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HomeMy WebLinkAbout4.01 Draft CC 09-23-2002 MinSPECIAL MEETING - September 23, 2002 A special meeting of the Dublin City Council was held on Monday, September 23, 2002, in the Council Chambers of the Dublin Civic Center. The meeting was called to order at 7:30 p.m., by Mayor Lockhart. ROLL CALL PRESENT: ABSENT: Councilmembers McCormick, Oravetz, Sbranti, Zika and Mayor Lockhart. None. PLEDGE OF ALLEGIANCE Mayor Lockhart led the Council, Staff and those present in the pledge of allegiance to the flag. 7:33 p.m. Bruce Fiedler, Cedar Street, stated that he works as an administrator of an elder housing complex locally, and is continually turning away applicants due to elder housing shortages. He felt that the Council's focus should be on low~income elders, and urged the Council to maximize our elder housing investment by increasing the total number of units to be constructed. He suggested adding another story on the building, if necessary, and felt that one-bedroom units would make the dollars go farther. He urged the Council to consider a developer who has openness to some kind of a joint operating strategy with the Senior Center that will allow for some economies of scale in purchasing, custodial and landscape service, office space and equipment, and even personnel. KEY iSSUE SUMMARY FOR SENIOR HOUSING DEVELOPER SELECTION 7:40 p.m. 7.1 (430-80/600-60) Mayor Lockhart thanked the Developers for their proposals. She explained the interview process, during which time each Developer would have 15 minutes to make their CITY COUNCIL MINUTES VOLUME 21 SPECIAL MEETING SEPTEMBER 23, 2002 PAGE 467 presentation, which would be followed by a series of questions from Council and Staff. Hopefully the question & answer period would take no more than 30 minutes. She introduced Staffmembers Julia Ab&ah, Housing Specialist; Herma Lichtenstein, Parks & Facilities Development Coordinator; Fred Marsh, Finance Manager; and Housing Consultant Dan Lopez, and indicated that they would be participating in the interview process. The developer's would be interviewed in the following order: EAH, Inc., Mercy Housing, American Baptist Homes of the West (ABHOW), and Eden Housing. 7:45 pm EAH, Inc., Representatives distributed supplementary information to the Council, and presented their proposal and slides, indicating that they are one of the oldest and most experienced affordable housing developers in the Bay Area, and have developed over 4,500 units of housing ranging in type from families to seniors to home ownership. EAH focused on "green design" before it was a requirement by the affordable housing funders. EAH proposed to build an aesthetically exceptional senior housing complex that would interact well with the new Senior Center, and develop a home for Dublin seniors where they can gather together, invite friends over and create community. The housing is also designed for seniors to "age in place", as they tend to stay in place for as long as possible because senior housing is so difficult to find. The final design will have to balance many competing interests including parking requirements, the desire for as many units as possible, the need for a small on-site communal gathering space and a manager and service worker's office. EAH proposed using the 9% tax credit program, as this offers the largest amount of equity to the project and the potential for the smallest amount of City investment. In this scenario, the City's contribution would be a total of $1.98 million or $39,700/unit. They also proposed alternatives to the 9% program, such as the Tax-Exempt bond/4% tax credit program, using 501-c-3 bonds or the HUD 202 program, pointing out that each of these programs has trade offs in terms of timing. Cm. Oravetz asked what criteria they based their estimated completion &ate of June 2004. EAH Representatives indicated that the estimate was based on the approval process timeline and a hope to go for the first round of tax credits in early 2003, and starting construction in 2003. Cm. Zika asked what would happen if them are cost overruns? CITY COUNCIL MINUTES VOLUME 21 SPECIAL MEETING SEPIEMBER 23, 2002 PAGE 468 EAH Representatives indicated that their tax credit projection is very conservative, if there were a cost overrun, they would consider deferring a portion of the developer fee or putting it back as equity into the project. Cm. Zika asked if they had a ready market for their tax credits? EAH Representatives indicated yes, they are very sought after by the tax credit investment community. Cm. Zika asked it was cost effective to sell credits over a period of time rather than selling them early, and would EAH look to the City to do the bridge financing in the interim? EAH Representatives indicated that they would look at the least expensive source of money, as well as get direction from the City as to its monetary priorities. Cm. Zika asked what we would get if HUD Section 202 money was used. From other developer proposals, it appears that we might be able fund a few more, lower income units. EAH Representatives indicated yes, they were very familiar with 202's. They did not fully analyze it for this project, but they would be happy to do so. HUD 202's are great because they provide a deep subsidy so that a resident who moves in is only paying a third of their income for rent. Unfortunately, it provides a more limited range of affordability than you can get with tax credits, and there are design items that HUD will not cover. Cm. McCormick asked if EAH was currently applying for HUD 202 for any other projects? EAH indicated that they were completing a 202 project in Contra Costa County, and have no applications currently pending. Cm. McCormick indicated that the term "aging in place" was new to her, although she understood the concept. Is it being used in any of their projects? EAH indicated yes, they were the first organization to go to HUD for permission to use social service support in the operating budget because they saw the need. People need assistance with