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~I~ OF SAN BERNARD.tO - REQUaT FOR COUNCIL ~C~O:
Frank A. Schuma
From: Planning Director Subject: Density Bonus No. 85-1
Dept: Planning Mayor and Council Meeting of
JuLy 1, 1985, 9:00 a.m.
Date: June 24, 1985
Synopsis of Previous Council action:
Previous Planning Commission action:
At the meeting of the Planning Commission on June 18, 1985, the
following recommendation was made:
The application for Density Bonus No. 85-1 was recommended for
approval of the alternatives listed in the memorandum to the
Planning Commission dated June 18, 1985.
Vote: 7-1, 1 absent
Recommended motion:
To approve, modify or reject the findings and the recommendation
of tne Planning Commission.
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CL?Y1
Signature Frank A. Schuma
Contact person:
Frank A. Schuma
Phone:
383-5057
3
Supporting data attached:
Yes, Staff Report
Ward:
FUNDING REQUIREMENTS:
Amount:
Source:
Finance:
Council Notes:
7 -0262
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~TY OF SAN BERfARDINO ... MEMORANDUrl
To
The Planning Commission
From
The Planning Dept.
Subject
Density Bonus No. 85-1
Date
June 18, 1985
Approved Agenda Item No.5, Ward 3
Date
OWner/Applicant:
C.J.A. Corporation
Donald M. Kaplan
612 N. Sepulveda Blvd., III
Los Angeles, CA 90049
Agent:
L.D. Lansing and Assoc.
1881 Business Center Drive, 19
San Bernardino, CA 92408
We have reviewed the information provided by the applicant,
Donald Kaplan, concerning the issue of a density bonus for
property consisting of 7.2 acres having a frontage of approx-
imately 497 feet on the northwesterly side of Inland Center
Drive and a frontage of 478 feet on the southeast side of
Hillcrest Drive and being located approximately 125 feet
southwesterly of the centerline of RJR Street, and have
concluded that the City is not in a position at this point in
time to pay the 25 percent cash equivalency needed to reduce
the number of units from the proposed request.
As submitted, Mr. Kaplan is requesting a density bonus of 25
percent over and above that which is permitted under the
existing zoning of PRD-14U. The number of units permitted on
the subject property would be 95 and the request, as submit-
ted, is for 118 units. In addition to the density bonus, the
applicant is requesting reduction or elimination of required
fees which would normally be applicable to developments of
this type.
In evaluating the performa submitted by Mr. Kaplan, it is the
opinion of staff that the fOllowing order of priority of
alternatives should be used in consideration of the density
bonus:
1. The applicant should apply for mortgage revenue
bonds through the City of San Bernardino Redevelop-
ment Agency. If accepted by the City Redevelopment
Agency, this would satisfy the provisions for a
density bonus as specified under the State Govern-
ment Code. No increase in density wouid be permit-
ted.
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Planning Commission Meeting of June 18, 1985
Density Bonus No. 85-1
Page -2-
2. That the Planning Commission recommend approval of
a 25 percent density bonus with the provision that
no revenue mortgage bonds be applied for and
approved by the City Redevelopment Agency.
FRANK A. SCRUMA
Planning Director
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DONALD M. KAPLAN
612 NORTH SEPULVEDA BOULEVARD
SUITE 11
LOS ANGELm'I. CALIFORNIA ll0049
(21:\l 472-12~3
March 5, 1985
Mr. Frank Schuma
San Bernardino City Planning Department
JOO North "D" Street
San Bernardino, California
Dear Mr. Schuma.
We would like to request consideration for the 25% density
bonus allowance that is granted in exchange for the provision of
affordable housing. Our project, Bunker Hill Apartments, located
south of Hillcrest Street and north of Colton Avenue is currently
undergoing review by your department as Conditional Use Permit
#85-9 and has included this density bonus as part of the proposed
design.
In exchange for the increased density allowance, the developer
hereby certifies that 25% of the units developed will be set aside
for low to moderate income housing as defined by the Housing
Authority of San Bernardino County, or any other authorized
agency. To ensure compliance with criteria for low and moderate
income housing, a covenant establishing this requirement shall
be made to the land and shown in the title report which will be
a prerequisite for the developer to obtain financing for the
project. We do not want to apply for participation in the
mortgage revenue bond program, but request a reduction of or an
elimination of required fees and help with the infrastructure of
the project.
As part of the approval of this project by the City, said
covenant shall be recorded to the satisfaction of the City and
the lender. Any other application requirements which are
consistent with State and local laws will also be complied with
to the satisfaction of the City.
We appreciate your consideration of this matter.
