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Home My WebLink About09- Development Department DEVELOPMENT DEPARTMENT 3F THE CITY OF SAN BERNARDINO REQUEST FOR COMMISSION/COUNCIL ACTION FROM: KENNETH J. HENDERSON SUBJECT: CALIFORNIA INN (SRO) Executive Director DATE: October 15, 1993 --------------------------------------------------------------------------------------------------------------------------------------------- Svnopsis of Previous Commission/Council/Committee Action(s): The Community Development Commission and Redevelopment Committee, on September 20 and October 7, 1993 considered the technical default status of the California Inn DDA. The Committee developed these recommendations for Community Development Commission consideration. --------------------------------------------------------------------------------------------------------------------------------------------- Recommended Motion(s): (Community Development Commission) Redevelopment Committee Recommendation MOTION A: That the Community Development Commission authorize staff to retain a professional consultant to prepare a Comprehensive Market Analysis on the proposed California Inn Single Room Occupancy (SRO) project. Administrator ICENNETA J. HENDkRSON Executive Director --------------------------------------------------------------------------------------------------------------------------------------------- Contact Person(s): Kenneth J. Henderson/David R. Edgar Phone: 5081 Project Area(s): Central City North (CCN) Ward(s): One (1) Supporting Data Attached: Staff Report FUNDING REQUIREMENTS: Amount: $ N/A Source: N/A Budget Authority: N/A --------------------------------------------------------------------------------------------------------------------------------------------- Commission/Council Notes: ------------------------------------------------------------------------------------------------------------------------- KJH:DRE:lag:califinn.cdc COMMISSION MEETING AGENDA MEETING DATE: 10121/1993 Agenda Item Number: Request for Commissior .1ouncil Action California Inn (SRO) October 14, 1993 Page Number -2- ------------------------------------------------------------------ 16 Recommended Motion(s) Continued: MOTION B: That the Community Development Commission direct staff to take actions, in conjunction with Larcon Development, Inc., to develop a modified project Schedule of Performance. MOTION C: That the Community Development Commission direct staff to investigate, in conjunction with Larcon Development, Inc., potential County of San Bernardino Housing Authority financial assistance relative to the California Inn Project. ------------------------------- ------------------------------ -------------------- TH:DRE:1ag:califinn.cdc COMMISSION MEETING AGENDA MEETING DATE: 10/21/1993 Agenda Item Number: �_ '00�. DE ELOPMENT DEPARTMENT STAFF REPORT --------------------------------------------------------------------------------------------------------------------- California Inn (SRO) On Thursday, October 7, 1993, the Redevelopment Committee conducted discussions regarding the current status of the proposed California Inn Single Room Occupancy (SRO) project. The primary focus of these discussions surrounded Larcon Development's technical default of the established project Schedule of Performance, as set forth in the recorded Disposition and Development Agreement (DDA). Please see attached memorandum. During Redevelopment Committee meeting Larcon Development surfaced several important issues, all of which potentially affect the successful completion of this project, including: • Larcon Development has now initiated dialogue with the San Bernardino County Housing Authority to utilize $1,000,000 in potentially available Housing Authority monies towards the California Inn project. • Staff is recommending (to which the developer and Committee agreed) a Comprehensive Market Feasibility Study on the proposed SRO to precisely determine the economic viability of this project. • Staff is recommending (to which the developer and Committee agreed) a revised Schedule of Performance which is necessary to cure the technical default status of the recorded Disposition and Development Agreement. During the course of discussion, the Committee voted to recommend to the Community Development Commission approval of form motions "A", "B", and "C". Adoption of the form motions will provide staff the policy guidance necessary to continue to make needed progress on this important project. KENNETH J. ENDERSON, Executive Director Development Department --------------------------------------------------- KJH:DRE:lag:califinn.cdc ------- COMMISSION MEETING AGENDA MEETING DATE: 10/21/1993 Agenda Item Number: 0 DEVELOPMENT DEPARTMENT OF THE CITY OF SAN BERNARDINO MEMORANDUM -------------------------------------------- TO: MAYOR MINOR FROM: KENNETH J. HENDERSON Executive Director SUBJECT: CALIFORNIA INN (SRO) DATE: October 6, 1993 COPIES: Administrator - EDA; Housing Division Manager; Housing Development Specialist Eliason; File --------------------------------------------- As you are aware, on September 30, 1993, staff met with the Mayor, three members of the Council and Larcon Development to discuss the current status of the proposed California Inn Single Room Occupancy (SRO) project. The developer is currently in technical default of the established schedule of performance set forth in the recorded Disposition and Development Agreement (DDA). Based upon discussions which occurred at this meeting, staff was directed to prepare a revised six (6) month Schedule of Performance which pertained primarily to the financing of this proposed project. On October 5, 1993, staff met with Gil Lara and Susan