for regional and neighborhood commercial uses South San Francisco Redevelopment Agency I-7 Seitel Consulting Inc. Five-Year Implementation Plan FY 2009/10-FY 2013/14 June 2010 • Extend Centennial Way along BART alignment and create east-west connections between El Camino and the neighborhoods. • Enhance pedestrian and Bicycle connectivity around existing facilities such as Kaiser, Orange Memorial Park and the Municipal Services Building as well as new public facilities such as a new library. • Make improvements along Colma Creek Canal, including bank improvements, landscaping and removal of chain link fencing. 3. Gateway The Agency will pursue the following major goals and objectives in the Gateway Project Area: • Eliminate blight and blighting influences. • Replan, redesign and develop a large area suffering from obsolete plant facilities. • Establish and implement performance criteria to assure high site design standards and envirommental quality so as to provide unity and integrity to the entire site. • Strengthen the economic base of the Project Area. and the community by installing public improvements needed to stimulate new office/hotel and commercial development, employment and economic growth. 4. Shearwater The Agency will pursue the following major goals and objectives in the Shearwater Project Area: • Eliminate and prevent blight and deterioration and redevelop the Project Area in accordance with the General Plan, specific plans, the Redevelopment Plan and local codes and ordinances. • Eliminate or ameliorate certain environmental deficiencies, including substandard vehicular circulation systems; disposal or handling of hazardous materials; inadequate water, sewer and storm drainage systems; and other similar public improvements, facilities and utilities deficiencies adversely affecting the Project Area. • Achieve an enviromnent reflecting a high level of concern for architectural, open space, landscape, and urban design and land use principles appropriate for the attaimnent of the objectives of the Redevelopment Plan. • Replan, redesign and develop undeveloped/vacant areas that are stagnant or improperly utilized. • Encourage investment by the private sector in the development and redevelopment of the Project Area by eliminating impediments to such development and redevelopment. • Create and develop local job opportunities to replace the Project Area's defunct employment base. • Provide for increased sales, business license, hotel occupancy and other fees, taxes and revenues to the City. • Establish a conference center to serve the needs of San Mateo County and the surrounding areas. South San Francisco Redevelopment Agency I-8 Seifel Consulting Inc. Five-Year Implementation Plan FY 2009/10-FY 2013/14 June 2010 Create increased cultural and recreation opportunities for visitors as well as area residents, particularly maximizing the potential offered by the waterfront. ; South San Francisco Redevelopment Agency I-9 Seifel Consulting Inc. Five-Year Implementation Plan FY 2009/10-FY 2013/14 June 2010 II.Non-Housing Redevelopment Program This chapter describes the Agency's five-year Non-Housing Redevelopment Program of projects and activities, deficiencies to be corrected, and estimated expenditures; linkages between the Redevelopment Program and the elimination of blighting conditions; and five-year Implementation Plan revenues available for the Non-Housing Program. As they are implemented, the Agency's projects and activities may be modified to better serve the purposes of redevelopment. The cost estimates are preliminary and subject to refinement as redevelopment planning and implementation proceed. Moreover, some of these projects and activities may not be completed within the next five-years, and thus, related costs may not be incurred during the implementation Plan period. A. Non-Housing Redevelopment Program FY 2009110-FY 2013114 The Agency will undertake projects and activities in the Project Areas over the next five-years to alleviate blighting conditions and attain the Redevelopment Program goals and objectives. These projects and activities can be categorized into five basic program categories. Table 11-1 lists specific projects and activities along with projected expenditures planned for the Implementation Plan period (FY 2009/l0-FY 2013/]4). The nature and scope of the projects, activities and expenditures have been shaped primarily by Agency goals and objectives for the Project Areas, available revenues for funding projects and activities, and blighting factors to be eliminated. The projected expenditures on Agency non-housing projects and activities included in Table II-] represent an estimate based on reasonable assumptions regarding potential tax increment revenues and other resources available to the Agency over the next five-years. 1. Public Infrastructure, Circulation and Parking Public infrastructure, circulation and parking projects and activities will involve the construction and installation of public i~nprove~nents to upgrade the existing aged and deteriorated infrastructure systems and support private sector development efforts. Projects to improve the public infrastructure in the Project Areas may include improvements to transportation, circulation, streets, parking., gateways, public transportation facilities, sewer and water systems, utilities and parks. The Agency will assist in funding the construction of new and rehabilitated public facilities within or serving the Project Areas. Projects are intended to improve circulation by separating local and residential traffic from interurban and commercial traffic, facilitate pedestrian access, provide visual linkages and a unified look for the community, provide for a broader range of transportation options and stimulate the growth of existing and new businesses to reduce stagnant economic conditions. This program category will serve all of the Project Areas. Public Facilities Public facility i~nprove~nents will support the construction, rehabilitation and improvement of community facilities; the redesign and improvement of sidewalks and lanes; and improved South San Francisco Redevelopment Agency II-1 Seifel Consulting Inc. Five-Year Implementation Plan FY 2009110-FY 2013114 June 2010 accessibility and circulation. Activities include streetscape improvements to Grand Avenue, the construction of the CalTrain plaza and other pedestrian plazas, planning for a new public library, creation of infill parks in the Downtown/Central Area, support for the Harbor District and improvements to maritime facilities, development of new parks, and reconfiguration of landscaping and playfields to meet the current needs of residents. Activities will mostly be undertaken in the Downtown/Central and E1 Camino Corridor Project Areas. Economic Development The goal of this program is to develop incentives that address specific needs of existing businesses and enhance the City's ability to attract new businesses. One component of this program involves working with existing businesses that are seen as assets to the City of South San Francisco in order to find ways of enhancing their opportunities. The projects and activities will be designed to promote economic development in the Project Areas and include the following: continued support of Downtown businesses through property improvement loans, Agency development of new housing in the Downtown/Central Project Area, support for mixed-use development in the Downtown/Central and E1 Camino Corridor Project Areas, and support for hotel and retail development at Oyster Point. Activities in this program category will be focused primarily in the Downtown/Central and El Camino Corridor Project Areas. 4. Property Acquisition, Demolition and Site Preparation This program will provide funding and other assistance to aid in property acquisition, demolition and site preparation and will be utilized in conjunction with the commercial/industrial attraction and retention activities. Major land improvement activities will include the Chestnut Avenue/CalWater site, lands acquired from the PUC in the El Camino Corridor, scattered site acquisitions in the Downtown/Central Project Area, and landfill remediation activities near the Oyster Point Marina. The program category will be utilized primarily in the Downtown/Central and E1 Camino Corridor Project Areas. 5. Affordable Housing Program The Housing Program promotes residential and mixed-use development on vacant and underutilized sites. Through this program the Agency will increase and preserve the low and moderate-income housing stock. Components of this program include assistance for the construction of new rental and ownership units, loans and grants for rehabilitation, and first-time homebuyer assistance. This program will be utilized in all Project Areas except Gateway and Shearwater given their non-residential land use profile, as well as outside the Project Areas. Chapter III describes planned housing activities in more detail. South San Francisco Redevelopment Agency II-2 Seitel Consulting Inc. Five-Year Implementation Plan FY 2009/10-FY 2013/14 June 2010 6. Agency Administration The Agency will continue to have various administration and operational requirements associated with carrying out the above projects and activities. These will include program staff, panning functions and legal and other technical assistance. The Agency is currently working with a team of consultants to evaluate the necessity and feasibility of redevelopment plan amendments to enhance the Agency's resources and bonding capacity in order to fulfill its blight elimination objectives. Table II-1 Five-Year Implementation Plan Non-Housing Projects, Activities and Projected Expenditures FY 2009110-FY 2013114 (Future Dollars) Pro'ect and Activities Projected Ez enditures Public Infrastructure Circulation and Parkin` Miller Avenue Parkin Gara e $ l0 000 000 Oak Avenue Extension $ 6 000 000 Gatewa Infrastructure Im rovements $ 1 250 000 Shearwater Infrastructure lm rovements $ 1 250 000 Fourth Lane Im rovements $ 2 000 000 O ster Point Phase 1 Im rovements $ 17 481 000 O ster Point Phase 2 Im rovements $ ] 3.514 000 Public Facilities Train Station Site Develo ment Assistance $ 500 000 CalTrain Pedestrian Plaza/Station $ 5 000 000 Oran e Avenue Park Ex ansion $ 4 000 000 Main Libra Plannin and Predevelo ment $ 1 000 000 Downtown Park Develo ment $ 2 000 000 Grand Boulevard Initiative $ 1 250 000 Assistance to Harbor District $ 3 500 000 :Economic Develo went 418 Linden Avenue Housin Develo ment $ 25 000 000 Downtown Revitalization Pro ert lm rovement Loans $ 2,000 000 Grand Avenue Mixed-Use Develo ment $ 10 000 000 Baden Avenue Develo ment $ 5 000 000 Su ort for O ster Point Hotel/Retail Develo ment $ 5 000 000 Pro a Ac uisition Demolition and,SiitePre aration Train Station Site Ac uisition and Cleanu $ 2 000 000 Grand Avenue Site Ac uisition $ 2 300 000 Linden Avenue Site Ac uisition $ 1 500 000 Chestnut Avenue/CalWater Site Ac uistion $ 10 000 000 SF PUC Site Infrastructure Develo ment $ 14,500 000 Downtown Land Ac uisition $ 5 000 000 El Camino/PUC Housin Site Ac uistion $ 4 000 000 Total Estimated Ez enditures $ 155 045 000 Note: Amounts rounded to nearest $1,000. Source: South San Francisco Redevelopment Agency. South San Francisco Redevelopment Agency II-3 Seitel Consulting Inc. Five-Year Implementation Plan FY 2009/10-FY 2013/14 June 2010 B. Linkage Between Program and Elimination of Blighting Influences The CRL requires that the Implementation Plan provide an explanation of how the goals, objectives, programs and expenditures for the next five-years will serve to eliminate blight in a project area. The five-year Redevelopment Program will continue the process of improving the Project Areas and alleviating blighting conditions. This section describes how deficiencies will be corrected by the projects and activities proposed for the next five-years. 1. Blighting Conditions in the Project Areas The following sections summarize the blighting conditions remaining in each Project Area. Although progress has been made in many of the Project Areas, blighting conditions remain, as documented in the 2005 Report to Council for the Plan Amendments and Fiscal Merger. Many existing commercial and other uses that have not yet been redeveloped continue to be marginal and are highly unlikely to have the resources required to make the necessary upgrades to modernize and become competitive. In reviewing the existing conditions in the Project Areas, it is clear that redevelopment continues to present the most realistic long-term financing vehicle for alleviating blighting conditions. DowntownlCentral • Deterioration and dilapidation due to a lack of maintenance of structures. • Unreinforced masonry buildings. • Earthquake and flooding hazards. • Parcels contaminated with hazardous materials. • Incompatible land uses. • Stagnant and declining businesses. • Indicators of economically distressed properties. • Residential overcrowding and problem businesses. • Crime and gang-related activity including graffiti. • Inadequate infrastructure, utilities and public facilities. EI Camino Corridor • Deterioration and dilapidation due to a lack of maintenance of structures. • Flooding hazards. • Parcels contaminated with hazardous materials. • Incompatible land uses. • Irregularly shaped and/or inadequately sized parcels. • Residential overcrowding and problem businesses. • Circulation, infrastructure and public facility deficiencies. South San Francisco Redevelopment Agency II-4 Seitel Consulting Inc. Five-Year Implementation Plan FY 2009/10-FY 2013/14 June 2010 Gateway • Poor soil conditions with associated development hazards. • Earthquake hazards. • Parcels contaminated with hazardous materials. • Irregular street patterns, inadequate circulation and presence of deteriorating defunct rail lines. Shearwater • Poor soil conditions with associated development hazards. • Earthquake and flooding hazards. • Parcels contaminated with hazardous materials. • ]nadequate circulation and public improvements. 