Sincerely,
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Donald M. Kaplan
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PROJECT COSTS
95 - 2 Bedroom units @ 925 square feet = 87,875 square
foot building. 87,875 square feet times a cost factor
for the building shell of $28.50 per square foot (this
figure may not incor~orate a general partner's profit
to build the project) equals
Based upon the prevailing market conditions the
anticipated financing charges will be 1~% above
prime plus 1~ points for the construction and
1~ points plus fees for the takeout commitment
Architectural (Landscaping & Building), Accounting,
Engineering (Structural and Mechanical), Legal and
Closing
We are assuming a constant land value of
Sewer Fees - based on $1410 per unit (71.25 units)
All other permits, fees, inspection costs, etc.
Grading
Rail Road Crossing
Pool and Decking
Interior Streets (asphalt, curbs, perimeter walls
etc.)
Sewer lines to units
Water System
Storm Drain
Electrical power and Gas
Landscaping and irrigation
Contingency
*Items to remain the same or increase moderately with
the development of 118 units.
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$2,504,500
480,000
150,000
450,000 *
100,462
70,000 *
100,000 *
112,500 *
50,000 *
200,000 *
75,000 *
110,000 *
10,000 *
50,000 *
175,000
200.000
$4,837,462
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PROJECT COSTS
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118 Units 100 2 Bedroom units @ 925 square feet
and 18 1 Bedroom units @ 625 square feet =
10}.750 square foot building. 10},750 square feet
times a cost factor for the building shell of $28.50
per square foot (this figure may not incorporate a
general partner's profit to build the project) equals
Based upon the prevailing market conditions the
anticipated financing charges will be l~% above
prime plus l~ points for the construction and
l~ points plus fees for the takeout commitment
Architectural (Landscaping & Building). Accounting,
Engineering (Structural & Mechanical), Legal and
Closing
We are assuming a constant land value of
Sewer Fees - based on $1410 per unit (88.5 units)
All other permits, fees, inspection costs, etc.
Grading
Rail Road Crossing
Interior Streets (asphalt, curbs. perimeter walls
etc.)
Sewer lines to units
Water System
Storm Drain
Electrical power and Gas
Pool and Decking
Landscaping and irrigation
Contingency
*Items to remain the same or increase moderately
with the development of 118 units
**The development of more units should result in
a lower per square foot cost.
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$2,957,000**
550,000
150,000*
450,000*
124,785
88.500
100,000*
112,500*
200,000*
75,000*
110,000*
10,000*
50.000*
50,000*
165.000
2S0,OOO
$5,442.785
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CASH FLOW
95 Apartment Units
Mix: 19 - 2 Bedrooms @ $480 9,120
76 - 2 Bedrooms @ $525 49.900
9,020
Monthly Rental $49,020 times 12 $588,240
Laundry 1.000
Gross Income 591,240
5% Vacancy 29,562
Gross Effective Inc ome 561.678
Operating Expenses (26%) 146.016
NET INCOME $415,642
Assume a loan constant on the permanent First Trust Deed
of 12.75%. The Debt Service coverage shall equal 1 to 1.
(Therefore, a break even cash flow).
415,642
12.75
equals a loan of $3,259,937
A cash investment of $1,577,525 is required in addition to
the $450,000 equity in the land.
1, 577,525
95
equals a cash investment
of $16,605 per unit
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CASH FLOW
118 Apartment Units
Mix. 18 1 Bedroom 4 @ *375
14 @ '400
100 2 Bedrooms 25 @ 1425
75 @ 525
Operating Expenses (26%)
NET INCOME
1.500
5,600
10,625
39'F5
57. 80
685,200
5.000
690,200
34.510
655.690
170.479
$485.211
Monthly Rental $57,100 times 12
Laundry
Gross Income
5% Vacancy
Gross Effect i ve Income
Assume a loan constant on the permanent First Trust Deed
of 12.75%. The Debt Service coverage shall equal 1 to l.t
(Therefore, a break even cash flow).
485.211
12.75
equals a loan of $3,805.576
A cash investment of $1,638,185 is required in addition to
the $450,000 equity in the land.
1.618.185
118
equals a cash investment of
$13,882 per unit
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LOCATION
CASE Density Bonus#85-1
HEARING DATE 6/18/85
AGENDA
ITEM #
CITY OF SAN BERNARDINO PLANNING DEPARTMENT
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DONALD M. KAPLAN
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612 N. Sepulveda Boulevard
Los Angeles. CA 90049
To Whom it may Concern:
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The following will outline my professional and educational
background. My experience has been in all phases of real estate
ranging from site and land acquisition to residential. industrial
and commercial real estate development.
I was employed by Home Savings and Loan from 1967 to 1969
in the Appraisal Department, working under George Kimble, Vice
President in charge of Appraisals and Research. In this capacity
I appraised multiple family dwellings for construction and re-
finance purposes throughout Southern California. I was also a
part of the appraisal team that completed the feasibility study
prior to the development of the Fox Hills complex located in
Culver City, California.
In 1969, I became associated with Marshall Ezralow and
Alan Schwartz, real estate developers. and assumed the responsi-
bility of acquiring land to be developed into apartment complexes.
