Item 13 - Consideration of Amending Existing Contract with David Paul Rosen Affordable Housing AGENDA REPORT T ! ! "T U
'0: Honorable Mayor and Members of the City Council
Honorable Chairman and Members of the Redevelopment Agency
FROM: James L. Bowersox, City Manager/Executive Direg~)
INITIATED BY: f~ohn D. Fitch, Assistant City Manager/Assistant Executive Directo~
~/Narren H. Sharer, Director of Redevelopment Services
'U
DATE: April 4, 1995
SUBJECT: Consideration of Amending an Existing Contract with David Paul Rosen and
Associates which Provides for Services to Assist the Agency in the
Development and Negotiations of Affordable Housing Projects
ABSTRACT
The Redevelopment Agency has approved a Five-Year Implementation Plan which includes
development of affordable housing projects. In addition, the Smith Judgement further
requires the Agency to develop these projects. The negotiation and development
arrangements required for affordable housing requires expertise which is unavailable on
staff. The Council/Agency approved an agreement with David Paul Rosen and Associates
in November 1994. This amendment will increase the contract amount to $135,000.
ENVIRONMENTAL REVIEW
This item is not subject to CEQA review.
FISCAL IMPACT
The cost for these services under the revised contract would not exceed $135,000; an
increase of $100,000 over the existing contract. There is approximately $20,000,000 of
Housing Funds in the Implementation Plan to assist housing projects.
ADDITIONAL PUBLIC NOTIFICATION AND CORRESPONDENCF
None.
RECOMMENDATION
It is recommended that the City Council/Redevelopment Agency approve an amendment to
the contract for project services with David Paul Rosen and Associates to a revised
amount of $135,000, and authorize the City Manager/Executive Director to execute the
amendment.
ACTION
Continued to April 18, 1995. '~2-~L~.z~
Marie Lofton, Del~uty'City Clerk
c: \dar a\agenda\rosenl .cov
APR 1 8 1995 ITEM 13
[ of 7 APR J. 1995 ITEM 17
AGENDA REPORT
CITY OF POWAY
TO: Honorable Mayor and Members of the City Council
Honorable Chairman and Members of the Redevelopment Agency
FROM: James L. Bowersox, City Manager/Executive Direct~
INITIATED BY: ~__John D. Fitch, Assistant City Manager/Assistant Executive .~<N_~ Warren H. Shafer, Director of Redevelopment Services
DATE: <-~) April 4, 1995
SUBJECT: Consideration of Amending an Existing Contract with David
Paul Rosen and Associates which Provides for Services to
Assist the Agency in the Development and Negotiations of
Affordable Housing Projects
BACKGROUND
According to the Redevelopment and Housing Implementation Plan approved by the
Redevelopment Agency in November 1994, and the Judgement entered in the Case of
Smith v All Persons, the Redevelopment Agency will be actively involved in the
development of affordable housing. These projects will involve intricate
financial negotiations and compliance with a complex set of regulations and laws.
These negotiations will determine the Agency's role(s) and level of financial~
assistance in order to make the projects happen. In November 1994, we originally
entered into an agreement with David Rosen to assist us. Based on this
experience, we recommend increasing his contract to a level that will allow
greater assistance. Under separate contract, we are also retaining Mr. Rosen to
perform several specific tasks required under the Smith Settlement.
FINDINGS
In order to assure that the Agency negotiates the best possible agreement for the
funds we intend to invest, it is critical that the Agency has available to it a
firm with a thorough knowledge about all the financial aspects of affordable
housing. The firm of David Paul Rosen and Associates has these skills and
abilities. Staff is pleased with the work performed to date by Mr. Rosen. The
feedback from the Redevelopment and Housing Advisory Committee has also been
positive. All of this leads us to believe that the work performed by David Paul
Rosen and Associates will be an asset to the Agency. Their knowledge of
affordable housing requirements, sources of housing funds, structuring of
affordable housing agreements, and the legal requirements provides the Agency
with critical information.