daily living as they age. Rather than forcing seniors to move into nursing care, they help people stay independent as long as possible. CITY COUNCIL MINUTES VOLUME 21 SPECIAL MEETING SEPTEMBER 23, 2002 PAGE 469 Cm. McCormick asked if their proposal for two-bedrooms was to allow for live~in assistance? EAH indicated yes, that would be an option. Cm. Sbranti asked if there would be a manager on site? EAH indicated yes, that was standard. Cm. Sbranti clarified that, with aging in place, they would provide social services to residents? EAH indicated yes. It really is a lottery to get into senior housing, and it's best to keep them in place for as long as possible. There is no extra cost to the City for the services, and those services would be customized to work with the resources available in the community. Cm. Sbranti asked if they would work collaboratively with the Senior Center for services and recreational programs? EAH indicated absolutely, they have already spent a couple of hours with Senior Center Staff to find out what services are currently available and what needs to be included in their operating costs. The Senior Center would also be able to use some of the facilities at the senior housing site. Cm. McCormick asked if any of the projects shown on their slide presentation were over 10 years old? EAH indicated yes, some were 11 ~ 13 years and still in good condition. Mayor Lockhart asked if they planned amenities other than a community room, and how did they envision handling the needs of seniors onsite? EAH indicated that it was part of the function of the overall financing of the development. The more units available, the more economical the development, which frees up more money for amenities. Outdoor decking, a library, or other private space other than in their rooms would be preferred, and still negotiable in the plans. Mayor Lockhart indicated that the City has certain priorities that are to be used in tenant selection, and asked if that would be an issue for EAH? CITY COUNCIL MINUTES VOLUME 21 SPECIAL MEETING SEPTEMBER 23, 2002 PAGE 470 EAH indicated that tenant selection policies were a normal course of business and they would support Dublin's process. Mayor Lockhart clarified that EAH hoped to go out to funding in March or April 2003, and asked if their timeline would be affected if the City didn't complete the transfer of property from the County to the City until next year? EAH Representatives indicated that as long as they knew it was going to happen, the timing was fine. Cm. Zika clarified that the value of the land was not considered in going for tax credits, only the value of the building? EAH Representatives indicated that if the land was donated by a local government, you get points. Cm. Zika clarified that you get points, but you don't get increased values for more credits? EAH indicated that in the basis for tax credits they don't consider land, just the construction. You do get points for the donation, and you need to get as many points as possible. 8:30 p.m. Mercy Housing Representatives distributed supplementary information (which was not provided to the Deputy City Clerk), presented their proposal and showed slides of their projects. They proposed to develop and operate 44 units of affordable apartments for seniors 62 years of age and better. All of the units would be one-bedroom apartments affordable to households at 40% of Area Median Income (AMI). At this level, the rents would be $559 per month. Low-income seniors are in desperate need of affordable housing at this price, as evidenced by the two and three year waiting lists at affordable senior communities in the Tri~Valley area. Mercy Housing proposed a four story, Type V, one-hour wood frame construction with some tuck under parking, and on grade landscaping to visually connect with the Senior Center. Each of the units would be 600 square feet and accessible, and the development would include a community room, on-site laundry, and property management offices. CITY COUNCIL MINUTES VOLUME 21 SPECIAL MEETING SEPTEMBER 23, 2002 PAGE 471 Mercy Housing proposed that the development be financed by 9% tax credit equity proceeds, AHP, a permanent loan, and City of Dublin financing. They proposed a City of Dublin loan of $1,882,145 to Partially finance the development. The City loan would allow Mercy to create permanent affordable housing for very low~income seniors. They would, however, be willing to work with whatever financing scenario the City deemed appropriate. Mercy Housing concluded by indicating that they are one of the largest nonprofit developers and managers of affordable housing in California, developing and managing over 4,300 units of rental housing with another 2,000 units in process. Their organization is driven to provide quality affordable housing that is service-enriched for the economically poor. Cm. Sbranti asked if they pursued the HUD 202, how it would affect the timeline, City financing, etc? Mercy Housing indicated that it may or may not affect the timeline. The next HUD cycle will be May 2003 with awards in Fall 2003; however, the design work could be started as soon as the developer is selected. Conceivably, there should be just a few months difference between the development processing with the 202 financing and the tax credit financing ff the City was willing to pay for pre~ development work in advance of receipt of the HUD capital advance notice. Cm. Sbranti asked why Mercy Housing was proposing fewer units than the other developers with more proposed City subsidy? Mercy Housing indicated they could look at including more units; but having not looked at the other proposals, they can't point out the differences. They did, however, include a laundry room, property management office, and the community room. Cm. Sbranti asked how Mercy Representatives saw themselves working in compatibility with the Senior Center? Mercy Housing Representatives indicated that one typical way they would coordinate with a service provider would be to meet with them regularly, for purposes of coordinating space