Loading...
HomeMy WebLinkAboutAgenda: Study Session A: Proposed Affordable Senior Housing Development at 16 Campus DriveP! PIP!" Yi ri al DATE: TO: FROM: SUBJECT: BACKGROUND ARA AFFORDABLE HOUSING FUNDS STAFF REPORT Arcadia Redevelopment Agency February 2, 2010 Chairman and Members of the Agency Board Jason Kruckeberg, Assistant City Manager /Development Services Director st By: Jerry Schwartz, Economic Development Manager p' S STUDY SESSION: PROPOSED AFFORDABLE SENIOR HOUSING DEVELOPMENT AT 16 CAMPUS DRIVE Recommendation: Provide Direction The Arcadia Redevelopment Agency has received a proposal to develop an affordable senior housing project at 16 Campus Drive, adjacent to the Arcadia High School baseball field. There are currently seven apartments on the project site. The project is being proposed by Davila Properties, which put together the Heritage Park senior housing project on Live Oak, and Ashwood Construction, a builder of multiple family housing projects. The proposal is to develop and manage a 43 unit project for low and very low income senior citizens. The four story project will include amenities for the residents, and the location is close to the Community Center, Library, and Arcadia County Park. The proposed financing plan would include a contribution of the Agency's low /mod housing fund designed as a long term loan, similar to Heritage Park. The major elements and issues of this proposed development are discussed below. As was discussed during the adoption of the Five Year Implementation Plan last December, one of the Agency's main responsibilities is to improve and increase the supply of affordable housing. The Agency assisted in the construction of Heritage Park, a 54 -unit senior project that opened in 2004, and the Alta Street Classics, a six -unit townhome project for first time homebuyers. The Agency invested $1.8 million in the Heritage Park project and $2.2 million in the Alta Street Classics. In July 2009 the Agency closed escrow on the property at 15 Lucille Street at a cost of $538,000, and it should be developed for up to four units of affordable housing. At the beginning of the 2009 -2010 fiscal year, the Agency had $5.1 million in its affordable housing fund. Up to 34% of the Agency's current and future affordable housing funds can be spent for additional senior citizen housing. We have worked with our consultant, Keyser Marston, to develop an accounting of the total amount of senior housing dollars available (current and future) to be expended and this information will be available at the study session. One of the key decisions to discuss is how this money should be expended. ENTITLEMENT AND ZONING ISSUES The proposed project would be a four story, 43 -unit senior citizen apartment project on a 23,000 square foot site. Drawings that show the proposed project design is included as part of the attachments to this staff report. The project is proposed as three levels of residential units over a parking level for a total height of 46 feet. The units range from 625 to 777 square feet in size and the project would include a community room and a great deal of private open space on the east side. Because the site is zoned for commercial use, the commercial zoning standards would apply. A full design review and site plan review would occur as part of the entitlement package but several major project issues are described below. The project would require a Conditional Use Permit, Design Review, and potentially several additional entitlements. Public hearings would be required with both the Planning Commission and the Agency. Site Planning Issues Despite the commercial zoning of the site, this property is developed with 7 residential units. The lot is in an excellent location for senior housing. The site is close to a number of amenities and services and meets all relevant criteria for financing. Through careful design of windows and sound attenuation, the proximity of an active open space area at the High School can be viewed as an asset rather than a liability for residents of the units. Additional open space is planned as a buffer between the units and the commercial property to the east. Parking is under the units, opening up the site to allow this important open space and to allow the increase in density sought. Density The Arcadia General Plan has a specific density allowance for senior affordable housing of 63 units per acre on commercially