HomeMy WebLinkAboutR36- Economic Development Agency CITY OF SAN BERNARDINO ORIGINAL
ECONOMIC DEVELOPMENT AGENCY
FROM: Emil A.Marmllo SUBJECT: 5" Street and Meridian Avenue Project
Interim Executive Director ("Project')Update of Project Activities
DATE: March 23,2010
Synopsis of Previous Commission/Council/Committee Action(s):
On March 4, 2010, Redevelopment Committee Members Johnson, Baxter and alternate Shorett unanimously voted to
recommend that the Community Development Commission consider this action for approval.
----------------------------- ------------------------------- --
Recommended Motion(s):
(Community Develooment Commission)
MOTION: That the Community Development Commission of the City of San Bernardino receive and file the annual update
of the 51 Street and Meridian Avenue Project for the Redevelopment Agency of the City of San Bernardino.
Contact Person(s): Carey K.Jenkins Phone: (909)663-1044
51°Street and Meridian Avenue Project
Project Area(s): Area Ward(s): 6th
Supporting Data Attached: 0 Staff Report O Resolution(s)O Agreement(s)/Contract(s)0 Map(s)O Letter(s)
FUNDING REQUIREMENTS: Amount: $ -0- Source: N/A
Budget Authority: N/A
Signature: Fiscal Review:
Emil A.Marzullo,Interim Executive Director Lo ' 'to ,,er€ ' dtninistrative Services
Director
Commtsston/Council Notes: -------
P'.Wgeeda T*o Po Co=iswn1(:a(,3010W 5-105@SUe eM Maim Annm Najen Update SR.da COMMISSION MEETING AGENDA
Meeting Date: 04/05/2010
Agenda Item Number: 43(0
ECONOMIC DEVELOPMENT AGENCY
STAFF REPORT
5'STREET AND MERIDIAN AVENUE PROJECT("PROJECT")
UPDATE OF PROJECT ACTIVITIES
BACKGROUND:
On September 15, 2008, the Community Development Commission of the City of San Bernardino
("Commission") authorized the Redevelopment Agency of the City of San Bernardino ("Agency") to initiate
Phase I of the 5t° Street and Meridian Avenue Project (the"Project"). The Project includes the acquisition of a
series of four-plex apartment buildings, most of which are currently bank-owned properties. The Project is a
priority for the Agency as a result of the blighting effects the current apartment complexes are having on the
immediate area which is generally comprised of single-family residences. Given the high number of bank-
owned properties and the overall depressed state of the residential housing market, the Agency has a unique
opportunity to acquire these properties at drastically reduced prices in order to obtain site control for future
development. After the properties are acquired, the Agency will issue a request for proposals to the
development community in an attempt to seek the best redevelopment solution on an open and competitive
basis.
On October 6, 2008, the Commission authorized the Agency to execute a Professional Services Agreement by
and between the Agency and California Property Specialists, Inc. ("CPSP'), in support of acquisition and
relocation services associated with the Project.
CURRENT ISSUE:
As of today, the Agency has been successful in acquiring nine (9) of the eleven (11) bank-owned properties,
with plans to acquire the remaining two (2) properties within the next sixty(60) days. The remaining seven (7)
privately owned properties have been appraised for negotiation and potential acquisition purposes. CPSI is
currently in the process of preparing and presenting offer packages to the homeowners of the remaining
properties on behalf of the Agency. It is their intention to acquire the remaining properties through short sales
and as of today,are currently in negotiations with three(3)of the property owners.
The nine (9) acquired properties include one (1) vacant lot and eight (8) fourplex apartment buildings. Of the
eight (8) buildings, only three (3) apartment complexes were tenant occupied, with a total of nine (9)
households. Of the nine(9)households, six(6)requested and received voluntary relocation assistance and as of
today, have been successfully relocated to decent, safe and sanitary replacement sites and received relocation
benefits. The three (3) remaining households were immediately removed by the sellers upon receipt and
acceptance of the Agency's offer on their properties and as a result, CPSI is currently working with the
displaced homeowners on behalf of the Agency to determine their eligibility to receive relocation benefits.
Demolition Activities
On May 15, 2009, the Commission adopted a resolution approving and authorizing the Interim Executive
Director of the Agency to execute a Demolition Contract by and between the Agency and J&G Industries, Inc.,
for the demolition of Agency Properties located at 2656, 2695 and 2639 West 5m Street which resulted in the
complete demolition and removal of these properties in June of 2009.