Entailed in the land acquisitions were completing the requisite
feasibility studies, conducting comparable rent studies, coordinat-
ing the engineering and architectural plans and phases, negotiating
with various governmental agencies and assisting with loan documenta-
tion. I also worked on marketing aspects to attract buyers to the
completed projects.
While with Earalow and Schwartz. I did the appraisal, analy-
sis, negotiation and placement of various second trust deeds and
acquired various discounted second trust deeds for investment
purposes.
In 1970, the Ezralow and Schwartz business was acquired by
a mutual fund company called Shareholders Capital Corporation of
Century City, California. At the time of acquisition, I was fully
responsible for all operations. My title was Director of Land
Acquisition. In addition to the use of the aforementioned skills,
I was required to travel to various cities throughout the Western
United States.
In 197), Marshall Ezralow, President of Shareholders Capital
Corporation, and I formed a General Partnership. At this point in
time, we developed several apartment house complexes along with
commercial, industrial and condominium projects. Concurrently
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with these activities, we continued in the second trust deed mort-
gage business and in the acquisi.ti~Hl Df distrenr;ed real cGtate.
In my capacity as a General Partner, I wa~; resp::m:';ihle for oven;pe-
ing all phases of real estate developmenL.
In 1976, I became President of Intercontinental Equities,
Inc., a publicly owned c;)rporation based in.Centruty Cit.y,
Cal if;)rnia. My primary resp;)nsibHities were to resolve the
.c;)mpany's previous organizational problem~; and t;) create a market
for the various parcels of raw land owned by the corporati;)tl.
During this period of time, I became familiar with suc-
cessfully marketing properties in the San Bernardino and Riverside
areas. I also acquired several parcels of land in this area on'
my own. My primary motivation in these latter acquisitions was to
h;)ld f;)r appreciati;)n and sale, rather than for development.
Within the last five years, I have acquired full c;)ntr;)l ;)f
Intercontinental Equities, Inc. and have worked on the disp;)si-
tion of all the remaining parcelS in Riverside and San Bernardin~).
At the present time, all property of the corporation has been
liquidated and my relati;)nship with the c;)mpany has ended.
Currently I am actively pursuing the development'of a
property in San Bernardino; the completion of zoning permits for
a housing development in Sun City, Riverside County; completion of
a )0,000 square foot industrial building in Ranch;) Cucam;)nga; and
have undertaken various other land acquisitions along with continuin{',
my activities involving the manaf,cment of properties I presently ;)wn.
My educational background includes a B. S. Degree in Real
Estate and Finance from the University of Southern California.
I possess a Real Estate Certificate from the University of
California at Los Ane:eles. Ilaving attended various independent
seminars and classes related to real estate, I flubsequently
rece i ved my Real Estate Broker's I,icense from the Sta te ;)f Cal if;)['nia
in 1968.
I trust that this inf;)rmation is sufficient to meet Y:lur
requirements. Please let me kn;)w if there is any additi;)nal :lr
other information you may need and it will be forthcoming immediately.
Yours very truly,
Donald M. Kaplan
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DONALD M. KAPLAN
612 NORTH SEPULVEDA BOULEVARD
SUITE 11
1.08 AN(mLI~8. CALIFORNIA 90049
(213) 472.12ll3
March 6, 1985
Mr. Prank Schuma
San Bernardino City Planning Department
JOO North "D" Street
San Bernardino, California
Dear Mr. Schuma,
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Enclosed is the update of the pro forma for
the Bunker Hill Apartments that you requested. I
am sorry for the delay.
If you have any questions, or need any
additional information, please do not hesitate
to contact me.
Yours very truly,
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Donald M. Kaplan
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Enclosures
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C I T Y 0 F SAN B ERN A R DIN 0
INTEROFFICE MEMORANDUM
8506-619
TO:
The Honorable Mayor and Common Council
Raymond D. Schweitzer, Deputy City Administrator
SUBJECT: Density Bonus No. 85-1
Donald M. Kaplan
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FROM:
DATE:
June 27, 1985
(6388)
COPIES:
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In addition to the Density Bonus requested by Mr. Donald
Kaplan under 112 on the July 1st Council Agenda, the develop-
ment will require 88.5 sewer capacity rights if the density
is. approved or 71.25 if the bonus is denied.
The City has received the $100 application fee for each unit
requested. The price through June 30th is $1410 per right.
However, on July 1st, the price is up to $1620 per right.
The price per sewer capacity right is the price in effect at
the time the balance is paid in full.
Mr. Kaplan is aware of
be allowed the $1410
approved .on the cusp.
the price change and requested that he
price since his development is being
so to speak of the price change.
We would recommend the $1410 price per unit so long as it is
paid in cash prior to Friday, July 5th. All other developers
have had to pay the complete bala e in cash to July
1st in order to take advantage of e lower pr
RDS/djn
SUPPLEMENTAL INFORMATION TO ITEM *12