zoned property. When this standard was set by Resolution in 2002, a base density of 50 units per acre was applied to market rate senior housing and a density bonus of 25% was added for affordable senior housing to reach the number of 63 units per acre. The proposed project is 81 units per acre. The applicant has stated that at least 40 units are needed for this project to be attractive for financing and for a senior affordable project in this location to pencil out. As part of the entitlement package, a General Plan Amendment would be necessary to allow this increase in density. Height The allowable height in this zone is 40 feet and 3 stories. The proposal would be 4 stories and 46 feet in height. Affordable housing law allows "concessions" to be made through the approval process to facilitate the construction of such housing by relaxing development standards. For example, concessions were granted to the Alta Street Classics affordable housing project (guest parking and a setback) to enable that project Staff Report February 2, 2010 Page 2 of 4 to proceed. The height requested by the applicant could be addressed through a similar concession. Parking Parking is proposed for the project at a rate of .9 spaces per unit. There is no question that senior housing projects require Tess parking than standard housing and affordable housing projects limited to those 62 years of age and over also require less parking. The Arcadia Municipal Code does not specify a parking requirement for senior housing; the parking rate is determined on a case by case basis through the CUP process. In this case, the rate of .9 spaces per unit has proven to be ample for similar projects and the applicant is confident in this number. Much of the service to this development would be pick -up and drop -off service in front of the building. Because of the school, there is no on- street parking to consider. FINANCIAL PROPOSAL The development team is proposing to fund the project in the lowest cost method possible so that the low and very low income rents can cover the operating and financing costs. The financing proposal includes applying for 4% tax credits and issuing tax exempt bonds. This is the method that was used for the Heritage Park project. Like Heritage Park, this process leaves a funding gap that would be bridged through a deferred loan from the Agency's low and moderate income housing fund. According to the project pro forma provided by the development team, the total estimated project cost is $12,359,466, and it would include a $6.9 million deferred loan from the Agency's low /mod housing fund. As discussed above, the Agency began the current fiscal year with about $5.1 million in affordable housing fund. It is important to note that the Agency owes $4,045,715 to the housing fund, and that these funds could be repaid as soon as later this calendar year if it proceeds with a tax allocation bond issue. This $6.9 million proposed as a participation amount would effectively make this the last affordable senior housing project that the Agency could develop. The details of how the Agency would invest its housing funds would be worked out with the developers if there is direction to proceed with this project. ISSUES TO CONSIDER In its deliberations, the Agency Board should consider these questions: a) Is this the appropriate location for a senior unit development? b) Are the height and density and other development standards appropriate for the site? c) The proposed Agency participation would make this the last affordable senior housing project the Agency would develop. Is this a desired use of the Agency's funding and at what amount? Staff Report February 2, 2010 Page 3 of 4 As you know, significant development sites are difficult to find in Arcadia. High land costs in Arcadia increase the Agency's level of financial participation for affordable housing. Receiving a proposal to develop affordable housing certainly facilitates the opportunity to expend our low /mod funds and eliminate any future concerns about excess surplus. If the Agency Board chooses to proceed, it would be partnering with an experienced development team that has successfully developed multiple family housing in Arcadia. Additional information from the developers about the project, financing plan, their experience, and proposed design are attached to this staff report. RECOMMENDATION Provide direction. Approved by: 3) Y aJQ ��^- Y►- -�.. -.