Johnston from Larcon Development to discuss a modified six (6) month Schedule of Performance (Please see attached). During the course of discussion at this meeting, the following issues surfaced: LARCON DEVELOPMENT wishes to meet with the Mayor's Office to ascertain support for its CUP application process prior to proceeding with the expenditure of funds necessary to submit a complete CUP application . • LARCON DEVELOPMENT is unwilling to pursue with Agency staff construction financing for this project prior to having received an approved CUP from the City. -- ---------------------------------------------------------------------------------------------- <I DEVELOPMENT DEPARTMENT MEMORANDUM California Inn (SRO) October 6, 1993 Page Number -2- ---------------------------------------------------------------------------------------------------------------------- • The developer firmly believes that by obtaining a financing Commitment Letter with various caveats and contingencies, it has adequately satisfied the "Proof of Financing" requirement discussed on September 30, 1993. Staff is seriously concerned about conditions and clauses which could be contained in any financing Commitment Letter as these conditions and clauses relate to actual proof of construction financing. • The developer indicated that rents, based upon comments from the Mayor's Office, could be lowered as much as $100 per month/per unit. Staff is concerned about the project's economic viability if the developer arbitrarily lowers rents significantly. On what basis is the decision to lower rents being made, and what are the financial ramifications of that decision? Unfortunately, the issues discussed herein regarding obtaining construction financing for this project concurrent with the processing of the CUP application also resulted in the developer immediately terminating said discussions. As I indicated to you verbally, Mr. Lara will be requesting a meeting with you and my understanding is that such a meeting has been scheduled for October 7, 1993. I spoke with the developer today and we have agreed to schedule a follow-up meeting to complete the amended schedule of performance after he meets with you tomorrow. Until such a modified schedule is approved by the Community Development Commission, however, the developer remains in technical default. Should you required additional information or clarification regarding the contents of this memorandum, please contact me or David R Edgar, Housing Division Manager, at extension 5081. i KENNETH J. HE DERSON, Executive Director A ISTRATOR Development Department ---------------- ---------------------- calinn.mmo �1 CALIFORNIA INN (SRO) SCHEDULE OF PERFORMANCE OCTOBER 1, 1993 TO MARCH 1, 1994 By Tuesday, October 12, 1993: A. Developer shall prepare and submit to Agency: 1. Final "Developer Schedule of Performance containing all performance dates through project occupancy. 2. Final "Development Budget" Package 3. Final "Economic Benefit" Report 4. Final "Annual Cash Flow" Report 5. Final "Rental Income and Expense" Report (Year One (l)) By Monday, January 17, 1994: A. Developer shall have received an approved CUP for subject property. B. Developer shall prepare and submit to Agency: L Comprehensive list of investors and/or J.V. Partners (the "financial team") including: a. Names b. Resumes c. Financial Information 2. Copy of partnership agreement. By Monday, January 24, 1994: A. Developer shall provide to Agency I. Copy of the loan package submitted to financial institutions. 2. Names of financial institutions the package was submitted to. 3. Address of financial institutions the package was submitted to. 4. Names of contact persons at financial institutions. 5. Phone number of each financial institution. 6. Submittal dates of loan package to financial institutions. �I CALIFORNIA IN"T (SRO) OCTOBER 5, 199,, PAGE - 2 - By Tuesday, February 15, 1994 A. Developer shall supply Agency with a copy of "Commitment Letter" from financial institution. B. Developer shall provide Agency: I. Name and phone number of appraisal company. 2. Copy of letter for request of appraisal. 3. Estimated date for completed appraisal. By Tuesday, March 1, 1994 A. Developer shall provide Agency with proof of recorded construction loan. �� Q* 11FORNIA INN oRO 1 I. ADMINISTRATION AND RDA COMMISSION A. TOUR SAN DIEGO SRO FACILITIES • Administration • RDA Commissioners • RDA Staff • Planning Staff and Commissioners B. MARKET ANALYSIS • HUD Approved Independent Consultant. • Validate market and rents. C. SRO HOUSING ELEMENT — PROJECT SUPPORT • 100% unified support of SRO represented. • Positive educational lobby D. LEVERAGE CITY PARTICIPATION • Include the San Bernardino County Housing Authority. • Initiate city ownership in a housing entity. I1. COMMUNITY RELATIONS A. Lower rates will mitigate the St. Bernardine's Tower concerns of qualified tenants. Will strengthen selection criteria. B. Lower rates will insure a 90% occupancy. C. Downtown business community support. 111. DEVELOPER FINANCING A. Assure marketability for investor partners and lenders by leveraging financial commitment of San Bernardino and assuring 50% of project is at VERY LOW income guideline per HUD. B. RDA Staff positive attitude will facilitate investor commitment. co C Z CO W c (D (D O C#) 0 0 m \^ r `} ' w o '< Z O Oo \ yx L T 4.. {tii:fi�{i.::ti -w Ul cn n .fi•:: �► w 0 OD O (D .1 m y �' iv CD fa w n CD g CT fa fo w 0) CIO c 3 II � o (Nip o o r: 0 0 0 c c c to fo ry O = =; w o 0 3 c O o rn (D O O O u, N v, ou 0 O cn O Ut O -< o O 0 2)< CD D m o CD (D CD N N o II > ' CJ .0 3 00 O N O C C C I Eft N �rwyy; } 7 W O N 8 O O O CA) r: r« ;-« W (O O W O O O O (� (� N G,) O O Ut Ut cn I I I U1 U1 V O 4 03