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HomeMy WebLinkAbout2015-11-04_AHTF_Minutes_Approved 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 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. Sontag provided a history of the development as a 100-unit complex located near Gelsons grocery store that is a 501(C)3 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 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.