On September 8, 2009, the Commission adopted a resolution approving and authorizing the Interim Executive
Director of the Agency to execute a Demolition Contract by and between the Agency and AON, Inc., for the
P%Av:td&aTo=Daa Corn isslon� 2010&1-0405WS aaaod Meddian Av Projees Update Sp-doe COMMISSION MEETING AGENDA
Meeting Date: 04/055/(20010
/0
Agenda Item Number: F
Economic Development Agency Staff Report
P Street and Meridian Avenue Project Update
Page 2
demolition of Agency Properties located at 2624, 2625, 2633, 2643 and 2657 West 5" Street which resulted in
the complete demolition and removal of these properties in September of 2009.
Upon acquiring the remaining bank-owned properties,the Agency will submit a request to the Commission for
their demolition should the demolition cost require Commission approval. The request should be submitted
sometime by May,2010.
Project Expenditures
Staff determined initially, based on market values of properties at the time, that the Project would require
approximately $6.3 million to acquire, relocate tenants and demolish structures in preparation for
redevelopment. Now, sixteen (16) months into the process, the Agency has benefitted from a substantial
decrease in property values over the amount of time that acquisition has been occurring. During FY2008-2009
the Agency expended a total of$1,579,252.66 towards all activities associated with the acquisition, relocation
and property management of the Project. Under its FY2009-2010 budget, the Agency has allocated $2,500,000
for Project activities. For the half-year period of July 1, 2009 through December 31, 2009, the Agency
expended a total of$146,819.06 for a total Project expenditure of$1,726,071.72.
A B C D
Expenditures Expenditures Total project Amount available for
FY 2008/2009 FY 09-10 through 12/31/09 expenditures through remainder of FY
12/31/09 2009/2010
$1,579,252.66 $146,819.06 $1,726,071.66 $2,353,180.94
NOTE: A+B=C
$2,500,000—B=D
In the upcoming FY20010-2011 budget the Agency will be requesting another amount to potentially finalize
acquisition of remaining properties.
Future Development Activities
As a part of the original plan that was presented by Agency Staff, several redevelopment concepts were
presented based on certain parameters such as market demand, housing type, current zoning and overall density
constraints. The Project site is currently zoned as CG-1 (Commercial General), which allows for the following
development opportunities: retail, personal service, entertainment, office and related commercial uses along
major transportation corridors and intersections to service the needs of the residents; reinforcing existing
commercial corridors and centers and establishing new locations as residential growth occurs.
At the time of the initial September 15, 2008 Commission approval, several redevelopment scenarios were
provided for the housing component once all acquisition, relocation and demolition activities had been
completed. Specifically,they included five separate alternatives:
