20050607_m



COUNTY OF SAN MATEO Inter-Departmental Correspondence
Department of Housing

DATE:			May 18, 2005
BOARD MEETING DATE:			June 7, 2005
SPECIAL NOTICE/HEARING			None
VOTE REQUIRED			Majority

TO:	Honorable Board of Supervisors
FROM:	Maureen Borland, Interim Acting Director, Department of Housing Steve Cervantes, Director, Office of Housing

SUBJECT:	Approve an Agreement with The Crossings Phase I, L.P. to provide funding to assist in land acquisition for the development of Senior Housing in San Bruno

Recommendation
Adopt a Resolution:
1.	Authorizing the execution of an Agreement with The Crossings Phase I, L.P. to provide funding in the amount of $1,700,000 to assist in land acquisition for the development of affordable senior housing in San Bruno, for the term beginning upon execution and ending forty years after execution of promissory note secured by the real property; and
2.	Authorizing the Director of the Department of Housing to execute subsequent amendments and minor modifications in the types of services and activities provided by The Crossings Phase I, L.P. under the Agreement with the cumulative cost of amendments and modifications not to exceed $25,000.

Vision Alignment
Commitment: Offer a full range of housing choices.
Goal 9: Housing exists for people at all income levels and for all generations of families. This Agreement contributes to this goal by expanding the supply of affordable senior housing. The County of San Mateo Consolidated Plan to the U.S. Department of Housing and Urban Development highlighted that in 1990 and 2000, seniors aged 65+ comprised 12.3% and 12.5%, respectively, of the total population. Their relative proportion to the overall population may seem to have changed little over the ten-year period, but when viewed within the context of the overall County population growth of 8.9%, seniors as a group have outpaced countywide growth with a 10.1% increase. Seniors have become a larger demographic group with significant needs for affordable housing.

Performance Measures:
Measure		FY 2004-05 (To Date)		FY 2004-05 (Modified)
Number of newly-constructed affordable senior units assisted by the County since 2000 (completed & under development)		188		302
Percent increase of County-assisted new senior housing units since 2000		NA		60.6%

Background
Funds in the Housing Development Reserve had been set aside through the Spring 2004 CDBG/HOME funding cycle for Fiscal 2004-05 funds to assist affordable housing developers needing County funding outside the narrow time confines of the application period. This action was approved by the Board on May of 2004. The Crossings Phase I, L.P. (The Crossing), through its nonprofit general partner, Citizens Housing Corporation, applied for $1.7 million of Housing Development Reserve Funds to assist in the purchase of land currently priced at $4,090,000 to develop new senior housing. On October 28, 2004, the Housing and Community Development Committee (HCDC), a public advisory body to the Board, recommended the requested amount of $1.7 million for this project.

The HCDC further recommended that the project sponsors negotiate for redevelopment housing set-aside funds from the City of San Bruno in order to create deeper affordability for a portion of the development. The City’s Redevelopment Agency has indicated that while it is fully supportive of the project, it currently has no uncommitted funds to subsidize the project as its redevelopment agency is relatively new and has yet to accrue substantial tax increment funding. The City is supporting the project by granting it various fee waivers.

Senior housing consisting of 114 units will be constructed on the land. Known as the Crossings Senior Apartments, this development represents Phase I of a 228-unit project. The development is located on a larger parcel of land formerly owned by the U.S. Navy and now designated a redevelopment area by the San Bruno Redevelopment Agency. Located along El Camino across the street from the Tanforan Shopping Center, this larger site is guided by a master plan elaborating an ambitious collage of housing and commercial development, including offices, a hotel, and an entertainment complex.

Discussion
The project development team consists of a partnership between a nonprofit, Citizens Housing Corporation, and the for-profit, KDF Communities, LLC. KDF is taking the lead to develop the project, with Citizen’s Housing’s role to access funding restricted to nonprofit developers and to develop the services component for the project.

Total project costs for Phase I is estimated at $29. 4 million. The project will be financed primarily by a combination of tax exempt bonds and proceeds from 4% low income housing tax credits. County funding of $1.7 million is well leveraged, representing 5.8% of total project costs. Construction is anticipated to take place Summer 2005 through Fall 2006.

Unlike other recent vintage senior projects characterized by studios and one-bedroom units, the Crossing will have 31% of its development (35 apartments) comprising of two-bedroom fully independent units, allowing for more versatile household arrangements, such as room-mate situations. The rest of Phase I (79 units) will consist of one-bedroom apartments.

This Agreement has been approved by the County Counsel's Office, and meets U.S. Department of Housing and Urban Development (HUD) regulations. Risk Management has reviewed and approved the Contractor’s insurance coverage.

Fiscal Impact
The term of this Agreement is for the period beginning upon execution and ending 40 years after execution of the promissory note secured by the real property to be purchased with funds provided in this Agreement. The total obligation under this Agreement is $1,700,000 from CDBG funds, and has been included in the Office of Housing Budget for FY 2004-05. There is no Net County Cost.