� Donald Penman, City Manager /Executive Director Exhibit A: "Campus Commons" Project Description and Information Package Staff Report February 2, 2010 Page 4 of 4 EXECUTIVE SUMMARY CAMPUS COMMONS SENIOR APARTMENTS 16 CAMPUS DRIVE ARCADIA, CALIFORNIA Presented for consideration is a preliminary request for financial assistance and design concessions from Ashwood Construction, Inc. for the development of an affordable senior housing project to be located at 16 Campus Drive in the City of Arcadia. We are requesting Arcadia Redevelopment Agency's approval to direct staff to begin processing our request for an Owner's Participation Agreement for financial assistance of the project and to set aside funds needed. Ashwood Construction, Inc. is one of California's leading multifamily developer /builders. Established in 1976, we are a family owned and operated company. Our experience represents a variety of development and construction projects, but our core focus remains in the market -rate and affordable multifamily arena. We have built over 17,000 units in more than 150 projects varying in size from fewer than 40 units to more than 400. We take pride in developing and building into communities and have become an integral part of neighborhoods in over 50 Cali- fornian cities. We have developed and constructed projects sponsored by HOME, Ca1HFA, LIHTC, HUD, CDLAC, MHP, RDA, HA, etc. We've done it all and are proud of our history. PROJECT DESCRIPTION The proposed project consists of 43 senior apartments including 10 two bedroom units and 33 one bedroom units. The project will target residents, age 62 and over, whose incomes range from 50% (Very Low) and 60% (Low Income) of the County median income. The building is designed with a ground floor level of parking and three stories of residential units above. The project will assist the City in meeting its affordable housing goals and objectives in accordance with their Housing Element. The project will remain rent restricted for 55 years. SITE DESCRIPTION The site is located at 16 Campus Drive and is currently occupied by a seven unit apartment project. The 23,100 square foot parcel abuts the Arcadia High School sports field to the west, an office project to the east and retail (private tutoring facility) to the south. To the north across Campus is the Santa Anita Golf Course. SITE CRITERIA & EVALUATION The site is very well suited for a senior community with its proximity to site amenities including the Arcadia Community Center (Arcadia Senior Citizens Services), the Methodist Hospital, the Arcadia County Park (including a variety of senior recreational opportunities), the Santa Anita Golf Course, an Arcadia Fire Station, immediate access to public transportation (MTA stops), and the Arcadia Public Library. The proximity to the services is also instrumental in securing the additional financing needed through the Federal Tax- Exempt Bond program, the Federal Low Income Housing Tax Credit program and any additional funding opportunities that may become available. Site availability is extremely limited in Arcadia and coupled with the required site criteria the opportunities to develop affordable housing are very limited. We spent a year pursuing appropriate sites or acquisition /rehabilitation properties and were only successful in securing site control over the Campus site after a long and extensive negotiation. PROJECT DESIGN The project design will be cued by the architectural flavor of the City of Arcadia maximizing the available funding to include the best possible features feasible within the budget limitations. As much as possible, the building will be situated to take advantage of passive heating and cooling methods. Large overhangs will be used to provide shade and heat relief. Light color roofing and siding materials will be incorporated in the design will help to reduce building temperature, effectively reducing the project's energy consumption levels. The project will be designed with the senior resident population in mind and will have the following features: • Community and Common Recreation area will be the social heart of the project. A meeting place for residents, touting a wide variety of classes, inspiring social activities and, perhaps, offering various health maintenance programs. The space will boast an open kitchen and island ideal for birthday and holiday potlucks or, perhaps, just a