Item 16 - Consideration of Agreement with CA Housing Partnership
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AGENDA REPORT SUMMARY
- TO: Honorable Chairman & Members of the Redevelopment
Agency
FROM: James L. Bowersox, Executive Dire~ . .,:..
INITIATED BY: John D. Fitch, Assistant Executive Director [' I '-C:;
Warren H. Shafer, Redevelopment servic~Director~/
David Narevsky, Redevelopment Manager \
DATE: August 15, 1995
SUBJECT: Consideration of an Agreement with California Housing Partnership to
Assist with the Potential Ownership Transition of Poway Villas
ABSTRACT
This report proposes to enter into contract with Cal ifornia Housing Partnership to
assist with potential transition in ownership of Poway Villas, a federally assisted low-
income housing project. The owner of Poway Vill as has made application to the
Department of Housing and Urban Development to sell and the City of Poway has committed
to preserve the affordability of Poway Villas. This Agreement will hire a consultant to
assist in this process.
ENVIRONMENTAL REVIEW
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This action is not subject to CEQA review.
FISCAL IMPACT
The fiscal impact of this Agreement would be $6000. These funds would be appropriated
from the Housing Fund's unappropriated reserve, account 471-8912.
ADDITIONAL PUBLIC NOTIFICATION AND CORRESPONDENCE
A copy of this report will be sent to Monfric Inc., owners of Poway Villas and to the
Legal Aid Society. In addition, a copy will be posted at Poway Villas.
RECOMMENDATION
It is recommended that the Redevelopment Agency approve the Agreement and appropriate
$6,000 for these services from the Housing Fund's unappropriated reserve, account 471-
8912, and transfer it to account 471-5972.
ACTION
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c:\data\agenda\v~llas.cov
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~ AGENDA REPORr1
CITY OF POW A Y
This report is included on the Consent Calendar. There will be no separate discussion of the report prior to approval by the
City CounCIl unless members of the Council. staff or public request it to be removed from the Consent Calendar and
djs~ussed separately. If you wish to have this report pulled for discussion. please fill out a slip indicating the report number
and give it to the City Clerk prior to the beginning of the City Council meeting.
TO: Honorable Chairman and Members of the Redevelopment Agency
FROM: James L. Bowersox, Executive Dir~
,
INITIATED BY: John D. Fitch, Assistant Executive DirectorC1'- ~
Warren H. Shafer, Redevelopment Services Diracto ~
David Narevsky, Redevelopment Manager~
DATE: August 15, 1995
SUBJECT: Consideration of an Agreement with California Housing
Partnership to Assist with the Potential Ownership Transition
of Poway Villas
BACKGROUND
Poway Villas is a Federally assisted, 60 unit, low-income housing project which
was completed on May 24, 1973 and was financed under the Department of Housing
and Urban Development's (HUD) Section 236 Program. The Housing Element to the
City's General Pl an references that we wi 11 undertake steps to preserve the
affordability of Poway Villas. Policy A (Strategy 8) of the 1991-96 Housing Plan
indicates that the City will "Take act ions necessary to ensure that ass i sted
rental units at risk of conversion are not converted to market-rate units."
FINDINGS
Under the terms of their HUD financing, the Poway Villas project owners agreed
to guarantee the affordability for 40 years. Twenty years after the project is
developed, the project owners have the option to stay in the program and receive
incentives, or to offer their units for sale.
The Poway Villas project owners have indicated their interest in selling their
project and initiated the process with HUD. Mayor Higginson received a copy of
the information HUD provided to the owners advising them of their options. On
April 12, 1995, Poway Villas filed their "Second Notice of Intent" to sell this
project. The City received a copy of this Notice.
If the owners elect to sell, they have 30 days to formally respond to HUD, after
which a 15 month sales period is triggered. Their April 12, 1995 Second Notice
of Intent triggers the following options.