2. How the Agency's Proposed Goals, Objectives, Programs and Expenditures Will Eliminate Blighting Influences The Agency's proposed five-year goals, objectives, programs and expenditures will help eliminate the remaining blighting influences in the Project Areas by improving economic conditions, stimulating private development, improving public infrastructure, circulation, parking and facilities, and meeting the Agency's affordable housing obligations. Public Infrastructure, Circulation and Parking The Agency's public infrastructure, circulation and parking projects and activities will ameliorate parking and circulation problems throughout the Project Areas that deter revitalization, making both pedestrian and vehicular traffic safer and smoother. Remediation of circulation and street deficiencies will reduce traffic congestion and hazards and reduce the risk of motor vehicle accidents. l~nprovements to lanes, sidewalks and other pedestrian walkways in addition to installation and repair of missing or deteriorated curbs and sidewalks will lessen pedestrian hazards and increase pedestrian movement and accessibility. Public Facilities The Agency's public facility projects and programs will support the construction, rehabilitation and improvement of community facilities in the Downtown/Central and E1 Camino Corridor Project Areas in order to address the lack of adequate public facilities that currently impacts the physical and economic well-being of the Project Areas. The Agency plans to undertake projects and activities addressing deficiencies in transit facilities, parks and open space, public library facilities, and maritime facilities. Economic Development Incentives that address the specific needs of existing businesses and enhance the City's ability to attract new businesses will result in the development of high quality and appropriately located residential, commercial and industrial uses in the Downtown/Central and E1 Camino Corridor Project Areas. Public and private investment will lead to the improvement of substandard and underutilized lots and buildings, as well as deteriorated and dilapidated buildings. The Agency's South San Francisco Redevelopment Agency II-5 Seifel Consulting Inc. Five-Year Implementation Plan FY 2009J10-FY 2013/14 June 2010 Economic Development activities will also reduce the perception of crime that hinders the economic vitality of portions of the Project Areas. Property Acquisition, Demolition and Site Preparation Agency funding and other assistance to aid in property acquisition, demolition and site preparation in the Downtown/Central and El Camino Corridor Project Areas will encourage development on properties that appear on environmental monitoring lists and/or contain leaking underground fuel tanks, and on large tracts of vacant and underutilized land. A reduction in parcels characterized by adjacent or nearby incompatible uses and concentrations of problem businesses will spur economic development and reduce crime. Affordable Housing Program The affordable housing program will allow the Agency to continue to provide increased affordable housing opportunities for South San Francisco residents. The Agency's Low and Moderate Income Housing Fund (Housing Fund) will be utilized in the original Downtown Central Project Area, the E1 Camino Corridor Project Area and throughout the City. Provision of assistance for the construction of new rental and ownership units, loans and grants for rehabilitation, and support for first-time homebuyers will help alleviate blighting conditions, including deteriorated buildings and overcrowding. Chapter Ill describes planned housing activities in more detail. C. Five-Year Implementation Plan Revenues Over the next five-years, the Agency will undertake those activities that can be financially supported by its revenue stream. The Agency has three basic revenue sources: • Annual tax increment revenues, • Bond issuance proceeds, and • Other revenues including repayment of Agency loans and advances. 1. Projected Tax Increment Funds for Non-Housing Program The Agency projects that approximately $155 million in funds will be available during the five-year Implementation Plan period. Table ll-2 details the Agency resources available to the Agency for non-housing projects during the next five-years of the Redevelopment Program. As indicated in Table H-2, the Agency is projected to receive approximately $194 million in gross tax increment revenues.' After deducting obligations including Housing Fund deposits, pass-through payments, County and Agency Administration, and debt service payments, ~ The projections in this report are based upon an understanding of the general assessment and apportionment practices of San Mateo County. These practices are subject to policy changes, legislative changes and the individual appraiser's judgment. While the Agency believes its estimates are reasonable; taxable values resulting from actual appraisals and adjustments are likely to vary from the amount assumed in the projections. The tax increment projections are intended only as estimates, which are based on the best available information at the present time. Actual tax increments may be higher or lower than indicated in the model. The projections in this report are not intended to predict future tax increment growth resulting from the increase in assessed value. South San Francisco Redevelopment Agency II-6 Seitel Consulting Inc. Five-Year Implementation Plan FY 2009/10-FY 2013/14 June 2010 approximately $43 million in net tax increment revenue is available for non-housing expenditures. 2. Projected Bond Issuance Proceeds Bond proceeds are expected to be an essential supplement to the tax increment revenues needed to accomplish the Agency's Redevelopment Program activities over the five-year period. The Agency has a maximum bonded indebtedness for the Fiscally Merged Project Areas of $232.65 million, except for the Downtown/Central Added Area, which has a maximum bonded indebtedness of $l 5 million. The Agency is currently exploring the feasibility of combining the Downtown/Central Added Area indebtedness limit with that of the Merged Project Areas. or of combining and raising the limit. Assuming that the current limits remain in place, the Agency estimates that approximately $65 million in new bond proceeds will be available in the next five-years to supplement the available tax increment revenues for non-housing activities. Other Agency and Non-Agency Financial Resources The Agency projects the receipt of approximately $26 million in other revenues over the five-year Implementation Plan period. These other sources of funds include the repayment of advances made to the City's Sewer Fund, land sales, and other payments connected with planned development at Oyster Point. Wherever possible, the Agency will continue to leverage other Agency and non-Agency funds in connection with its redevelopment efforts. If more funds are received, the Agency could potentially undertake additional activities. The Agency has targeted local, state and federal funding sources to assist with financing eligible projects, including the following: the City of South San Francisco or other local entities, San Mateo County, the State of California, the federal government and private developers; proceeds from the sale or lease of Agency-owned property; repayment of Agency loans and advances; financing proceeds based upon revenues from special assessment or special tax districts; and developer fees. 4. Total Resources Available for Non-Housing Program As indicated on Table 11-2, the Agency projects the receipt of approximately $43 million in net tax increment available for non-housing expenditures during the five-year Implementation Plan period. The Agency also projects receiving $65 million in bond proceeds and $26 million in other revenues. After taking into account the Agency's year-end balance of $2l million in cash for FY 2008/09, the total funds available for non-housing projects and activities over the five-year period is $155 million. South San Francisco Redevelopment Agency II-7 Seifel Consulting Inc. Five-Year Implementation Plan FY 2009110-FY 2013/14 June 2010 IO On L a N C_ R y O ~ O 0 S d C Y O ~ 2 ti ` ~~ N ~O ~ 47 M T ~ R O F .~ N Q I.L ti w (~ O 3 ~ O C y G d N r ~ LL V d .O d O O O C O O C O C O O O O O O O O O O O C O C O O O O O O O O O O O O C O O O O O O O O O i M 00 ~D O' ~O O~ O~ 00 N ~"~ O~ O O ^'~ O H ~ pp` ~ .-~ N C ti M ~ 7 ~D ~ N "r O\ M ~ O~ .~I M M N H ..r 69 69 Fi3 6R d9 5A F/3 6A b9 69 6R 69 6R 69 b9 O O O C O O O O O O O O O O O O O O C C O C O O O O ~ O O O O O O O O O O O O O ~ O\ N D\ O r V h ~O ~ G\ O~ M V1 M ~"'~ O C O N V Q1 V ~ N ~ M ~ ~ V ,~~ O O ~ O N .- ~ 00 h M N OC M M ~ ~ .~ W 69 N3 Ef3 69 69 69 69 69 d4 Y3 (~ 69 fA b9 b9 O O O O O O C O O O C O O M C O O O O O O C O O C O O C O O O O O O O O O O O O '"~ N N V ~ D, d O~ r N .r 00 D1 N O\ N O ~--~ N ~O ~ r D1 ~ M N M d V~ O O ~O 00 C N ~ M r r M N r M M O ~ .-ti (s. 6A 6A 69 69 69 69 59 69 ff3 6R 6A 69 6R b9 6A O O C O O O C O O O O O O O c o o c o o c o 0 0 0 0 0 0 N C O C O O C O O C O O O O O ~ v'1 h U V C ~O G M ~G 1~ N Q~ ~ N ~ M 00 00 Vl O~ 00 ~ ~C N h O\ ~O V1 ~"' ~ ~O N M N M M ~ ~ ~ ~ ~ N O N ~ h h M N ~C ~ `:. .-y 00 M ry W M `:, r r M .-w E.9 69 6R b9 S9 69 6A b4 64 d9 69 69 (!i 6f3 5A 0 0 0 0 o c o 0 0 0 0 0 0 0 0 0 o c o o c o c o 0 0 0 0 •"~ O O O ~ O O O O O O O C O O ~ O\ N h C ~ M h V ~-, 7 ~ N r N r ~ ~ r 00 o ~, a~ ~n x N rn oo M o N h r` ~ v r`.i - r~i ~c ~ N ~ M F=. t,9 s9 c~ s9 s~ ~ 6.4 Ly4 +~ 69 ts~ EA 55 69 6r9 O O O O O O C O O O O O O O C O O O O O O O C O O C C O O O O O O O C O O O O O C O O ~ ~ ~-- O ~ M V ~n M h O V'i N N r •-+ O\ v1 v7 M h N U Q\ G\ N ~L^ h r M r O N ~t 00 M v1 M N ul ~O ~O ~O r'7 N h h ~O V N 00 ~C `.: ~ N M .-w M k. 69 64 (~ fA 69 S9 69 69 69 69 69 69 69 69 b9 C O O ~ O C O M R N O~ RS O ~ N C t30 7 ~ ~I L ~ a..+ ~ y U `v, ~ ~. V L ~ 7 ~ ~ ~ ~ ~ i .~ r.a T ^p v > o ~ ~ ~ ~ Q ca L ~ u ~ ~ ~ ~ C ~ , O C ~ z L o ~ a s v L c.. ,Z, ~ ~ O h h ~ C C O a~ G O ~ a~ ~ L ~ O w 7 ^ U L v, L O v ~ ~ u ' ° c ~ ~ a O c . 0. . ~, a • ~ O ~ . .. .. c ? ~ • O Q ~ y ~ o 0 ~ ~ • ~ ~ ~ v ~ ~, 7 z ~ ^ V O ~ ~' L O ~ ~ O L ~ U a~i a~i o p ~ e s ~' A sue. ~ :~ x fY ~ c . C y .. y rJ (z„ c0 i ~ z v v, C C ~ ~ C C ' O ~+ O a v s tU a~ ~ p c., °' x a v x Q w z ~ a x .. _ -. F y y ~ h h Vi ~ V1 h ~ ~ V1 h ~ h ~ A ~ ~ Ri ~ ~ h N ~ 67 ~ d ~ Nl v ~ v /-~ Nl 1~1 d ~ +~ ~ 'C ~ 'C Q ++ y 7 LT- ~ G ~ I~1 . ~ v ( ~ z U ~ C ~ N ~ ~ ._. c ~ ~ c U N :~ T U dOq Q O C v G U G x v, O ~D -v ~U+ T U U N U V b0 N G b0 - a0 - Q C ~ . 7 V O C O U c ^ u ~ u ~ U v U U c~; U ~ 2 F U ~ ~ T C Y >, ~ '- d ~ 'D U N U m Cp a ~ : _ ~ .% c •O O - •- . ~ ~ c y D a i N U of U C U ~ ~ p W b U cC C ' > G h " ~ U w c C 0 'O '~ y C V ~ ai ~ O ca •- N U ~ U ca U U v U ~ C . O C ^ N U jy X T ~ :? ? U .~ i y 3 ~ m O G ~ ~ -C _ a 0. ~"p ' K ro K W ~ U ~ Y. V 4- O s.. O ~ O v U N U ~ ~ 1° U bq Q °~ V] O U ~ " r%~ ~ ~ U y ~ ~ O ~y N ^ 0 N p C ~ '~ ~ V ~ Li v . ~ ~ ~ 3 F ^ O 69 ~ ~ U O T y 7 L ~ U ~ Q ~ r3 ~~ C' ~ ~ ~ O N y ~ c e v ~ -v o ~' c u t ,o a ~ u u- p ci ~ U T ~ ~ ~~ C ~ ro U U ~ .D 7 ~ a i . a~ U r' CL. U C .Q ~ ~ r ~ (O (O ~ 7J v. U ~- 'b m O (n 'fl '" C ~ n i O GD ~ U ~, O ~ E C ~' / V Q C~ N Z V] ` O ~ d x Li O Q Q C p _ ° } z ~ ~-~ v ~ ~ ~ j ~v_ Housing Component This Chapter contains information on the Agency's Affordable Housing Program and progress towards meeting CRL housing requirements. It is organized as follows: A. Overview of Affordable Housing and Agency Responsibilities B. Affordable Housing Program C. Low and Moderate Income F[ousing Fund D. Affordable Housing Production Plan E. Replacement Housing F. Completion of Housing Obligations Appendix A includes a summary of the CRL affordable housing requirements and Appendix B contains details on Agency housing programs and expenditures. A. Overview of Affordable Housing and Agency Responsibilities This section provides background regarding required contents of the Implementation Plan's housing component. Refer to Appendix A for detailed requirements and definitions of affordable housing levels and permissible affordable housing costs in South San Francisco. 