place for coffee and doughnuts during a competitive bridge match! • Convenient elevator service accessing the parking level and all residential units. PROJECT DESIGN, CONTINUED • Universal design of all residential units including features such as levered faucet and door handles, low entry door thresholds, wide hallways, etc. • Washers and dryers provided in all residential units. • Abundant parking designed at .9 stalls per unit, exceeding typical senior apartment standards. • Extra insulation and sound proofing / lighting screening from athletic field. • Residents will enjoy professionally landscaped walking paths and common areas through out the property. Well placed site lighting will ensure safety and visibility after dark. Onsite management will be ever present to serve the resident population. • A photovoltaic panel system is planned for the project. The system will service the electrical needs of the community spaces including the community building, site lighting, etc. PROJECT DENSITY The increased density we are requesting to make the affordable project viable is being driven by many factors and can be a benefit to the City of Arcadia. The unit count per acre is not as critical as the design standards that provide appropriate parking, open space, and private resident space while the project blends into the existing neighborhood. In built -out cities, appropriate increased density is the only option for them to reasonably meet their current housing requirements. The Campus site is a classic in -fill parcel that is "walkable" with access amenities and to mass transit connections and can assist the City in meeting the higher density demands of the future such as the "carbon footprint" requirements of SB375. In addition to the cost and development efficiencies we need to achieve operational efficiencies for a project to be financially viable with the limited resources available. The typical tax credit project needs to be at 40 units or more to begin operating efficiently. Because of the higher cost of compliance reporting, resident assistance programs, and sophisticated financing structures the 40 units has evolved as the minimum industry standard. As we fall below the 40 unit count the number of tax credit investors and lenders become very scarce. In the current economic market that could mean no investors or lenders as their underwriting criteria has become more selective. We are always competing for available resources. RESIDENTS The project will be restricted to residents who meet the income group requirements for those who make 50% and 60% of the County Median Income; INCOME LIMITS ONE PERSON TWO PERSON Very Low 50% $27,500 $31,700 Low 60% $33,300 $38,040 RENTS ONE BEDROOM TWO BEDROOM 50% $695 $843 60% $834 $1,013 FINANCIAL ASSISTANCE In order to lower rents to the target amounts, the project will require financial assistance in the form of a below market rate cash residual loan from the Arcadia Redevelopment Agency in the amount of $6,900,000. The funding program that will have highest likelihood of success of funding for a senior project will utilize Federal Tax - Exempt Bonds and 4% Low Income Housing Tax Credits. The cash residual loan is needed to fill the gap created between the tax credit investment, tax - exempt bonds proceeds (mortgage) and the project costs. The project sources and uses are summarized as follows; Mortgage (Tax- Exempt Bonds) $2,200,360 Tax Credit Proceeds 3,086,363 Deferred Developer Fee 172,743 Cash Residual Loan $6.900,000 Total Project Costs $12,359,466 FINANCIAL ASSISTANCE, CONTINUED The project budget is somewhat fluid as the design plan is developed, interest rates are confirmed, rental targets are confirmed with the Agency, and the price for tax credits is established. The financial engineering of the project is an iterative process with the financial participants and the Agency and will be refined to a final budget for the Agency approval. PROJECT OWNERSHIP Ashwood Construction, Inc. will act as the Development General Partner and will combine with a non -profit entity, acting as the Managing General Partner. Potential non -profit entities are currently being interviewed and an appropriate and qualified entity will be added to the development and ownership team. Ashwood will act as the project contractor, developer, and provide the necessary financial support to see the project to completion and through the long term