and time and program development. Cm. McCormick asked if they would put together combinations of financing? Mercy Housing Representatives indicated that all of the proposed developers would turn over every stone and look for every available subsidy dollar. CITY COUNCIL MINUTES VOLUME 21 SPECIAL MEETING SEPTEMBER 23, 2002 PAGE 472 Cm. McCormick asked if Mercy Housing had used green building elements in their past projects, and if so, did it raise the costs? Mercy Housing Representatives discussed their use of green building and indicated yes, sometimes it raises the cost. They would work with the City to study options. Mayor Lockhart asked Mercy Housing to describe the selection criteria of an onsite manager. Mercy Housing Representatives indicated they would do an extensive search to find someone with experience in working with seniors; it is a very specialized area. The person would need to be a people person with a heart for seniors. Mayor Lockhart asked if they planned any usable roof space for a patio area, etc? Mercy Housing Representatives indicated that its architect cautioned against putting usable outdoor space above living spaces. There is a concern about the long~term protection of the living space below usable areas in a wood frame building. They suggested using that area for solar collectors, etc. Cm. Zika asked what would happen if they applied for both HUD 202 and tax credits at the same time and they got both? Would they lose credibility? Mercy Housing Representatives indicated that it would be more difficult to not accept a HUD award because, in addition to the capital advance, it would come with a very long~ term operating subsidy. A credibility loss would not come from declining the credits, but in accepting the credits but failing to perform. There would be penalties to the sponsor of the developer. Cm. Zika expressed concern that the senior housing residents would become territorial over the Senior Center, thinking the Senior Center was their own, and start a big brouhaha with other seniors. Mercy Housing Representatives stated that brouhahas were not alien to them. In other projects, with hard, skilled work, they have been able to successfully educate residents that the Senior Center was for all seniors. Cm. Zika reiterated his concern and wanted everyone to know that the Senior Center is for all seniors, not just the seniors who reside in the senior housing complex. Cm Oravetz asked what a 5th story on the building would look like? CITY COUNCIL MINEr. S VOLUME 21 SPECIAL MEETING SEPTEMBER 23, 2002 PAGE 473 The Mercy Housing Architect responded that it would change the construction dramatically. At that point, a wood frame building would not work; it would probably need to be a concrete structure. It would still be sympathetic with the Senior Center, and in terms of the downtown plan, it would work fine. There is plenty of space around area and would not be in conflict with the commercial spaces around it. Costs efficiency, however, would drop dramatically. Housing Consultant Dan Lopez asked Mercy Representatives to discuss their proposal of a 15~year fully amortized loan, as compared to the other developers' proposal of a 30~ year loan. Mercy Housing Representatives indicated they kept the loans at 15 years because they were comfortable with debt payment every year. They wanted to start year 16 with the operations being positive. Mr. Lopez asked, in terms of paying back the City, what do they anticipate? Mercy Housing indicated they would be requesting a residual receipts terms. Whatever is left over after they pay their operating expenses and partnership management fees would be repaid to the City. Mr. Lopez clarified that, potentially, after the first is paid off after 15 years, there would be greater residual receipts to pay to the City? Mercy Housing concurred. Mr. Lopez referred to their application which talked about receiving 82 cents on the dollar on 9% credits, and asked how realistic is that? Mercy Housing indicated that they may be able to do better, but wanted to use a conservative number. They would solicit investor proposals from the wide array of purchasers of tax credits, and get the best price for tax credits at the time they were sold on the market. Mr. Lopez asked either EAH, Inc. or Mercy Housing what the cost difference would be between podium construction vs. Type V wood frame? EAH Representatives indicated that typically podium construction is cost effective when land costs are taken into account. Podium has a cost premium of between $10 ~ $15,000/unit. However, you get additional units in exchange. CITY COUNCIL MINUTES VOLUME 21 SPECIAL MEETING SEPTEMBER 23, 2002 PAGE 474 Cm. Oravetz asked if parking was really a big issue at the senior center. Mercy Housing Representatives indicated yes. They are proposing a 50% ratio; one space for every two units. Because many seniors do not drive, they feel comfortable with that ratio. RECESS 9:30 p.m. Mayor Lockhart called for a short recess. Councilmembers present. The meeting reconvened at 9:40 p.m. with all American Baptist Homes of the West (ABHOW) distributed supplementary information to the Council and presented their proposal with accompanying slides. ABHOW and its affiliate corporations own and/or manage 13 continuing care retirement communities and 15 federally subsidized rental complexes, as well as one financed with tax credits and state bond funds. The total number of elderly and disable people served by ABHOW is close to 5,000. ABHOW Representatives indicated that their proposal meets the City's objectives to maximize the number of units and to provide innovative use of the space by building a 3~story structure over underground parking. The architect has designed the project to be fully integrated with the adjacent Senior Center. Highlights of the proposed plan includes: 48 apartments (47 1 ~bedroom and 1 2-bedroom for the manager); 87 spaces for Senior Center parking; 3~story building totaling 40,500 square feet of living and common area space; underground parking totaling 13,500 square feet