HomeMy WebLinkAboutR12-Economic Development Agency
o
c
o
".
,-
o
o
DEVELOPIIEKT DEPARTIIEKT
OF TIlE CITY OF SAR BERlWmIIIO
REQUEST FOR COIMISSIOK/COUllCIL ACTIOK
From:
KENNETH J. HENDERSON
Executive Director
Subject:
CLIFF R. CAREL ARD
ASSOCIATES FOR
"llILL61UUUft
IIAlIOR" PROPOSAL
Date:
December II, 1991
-------------------------------------------------------------------------------
SvnoDsis of Previous Commfssion/Counril/Committee Action(s):
-------------------------------------------------------------------------------
Recommended IIotion(s):
(Co..un!tv Develo1llllent Commission)
That the COllllllunity Development COllllllission approve the Cliff Carel and
Associates request for a construction loan in the amount of $1,847,838
for the development of a 40 unit Senior Citizen apartment complex, and
establish Millennium Manor as priority one for future 20% Set-Aside Tax
Increment.
Adm~ator
~ERSOK
Executive Director
-------------------------------------------------------------------------------
Contact Person(s): Ken Henderson/Doris Daniels
Phone:
714/384-5081
Project Area(s):
Ward(s):
Supporting Data Attached:
Staff ReDort
FUNDING REQUIREMENTS:
Amount: $1;847,838
Source: 20% Set-Aside
Budget Authority:
Beinq souqht.
-------------------------------------------------------------------------------
Commission/Council Kotes:
--------------------------------------------------------------------------------
KJH:DAD:paw:0227q
COIMISSIOK IIDTIIIG AGBlIDA
lIeeting Date: 12/16/91
Agenda Item Ko.
/c1
o
o
o
o
o
DEVELOPKBIIT DEPAll.l'HE1IT
STAFF REPORT
----------------------------------------------------------------------------------
Cliff R. Carel and Associates
"Killennium Kanor" Proposal
Cliff R. Carel and Associates proposes to construct "Millennium Manor, "
a forty (40) unit senior citizen apartment complex on 1.63 acres
adjacent to the City's main fire station at Third Street and Sierra Way.
The project will contain ten (10) four-plex units consisting of fourteen (14)
one bedroom and twenty-six (26) two bedroom units. The rental amounts will be
$515 for the one bedroom units and $605 for the two bedroom units. Amenities
will include full kitchens with microwaves frost-free refrigerators, garbage
disposals, dishwashers, stackable washer/dryer combinations, safety grab bars
for tub/shower, perimeter parking (close to unit entrance), and security gates.
On December 20, 1982, Carel and Associates entered into a Disposition and
Joint Development Agreement (DDA) with the Redevelopment Agency which
provided the land for the project, the demolition and reconstruction of the
bridge at Third Street and Warm Creek, and the widening of Third Street. The
DDA was amended in 1983 and 1985 and there was a third proposed amendment in
1988. The project was held up during the state-imposed building moratorium
between June, 1987 and June, 1988.
The request from Carel & Associates is for a loan in the amount of $1,847,838
to construct the units, remove the bridge and widen Third Street. The total
value of the project is $2,463,784 which encompasses a land value of $576,666
and construction costs of $1,887,118. The request is for a 75% advance of
approximately $1,847,838.
The anticipated construction loan of $1,847,838 would be interest only for
eighteen (18) months to allow for construction and rent-up. There will be a
1.5% Loan Origination Fee. The project will be listed for sale with proceeds
repaying the construction loan and, by prior agreement, an additional five
percent (5%) will be repaid to the RDA for land proceeds. The cash flow on
the project was presented based upon conservative estimates of three percent
(3%) vacancy factor and twenty-two percent (22%) operating expenses.
The construction loan would be repaid upon sale or reprogrammed at nine percent
(9%) interest rate for a thirty (30) year term with a five (5) year maturity.
Payments annually would be $174,994 which would leave a margin of $38,000 after
debt service. The reason for the construction and short term take-out request
is due to the difficulty in obtaining construction loans form conventional
lenders.
Staff recommends acceptance of the proposal based upon the following:
1) This project will complete the commitments made between
Carel and Associates and the San Bernardino Redevelopment Agency.
(See Attachment I.)
---------------------------------------------------------------------------------
KJH:DAD:dle
CCIIKISSIOR KEETIRG AGEBDA
Keeting Date: 12/16/91
Agenda Itea Ro. 12
DEYELOPIIEIIT DEPAR~ STAFF REPORT 0
CLIFF R. CAREL AIm ASSOCIATES "MILLEHKIUK IfAll()R" PROPOSAL
Deceaber II, 1991
Page N...ber -2-
o
2) Carel and Associates is a proven builder/developer and has
successfully completed over 150 units of low/moderate and
senior apartments in the area adjacent to this project.
3) The project will provide needed quality low-cost senior
housing for the city.
4) The risk on this loan is mitigated by the existing unmet
demand for affordable senior citizen housing, the targeting
of rents to be generally parallel to section 8 subsidized
levels, and the inclusion of greater amenities in the
structures to enhance marketability.
Staff further recommends that, in view of the current cash-flow position of
the low/moderate Income Housing Fund, the Community Development approve the
structure of the financing, establish the Millennium Manor as the number one
housing priority in terms of future tax increment and approve Millennium
Manor having first call on unobligated and/or available future 20% Set-Aside
tax increment.
o
Director
o
K.JII.DAD.dle
COHIUSSIOIl ItEETllIG AGERDA
Meeting Date, 12/16/91
Agenda It_ No. 12