compliance and investment guaranties. The Managing General Partner (non - profit) will provide the needed project support for the residents with on site programs and act as the gate keeper for local assistance programs. Ashwood and the non -profit partner will oversee day to day management of the project. PROPERTY MANAGEMENT Buckingham Property Management is a specialist in residential real estate and currently manages over 7,000 units of market rate and affordable apartments throughout California. Since 1974 the firm has managed a wide variety of properties and has an extensive background in the operation of compliance based apartment communities. DEVELOPMENT TEAM Developer: Managing General Partner (non - profit): Development Consultant: Legal: Contractor: Architect: Property Management: Relocation Consultant: Ashwood Construction, Inc. To be determined. Davila Properties LLC Patrick R. Sabelhaus, Esquire Ashwood Construction, Inc. Gary R. Boyer & Associates Buckingham Property Management Advanced Relocation Specialist SITE MAP Arcadia, California Site W - Naomi -Ave -- thddist Ho -dt91 of Southern CA 4� �r 0, " c Arcadia Police Are80ia Oepartmenl City H a W Le 1/4 Mile Santa Anita Golf Course FCC Cam us Dr Arcadia Unified School Arcadia -- County Park Fa St 16 Campus Dr, Arcadia; ,A 9... 16 Campus Dr Arcadia, CA 91007 r' bel Educa Arcadia Academy 1 W Duarte F 22 E Duarte Rd Arcadia CA 9 Arcadia CA 91006 (626)446 - 555626)446.5488 — Arcadia Altemafive High School Genoa- Si East West Bank 200 E Duarte Rd Arcadia CA 91006 :e St (626) 821-4988 Fast West , nk — Diamond St Trans . ortatio Leda Ln Leda Ln Monrovia Leda -Ln 0 mi 0.2 04 r,d ad, •St Park & Facilities, Senior Recreation - ,N1 fi 4E6— . . , . 1 r 1 si 4 at r k si { flu 'ousel] OL l 61100 "Pa 00 A O 6 '3 SSLs - ned seMedoid W.0 1. ooxysy :113011l18 I 113d iA30 6lwO e0'elpe 014/08116,W0(4 nu. oo mu vuw»s Ion trV s ;ue wiedy suowwo0 sndwe3 NVId 31tS AMVNIWI13Md anion enai yo ,e 2 z a. W H a) cti 0) t0 0) c 1 d c c m . c 0 . 0 QE 00 0 � c t- a z 0 2 0 0 U) a 2 0 s gj <m 0 z C 8 Z e�a tg Di a =28E, ,h 1 2 1 1 I 1 1 T a:0 z { 0 C 1 z 0 x r -- G /10' L Mal .lIC. att ti a 1 1 1 -* FLOOR PLAN LAYOUT for Campus Commons Apartments A 4S UM bonbn RMW Commvnay 16 Campus Drive Arcadia, California DEVELOPER / BUILDER: Ashwood Corntructioo / Davtla Properties Dev. 5755 E. Kings Canyon Rd. Suite 110 Fresno. California i 1 3 f FLOOR PLANS tor, Campus Commons Apartments • 0 UMI Union nmbl cueuu nev 16 Campos Dave Arcadia, California DEVELOPER / BUILDER: Asnwood Construction / Davila Properties Dev. 5755E Kings Canyon Rd., Suite 110 Fresno, California ELEVATIONS for Campus Commons Apartments AN UMt Sanwa 114.4a1 Comm•wly 16 Campus Drive Arcadia, California DEVELOPER I BUILDER: Ashwood Construction / Davao Properties Dev 5755 E. Kings Canyon Rd., Suite 110 Fresno, California • 1 DAvI LA PROPERTIES LLC COMMITTED Davila Properties LLC is committed to the development of quality affordable multi - family communities serving both families and seniors in California. EXPERIENCED Over 1,400 affordable units developed in California, including over 1,000 units of senior housing. When combined with Davila Properties LLC's partners and consultants, a powerful and experienced development team is created to ensure each community is a success. RELATIONSHIPS It is our goal to create partnerships with our participating cities and community "stakeholders" to ensure the success of our communities. Roger Davila — President Mr. Davila has over 37 years of related development and real estate finance experience, including 15 years in the development of affordable housing. He has been involved in all aspects of multi- family housing and commercial development. Mr. Davila has been a development partner and owner of multi- family units, shopping centers, and office buildings across California. He was directly responsible for all aspects of development including acquisitions, political entitlement, financing, construction, leasing, and prop- erty management. His career started at Bank of America as a real estate loan officer specializing in multi- family lending. He is a graduate of California State University at Fresno where he received a Bachelor of Science degree in Business Administration. PROJECTS COMPLETED Las Brisas CITY / STATE Madera, CA UNITS 81 Heritage Park at Hanford Hanford, CA 81 Heritage Park at Taft Taft, CA 61 Heritage Park at Hilltop