with 24 parking slots including handicap spaces; and building height of 48 feet with a flat roof, with an alternate of 58 feet with a pitched roof. ABHOW's preferred financing alternative is the HUD Section 202 program because it is less costly to develop projects under this program and the available resident subsidies ensure that the project can serve seniors with very limited resources. Based on the assumptions regarding financing under the Section 202 program, ABHOW projects that an additional $1,753,358 would be required from the City, County and/or other public sources. This could include funds from the City's inclusionary housing fund as well as HOME funds from the County. ABHOW indicated that the HUD Section 202 capital advance does not provide sufficient funds to cover all developments costs; however they are experienced in seeking out and CITY COUNCIL MINUTES VOLUME 21 SPECIAL MEETING SEPTEMBER 23, 2002 PAGE 475 applying for gap funding to supplement these funds. ABHOW is also willing to commit funds of its own to the Dublin senior housing project. Mayor Lockhart asked if there were additional strings attached when using the HUD 202? Is there a difference in amenities that can be put into the project? ABHOW Representatives indicated yes, the HUD 202 program has different requirements and limitations for construction, we would not able to support as many amenities. You need to look at the HUD 202 funding as giving a basic box, with gap funding providing the nice amenities. Mayor Lockhart asked how a Board of Directors would be organized, and what its purpose and goals would be? ABHOW Representatives indicated that each of its corporations has its own Board, which reaches out to the community for members with specialties in the senior arena. They also train and help develop the Board in making decision for the construction and completion of the job, as well as future management. Mayor Lockhart if ABHOW had used green building principles in previous projects? ABHOW Representatives indicated that they incorporate green building whenever possible, but can't always fund those improvements. If they can't afford an improvement completely, they will put in the infrastructure, such as wiring, and be ready to go when they can afford it. They always use energy efficient appliances, purchase good windows, and insulate walls; however, they haven't done any certified projects. Cm. McCormick asked what gap funding would cover in their proposal? ABHOW Representatives indicated it would cover the addition of nice balconies, and any other amenities, etc. Cm. McCormick asked if they did aging in place in any of their facilities? ABHOW Representatives indicated absolutely, the continuum of care was deeply ingrained in their communities, through social services coordinators, activity directors, etc. Cm. Sbranti referred to ABHOW's proposed timeframe, and asked the reason for a 4~ year completion period instead of the other proposals of g-years? CITY COUNCIL MINUTES VOLUME 21 SPECIAL MEETING SEPTEMBER 23, 2002 PAGE 476 ABHOW Representatives indicated that they wanted to allow for sufficient time for funding, in case they needed to go through a second round. However, they should be able to complete the project in 3 years. It all depends on HUD 202 awards. Cm. Sbranti noted that ABHOW considered themselves specialists in senior housing and asked how that sets them apart in terms of additional amenities provided for their residents. ABHOW Representatives referred to a recent study done by the Tri~Valley Consortium of Housing Service Providers, which identified four main items to consider. In addition to housing, there was transportation, case management and in-home support. ABHOW provides these resources in all of their current communities, and would do so with this community. Julia Abdala, Housing Specialist, asked if ABHOW was applying for Section 202 for any other project in 2003? ABHOW Representatives indicated that they had a Section 202 project in Oakland. Ms. Abdala asked if that would hurt ABHOW's chances of receiving simultaneous funding? ABHOW Representatives indicated no, they've already done it with no problems. Ms. Abdala asked how long their two senior projects in the Bay Area have been in existence? ABHOW Representatives advised that Casa de Redwood was 30 years old, and the Allen Temple in Oakland opened in 1984. They are both in very good condition, with superior management reviews. Fred Marsh, Finance Manager, noted that their proposal included $274,000 in residual receipts, but couldn't tell from their schedules when they anticipate those schedules start to be paid to the City? It looked like the cash flow was coming out to zero at the end of each year. ABHOW Representatives indicated that the operating budget leaves little room for residuals receipts on these projects. Until you reach a point that the project's been in existence for quite a period of time, there really is not much of any payback. Most of the additional assistance that they get from cities and counties are deferred loans that go on for 40 or more years. CITY COUNCIL MINUTES VOLUME 21 SPECIAL MEETING SEPTEMBER 23, 2002 PAGE 477 Mr. Marsh noted that ABHOW did not include the required audit report and verified that they had received an audit for 2001. ABHOW Representatives indicated yes, it would be sent to the City. Parks & Facilities Development Coordinator Herma Lichtenstein asked how they would balance the development costs with long~term maintenance and material upkeep, and what cost premium dollar per square foot do they anticipate adding to the project cost if we do increase the material type or design complexity? ABHOW Representatives indicated that they would look at developing a very complete set of design specifications. They don't cost cut on certain quality materials that are long-term maintenance items. In their gap funding, they plan to include a better grade of flooring, door locks, etc., that don't become obsolete early. Project costs currently average approximately $128 ~ $1 $6 per square foot. 10:25 p.m. Eden