| |||||
COUNTY OF SAN MATEO Inter-Departmental Correspondence | |||||
Department of Housing | |||||
DATE: |
November 3, 2006 | ||||
BOARD MEETING DATE: |
November 14, 2006 | ||||
SPECIAL NOTICE/HEARING |
None | ||||
VOTE REQUIRED |
Majority | ||||
TO: |
Honorable Board of Supervisors | ||||
FROM: |
Duane Bay, Director, Department of Housing | ||||
SUBJECT: |
Approve an Assignment of and Amendment to the Agreement with BRIDGE Regional Partners, Regarding Trestle Glen Apartments (formerly known as Colma Transit Village) and confirm the HELP Loan Agreement | ||||
Recommendation | |||||
Adopt a Resolution: | |||||
1. |
Authorizing execution of an Assignment of and Amendment to, the Agreement with BRIDGE Regional Partners, regarding Trestle Glen Apartments (formerly known as Colma Transit Village), to add up to $1.5 million to $500,000 for a total obligation of $2 million, for the original term of 55 years; and | ||||
2. |
Authorizing the Director of the Department of Housing or the Director's designee to execute contract amendments which modify the County's maximum fiscal obligation by no more than $25,000 (in aggregate), and/or modify the contract term and/or services so long as the modified term or services is/are within the current or revised fiscal provisions. | ||||
3. |
Confirming and authorizing the $1.5 million Loan Agreement between the County, as borrower, and CalHFA as lender, under the HELP Program, and the July 10, 2006, $1.5 million Loan Agreement between the County, as lender and BRIDGE Regional Partners, as borrower, regarding the HELP Program Funds. | ||||
Vision Alignment | |||||
Commitment: Offer a full range of housing choices. | |||||
The action contributes to this commitment and goal by increasing the supply of housing for very low income families. | |||||
Performance Measures: | |||||
Measure |
FY 2005-06 |
FY 2006-07 | |||
Number of County-supported affordable housing units completed and occupied |
158 |
200 | |||
Background | |||||
BRIDGE is in contract to purchase a 2.7 acre site next to the Colma BART Station. The site is currently the locale of the Meadowbrook Mobilehome Park. After acquisition of the site by BRIDGE or a qualified assignee, it is intended that the land be split into two separate parcels. A 1.7-acre parcel is to be used for the development of 123 affordable housing units (“Trestle Glen Apartments”), and a 1.0-acre parcel is to be sold to a market-rate developer for the construction of 32 townhouse condominiums. The entire 155-unit plan is now known as El Camino Transit Village, and will eventually house families with a spectrum of incomes. A 60-slot child care facility is also planned for the site. | |||||
BRIDGE had originally proposed 170 affordable units for the entire 2.7 acre site. Due to tax credit limitations on project size and architectural design-development considerations, the affordable component was downsized to 123 units, which in turn led to the decision to sell part of the land for market rate housing and use those sale proceeds to subsidize the affordable component – Trestle Glen Apartments. | |||||
It is anticipated that the one-acre for the development of the townhomes will be sold in mid- 2007, as part of an arms-length transaction, with land use entitlements already in place. The entire 2.7-acre site will be purchased for $6.9 million, and it is anticipated that the 1.0–acre site will resell for an estimated $3.6 million. Total project costs for Trestle Glen Apartments are estimated at $51 million, including acquisition of the entire site. | |||||
BRIDGE hopes to start construction by mid-summer 2007. BRIDGE has submitted plans to the County Planning Department for the Colma Transit Village plan, and the County Planning Commission is scheduled for November 8, 2006, to review and hear BRIDGE’s application for a subdivision map change creating the two parcels, design-review approval, a grading permit, and a conditional use permit for the on-site child care facility. | |||||
Trestle Glen Apartments has received extensive County support. The project has appeared in front of the Board numerous times in the past year, primarily to request County approvals related to funding, and once to seek approval of the relocation plan. | |||||
The Project has also received a commitment of HEART funds totaling $1.76 million. | |||||
HUD is currently reviewing the County’s request for Section 108 funds. While the County requested $7.145 million, HUD is recommending that the County increase its request to $10.745 to make the financing feasible due to Section 108 loan program technicalities on the treatment of the sale proceeds of the 1.0 acre lot. The sale of this lot, anticipated to occur within 6 to 8 months, will be used to pay the Section 108 loan principal down to the County’s original request of $7.145 million. Once HUD and the Department of Housing conclude negotiations, the Board will be asked to review and approve the Section 108 funding. | |||||
Discussion | |||||
The subject Assignment and Amendment to the Original Agreement (the “Amendment”) adds up to $1.5 million of CDBG/HOME funds to the existing $500,000 Agreement. The additional funds will be used toward site acquisition, relocation of the mobilehome occupants on the project site, and other eligible costs. | |||||
The Amendment includes BRIDGE’S assignment of the Original Agreement, which assignment to Northpoint Housing Inc., a non-profit corporation that is a wholly-owned subsidiary of BRIDGE (“Northpoint”), is required in order to take advantage of low income housing tax credits. Trestle Glen will be serving households with incomes ranging from 30% to 48% of area median income. | |||||
As a result of the Board’s November 8, 2005, authorization of the submission of an application to the California Housing Finance Agency (CalHFA) for a HELP loan of $1.5 million, the following actions were taken: the application was approved; a March 24, 2006, $1.5 million Loan Agreement between the County, as borrower, and CalHFA as lender, under the HELP Program was executed by the Director of Housing; and a July 10, 2006, $1.5 million Loan Agreement between the County, as lender, and BRIDGE Regional Partners, as borrower, regarding the HELP Program Funds, was executed by the Director of Housing. In this action, the Board is also being asked to approve and confirm these HELP program loan transactions. | |||||
Repayments on the loans will be structured on a residual receipts basis – that is, only project operating surplus cash will be diverted for repayment. At the end of the 55-year term, a balloon payment will be due the County on any unpaid balances. | |||||
Low income housing tax credit proceeds will finance a large part of the project. In these kinds of tax credit projects, a limited partnership is set up as the Project owner to assume all the obligations of the nonprofit developer and to take advantage of tax credits generated by the project. For this Project, the Agreement will be assigned to Northpoint, serving as the nonprofit general partner entity of the limited partnership, Trestle Glen Associates. | |||||
BRIDGE and Northpoint have assured compliance with the County's Contractor Employee Jury Service Ordinance, as well as all other contract provisions that are required by County ordinance and administrative memoranda, including but not limited to insurance, hold harmless, non-discrimination and equal benefits. Real Property Services has reviewed and approved the Amendment and County Counsel has reviewed and approved the Resolution and the Amendment as to form. Risk Management has reviewed and approved the insurance coverage provided by the in the Agreement and the Amendment. | |||||
Fiscal Impact | |||||
This project is included in the Department of Housing Budget for FY 2006-07. The County’s total additional obligation added by the Amendment is $1.5 million from FY 06-07 CDBG/HOME funds. The HELP Program Loan represents another $1.5 million to assist the Project. There is no Net County Cost. | |||||