HomeMy WebLinkAboutR32-Economic Development Agency
CITY OF SAN BERNARDINO
ECONOMIC DEVELOPMENT AGENCY
FROM: Emil A. Marzullo
Interim Executive Director
SUBJECT:
Affordable Housing Solutions of San Bernardino
("AHS") Quarterly Report of Program Activities
tbrough December 31, 2010
DATE:
May 5, 2011
u__________u_____________________________________________________________________________________________________________________________________________________________________________________________________.
SvnoDsis of Previous Commission/CounciVCommittee Action(s):
On April 7, 2011, Redevelopment Committee Members Johnson, Marquez and Brinker unanimously voted to recommend that
the Community Development Commission consider this action for approval.
Recommended Motion(s):
(Communitv Development Commission)
Motion: That the Community Development Commission of the City of San Bernardino receive and file the quarterly report
of Affordable Housing Solutions of San Bernardino Program Activities for the period ending December 31, 20 I 0,
for the Redevelopment Agency of the City of San Bernardino
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Contact Person(s):
Carey K. Jenkins
Phone:
(909) 663-1044
Project Area(s):
N/A
Ward(s):
All
Supporting Data Attached:
o Staff Report 0 Resolution(s) 0 Agreement(s)/Contract(s) 0 Map(s) 0 Letter(s)
FUNDING REQUIREMENTS:
Amount: $
N/A
Source:
N/A
Signature:
Emil A. Marzu
/"
?
,{
Budget Authority:
Fiscal Review:
t . Executive Director Lori Panzin
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Commission/Council Notes:
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P:\Agendas\Comm Dev Commission\CDC 20] 1\05-]6-] 1 AHS Quarterly Report SRdoc
COMMISSION MEETING AGENDA
Meeting Date: 5/16/2011
Agenda Item Number: /2:3'1-
ECONOMIC DEVELOPMENT AGENCY
STAFF REPORT
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AFFORDABLE HOUSING SOLUTIONS OF SAN BERNARDINO ("AHS") QUARTERLY
REPORT OF PROGRAM ACTIVITIES THROUGH DECEMBER 31,2010
BACKGROUND:
In August of 2008, the City of San Bernardino ("City" or "San Bernardino") received a funding
allocation of $8,408,558 from the United States Department of Housing and Urban Development
("HUD") under the Neighborhood Stabilization Program ("NSP") to address the City's foreclosure
problem. On November 17, 2008, the Mayor and Common Council of the City of San Bernardino
("Council") and the Community Development Commission of the City of San Bernardino
("Commission") jointly approved the proposal of the City's redevelopment agency (the "Agency") and
submission to HUD for its NSP allocation. Finally, on March 3, 2009, HUD approved the City's
application which was followed by an April 23, 2009, City Council action to formally accept the funds.
The Program commenced shortly thereafter.
As the program got under way a later action occurred on September 21,2009, when the Commission
authorized Affordable Housing Solutions of San Bernardino, a California non-profit corporation,
("AHS") to undertake activities for the acquisition and administration of properties to be acquired in
furtherance of the NSP Program which includes the rehabilitation or demolition, as appropriate, of
foreclosed properties within designated target areas or elsewhere in the City, as may be permitted by
NSP rules and regulations and in furtherance of the use of the NSP funds by the Agency. The
Commission further authorized and directed Agency Staff to fund AHS with HOME Investment
Partnership Program Funds in an amount up to Two Million Dollars ($2,000,000). These funds are
available for the purpose of acquisition and development of qualified residential properties targeting
lower income households.
Two other actions to date occurred authorizing the Agency to allocate additional funds to implement
the Demolition Program and redevelopment of blighted residential properties in furtherance of its
affordable housing efforts. The first action took place on December 21, 2009 and consisted of the
allocation of $1,000,000 in low-mod funds to continue AHS demolition activities and $500,000 in
HOME funds to continue acquisition I rehabilitation activities in eligible areas of the City. The second
action took place on October 18,2010 and consisted of the allocation to AHS of $4,000,000 in low-
mod funds to continue acquisition I rehabilitation and demolition of various projects. Please see
Attachment "I" provided with this report which depicts the funds allocated to AHS and their
associated expenditures.