Housing Representatives presented their proposal and slide presentation, indicating that they were a fully integrated nonprofit development corporation with development, management, and resident services companies. They are different from peers in that they are chartered to work statewide, but work in our region. Their philosophy and programs promote "aging in place". They are committed to independent living for seniors who can't afford assisted living. Eden Housing is made special by their senior activities, health and well-being resources, as well as their scholarship program run at the discretion of their Board of Directors. Eden Housing analyzed the Dublin Senior Housing project using both HUD 202 and tax credit project scenarios. Under the tax credit scenario, the housing would feature 48 units, with a combination of one- and two-bedroom units. The HUD 202 scenario would include 54 one-bedroom/one-bath units (except for the manager's 2- bedroom/2-bath unit) in a three-story elevator building on top of structured parking at grade. The financing section of their proposal identifies the need for local gap funding ranging from $1.7 to $1.8 million, which would come form a combination of proposed City and County sources. Under the 202 program, all of the units would be 100% affordable to very low income seniors. Tenants would pay 30% of their income for rent, and the project rental assistance contract provides the difference. The PRAC can also cover the cost of the onsite services coordinator. Although difficult to work within the constraints of the HUD 202 program, it targets a level affordable that is not achievable with any other model. On the tax credit side, it would be 100% to very low~ and low- CITY COUNCIL MINUTES VOLUME 21 SPECIAL MEETING SEPTEMBER 23, 2002 PAGE 478 income households up to 60%. There would be a 55~year minimum term of affordability. With this scenario, Eden included $250,000 upfront services reserve to ensure the provision of their onsite coordinator. The tax credit scenario concerned them in that rents would need to be raised over time. One of the concerns in developing under the 9% model is the need to raise rents over time. To ensure rent stability, they would want to explore with the City either project~based Section 8 or a capitalized rent reserve to try to hold rents low. Eden's proposed site plan orientates the building along the southern property line to provide maximum sun for the site of the future Senior Center and a sunny walkway connection which residents can use and feel both a sense of connection and community with the new Senior Center. Inside, the design incorporates a "pedestrian way" with units laid out along a central circulation path on each level, with "front porches" where tenants will have individual entries. These "porches" or alcoved entryways provide a means of transitioning between public to private space. These areas have been very successful with other Eden residents, each uniquely decorating their entr)wvay to personalize this semi~public alcove. The units are furnished with full kitchens for independent living and are designed in full ADA compliance. The proposed building contains a variety of community facilities including the manager's unit and office, Service Coordinator's office, reception/lobby and mail area on the first level, a community room on the second level, and a library/computer room and laundry/exercise room on the third level. The building is proposed to be a 3~story wood frame Type V one~hour, fully sprinkled R~ 1 occupancy over a Type II concrete parking garage. The overall building will have a height of approximately 44 feet, with approximately 12,000 square feet of heated space per floor and a 14,600 square foot garage on grade level for a total building area of approximately 50,500 square feet. The building will have pitched roofs and spaced wood decks on the second and third levels of the residential portion. The site plan allows for a total of 35 parking spaces provided on the housing site. The landscape design of the outdoor space is minimal due to the site density; however, the units are buffered from the adjacent parcels on the south, east and west by trees and layers of planting to filter view and add privacy. Cm. Sbranti noted that Eden's estimated completion date was August 2006, and asked if it could be speeded up. Eden Housing Representatives indicated that the timeline was very conservative; it all depended on funding. If everything went smoothly, the timeline could be accelerated. Cm. Sbranti asked how Eden saw their proposed senior activities linking with the Senior Center? CITY COUNCIL MINUTES VOLUME 21 SPECIAL MEETING SEPTEMBER 23, 2002 PAGE 479 Eden Housing Representatives would like to coordinate with the Senior Center to not duplicate programming, and to utilize each other's facilities. Cm. McCormick asked fi, because Eden builds in the Tri~Valley, would they have another 202 funding application in process? Eden Housing Representatives advised that they had an application for a project in Livermore in the current round, but don't anticipate one for next year. Eden wondered if there was a strategy to do a Tri~Valley Senior Housing proposal to HUD. If Livermore doesn't get funded, perhaps Eden could pare them together and go to HUD with the unique approach in conjunction with Livermore next year. A tax credit proposal with collaboration between the two projects could be considered, as well. Cm. McCormick asked if they planned to incorporate green building elements into the project? Eden Housing Representatives indicated yes, they support green building and get additional points for tax credits by exceeding Title 24. Cm. McCormick confirmed that Eden would initiate community meetings to get input from seniors before construction? Eden Housing Representatives yes, on prior projects they have solicited input from seniors through the total design process. Cm. Zika clarified that HUD 202 funding allows only one~bedroom units. Eden Housing Representatives indicated yes, with the exception of the manager's