HomeMy WebLinkAboutR32- Economic Development Agency CITY OF SAN BERNARDINO ORIGINAL
ECONOMIC DEVELOPMENT AGENCY
FROM: Emil A.Marzullo SUBJECT: Affordable Housing Solutions of San Bernardino
Interim Executive Director - Amendment No. 2 to the 2009 Neighborhood
Stabilization Program Sub-Recipient Agreement
and allocation of funds from the Agency's Low
DATE: October 6,2010 and Moderate Income Housing Set-Aside Funds
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Svnopsis of Previous Commission/Council/Committee Action(s):
On September 23,2010, Redevelopment Committee Members Johnson,Marquez and Brinker unanimously voted to recommend
that the Community Development Commission consider this action for approval.
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Recommended Motion(s):
(Community Development Commission)
Resolution of the Community Development Commission of the City of San Bernardino approving and authorizing 1)
that the Interim Executive Director of the Redevelopment Agency of the City of San Bernardino("Agency")execute
Amendment No. 2 to the 2009 Neighborhood Stabilization Program Sub-Recipient Agreement by and between the
Agency and Affordable Housing Solutions of San Bernardino, Inc. ("Sub-Recipient") and 2) that the Interim
Executive Director of the Agency be authorized to increase the capital allocation of the Agency's Low and Moderate
Income Set-Aside Funds in the amount of $4 million to the Sub-Recipient for the purpose of continuing its
foreclosure mitigation activities
Contact Person(s): Carey K.Jenkins Phone: (909)663-1044
Project Area(s): N/A Ward(s): All
Supporting Data Attached: 0 Staff Report 0 Resolution(s)0 Agreement(s)/Contract(s)❑Map(s)❑Letter(s)
FUNDING REQUIREMENTS: Amount: $ N/A Source: N/A
Budget Authority: N/A
Signature: Fiscal Review:
Emil A.Marzullo,Interim ExAcutive Director Lori 115nzWille& m Chief Financial Officer
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Commission/Council Notes:
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PAAgendas\Comm Dev Commission\CDC 2010\10-18-10 AHS-Allocation of Funds SR.doc COMMISSION MEETING AGENDA
Meeting Date: 10/18/2010
Agenda Item Number: �3?i
ECONOMIC DEVELOPMENT AGENCY
STAFF REPORT
AFFORDABLE HOUSING SOLUTIONS OF SAN BERNARDINO—AMENDMENT NO. 2
TO THE 2009 NEIGHBORHOOD STABILIZATION PROGRAM SUB-RECIPIENT
AGREEMENT AND ALLOCATION OF FUNDS FROM THE AGENCY'S
LOW AND MODERATE INCOME HOUSING SET-ASIDE FUNDS
BACKGROUND:
On July 30, 2008, Congress enacted the Housing and Economic Recovery Act of 2008 to address
foreclosures nationwide by funding $3.9 billion for the Neighborhood Stabilization Program ("NSP")
administered by the United States Department of Housing and Urban Development ("HUD"). Under a
formula allocation, the City received approximately $8.4 million to address its foreclosure problem. On
November 17, 2008, the Mayor and Common Council of the City of San Bernardino and the Community
Development Commission of the City of San Bernardino (collectively, the "City") jointly approved the
Redevelopment Agency of the City of San Bernardino's (the"Agency")proposal and submission to HUD
for its $8.4 million 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 City's approved plan with HUD consists of the following three Program activities plus an
administrative line item:
1. Acquisition, Rehabilitation and Resale of single-family residences ($3,700,000);
2. Acquisition and Demolition for future development ($1,320,000);
3. Housing Opportunities for Households at or below 50% of the AMI — HUD Requirement
($2,620,000); and
4. Administration($768,558).
Affordable Housing Solutions of San Bernardino ("AHS"), the non-profit organization created by the
Agency to acquire, hold and eventually dispose of previously foreclosed properties, received its initial
funding authority by the Commission on September 21, 2009. This consisted of an allocation of $4.3
million in NSP for use in specified target areas and housing set-aside funds in the amount of$2 million to
be used in conjunction with NSP for properties outside of these HUD approved target areas. HOME
Investment Partnership funds were also allocated to AHS in the amount of$2 million and would be used
for affordable housing projects on a citywide basis as they were identified by Agency staff. This
constituted a total initial allocation for AHS in the amount of$8.3 million.