ACTION:
See Summary Sheet
13
APR 4 1995 ri'EM 17
Consideration of Amending an Existing Contract with David Paul Rosen & Associates
April 4, 1995
Page 2
The amount of the contract is being increased since the original amount was for
some initial work, and for the Agency to obtain first-hand experience with Mr.
Rosen. During this time, Mr. Rosen has assisted in meetings with Retirement
Housing Foundation (RHF} on the Gateway project. He has prepared a draft
Memorandum of Understanding with RHFwhich is now being finalized. Mr. Rosen has
also prepared several presentations for the Redevelopment and Housing Advisory
Committee on affordable housing financing programs, the developer selection
process, and preliminary proformas for the Bowron and Brookview sites. Finally,
Mr. Rosen is preparing an analysis for the Redevelopment and Housing Advisory
Committee and the Agency regarding the options for meeting the 60/40% housing
balance per the Smith Judgement.
In the future, Mr. Rosen will be working on the structure of the five major
projects contained in the Implementation Plan. As noted in the proposal
(Attachment I), the estimated cost on a project basis is approximately $25,000
to $35,000 per project based on the complexities of each project. As amended,
the contract amount equals about $27,000 per project. Considering the total
dollars invested and the Agency's desire to assure well financed, managed, and
constructed projects, the fee is considered to be reasonable.
ENVIRONMENTAL REVIEW
This item is not subject to CEQA review.
FISCAL IMPACT
The cost for these services under the revised contract would not exceed $135,000;
an increase of $100,000 over the existing contract. There is approximately
$20,000,000 of Housing Funds in the Implementation Plan to assist housing
projects.
ADDITIONAL PUBLIC NOTIFICATION AND CORRESPONDENCF
None.
RECOMMENDATION
It is recommended that the City Council/Redevelopment Agency approve an amendment
(Attachment 2) to the contract for project services with David Paul Rosen and
Associates to a revised amount of $135,000, and authorize the City
Manager/Executive Director to execute the amendment.
Attachments: 1. Proposal-David Paul Rosen & Associates
2. Contract Amendment
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APR 1.8 1995 ITIEI~ 1}
3 of 7 APR 4 1995 ~'~ ]7
:% DAVID PAUL ROSEN & ASSOCIATES HOUSING, COMMUNITY
' RECEIVED ECO,OM,C
March 10, 1995
Via Fax (619/748q455); original to follow by mail
Mr. Warren H. Shafer
Director of Redevelopment Services
Cit'y' of Poway
13325 Civic Center Drive
Post Office Box 789
Poway, CA 92074-0789
DeaF Warren:
This letter, as requested, clarifies the affordable housing development and finance consulting
services contract extension request which we submitted to you on March 3, 1995. ' '
As indicated in that letter, we estimate that for the coming twelve-month period a $100,000
extension to our contract scope of services will be necessary, given the intensive affordable
housing development and finance efforts anticipated over the coming year.
Following is a description of the affordable housing development and finance consulting
services we expect to provide to the Agency over the coming twelve-month period on projects
assisted by the Agency:
·review project financial and economic feasibility studies and sensitivity analyses
prepared by developers, advise Agency and conduct revisions as necessary;
· clarify and recommend credit and underwriting standards for projects receiving
Agency financial assistance. Such standards include, but will not be limited to:
replacement reserves; operating reserves; developer fees; profit, overhead, and
general requirements pricing for general contracting services; parameters for
consultant fees charged by developer team members; finance charges; guarantee
fees and others;
· represent and advise the Agency on business and deal points and negotiations for
project development. Such issues include, but may not be limited to, terms and
conditions of Agency financial assistance, financial assistance provided by other
public sector entities, private sector construction and permanent financing terms
and conditions, partnership agreements, regulatory agreements, notes, deeds of
trust and loan agreements;
APRl$1995 ITEM 13
4 of 7 APR A 1995 ri'EM ]7
DAVID PAUL ROSEN & ASSOCIATES
Mr. Warren H. Shafer
March 10, 1995
Page 2
· review documents associated with project development as described above,
including applications for financing, both private and public sector. Such review
will be conducted through permanent loan closing; and
· prepare and/or review marketing analyses and data, marketing plans, compliance
with Fair Housing requirements, and lease up and operation plans and budgets.