1. Required Portions of the Housing Component According to the CRL, the housing component of the Implementation Plan is required to set forth housing goals and objectives for the five-year Implementation Plan period (FY 2009// 0-FY 2013/] 4), present estimates of Low and Moderate-Income Housing Fund (Housing Fund) deposits and describe potential projects and estimated expenditures planned for the five-year Implementation Plan period. The CRL also requires the housing portion to explain how the stated goals, objectives, deposits, programs, projects, and expenditures will produce affordable housing units to meet CRL obligations. In addition, the Implementation Plan must include the following affordable housing planning components: • The Affordable Housing Program, with a description of how the Agency will implement the Housing Fund expenditure targeting and other requirements. • The amount available in the Housing Fund, estimates of annual deposits into the Housing Fund during the five-year Implementation Plan period, the Agency's plans for using the annual deposits to the Housing Fund, and the number of new or rehabilitated price-restricted affordable housing units to be assisted by the Housing Fund during each of the five-years. • A description of the Agency's affordable housing expenditures and activities over the previous five-year Implementation Plan period. • The Housing Production Plan, including the number of affordable and total housing units estimated to be produced for two time periods: - Ten year compliance period, and - Over the life of the Redevelopment Plan. South San Francisco Redevelopment Agency III-1 Seifel Consulting tnc. Five-Year Implementation Plan FY 2009/10-FY 2013114 June 2010 • Identification of proposed locations for replacement housing that the Agency would be required to produce if a planned project results in the destruction of existing affordable housing. • For plans that are within six years of completion of project activities, a detailed description of how the Agency will meet its affordable housing production and expenditure targeting obligations prior to termination of the plan. B. Affordable Housing Program During the five-year Implementation Plan period, the Agency will concentrate on housing activities that are most applicable to the Agency's goals and objectives. In developing its Affordable Housing Program, the Agency has been guided by the goals, policies and programs of the City's Housing Element (adopted by the City and certified by the California Department of Housing and Community Development in 2010) and the housing goals in its Redevelopment Plan. The proposed goals stated in the (:ity's Housing Element are: • Promote the provision of housing by both the private and public sectors for all income groups in the community. • Take necessary steps to remove government and public infrastructure constraints to housing development through administrative support, intergovernmental cooperation, public-private partnerships, and permit streamlining. • Strive to maintain and preserve existing housing resources, including both affordable and market-rate units. • Maintain and improve the quality of life, safety and historic integrity of existing neighborhoods as a high priority for the City. • Support the development of an adequate supply of safe, decent, and affordable housing for groups with special housing needs. • Ensure that all households have equal access to the City's housing resources. • Promote energy efficiency in residential development within the City, including reduction of energy use through better design and construction in individual homes, and also through energy-efficient urban design. Redevelopment Plan housing goals are listed along with non-housing goals in Chapter 1. 1. Affordable Housing Program Components The Agency recognizes the important role of the Affordable Housing Program in its overall Redevelopment Program. Consequently, the proposed Affordable Housing Program should be viewed not only as the means of implementing the Agency's stated goals and objectives related to affordable housing and meeting CRL housing obligations, but as a key element in its overall blight alleviation and revitalization efforts. As part of the Affordable Housing Program, the Agency will undertake the following types of affordable housing projects and activities: South San Francisco Redevelopment Agency III-2 Seitel Consulting Inc. Five-Year Implementation Plan FY 2009/10-FY 2013/14 June 2010 • Encourage the development, preservation and/or substantial rehabilitation of affordable housing. • Provide housing opportunities for very low-income renters and persons with special needs. • Provide homeownership opportunities for first-time homebuyers earning less than l20 percent of median income. 2. Proposed Housing Activities and Expenditures The Agency will respond to favorable opportunities for development and substantial rehabilitation and will target Housing Fund monies to specific groups identified in the CRL. Housing Fund monies will be spent both inside and outside the Project Areas.' In carrying out its purpose to preserve, improve and increase the affordable housing supply. the Agency tnay use the following methods: • Provide assistance from all departments within the bounds of local ordinances to stimulate affordable housing production. • Provide technical, financial and other redevelopment assistance to nonprofit developers to stimulate affordable housing production. • Help implement the City's Inclusionary Zoning Ordinance. • Undertake programs to provide financial assistance for acquisition and/or physical improvements to existing boarding rooms, single room occupancies and other existing rental UmtS. • Increase the supply of affordable rental units by providing financial assistance to developers for the creation of new multifamily rental units. • Provide financing or incentives to preserve affordable housing at risk of reverting to market rate as subsidies expire. • Undertake housing rehabilitation to promote health, sustainability and code compliance. • Streamline the permit process. • Provide density bonuses and other forms of assistance within the bounds of local ordinances and policies. • Provide assistance or incentives to stimulate the creation of new homeownership opportunities, including funds to subsidize the purchase of new housing by qualified low and moderate-income buyers. • Support efforts to provide first-time homebuyer opportunities by working with other agencies and housing programs, including the Mortgage Credit Certificate and corporate homebuyer programs. These programs and the Agency's overall Affordable Housing Program are designed to direct funding towards households at various affordability levels and regardless of age, as required by the CRL. Detailed expenditures for these programs and the expected number of units to be assisted during the Implementation Plan period can be found in Appendix B. The Agency will make every effort to encourage the preservation and development of housing affordable to a ' The City Council and Agency anticipate approving resolutions detern~ining that the use of its Housing Fund monies to assist housing activities located outside the Merged Project Area is of benefit to the Project Areas. Such a resolution is required for merged project areas b}~ the CRL (33487(b)). South San Francisco Redevelopment Agency III-3 Seifel Consulting Inc. Five-Year Implementation Plan FY 2009/10-FY 2013!14 June 2010 variety of income levels and age groups. By combining various funding sources and partnering with other entities dedicated to the' preservation and development of affordable housing, the Agency is confident it will be abler to meet its affordable housing production obligations and expenditure requirements within the ten year compliance period, as well as over the life of the Redevelopment Plans. C. Low and Moderate Income Housing Fund The CRL requires an agency to deposit 20 percent of its annual tax increment revenues into the Housing Fund for the purpose of increasing, improving and preserving the community's supply of affordable housing.z The Housing Fund will be the primary funding source for the Agency's affordable housing activities during the Implementation Plan period. This section describes the history and status of the Housing Fund, planned deposits, expenditures and units to be assisted during the Implementation Plan period, and the targeting of funds for housing affordable to specific income groups identified in the CRL and non-age restricted housing. It also contains a report on use of the Housing Fund during the previous Lnplementation Plan period. The Agency will also seek to combine Housing Fund revenues with other funding sources devoted to the provision of affordable housing to maximize the number of affordable units that can be developed or rehabilitated with revenues available from the Housing Fund. These other sources may include discretionary advances by the Agency from non-housing funds, CDBG and HOME Investment Partnership fiords from HUD, Ca1HFA, HCD programs, and Low-Income Housing Tax Credit equity funds.. 1. History and Status The Agency has deposited at least 20 percent of the tax increment revenue allocated to the Agency into the Housing Fund. The Housing Fund balance at the end of FY 2008/09 was approximately $22 million. 2. Housing Fund Deposits, Expenditures and Housing Assisted in the Current Implementation Plan Period This section estimates the Agency's deposits into the Housing Fund, expenditures from it, and the housing units those expenditures will assist during the current ltnpletnentation Plan period. a. Deposits During the Implementation Plan Period The Agency plans to continue to deposit funds from its fiscally-merged Project Areas into the Housing Fund. Based on the Agency's projections, the Agency estimates that the cumulative deposit of tax increment revenue into the Housing Fund between FY 2009/10 and FY 2013/14 ~' The CRL requires the placement and recordation of affordability controls on any new or substantially rehabilitated housing assisted by Housing Fund monies. As of January 1, 2002; the controls are as follows: for rental housing, the assisted housing must remain affordable for 55 years, and for owner-occupied housing; the units must remain affordable for 45 years. South San Francisco Redevelopment Agency III-4 Seitel Consulting Inc. Five-Year Implementation Plan FY 2009/10-FY 2013/14 June 2010 will be $39 million, as shown in Table III-] .After accounting for other revenues and deducting debt obligations, the Agency will have approximately $65 million available for its Housing Program through FY 2013/14, including the balance in the Housing Fund as of July 1, 2009. The Agency plans to use most of its available Housing Fund revenues in the next five-years. The Agency anticipates issuing roughly $4.4 million in tax allocation bonds (yielding $3.9 million in bond proceeds) secured by future Housing Fund deposits in order to fund the projects and activities identified in Table III-2 below. Expenditures and Affordable Housing Units Assisted During the Implementation Plan Period During the current Implementation Plan period, the Agency plans to spend its Housing Fund resources to preserve, improve and facilitate the development of housing affordable to households whose basic needs are not met by the private housing market. These expenditures and the units they support will be consistent with the CRL and the City's Housing Element. Table 111-2 presents estimated Housing Fund expenditures and the affordable housing units to be assisted during each of the five-years in the Implementation Plan period. In summary, from FY 2009/10-FY 2013/] 4, the Agency estimates housing activity expenditures of approximately $65 million and plans to assist in the production of 316 housing units affordable to very low, low and moderate-income households.3 Several factors may result in expenditures and unit production being either less than or greater than what is projected for given years. These factors include the tax credit market and general availability of credit, the timing of the development process, the levels of Housing Fund revenue and other public assistance, the need to amass sufficient funds for efficiently-sized development, and development opportunities. 3 The number of affordable housing units in Table III-2 does not correspond to the number of affordable housing units in Tables 111-5 and 111-6. Tables 111-5 and III-6 address general housing production and affordable housing obligations and production. These two tables separately present affordable housing units produced by the Agency and non- Agency units produced with Agency assistance over various time periods for the purpose of compliance with CRL production obligations. In Table Ill-6, affordable units produced outside the Project Areas are counted on a one for two basis for purposes of calculating the affordable housing produced to meet the affordable housing production requirement. Table 111-2 addresses Housing Fund expenditure requirements; and includes both Agency and non- Agency developed housing. Table III;Z includes units located both inside and outside the Project Areas, and all units are counted on a one for one basis, i.e., the number of units located outside the Project Areas has not been adjusted. South San Francisco Redevelopment Ayency III-5 Seifel Consulting Inc. Five-Year Implementation Plan FY 2009/10-FY 2013/14 June 2010 rn 0 d C .y 7 L _N A .