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HomeMy WebLinkAboutItem 8.1 Housing Auth Consolidate~~~~ OF DU~~~G ~ ~9;~;~%z STAFF REPORT C I T Y C L E R K ~~c~,,,;~~ ~ DUBLIN CITY COUNCIL File #^~^ 3^~-~~ DATE: December 7, 2010 TO: Honorable Mayor and City Councilmembers FROM: Joni Pattillo, City Manager SUBJE • Dublin Housing Authority - Consolidation of Dublin Housing Authority with the Housing Authority of the County of Alameda. Prepared By: John Bakker, City Attorney EXECUTIVE SUMMARY: The City Council will consider the adoption of a resolution authorizing the Housing Authority of the County of Alameda (HACA) to operate within the City and approve the Dublin Housing Authority's assignment of existing agreements to HACA. These actions are necessary to continue the redevelopment of the Arroyo Vista housing development. FINANCIAL IMPACT: Legal and other processing costs relating to the consolidation will be covered by the Dublin Housing Authority and/or Alameda County Housing Authority, as applicable. RECOMMENDATION: It is recommended that the City Council adopt a Resolution authorizing the Housing Authority of the County of Alameda to operate within the City and approving Dublin Housing Authority's assignment of any existing agreements between the City and the Dublin Housing Authority to the Housing Authority of the County of Alameda. Submitted By City Attorney Revi wed By Assistant anager Page 1 of 3 ITEM NO. O~_ ~ ~ DESCRIPTION: The redevelopment of the Arroyo Vista project has, from inception, included the plan for the Dublin Housing Authority (DHA) to merge with the Housing Authority of the County of Alameda (HACA), since once the redeveloped Arroyo Vista is owned by another entity there would be no need for DHA to exist. The project is at the point where the merger process needs to begin. Fundinq Status. Eden Housing, the non-profit corporation selected by DHA to redevelop the rental portion of Arroyo Vista, applied to the State for tax-exempt bonds and 4% Low Income Housing Tax Credits on November 3rd. Unlike the 9% Tax Credit, which is very competitive and for which Eden was skipped over in September 2010 on a technicality, the tax-exempt bonds/4% Tax Credit is not, and Eden expects to receive awards for Tax Credits in December 2010 and tax-exempt bonds in January 2011. This financing structure has been made possible primarily by the recent increase in price that investors are willing to pay for Tax Credits. Construction Timinq. Eden has combined the family and senior projects in its applications so that both will be funded at the same time. Previously, Eden had planned to apply for funding for the family project first and then apply for the senior project the following year. There are economies of scale in building both at the same time and, combined with the price increase for Tax Credits, constructing the two projects simultaneously is now viable. Very preliminarily, if actions take place as planned, Staff expects demolition to begin in March/April 2011 and construction of the units to begin in July 2011. HUD Reauirements. In its approval of the disposition application submitted by DHA, the U.S. Department of Housing and Urban Development (HUD) required that DHA and HACA merge before the property is transferred to Eden (for the rental portion) and Citation Homes (for the home ownership portion). Staff, their attorneys and the developers have been meeting to discuss timing, City of Dublin, DHA and HACA approvals, Final Subdivision Map approval, developer purchase of the property, State deadlines for start of construction and a myriad of other scheduling matters that must be met on a project as complex as this. One of the first actions that must be taken is the approval of resolutions by DHA, HACA and the City of Dublin about the merger (HUD refers to the merger as a consolidation). The consolidation/merger would be accomplished as follows: 1. All of DHA's assets and liabilities would be assigned to and assumed by HACA. 2. HACA would assume responsibility for DHA's federally funded housing programs. 3. Following these actions, DHA would continue to exist, but it would no longer have any legal or practical responsibilities or reason to exist. After 2 years of such dormancy, the City Council could adopt an ordinance terminating DHA's existence. Resolution Summary and Submittal Deadline. In order to effectuate the consolidation/merger, state law and HUD require that the City of Dublin approve a resolution allowing HACA to operate within the City. DHA's Commission must approve a resolution authorizing the divesture of DHA's assets and operations to HACA. HACA's Housing Commission must approve a resolution agreeing to accept the merger with DHA. The City of Dublin and DHA resolutions are scheduled for December 7 and the HACA resolution for December 8. The Resolution before the City Council tonight (Attachment 1) states that DHA and HACA wish to consolidate. It references the 1986 Cooperation Agreement entered into between the City and DHA and acknowledges that the City of Dublin must consent to HACA's operation within the boundaries of the City