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Home My WebLink AboutAGENDA REPORT 2009 0429 CC SPC ITEM 05ArrEm S.A. CITY OF MOORPARK, CALIFORN9 A City Council Meeting of ACTION: MOORPARK CITY COUNCLY' AGENDA REPORT TO: Honorable City Council FROM: David C. Moe II, Redevelopment Manager DATE: April 23, 2009 (Special CC Meeting of 4/29/09) SUBJECT: Consider Entitlement Process for the Charles Street Affordable Housing Rental Project BACKGROUND In accordance with the Development Agreement dated August 30, 2007, Toll Land XX Limited Partnership has acquired the properties at 396, 406 and 436 Charles Street ( "Properties "), totaling approximately 36,590 square feet, to satisfy a portion of their affordable housing requirement for Tract 5463, and transferred the Properties on April 10, 2008 to the City of Moorpark. Prior to development, the City of Moorpark will transfer the Properties to the Redevelopment Agency of the City of Moorpark for development of an affordable housing project. On December 27, 2007, the Agency entered into an Exclusive Negotiation Agreement ( "ENA ") with the Area Housing Authority of the County of Ventura ( "AHA ") to develop a conceptual plan for an affordable housing project on the Properties. The ENA resulted in a proposed project consisting of 21 units with a podium style building and assigned covered parking underneath the building. The project would be 100% affordable and have a mixture of one, two and three bedroom units, ranging in size from 870 -1100 square feet. During the last two years, staff has been negotiating a Disposition and Development Agreement ( "DDA ") with the AHA. Negotiations were almost complete until a financial gap was identified in the predevelopment phase of the project. The AHA committed $50,000.00 towards predevelopment expenses and requested the Agency pay the anticipated difference of $300,000.00. Negotiations stalled as the Agency was hesitant to give $300,000.00 to a project that might not come to fruition. In the end, Agency staff suggested a loan be given to the AHA secured by the entitlement of the project. 000001 Honorable City Council April 29, 2009 Page 2 of 4 On April 1, 2009, the Agency Board approved a Loan Agreement with the AHA to fund predevelopment expenses to entitle the housing project. The loan would not require any payments and would be repaid with the first draw of the construction loan for the project. Interest on the loan would accrue quarterly and the rate would be based on the quarterly Local Agency Investment Fund (LAIF) rate. DISCUSSION The original plan was to entitle the project by October 2009 and submit in the second round of the 2009 tax credits. However, on April 8, 2009, the California Tax Credit Allocation Committee ( "TCAC ") issued a memorandum stating there would only be one tax credit funding round this year. The deadline to submit a preliminary application is June 9, 2009. All projects selected to proceed beyond the preliminary deadline will need to be entitled by August 17, 2009, to receive a tax credit reservation. TCAC mentioned the reason for the single funding round in 2009 was to align with the American Recovery and Reinvestment Act of 2009 to give California access to the national pool of credits. The new single funding round for 2009 presents the Agency with two options to proceed with this project. The first option is to simply entitle the project on a normal entitlement schedule. The City would need to process General Plan, Zoning Ordinance and Downtown Specific Plan Amendments and a DDA could be executed between the Agency and AHA. The project would not be ready for the 2009 tax credit round, but would be ready for the 2010 funding round (dates are unknown). The second option is to fast track the project and secure entitlement by August 17, 2009. The City, Agency and AHA would need to be co- applicants on the tax credit application to demonstrate site control. The project will also need to meet the density limitation in the current General Plan, Zoning and Downtown Specific Plan districts to be considered an infill development to be exempt under CEQA. Government Code Section 65915 allows up to 35% density bonus where 20% of the units are restricted to low income tenants and a 35% density bonus where 11 % are restricted to very low income tenants, but the statute requires the developer to select one of those bonuses (not both). However, Section (n) of the statute allows cities "if permitted by local ordinance" to grant a greater density bonus. Therefore, the City Council would need to amend the City's density bonus ordinance and the General Plan to allow a higher density than allowed by Government Code 65915 for certain projects. This would need to be effective prior to Council approval of the proposed RPD. A separate agenda item is included on this agenda to initiate changes to the City's density bonus policies and regulations. At the appropriate time, staff will recommend that a greater density bonus than specified in State statute be authorized for projects that are 100% affordable for low and very low income persons. 000002 Honorable City Council April 29, 2009 Page 3 of 4 The timeline to have the proposed project fully entitled as proposed in the second option is extremely tight, but staff believes it can be achieved. Below is the timeline that would need to be followed in order to entitle the project by the August 17, 2009, deadline: Density Bonus Ordinance /General Plan Amendment 1. City Council initiates changes to density bonus regulations — April 29, 2009 2. Publish 1/8 page ad for Planning Commission meeting on proposed changes to density bonus regulations due - May 9, 2009 3. Planning Commission meeting to consider proposed changes to density bonus regulations - May 26, 2009 (or a special meeting on May 19, 2009) 4. Publish 1/8 page ad on City Council meeting to consider proposed changes to density bonus regulations due — May 23, 2009 5. City Council action on proposed changes to density bonus regulations - June 3, 2009 6. Zoning ordinance second reading — June 17, 2009 7. Zoning ordinance effective date — June 17, 2009 RPD Applications 1. Area Housing Authority (AHA) proposed RPD application submittal due - May 4, 2009 2. AHA proposed RPD application must be complete - May 20, 2009 3. Planning Commission staff report and advertisement for proposed RPD application hearing due - June 8, 2009 4. Planning Commission hearing on proposed RPD application - June 23, 2009 5. City Council staff report and advertisement on RPD hearing due - June 29, 2009 6. City Council hearing on proposed RPD application - July 15, 2009 (RPD approval resolution to be adopted following effective date of zoning ordinance.) 000003 Honorable City Council April 29, 2009 Page 4 of 4 The dates on the prior page may change depending upon the City Council summer recess schedule. Staff believes the second option may present a rare opportunity for the City and Agency. With a short and unexpected deadline, most agencies will delay their projects unless they are currently entitled. The new deadline may significantly reduce the number of applications submitted to TCAC and increase the City's chance of being funded. After the project has received a reservation for tax credits, the Agency would execute the DDA with the AHA and the City could proceed to amend the General Plan, Zoning Ordinance and Downtown Specific Plan to align the project with the appropriate land use controls. FISCAL IMPACT None that are not already planned as part of the proposed project. STAFF RECOMMENDATION 1. Authorize staff to proceed with second option described in agenda report; and 2. Direct City Manager to execute any documents necessary to apply for tax credits. 000004