~ r Q N V ~ ~ N ~ f- O N d '~ C 7 ~1 .y N V ~_ ~O d V C a Q O d d d O V H .U C R LL C N L Q ~_ M O N } LI. O r O O N LL O O O n O O O C O O O O ~D O O\ vi O ~ ~ ~+ ~ ~ ~ ~ O ~..i op M N M N ~" N 'C}' 69 64 69 fJ3 6A O O ~. O O O C O O O O 7 O O ' O O O ~ N O O N O~ M .~-~ O N O Ul N 00 ~ 00 M 00 ~ r N ~ (i 64 69 69 64 Ff3 514 C O C\ O O M C C O O ' O C O O O O `~~ ~ p O ~n r N .--i ~ U O ~n N o0 N ~p ~ Q~ c N r r ~ V) W 69 5.4 69 ff.1 4!j Sl4 0 O 0 o 0 o 0 O 0 o 0 0 N O O O G O C '"~ ,~-~ r oo O O D\ O ~~ O~ O N M ...+ ~O v'~ D1 N 00 M N r cn ~ Lf3 69 b9 ff3 69 5l9 C O O O O O O O O C .~-~ O O ' O O O ~ O ~j O~ O O vi ~ r D\ .-+ M .. ~n ~n N r v' o N r r r M ~S. 64 E/-J 6A b4 69 514 O O O O C O O O ' O O O ~ Q~ O v~ O O v-i Cn v~ ~n 7 M N r r N 64 b9 64 6R 69 5i4 V ~ O c0 ~ ~ r ~ N N G ~ a W ~" SA vi ~ " O .~ . .~ ~ ~4 O . x ~~ C) ~ 6) ~ . b ~ VJ / ~`` F-i CD •C~ L N C> Q Q O ~ N V d~ w. v~ ~ ~ ~ ~ 4~ G Q ~ a- ~ ~ ~ b ~ b O ' '~ w ~ w ~ :s > +r bD ~ bq p Q~'". ~ ~ O 'O O ~ ~ ~ O a U O C ~ ~ N c a~ r. c ~ ~ c ~ 0 U N N U U .~ .b C O A U ~ - Q 'r U 'G 'G Q U L 3 0 3 O Q 'r U Q U U_ O~ 0. b J G bq U cfl N O N 3 7 U 0 U U U U O U c C C ~ tU ~ ~ _ Q 'b O F O v P y ~ O U ~ ~ ~ ~ w U ~ W ,~. O ._ ~ ~ X N ~ _ ~ O O vNi [' J N V O p ~ O ~ vi ~ Cq OL Q c- M 69 .C G_ o in +~ ~ ~ ~ } °~ y ~ ~ o ~ o o. ~, O ? U ~ Q rn O O ? '- N U b C O _ a b ~ 'D ~ GL' p ~ ~ a ~ J ~ ~ U ¢ N f0 OL O `n 'G ~ cC N O ~ ~ ~ ~ ~ b ~ ~I" ~ io ~ c ^ ~ -b ~ ~ ro _,~ i.. U i ~ C ~ ~ [ is -t~ a `° n pro o y ca o ~ ~ E c .. o x ~ W ~ 'J } = z ~ ~ ~ O ~ J ~~ Table III-2 Affordable Housing to be Produced with Agency AssistancelHousing Fund Expenditures FY 2009110 to FY 2013114 (Future Dollars) Income Cate or FY 2009/10 FY 2010/11 FY 2011/12 FY 2010/13 FY 20]3/14 Total Ea enditures Ver Low $510 000 $52] 000 $15 53] 000 $542.000 $43,553.000 $60.657,000 Low $157 000 $157 000 $157.000 $157.000 $157.000 $785.000 Moderate $179,000 $179,000 $2,680,000 $180,000 $181.000 $3,399,000 Total $846 000 $857 000 $18 368 000 $879 000 $43.891.000 $64 841.000 Units Assisted Ver Low 0 0 109 0 177 286 Low 2 2 2 2 2 ]0 Moderate 2 2 12 2 2 20 Total 4 4 123 4 181 316 Note: Dollar figures rounded to the nearest thousand. Totals may not add up correctly due to rounding. Source: South San Francisco Redevelopment Agency, Seifel Consulting Inc. 3. Housing Fund Targeting Requirements The CRL imposes Housing Fund expenditure requirements based on the proportion of unmet need for housing affordable to households of very low, low and moderate-incomes. It also limits the percentage of Housing Fund expenditures that can be spent on age-restricted housing. This section describes the Agency's plans to meet these obligations. Please refer to Appendix A for details on the expenditure requirements. The Agency's specific housing projects and activities are designed to meet these targeting requirements over the compliance period. Housing Fund Income Targeting The Agency plans to target its Housing Fund monies to specific income groups based on its fair share of regional housing needs as determined by the Association of Bay Area Governments (ABAG). Based on current Regional Housing Needs Allocation (RHNA) figures, the Agency is required to expend Housing Fund monies in the following proportions: at least 39 percent on units affordable to very low-income households, at least 28 percent on units affordable to low-income households, and no more than 33 percent on units to moderate-income households. Please see Appendix A for calculations. As shown in Table HI-3, the Agency will target most of its Housing Fund money to assist in the development of very low-income housing in the Project Areas. Over the compliance period ending in 2014, the Agency will have targeted 89.1 percent of its Housing Fund expenditures to assist very low-income households and 6.2 percent to assist low-income households. Thus. the Agency expects to exceed income expenditure targeting requirements. South San Francisco Redevelopment Agency III-7 Seifel Consulting Inc. Five-Year Implementation Plan FY 20041/10-FY 2013/14 June 2010 Table III-3 Low and Moderate-Income Housing Fund Expenditures Targeted by Income 111/2002-613012014 South San Francisco Redevelopment Agency 1/1/2002-6/30/2009 7/1/2009-6/30/2014 Over Com Hance Period Income Ta etin LM1HF Ea enditures' Percent Ta eted LM1HF Ex enditures" Percent Ta eted LMIHF Ea enditures Percent Ta eted CRL Required Ta et Ve Low $14,720,000 74.5% $60,656,000 93.5% $75,376,000 89.1% At least 39.0% Low $4,465,000 22.6% $784,000 1.2% $5 249,000 6.2% Al least 28.0% Moderate $566 000 2.9% $3 399,000 5.2% $3,965 000 4.7% No more than 33.0% Total Sl9 752 000 100% $64 839 000 100% 884 591 000 100% 100% a. Includes Agency actual expenditures as shown in Appendix B. b. ]ncludes Agency projected expenditures as shown in Table 111-2. Source: South San Francisco Redevelopment Agency, Seifel Consulting Inc. b. Housing Fund Assistance for Non-Age Restricted Housing The Agency plans to target Housing Fund expenditures to provide affordable housing that is not restricted by age. As detailed in ,Appendix A, the Agency must expend at least 60 percent of its funds on housing that does not irnpose age restrictions on residents. The Agency plans to spend at least 79.7 percent of Housing Fund monies on non-age restricted housing over the ten year compliance period between January 1, 2002 and June 30, 2014, as shown in Table III-4. To date, the Agency has expended more than $ l 6 million on non-age restricted housing and $3.6 million on age-restricted housing since January 1, 2002. The Agency will continue to monitor Housinf; Fund expenditures in order to comply with the requirement for minimum Housing Fund expenditures on non-age restricted housing. The Agency anticipates it will exceed its non-age restricted targeting requirements for the compliance period ending in 2014. Table III-4 Low and Moderate-Income Housing Fund Expenditures Targeted by Non-Age Restricted housing 11112002-613012014 South San Francisco Redevelopment Agency 1/1/2002-6/30/2009 7/1/2009/30/2014 Over Com Hance Period A e Tar etin LMIHF Ea enditures' Percent Tar eted LMIHF Ex endituresb Percent Tar eted LMIHF Ea enditures Percent Tar eted CRL Required Ta et A e Restricted $3 594 000 18.2% $13.595 000 21.0% $17 189 000 20.3% No more than 40.0% Non-A e Restricted $16 158,000 81.8% $51,244 000 79.0% $67 402 000 79.7% At least 60.0% Total 819 752 000 100% S64 839 000 100% 884 591 000 100% 100% a. ]ncludes Agency actual expenditures as shown in Appendix B. b_ Includes Agency projected expenditures as shown in Table ]ll-2. Source: South San Francisco Redevelopment Aeency_ Seifel Consulting ]nc. South San Francisco Redevelopment Agency III-8 Seifel Consulting Inc. Five-Year Implementation Plan FY 2009/10-FY 2013/14 June 2010 Report on Targeting for Previous Implementation Plan Period During the previous Implementation Plan period the Agency spent roughly $l5 million for very low-income households and approximately $4 million for low-income households a The Agency expended approximately $570,000 to assist units affordable to extremely low-income households, although some very low-income 'units are occupied by extremely low-income households. The number, location and level of affi~rdability of units constructed with Housing Fund assistance during the previous Implementation Period are shown in Appendix B. Roughly $ l 6 million was spent during the previous Implementation Plan period to support non-age restricted housing, as shown in Appendix B. The number, location, and level of affordability of those units are shown in Appendix B. D. Affordable Housing Production Plan This section constitutes the Housing Production Plan for the Agency's ten year housing compliance period and over the life of the Project Areas. ]t includes estimates of housing production subject to the affordable housing production requirement and the Agency's strategy for meeting its affordable housing production obligation. All of the Project Areas are subject to the affordable housing production requirement. Only the original Downtown/Central and E1 Camino Project Areas have residential units. Rather than present the production obligation individually by Project Area or Added Area, this plan presents the Agency's housing production. obligation in aggregate for all of the Project Areas. The Agency's affordable housin€; production requirement must be satisfied in the aggregate for the ten year compliance period as well as over the life of the Redevelopment Plan. Consequently, the Housing Production Plan is organized to keep track of both historical and projected housing production for the following times periods: • Through FY 2003/04, • FY 2004/05 through FY 20l 3/14, and • Over the life of the Redevelopment Plan. 1. Agency-developed Housing Production, Obligation and Compliance Housing developed or substantially rehabilitated directly by the Agency is subject to affordability requirements under the CRL. Historical and projected housing production by the Agency is shown in Table III-5. Through FY 2003/04, the Agency substantially rehabilitated four housing units at 339-341 Commercial Avenue outside of the Project Areas, creating an affordable housing obligation of two affordable units (30 percent), of which one unit (50 percent of the affordable units) had to be affordable to very low-income households. All four units at 339-341 Commercial a As income and age-restricted targeting; requirements went into effect on January 1, 2002 and the first ten year compliance period begins on this date, figures reported here for the past Implementation Plan period include 2002 through the end of FY 2008/09. South San Francisco Redevelopment Agency III-9 Seifel Consulting Inc. Five-Year Implementation Plan FY 2009/10-FY 2013/14 June 2010 Avenue are affordable to very low-income households, and the Agency also acquired four units at 312 Miller Avenue. Thus, the Al;ency exceeded its obligation. From FY 2004/OS-FY 2008/09, the Agency substantially rehabilitated 3 units at 714-718 Linden Avenue and one unit at 380 Alta Vista Drive, creating an affordable housing obligation of two affordable units (30 percent), of which one unit (50 percent of the affordable units) had to be affordable to very low-income households. All four units are affordable to low or very low- income households, and the Agency also acquired three units at 3 ] 0 Miller Avenue and one unit at 3l4 Miller Avenue. Thus, the Agency exceeded its obligation for the previous Implementation Plan period. From FY 2009/]0-FY 2013/14, the Agency anticipates developing 25 market rate units at 418 Linden Avenue in the Down~town/Central Project Area, creating an affordable housing obligation of 8 units (30 percent;l, 4 of which (50 percent of the affordable units) must be affordable to very low-income households. The Agency anticipates acquiring and rehabilitating housing in the future, including at least two units during the current l~nplementation Plan period. These units would be affordable to very low-income households. Thus, the Agency anticipates it will continue to meet its future obligations. South San Francisco Redevelopment Agency III-10 Seifel Consulting Inc. 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Non-Agency Developed Housing Production, Obligation and Compliance In addition to obligations derived from its own housing development activities, the Agency has also incurred affordable housing obligations as a result of housing not directly developed by the Agency. Non-Agency housing production includes some projects with Agency financial or technical assistance. This section describes the Agency's progress toward meeting these housing production obligations for non-Agency developed housing. a. Historical Housing Production, Obligation and Compliance (Through FY 2003104) The Agency has met and exceeded its affordable housing production requirements through FY 2003/04. The Agency reports that 670 housing units were developed or substantially rehabilitated in the Project Areas through FY 2003/04, as shown in Table Ill-6. The housing obligation, as defined by the CRL, requires that of the 670 housing units produced through FY 2003/04, 101 must be affordable units (15 percent), of which 41 units (40 percent) must be affordable to very low-income households. Through FY 2003/04, 329 affordable units were developed, of which 328 were made affordable to very low-income households.5 b. Ten year Production, Obligation and Compliance (FY 2004105 through FY 2013114) The Agency anticipates that it will meet its affordable housing production requirement for the ten year compliance period. As shown in Table Ill-6, the Agency estimates that 808 housing units will be developed (or substantially rehabilitated with Agency assistance) in the Project Areas during the current compliance period. Based upon this forecast, the Agency will have an obligation to ensure production oi' 122 affordable units, of which 50 must be affordable to very low-income households. The Agency estimates that 442 housing units affordable to very low, low or moderate-income households will be produced. Of these, 338 units are anticipated to be affordable to very low-income households. Therefore, the Agency is expected to exceed its affordable housing production obligation during the current compliance period. c. Production, Obligation and Compliance over the Life of the Redevelopment Plan The Agency has evaluated the potential for future housing production in the Project Areas through the end of the Redevelopment Plans. Based on historical housing development and trends in the Project Areas along with an analysis of development capacity from the City's Housing Element, the Agency estimates that a total of 2, 160 units will be constructed within the Project Areas over the life of the Redevelopment Plans. Table ll]-6 summarizes the units projected to be produced through the end of the Redevelopment Plans. Based on the projection of 2,160 ',housing units, the Agency will have an obligation to ensure 326 units (15 percent) are affordable to very low, low and moderate-income households. Of these, 130 units (40 percent) must be availat>le at affordable housing cost to very low-income households, as shown in Table III-6. Affordable units developed inside the Project Area count on aone-for-one basis: affordable units developed outside the Project Area count on atwo-for-one basis. South San Francisco Redevelopment Agency III-12 Seitel Consulting Inc. Five-Year Implementation Plan FY 2009110-FY 2013/14 June 2010 '~ d N .O L a "a C f~ .L O _N ~ ` ~ O C L. ~ ~ O ~ _N Q ~ Q ~ ~ d ~ ~ ~ Q d (a a/ ~ ~ O ~ V [C N ~ ~v O = V ~ ~ ~ ~ ~ 0 ~ ~ .O ~ Q d 0 V C Q O Z L O rn N M ~D M N O [~ r ~ j ~ ~--~ N o p,,, ~ ~ ,~, O O ~ [~ J M ~ O ~ ~ ~n v i O N ~ ~ ' oo N O `~' 1~ 00 ~--+ M ~ N M ~ M o ~ N N ~ ~ ~--~ M ~--~ M i i ~ 00 O 00 d' O 'Ct O ~ ~ N `p •--+ .