HomeMy WebLinkAboutNB01-Council Office
-
.._-...
-
--
CIU' OF SAN BERNARDINA
lo....
- REQUJ=.ST FOR COUNCIL Ar)'ION
~ !
From: Councilman Steve Marks
Subject: Executi ve Session
Dept:
Council Office
-t.~
, ,c:
,:..;,>
Date:
November l2, 1985
';1",/'- ,"
. ,
,/;) '"
--~.,-
""'.-.1
Synopsis of Previous Council action:
Recommended motion:
Tnat the Mayor and Common Council go into Executive Session to
v/l
discuss personnel matters.
(~
'--'
c
('
~ I ')
Lp"'-- /
c:.- < ~,/"-
"..
/ '~
1 S
J
(". "7
-
) .
i/-..
SV1.j'l
"l
) --.-.-./
Q ~"~,G,,,~
Signatu
Contact person: Councilman Steve Marks
Phone:
383-5178
Supporting data attached:
Yes
Ward:
N/A
FUNDING REQUIREMENTS:
Amount:
N/A
Source:
Finance:
Council Notes:
75-0262
Agenda Item No,New Business
(
l,
JIi
V OF SAN BERNARDlt.O - REQUQT FOR COUNCIL AoJaON
STAFF REPORT
The resolutions before you today are for three separate bonds for a
project for International Christian Graduate University. Included in the
project are requests for two separate industrial development bonds and a
cooperative agreement with the County of San Bernardino to issue a
multifamily mortgage revenue bond.
The developer has requested inducements for the industrial development
bonds at this time in order to have the inducement prior to the close of
1985. Pending action by the U. S. Congress may make this type of
financing very difficult to obtain after January I, 1986. However,
projects which receive inducements prior to January I, 1986, may be able
to fund in 1986.
Resolution A is for the acquisition and rehabilitation of facilities
currently owned by Campus Crusade. The facility will be bought by
International Christian Graduate University. The amount of the bond
isnot to exceed $15,000,000. The location of the project is Arrowhead
Springs Ranch. While this location is within the County, the City may
issue bonds for the project if a benefit to the city is determined. This
language is included in the resolution.
Resolution B is an inducement for construction of student/faculty housing
adjacent to the University. This will be an industrial development bond
in the amount not to exceed $15,000,000. Once again, the finding of
public benefit to the city is found in the resolution.
Resolution C is a cooperative agreement with the County to issue a
multifamily mortgage revenue bond in an amount not to exceed $350,000,000
for the construction of 5,000 multifamily units of which approximately
1,000 will be within the city limits. The location of the project is
Arrowhead Springs Ranch, State Highway 18, and Old Waterman Canyon Road.
Name of Developer:
Arrowhead Springs Ranch, a partnership
Principals:
Steven Douglas, Campus Crusade for Christ
International
Warner Hodgdon, Project Manager
Project:
Approximately 1,900 acres - construction of
5,000 apartment units
Construction schedule:
Start - January 1987
Complete - December 1990
Rental schedule:
Studio, 500 units, S325/month
1 bedroom, 1 bath, 1,250 units, $450/month
2 bedroom 2 bath, 2,750 units, S550/month
3 bedroom, 2 bath, 500 units, $600/month
~ Developer will be available to answer any questions you may have.
0872K/EB
'",0264 12/2/85
I- I'"
100...-
J
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
I
I
5,~ 5,~
:)
&conum<<: eJn\\uftanl)
go""!,!'. :r. Jfan<5:F' ~.9l.
300 5,,,,,t Slak St.-!, Su.a., 502
~k" t'4uua 92373
(711;) 79~-82'1;;
~
May 3, 1985
Mr. Tom Laurin
Ms. Thelma Moore
Office of Community Development
474 W. 5th Street
San Bernardino, CA 92415
Re: San Bernardino County Multifamily Bond Program Study:
Market "Need" for Apartments
Dear Mr. Laurin and Ms. Moore,
We have completed our study of San Bernardino County's
Multifamily Bond Program; this letter will provide you with a
summary of the key findings of the study.
Description of Projects
San Bernardino County has recently passed inducement resolutions
for a total of 100 apartment projects that have requested some
$710 million in bond financing which would be used to develop
approximately 16,000 apartment units; the distribution of these
projects b~ Market Regions is as follows:
West East Victor
Valley Valley Valley County
------- ------- ------- -------
Proposed Projects: 33 50 17 100
Units: 6,476 7,790 1,870 16,136
Bond Financing Request: $322 $324 $164 $710
(millions)
Thus, most of the projects are located in the East and West
Valley regions of San Bernardino County.
