MEETING DATE:
DECEMBER 9, 2014
SUBJECT:
Title
RESOLUTION NO. 2014-8010 - INFILL INFRASTRUCTURE GRANT APPLICATION - EL DORADO II AFFORDABLE HOUSING DEVELOPMENT
Body
Recommendation
Recommendation
ADOPT a resolution approving the City of San Marcos' submittal of a joint application with Orange Housing Development Corporation to request an allocation of funds through the California Department of Housing and Community Development's Infill Infrastructure Grant Program in an amount not to exceed $3,000,000 for Phase I of El Dorado II.
Body
Board or Commission Action
Planning Commission approval on April 28, 2014
City Council project approval on May 27, 2014
Relevant Council Strategic Theme
Planning for the Future
Relevant Department Goal
Facilitate Affordable Housing Production
Introduction
One of the City's long term projects is the completion of the revitalization of the Richmar neighborhood, including the area between Mission Road and Richmar Avenue. To that end, the former Redevelopment Agency (RDA) Board of Directors approved on January 27, 2009 an Exclusive Negotiating Agreement with the Developer and authorized a predevelopment loan of $173,000 for a project in the vicinity of the ageing El Dorado Apartments, which is owned and operated by the Developer. On five subsequent occasions since 2009, the former RDA Board of Directors or the City Council in its capacity as Successor Housing Agency (SHA) followed up by approving acquisition loans to the Developer totaling $9,537,238 from the Low/Mod Housing Increment fund for property assembly. The last land purchase was concluded in 2013, completing the acquisition of privately held property by the Developer.
This project, known as El Dorado II, like other affordable housing developments in San Marcos (Residences at Creekside and Eastgate), became temporarily stalled in the turbulence and uncertainty engendered by the State government's dissolution of the RDA. Despite the unforeseen challenges, the Developer persistently kept the project moving forward to the point where request for a project loan and subsequent application for 9% low income housing tax credits is now feasible. The El Dorado II project will be built on the twelve parcels owned by the Developer and an additional two parcels currently owned by the City.
Discussion
The new El Dorado will be a mixed-use, multi-family, new construction affordable housing community consisting of 120 residential units, approximately 7,000 square feet of ground level commercial space and a community center on 3.8 acres. The development will be bifurcated into two separate phases. The Developer's overall budget to complete the entire development is currently estimated to be $48.2 million and reflects the infrastructure requirements levied on the project.
The Developer will apply to the California Tax Credit Allocation Committee (CTCAC) for 9% low income housing tax credits for Phase I of the project as soon as feasible and as coordinated with City staff. Additionally, to help fund infrastructure costs associated with the development, and to enhance the project's competitive position for CTCAC, the Developer has asked the City to submit a joint application for funding through the California Department of Housing and Community Development's Infill Infrastructure Grant Program.
The Infill Infrastructure Grant Program was funded by Proposition 1C, the Housing and Emergency Shelter Trust Fund Act of 2006. Its primary objective is to promote infill housing development. The program seeks to accomplish this objective by providing financial assistance for infrastructure improvements necessary to facilitate new infill housing development. Under the program, grants are available as gap funding for infrastructure improvements necessary for specific residential or mixed-use infill development projects. Both infill projects and areas must have either been previously developed or be largely surrounded by development. Specific eligible improvements include: development or rehabilitation of parks or open space, water, sewer or other utility service improvements, streets, roads, parking structures, transit linkages, transit shelters, traffic mitigation features, sidewalks and streetscape improvements.
Funds will be allocated through a competitive process, based on the merits of the individual infill projects and areas. The application selection criteria include project readiness, housing affordability, housing density, proximity and access to transit, parks, employment centers, and consistency with a regional blueprint or similar regional growth plan. The attached resolution is presented in support of the Infill Infrastructure Grant Application for El Dorado II (Phase I). The grant request is for an amount not to exceed $3,000,000. If approved by the State, these funds will be used for infrastructure costs for the El Dorado II (Phase I) to include construction of a sewer line, street, sidewalk, utility, and park improvements associated with the project.
Fiscal Impact
None. The developer will bear all costs associated with the application for, and compliance with, the Infill Infrastructure Grant Program. Regardless if the project receives an allocation of the Infill Infrastructure Grant it will not impact the City's funding for the project. The Grant funds will solely make the project more competitive for CTCAC in that it will require less funding from the 9% low income housing tax credits.
Attachment(s)
Resolution
Submitted by: Karl Schwarm, Director, HANS
Reviewed by: Lydia Romero, Deputy City Manager
Approved by: Jack Griffin, City Manager