unit. Cm. Zika asked how much the Services Coordinator makes per year? Eden Housing Representatives indicated typically in the low $30,000's. Cm. Zika asked why a $250,000 reserve would be needed for that position? Eden Housing Representatives indicated that the estimate covered a 5~year period, including health and worker's compensation insurance. Because they own their projects for life, they want to make sure they have a head start on that position. This scenario is for the tax credit projects. CiTY COUNCIL MINUTES VOLUME 21 SPECIAL MEETING SEPTEMBER 23, 2002 PAGE 480 Eden Housing Representatives further advised they liked a HUD building and they raise the rents because HUD pays the rent raise. It's a real challenge to raise rents with a tax credit properties because the seniors live on increasingly fixed incomes. Cm. Zika clarified that if, with the HUD 202 program, the cost of maintaining the building exceeds the rent income of the 30% that the seniors can pay, HUD picks up difference? Eden Housing Representatives indicated yes, that's why Eden only has one tax credit project in their portfolio. It's an important consideration between the two programs. The tax credits gets a wider range of rents, which has some value. However, as the building gets older and the operating costs go up, rents need to go up because you need to generate enough income to cover the cost of operating the building, but the seniors fixed incomes need to be considered~ as well. Cm. Oravetz referred to a project Eden built in 1972 and asked how many square feet the rooms were in that building. Eden Housing Representatives indicated that the rooms were 540 feet. HUD has always had a 540 square foot bias; you don't get to do much outside of their box. Eden actually sneaks in a few extra square feet, which HUD allows. Mayor Lockhart indicated that she had one question, then she would allow Staff to ask their questions. After that, each previous developer would have three minutes to give any input on their proposal which wasn't discussed earlier. Mayor Lockhart noted that Eden Housing was the first developer to discuss Section 8 Housing and asked if that would be just a component of something else or it's something Eden could add to the project? Eden Housing Representatives indicated that they had another project in Hercules that they are in predevelopment. Because they are afraid on the tax credit project of having to raise rents, they tried to figure out a way to structure the rents in tiers. They have been talking to the Contra Costa Housing Authority about setting aside 20% of the units with project~based Section 8 certificates, so that the extremely low-income folks don't incur a hardship when you raise the rents. The Housing Authority basically pays their voucher increase. They can't get more than that percentage. They would use it as a tier to help the very low income in a tax credit project, it also helps the cash flow on the property. CITY COUNCIL MINUTES VOLUME 21 SPECIAL MEETING SEPTEMBER 23, 2002 PAGE 481 Mr. Lopez referred to Eden's 9% credit proposal, in which they were looking at building 40 one~bedrooms and 8 two~bedrooms, and asked Eden to address the difference. Eden Housing Representatives indicated they liked the two-bedrooms because it allowed room for in~home service care providers, and also they sometimes house couples who can afford more rent. It's both a lifestyle choice for the seniors, and a cash flow choice for the property as it generates more revenue. Mr. Lopez asked if Eden had a HUD 202 project, what would be a strategy to get some two~bedrooms? Can it be done through private funding? Eden Housing Representatives advised that it can't be done with HUD; they would not fund it. We could talk about building some two-bedrooms that HUD doesn't pay for; however, she's not sure it would work. They have talked to their consultant about using tax credits with HUD 202's. Their consultant responded that it could be done if the 202 is a 30 year old project that is expiring and you want to syndicate it. It is not for new 202's. The tax credit program is way more efficient than the 202 program from a time perspective, assuming you are competitive. To mix them would be a challenge. Mr. Marsh clarified that Eden was proposing a 30~year loan from the City, but Eden would not make any residual payments to the City because they would be reinvesting into the housing units? Eden Housing Representatives advised that on the HUD side, they don't anticipate any residual receipts. On the tax credit side, ff there were residuals, Eden would negotiate how the residuals got paid out. Typically, they would take out a managing general partner fee. The splits would range from the City talcing all of the cash flow to doing a 60/40 split. They don't envision a cash flow on a project of this size. Ms. Abdala referred to the deferred developers fees and asked when they would collect it? Eden Housing Representatives indicated that in the past they have created a reserve by deferring developer fees for the service provider on a tax credit project. If you do a deferred developer fee, you have to prove to your limited partner that you can collect it from cash flow within 10 years. Ms. Lichtenstein asked Eden to describe the makeup of a Senior Taskforce to help with the design process. CITY COUNCIL MINLrrEs VOLUME 21 SPECIAL MEETING SEPTEMBER 23, 2002 PAGE 482 Eden Housing Representatives indicated they would look to the Council and Senior Center to help them select a Design Advisory Committee, which would include seniors, user groups and resource groups. Ms. Lichtenstein noted that Eden hoped to foster a sense of ownership and community in the senior housing project and asked them to expand on the proposed "front porches" or alcoves and how that would foster ownership? Eden Housing Representatives indicated that providing individual vestibules, which included various design features and colors, for each doorway would give the senior a sense of ownership and individuality. The design features are also practical in that each