As a result of the initial success in expending these funds and the need to reallocate certain funds between
program categories, another funding request was approved by the Commission on December 21, 2009.
As a result, AHS obtained additional funds in the amount of$1.9 million to continue its acquisition and
redevelopment activities. Much of these funds were used in conjunction with other NSP resources to
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P:\Agendas\COmmDevCommission\CDC 2010\10-18-10 AHS-Allocation ofPundsSP-doc COMMISSION MEETING AGENDA
Meeting Date: 10/18/2010
Agenda Item Number: 1(�✓�
Economic Development Agency Staff Report
AHS–Allocation of Funds
Page 2
acquire and demolish properties in and around the 19`h and Sunrise Project. Further acquisition,
rehabilitation and resale activities were also addressed with these funds.
Through June 30, 2010, AHS had approximately $2.5 million in unobligated funds available for new
acquisitions. This represents just 24% of the $10.2 million in funds initially allocated to AHS for
foreclosure mitigation activities. These funds have since been reduced further as AHS has identified
additional foreclosed and/or distressed properties for acquisition and further rehabilitation or demolition,
depending upon the property condition.
CURRENT ISSUE:
Within the past three weeks, the Agency has been notified by HUD that it has been awarded an additional
allocation of approximately $3.2 million in NSP3 funds which should be available for use by the end of
2010. In anticipation of this and as a way to continue the Agency's activities under NSP, a further
funding request of $4 million in housing set-aside funds is being requested at this time. These funds
would be used to continue the acquisition of foreclosed and distressed properties throughout the City,
with an emphasis on acquiring sites that would otherwise be purchased by outside investors. These funds
would also serve to maintain the momentum the Agency has obtained in acquiring foreclosed properties
under short time frames and on an all-cash basis, thereby outbidding most private investors. If authorized,
AHS will be able to use these funds to continue its acquisition and rehabilitation and/or demolition
activities while it awaits for the HUD allocation of new NSP3 funds which should be made available by
the close of 2010. For further review, a funding matrix has been provided and identified as Attachment
"A". Also, a map identifying the properties acquired and/or in escrow by AHS through June 30, 2010 is
identified as Attachment`B".
ENVIRONMENTAL IMPACT:
This does not meet the definition of a "project" under Section 15378 of the California Environmental
Quality Act("CEQA").
FISCAL IMPACT:
There will be no fiscal impact to the City's General Fund. The services provided by AHS in continuation
of its foreclosure mitigation activities is derived from the Agency's tax increment housing set-aside funds.
RECOMMENDATION:
That the Community Development Commission adopt the attached Resolution.
— /,-,0, ��, , /J.."I
Emil A. Mamullo,Interim Wedive Director
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PAAgendas\Comm Dev Commission\CDC 2010\10-18-10 AHS-Allocation of Funds SR.doc COMMISSION MEETING AGENDA
Meeting Date: 10/18/20010
Agenda Item Number: ✓Z
ATTACHMENT "A"
Affordable Housing Solutions (AHS) - Allocations for NSP & Related Activities
Funding Approved Approved Proposed
Source Sept. 21, 2009 Dec. 21, 2009 Allocation Total
NSP1 4,300,000 400,000 - $ 4,700,000
20% Housing Set-aside 2,000,000 1,000,000 4,000,000 $ 7,000,000
HOME 2,000,000 500,000 - $ 2,500,000
Total $ 8,300,000 $ 1,900,000 $ 4,000,000 $ 14,200,000
ATTACHMENT "B"
Properties Acquired and/or In Escrow
by Affordable Housing Solutions (AHS) Through 6/30/2010
89
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1 RESOLUTION NO.
