HomeMy WebLinkAboutRS1- Economic Development ECONOMIC DEVELOPMENT AGENCY
OF THE CITY OF SAN BERNARDINO
REQUEST FOR COMMISSION
FROM: BARBARA J.LINDSETH SUBJECT: YEOMAN&ASSOCIATES
Acting Director CALIFORNIA
DATE: March 3, 1995
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Snopsis of Previous Commission/Council/Committee Action(s):
On September 6, 1994,the Community Development Commission approved financial assistance in the form of a grant of
$250,000 to Yeoman and Associates for the development of thirty-six(36)high quality homes. An Owner Participation
Agreement(OPA)was executed on September 8, 1994.
On February 20, 1995,the Community Development Commission continued a request for financial assistance of$400,000
at the next Commission meeting.
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Recommended Motion(s):
(Community Development Commission)
(Councilwoman Pope-Ludlam's Recommendation)
MOTION A: That the Community Development Commission authorize the Acting Director to prepare and execute an
Amendment to the existing Owner Participation Agreement(OPA)with Yeoman and Associates f'or additional
assistance to complete offsite improvements,contingent upon developer acquiring a letter of commitment for
construction financing in the amount of$1,500,000 from an acceptable institutional lender.
(MOTIONS CONTINUED TO NEXT PAGE...)
Administrator BARBARA J.LINDSETH
Acting Director
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Contact Person(s): Barbara J.Lindseth/Robert J.Lemley Phone: 5081
Project Area(s): N/A Ward(s): One(1)
Supporting Data Attached: Staff Report:Owner Participation Agreement(OPA)
FUNDING REQUIREMENTS: Amount:$ 400.000 Source: Low/Mod
Budget Authority: Requested
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Commission/Council Notes:
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BJL:R.TI,:paw:yomnasso.cdc COMi4IISSION MEETING AGENDA
Meeting Date: 03/06/95
Agenda Item No:
ECONOMIC DEVELOPMENT AGENCY REQUEST FOR COMMISSION ACTION
Yeoman and Associates--California
Prepared: March 1, 1995
Page-2-
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Recommended Motions Continued...
OR
(Councilman Hernandez'Recommendation)
MOTION R: That the Com nunity Development Commission authorize the Acting Director to prepare and execute an
Amendment to the existing Owner Participation Agreement(OPA)with Yeoman and Associates to provide
additional financial assistance for an amount not to exceed$400,000 in the form of 1) a partial loan of
$130,000 with interest,to facilitate subdivision offsite improvements and 2) $270,000 in down payment
assistance to first-time home buyers,contingent upon developer acquiring construction financing in the
amount of$1,500,000 from an acceptable institutional lender.
OR
(Staff's Recommendation)
MOTION C: That the Community Development Commission authorize the Acting Director to continue to work with and
ratify the retention of a real estate financial consultant to analyze cost projections and project proforma and
the request for additional financial assistance from the Commission in connection with the Yeoman and
Associates housing development project.
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BJI,:RJL:paw:yomnasso.cde COMMISSION MEETING AGENDA
Meeting Date: 03/06/95
Agenda Item No:
ECONOMIC DEVELOPMENT AGENCY
OF THE CITY OF SAN BERNARDINO
STAFF REPORT
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YEOMAN AND ASSOCIATES -- CALIFORNIA
BACKGROUND
The proposed development is located within Ward 1, one block west of Mountain View Avenue on
Coulston Street (see attached map). The developer has a significant interest in upgrading the
housing stock within this community. Development of this property will substantially improve the
physical appearance of the adjacent area with much needed infrastructure, in the form of full width
streets, curbs, gutters, sidewalks, and a sewer collection system that will service the proposed
development and ultimately the adjacent eighty-six (86) existing residences.
The project consists of the following:
• Eight (8)three bedrooms/2 baths, 1,206 square foot homes priced at
$109,990.
• Fourteen (14) three bedrooms/2 baths, 1,460 square foot homes priced at
$119,990.
• Fourteen (14) four bedrooms/2 baths, 1,669 square foot homes priced at
$129,990.