1
I
I
I
I
.
.
I
I
I
I
I
I
c
-,
~
:J
r""
'-
Methodology
The market "need" for apartments was analyzed using a
comprehensive model that encompassed all of the relevant
demographic, economic and market demand-supply conditions for
apartment projects.
:
Market Demand for Apartments
The demand for apartment units was estimated through a systematic
analysis of demOgraphic/economic/construction trends in the Los
Angeles Metropolitan Area, San Bernardino County and the various
market regions; the t>r1mary;.;t~ndings'are as follows:
'~~\t;:~i:}'rf.'f:~~>:1'li.~~~_,;,:;;:;~
Recent Demographic, Employment and Construction Trends
"'.,' ,'. "
San Bernardino County 'is.,increasing its share of the Los Ange 1 es
Metropolitan Area'sc1emographicj employment and construction
activity: : ';,.".,...,.,,,
Mark\!.t:,:Share of Activity
Ratio of
Market Share to
Population Share
-------------------------
1975
1984
------------------
'....----
------
----------------
Population 6.18%
Employment 3.84%
Construction Activity
Residential ri,~."...'-'".~,."6 ~ 21 %
Commercial 3.38%
Industrial 4.84%
6.98%
3.97%
1. 00
0.57
,'":.
.'.._7_~,',.~:.,.. r-'~;'-":>"'-'
2.04
0.68
1. 63
-;~"
4.26%
4.73%
11. 37%
Thus, San Bernardino County has increased it share of the Los
Angeles Metropolitan Area's 'population, employment and
construction activity; themost;;\:iramatic changes have been for
residential and industrial c6nstruction~
Within San Bernardino County, the recent market shares of
construction activity for the various regions during the 1981-84
time period-are as follows:
West East Victor
Valley Valley Valley
------ ------- ------
Residential 37% 41% 22%
Commercial 40% 44% 16%
Industrial 72% 18% 10%
Thus, industrial activity is primarily in the West Valley, while
residential and commercial construction are in the West and East
Valley.
2
-
I
I
I
I
I
.
.
.
.
.
.
.
I
I
I
I
I
I
.
c
:)
,-
.......
Demand from Existing Households
The demand for apartment units from households that currently
reside in such units is referred to a turnover demand. This was
estimated using 1980 Census information, along wi th updates to
make the data current, as well as the mobility rates for such
households; the results are as follows:
,......,
'-I
~
Rent Ranges
(Approximate)
Total
Households
Turnover
Demand
3,414
6,693
"'~~l29 ,583
-t\I.l'.' :"";'if..,Jt;"!l':i~~~,,, ,;""\:;q 9 ..' "'5.4
....'.'.~,''''.~.". -,:-c:
{.~,'" 16,163
Ie 13,353
1'"",,: 4,163
t:>., 1,0,91
,~:~:.~i:}C:: . . .______
,t:c:.",'-';.:'..._..",",.:;':,,:,!"Q,..;t,
,;,.,.;"" "-,,, 9 3 7 1 2
~~;~~~H~~~~~2c<~~~ ,:'
Thus, of the some 94,000' households that rent apartment units in
San Bernardino County, ;'about '.1,000 of them move each year. Of
these, 2,300 pay rents of $350 or more per month, so they would
be candidates for."units in new apartment projects. The
subsequent analysis; however, will not take this turnover demand
into account, .since these households ,are "likely to move from one
compl ex to anotherccompl:ex ,within the ,;county.
No Cash Pymt:
$ 0-130
$131-263
$264-328
$329-395
$396-527
$528-659
$660+
154
1,004
3,994
2,310
1,697
1,202
312
65
TOTAL:
10,738
Demand for Population Growth
The demand for apartments due to population growth was estimated
through forecasts of housing demand,and the share of this demand
that is likely to consist of apartment units:
West East Victor San Bernardino
Annual Demand Valley Valley Valley County
-------------- ------ ------- ------- -------------
1985-90 1,440 1,614 , ,01 1 4,077
These demand statistics encompass apartment projects of various
sizes. Since the Multifamily Bond Program focuses primarily upon
apartment complexes of 25 or more units, the demand for such
complexes was estimated.