2 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF
THE CITY OF SAN BERNARDINO APPROVING AND AUTHORIZING 1)
3 THAT THE INTERIM EXECUTIVE DIRECTOR OF THE
4 REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
("AGENCY") EXECUTE AMENDMENT NO. 2 TO THE 2009
5 NEIGHBORHOOD STABILIZATION PROGRAM SUB-RECIPIENT
AGREEMENT BY AND BETWEEN THE AGENCY AND AFFORDABLE
6 HOUSING SOLUTIONS OF SAN BERNARDINO, INC. ("SUB-RECIPIENT")
AND 2) THAT THE INTERIM EXECUTIVE DIRECTOR OF THE AGENCY
7 BE AUTHORIZED TO INCREASE THE CAPITAL ALLOCATION OF THE
8 AGENCY'S LOW AND MODERATE INCOME SET-ASIDE FUNDS IN THE
AMOUNT OF $4 MILLION TO THE SUB-RECIPIENT FOR THE PURPOSE
9 OF CONTINUING ITS FORECLOSURE MITIGATION ACTIVITIES
10
WHEREAS, on September 21, 2009, the Community Development Commission of the City
11
of San Bernardino ("Commission") approved the 2009 Neighborhood Stabilization Program
12
("NSP") Sub-Recipient Agreement ("Sub-Recipient Agreement"), through which the Sub-Recipient,
13
Affordable Housing Solutions of San Bernardino, Inc., a California non-profit corporation, was
14
charged with acquiring properties in furtherance of the Neighborhood Stabilization Program
15
("NSP") with the intent of future rehabilitation and resale of single-family properties and the
16
demolition of other residential properties as determined to be appropriate in furtherance of the
17
Agency's foreclosure mitigation activities; and
18
WHEREAS, the initial NSP funding allocation approved for these activities was $4,300,000
19
($3,700,000 for acquisition, rehabilitation and resale of single-family homes and $600,000 for
20
acquisition and demolition of residential structures); and
21
WHEREAS additional non-NSP funds were also initially allocated to AHS under the same
22
approval authority for residential properties falling outside of the NSP target zone and included
23
$2,000,000 in Agency Low and Moderate Income Housing funds ("Low-Mod Funds") and
24
$2,000,000 in HOME Investment Partnership Funds ("HOME Funds"); and
25
WHEREAS, on December 21, 2009,the Agency received authority to enter into Amendment
26
No. 1 to the Sub-Recipient Agreement ("Sub-Recipient Amendment No. I") to add an additional
27
$400,000 in NSP Funds and $1,000,000 in Low-Mod Funds to continue with acquisition and
28
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P:\Agendas\Resolutions\Resolutions\2010\10-18-10 AHS-Allocation of Funding CDC Reso.docx
1 demolition activities and an additional $500,000 in HOME Funds for the purpose of acquiring
2 residential properties outside of the NSP target zone; and
3 WHEREAS, since the initiation of foreclosure mitigation activities the Agency, through
4 Affordable Housing Solutions of San Bernardino, Inc. ("AHS"), has been successful in obligating
5 100% of the $8,408,558 in NSP funds initially allocated to the City of San Bernardino ("City") by
6 the U.S. Department of Housing and Urban Development("HUD") resulting in the acquisition of up
7 to 55 residential properties accounting for 101 dwelling units as of June 30, 2010; and
8 WHEREAS, in light of the initial success of NSP and the knowledge that additional NSP
9 funds will be made available to the City by HUD at a future date, the Agency deems it desirable to
10 enter into Amendment No. 2 to the Sub-Recipient Agreement ("Sub-Recipient Amendment No. 2")
11 in the form as attached hereto as Exhibit "A" with the Sub-Recipient to provide an additional
12 $4,000,000 in Low-Mod Funds for the purpose of continuing the City's efforts at addressing
13 residential foreclosures; and
14 WHEREAS, the Agency has determined that the execution of the Sub-Recipient
15 Amendment No. 2 and the fulfillment generally of the purposes of the Sub-Recipient Agreement are
16 in the vital and best interests of the City and the Agency.