-r ~ .--~ M 7 ~ ~ M o° N N M O M ~O oo ~ ~ ~ ~ C rf ON ~ N N N N N ~ ~ ~ M .-i O ~ ~ N ~I M O Vl ~ M 00 ~ CT' N ~O O ~ ~ ~ O ~ O O N W ~ •-.• Q~ O .-, .-, 00 Q~ 1~ 1~ ~ ~ r ~ ~ M M N ~ 0 N O ~ M ~ O O O L N ~..+ ..i J a am' ~ ~i }. ~ O A Q ~ ~ yr V •.r ,~ O ~ ~ ~ ~' ^ a L~ c '~ o '~ ~ ~ ~ ~ .~ N ~ N ~ QI O O O .O : ,y p ~ O .~ y p ~ ~ a x ~ ~ a "" ~ _ ~`~ ~° 3 3 a 3 3 3 3 ~ e '~ ~ m d o o cc 'b o o ~ 'b o 0 . ~ ~ ...a ~ ~ ~ a a ~ ~ ~ a o 0 o '~ o ~ a~ a~ w ~ a~ w a~ a~ '~ Z v~ H ~~ ~ J d ~ > d » U N t0 ~- c ~ r N ~ ~ o ,~ ~ N 3 .D .~ 4-- c o ~ r ~ ~ ~ Y ~-p~ :. . ~ cd ~ Q U i }p b ,~ M ~ ~ cn 3 °~ o ~, U ~_ U U O ~ ~ ~ F. N O GJ ti "O v; bD ~ "O Q ~ Q ? o c ~ ~ 'U y ~ Y ~ i y O aj ~~ 'D O ~' ~ ~ U ~ ,~ ~ U ~ ~ O N ~ O .O ^ Q U ~ :. r .~ ~' ~ 0 3 O O `~ U O ~ b U ~" c*d O -D 'O 4-. - O w _~ ~ ~ o ~ ~ ~ o p ~' ~. ~ N _ ~' ~ ~ ~ ~ ~ ~ .D a7 a~i p 4: `'' ~- r- ~ ^ O\ U N p -~ ~ _~ O ~ M ~ ~ ~ ~ v: U U M ~ ~ cG N ~ p '~ V ~ .^-. y ~ .~.. O y w O `n ~ in 'O ^ w ~ ~_ C r1. a ~ td U bA cd p '~ i bq C M ~ b ~' ~ ~- ~ o v ~ c a~ _ ~, ~ a~ ~ ~ ~ O U O ~ ~ _ .'d cd ca V] ~ N .. ~ O O ~ vi ~ O O ~, 4-, O N Q. cC `n ~ ~ Q Y c0 'O p N ~ ~ Y ~ ~ U ~i .fl ~ bA "D ~ ~ a~ b ~ ~ ~ .~ ° ~ bL .... ~ U ~. .~ ~ ¢ 'b ~-+ O b N ~ ~,^ ,~ O (- ~ OU ~ f1. 3 ~ ~ ~^. (- N s. s~ '_. ~ N ~ '~ ~ O N .~CO." ~ ~ ~ 'B 'O 't7 :? O ~ ^ ~ ~ y ~ ~ .D ^ ~ O ~ .D .D ~ O ~ ~ ~ U .^ y ~ ~ -- _ Y ~ N ~ O ~ ~ ~ O" ~ C ~ N ~ a~ ~ ~' ~ ~ ` ~ ~ N ~ 7+ ~ U ~ cC 4C ~ ca .ti -b o rn o c ~ m ~ _~ c o p -. r ~ p c o Q Q F- a- .= n. ~ Z - z.~~~z .~ 0 3 O r-. a~ C R 0 -v .~j 0 U a~ U N ~O. 0. -p O '~ U -n 0 a _N cd -v ,o Q v C ~ - O ~ N C N +_~ C ~ ~ N ~ c 0 U N N M M O N ?. ~' c LI U) O Cn ' Q p) ~ o ~ o N d ~ O ~ ~ > ~ a~ ~ °' _o O ~6 ~ ~ ~ Q co ca ~} L_ ~ 7 ~ O ._ (n L.L The Agency anticipates that over the life of the Redevelopment Plans, 874 housing units affordable to very ]ow, low and moderate-income households will have been developed, and of these, 707 units will be affordable to very low-income households. Thus, the Agency expects that it will meet and exceed its affordable housing production obligations over the life of the Redevelopment Plans. E. Replacement Housing In 2008, the Agency removed two housing units at 323 Miller Avenue in the Downtown/Central Project Area, and adopted a replacement plan. The units have not yet been replaced, but the Agency plans to provide replacement units within four years of the original units' demolition. The Agency has no plans to destroy or remove any additional residential units housing low or moderate-income persons in the Future. As the Agency does not expect the displacement of any additional households in the next: ten years, it will not be obligated to plan to replace any units beyond the two currently planned for replacement. In the event that the removal of housing were to become a necessity in the future, the City and Agency would follow all state requirements for replacement housing and relocatiion, and make every effort to relocate persons as close as possible to their current place of residence. Refer to Table ]II-7 for historical information on housing replacement in South San Francisco. F. Completion of Housing Obligations As the Agency has no Project Areas that will reach their time limit on plan effectiveness in the next six years, this Implementation Plan does not need to address the requirements of CRL Section 33333.8. South San Francisco Redevelopment Agency III-14 Seitel Consulting Inc. Five-Year Implementation Plan FY 2009/10-FY 2013/14 June 2010 Table III-7 Replacement Housing Obligation Years Units Removed Units Produced Cumulative Production Balance Sur lus (Deficit Historical Before 9/1 /1989a 22 l 1 (1 ] ) 9/1/1989-12/31/20016 3d l4 0 1/1/2002-6/31/2004` 0 0 0 07/01/05-6/31/2009 2e 0 (2) Total 27 25 (2) a. The replacement-housing obligation must be met within four years of the removal of the original units b. For dwelling units destroyed or removed after 9/]/1989 and before l/1 /2002; the CRL required that 75% of the replacement units be available at affordable housing cost to the same income level of households (very low, low ormoderate-income) as were displaced from the units removed or destroyed. The three very low-income units removed between 9/1/1989 and 12/31/200] were replaced by three very low-income units. c. As of 1/]/2002, the CRL requires 100% of replacement units to be available at affordable housing cost to the same income level of households its the households displaced. d. Units were located on Baden Avenue. Two units were removed in 1998/99; and one unit was removed in 2000. e. Two units were removed at 323 Miller Avenue and a replacement plan has been adopted. Source: South San Francisco Redevelopment Agency. South San Francisco Redevelopment P~gency III-15 Seitel Consulting Inc. Five-Year Implementation Plan FY 200'9110-FY 2013/14 June 2010 Appendices South `.>an Francisco Redevelopment Agency Five-Year Implementation Plan FY 2009110-FY 2013114 Appendix A. CRL Requirements for Affordable Housing Appendix B. Detailed Expencliture Tables South San Francisco Redevelopment ~4gency i Seifel Consulting Inc. Five-Year Implementation Plan FY 2009110-FY 2013/14 June 2010 Appendix A: CRL Requirements for Affordable Housing Appendix A CRL Requirements for Affordable Housing This appendix defines key affordable housing terms and summarizes the Agency's affordable housing requirements under the CRL. Relevant section references to the CRL are included in parentheses. The major statutory requirements for affordable housing imposed on redevelopment agencies by the CRL may be generally categorized as: • Housing Program (Section 33490(a)(2)(A)): Agencies are required to prepare a Housing Program with estimates of the number affordable housing units to be assisted during each of the five years, estimates of annual expenditures and a description of how the Housing Program will implement expenditure requirements. • Housing_Fund Reguiretnent (Sections 33334.2 33334.4 and 33334.6): Agencies must deposit specified percentages of tax increment revenue for the provision of affordable housing into the Housing Fund. The CRL ,also imposes various limits on the use of Housing Fund moneys. • Affordable Housing Production Requirement (Section 33413): Agencies must cause specified minimum percentages of new or substantially rehabilitated housing units in project areas subject to this requirement to be available to very low, low and moderate-income households at a legally defined affordable housing cost.' • Replacement Housing Requirement (Section 334 ] 3): Agencies must replace within four years housing units removed from /the housing stock as a result of redevelopment activities. • Completion of Housing Obligation (Section 33333.8): A redevelopment project cannot be terminated if an agency has not fulfilled its affordable housing obligations, including housing fund, replacement housing, and affordable housing production responsibilities, prior to the expiration of the time limit on redevelopment plan effectiveness. The sections of the Housing Component that address Housing Fund expenditure requirements must be reviewed every five years in conjunction with updating the Housing Element or preparing the next five-year Implementation Plan. The CRL requirements are described in greater detail in the following sections. A. Affordable Housing Definitions 1. Income Levels The CRL defines affordable hou:>ing as that which is affordable to households of:Z • Very Low Incomes up to 50 percent of~ area median income, adjusted for family size. ' The CRL defines substantially rehabiliitated units as all units substantially rehabilitated with Agency assistance. Substantial rehabilitation means rehabilitation; the value of which constitutes at least 25 percent of the after-rehabilitation value of the dwelling; inclusive of land value (33416(b)(2)(A)(iii)). 2 The Health and Safety Code defines law and moderate-income in Section 50093, low-income in Section 50079.5; and very low-income in Section 50105. City of South San Francisco A_1 Seifel Consulting Inc. Five-Year Implementation Plan FY 2009/10-FY 2013/14 June 2010 Low Incomes from 50 percent up to 80 percent of area median income, adjusted for family size. Moderate Incomes from 80 percent up to 120 percent of area median income, adjusted for family size. Table A-1 shows the maximum income limits for each income level by household size, published in 2009 by the State of California Department of Housing and Community Development (HCD) uti]izing income limits prepared by the U.S, Department of Housing and Urban Development (HUD) for San Mateo County. Table A-1 2009 San Mateo County Maximum Incomes by Income Category and Household Size Persons per Honsehold Income Cate o 1 2 3 4 5 6 7 8 VeryLo~vlncome $ 39,600 $ 45,250 $ 50,900 $ 56.550 $ 61;050 $ 65, 600 $ 70,100 $ 74;650 Lowerlncome $ 63,350 $ 72,400 $ 8] 450 $ 90,500 $ 97.700 $ 104, 950 $ 112,200 $ 119.450 Median Income $ 67,750 $ 77,450 $ 87,100 $ 96,800 $ 104,550 $ 112, 300 $ 120;050 $ 127;800 Moderate Income $ 8] 300 $ 92 900 $ 104 550 $ 116,150 $ 125 450 $ 134 .750 $ ]44 050 $ 153,300 Source: California Department of Housing and Community Development; 2009 2. Affordable Housing Cost Affordable housing must be avaiaable to and occupied by very low, low and moderate-income households at an affordable housing cost in accordance with the CRL. The affordable housing cost definitions presented below in Table A-2 apply.3 ~' For housing assisted by Housing Fund moneys after January 1; 1991, the affordable housing cost definitions presented in Table 2 apply. For housing assisted by Housing Fund moneys prior to January 1, 1991, affordable housing cost is defined as rent or cost for rental or ownership housing that does not exceed 25 percent of the household's gross income. City of South San Francisco A_2 Seifel Consulting Inc. Five-Year Implementation Plan FY 200'9110-FY 2013/14 June 2010 Table A-2 Affordable Housing Cost Rental Housin Ownershi Housin Income Level Income Spent on Housin g % of Area b Median lncome % Income Spent on Housin g % of Area b Median Income Very Low 30% 50% 30% 50% Low 30% 60 % 30%` 70%` Moderate 30% ll0% 35%` 110% a. Rental housing costs include rent and utility allowance. Affordable housing costs are adjusted by number of persons in household. b. The CRL requires HCD median income figures published by HCD, and not HUD, to be utilized. In many instances, this causes CRL-restricted rents to be lower than HOME rents and low-income housing tax credit rents. In the instance a project receives Housing ]Fund and HOME or tax credit assistance, the owner must comply with all applicable legal requirements and the lower CRL-restricted rents will ;prevail. c. With optional higher housing cost linked to actual income at upper end of income category. Source: CRL Sections 50052.5 and 50053(b). 