Annual Demand
West
Valley
East
Valley
San Bernardino
County
Victor
Valley
1985-90
554
598
200
1,352
Thus, the demand for apartment units in complexes that are
relatively large is strongest in the East and West Valley and
relatively lower in Victor Valley.
3
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
c
.-...
v
:>
c
Market Supply of Apartment Units
To gauge the market supply conditions for apartments, information
was compiled on existing, new, and proposed projects; the primary
results are as follows:
Existing Complexes
~
Victor San Bernardino
Valley County
------- ---------------
4 97
472 14,294
1981 1973
$334 $322
$413 $393
$523 $452
Characteristics
West
Valley
East
Valley
33
60
Number of Projects
in Stratified Sample
Units in Projects: t1'i.i~.~..M'#19.~~rtJ343
Year Built :""1974""'" lJi<;!'*1972 ,
(Avg)_
.;"
Rents/mo:
One Bedroom
Two Bedrooms
Three Bedrooms
.~$299 .
::,$369
$422
New Complexes
West ;'East Victor San Bernardino
Characteristics Valley Valley Valley County
-------------------- ------ ------- ------- -------------
Number of Projects 4 4 3 1 1
in Sample -~;~"
Units: ",~,,,"i;(}5' .'695 1,963
Rents/mo:
One Bedroom $456 $370 $290 $395
Two Bedrooms $538 .$444 $395 $467
Three Bedrooms $655 N/A $498 $550
Proposed Projects
West East Victor
Characteristics Valley Valley Valley
-----------~------- ------ ------- ------
Number of Projects 26 29 9
Apartment Units 2,921 3,921 1,197
Development Status ;.
Stage of Approval
Preliminary 250 334 716
Tentative 1,677 1,553 281
Final 792 1,896 200
The optimum rents for new apartment units are based upon a
consideration of the rents for complexes that have entered the
market recently as well as the after-tax monthly payment for
ownership units; the typical market rents are as follows:
4
I c
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
I
1'"
'-'
Recommended Rents
(Average)
---------------------
One-Bedroom
Two-Bedrooms
Three-Bedrooms
,......,
'-'
:)
West
Valley
East
Valley
Victor
Valley
$475
$525
$575
$400
$450
$500
$375
$425
$475
OPTIMAL ALLOCATION OF MULTIFAMILY BOND FUNDS
:
San Bernardino County may desire to allocate the Multifamily Bond
Program funds among tb,e{;v~l'ious""Mal".ket,,,Regions in order to ensure
tha t an excess supp l'y:~"of.,;;a'pimtmen ts' does no t oc cur in any
particular region. Accordingly, the allocation algorithm would
be based upon a consic'eration of the following: First, the
market demand conditions~for apartmenti in San Bernardino County,
as a whole, and eachLof, the Market Regions, in particular.
Secondly, the inducemellt""r.~::lolutions that have been approved
thusfar, for both San:.:Bern~'r,dino County as well as the various
.<:::....;..-~.w:.""">.~:~.<;: :
Market Region. .i(:of' - . ,
/"
The allocation of, Multifamily Bond Program funds among the
Market Regions can be made according to the ratio of the number
of units with inducement resolutions relative to the market
demand for apartment units in ~largen complexes; the relevant
sta tistics are as follows; . ("""':'Y';;;'
<~'L~ ';! '\!,;~;~:~~:.,.~;1.L:t2;fi.b:~;~':; ,~.' .
West
Valley
Projects with
Inducement Resolutions
Projects
Units
33
6,476
Demand for Units in
Large Apart~ent Projects
Demand (1985-90)
Ratio: Inducementl
Annual Demand
3,323
"1. 95
pEast
Valley
Victor
Valley
San Bernardino
County
,.
50
7,790
17
1,870
100
16,136
"',,3,585
. 2. 1"7
1,199
" '1.56
8,107
1. 99
Thus, a comparison of the market demand for apartment units in
large complexes during the 1985-90 time period with the number of
units that have been induced thusfar reveals that the number of
units which have already been induced is sufficient to satisfy
the market demand during the 1985-90 time period.
5
I,
I:
I
I
I
I
I
I
I
c
c
r-,
v
:)
Conclusion
Based upon a consideration of all of the market demand-supply
conditions for apartment units in relatively large apartment
projects in San Bernardino County, we recommend that the county
carefully monitor its Multifamily Bond Program, since the number
of units that have already been induced exceeds the maPket demand
for apartment units during the 1985-90 time period.