The proposed subdivision will establish a new standard in the area for quality and pride of
ownership with a variety of quality amenities as follows:
• Tile Roofs Ceramic Tile Counter Tops
• Vaulted Ceilings 0 Oak Cabinets
• Skylights 0 Side and Rear Yard Fencing
• Front yard landscaping with automatic irrigation. The exterior elevations,
interior amenities and overall appearance will establish this project as a
standard for future development of the "Eastern Entrance" to the City.
Yeoman and Associates previously requested and received $250,000 in Agency assistance to
effectuate development of the subdivision. The Agency monies were to augment a proposed
construction loan that originally was to include $400,000 for offsite infrastructure development.
The Phase I budget for project offsite development is $650,000. The total Phase I project cost
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F 3JL:RJI,:paw:yomnasso.cdc COMMISSION MEETING AGENDA
Meeting Date: 03/06/95
mac_ r
Agenda Item No:
STAFF REPORT
YEOMAN& ASSOCIATES -- CALIFORNIA
March 1, 1995
Page - 2 -
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including offsite and onsite improvements is $1,900,000.
Benefits of the offsite improvements to the City will be realized in the form of improved ingress and
egress for approximately 182 households within the surrounding neighborhood, control of surface
water runoff and installation of approximately 2,470 lineal feet of sewer lines to help offset the use
of old and failing septic tanks in the surrounding neighborhood (see Attachment B) . With the
addition of this subdivision, the character of this community will be transformed and will make this
neighborhood a viable housing opportunity for prospective home buyers.
Absent Agency participation in providing financial assistance for this project and given the current
economic lending trends, it may be difficult, if not impossible, to obtain necessary funds for this
development from conventional lenders.
The developer has attempted to obtain construction financing. However, lenders that were
contacted regarding construction financing for this project are now unwilling to provide funding,
which includes offsite costs for the following reasons:
• Lenders are not interested in funding construction loans less than
$5,000,000.
• Lenders in any case are not interested in funding the "offsites" portion of the
construction loan. Fear of possible "REO" property.
• Lenders are reluctant to lend in the subject neighborhood. Did not like the
surrounding development.
Valley Bank of Moreno Valley has given the developer a tentative commitment predicated on the
Agency advancing $400,000 for the "offsites" improvement portion of the development.
DISCUSSION
If an Amendment to the Owner Participation Agreement (OPA) is approved, the following terms
will be incorporated based upon the alternative solution by the Commission:
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BJI,:RJL:pa«v:yonuiasso.cdc COMMISSION MEETING AGENDA
Meeting Date: 03/06/95
Agenda Item No: L `) 4
STAFF REPORT
YEOMAN& ASSOCIATES -- CALIFORNIA
March 1, 1995
Page - 2 -
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,(Councilwoman Pope-Ludlam's Recommendation)
The original Owner Participation Agreement (OPA)utilizes $250,000 in Agency assistance for the
construction of a sewer collection main. The additional $400,000 being requested will increase
Agency assistance to $650,000. For this consideration the developer has agreed to utilize $270,000
of the proceeds from the sales of the homes in the following manner:
• First-Time Home Buyers Assistance -- $270,000.
• The City will receive over $500,000 in developer fees and an additional $320,780 in
sewer capacity fees tied to eighty-six (86) additional homes in the area. These funds
constitute a total of$280,780 in possible revenues to various City agencies;
OR
Councilman Hernandez' Recommendation)
• A total of$400,000 will be advanced to the lending institution that provides the
construction financing in the form of a Completion Allowance for the "offsite"
construction;
• Of the $130,000 financial assistance, a portion($121,671) will be forgiven. These
monies will be deemed to be used to offset increased City development fees that have
escalated from $303,926 to $425,597 (excluding school fees) (see Attachment A)
Thus, a remainder of$8,329 shall be repaid to the Agency upon sale of the thirty first
(31 st) house at an interest rate of prime plus one percent (I%);
• The remaining $270,000 will be used to facilitate First-Time Home Buyer's opportunities
in the form of secondary financing loans, implemented for down payment and closing
costs assistance by the developer in the name of the Agency. The developer will provide
"turn key" financing to potential home buyers by providing $7,500 down payment and
closing costs assistance from the proceeds of each sale commencing with house number
one (1);
OR
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BJf,:R.L:paw-.yonuiasso.cdc COMMISSION MEETING AGENDA
Meeting Date: 03/06/95
Agenda Item No: `�
STAFF REPORT
YEOMAN& ASSOCIATES -- CALIFORNIA
March 1, 1995
Page - 2 -
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(Staff`s Recommendation)
• Because of the complexity of the proposal as outlined above, as well as the necessity to
fully comprehend the project's financial "proforma", it was necessary to retain the
services of a recognized real estate financial consultant to properly analyze the
proforma, financial impact to the City and Agency, determine benefits to be derived
from the development of this project, and to coordinate funding requirements being
imposed by the institutional lender to the developer.