and to the assignment of any existing agreements between the City Page 2 of 3 and DHA (like the Cooperation Agreement) to HACA. It authorizes the City Manager to execute any documents that may be required by HUD or other parties to implement the consolidation and assign any agreements. Note that the actual merger/consolidation will not occur until DHA is ready to sell the property to Eden and Citation. Thus, any land use approvals, etc. still required will be made by DHA or the City of Dublin, as applicable-not HACA. HUD requires that the three resolutions be submitted 90 days before the merger and that the merger occur on the first day of a month. Staff has stressed to HUD the need to merge on March 1, 2011 in order to meet the State funding deadlines and HUD has agreed to process the merger in time for a March 1 close, even though, technically, we will be short one week of the 90-day requirement. Staff is very pteased that HUD agreed to fast track this. CONCLUSION: HUD requires that the City Council, DHA and HACA each adopt a resolution authorizing and agreeing to the consolidation of DHA with HACA. Without the resolutions HUD will not begin to process the consolidation and without the consolidation DHA would remain in existence. If DHA were to remain in existence, the HUD disposition approval would have to be amended to recognize DHA's continuing role in, and HACA's exclusion from, the Arroyo Vista redevelopment. This could delay the start of construction. The Arroyo Vista redevelopment has always included the plan to merge the two housing authorities. The Resolution before the City Council (and DHA and HACA) is the first step to the final processing of the merger. NOTICING REQUIREMENTS/PUBLIC OUTREACH: Not applicable. ATTACHMENTS: 1. Resolution authorizing the Housing Authority of the County of Alameda to operate within the City and approving Dublin Housing Authority's assignment of any existing agreements between the City and the Dublin Housing Authority to the Housing Authority of the County of Alameda. Page3of3 i~~ ~~ RESOLUTION NO. -10 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DUBLIN ********* AUTHORIZING THE HOUSING AUTHORITY OF THE COUNTY OF ALAMEDA TO OPERATE WITHIN THE CITY AND APPROVING DUBLIN HOUSING AUTHORITY'S ASSIGNMENT OF ANY EXISTING AGREEMENTS BETWEEN THE CITY AND THE DUBLIN HOUSING AUTHORITY TO HACA WHEREAS, the Dublin Housing Authority ("Authority") was created by action of the City Council on September 9, 1985, in order to combat the existence of unsanitary and unsafe dwellings in the City of Dublin ("City"), and the shortage of safe and sanitary dwellings available to persons of low income at rents they can afford; and WHEREAS, the Authority is a separate body politic under law, independent of City control, and governed by an independent Board of Commissioners; and WHEREAS, the Authority has determined that, given the administrative and legal requirements necessary to operate low-income public housing and the limited amount of funds available to administer the program, it would be more efficient to transfer responsibility for operating its low income public housing program to the Housing Authority of the County of Alameda ("HACA"); and WHEREAS, HACA is willing to accept responsibility for operation of the Authority's low income public housing program in the City; and WHEREAS, to effect the consolidation of the activities of the two agencies, the Authority desires to transfer to HACA all of the Authority's rights, title and interest in the real property commonly known as Arroyo Vista (the "Project"), as well as any other real property owned by the Authority; and WHEREAS, the Authority and the City entered into a Cooperation Agreement dated as of October 31, 1986 (the "Cooperation AgreemenY'), pursuant to which the Authority and the City agreed to the conditions under which the Authority would acquire and administer the Project; and WHEREAS, in order to effectuate the consolidation of the activities of HACA and the Authority, the City must consent to HACA's operation within the boundaries af the City and to the assignment of any agreements between the City and the Authority, including the Cooperation Agreement, to HACA. NOW THEREFORE, BE IT RESOLVED that: 1. Pursuant to Health and Safety Code sections 34209 and 34312.5, the City of Dublin hereby consents to HACA's operation and exercise of its powers within the 1460\02\910178.3 g. l ~~ -~7 ~o ATTACHMENT ~ ~~ ~ ~ City of Dublin. The City Manager is hereby authorized to execute such documents as may be necessary and/or required by the United States Department of Housing and Urban Development to implement or effectuate this authorization. 2. The City of Dublin hereby approves the Authority's assignment of any existing agreements between the City and the Authority, including the Cooperation Agreement, to HACA. The City Manager is hereby authorized to execute such documents as are necessary to effectuate such assignments. PASSED, APPROVED AND ADOPTED this 7th day of December, 2010, by the following vote: AYES: NOES: ABSENT: ABSTAIN: Mayor ATTEST: City Clerk 1554390.1 1460\02\910178.3