HomeMy WebLinkAboutR06-Economic Development Agency
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DBVBLOPIIBBr DBPAllrllBBr
OF TIlE CITY OF SU -.avnIIIO
RBOUBST I'OIl COIM[SSIo./CODIICIL ACTIO.
From:
ICEBlUTH J. HENDBRSON
Bxecutive Director
Subject:
A~.. WITH SSLII
YIIIInIIld IIIC.
Date:
November 26, 1991
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SvnoDsis of Previous C~issianlCnnn~il/r.~tttee Aetionea):
On November 13 and 26, 1991, the Housing Committee eonsidered ehanges
to the Infi1l Housing Agreement between the City of San Bernardino
Redevelopment Agency (Development Department) and SS1M Ventures, Ine.,
incorporated and expanded language consistent with changes to
Co_ity Redevelopment Law, and recommended approval of the changes
to the Co_ity Development Commission.
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Ilec~~ed Botiones):
ec_tty Devl'ln__t C--ission)
That the Community Development Commission approve changes to the
Infill Housing Agreement between the City of San Bernardino
Redevelopment Ageney (Development Department) and SS1M Ventures, Inc.,
and incorporate and expand language consistent with changes to
Co_ity Redevelopment Law.
Adm~ator
~OB
Kxecatiye Director
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Contact Person(s): Ken Henderson/Doris Daniels
Phone:
384-5081
Project Area(s):
Citv-Wide
Ward(s):
Supporting Data Attached:
FUBDING REQUIREMENTS:
Amount: S
Source:
Budget Authority:
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CftMMissianlCnnneil Botes:
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KJH:DAD:tnt:02l4q
COIIIISSIOB IIDTIJIIG AGDDA
lleeting Date: 12/16/91
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AgeDda Item .0.
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DBVBLOPIIBBT DBPAllTIIBBT
OF TIIJI: CITY OF S.... BBJDQJlDIIO
STAFF IlBPOllT
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Aare--t with SSLII Ventures. Inc.
On October 16 and 19, 1991, as well as on November 13, 1991, this item was
presented to the Housina CODlllittee for consideration. On both occasions
there were 1enatby discussions regardina affordabi1ity covenants and area
comparab1es. The Committee requested that staff further research the
issues and return with additional information. The proposed changes were
recommended for approval by the Housina Committee on November 26, 1991.
On November 6, 1986, the Redevelopment Agency of the City of San
Bernardino entered into an agreement with SSLM VENTURES, Inc., a
California Corporation, doina business as PACIFIC LAND INVESTMENTS, to
develop housina on infi11 lots and implement the Infi11 Housina Program
(see Exhibit "I"). The agreement authorized the expenditure of
redevelopment funds for acquisition of land for the purpose of deve10pina
sina1e family housina units within redevelopment project areas.
A land acquisition limit of $7,000 per lot was included in the agreement
to be secured by deed of trust, (owned by the Department) to be
subordinated to the construction financina loan acquired by the
developer. At close of escrow, funds expended for land acquisition plus
interest were paid to the Department. Houses built under this agreement
were offered to low and moderate income buyers from within the City. At
the inception of this agreement, affordabi1ity covenants were not as
specific as they are today and the time period for units to remain
affordable to low and moderate income buyers was not as 1enatby as is
currently.
To enable the Development Department to enforce current statutory
requirements when usina funds from the LowlModerste Income Housina Fund,
it is necessary to amend the agreement with SSLM Ventures as follows:
Deal Points
'Rrfatf....
Rec,.....illed.
Land Acquisition
Assistance to Developer:
$7,OOO/10t
$25,OOO/10t (maximum)
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KJH:DAD:tnt:0214q
COBIISSIIlB IIBBrIBG AGDDA
lleeting Date: 12/16/91
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Ageoda Itea Bo.
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DEVELOPIIBIft' DBPAounanr STAPF 1lBPOR1'
Agre_t with SSLII Ventures
Bov~er 26, 1991
Page ~r - 2 -
Deal Points
ltYtst:ina
Ilec
--vied
Interest rate raised:
7.5%
Bank of America
Prime, Plus One
Developer's Profit Margin
Unlimited
15% (any profit greater
than this percentage will
be divided equally between
Developer and Department.)
Developer's Performance Bond
Required
Released
Covenants to ensure
Affordability*
None
Covenants, such as equity
sharing, deferred loans,
resale controls to run
with the land for 10 (ten)
years.
