HomeMy WebLinkAbout2016-03-08 AHTF_Agenda Packet CITY OF NEWPORT BEACH
}
AFFORDABLE HOUSING TASK FORCE AGENDA
cq<,FOR�`P 100 Civic Center Drive, Crystal Cove Conference Room (Bay D-2nd Floor)
Tuesday, March 8, 2016 - 3:00 PM
Affordable Housing Task Force Members:
Edward Selich, Council Member(Chair)
Kevin Muldoon, Mayor Pro Tem
Scott Peotter, Council Member
Staff Members:
Kimberly Brandt, Community Development Director
Brenda Wisneski, Deputy Community Development Director
James Campbell, Principal Planner
Jaime Murillo, Senior Planner
Melinda Whelan, Assistant Planner
The Affordable Housing Task Force meeting is subject to the Ralph M. Brown Act. Among other things, the Brown Act requires
that the Affordable Housing Task Force agenda be posted at least seventy-two (72) hours in advance of each regular meeting and
that the public be allowed to comment on agenda items before the Task Force and items not on the agenda but are within the
subject matter jurisdiction of the Affordable Housing Task Force. The Chair may limit public comments to a reasonable amount of
time,generally three(3)minutes per person.
The City of Newport Beach's goal is to comply with the Americans with Disabilities Act (ADA) in all respects. If, as an attendee or a
participant at this meeting, you will need special assistance beyond what is normally provided, we will attempt to accommodate
you in every reasonable manner. Please contact Melinda Whelan, Assistant Planner, at least forty-eight (48) hours prior to the
meeting to inform us of your particular needs and to determine if accommodation is feasible at (949) 644-3221 or
mwhelan@newportbeachca.gov.
NOTICE REGARDING PRESENTATIONS REQUIRING USE OF CITY EQUIPMENT
Any presentation requiring the use of the City of Newport Beach's equipment must be submitted to the Community Development
Department 24 hours prior to the scheduled meeting.
I. CALL MEETING TO ORDER
II. ROLL CALL
III. PUBLIC COMMENTS ON NON-AGENDA ITEMS
Speakers must limit comments to three (3) minutes.
IV. APPROVAL OF MINUTES
1. Minutes from November 4, 2015 Meeting
Draft Minutes of 11-04-2015
V. CURRENT BUSINESS
1. Negotiation of Agreement Terms for Seaview Lutheran Plaza Funding
Site Location: 2800 Pacific View Drive
Negotiation of Agreement Terms Memorandum.pdf
VI. PUBLIC COMMENTS
Public comments are invited on Current Business items.
VII. ADJOURNMENT
City of Newport Beach
Affordable Housing Task Force Minutes
Date: November 4, 2015
Location: Newport Beach Civic Center— 100 Civic Center Drive
Crystal Cove Meeting Room (Bay D-2nd Floor)
Members Council Member Edward Selich (Chair), Council Member Scott Peotter
Present:
Members Absent: Council Member Kevin Muldoon
Staff: Kimberly Brandt, Community Development Director; Brenda Wisneski,
Deputy Community Development Director; David Kiff, City Manager,;
Jaime Murillo, Senior Planner; and Melinda Whelan, Assistant Planner
I. CALL MEETING TO ORDER
The meeting was called to order at 2:30 p.m.
II. ROLL CALL
III. PUBLIC COMMENT ON NON-AGENDIZED ITEMS
None
IV. DRAFT MINUTES OF AUGUST 11, 2015
Mr. Jaime Murillo, Senior Planner, explained that a member of the public, Mr. Jim Mosher,
provided corrections to typographical errors and the errors have been addressed. The
minutes of the August 4, 2015 meeting were approved as amended.
V. CURRENT BUSINESS
a. Affordable Housing Fund RFP — Discussion and Recommendation
Mr. Murillo explained that the intent of the meeting is to review the proposal submitted on
behalf of Seaview Lutheran Plaza (SVLP) in response to the Affordable Housing Fund
RFP. The proposal was submitted on time and staff apologized for a glitch in the system
and the application was found in an electronic archived folder.