alcove would have a bench or shelf to set packages while opening the door, and provide a "porch" light for easy visibility. Ms. Lichtenstein asked how Eden would interface with City's Senior Center architect? Eden Housing Representatives indicated that they were eager to meet with them to see what ideas they have for the Senior Center. Although the senior housing doesn't need to match the other project, it should certainly be compatible. Mayor Lockhart invited the other three developers to give final comments. EAH Representatives reiterated that their proposal addressed what was requested in the RFP. They tried to include the most units and the most number of parking spaces, with best and worst case scenarios. EAH is flexible and competent, and will work with the Council, Senior Center, seniors and other community members to create a development that works the best for the entire community. It is important to work with Senior Center's architect in design development and even in construction to make a better overall project. Mercy Housing Representatives reiterated that the notion of combining the Senior Center with senior housing was a good idea, and encouraged a collaboration of different resources to come up with the best development available. Their mission is not building housing; their mission is to build healthy communities through housing. ABHOW Representatives asked to leave the Council with the thought that they have been around for 50 years for several reasons. After the buildings are built and being lived in, it takes employees to see to things after the fact. They have a history of long~term employees, who will be pivotal in helping ABHOW with its mission. CITY COUNCIL MINUTES VOLUME 21 SPECIAL MEETING SEPTEMBER 23, 2002 PAGE 483 Eden Housing Representatives advised that they work with the cities to create what they need. They have done two projects for Livermore, and are being asked to do a third. They can build fabulous projects and thanked the Council for allowing them to participate in this opportunity. City Manager Richard Ambrose advised that Staff was prepared to help the Council sort through the process. One of the major breaking points was the HUD 202 financing and what type of advantages come with that financing vs. flexibility which might be lost. A lot of that depends on the Council's interest in terms of what type of project it wants. Mr. Peabody presented an outline of important project considerations, the first being: What is the best design that is adaptable to the Senior Center and the physical needs of the site? What does the Council want the relationship to be between the senior housing project and the Senior Center? Mr. Ambrose advised that the corollary question would be how it affects the timing of the Senior Center vs. the housing project. The closer they are, the greater the potential to create some issues or obstacles that we would have to overcome in building the Senior Center and keeping it on its current time schedule. Mr. Peabody continued with his list of important project considerations: · Best provision of resident services and amenities for residents Local and community involvement in development of project · Best chance to get HUD 202 and 0% tax credits · Local area experience · Timeline to build the project, in relation to financing · Long term management experience · Best financial plan · How it affects the timing of the Senior Center · "Aging in place" program · Senior housing/Senior Center compatibility (design, programs, services) · HUD 202 or 9% tax credits for 2003 (competing projects) · Deferred developer fee · Completion timeline · Parking Plan Mayor Lockhart asked to add the question of "Who are we serving with this project?" We can't do everything for every senior with this one small project. Are we serving CITY COUNCIL MINUTES VOLUME 21 SPECIAL MEETING SEPTEMBER 23, 2002 PAGE 484 seniors who are giving up their small single-family homes, which will go back into the market as starter homes for young families? Are we more interested in serving frail seniors with this project? This specific site, which is within walking distance to department, grocery and drug stores, is an excellent location for healthy seniors. Mr. Ambrose noted that it was one of the most important considerations because it would determine the outcome of the financing chosen. Mr. Lopez agreed that deciding who the Council wanted to serve because that would drive the Council's decision of which is the better program. Clearly, the HUD 202 serves lower income folks; however, timeframes will be different. Cm. McCormick stated that she would like to add green building, which is very important to her, to the list of considerations. Mr. Ambrose advised that Staff anticipates that Senior Center construction will commence in July/August 2005 and be complete by September 2004. Mr. Marsh advised that developer assumptions on interest rates, permit fees, etc., could make costs vary. Mr. Ambrose advised that the HUD 202 grant is a loan in name only; we will not get our money back. It should be considered up front as a grant. The potential to get something back is greater with the tax credit program. Mayor Lockhart referred to Eden Housing's proposal, which mentioned the possibility of combining projects from different cities and applying for funding under an umbrella. Mr. Lopez indicated that it would be worth exploring, but would have a lot of variables. Council and Staff discussed the different funding mechanisms and how it would affect the timeline. Council agreed that this was not planned to be a money~making project. Mayor Lockhart asked to decide what seniors this project would serve. Cm. Zika indicated that the HUD 202 one-bedroom units would serve most seniors, but would effectively eliminate aging in place. Future senior housing, such as in the transit center, could be used for another segment of the senior population. The Council discussed the issue in depth, including the pros and cons of each funding mechanisms and the possibility of dual tracking both the HUD and tax