3. Duration and Enforceability of Affordability Covenants The CRL requires the placement and recordation of affordability controls on any new or substantially rehabilitated housing assisted by Housing Fund moneys and/or counted towards Housing Production or Replacement Housing obligations. For rental housing, controls must be placed on the assisted housing units requiring them to remain affordable for 55 years. For owner occupied housing, the units tnusl: remain affordable for the 45 years.4 An agency may permit sales of owner occupied units prior to the expiration of the 45 year period for a sales price in excess of affordable cost pursuant to a program that protects the agency's investment of Housing Fund monies, including, but not limited to, an equity sharing program that establishes a schedule of equity sharing that permits retention by the seller of a portion of the excess proceeds, based on the length of occupancy. The retnairtder of the excess proceeds of the sale must be allocated to the agency and deposited in the Housing Fund. Within three years from the sale of the units, the agency must expend funds to make affordable an equal number of units as the same income level as the units sold. Only the units originally assisted by the agency can count towards the agency's housing affordable housing replacement and production obligations (Sections 33334.3(f)(1), 33413(c)(2)). a Prior to .lanuary 1; 2002 and the effectiveness of AB 637; the income and affordability covenants for Housing Fund assisted projects were required to be imposed for the longest feasible time but not less than 15 years for rental housing, l0 years for owner occupant. housing, and 30 years in merged areas. Prior to AB 637 and SB 701, in order for units to count towards fulfilling alffordable housing production requirements; units had to be subject to affordability covenants of at least the duration of the Redevelopment Plan's land use controls. City of South San Francisco A_3 Seitel Consulting Inc. Five-Year Implementation Plan FY 200'9110-FY 2013/14 June 2010 An agency must require the recording of affordability covenants or restrictions with the office of the county recorder of covenants or restrictions for each parcel or unit. Covenants and restrictions must run with the land and are enlForceable by the agency or community (Sections 33334.3(f)(2), 33413(c)(3)). B. Implementation Plan Affordable Housing Requirements 1. Affordable Housing Program Agencies are required to prepare an Affordable Housing Program with estimates of the number of new, rehabilitated, or price restricted affordable housing units to be assisted during each of the five years. The Affordable Housing Program must also include estimates of expenditures of moneys from the Housing Fund during each of the five years. Finally, it must include a description of how it will implement the expenditure requirements over the ten year compliance period. Section lll.B of the Implementation Plan includes the Agency's Affordable Housing Program. 2. Low and Moderate Income Housing Fund The CRL requires an agency to set aside in a separate Low and Moderate income Housing Fund (the Housing Fund) at least 20 percent of all tax increment revenue generated from its project areas. The funds must be used for the purpose of increasing, improving and preserving the community's supply of affordable housing. Such housing must be available at affordable housing cost and occupied by households of very low, low or moderate-income (Sections 33334.2 and 33334.3). The CRL imposes Housing Fund expenditure requirements based on the proportion of unmet need for housing affordable to households of very low, low and moderate-incomes (Section 33334.4(a)).5 It also requires a minimum percentage of Housing Fund expenditures be spent on non-age restricted housing (Section 33334.4). The CRL also places other limits on the use of Housing Fund moneys, as described below. a. Housing Fund Targeting Requirements The CRL imposes Housing Fund expenditure requirements based on the proportion of unmet need for housing affordable to households of very low, low and moderate-incomes. It also limits the percentage of Housing Fund expenditures that can be spent on age-restricted housing. These targeting obligations must be met over the ten year compliance period. However, the initial period for meeting this requirement is January 1, 2002, the date the targeting requirement became effective, through the ten year compliance period. The following sections describe in greater detail the Agency's requirements to target the Housing Fund expenditures by income need and non-age restricted housing. 5 As provided by AB 6 37 and SB 701. City of South San Francisco A_4 Seitel Consulting Inc. Five-Year Implementation Plan FY 20051/10-FY 2013114 June 2010 Targeting According to Income Need Agencies must target the use of Hlousing Fund monies to specific income levels in proportion with the community's need for very low, low and moderate-income housing. The Association of Bay Area Governments (ABAG) has determined the affordable housing need for the City of South San Francisco in its regional fair share allocation for 2007 through 2014. This regional fair share housing need allocation must be used to determine the targeting obligation. Table A-3 shows the fair share allocation applicable to the Agency for housing affordable to persons at or below 120 percent of median income. Table A-3 ABAG Regional Fair Share Allocations 2007-2014 Affordable Housing Need by Income Category City of South San Francisco Expenditure Total Housing Units Percentage need by Income Grou Needed Income Level Very Low (0-50% AMI) 373 At least 39% Low (51-80%AMI) 268 At least 28% Moderate 81-120% AMI 315 No more than 33% Total 956 100% Source: ABAG Adopted Regional Housing Needs Assessment, 2008. As Table A-3 indicates, the Agency is required to expend Housing Fund moneys in the following proportions: at least 39 percent for units affordable to very low-income households, at least 28 percent for units affordable to low-income households, and no more than 33 percent on housing affordable to moderate-income households. However, the Agency is entitled to expend a disproportionate amount of the funds for very low-income households, and to subtract a commensurate amount from the low and/or moderate-income thresholds. Similarly, the Agency can provide a disproportionate amount of funding for low-income housing by reducing the amount of funds allocated to housing affordable to moderate-income households. In no event can the expenditures targeted to housing affordable to moderate-income households exceed the threshold amount (33 percent). Under the CRL, an agency is allowed to reduce its income targeting requirement if other locally controlled funding produces newly constructed housing for the targeted income groups, so long as such units are produced without any agency assistance and their continued affordability is ensured through long term affordability covenants (at least 45 years for owner occupied and 55 years for rental). An agency ~inay adjust the income targeting proportion by subtracting from the need identified for each income category, the number of units for persons of that income category that are newly constructed over the duration of the implementation plan with other locally controlled government assistance. However, an agency cannot subtract units developed pursuant to a replacement housing obligation under federal or state law (Section 33334.4(a)). Locally controlled means government assistance where the local government entity has discretion and authority to determine the recipient and the amount of assistance (Section 33334.4). Examples of such funding are C'I)BG, HOME Investment Partnership Program, and fees received by a city pursuant to a city authorized program. City of South San Francisco A-5 Seifel Consulting Inc. Five-Year Implementation Plan FY 2009110-FY 2013114 June 2010 Targeting to Non-Age Restricted Housing In addition to the requirement outlined above, as of January l , 2002, a defined minimum percentage of Housing Fund moneys must be spent on housing available to all persons regardless of age. This minimum was originally defined as the share of a community's population under the age of 65 compared to the total population, and the CRL still requires that agencies report this figure in their Implementation Plan. In South San Francisco, this was 87.4 percent, as 52,922 of South San Francisco's 60,552 residents were under 65 according to the 2000 U.S. Census. In 2005, the CRI, was amended to modify the method of determining the minimum percentage of Housing Fund moneys spent on non-age restricted housing. This minimum is equal to the percentage of South San Francisco's low-income households with a member under age 65, as reported in the most recent US Census as compared to all low-income households. The 2000 Census indicates that 60 percent of the Town's low-income households have a householder under 65 years of age.b (Refer to Table ,A-4.) Thus, the Agency must expend at least 60 percent of its funds on housing that does not irrtpose age restrictions on residents. This targeting obligation must be met over the compliance period. Table A-4 Housing Fund Expenditures Requirement Non-Age Restricted Housing City of South San Francisco A e Tar etin e Low Income Householdsb Ez enditure Percenta e With Householder under 6:5 4,897 60% minimum ex enditures With Householder 65 and over 3 240 40% maximum ex enditures Total 8 137 100% a. Based on Census data shovving low-income households by householder age. Data is not available for lovv-income households by household members ages. b. Three-person households with incomes of less than $52,250 (HCD limit published in 2000 defined as "lower income"). Source: 2000 US Census, HC'D Income Limits 2000, Seifel Consulting Inc. b. Housing Fund Revenues and Expenditures During the Previous Implementation Plan Period CRL Section 33490(a)(2)(C)(iv) requires that agencies report the amounts of Housing Fund moneys utilized to assist units affordable to, and occupied by, extremely low-incotme, very low- income and low-income households during the previous Implementation Plan period. In addition, agencies tmust indicate the number, location and level of affordability of units newly constructed 6 The Census does not report lo~~~-income household information according to the age of household members; but rather identifies households by the age of the householder. City of South San Francisco A_6 Seifel Consulting Inc. Five-Year Implementation Plan FY 2009/10-FY 2013/14 June 2010 with other locally controlled governmental assistance (but without Agency assistance). Finally, agencies must also report on the amount of Housing Fund moneys utilized to assist housing units not restricted to seniors (non-age restricted housing), and the number, location, and level of affordability of those units. CRL Restrictions on Use of Funds Housing Fund Leveraging The CRL prohibits agencies from using Housing Fund moneys to the extent that other reasonable means of financing are available. Whenever possible, Housing Fund moneys should leverage other funding resources and not be used when private or commercial funding is obtainable (Section 33334.3(j)). When more than 50 percent of an affordable housing development's funding is provided solely from the Housing Fund, an agency must make a finding that no other private or commercial funding sources could be reasonably obtained. Other Limitations on Use of Housing Fund Moneys The CRL imposes limits on the use of Housing Fund moneys for the construction of infrastructure and public improvements (Section 33334.2(e)(2)). The conditions under which Housing Fund moneys may be used to fund these costs are: • The improvements must be a reasonable and fundamental component of the new construction or rehabilitation of income restricted housing units that are directly benefited by the improvements. Affordability controls of not less than 55 years must be imposed on rental units, and affordability controls of not less than 45 years must be imposed on owner occupied units. Covenant and deed restrictions must be recorded with the redevelopment agency. If the newly constructed or rehabilitated affordable units are part of a larger project such as a mixed income or mixed use :project, Housing Fund moneys nay only be utilized for a pro rata share of the cost of the improvements benefiting the affordable housing. For mixed income residential developments, the maximum amount is based on the ratio of the number of affordable units to the total number of housing units. For mixed use projects, the maximum is based on the ratio of total cost of the affordable units to the total cost of the project. d. Use of Funds outside of Project Area An Agency can use Housing Fund moneys outside a project area upon resolution by the agency and legislative body that the use can benefit the project (Section 33334.2(g)). If an agency has more than one project area, it can spend housing funds from one project area in other areas, pursuant to a resolution by the agency and legislative body that such use of the funds will benefit the project (Section 33334.2(1)). For merged project areas, Housing Fund moneys may be spent outside the merged areas upon resolution of the agency and the legislative body that the use will be of benefit to the projects (Section 33487(b)). City of South San Francisco A_7 Seifel Consulting Inc. Five-Year Implementation Plan FY 2009110-FY 2013/14 June 2010 The Agency must meet these legal requirements for the expenditure of Noosing Funds. Section III.C of the Implementation Plan describes the Agency's compliance with meeting the expenditure requirements. 