1. Affordable senior rental alternative at 125 units.
2. Affordable family rental alternative at 160 units.
3. Low density single-family residential ownership alternative at 18 units.
4. Medium density single-family residential ownership alternative at 50 units.
5. Higher density single-family residential ownership alternative at 60 units.
P:USmduT0 Dw ComminloACDC 2010�A1-05-1056 SV Maidim AV ePmiea Updne Skd COMMISSION MEETING AGENDA
Meeting Date: 04/05/2010
Agenda Item Number:
Economic Development Agency Staff Report
5m Street and Meridian Avenue Project Update
Page 3
Each of these alternatives remains viable, especially given the lower acquisition costs the Agency has
experienced thus far. However, each alternative assumes the Agency would write down the anticipated land
value to zero (currently projected at$6.10 million). In addition to this, each alternative has its own cost-benefit
profile which should be noted:
Residual Land
Alternative Value("RLV") Cost Benefit
Affordable Senior ($5,146,568) Several affordable senior Availability of funding
Rental Housing (125 projects in City; project sources; relative ease with
units) would need to attract add'I lease-up; minimal community
equity=RLV; relatively concerns
expensive
Affordable Family ($16,140,780) Acq./rehab of existing family Opportunity to provide
Rental(160 units) housing better alternative; quality affordable housing to
extremely expensive - add'l families; possible insertion of
equity=RLV; possible community services; after
community concerns; not school programs; larger
consistent with immediate potential retail base; greatest
neighborhood. benefit to greatest#.theory
Low density SFR(18 ($2,785,598) Requires a very favorable Much lower public services
units) housing market @ $350,000 impact;relatively easy market
per unit; large footprint rate opportunity; chance to
homes may not be marketable increase income demographic
in neighborhood
Medium density SFR ($709,202) Requires stabilized and/or Cheater amount of home
(50 units) rising housing market @ ownership; chance to
$275,000 per unit; denser site substantially increase income
design required; phasing demographic; attraction to
strategy needed more retailers
Higher density SFR ($627,099) Requires stabilized and/or Significant amount of home
(60 units) rising housing market @ ownership; chance to
$275,000 per unit; very dense substantially increase income
site design required; phasing demographic; attraction to
strategy required; appropriate greater number of retailers
absorption assumptions;
probability of extensive
public improvements
As the Agency completes the acquisition phase on the residential properties, it is recommended that further
analysis be conducted on the redevelopment scenarios presented. In addition, it is advised that the Agency
conduct a market demand survey, demographic and economic profile of the one-mile radius around the Project
to better gauge commercial revitalization opportunities on Foothill Boulevard immediately to the south of the
Project. Upon conducting this analysis, the Agency will be better able to recommend any commercial
revitalization opportunities and thus acquisition strategies for Foothill Boulevard. This information should be
available for presentation to the Commission by June 30,2010.
PNgmdn ommD CUmmi„bnN;DC]Al00 105NSm a MendienAvenue Ropo Up&te Sadoc COMMISSION MEETING AGENDA
Meeting Date: 04/05/2010
Agenda Item Number: R-3(0
Economic Development Agency Staff Report
Yh Street and Meridian Avenue Project Update
Page 4
Once these steps are taken and there is consensus generated on the possibility of acquiring sites along Foothill
Boulevard, the Agency will then look to create an acquisition budget, with conforming development schedule
for the commercial piece and also issue a request for proposals to the development community for the residential
component and whatever commercial opportunities are identified at that time.
Provisions relating to the Project's funding source require that the Agency use the housing fund monies to
increase, improve and preserve housing available to low- and moderate-income persons and families at an
affordable cost, as required in sections, 33070, 33071, 33334.2 and 33449 of the California Health and Safety
Code. In addition, section 33334.2(8) states that the monies may be spent outside a project area if it is
determined by the agency and its legislative body to be of benefit to the project area. The housing-related
component is outside any of the Agency's current Redevelopment Project areas. Section 3334.16 of the Health
and Safety Code requires agencies to commence actions leading to the development of property acquired with
monies from the housing fund within five(5)years after acquiring the property.
Therefore, it is incumbent upon the Agency to start redeveloping this area by November 17,2013, which would
be five(5)years after the purchase of the first property utilizing housing set-aside funds located at 2656 West 51h
Street.
ENVIRONMENTAL IMPACT:
This item does not meet the definition of a "project" under Section 15378 of the California Environmental
Quality Act(CEQA).
FISCAL IMPACT:
There is no General Fund impact to the City. Funds used to pay for this Project are derived from the Agency's
Low and Moderate Income Housing Set- Aside Funds identified in the FY2008/2009 and FY2009/2010
Budgets.
Account Budgeted Amount: $0 Balance as of: March 23.2010
Balance after approval of this item:
RECOMMENDATION:
That the Community Development Commission adopt the Motion.
Emil A. Marzu lo,Interim xecutive Director
----------------- ----------------------------------- ------------- -----
PkA a a5comm�v Commission\CDC 2010%04-05-m 5th Sneer and meddiaa Avewe vro7«r uodam S&d COMMISSION MEETING AGENDA
Meeting Date: 04//)J055/�/2,010
Agenda Item Number: P_W
v
n� s ;
s q
I {
l�
� IWL H
I
�-
F 1
8f
' 619Z 9Z9Z "
i
ZE9Z EE9Z
8E9Z 6£9Z
s,
` Z69Z E69Z
w
,.• iF 999Z L99Z f
OL9Z �i 699Z
f Z89ZI E89Z 4•
6692 9692
oM
oge
a =.g
`id ae
UPI mm
UPI
a
N
+ � 7
d
1 Y
w
ui
a 'r as
e » • � �� e. z = . . .
� - -
/� m,
� . _ .
\ 699
§ a » . I
- IL
�
bw
\ . G ^ ■ ? : » L
. � & §