Mr. Murillo provided a brief background stating that SVLP is an existing 100-unit apartment
complex serving low and very low income seniors. They operate under an existing
covenant with the City that expires in 2039. They are requesting 2.8 million to provide
accessibility upgrades to all of the units' bathrooms as well as kitchen upgrades. Staff
found the proposal has merit and a full evaluation has been conducted consistent with the
RFP process including a site visit and a review by the evaluation panel. Staff recommends
prioritizing the Affordable Housing Funds (Fund) for new units including the conversion of
the 12-unit apartment complex in Newport Shores and the Oasis/Habitat for Humanity
senior home repair program since these projects would provide new units and a new
program which is needed in the City. SVLP has already received assistance from the City
2
Affordable Housing Task Force
November 04, 2015, Minutes
Page 2
and already provides the affordable units to seniors with an agreement until 2039 in
addition to assistance from the Department of Housing and Urban Development (HUD).
However, staff recommends that SVLP receive the balance in Funds with priority on the
bathrooms and accessible upgrades to the existing units.
Kimberly Brandt, Community Development Director, explained that there is only one
outstanding payment into the Fund of approximately $25,000 and therefore, the Fund is a
finite amount.
Richard Sontag introduced himself as a Seaview Lutheran Board Member and represented
SVLP. Mr. Sontage provided a history of the development as a 100-unit complex located
near Gelsons grocery store that is a 501, C3 entity built in the early 1980s with a mortgage
from HUD. He further noted there is a 2 to 3 year resident waiting list. He explained that
Seaview is managed by Caring Ministries which are unpaid volunteers. SVLP is strictly
overseen by HUD with regular inspections. He reminded the committee members and staff
that SVLP recently worked with the City to fix plumbing issues which included receiving
Affordable Housing Funds in exchange for extending their existing affordable housing
covenant until 2039. The Board intends to maintain senior affordable units indefinitely as it
is a mission of the Board and the Lutheran Church. SVLP recently used its own money to
upgrade the common areas however, the individual units are 30-years old and are in need
of upgrades. They have a list of priorities with the highest priority being the accessibility
upgrades to the bathrooms and shower stalls and any leftover funds would be used to
upgrade the kitchen areas. Mr. Sontag added that SVLP always scores high on HUD
inspections and they are grateful for the consideration of receiving the Fund.
Chairman Selich inquired if the HUD loan was still outstanding to which Mr. Pete Gross,
Seaview Lutheran Board Member, confirmed the loan is still outstanding with two years
remaining on the 5-year contract. Mr. Murillo further explained that the HUD loan will be
paid off in 2021. In response to questions, Mr. Gross explained that they are required by
HUD to maintain $100,000 in reserves; that the resident never experiences an increase in
rent unless their income increases; that HUD covers the gap if there is a rent increase; and
that once a senior becomes a resident, they can reside at SVLP indefinitely. .
David Kiff, City Manager, questioned why improvements are not funded with the general
operating fund if the operation is receiving some residual receipts. Mr. Sontag explained
that SVLP does not have enough funds to complete the necessary upgrades to all of the
units within a reasonable amount of time.
In response to Chairman Selich's inquiry, Mr. Sontag explained that they would still work
with HUD for the Section 8 program.. Mr. Murillo added that the operating expenses were
reviewed by the City's Housing Consultant, Clint Whited, who was also an evaluation panel
member.Mr. Whited determined that there would be funds available from residual recepits
after the HUD loan is paid off in 2021 to use for SVLP or to payoff another loan.
Chairman Selich suggested structuring the grant as a loan so that when SVLP has
available funds after their HUD loan is paid in full, they can pay back the City Fund which
could be used by other projects in the future. Mr. Kiff added that this would help the City
reach its goal in obtaining more units elsewhere in City.