If you have any additional comments or questions, please contact
me.
~:r;Ji
<... '
)"Joseph,1'.Janczyk, Ph
'~conomic Consultant
JTJ:re
I
I
I
I
I
I
I
I
I
I
6
-
.
c
1853
o ,~\\II"I~?/ 0
'~t~-"
'"!:: ~-
-- -
~ ..::::--
......~ ~......
/1111111\\\~'
County of San Bernardino
J
KENNETH C. TOPPING
Deputy Administrator
Development Services
THOMAS R, LAURIN
Director
Depanment of Housing
and Community Development
ENVIRONMENTAL PUBUC WORXS AGENCY
DEPARTMENT OF HOUSING
AND COMMUNITY DEVELOPMENT
~ 474 West Fiflh Sl_
SaD Bernardino, CA 924U-0040
(714) 383-2563 Housi..
(714) 383-274S P1annin8
December 5, 1985
Glenda Saul, Executive Director
City of San Bernardino
Redevelopment Agency
300 North "D" Street
San Bernardino, CA 92418
Re: Arrowhead Springs Ranch Proposed Multifamily Project
Dear Ms. Saul:
As per our telephone conversation of December 4, 1985, the following are
my comments regarding this project,
As you know, Campus Crusade for Christ International has requested that
the County Board of Supervisors adopt a resolution requesting that the
Housing Authority of San Bernardino County issue up to $350,000,000 in
multifamily'bonds for Arrowhead Springs Ranch Partnership prior to December
31, 1985. These 5000 units would be located in the Arrowhead Springs
area generally east of Old Waterman Canyon Road and Highway 18 and proposed
to be built over a three to five year period.
The project was ini ti ally brought to my Department on Fri day, November
22 for review. The above Resolution was placed before the Board of Super-
visors on December 2, 1985 for their consideration. The item was continued
to December 9, 1985.
"
J
".'"
~l
-- -
- -
-
c
o
o
:>
ltr to Glenda Saul
Re: Arrowhead Springs Ranch Proposed Multifamily Project
December-5, 1985
Page 2
Two factors must be considered when evaluating a development fo~ multifamily
bond financing. First, is there a reasonable expectation that the project
will be built? Second, is there a demand for the units in the surrounding
area? let me discuss each point separately.
(1) Recent IRS rul ings on the tax-exempt status of bonds for multi-
family housing are being based on a number of factors, the pri-
mary one being if there is a "reasonable expectation" by the
issuer that the total units will be completed.
(a) The size of the issue is $350,000,000 to construct 5000
units. Staff has not seen detailed plans, specifications,
or site development to judge whether 5000 units is feasible
for that area. Normally, our staff has a lead time of
two to three months to review these proposals before placing
them into the pipeline to be structured for bonds. However,
in this case, beginning documents were only brought in
on November 22, 1985.
(b) There is no letter of credit in place to provide credit
support to the bonds that are bei ng issued, therefore it
is an escrow account. All other County or Housing Authority
issues have had some form of credit support in place before
issuance or one was reserved by a developer who had paid
points for this reservation.
(2) The County and City have already induced enough apartment units
into the greater San Bernardino area to meet demand by over
2 to 1, according to a County sponsored Market Feasibility Study
completed in 1985 by Empire Economics.
,;1
-
- -
- -
-
Ltr to Glenda Saul
Re: Arrowhead Springs
December. 5, 1985
Page 3
o
o
:)
c
Ranch Proposed Multifamily Project
(a) This study states that the greater San Bernardino area
supply of multifamily housing is adequate for the next
five years. Multifamily demand is estimated at 3600 units
for the next six years. There are already 4897 units that
have received bond financing in this same geographic area,
a supply 137% over demand.
(b) A recent survey conducted by the County's feasibility con-
sultant revealed there are currently approximately 500
vacant apartment units existing in the City of San Bernar-
dino, north of Highland Avenue. The impact of issuing
bonds for 5000 additional units could negatively affect
occupancy levels in existing projects.
We have no comment at this time regarding related issues such as planning
and environmental review. The County's Land Management Department has
not received any formal applications for General Plan amendment, Alquist-
Priolo Seismic Safety Study Zone geologic investigation, site approval
or other review which might be necessary.