On March 7, 2011, the Agency was awarded $3,277,401 in NSP 3 funds. The majority of the City's
NSP3 funds, $2,130,311, would be used for the acquisition, rehabilitation and resale of foreclosed or
abandoned single-family homes through participating intermediary developers. Additionally, up to
$819,350 or 25% would be used for the acquisition, rehabilitation and rental of smaller multifamily
sites as this is a programmatic requirement of HUD. The remaining $327,740 would be allocated to
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P:\AgendasIComm Dev CommissionlCDC 2011\05-16-11 AHS Quarterly Report SR,doc
COMMISSION MEETING AGENDA
Meeting Date: 5/16/2011
Agenda Item Number: ~-z...--
Economic Development Agency Staff Report
AHS Quarterly Update - Ending December 31,2010
Page 2
NSP administration. It is anticipated these funds would be available for draw down sometime around
July 1, 2011.
CURRENT ISSUE:
NSP Funds
For the quarter ending December 31, 2010, the Agency acquired 7 properties utilizing NSP funds.
These properties constituted a total of 10 dwelling units. Since the inception of the Program a total of
50 properties have been acquired, which represents a total of 67 dwelling units that have been
positively impacted. The properties include single family homes, four-plex properties and multi-
family apartment buildings. Thus far, $314,737 has been generated in program income from the sale
of 15 homes to qualified homebuyers. The program income will be reinvested back into the NSP for
future acquisitions.
Set Aside Funds
For the quarter ending December 31, 2010, the Agency acquired 3 properties utilizing Set Aside funds.
These properties constituted a total of 45 dwelling units. Since the inception of the Program a total of
14 properties have been acquired, which represents a total of 85 dwelling units that have been
positively impacted with Set Aside funds. The properties include single family homes, four-plex
properties and multi-family apartment buildings. Thus far, $55,052 has been generated in program
income from the sale of2 homes to qualified homebuyers.
Please see Attachments "2" and "3" for the locations of program activities and approved funding
indicated by Council Ward. The maps identify this information for the quarter through December 31,
2010 and for all activities to-date through December 31,2010.
The tables below detail the number of properties acquired, the number of units, funds committed and
the program income received (as of December 31,2010) by funding and Program type.
NSP Funds
Quarter Endin~ December 31, 2010 Activities-to-Date
Program Properties # of Funds Propertie # of Funds Program
Component Acquired Units Obligated s units Obligated Income
Acquired
Rehabilitation 5 5 $367,399 36 36 $4,019,869 $314,737
and Resale
Demolition I 1 $45,880 12 26 $1,070,714 N/A
Rehabilitation I 4 $151,627 2 5 $212,384 N/A
and Rental
TOTAL 7 10 $564,906 50 67 $5,302,967 $314,737
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P:\AgendasIComrn Dev Comrnission\CDC 2011\05_]6-1\ AHS Quarterly Report SRdoc
COMMISSION MEETING AGENDA
Meeting Date: 5/16/2011
Agenda Item Nnmber: --fJ.::b~
Economic Development Agency Staff Report
AHS Quarterly Update - Ending December 31,2010
Page 3
Set Aside Funds
Quarter Ending December 31,2010 Activities-to-Date
Program Properties # of Funds Propertie # of Funds Program
Component Acquired Units Obligated s units Obligated Income
Acquired
Rehabilitatio I I $106,190 4 4 $495,237 $55,052
n and Resale
Demolition 2 44 $2,030,047 9 71 $3,277,916 N/A
Rehabilitatio 0 0 $0 I 10 $232,498 N/A
n and Rental
TOTAL 3 45 $2,136,237 14 85 $4,005,651 $55,052
For a review of expenditures associated with the Program to-date, please see Attachment "I" to this
report.
Proe:ram Detail:
Rehabilitation and Resale - 6 additional single family homes were acquired for a total obligation of
$473,589 during the December 31, 2010 quarter and 40 homes have been acquired since program
inception for a total obligation of $4,515, 1 06 under this program category.