*~ Covenants that run with the land are QIL.I implemented should the
potential home buyer require financial assistance in order to purchase
new infill housing units. On a caae-by-case basis, land acquisition
funds provided to the developer can be used as silent second deeds of
trust to underwrite the initial selling price for the benefit of low and
moderate income households.
Should low and moderate income families require financial assistance to
purchase housing, the developer would be required to request such
assistance on behalf of the qualified potential home buyer to the
Department.
a) RY.....le:
Income Limitation:
Area Median Income:
Factor:
Income Limitations:
Moderate Income Household
$36,000
80%
$28,800 For a Family of Four (4)
$28,800
30% Gross Income Limitations
$ 8.630 Year divided by 12
$ 720.00 Month
- 182.00 Month
$ 583.00
Affordable Housing Costs:
Factor:
Less Housing Costs:
(except P&I)
Monthly Amount Available:
(for P&I)
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KJH:DAD:tnt:02l4q
COMISSIOB ftUl:.LaG AGBlIDA
Meeting Date: 12116/91
Agenda It_ Bo. (;,
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. DBVBLOPIIIIIr DBPD1hut.c SrAIT IBPORr
Agrement with SSLII Ventures
November 26, 1991
Paae w-ber - 3 -
---Ie tal Conti_eel...
MP = Mortgaae Payment:
IR = Interest Rate:
T = Term:
MA = Mortgage Amount:
$ 538.00
7.5%
30 Years
$80,993.14 divided by .95 = *85.041.14
Purchase Price Limit
The Department would in such cases require the developer to only pay
interest on acquisition funds initially loaned to developer at close of
escrow to the Department. In the event acquisition funds are not totally
required in providing assistance, developer would pay all interest due,
plus reimburse that portion not used for financial assistance. All
interest earnings would be reinvested in the Low and Moderate Income
Housing fund.
b) -....le:
Purchase Price Limit:
Silent Second Trust Deed:
Mortgage Amount To
be Financed by very Low-Income
Buyer
$80,993.14
-25.000.00
*55.993.14
The developer would have to transfer funds on behalf of the Department to
an escrow account equal to the actual acquisition costs to be used as a
silent second. Depending on each case, financial situation, the
Department would authorize funds to be used as silent second deeds of
trust up to the actual acquisition costs, but not to exceed such costs.
Each silent second funded would be restricted through the use of recorded
covenants to ensure affordability of housing should a resale occur prior
to the end of the ten (10) year sunset date for the covenants.
Housing resale prices as well as equity build-up for each unit requiring
assistance would be restricted to annual increase in equity, estimated at
approximately three-percent (3%) per annum. If the homebuyer holds
property for ten (10) years, affordabi1ity covenants will not be imposed.
......-nle:
YEAR 1991
b5.043
Purchase Price
1995
h7.799
Selling Price
2000
*t1.469
Selling Price
2005
*129.329
Selling Price
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KJH:DAD:tnt:02l4q
COIBISSIOR IIIBrIIIG AGEIIDA
lIeeting Date: 12/16/91
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Agenda It_ 110.
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. DKVBLOPIIBIIr DBPAa.......... STAFF IIBPORr
Agre_t with SSLII Venture.
&oveBber 26, 1991
Paae ~er - 4 -
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c) If a home buyer sells the property prior to the sunset date of ten
(10) years, the affordability covenants would impose equity sharing,
as well as resale controls to ensure affordability for other potential
low and moderate income buyers.
....Allmle:
Year throngh
ConcluslO11 of
A:nniver&ar9' Date
Percent... of Balc
AaatatJlft"e Poraiven.
Allcnmt to
Be Reoaid
0-1
1-2
2-3
3-4
4-5
5-6
6-7
7-8
8-9
9-10
10+
OX
6X
l2X
l8X
24X
30X
40X
52X
66X
82X
100X
To be
determined
on a case
by case
basis
d) Such restrictions should include, but not be limited to, equity
sharing, deferred loans, or resale controls. Upon sale or
refinancing, the resale controls should provide for the Department to
receive a share of the proceeds that will protect the Department'.
investment and will return previously loaned monies to the Housing
Fund.
Staff recommends adoption of the form motion.
~&, Ezecutlve Director
DeveloPllent Deparaaent
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KJH:DAD:tnt:02l4q
COIIIISSIO& IIBB1'IBG AGBlIDA
Neeting Date: 12/16/91
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Agenda IteB &0.