First six months: The project can be purchased only by the residents as
an organized entity or by a community based non-profit organization with
the su t f i nt
ACTION: I
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Consideration of an Agreement with
California Housing Partnership
August 15, 1995
Page 2
Next six months: The project can be purchased by a government agency or
non-profit organization.
Next three months: The project can be purchased by any entity.
After 15 months: The owners can prepay their mortgage.
HUD will offer part i es interested in purchasi ng Poway Vi 11 as a vari ety of
incentives which may include (l) an insured loan for acquisition, including
rehabilitation of the project to a total cost of 95% of the project cost and, (2)
Section 8, Federal housing subsidy funds.
On April 12, 1995, City staff met with Sue Reynolds of the California Housing
Partnership (CHP). CHP acts as consultants to many non-profits on preservation
projects. The San Diego HUD office confirms that Sue Reynolds is very
knowledgeable concerning this process. Both Sue Reynolds and the local HUD staff
have indicated that Preservation Program legislation is in the process of being
amended in the United State Congress at this time. Lack of specifics of the
proposed legislation causes this conversion process to be rather difficult to
assess.
~ Generally, the process is to work with the existing residents who have the first
option to purchase. Legal Aid is very involved with this process and provides
technical assistance to the residents during this conversion or preservation
process. Legal Aid has established a program that deals exclusively with these
issues. Typically a non-profit housing entity will either manage and/or own the
proj ect.
The City/Redevelopment Agency may be involved, as the current process for
preservation requires that 5% of the total project purchase cost must be
generated from locally generated funds such as CDBG, low and moderate-income
housing funds, etc. Based upon preliminary information from HUD, it is estimated
that this local cost would be approximately $125,000.
Staff has requested a proposal for consulting services from the Cal ifornia
Housing Partnership, which is attached (Attachment 1).
ENVIRONMENTAL REVIEW
This action is not subject to CEQA review.
FISCAL IMPACT
The fi sca 1 impact of th is agreement woul d be $6,000. These funds woul d be
appropriated from the Housing Fund's unappropriated reserve, account 471-8912.
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Consideration of an Agreement with
California Housing Partnership
August 15, 1995
Page 3
ADDITIONAL PUBLIC NOTIFICATION AND CORRESPONDENCE
A copy of this report will be sent to Monfric, Inc., owners of Poway Villas and
to the Legal Aid Society. In addition, a copy will be posted at Poway Villas.
RECOMMENDATION
It is recommended that the Redevelopment Agency:
1. enter into an agreement with the California Housing Partnership for consulting
services in connection with the transition of ownership at Poway Villas in a form
acceptable to the City Attorney/Agency General Counsel, and authori ze the
Executive Director to execute said agreement, and
2. appropri ate the sum of $6,000 for these servi ces from the Hous i ng Fund's
unappropriated reserve, account 471-8912, and transfer it to account 471-5972.
Attachment: (I) Proposal from California Housing Partnership
c:\data\agenda\villas.rpt
AUG 1 5 1995 ITEM 16 .,1
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RECEIVED
C.-\LI Fn [.(,\ L\ JUl 20 9!15
HOL"!\( ~
P.\RT\EI\"HIP CITY OF POWAV
- REDEVelCPMENTSEAV~ES
CORPO!~~llU\ DEPARTlliHT
\\ \ Irh:j;:~ \\llh y, 'll ;11 !)~t..'''':'''<': .\1[, :ri.-Lihle HI )U"ln,~
Roard of Directors July 18, 1995
Chairp~rson;
'\\ ~. .I.'~~' David Nurevsky
,-:,,,,/",11,'.'''1 City of Poway
.,ii 13325 Civic Center Drive
Oirectors: Poway, California 92064 .