Presently, the Agency is actively working with its available pool of selected developer intermediaries
wherein once the Agency acquires a specific property, an intermediary is selected to secure, manage,
rehabilitate and market the property for re-sale. At no time does the intermediary take title to the
property but instead earns a fee for the services rendered. As of the end of the December 31, 2010
quarter, the Agency, through its intermediary pool, had sold 17 rehabilitated homes to qualified home
buyers and was in escrow to close on 5 more. The sales of these homes generated a total amount of
$369,789 in program income thus far. It is expected these and several other properties will be sold in
the current quarter which will be confirmed during the next reporting period. The other properties
under this component are in various stages of acquisition and rehabilitation.
Within this program component the Agency has also had preliminary success with reaching out to
local non-profits with an interest in becoming community based housing developers. Thus far, the
Agency has entered into 12 separate intermediary agreements with local faith-based housing non-profit
corporations. Along with the rehabilitation and resale of the homes to income qualified home buyers,
the Agency is working with these organizations to create job training opportunities with hands-on work
experience for local youths who are currently unemployed or underemployed. As this pilot program
matures and NSP 3 funds are introduced to Program activities local job creation activities will take on
an even more pronounced role.
Demolition - 3 additional properties, to include 1 single-family, 1 four-plex and 1 multi-family
property were acquired for a total obligation of $2,075,927 during the December 31, 2010 quarter and
21 properties have been acquired since the Program's inception for a total obligation of $4,348,630
under this program category.
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P:\AgcndasICommDevCornmissionICDC 201]\05-16_1] AHS Quarterly Report SR,doc COMMISSION MEETING AGENDA
Meeting Date: 5/16/2011
Agenda Item Number: t:?J-z..-
Economic Development Agency Staff Report
AHS Quarterly Update - Ending December 31,2010
Page 4
As the housing market eventually stabilizes and demand for new housing returns, the Agency will seek
to create an infill development program for those properties demolished under NSP. Looking at the
current market, infill development opportunities might begin to materialize in San Bernardino by 2013.
Rehabilitation and Rental: AHS - No new properties were acquired during the reporting quarter.
However, during this period the Agency had the opportunity to negotiate the allocation of certain
properties previously acquired for demolition purposes to non-profit organizations that specialize in
providing housing to special needs individuals and their families. The property addresses include:
1464 West Victoria (NSP funded rental), 657 North "F" Street (set-aside and HOME funded rental),
and 1405 Lugo (NSP funded rental). During the current reporting period the Agency was successful in
reallocating funds to the Rental Housing Opportunities component for these 3 development
opportunities. The project sponsors for these sites include California Housing Foundation (1405
Lugo), Mary's Mercy Center (1464 West Victoria) and Time for Change Foundation (657 North "F").
Therefore, a total of 3 properties, to include I single-family, I four-plex and I IO-unit property, have
been acquired since program's inception for a total obligation of $444,882 in total development costs
for the acquired properties.
Rehabilitation and Rental - MECH - Although no new properties were acquired during the
December 31, 20 I 0 quarter, it was determined that one of the properties previously acquired by the
Mary Erickson Community Housing ("MECH") utilizing Agency housing set-aside funds was, in fact,
NSP eligible (2148 E. 19th Street). As a result MECH and the Agency reallocated NSP funds to this
site acquisition and rehabilitation as it was seen as an opportunity to benefit the overall program and
further the NSP expenditure goal.
Within the rental housing opportunities component, MECH has been very active in purchasing and
rehabilitating 10 four-plex properties in the area of the City known as the 19th Street and Sunrise Lane
Project. Under their development agreement with the Agency, MECH is responsible for acquiring 25
separate four-plexes within the designated area. For the reporting period, they have been successful in
acquiring outright 10 of the 25 properties. In addition to their use of NSP funds, Mary Erickson has
been allocated Redevelopment Agency Housing Set Aside funds to acquire and rehabilitate those
properties that do not meet the strict acquisition guidelines of NSP. Thus far Mary Erickson has
acquired 3 separate properties utilizing Agency housing set aside funds and is currently in escrow to
acquire a fourth. This has been an impressive start given the complexity of the project. To-date,
MECH has expended a total of $4,385,501 in program funds to include $3,034,311 in NSP funds and
$1,351,190 in Set Aside funds.
