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Home My WebLink About2016-03-07 e-packetCITY OF SOUTH SAN FRANCISCO INTER-OFFICE MEMORANDUM DATE: June 27, 2008 TO: Honorable Mayor and City Council FROM: Marty Van Duyn, Assistant City Manager SUBJECT: Mid-Peninsula Housing Development Proposal Mid-Peninsula Housing Coalition is proposing to partner with the City of South San Francisco to develop a mixed use, affordable rental housing project at the trailer park next to South San Francisco High School (636 El Camino Real). A development by Mid- Peninsula presents an excellent opportunity for the City to begin making progress in meeting its 2008-2014 affordable housing obligation and to revitalize a blighted area on El Camino. Mid-Peninsula was able to secure the right to purchase the two acre property for $4,450,000 before it was formally marketed. This price represents a very reasonable purchase price of roughly $51 per square foot. Because of the desirability of this property, Mid-Peninsula was only able to secure purchase rights for 90 days. As a result, Mid-Peninsula does not have the luxury of time to work with staff to prepare and present to the City Council a complete development package for its consideration. Instead, Mid- Peninsula has prepared an introductory package that describes the development potential of the land. Mid-Peninsula’s package consists of three development scenarios. The architectural rendering for all three scenarios reveal very attractive design concepts. From a financial standpoint, however; it is likely the City will need to focus on option one or two. Option three, while also attractive, poses significant financial and development constraints. As indicated in the proposal, Mid-Peninsula is requesting that the City provide a loan of $4,450,000 to $4,500,000 for land and other acquisition costs. Depending on which option the City Council decides to pursue and the availability of other funds, Mid- Peninsula may have to request additional construction funds from the City. For option one, the total City subsidy will range between a low of $57,000 per unit (land cost only) and a high of $82,000 (land and some construction costs). For option two, the total City subsidy will range between a low of $76,000 and a high of $126,000 per unit. For option three, the range would be between $120,000 and $178,000 per unit. The amount for options one and two compares favorably to the per unit costs at Grand Oaks ($81,000/unit), Chestnut Creek ($67,500/unit), Habitat’s Commercial Avenue project ($112,000/unit) and HIP’s Commercial Avenue project ($120,000/unit). In conclusion, the proposed project would address the housing needs of very-low income families in South San Francisco and make significant progress in meeting the City’s 2008-2014 ABAG housing affordable housing requirement. Mid-Peninsula will present the project to the City Council Housing Sub-Committee in early July so that the Sub- Committee can consider the proposed partnership with Mid-Peninsula and the funding available for the project. Staff will also begin preparing loan agreements to formally bring the proposed partnership before the Redevelopment Agency on July 23rd or August 27th. At this meeting Mid-Peninsula will only be seeking approval for the land acquisition, not approval for a project design. Once the land is secured, Mid-Peninsula will work with the City on specific density and design concepts. Please call me if you have any questions or concerns. MVD:AFS 636 El Camino Option 1 This option illustrates how 78 units of family housing could be accommodated on the site with a two-story retail/garage building fronting El Camino, a four-level parking garage behind the retail building, and clusters of three and two story townhouses at grade on the remainder of the site. All uses would fit within a 35 foot building height, with a clear separation of the retail and residential uses, and a scale of development that is very compatible with the existing single-family neighborhood near the back of the site. Advantages of this Option • Simplicity of design & lower density allows for fastest entitlement process • Retail space likely to be more marketable because of separation from residential uses • Least costly construction • Can be built all in one phase Disadvantages of this Option • Fewest number of units • Least transformative impact on El Camino Estimated Range of City Subsidy Required for Housing Construction $0 to $25,000 per unit (in addition to land acquisition cost)* *Lower number assumes we can receive entitlements in time to apply for State HCD Infill Grant - eligible for approx. $25,000 per unit. Estimated Range of Total Cost to City for Land and Construction of 78 Units $4.5 million to $6.4 million (or $57,000 to $82,000 per unit)** **Assumes additional subsidy from 9% Low Income Housing Tax Credits and $30,000 per unit subsidy from County of San Mateo. 636 El Camino Option 2 This option illustrates how more density can be achieved with a building height of 50 feet and all parking provided below the housing in a single-level parking podium, similar to our recently approved San Mateo project called “Peninsula Station” to be constructed on El Camino across from the Hillsdale Mall. This 108-unit concept envisions the housing stacked on top of retail space along the El Camino frontage, stepping down from four-stories of flats to three-story townhouses along the B Street frontage. Although it is more costly to construct housing units on top of a parking podium in this manner, keeping the housing to no more than four stories allows us to stay within a Type V lightweight framed construction category which is less costly than constructing buildings that exceed this height. Advantages of this Option • 30 more units than under Option 1 • Impressive, transformative impact on El Camino Disadvantages of this Option • Higher density and more complex design may require longer entitlement process (especially if triggers General Plan Amendment) • More costly to build housing over parking podium • May need to construct in 2 phases due to size limitations of funding sources Estimated Range of City Subsidy Required for Housing Construction $35,000 to $85,000 per unit (in addition to land acquisition cost)* *Lower number assumes we can receive entitlements in time to apply for State HCD Infill Grant – eligible for approx. $50,000/unit. Estimated Range of Total Cost to City for Land and Construction of 108 Units $8.2 million to $13.6 million (or $76,000 to $126,000 per unit)** **Assumes additional subsidy from 9% Low Income Housing Tax Credits and $30,000 per unit subsidy from County of San Mateo. 636 El Camino Option 3 This option illustrates a much more dramatic concept in which we have assumed substantial changes to existing zoning standards for El Camino. Under this scenario, 138 units of family housing could be achieved on the site with building heights of 80 or 90 feet along the El Camino frontage. 100 units would be provided within 7 to 8 story buildings on top of and abutting a four-level garage. The remaining 38 units would be provided in three story townhouses at grade along the B Street frontage (similar to Option 1). Construction of the high rise units would be under Type I standards which costs at least 30% more than the Type V construction proposed in Option 2. Advantages of this Option • 30 more units than under Option 2, 60 more units than under Option 1 • Most dramatic, transformative impact on El Camino Disadvantages of this Option: • Extremely complex, more controversial design will require lengthy entitlement process (assume a General Plan Amendment will be needed) • More costly to construct high rise Type I housing • Will need to construct in 2 or possibly 3 phases due to size limitations of funding sources Estimated Range of City Subsidy Required for Housing Construction $120,000 to $178,000 per unit for high rise units (in addition to land acquisition cost)* *Lower number assumes we can receive entitlements in time to apply for State HCD Infill Grant – eligible for approx. $58,000/unit. At grade townhouses would cost same as under Option 1. These estimates are very rough as we cannot properly evaluate this product type without further design details. Estimated Range of Total Cost to City for Land and Construction of 138 Units $16.5 million to $23.2 million (or $120,000 to $168,000 per unit)** **Assumes additional subsidy from 9% Low Income Housing Tax Credits and $30,000 per unit subsidy from County of San Mateo.