Depending upon project complexity, the nature and extent of negotiations, we expect these
consulting services to run approximately from $25,000 to $35,000 per project.
Were we asked to prepare additional analyses direct[y, rather than review and comment on the
developer's preparations, these expenses could double on a per-project basis. Examples of
direct preparations include:
- · pro forma, cash flow, capital account and tax credit analyses;
· TCAC applications;
· CHFA applications;
· CDLAC applications;
· AHP applications; and
· MCC applications.
°~* ...... ! should note .k., ,~. .. . ......
In ~,.h~, .,,~,., ~,,,,, ,,,e cost of our k, rojec~-ba~ea services may be ~ncluoaote in
project basis and reimbursed to the Agency, or alternatively included in overall Agency project-
based gap financing. Thus, DRA's project-based consulting services may effectively be
reimbursed through total project proceeds.
As has been the case in our work to date for the Agency, DRA expects to provide additional
affordable housing development and finance consulting services to the Agency. These services
include research, advice and guidance on a variety of affordable housing finance and program
issues, preparation and presentation of research material, recommendations and actions to
support decisions before the Redevelopment and Affordable Housing Advisory Committee, the
Affordable Housing Commission, the Agency, and the City Council. Other issues requiring
review may include mobile home park property management and ownership, and the Agency
option agreement on Haley Park Estates.
.~PR 1 8 1995 ITEM
o~ 7 ~PR4 1995 ITEIVI 17
DAVID PAUL ROSEN & ASSOCIATES
Mr. Warren H. Shafer
March 10, 1995
Page 3
Final]y, other services associated with affordable housing development in Poway may arise as
opportunities occur.
As always,, we will work in close cooperation with you and your colleagues at the City, and
under your direction.
I hope this clarifies the nature and extent of both project based and generalized affordable
housing development and finance consulting services which DRA will continue to ~rovide to
the Ci~ of Poway. Please call with any questions.
David Rosen
Principal
DR:smf
APR'~ 1995 ITEM
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POWAY t ,DEVELOPMENT AGENCY-
AMENDMENT TO STANDARD AGREEMENT FOR CONSULTANT SERVICES
WITH DAVID PAUL ROSEN & ASSOCIATES
This amendment revises the contract amount under the existing Standard Agreement
for Consultant Services between the Poway Redevelopment Agency and David Paul
Rosen & Associates entered into the 15th day of November 1994 for services
related to affordable housing development.
Specifically, Exhibit A, Special Provisions, Item B, Paragraph 1, is changed to
read:
"Agency shall pay Consultant a fee not to exceed One Hundred Thirty-five
Thousand Dollars ($135,000) as compensation for consulting services. These
services will be billed on a time and expense basis, pursuant to the attached
Professional Fee Schedule (Attachment 2). Consultant's fee shall include and
Consultant shall be responsible for the payment of all federal, state, and local
taxes of any kind which are attributable to the compensation received."
-i
POWAY REDEVELOPMENT AGENCY
Date: By:
James L. Bowersox, Executive Director
DAVID PAUL ROSEN & ASSOCIATES
Date: By:
David Paul Rosen, Principal
ATTEST:
Marjorie K. Wahlsten, Secretary
APR 1 8 1995 ITEM 13
APR A 1995 ri'EM 17
~ 13325 Civic Center Drive
7 of 7 ~g Address: P.O. Box 789, Poway, California 92074-0789 · (619) 748-6600, 695-1400