Program Administration - In addition to direct program activities, NSP allows for an administrative
fee not to exceed 10% of the grant. The Agency allocated approximately $769,000 for the duration of
the Program to pay staff salaries, program consultants, appraisal, environmental review, support staff,
equipment and supplies. During the December 31, 2010 quarter the Agency drew down $51,295 in
NSP Funds for a total amount of $85,531 drawn down to-date.
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P:\AgendasICommDevCommission\CDC 2011\05-16_]1 AHS Quarterly Report SR.doc COMMISSION MEETING AGENDA
Meeting Date: 5/16/2011
Agenda Item Number: ~1--
Economic Development Agency Staff Report
AHS Quarterly Update - Ending December 31,2010
Page 5
Future Proiects:
Over the next several quarters Agency staff will initiate the following projects under the authority of
AHS. At present, 3 have been identified. This list will grow substantially as AHS assumes greater
responsibility for housing production activities.
"F" Street Proiect
The North "F" Street Rehabilitation is a Multi-family Low-Income Rental Housing Project which
includes the acquisition and rehabilitation of an existing I O-unit apartment complex located at the
corner of Victoria and "F" Street. The building will be owned and operated by a local non-profit
organization, Time for Change Foundation, and will be used to provide permanent housing to women
and their children who have successfully completed an extended transitional housing program at one of
Time for Change's existing facilities.
Ward I Target Area
In an attempt to target housing resources and make a more effective housing rehabilitation program,
Agency staff has been interacting with various Council members in an attempt to identifY specific
target areas for these resources. Thus far Agency staff has met with the Council member from Ward I
to map out a strategy to target a portion of citywide funds in a specific area to include the boundaries
between 9th Street to the north, Spruce Street to the south, Mt. Vernon Avenue to the west and the 215
Freeway to the east. This component to the strategy includes targeting beautification and rehabilitation
funds to homeowners and separately attempts acquire foreclosed and abandoned properties in the same
immediate area. The overall intent of the program is to create more homeownership opportunities and
to beautifY this area of Ward 1.
Thus far the Agency, through its current contract with Inland Housing Development Corporation for
the administration of the Beautification Grant and Rehabilitation Loan Programs, has been successful
in completing I grant and identifying 2 additional qualified homeowners for the beautification /
rehabilitation program. Furthermore, Agency staff has identified approximately 24 properties to
acquire and rehabilitate. The acquisition and rehabilitation process will occur through local third party
developers overseen by AHS. These activities should be underway by the end of the current fiscal
year.
NSP3
On March 7, 2011, the Agency was awarded $3,277,401 in NSP 3 funds. The majority of the City's
NSP3 funds, $2,130,311, would be used for the acquisition, rehabilitation and resale of foreclosed or
abandoned single-family homes through participating intermediary developers. Approximately
$819,350 or at least 25% of the total award under NSP 3 would be dedicated to provide housing for
individuals or families whose incomes do not exceed 50% of AMI. This portion of funding would be
used to acquire and rehabilitate small, foreclosed or abandoned, multi-family properties. The
remaining $327,720 would be allocated to administrative activities.
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P:\Agendas\Comm Dev Commission\CDC 20] 1\05-16-11 AHS Quarterly Report SR.doc
COMMISSION MEETING AGENDA
Meeting Date: 5/16/2011
Agenda Item Nnmber: ~'2--
Economic Development Agency Staff Report
AHS Quarterly Update - Ending December 31, 2010
Page 6
ENVIRONMENTAL IMPACT:
This item does not meet the definition of a "project" under Section 15378 of the California
Environmental Quality Act ("CEQA"), which states that a "Project" means the whole of an action,
which has a potential for resulting in either a direct physical change in the environment, or a
reasonably foreseeable indirect physical change in the environment.
FISCAL IMPACT:
There is no General Fund impact to the City. The services provided under the NSP Program and the
associated administration costs will be funded either with NSP funds derived from HUD or funds from
the Agency's Tax Increment Housing Set-Aside.
RECOMMENDATION:
That the Community Development Commission adopt the Motion to receive and file the Quarterly
Report.
Emil A. Marzullo,
Executive Director
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P:\Agendas\Cornm Dev CommissionlCDC 2011105-16-1] AHS Quarterly Report SRdoc
COMMISSION MEETING AGENDA
Meeting Date: 5/16/2011
Agenda Item Number: {L3?-