MEETING DATE:
SEPTEMBER 12, 2017
SUBJECT:
Title
RESOLUTION NO. SHA 2017-027 - APPROVAL OF A PROPERTY ACQUISITION LOAN TO RICHMAR STATION SAN MARCOS, LP (DEVELOPER) FOR PROPERTY ACQUISITION FOR A FUTURE AFFORDABLE HOUSING DEVELOPMENT IN THE RICHMAR NEIGHBORHOOD
Body
Recommendation
Recommendation
ADOPT a resolution that the City Council in its capacity as the Successor Housing Agency (SHA) to approve property acquisition loan in the amount $360,000.
Body
Board or Commission Action
City Council as SHA approval of ENA and predevelopment loan on September 9, 2014
City Council as SHA approval of Supplemental Housing Support Agreement on December 9, 2014
City Council as SHA approval of Development and Loan Agreement, Section 33433 Report and property transfer on August 11, 2015
City Council as SHA approval of property acquisition loan on July 11, 2017
Relevant Council Strategic Theme
Planning for the Future
Relevant Department Goal
Facilitate Affordable Housing Production
Introduction
One of the City’s objectives has been the completion of the revitalization of the Richmar neighborhood, including the area between Mission Road and Richmar Avenue eastward to Firebird Lane. To that end, on September 9, 2014 the City Council as SHA approved an Exclusive Negotiating Agreement (ENA) and a related predevelopment loan of $392,500 for the Richmar Station mixed-use affordable housing development. On August 11, 2015 the SHA approved a Development and Loan Agreement, Section 33433 Report, and transfer of the SHA-owned property known as “4-Way Liquor” to the Developer for a loan of $2,227,870 inclusive of the property value, relocation, demolition and associated soft costs. On July 11, 2017 the SHA approved an additional loan of $721,500 for acquisition by the Developer for property known as the “Sabbas property” inclusive of the property value and associated soft costs.
Discussion
Since the inception of the project, the Developer planned to include the property at 220 Richmar Avenue (APN 220-082-04) in the project. This property is under private ownership and consists of one 0.12 acre parcel, APN 220-082-04 that is presently devoid of structures. Purchase of this property will allow the developer to continue orderly property assembly for the affordable housing project. This property acquisition will be the next step in a multi-phased property assembly process. Final property assembly for the entire project could take several years.
Included in the attached resolution is the approval of an additional loan from the City as the SHA for $360,000; $300,000 is for property acquisition and an additional $60,000 is for associated predevelopment soft costs. The $360,000 represents the actual out-of-pocket cash loan that is being requested from the SHA. The money will be pulled from the Fund SHA 250 account. Sufficient money is in this account to fund this amount.
Fiscal Impact
Fiscal impact is up to $360,000 from the SHA account. Due to unusually robust recent residual receipt payments, the current balance in Fund SHA 250 allows for this without draining money from other SHA sources. This is a one-time out-of-pocket fiscal impact for this singular acquisition event.
Attachment(s)
1. Resolution No. SHA 2017 - XXX
2. GIS Exhibit depicting the potential project site, including the property at 220 Richmar Avenue
Prepared by: Harry Williams, Housing Programs Manager
Submitted by: Dahvia Lynch, Director, Development Services Department
Approved by: Jack Griffin, City Manager