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HomeMy WebLinkAboutAUGUST 5,1980_3 CITY COUNCIL PROCEEDINGS ARE TAPE RECORDED AND ON FILE IN THE OFFICE OF THE CITY CLERK 1 '~L ~ll 1 25:0095 MINUTES CITY COUNCIL OF THE CITY OF ARCADIA SPECIAL MEETING Augus t 5, 1980 The City Council met in a Special Meeting at 6 p, m. August in the Arcadia City Hall Conference Room for the purpose of additional presentation on senior citizen housing. 5, 1980 receiving PRESENT: ABSENT : Councilmen Dring, Gilb, Haltom, Saelid, Pellegrino None William Phelps, of a Municipal Consulting firm located in Rosemead, ex- plained the services offered by his company and that of Goldrich, Kest and Associates which firm owns, builds and manages many senior citizen housing developments, one of which is in Monrovia. Mr. Phelps suggested Council visit this facility. He then introduced Robert Hirsch, one of the partners in the firm. Mr, Hirsch then explained the association of his firm with'HUD in its initial developments on the wes.t' coast. projec turais were the'h shown of many of the facilities constructed and managed by his fi~. It was stated in his remarks that units run approximately $8000 per unit for land costs with 40 units to the acre - about $7 a sq. ft. or $300,000 per acre - all with elevators and full security. An endeavor is always made to design the facility to be compatible with the surrounding neigh- borhood. He submitted in part that in addition to working with HUD they have association with the California Housing Finance Agency. In response to questions Mr. Hirsch said in part that all he would need to get started would be the cooperation of the Planning Department .in assisting them to seek out undeveloped land or perhaps pursue the possi- bility of air rights on the race track property, ., this would leave the parking intact One such development has been approved by HUD in an- other city where municipally owned parking land was leased. He said further that usually they are in a position to pay about $8000 per unit for land cost. Non-profit facilities do not stay on the tax rolls where- as the profit motivated facilities do. As to rentals for senior citizens Mr. Hirsch explained that under Section 8 Program HUD awards the management a rent based upon today's cost and expense of operation i, e., they would place a rental of $450 to $475 for a one bedroom elderly .., they have a return designed at 95% collections to give them 10% on what HUD determines is their invested capital after cost certification when the development is completed. The rents which are set by HUD are completely separated from what the tenants pay. The tenant only pays 25% of his or her gross income. There is a required certification every year by the tenant through management. There is an automatic 5.1/2% increase each year based on management submitting CPA audited annual financial statements ., if there is an increase they re- ceive the automatic increase of 5.1/2% from HUD on the $450 per month rent for instance. There are other ways in which HUD will reimburse the management if need is justified. Most of the developments are sold after construction - they are eagerly sought after - they are safe projects ... HUD has a very involved proce- dure called a physical transfer of assets... HUD has safeguards .. i. e., for the first two years after a development is completed they will come out every six months annually thereafter - checking on most every part of the development ... replacement and repair '" the reserve for these replace- -1- 8- 5-80 ADJOURNMENT 25:0096 ments is calculated on the basis of 6/10th of 1 percent of the construction cost. This reserve fund is in a separate account. Management receives a- bout $25 per unit out of which all HUD's requirements must come. His com- pany has found that there is more control if they manage the facility. They have never sold one of their facilities but that isn't to say they may not in the future. Many aspects of the procedure for filing applica- tions were explored. At 6:55 p. m. the meeting adjourned sine die. ~~ J2aU~uo') Mayor 1 City Clerk 1 - 2- 8- 5-80