3. Affordable Housing Production Requirement Redevelopment agencies administering project areas created by redevelopment plans adopted on or after January 1, 1976 and territory added to project areas by amendments adopted on or after January 1, 1976 must meet an affordable housing production requirement. As part of an implementation plan, an agency rnust adopt a Housing Production Plan showing how the agency intends to meet its affordable housing production requirements. The Plan must be consistent with the community's housing element and cover the following time periods: • Production over the ten year compliance period (FY 2004/05 through FY 20l 3/l4). • Production through the life of the Redevelopment Plans (through FY 2034/2035). The Housing Production Plan must include estimates of the number of residential units produced or to be produced within project .areas. It also must include the number of units available at an affordable housing cost to very low, low and moderate-income households developed or substantially rehabilitated in orde;r to meet the affordable housing obligation (Section 33413). Units produced outside of a project area count one for two towards meeting an agency's affordable production obligation (Section 33413(b)(2)(A)(ii)). The Plan must also include estimates of the number of units the agency itself will produce or provide assistance to produce during the Implementation Plan period, including the number of units available at an affordable housing cost to very low, low and moderate-income households. Section 111.D of the Implementation Plan contains the Agency's Housing Production Plan. a. Agency Developed Housing The CRL inclusionary housing obligation requires at least 30 percent of all new or substantially rehabilitated dwelling units developed directly by an agency to be available at affordable housing cost to persons and families of very low, low ormoderate-income. Of those units, at least 50 percent must be affordable to very low-income households. The 50 percent requirement translates to l 5 percent of the to1:a1 number of units developed or rehabilitated by an agency. This requirement applies only to units developed by an agency and does not apply to units developed by housing developers pursuant to agreements with an agency (Section 33413(b)(1)). City of South San Francisco q_g Seitel Consulting Inc. Five-Year Implementation Plan FY 2009/10-FY 2013114 June 2010 b. Housing Not Developed by the Agency When new dwelling units are developed in a project area by public or private entities other than the agency or when housing is substantially rehabilitated in a project area by public or private entities with agency assistance, at least 15 percent of these units must be affordable to very low, low or moderate-income households.' Of those units, at least 40 percent must be affordable to very low-income households. This 40 percent requirement for very low-income households translates to 6 percent of the total number of units (Section 33413(b)(2)). c. Agency Acquisition of Affordability Covenants To satisfy the affordable housing production requirements, an agency may purchase or otherwise acquire affordability covenants on existing multifamily housing units that: l) are not presently available at affordable housing cc-st or 2) are affordable to households of ]ow or very low- incomes but are units that an agency finds, based upon substantial evidence after a public hearing, cannot reasonably be expected to remain affordable to the same group of persons or families. Affordable units made available by an agency's acquisition of long term affordability covenants may count towards the agency's affordable housing obligation. As described in Section A.3 above, the covenants must be for at least 55 years for rental units and 45 years for owner occupied units. I-lowever, no more than 50 percent of an agency's housing obligation can consist of units made available by the ac~auisition of long term affordability covenants, and not less than 50 percent of units made available by the acquisition of long term affordability covenants shall be available at an affordable housin€; cost to, and occupied by, very low-income households (Sections 33413(b)(2)(B) and (C;1). The Agency has utilized the acquisition of affordability covenants as discussed in Section III.D.I of the Implementation Plan. d. Aggregation of Units The CRL permits an agency with more than one project area to meet its affordable housing production requirements in the aggregate in one or more project areas if the agency finds, based on substantial evidence, after a public hearing, that the aggregation will not cause or exacerbate racial, ethnic, or economic segrel;ation (Section 33413(b)(2)(A)(v)). The Agency has aggregated its production in this manner, as discussed in Section llI.D of the Implementation Plan. e. Fulfillment of Housing Production Obligation The affordable housing production obligation must be fulfilled prior to the time limit on a redevelopment plan's effectiveness. Alternatively, a redevelopment plan may be extended until the Agency's housing obligations are rnet. Under the CRL, a redevelopment project cannot be terminated if the agency has not met its affordable housing production requirements. Refer to Section 5 below for further detail. ~ Prior to 1994, the rehabilitation of any unit; whether substantial or not; triggered affordable housing production requirements. After 1993 and until January 1, 2002, housing production requirements were triggered by (a) the substantial rehabilitation of a multifamily residential project with three or more units regardless of whether an agency provided financial assistance and (b) the substantial rehabilitation of a one or two unit residential project if the project received Agency assistance. AB 637 and SB 701, effective January l; 2002, impose the affordable housing production requirement on substantial rehabilitation projects that receive agency assistance. City of South San Francisco q_g Seifel Consulting Inc. Five-Year Implementation Plan FY 200'9/10-FY 2013/14 June 2010 4. Replacement Housing Requirement The replacement housing requirement applies to project areas established by redevelopment plans (or areas added by amendments) adopted on or after January ], 1976. When residential units sheltering very ]ow, low and moderate-income households are destroyed or removed, or are no longer affordable due to agency action or assistance, an agency must cause the replacement of the units within four years. As of January 1, 2002. each replacement unit must include at least the same number of bedrooms as the units that were removed. The units may be replaced with fewer units if an equal or greater number of bedrooms are provided. For example, four two bedroom units may be replaced with two four bedroom units (Section 33413). At least thirty days prior to acquiring property or adopting an agreement that will lead to the destruction or removal of low and moderate-income housing units, an agency must adopt by resolution a Replacement Housing Plan that generally describes the location, timing and method by which replacement housing will be provided (Section 33413.5). Replacement units may be located anywhere within the territorial jurisdiction of the agency (Section 33413(a)).g An agency rrray either construct replacement housing, or assist with the development of replacement housing through agreements with housing developers.9 Replacement housing is discussed in Section III.E of the Implementation Plan. a. Income and Affordability Requirements The basic income and affordabilitty standards for replacement housing are the same as those for the affordable housing production requirement and for use of Housing Fund moneys, as described in Section A above. The units rnu~st be available at affordable housing cost to households of very low, low and moderate-income. As of January 1, 2002, the CRL requires 100 percent of replacement units to be available at affordable housing cost to the same income level of households as the households displaced. For dwelling units destroyed or removed after September l , l 989 and before January l , 2002, the CRL required that 75 percent of the replacement units be available at affordable housing cost to the same income level of households (very low, low or moderate-income) as were displaced from the units removed or destroyed (Section 33413(a)). Replacement. units do not have to match the tenure (rental versus ownership) or tenancy (age restricted or non-age restricted) of the units that were destroyed. b. Duration and Enforceability of Affordability Covenants The affordability duration and enforceability requirements for replacement housing are the same as those required for affordable }rousing production (Section 33413(c)). Refer to Section A above for these requirements. g For city agencies, replacement units can be located anywhere within the city, and for county agencies, replacement housing can be located anywhere within the unincorporated portion of the county. 9 Replacement housing units located inside a project area count towards the housing production requirement on a ] : ] basis. Replacement units located outside a project area count on a 1:2 basis. City of South San Francisco A-10 Seifel Consulting Inc. Five-Year Implementation Plan FY 2009110-FY 2013/14 June 2010 c. Priority Households An agency must give priority in renting or buying housing developed as part of a redevelopment project to households displaced by an agency regardless of whether the units are inside or outside of a project area. As of January ] , 2002, AB 637 requires an agency to maintain a list of displaced households who are to be given priority. An agency may establish rules to determine priority. 5. Completion of Housing Obligations CRL Section 33333.8, as amended) by SB 2l 1, requires that an agency comply with and fulfill its affordable housing responsibilities., including housing fund, replacement housing, and affordable housing production responsibilities, prior to the expiration of the time limit on redevelopment plan effectiveness. A redevelopment project cannot be terminated if an agency has not complied with its affordable housing obligations. The law further requires that for a Redevelopment Project that is within six years of reaching; its limit on plan effectiveness, an implementation plan needs to address the ability of the agency to comply with its housing responsibilities. The affordable housing obligations to be fulfilled prior to the expiration of plan effectiveness are: • Make deposits to and expenditures from the Low and Moderate Income Housing Fund. • Eliminate project deficits. • Expend or transfer excess surplus funds. • Provide relocation assistance. • Provide replacement housing. • Provide inclusionary housing,. City of South San Francisco A-11 Seifel Consulting Inc. Five-Year Implementation Plan FY 2009/10-FY 2013114 June 2010 Appendix B: Detailed Expenditure Tables V oCi Q a rn Ea w °o ° N ~ ~O {O+) W ~ ~ d c u ~ O y O li C 'O tC ~ ~ Q L O v .~+ o o o ~ t - : c c o ~ o a. o c c o ~ o ~ n c c c o c c a~ ~ c m ~ ~ o~ o n ~o N 'D C O O ~ °~ N D r w rt '1 ~ G C w O O ° °• oo r °• c ~ - ~ r Q - v. ^' ~ ~ ~ - ~ w r o ~ r W : 69 _ , 69 Vi M f A K F A ^K v F x L y 00 .. o w c o o N ~p - x r to n c .n o c ~ O o rn x 00 r c c c C C x ~c vi r ~ c c c ~n - o o o U ~ c ~ - m c ~ x O~ r c o `o r C r ~n 0 o0 1~ v-~i ~ r T. C oo u5 ~n vi m o .-. v~ 6 ^: r v v ~c a~ _- ~' 6A ~e ^ a. a 69 IA 9 fA ' » b y C O O M C (A C C O fA O 69 C fh O b9 C fh C 6~ ::J S9 C fA O~ •~ ~ M C L C a C c r a ~ L x 1 69 i/3 M a `° a 'o ~ cA ~ ca ~ vi ~ cA ~ w ~ ss ~ s5 ~ ss ~ us - it. ~ v3 - G ^ Q ~C G d v Y ~ E - .7 v ~ ~O ,c v, L F u Z V ~ K K M •D C " x W 1 E p c 6A o 1/i c V3 c K o ~ ~ o~. ~ ~ c Y c 6H c V-, c ~ a. O - v GC a GG ^ ~: Q v, e 3 o sv o v'. `c r ~= K rn v y » a O j C O - r 0 C 0 O 0 K C C a ~ c C ^ c O t/3 c K oC " I~ ~ ~_ 1 r~ E ~ O ~ rn N ~ x to N1 N1 ~ F/i C C c t5 O N r d C v~ r,j r r r ~' P. ~ ~ M ~~ O N ~ Q ~ C ? ~ ,__, yi v v '~ K v y oc ~.. r'. v v. - .+i ~ ~c - -t - ~ _ ~ c C w Z ~ C ~ r u .Y i N. 1 C N~ R d L ~ p Q W F o a 7 - - .o - 'a - - ~ e b ~ m '~ ~ ~ F ,° a a •~ ~ 1 r r `o L `° E v ~ L a ~ ;~ - G E 0 ~.. Z . y o ~. - - ~ ` N E J 3 a 3 y C~ r -~ a M ~ ~ - V N x ,j E 7 V • r C G U vi Q~ E n 0 v a` 0 c c c c U N r ~i c o a ~ o m E ~ 0 o ~ a> m ~ a d 0 ~ -~ s E N t > v~ ii a N V N C N ~ ~ Q 9 C ~ d W M ~ d W o O N A ~ ~ M ~ O ~ ~ d ~ °' u c_ °o w N N U ~ ~ C O r ` = LL ~ C d ~ V ~ O 7 a` O C C C C O ~ O O 0 c O 0 ~ C c C C o C c c C G c O o O O~ .~ C ~ ~ 00 C V p ~ v~ ~ r~1 = ~ V1 ~ ~/1 bS G b'~ N N Y~ a N b9 7 K K W n va bA vs ds 0 Fy ~ o b9 c 6A c 65 o O c 65 o c b'i c b9 c 'A c c c y C O C7 C ~ c ° rn a C' v v3 ds ~ Q o c c o c o o o c o '~ ~ 0 C 0 C ~ °o O c C o C] c O o V c ~ 'Q C ~' r' v p ~ ^ ~ 69 O r C ... b __ C ~ N C 7 C ~ Z ~ vl - E/3 N 64 . .. r1 b9 7 Vf Vi bL `!'i bA NVi y ~ p W b9i Vi C pC O C C C Q V C O C O C c C C d i E C C VCi O ~ V ?~ .. V 'a V N N 6A EA `A 6° ~ F/S L F O C ~ V; Fri ~ :n ~ o c ,~ ;~ ~ ~ o ~ c c c o o o c o o o c c 0 o o c v E o c ~ _ ~n o r v b~A v r W ~ b, ~s3 v3 ~ 5 c vca o c c c ° sj v; c o c 0 3 m c o c c c `° ~o o ~7 E po _ ° a c ~ ~ O ,..' 65 rl cA 69 ~ d9 N C 69 '7 J ` ~ r ~ u c, Q 'C J V w C o C - N - N C N C N ^ N Q .".''. G ~ ' Z L v C ' L L C O O v !