Richmond, CA 192 Heritage Park on Woodman Panorama City, CA 155 Heritage Park at Monrovia Monrovia, CA 78 Heritage Place at Tustin Tustin, CA 54 Heritage Park at Glendale Glendale, CA 52 Heritage Park /Cathedral City Cathedral City, CA 153 Heritage Park at Arcadia Arcadia, CA 54 The Crossings at Madera Madera, CA 64 The Crossings at Elk Grove Elk Grove, CA 116 Stoneridge at Elk Grove Elk Grove, CA 96 The Crossings at Santa Rosa Santa Rosa, CA 49 The Horizons at Indio ACQUIRED / UNDER DEVELOPMENT Glendale Senior Apartments Indio, CA CITY /STATE Glendale, CA 80 UNITS 80 .11 Development Partner Project Experience en Heritage Park at Arcadia, a senior community D AV I LA PROPERTIES LLC The Crossings at Elk Grove, a family community Inv Heritage Park at Glendale, a senior community The Crossings at Madera, a family community ASHWOOD Integrity. Persistence. Quality. Conducting a Higher Standard of Business — Doing Things the "Ashwood Way" CONSTRUCTION Ashwood Construction, Inc. is one of California's leading multifamily developer/builders. Established in 1976, we are a family owned and operated company. Our experience represents a variety of building construction projects, but our core focus remains in the market -rate and affordable multifamily arena. We have built over 17,000 units in more than 150 projects varying in size from fewer than 40 units to more than 400. We take pride in developing and building into communities and have become an integral part of neighborhoods in over 50 Californian cities. We have constructed projects sponsored by HOME, Ca1HFA, LIHTC, HUD, CDLAC, MHP, RDA, HA, etc. We've done it all and are proud of our product. We are well - seasoned professionals. / " I 4 Ackaaacl s i fore / ,�rij4t, r coirstwactioa £r a%aae, ai i. /, parades deN a Nest c(esir.aJIe l oaar.t7ee• an' mime: omime: (i%/- /8t/Ka 4GGI�L, (%i'j t eCst/oe Offee/` al de (ieet/'aG Valk, CoaG/t/aK /o' - /o.'a'a T /oashry From the beginning, we have always been committed to integrity, persistence and quality and have prided ourselves on conducting a higher standard of business. Over the years, as our reputation grew, those foci became synonymous with doing things "The Ashwood Way." Our partners respect and value this. We are the developer/builder that can bring a project to fruition. We have a wealth of industry experience on our team, and they are dedicated to the success of our organization. The average tenure of Ashwood's leaders is just over 11 years. We explore innovative designs and redevelopment efforts and believe in smart growth. In the end, Ashwood has developed the capabilities and flexibility required for efficient and effective workflow, evidenced by the on -time completion record of Ashwood projects. for (t/vstaii, PwesideKt o/ 111:51- Peaiirsada //oasiadr (oaI/tiOir eow reKts, � � (t/e %ase load 74s'% ood G'oKStwaetiorr to k %oeest is t/reir' deaeg s wit%i as, Zwel (dr eah'4e, eceade aid eete -eyre4 cost e jjeetiae, Ashwood maintains a focus on community enhancement. We believe in being more than our vision statement and have contributed significantly to many philanthropic organizations and service projects. We have also been recognized by many prestigious private and governmental groups. Among our awards is a Commendation for outstanding community service from the California State Assembly. The Pacific Coast Builders Conference awarded our project, Cottonwood Grove, Best Apartment Project. In 2004, we were recognized with several awards including: Commendation for the Kings Villages Apartments by the City of Pasadena, Certificate of Recognition from California State Assembly and the Family Self - Sufficiency Program Corporation, Inc. awarded a Special Recognition for our company's leadership and contribution to the program. 74er awe Eros %eddr.eaie, /iwo /essiaffa/ acrd t/ceii' /,raft/ - a wi 4 e 7 oe/'ie7ce is seeoird to 'are, , , / %aee Iowa' liskooacl to ee air etAiica ' urell?ewt ow,aviae yr arrd rsoa4d 44 weeom,wead azie sewuiees, " Nickias Be aerie, Execatiae 9iweetaw al t/e //oasirri ,4at/rawitt o f Nadewa Ashwood stands behind our reputation and believe our project history speaks for itself. We are experienced development/construction professionals who are committed to building the very best. After all, we have Integrity. We are Persistent. We build Quality. And, most importantly, we Conduct a Higher Standard of Business and do things our way... "The Ashwood Way." /1