17 NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION OF THE
18 CITY OF SAN BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND ORDER, AS
19 FOLLOWS:
20 Section 1. The facts set forth in the Recitals to this Resolution are accurate and correct in all
21 respects.
22 Section 2. The Commission hereby approves Sub-Recipient Amendment No. 2 and hereby
23 authorizes the Interim Executive Director of the Redevelopment Agency of the City of San
24 Bernardino to execute Sub-Recipient Amendment No. 2 on behalf of the Agency together with such
25 technical and conforming changes as may be recommended by the Executive Director, or Interim
26 Executive Director, as applicable, of the Agency and approved by the Agency Counsel.
27 Section 3. This Resolution shall take effect from and after its date of adoption by this
28 Commission.
2
P:\Agendas\Resolutions\Resolutions\2010\10-18-10 AHS-Allocation of Funding CDC Reso.docx
1 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF
THE CITY OF SAN BERNARDINO APPROVING AND AUTHORIZING 1)
2 THAT THE INTERIM EXECUTIVE DIRECTOR OF THE
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
3 ("AGENCY") EXECUTE AMENDMENT NO. 2 TO THE 2009
NEIGHBORHOOD STABILIZATION PROGRAM SUB-RECIPIENT
4 AGREEMENT BY AND BETWEEN THE AGENCY AND AFFORDABLE
5 HOUSING SOLUTIONS OF SAN BERNARDINO, INC. ("SUB-RECIPIENT")
AND 2) THAT THE INTERIM EXECUTIVE DIRECTOR OF THE AGENCY
6 BE AUTHORIZED TO INCREASE THE CAPITAL ALLOCATION OF THE
AGENCY'S LOW AND MODERATE INCOME SET-ASIDE FUNDS IN THE
7 AMOUNT OF $4 MILLION TO THE SUB-RECIPIENT FOR THE PURPOSE
OF CONTINUING ITS FORECLOSURE MITIGATION ACTIVITIES
8
9 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Community
10 Development Commission of the City of San Bernardino at a meeting
11 thereof, held on the day of , 2010, by the following vote to wit:
12 Commission Members: Ayes Nays Abstain Absent
13 MARQUEZ
14 DES JARDINS
15 BRINKER
16 SHORETT
17 KELLEY
18 JOHNSON
MC CAMMACK
19
20
Secretary
21
22 The foregoing Resolution is hereby approved this day of , 2010.
23
24 Patrick J. Morris, Chairperson
Community Development Commission
25 of the City of San Bernardino
26 Approved as to Form:
27
By: ° c
28 A ency Counsel
3
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EXHIBIT "A"
2 Amendment No. 2 to the 2009
Neighborhood Stabilization Program Sub-Recipient Agreement
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I,
AMENDMENT NO. 2
TO THE
NEIGHBORHOOD STABILIZATION PROGRAM
SUB-RECIPIENT AGREEMENT
BY AND BETWEEN
THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
AND
AFFORDABLE HOUSING SOLUTIONS OF SAN BERNARDINO, INC.
This Amendment No. 2 to the Neighborhood Stabilization Program Sub-Recipient Agreement
(this "Amendment No. 2") is entered into on October 18, 2010, by and between the Redevelopment
Agency of the City of San Bernardino (the "Agency"), a public body, corporate and politic, and
Affordable Housing Solutions of San Bernardino, Inc., a California non-profit public benefit
corporation (the "Sub-Recipient"), and is entered into in consideration of the facts set forth in the
following Recital paragraphs:
-RECITALS-
A. The Sub-Recipient and the Agency have previously entered into an agreement entitled
"Neighborhood Stabilization Program Sub-Recipient Agreement", dated as of September 21, 2009 (the
"Sub-Recipient Agreement"), through which the Sub-Recipient was charged with acquiring properties
in furtherance of the Neighborhood Stabilization Program ("NSP") activity known as the Acquisition
and Demolition for future development program (the "Demolition Program") and with acquiring
properties with NSP funding for the purpose of rehabilitating them (the "Acquisition Program").