:: P,<,,)h.<;:'T
d'L.1I1 Dear Dave:
" ,-.,J\'ic
:i,/ll"(",''rnlt'I/:''! The California Housing Partnership Corporation is pleased to submit
~ dud 1_';III/I/lIi/l11 the attached Scope of Services, Schedule and Compensation proposal
"11',",'/ for your consideration. I have structured it as an Attachment 1 to per
; )';' '.i.,~kl\ your Standard Agreement, which I have reviewed. Our business
/l, '{'-" "~ ,II-,U/"(I!/.' manager is checking your insurance requirements against our current
"U/,I:1:1t"'\1l17 insurance coverage limits, and I'll let you know the results of that
.- review. I know that we do not carry and have no plans to purchase
1'<:':i<I',.l!, Errors and Omissions insurance, and I hope that this requirement
.".,n,','!' df l.dll
\,III,,,,,dH"IISJII:..! could be waived.
i,ii, iJ'-"/l'L';
"_'.1:'''.:,:.... We appreciate your consideration for this opportunity, and very much
',\ c ,,'c""'" !,\.~' ,'1,1/0,' look forward to working together. If you have any questions about this
';-:1',",
;;. "..J!~ l."I..ld!!,,' <.'J!lile proposal, please contact me at 531-1995,
",':". \1 ':-:~(>ljU'
(';,,'i/Jli."!lhl'" ..-/'
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Chid Executive Officer: 'llfjf
!'I: ,I i \ 1I [~ll'! . (l
san M. \ Rey Ids
Deputy D or
Enclosure
Attachment 1 M1G 1 5 1995 ITEM 16 ~
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A IT ACHMENT 1
Preamble
Poway Villas is a 60 unit, HUD-assisted multifamily complex located in
Poway, and originally eligible for mortgage prepayment. The owner of
the development has received the project valuation under the Title VI
program, and has filed a second Notice of Intent to sell under that
program. The Title VI program at the time of signature of this
contract has no funds, and it appears that Congress will be funding
either an alternative program or no program at all. Any new program
is expected to give preference nonprofit purchases. A t the time of
signaturl:! of this contract, there is no nonprofit which is interested in
purchasing the complex, and the residents do not appear to be
organized or informed about the potential for prepayment. The City of
Poway wants to assure that the development's affordability is
preserved, and that a responsible nonprofit with resident support is
prepared to purchase the complex,
1. SCOPE OF SERVICES AND CONTRACT DELIVERABLES
CHPC agrees to provide the following services to the Sponsor:
Phase 1. Resident Education and Nonprofit Purchaser Identification
Phase I services cover the time period from contract signature through
identification of a nonprofit purchaser.
1. Provide outreach and information to the residents of Poway
Villas, through written materials, one to two resident meetings, and
other methods as appropriate,
2. Meet with the owner or their representatives and determine the
owner's concerns and goals in the sale.
3. Meet with potential nonprofit purchasers, and identify at least
one nonprofit with housing ownership or development experience
which is interested in purchasing the development with a participatory
role for the residents, and which appears to be initially acceptable to the
seller, the residents and the Agency.
4. Brief the Agency staff as needed on the progress of the resident
and nonprofit solicitation process, any new programs considered by
Congress, and the potential local funding which may be needed for the
purchase.
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~~ Phase II. Option Agreement/Predeveloprnent Financing.
Phase II services cover the time period from identification of a
nonprofit purchaser through approval of predevelopment financing.
1. Assist the purchasing nonprofit to prepare and submit an
application for a HUD Technical Assistance Grant from the Low
Income Housing Fund, or other predevelopment financing as may be
appropriate, and to secure approval of such predevelopment financing.
2. ADDITIONAL SERVICES .
Additional training, additional meetings or other additional services
may also be provided by CHPC, on an hourly basis at a rate of $120 per
hour, upon written authorization by the Agency.
3. SCHEDULE
CHPC will provide these services commencing with the date on this
agreement and extending until completion of the services, currently
expected to occur by October 31, 1996.
4. COMPENSATION
CHPC's compensation under this contract shall be as follows:
. Phase I. A fixed fee of $3000 plus actual expenses.
. Phase II. A fixed fee of $1,500 plus actual expenses.
. For Additional Services, an hourly fee of $120 per hour plus
actual expenses.
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