~ i N ~ CT C N O N L v L C. R W o 'O - - u F ~ ~ . Q Q c c c o 0 N C.1 ] ~ u E ~ v . t e o u c L ~ ^ L E V C C C ~ 7. C 3 ~ y O , c ~ ~ N ~ D x ~ oD N .~ E I. L V C C y - a o S '~ c c c E O - . c re ~ eFa a ~ O` v L v 2 cn _ - a ~ y C °_ c ~ v L '= ~ E 0. ~ ~~ 7 y ~ C V 0. ' L ~ V C Q u C O U ~ G y . ~ p O E V O ^ ~ Q z V d. x ~ d L O y u ~ ~ U Q a N S ~ Q R ~ O ~, C C,1 R p L v ~ ~ ~ U U C t c ~ ~ e 5 a ~ ~ x W u z ~ `.C F m C V T C m Q U E c u .Q c F N .t. c ti ai c o O~ N c m c U N h M O N U ~ o Q °' 0 E > Cy LL O ~ >-° ~a ~ C ~ O `m w d m ~ d ii E in t i ~ v O to LL °~x~~s~~~ Redevelo ment o ~ p A enc g y Sta Re ort .f .f '9ZIFOR~IA RDA AGENDA ITEM # 4 DATE: July 14, 2010 TO: Redevelopment Agency Board FROM: Marty Van Duyn, Assistant Executive Director SUBJECT: ADOPT A RESOLUTION AUTHORIZING THE EXPENDITURE OF UP TO $300,000 FROM THE LOW- AND MODERATE-INCOME HOUSING FUND 'TO SUBSIDIZE THE PURCHASE OF BELOW MARKET RATE 1.JNITS AT CITY LIGHTS, ADOPTING FINDINGS IN CONNECTION THEREWITH, AND APPROVING AN AMENDMENT TO THE AGENCY'S LOW- AND MODERATE-INCOME HOUSING FUND OPERATING BUDGET RECOMMENDATION It is recommended that the Redevelopment Agency Board adopt a Resolution 1) authorizing the expenditure of up to $300,000 from the Low- and Moderate-Income Housing Fund to subsidize the purchase of lower-income units at City Lights by providing a subsidy of up to $50,000 to qualified buyers to preserve each unit; 2) adopting findings that such expenditure will be of benefit to the El Camino Corridor Project Area; and 3) approving a budget amendment to the Redevelopment Agency's Low- and Moderate Income Housing Fund Operating Budget. BACKGROND/DISCUSSION On .lanuary 9, 2002, the City Council adopted ordinance l 306-2002 approving a Development Agreement for the Marbella Housing Development, now known as South City Lights. The Development Agreement required the developer to sell 70 below market rate ("BMR") units to families of low-, median-, and moderate°-incomes. The BMR units in the first three City Lights buildings successfully sold out. In 2007, the housing market began to slow and it became increasingly difficult to sell the moderate-income (] 20% Area Median Income) units in the development. Consequently on August 8, 2007; the City Council adopted a resolution that resulted in the release of six moderate-income units in return for redesignating eight moderate-income units as 80% low-income units in the remaining three buildings. Following the redesignation, BMR units once again began to sell in the fourth and fifth buildings. However, the housing market: continued to deteriorate and the affordability restrictions expired on four median-income (100%) units in the sixth building. When BMR buyers purchase an inclusionary BMR unit, they are required to sign a Resale Restriction Agreement with the City that imposes occupancy and resale restrictions and gives the City the option to purchase the unit, or transfer the right to a new low- to moderate-income Staff Report Subject: Below Market Rate Units at City Lights Page 2 buyer. In a typical year, the City receives two to five resale notices which result in the transfer of BMR units to new eligible buyers. Unfortunately, in two cases this past year, the affordable prices were too high to attract new BMR buyers. As a result, the City did not exercise its purchase options and two City Lights units were sold at market-rate prices. The City, however, did capture the price difference between the affordable sales price and the market-rate price resulting in the City receiving $23,664 from the sale of one unit and $28,554 from the other unit (total $52,218, the "Excess Proceeds").. Recently, the City has received notices of intent to sell from two more BMR owners at City Lights. The allowed resale prices are once again too high to attract new BMR buyers, and the units are at risk of being lost from the City's affordable housing stock. The reason it is difficult to resell the City Lights BMR units is that: the price difference between the restricted BMR units and the market-rate units is very small, so Buyers would rather purchase market-rate units that are not subject to resale restrictions than purchase BMR units that are subject to such restrictions. The City and Redevelopment Agency have three options for addressing the affordable units at risk of converting to market-rate units: A. The City's First Time Homebuyer Administrator has determined that BMR units need to be priced 20% below market-rate unit:> in order to attract new buyers. Therefore, the City and Agency could preserve the BMR units by providing a subsidy to the buyer that would reduce the price of the units to that level. F'or example, the two units currently being sold are alow- income two-bedroom unit and median-income two-bedroom unit. As shown on the table below, the low-income unit could be preserved by providing a $14,533 subsidy to the buyer and the median-income unit could be preserved by providing a $35,200 subsidy to the buyer. In this scenario both units would bE; restricted as low-income units going forward. Low-Income Median Income Market Price $ 435,000 $ 435,000 20% Reduction $ 89,019 $ 89,019 Proposed Resale Price $ 345,981 $ 345,981 Allowed Resale Price $ 360,514 $ 381,181 City/Agency Subsidy Necessary to Reach Proposed Resale Price $ 14,533 $ 35,200 B. The Agency and City could assist a~ nonprofit agency to purchase the units and rent them. The nonprofit would obtain a conventional loan for up to the amount supported by the rents less operating expenses. Unfortunately, the free cash flow from the affordable rents would only be about $1,000 to $1,300 and would only support bank loans of about $160,000 to $220,000. The Agency would have to provide a subsidy of $140,000 and. $221,000 per unit in order to make this option feasible. C. The City and Agency could allow the units be sold as market-rate units and collect the difference between the market-rate price and the restricted resale price. Based on past experience, the City would receive an average of $25,000 per unit sold. Staff Report Subject: Below Market Rate Units at City Lights Page 3 The loss of BMR units eliminates affordable housing opportunities for low- to moderate-income residents and affects the City's affordable housing production credit. Staff, therefore, is requesting that the City Council and Redevelopment Agency Board authorize the use of $300,000 in Low- and Moderate Incorrie Housing Funds and $52,218 in Excess Funds from the Affordable Housing Trust Fund to pursue Option B as the most economical means to preserve units at risk of losing their affordability. These funds will allow the City to preserve a minimum of 8 units and potentially as many as 1(units. It is much less expensive to preserve an existing affordable unit created under the City's Inclusionary Housing Ordinance than it is to create a new affordable unit. Preserving BMR units at City Lights also meets the City Council's desire to blend affordable units into mixed-income developments. With Option B, BMR buyers would be required to enter into an agreement with the City and/or Agency that restricts the resale price to an affordable level for 55 years. Staff will also require buyers and all subsequent buyers to pa:y the City and/or Agency a small percentage of the appreciation upon the sale of the home. The shared appreciation would. be based on the size of the subsidy provided to the buyer. For example, the low-income unit buyer would be required to provide the City and/or Agency 4% of the appreciation upon resale of the unit and the median- income unit buyer would be required to provide the City and/or Agency 9.2% of the appreciation. However, if the shared appreciation requirement proves to be a hindrance to selling the units, the Executive Director should be given they discretion to eliminate this requirement from the program. FT TNT~TN(; Funds in the amount of up to $300,000 are available for the proposed subsidy upon Agency Board approval of a budget amendment to the Agency's Low- and Moderate Income Housing Fund ("Low/Mod Fund") Operating Budget. CONCLUSION It is recommended that the Redevelopment Agency Board adopt a resolution 1 }authorizing the expenditure of up to $300,000 from thc; Low- and Moderate-Income Housing Fund to subsidize the purchase oflower-income units at City Lights by providing a subsidy of up to $50,000 to eligible buyers to preserve each unit; 2) adopting findings that such expenditure will be of benefit to the El Camino Corridor Project Area; 3) approving a budget amendment to the Redevelopment Agency Low- and Moderate Income Housing Fund Operating Budget. In return for the subsidy, buyers will be required to enter into an agreement with the Agency that restricts the resale price to an affordable level for 55 years and :requires the buyer and subsequent buyers to pay the Agency a small percentage of the appreciation upon the sale of the home; and 4) authorizing the Executive Director to eliminate the thc; shared appreciation requirement if it proves to be a hindrance to selling the units. Staff Report Subject: Below Market Rate Units at City Lights Page 4 By: Approved: ~ ~-~ Marty Van Duyn Barry .Nagel Assistant Executive Director Executive Director Exhibits: Resolution 1478430.1 RESOLUTION NO REDEVELOPMENT AGENCY, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA A RESOLUTION AUTHORIZING THE EXPENDITURE OF UP TO $300,000 FROM THE LOW- AND MODERATE-INCOI`~1E HOUSING FUND TO PRESERVE THE AFFORDABILITY OF BELOW MARKET RATE UNI"TS AT CITY LIGHTS, ADOPTING FINDINGS IN CONNECTION THEREWITH, AND APPROVING AN AMENDMENT TO THE A_GENCY'S LOW- AND MODERATE-INCOME HOUSING FUND OPERATING BUDGF;T WHEREAS, the Redevelopment Agency of the City of South San Francisco ("Agency") is a redevelopment agency existing pursuant to the Community Redevelopment Law, California Health and Safety Code Section 33000, et seq. (the "CRL"), and pursuant to the authority granted thereunder, has the responsibility to carry out the Redevelopment Plan ("Redevelopment Plan") for the El Camino Corridor Redevelopment Project Area ("Project Area "); and WHEREAS, two owners of inclusionary below market rate units ("nMR Units") in the South City Lights development located outside the Project Area at 2200 Gellert Court desire to sell their BMR Units; and WHEREAS, the owners of the BMR Units are having difficulty finding buyers to purchase the BMR Units at the affordable price because the affordable price is so close to market rate; and WHEREAS, if the owners cannot find buyers to purchase the BMR Units at the affordable price, the BMR Units will lbe sold at market rate, and the City will lose the affordability of the units; and WHEREAS, to preserve the affordability of the two BMR Units and facilitate the sale of the units to eligible buyers, the Agency and City intend to provide a subsidy to the buyers of the two BMR Units; and WHEREAS, the Agency intends to finance its portion of the subsidy with funds from the Agency's Low- and Moderate-Income Housing Fund ("Low/Mod Housing Fund"); and WHEREAS, to recoup the Age°ncy's anal City's investment and ensure the continued affordability of the BMR Units, the buyers will be required to execute an agreement with the Agency and/or City which restricts the affordability of the BMR Units for 55 years and requires the buyer and subsequent buyers to pay the Agency and/or City a percentage of the appreciation. upon the resale of the unit ("Resale R~:striction AgrEement"); and WHEREAS, pursuant to Section 33334.2 of the CRL, the Agency may use Low/Mod Housing Fund monies outside of the Project Area provided that the Agency Board and the City Council find that the use will be of benefit to the Project Area; and WHEREAS, the City Council has adopted a resolution finding that use of Low/Mod Housing Fund monies to subsidize the purchase of two BMR units in City Lights will be of benefit to the Project Area by providing affordable housing. NOW, THEREFORE, BE IT RESOLVED by the Redevelopment Agency of the City of South San Francisco that it hereby: 1. Finds that the expenditure of monies from the Low/Mod Housing Fund to subsidize the purchase of two BMR Units in South City Lights will benefit the Project Area by providing affordable housing. 2. Authorizes the expenditure of up to $300,000 from the Low/Mod Housing Fund to subsidize the purchase of two BMR Units in South City Lights. 3. Approves an amendment to the Agency's Low/]~1od Housing Fund operating budget. 4. Authorizes the Executive Director of the Agency (or his designee) to execute Resale Restriction Agreements with the buyers of the subsidized BMR Units, to eliminate the shared appreciation requirement from the Resale Restriction Agreements if the Executive Director determines that such requirement adversely affects the marketability of the BMR Units, to sign all documents, make all approvals and take all actions necessary or appropriate to carry out and implement the intent of this Resolution. I hereby certify that the foregoing Resolution was regularly introduced and adopted by the Redevelopment Agency of the City of South San Francisco at a meeting held on the 14th day of July, 2010 by 'the following vote: AYES: NOES: ABSTAIN: ABSENT: .ATTEST: Agency Secretary 1478696.1