It must be understood that this request for additional assistance was something that was unforeseen
at the time the Owner Participation Agreement (OPA) was executed. Therefore, no provision was
made in the Fiscal Year 94-95 Budget for this additional $400,000 item.
Based upon the foregoing, staff recommends adoption of Motion "C".
BARBARA J. LINDSETH, Acting Director
Development Department
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BJ1.:RJL:paw:yomw sso.cdc COMMISSION MEETING AGENDA
Meeting Date: 03/06/95
Agenda Item No: f `�
02/28/1995 09:40 909-79Q-1668 YEOMAN ASSOCIATES PAGE 02
s E ATTACHMENT A
S:'Cr.K�?5
Fab 28, 1995
Estimated Fees for Tract 15573
It0M Description Yoe unit
offsite Plan Check* $15,632 $434
offsite Permits* $15,632 $434
onsite Improvement Plan Check* $213 $6
onsite Improvement Permits* $320 $9
Grading* $284 $8
Landscape Maintainance district* $5,000 $139
Sewer Connection* $29,236 $812
Sewer Capacity* $134,280 $3,730
Storm Drain* $29,607 $822
Traffic System* $5,361 $149
Parks and Recreation $38,206 $1, 061
Building Permits $23,518 $653
Building Plan Check* $16,200 $450
School Fees* $92,447 $2,568
Plumbing $3,337 $93
Electrical $3,643 $107
Mechanical $1,037 $29
Final Map* $2,080 $58
Earthquake $360 $10
Street Light Energy Fee* $4,252 $118
Water Acquisition* $97.200 $2,700
$518,044 $14,390
*Estimated Fee amount has been verified.
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IN"PIE!
SUMMARY
Coulston 36 Homes
Proforma Cost Analysis
Construction Loan
27-Feb-95
Schedule Description Total Costs Unit Cost
A Total Land Acquisition Cost $457,300 $12,703
B Fees and Permits $518,045 $14,390
C Offsite Improvements $632,995 $17,583
D Landscaping & Amenities $71,280 $1,980
E Direct Construction Costs $1,718,384 $32
F Indirect Construction Costs $210,110 $3.91
G Contingencies $133,281 $2.48
E.D.A. Contribution ($650,000)
Architecture Contribution ($57,200)
Total Land & Construction Costs $3,034,195 $56
H Marketing Costs $658,883 16.22%
I G & A Expenses $239,745 5.90%
J Financing Costs $130,305 3.21%
Total Applied Costs $1,028,933 $28,581
Total Proforma Costs $4,063,128 $112,865
Total Base Sales $4,379,640 $121,657
Total Average Lot Premiums $54,000
Models $28,500
Total Sales $4,462,140 $123,948
Total Proforma Profits $399,012 8.94%
Discription/Plan # A B C
1. Square Footage 1206 1482 1669
2. Number of Bedrooms/Baths 3/2 3/2 4/2.5
3. Number of Units 8 14 14
4. Base Sales Price $109,990 $119,990 $129,990
5. Base Square Foot Price $91 $81 $78
6. Redevelopment Incentive
THIS INFORMATION, WHILE BASED ON FACTS THAT WE BELIEVE TO BE REASONABLY
ACCURATE, CONTAIN NO GUARANTEES OR WARRANTIES EITHER WRITTEN OR IMPLIED.
THE ENTIRE ANALYSIS IS A FORECAST OF FUTURE EVENTS WHICH MAY OR MAY
NOT PROVE TO BE ACCURATE OR REALISTIC.
I HAVE REVIEWED AND AGREED TO THESE NUMBERS:
DWIGHT YEOMAN
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