County HCD Staff recogni zes the positi ve impact Campus Crusade for Chri st
International has had in our community, however, because of the concerns
this Department has in regard to the feasibility of this project and
the supply and demand equation, the HCD Staff will recommend that the
Board of Supervisors defer any action until such time that these concerns
are resolved.
Sincerely,
ENVIRONMENTAL PUBLIC WORKS AGENCY
DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT
rH7~ (?,.-'JCJA-'-
THOMAS R, LA~N'
Director
TRL: 1 s
l
cc: The Honorable Mayor and Common Council
City of San Bernardino
-
-
c
SUMMARY OF MA~OEMANO ANO SUPPLY CO~IONS FOR APARTMENT UNITS
SAN B~OINO COUNTY'S EAST ~EY MARKET REGION
o
(Source: Empire Economics, Joseph Janczyk Ph,O,)
================================================================================================
1
MAXIMUM I 1 1
YEAR MARKET 1 MARKET SUPPLY I EXCESS SUPPLY 1
OEMANO I-----------------------~-------------------------I -------------------- I
I FOR 1 Permits Induced Tot.l Arrowhe.d Tot.1 I Induced Induced & 1
1 I APARTMENTS 1 .nd/or Balance Supply Springs I Projects Arrowhe.d 1
1 I I Fin.ncsd (Induced) R.nch I On 1y Springs 1
1--------- -----------1-------------------------------------------------1----------------------1
1 1 1 I
I I 1 1
I 1985 1,149 I 2,635 2,635 2,6351 1,486 1,486 I
I 1986 1,260 1 2,958 2,958 2,958 I 3,lB4 3,184 I
1 1987 1,3701 1,020 1,020 660 1,680 I 2,835 3,495 I
1 19B8 1,472 I 1,020 1,020 945 1,965 I 2,383 3,988 1
I 1989 1,513 1 1,020 1,020 1,085 2,105 1 1,890 4,580 1
1 1990 1,518 I 1,020 1,020 2,310 3,330 I 1,393 6,393 1
1 I I 1
1 Total 8,282 1 5,593 4,082 5,000 14,675 1 1
I 1 1 I
1 I 1 1
1 Notes.. , I 2,3 4 5 6 7 I I
1 I I 1
================================================================================================
EXPLANATION OF NOTES:
I, To .djust the mu1ti-f.mi1ty st.tistics for condos .nd sm.11 .partment
projects, a factor of 70% was .pp1ied to the projected demand for
mu1ti-f.mi1y units,
2, The Markst Supply for 1985 represents building permits for large
.p.rtment complexes during the J.nu.ry to August 1985 tiMe period,
3, The M.rket Supply for 1986 represents the units in projects that
h.ve been or will soon be fin.nced but h.ve not yet obt.ined their
building permits,
4, This represents the units th.t have been induced but not yet
financed,
Total Units Induced,.."..,""""..,
Induced Units Fin.nced .s of Dec 1985.
Remaining Induced Units""""",.",
Probable Attrition R.te..............,
Net Units.... ,(1987 - 1990)..........
Net Units.... ,(Annu.l1y)............ ,
12,321
4,157
8,164
50%
4.082
1,020
5, This is the sum of the M.rket Supply from the Induced Projects.
6, This is taken from the M.rket Oemand Study by Parnell, Kerr,
and Foster, T.b1e 22 on P.ge VI-9,
7, This is the Market Supply including Arrowhead Springs,
o
(f)
I-
Z
!.l
~
I-
0::
<(
CL
<(
0::
o
1.1..
>-
...J
CL
CL
=>
(f)
Q
Z
<(
Q
Z
<(
~
!.l
Q
I-
!.l
~
0::
<(
~
-
o
o
:z:
o
Cl
!oJ
a,;
.....
!oJ
~
a,;
-<
::E
>-
!oJ
..l
..l
~
.....
III
-<
!oJ
o
CJI
CJI
-
CJI
00
CJl
-
00
00
CJl
-
l'-
00
CJl
-
Ul
00
O'l
-
o
"0
o
lD
J:
~
o
..
..
-<
<l:l
"0
Ol
o
::I
"0
C
+
II'l
00 ~
CJI C
- 0
0 0 0 0 0 0 .tl
0 0 0 0 0 0
. ..t .
Ul 10 I"l N - c
=:J
"0
Ol
0
::I
"0
C
0
o
o
,...
(spuosn04.L)
s.uew....od'V JO ,(lddnS .e>l.Jol/ll sseoxJ