Council Member Peotter inquired if SVLP accumulates more than $100,000 in their reserve
every year. Mr. Gross responded that HUD uses $1,200 per month and Mr. Sontag added
that there is currently almost $300,000 in their reserve as a "rainy day" fund but they try to
3
Affordable Housing Task Force
November 04, 2015, Minutes
Page 3
use the funds every year otherwise it is reclaimed by HUD. Mr. Gross added they utilize
their reserves for replacement carpeting or laminate where there are damages or it is worn
beyond use once someone moves out.
Council Member Peotter questioned if the Board Members would be interested in a loan
and still consider extending the covenant if it were a loan and not a grant. Mr. Sontag
affirmed they are interested in receiving the funds through a loan and extending the
covenant as it meets their mission of providing affordable housing.
Mr. Sontag clarified that the improvements are a high priority for safety and accessibility
reasons.
Council Member Peotter proposed the funds be divided between a loan and a grant and
recommended a continuation to a future meeting to discuss the loan and the grant after
staff and Seaview Lutheran Plaza board members work out the details.
Ms. Brandt recommended that staff move forward to City Council with the three proposals
recommending funding for two (Newport Shores and Oasis/Habitat for Humanity senior
home repair program) and work on providing the balance of the Fund, 1.6 million, to the
third (Seaview Lutheran Plaza) in order to reach an agreement with the disbursement of
funds for the loan and the grant.
Chairman Selich agreed and added that the Task Force does not want to hold up the other
projects. Member Peotter moved to continue the meeting to discuss the details of the loan
and grant when it is ready.
VI. PUBLIC COMMENT
None
VILADJOURNMENT
The meeting adjourned at 3:56 p.m.
The agenda for the Affordable Housing Task Force was posted on October 30, 2015, at 3:20 p.m. in the
Chambers binder and on the digital display board located inside the vestibule of the Council Chambers at
100 Civic Center Drive and on the City's website on October 30, 2015 at 3:30 p.m.
P4R� CITY OF NEWPORT BF;'
O COMMUNITY DEVELOPMENT DEPAP
H \ n 100 Civic Center Drive
C� MON. Newport Beach,California 92660
949 644-3200
c�CI�ORN�P newportbeachca.gov/communitydevelopment
Memorandum
To: Affordable Housing Task Force
From: Jaime Murillo, Senior Planner
Date: March 8, 2016
Re: Affordable Housing Fund Award
Seaview Lutheran Plaza - 2800 Pacific View Drive
On November 24, 2015, the City Council authorized staff to negotiate an
agreement with Seaview Lutheran Plaza (SVLP) for the remaining balance of
approximately $1.6 million of the Affordable Housing Fund for proposed
renovations and accessibility improvements.
This memorandum outlines the general terms of the agreement that the SVLP
management and staff have prepared for the Affordable Housing Task Force
(AHTF) and SVLP Board of Director's consideration. If the AHTF agrees with
these terms, SVLP Board of Director's will vote to accept the terms. Staff will
then prepare the agreements for City Council approval.
Background
On April 29, 2015, the City published RFP No. 15-55 for use of the City's
Affordable Housing Fund toward affordable housing development or
programming. Three proposals were submitted that ultimately received
recommendations for funding from an evaluation panel and the AHTF. The SVLP
project was one of three proposals.
Specifically, the project was presented to the AHTF on November 4, 2015. At the
conclusion of the meeting, the AHTF agreed that the remaining Fund balance of
approximately $1.6 million (balance after funding the other two proposals) be
allocated to SVLP, but recommended that at least half be provided in the form of
a deferred loan with any remaining balance provided as a grant. On November
24, 2015, the City Council authorized staff to negotiate an agreement with SVLP
and obtain a recommendation from the AHTF.
P"MW Community Development Department
Affordable Housing Fund Award
Seaview Lutheran Plaza
March 8,2016
Original Seaview Lutheran Proposal
SVLP is an existing 100-unit apartment complex that provides affordable housing
and services to very low- and extremely low-income seniors. The complex was
constructed in 1981 with financing support (Section 202 loan) from the U.S.
Department of Housing and Urban Development (HUD). In 2009, the City
provided $135,000 in Affordable Housing Funds to the complex to repair a
deteriorated water system in exchange for extending the affordability covenant
from 2021 to 2039. Although the condition of the units interior finishes remain
good, they have never been remodeled or upgraded and are nearing the end of
their useful life.
