Loading...
HomeMy WebLinkAboutRDA Minutes 2010-05-12~~x sAN~ MINUTE REDEVELOPMENT AGENCY " ~ ~ CITY OF SOUTH SAN FRANCISCO _ ..~:~ ~gLIFOR~~P REGULAR MEETING MUNICIPAL SERVICES BUILDING COMMUNITY ROOM WEDNESDAY, MAY 12, 2010 CALLED TO ORDER 6:31 p.m.. ROLL CALL Present: Boardmembers Garbarino, Gonzalez and Matsumoto, Vice Chair Mullin, Chairman Addiego Absent: None AGENDA REVIEW No changes. PUBLIC COMMENTS None. CONSENT CALENDAR 1. Motion to approve the minutes of April 14, 2010. 2. Motion to accept the Emergency Operations Center/Training Classroom Project as complete in accordance with the plans and specifications. Motion -Boardmember Garbarino/Second -Boardmember Gonzalez: To approve the Consent Calendar. Unanimously approved by voice vote. ADMINISTRATIVE BUSINESS 3. Review Updated Financing Plan for Affordable Housing Project at 636 El Camino Real, Mid-Peninsula Housing Coalition, and Agency's Financial Participation. Housing and Community Development Consultant Armando Sanchez gave a brief overview of the project and the financial update and obstacles that have occurred. The initial development had experienced a change in scope and change in financial situation as a result of the current economic environment. Initially 80 units at $37 million, the project has now become 109 units with increased costs over $50 million. The City has given $5 million for land and development costs, and additional sources of funding included tax credits and grants. The change in the economic environment has caused a reduction and/or elimination of grants, resulting in a deficit of over $4 million, with tax credits included. The current situation has left the project $18 million in the hole since inception. Mr. Sanchez included an article to illustrate that this situation was not unique and that many projects have been cancelled or stalled. Mr. Sanchez hoped the Board would help keep the project going with an increase of funding and cautioned that steep subsidies would be the norm if further affordable housing developments were pursued in the future. Mr. Sanchez explained how, fortunately, Mid-Peninsula Housing Coalition has found success in securing close to $9 million in additional funding. This erased the decrease in grants; however, there remains a deficit of $10 million. Options discussed included returning land ownership to the Redevelopment Agency ("Agency"). This would defer $700,000 in development fees, the Agency could lease land to Mid-Peninsula for 99 years and have a master lease for commercial space. An additional $10 million was requested from the Agency. Mr. Sanchez noted all other sources, with exception of the state grant, had been committed to the project. He also noted there were several opportunities to apply for the grant should it not be awarded the first time around and they were hopeful in regards to the tax credit because of the scope of project. The agreement and financial assistance could be terminated if Mid-Peninsula was unable to secure funding. Boardmember Matsumoto asked why the land was not credited as part of the Agency's contribution and sought clarification as to its value. Mr. Sanchez stated the value of the land was between $4.5 to 5 million and that it was not being credited to show what was being lent to the project. Boardmember Garbarino noted the recent court ruling allowing the state to take Agency funds and was unsure of what would be left. Chairman Addiego stated perhaps that was the best argument for spending it. Mr. Sanchez agreed and noted committed funds could not be taken. Chairman Addiego sought clarification that with the new numbers it worked out to $500,000 per unit. He was unsure about committing due to this estimation and noted the Agency could purchase existing units for a much lower price. Jan Lindenthal, Vice President of Real Estate Development for Mid Peninsula, agreed the total development was around $500,000 per unit and listed the factors contributing to the cost, which included: more density, parking underground, and being unable to underwrite the income for the rental commercial space, though the expected rental would give 100% revenue back to City over the long term through a master lease. She also agreed that while existing units could be purchased, they would not have the lifespan of the new development nor the high quality. Standards were set high and even though it would be affordable housing, it would not be cheap to build. Vice Chairman Mullin asked Ms. Lindenthal to explain why density equaled greater expense. He also requested an explanation as to why a greater Agency contribution was beneficial in terms of making the project more competitive for tax credit and other types of funding. REGULAR REDEVELOPMENT AGENCY MEETING MAY 12, 2010 MINUTES PAGE 2 Ms. Lindenthal explained the concrete box to accommodate parking and stability was extremely expensive to engineer as it had to be the foundation as well as be suitable for parking. When you get to five (5) floors, the cost is more per square foot. Ms. Lindenthal noted a decline of 35% in what tax credit investors are willing to pay compared to the previous year. At the same time, the competitiveness became more intense as there was only enough money in this region to finance 140 units per year. Mid-Peninsula scored information gathered from other projects to determine what was needed to maximize competitiveness, which drove up the City's subsidy. The score relied heavily on the credit requested. Vice Chairman Mullin asked what the main factor was for the inadequate tax credit- the state budget situation or the overall economic climate. Ms. Lindenthal stated it was both. The value of the tax credit continues to drop and the state has had difficulty issuing bonds under Proposition 1C. Mid Peninsula intended to apply for the bonds, which would reduce the City's contribution. With the state situation as it was, there was no way to bring forth another bond due to the economic climate. A positive was the county stepped up to partner with the City, helping provide funding for 20 units for special needs residents as well as Section 8 rental assistance. Ms Lindenthal noted City staff's work as advocates. Boardmember Matsumoto requested clarification as to whether special needs meant wheelchair bound. Ms. Lindenthal clarified the meaning as such and noted in addition, all units would be fully adaptable. Boardmember Gonzalez found the expenses difficult but liked the project. He noted feeling rushed during the approval of the land purchase and felt the same about this but understood this presentation was for provision of information. Mr. Sanchez went through the next steps as being the presentation to the Planning Commission on June 3, followed by the presentation of the complex project to the Agency on June 23, 2010 assuming Planning Commission approval. Chairman Addiego noted a time frame of approximately 1 month to review and determine the best direction for the project. ADJOURNMENT Being no further business, Chairman Addiego adjourned the meeting at 6:59 p.m. Submitted: Anna M. Brown, Deputy Clerk City of South San Francisco ~A pr ved: Mar Addiego, Chairman City of South San Francisco REGULAR REDEVELOPMENT AGENCY MEETING MAY 12, 2010 MINUTES PAGE 3