credit funding, CITY COUNCIL MINUTES VOLUME 21 SPECIAL MEETING SEPTEMBER 23, 2002 PAGE 485 how this project was physically situated in the community, how to maximize the amount of units, the possibility of including a Section 8 tier. The Council polled themselves and concurred that a HUD 202 was the way to get as many units as possible, even though it could extend the timeline by several months, with a tier of Section 8 Housing. Amenities could be added through gap funding. The target senior group would be low-income, mobile seniors who could take advantage of the shopping in the area, as well as the Senior Center. The Council discussed the individual developers, and agreed that although all of the proposals were excellent, each Councilmember agreed that Eden Housing gave the best proposal. On motion of Cm. Oravetz, seconded by Cm. Zika, and by unanimous vote, the Council accepted Eden Housing as the senior housing developer. On motion of Cm. Zika, seconded by Cm. Oravetz, and by unanimous vote, the Council approved dual track funding, with HUD 202 as its preferred source. On motion of Cm. Sbranti, seconded by Cm. McCormick, and by unanimous vote, the Council authorized the City Manager to negotiate a contract with Eden Housing. TRI-VALLEY AFFORDABLE HOUSING CLEARINGHOUSE PROPOSAL 12:13 a.m. 8.1 (4:30-80) Ms. Abdala presented the Staff Report, indicating that in order to coordinate affordable housing efforts and work cooperatively toward meeting the community's need for affordable housing in the region, the Tri~Valley Affordable Housing Committee (consisting of the Cities of Dublin, Livermore, Pleasanton, San Ramon, Danville, Alameda County and Contra Costa County) is endeavoring to coordinate all existing affordable homebuyer programs and develop future housing programs by creating a Homebuyer Clearinghouse for the Tri~Valley region. In conjunction with Congresswomen Ellen Tauscher's office, the Tri-Valley Affordable Housing Committee is developing the framework for federal funding that will be requested to be included in the Congressional budget for Fiscal Year 2003. The Clearinghouse would serve the following functions: CiTY COUNCIL MINUTES VOLUME g 1 SPECIAL MEETING SEPTEMBER 23, 2002 PAGE 486 A "one stop" center for interested homebuyers, with an inventory of all Tri~Valley programs. Assist potential buyers with the program of their choice and purchasing application process. When applicable, be responsible for the buyer selection for restricted units such as Inclusionary Units. Provide needed classes to comply with the education component in many First Time Homebuyer programs. Coordinate resale of units. Research and apply for additional beneficial homebuyer programs. If successfully included in the federal budget, the money is intended to start up the Clearinghouse and provide funding for the first three years. Mter that time, it is anticipated that the Clearinghouse's Executive Director would be responsible for obtaining continued funding though various grants. Staff recommended that the Council support the effort to create a Homebuyer Clearinghouse for the Tri~Valley Region. Cm. Zika asked if we would do this in-house or hire a contractor? Ms. Abdala advised that the current plan was for an outside agency with a Board of Directors, which would include representation from each city. Cm. Sbranti asked if, after the three years of federal funding, the program would pay for itself with grants? Ms. Abdala indicated yes, and hopefully through donations from private foundations. Cm. Zika suggested that, because homes needed to be sold at a certain rate, perhaps the Clearinghouse could act as a real estate agent and collect the real estate commission as a way to continue to fund itself. Mayor Lockhart noted that a service such as this could benefit potentially valuable residents with issues, such as a language barrier, get through the process. Cm. Sbranti noted that a $450,000 Federal budget request had been made, and asked if any monies had been requested in the State budget? Ms. Julia indicated no, Congresswoman Tauscher was interested in pursuing this regional effort and thought she could get Federal support. CITY COUNCIL MINUTES VOLUME 21 SPECIAL MEETING SEPTEMBER 23, 2002 PAGE 487 Council and Staff discussed funding issues and decided it was worth exploring State funding at some point. Cynthia Morse, Lake Drive, encouraged the Council to support the Tri~Valley Affordable Housing Clearinghouse. On motion of Cm. Oravetz, seconded by Cm. McCormick, and by unanimous vote, the Council agreed to support the effort to create a Homebuyer Clearinghouse for the Tri~ Valley Region. SUMMARY OF ACCOMPLISI-IME~S AND FUTURE HOUSING WORK PROGRAM 12:28 a.m. 8.2 (430~80) The Council received the report without Staff presentation, which summarized the City's affordable housing activities this past year as follows: 1. The Housing Task Force was established and created the Draft Housing Element, now in public review, as well as details and implementation issues of the Affordable Housing Programs. 2. An effective Inclusionary Ordinance was adopted, requiring developers to build affordable housing any time new a residential development is constructed. 3. A successful RFP was developed to solicit proposals from interested developers to produce affordable senior housing at 7606 Amador Valley Boulevard. 4. An Affordable Housing Agreement was developed and executed with Toll Brothers for the provisions of 105 below market rate condominium units. OTHER BUSINESS Mr. Ambrose confirmed with the Council that the Fire Station 17 groundbreaking would be held Tuesday, October 1~t, at 5:30 p.m. Fire Station 18 groundbreaking would be held Monday, October 14t~, at 1:00 p.m. CITY COUNCIL MINUTES VOLUME 21 SPECIAL MEETING SEPTEMBER 23, 2002 PAGE 488 ADJOURNMENT There being no further business to come before the Council, the meeting was adjourned at 12:$2 a.m. Minutes taken and prepared by Fawn Holman, Deputy City Clerk. ATIEST: Deputy City Clerk Mayor CITY COUNCIL MINUTES VOLUME 21 SPECIAL MEETING SEPTEMBER 23, 2002 PAGE 489