The original proposal from SVLP requested a $2.8 million grant to improve
accessibility for persons with disabilities and improve livability for the elderly
residents, such as replacing bathtubs with showers, ADA compliant toilets and
grab bars, lavatories and faucets. In addition, funding was requested to replace
all flooring within the units and remodel bathrooms and kitchens with new
cabinets and counters.
Current Proposal
Due to the complexity of the terms and timing of the loan, staff is recommending
entering into two separate agreements as summarized below. Both agreements
would include deed restrictions/covenants recorded against property.
Agreement No. 1- $800,000 Grant
Scope of work — Rehabilitation of 100 apartment bathrooms to include
ADA toilets; removal of tubs; installation of shower with glass doors (or roll
in for 6 accessible units); installation of new and/or existing safety grab
bars; installation of sliding/adjustable shower wand; installation of new
sink/vanity/mirror; replacement of hard surface flooring; new paint and
lighting.
Waiver of Building Permit and inspections fees (approximate value
$10,700 in addition to grant).
Agreement by SVLP to maintain existing affordability restrictions until
2069, which is an additional 30 years beyond present expiration date of
2039. Should SVLP or successors choose to terminate agreement prior to
2069, at minimum, a prorated amount of grant plus interest shall be repaid
to City. In no case shall the agreement be terminated prior to 2039.
Funds to be paid in full to SVLP upon completion of the following:
o SVLP shall execute and deliver to the City a copy of an executed
contract with contractor completing the improvements;
2
Affordable Housing Fund Award
Seaview Lutheran Plaza
March 8,2016
o SVLP shall provide the City certificates of insurance by each
contractor with original endorsements effecting coverage required
by City; and
o Plans reviewed for compliance with approved scope of work and
building permits obtained.
SVLP shall reimburse City the entire amount of funds if any of the
following conditions occur:
o SVLP does not obtain a final inspection for the improvements by
the City; or
o SLVP fails to submit a lien release in such form as approved by
City; or
o SVLP defaults in the performance of obligations under the
agreement; or
o If any of the funds disbursed by City are not used for the
construction of the improvements.
Agreement No. 2- $800,000 Loan
Scope of Work - Renovation of the 100 apartment kitchens, including new
cabinets, sinks and counters, and flooring. In addition, renovation would
include new flooring and window coverings of living area and bedroom.
Waiver of Building Permit and inspection fees (approximate value
$10,700).
To be repaid on an annual basis with available residual receipts. Residual
receipts are funds that would exceed amounts needed to operate the
property on a monthly basis and maintain a reserve for replacement funds.
Repayment would begin with the first full fiscal year after the present HUD
Section 202 loan is paid in full (2021). Annual report shall be provided to
City.
SVLP will make a full balloon payment to the City if the loan is not paid in
full at conclusion of affordability period (per Agreement No. 1), or the
affordability period will automatically extend until loan repaid. Should
SVLP or successors choose to terminate the agreement prior to 2069, at
minimum, the unpaid loan balance plus interest (and prorated grant plus
interest per Agreement No. 1) shall be repaid to City. In no case shall the
agreement be terminated prior to 2039.
3
Affordable Housing Fund Award
Seaview Lutheran Plaza
March 8,2016
SVLP will seek HUD approval to enter into this loan agreement. HUD
approval is required for any encumbrance entered into during the course
of the existing mortgage, even if the conditions will take effect after the
mortgage is paid in full. If HUD approval is not secured within 6 months of
execution of the agreement, the City reserves the right to terminate
agreement and utilize funds for other purposes.
Funds to be paid in full to SVLP upon completion of the following:
o SVLP shall execute and deliver to the City a copy of an executed
contract with the contractor completing the improvements;
o Prior to disbursement of any funds, SVLP shall provide the City
certificates of insurance by each contractor with original
endorsements effecting coverage required by City;
o Plans reviewed for compliance with approved scope of work and
building permits obtained; and
o HUD approval.
4
g