B. The Agency is desirous of working with the Sub-Recipient in acquiring properties for
both the Demolition Program and the Acquisition Program and has previously provided NSP funds and
Tax Increment Housing Set-Aside Funds ("Low and Moderate Income Funds") for the purpose of
acquiring and demolishing identified 4-plex, multi-family, residential properties and acquiring and
rehabilitating single-family residential properties within the City of San Bernardino ("City") as
stipulated in the Sub-Recipient Agreement.
C. As of June 30, 2010, both the Agency and the Sub-Recipient have obligated 100% of
the original NSP funding provided by the U.S. Department of Housing and Urban Development
("HUD") after having acquired one hundred one (101) dwelling units identified as eligible activities
under the Sub-Recipient Agreement. As of the effective date of this Amendment No. 2, there still
remains abundant opportunity for the Sub-Recipient to acquire and demolish or acquire and
rehabilitate blighted properties in the City.
D. The continued supply of abandoned and foreclosed residential properties and the 100%
obligation of NSP funds by the Agency and the Sub-Recipient have caused a further need to fund AHS
activities in support of the Demolition Program and Acquisition Program, respectively.
1
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i
E. The Agency is desirous of continuing NSP activities with the Sub-Recipient by
acquiring properties for the Acquisition Program and Demolition Program throughout City that are in a
state of disrepair in both NSP eligible and non-NSP eligible areas.
F. The Agency has determined that the continuation of the Demolition Program and the
Acquisition Program pursuant to the Sub-Recipient Agreement and this Amendment No. 2 and the
fulfillment generally of the purposes of the Sub-Recipient Agreement are in the vital and best interests
of the City and the Agency.
NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS AND
CONDITIONS CONTAINED HEREIN, THE AGENCY AND THE SUB-RECIPIENT AGREE AS
FOLLOWS:
Section 1. References to the Sub-Recipient Agreement; Defined Terms. (a) Unless the
context of the usage of a term or phrase in this Amendment No. 2 may otherwise require, the meaning
of words and phrases as contained in this Amendment No. 2, which are indicated by an initially
capitalized letter, shall be the same as set forth in the Sub-Recipient Agreement.
(b) The information contained in the Recitals as set forth in this Amendment No. 2 is true and
correct in all respects.
Section 2. Specific Amendments to the Sub-Recipient Agreement. (a) The Sub-
Recipient Agreement is hereby amended by this Amendment No. 2 in the manner as indicated in this
Section 2 and which changes and amendments shall be effective from and after the date of approval of
this Amendment No. 2 by the Sub-Recipient and the Agency and execution hereof by the parties.
(b) Section 5.B. of the Sub-Recipient Agreement is hereby amended by adding the following at
the end of said Section:
Additional amounts allocated to Sub-Recipient as of October 18,2010•
Source of Funds: Dollar Amount:
Low and Moderate Income Housing Funds $4,000,000
(acquisition and demolition and acquisition
and rehabilitation)
Section 3. Effect of Amendment No. 2. Except as modified or amended by this
Amendment No. 2, all of the provisions of the Sub-Recipient Agreement shall remain in full force and
effect following the effective date of this Amendment No. 2.
2
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IN WITNESS WHEREOF, the parties hereto have accepted and made and executed this
Amendment No. 2 upon the terms and conditions and with the provisions as set forth above and as of
the date first written above.
AGENCY
Redevelopment Agency of the City of San Bernardino,
a public body, corporate and politic
Date: By:
Emil A. Marzullo, Interim Executive Director
Approved as to Form and Legal Content:
By: w',_ u
A gzncy Counsel
SUB-RECIPIENT
Affordable Housing Solutions of San Bernardino, Inc.,
a California non-profit public benefit corporation
Date: By.
Title:
I
3
P:1Agendas\Agenda Attachments\Agenda Attachments\Agrmts-Amend 2010\10-19-10 AHS Allocation-Amendment No.2 to Sub-Recipient Agreement.docx