Loading...
2009122119MEETING DATE: 12/21/09 ITEM NO: REDEVELOPMENT AGENCY AGENDA REPORT 19 DATE: December 4, 2009 TO: CHAIR AND MEMBERS OF THE REDEVELOPMENT AGENCY FROM: GREG LARSON, EXECUTIVE DIRECTOR A - SUBJECT: CONSIDER AND ADOPT THE REDEVELOPMENT AGENCY FIVE YEAR IMPLEMENTATION PLAN AND AFFORDABLE HOUSING PRODUCTION PLAN FOR THE CENTRAL LOS GATOS REDEVELOPMENT PROJECT FOR THE PERIOD OF JULY 1, 2009 TO JUNE 30, 2014. RECOMMENDATION: 1. Open and hold the public hearing and receive public testimony. 2. Close the public hearing. 3. Adopt the attached resolution adopting the Five Year Implementation Plan and Affordable Housing Production Plan for the Central Los Gatos Redevelopment Project for the period of July 1, 2009 to June 30, 2014. (Motion Required) BACKGROUND: The Los Gatos Redevelopment Agency originally adopted its Implementation Plan in 1994. In 1997, the Plan was reviewed and amended to add public parking as one of the activities contemplated in the plan. Beginning in 1999, the Agency was developing detailed capital improvement programs for the Project Area, and these were adopted and used as the Agency's Implementation Plan. In February 2000, the Agency approved a resolution adopting a new Redevelopment Affordable Housing Production Plan. This plan supplemented the CIP programs that were adopted in 1999, 2000, and 2001 by specifically addressing affordable housing issues. After discussions with Agency Legal Council, a single document was produced that combined the housing and non -housing activities, which was adopted by the Agency on March 4, 2002, to serve as the Agency's Implementation Plan for the remainder of the five-year period from July 1, 1999, to June 30, 2004. On November 15, 2004, the Agency adopted the current Implementation Plan for the five year period from July 1, 2004, to June 30, 2009. PREPARED BY: Wendie R. Rooney, Director of Community Development Reviewed by: Deputy Director 2 Community Development General Counsel Secretary Finance PAGE 2 CHAIR AND MEMBERS OF THE REDEVELOPMENT AGENCY SUBJECT: FIVE YEAR IMPLEMENTATION PLAN FOR CENTRAL LOS GATOS REDEVELOPMENT PROJECT AREA December 14, 2009 DISCUSSION: Section 33490 of the California Community Redevelopment Law (CRL) requires a redevelopment agency administering a redevelopment plan to prepare and adopt a five-year implementation plan for its project areas. The principal goal of an implementation plan is to guide an agency in implementing its redevelopment program to help eliminate blighting influences. Additionally, the required affordable housing component of the implementation plan provides a mechanism for a redevelopment agency to monitor its progress in meeting both its affordable housing obligations under the CRL and the affordable housing needs of the community. Generally, the law states that an Implementation Plan must contain the following: Specific goals and objectives for the next five years for both housing and non -housing activities; and Specific projects and expenditures planned for the next five years for both housing and non -housing activities; and An explanation of how the goals, objectives, programs and expenditures will assist in the elimination of blight and in meeting affordable housing obligations; and Other information related to the provisions of affordable housing. The Town hired Seifel Consulting to work with staff and prepare the required five-year implementation plan. Seifel was chosen due to their extensive background and expertise in the preparation of implementation plans and because they prepared the Agency's previous Implementation Plan. Seifel has consulted on more than 90 redevelopment project areas in California and has prepared over 40 implementation plans. Additionally, Jack Nagle of Goldfarb and Lipman (Redevelopment Agency legal counsel) has reviewed the proposed Implementation Plan to ensure that the statutory requirements of the CRL have been met. In reviewing the Implementation Plan, the Agency should be aware that the proposed Implementation Plan is a guide, incorporating the goals, objectives and potential programs of an agency for the five-year implementation plan period (July 1, 2009, to June 30, 2014), while providing flexibility so the agency may adjust to changing circumstances and new opportunities. The Implementation Plan itself is not "cast in concrete," but is intended to serve as a planning tool to look forward over a five-year period and contemplate potential activities. Additionally, the Implementation Plan does not "approve" projects. The normal budgetary process and other approvals will require more detailed information, which will be returned to the Town Council and/or Agency for review. In general terms, the proposed Implementation Plan reflects potential activities for the period from July 1, 2009, to June 30, 2014. Available funding and staff resources will determine the ability to fund a number of the projects listed below. Staff will forward information to the Agency detailing funding for potential capital projects and affordable housing opportunities. PAGE 3 CHAIR AND MEMBERS OF THE REDEVELOPMENT AGENCY SUBJECT: FIVE YEAR IMPLEMENTATION PLAN FOR CENTRAL LOS GATOS REDEVELOPMENT PROJECT AREA December 14, 2009 This will be an opportunity for the Agency to establish more specific priorities for projects over the next five years. For several projects, the proposed expenditures listed below are not intended to fully fund each of the projects, but are an indication of the amount of RDA funds that could be allocated to each project. Staff will explore opportunities for other funding sources where appropriate. The following is a brief summary of the major projects called out in the proposed Implementation Plan: Police Operations Building - $264,000 Library Facility - $6 million* Almond Grove concrete rehabilitation - $78,000 S. Santa Cruz/Wood Road gateway - $65,000 Ditto's Lane - $5.3 million 224 W. Main Street - $1.2 million Contributions to Santa Clara County Housing Trust - $150,000 * Represents five years of debt service on a $14 million COP issuance. The Agency currently has approximately $11.5 million in the Non -Housing Fund with the total available resources in the Non -Housing Fund increasing to a total of approximately $16.2 million by FY 2013-14. The available non -housing resources over the next five years are sufficient to undertake the projects listed above, if the projects required only the proposed expenditures listed above. The Agency currently has approximately $8.5 million in the Affordable Housing Fund with the total available resources in the Affordable Housing Fund increasing to a total of approximately $17.7 million by FY 2013-14. The Agency will need to begin to spend down this fund in the next few years in order to be in compliance with Redevelopment Law. Consequently, the last three projects listed above would utilize these funds as staff works with the Agency board to create affordable housing. Again, it should be noted that the potential projects listed above and the proposed expenditures are not intended to fully fund each of these projects and staff will explore opportunities for other funding sources where appropriate. Staff will work with the Agency board to establish priorities and will seek to leverage its resources with additional funding opportunities including local, state and federal grant and assistance programs, as well as private sector sources. CONCLUSION: The Agency should adopt the attached resolution (Attachment 1) approving the Five Year Implementation Plan and Affordable Housing Production Plan for the Central Los Gatos Redevelopment Project for the period of July 1, 2009, to June 30, 2014 (Attachment 2). As noted above, the proposed Implementation Plan is a guide, incorporating the goals, objectives and potential programs of the Agency for the five-year implementation plan period (July 1, 2009, PAGE 4 CHAIR AND MEMBERS OF THE REDEVELOPMENT AGENCY SUBJECT: FIVE YEAR IMPLEMENTATION PLAN FOR CENTRAL LOS GATOS REDEVELOPMENT PROJECT AREA December 14, 2009 to June 30, 2014), while providing flexibility so the Agency may adjust to changing circumstances and new opportunities. Additionally, the Implementation Plan itself is not "cast in concrete", but is intended to serve as a planning tool to look forward over a five-year period and contemplate potential activities. The Implementation Plan will be reviewed 2-3 years after its adoption as required by Redevelopment Law. Additional review and/or amendments may be contemplated at other intervals, if the Town Council and/or Agency would like to explore an opportunity for a project not currently listed in the Implementation Plan. ENVIRONMENTAL REVIEW: The Implementation Plan is not a project as defined under CEQA, and no action is required. FISCAL IMPACT: The Implementation Plan itself has no direct fiscal impact. Projects will be brought forward for funding through the normal budgetary process. Attachments: 1. Resolution 2. Five Year Implementation Plan FY 2009/10 to FY 2013/14 N:\DEV\CNCLRPTS\2009\RDA5 YR09-14.doc RESOLUTION RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE TOWN OF LOS GATOS APPROVING AN IMPLEMENTATION PLAN AND AFFORDABLE HOUSING PRODUCTION PLAN FOR THE CENTRAL LOS GATOS REDEVELOPMENT PROJECT AREA FOR THE PERIOD OF JULY 1, 2009 TO JUNE 30, 2014 WHEREAS, the Town Council of the Town of Los Gatos has approved and adopted the Redevelopment Plan for the Central Los Gatos Project Area (the "Project Area"); and WHEREAS, pursuant to Health and Safety Code Section 33490, the Redevelopment Agency of the Town of Los Gatos (the "Agency") is required to conduct a noticed public hearing to adopt, amend, and review an Implementation Plan for the Project Area (the "Implementation Plan"); and WHEREAS, Agency staff has prepared and presented to the Agency a proposed Implementation Plan for the five year period covering July 1, 2009 to June 30, 2014, a copy of which is on file with the Agency Secretary; and WHEREAS, on the date of this resolution, the Agency has conducted and concluded a duly noticed public hearing on the Implementation Plan in accordance with Health and Safety Code Section 33490; and WHEREAS, the Agency finds that the Implementation Plan, with any modifications as considered and approved in connection with the public hearing, constitutes a statement of the Agency's goals and objectives for the Project Area, a summary of specific programs and proposed expenditures proposed to be made by the Agency for the redevelopment of the Project Area for the five year period stated, and an explanation of how the goals and objectives, projects and expenditures will eliminate blight within the Project Area and implement the affordable housing regulations of the Community Redevelopment Law; and ATTACBMENT 1 WHEREAS, pursuant to Health and Safety Code Section 33490, approval of an Implementation Plan does not constitute a project for purposes of the California Environmental Quality Act ("CEQA"), and therefore no environmental documentation is required pursuant to CEQA. RESOLVED, that the Agency hereby approves and adopts the Implementation Plan for the Central Los Gatos Project Area and orders that a copy of the Implementation Plan be maintained on file with the Agency Secretary. FURTHER RESOLVED, that the Agency hereby authorized the Agency Executive Director to take such other actions as are appropriate to effectuate the intent of the Implementation Plan. FURTHER RESOLVED THAT, that this Resolution shall take immediate effect from and after its passage. PASSED AND ADOPTED at a regular meeting of the Town of Los Gatos Redevelopment Agency held on the 21 st day of December, 2009, by the following vote: REDEVELOPMENT AGENCY MEMBERS: AYES: NAYS: ABSENT: ABSTAIN: SIGNED: /s/ Diane McNutt CHAIR OF THE REDEVELOPMENT AGENCY TOWN OF LOS GATOS, CALIFORNIA ATTEST: /s/Jackie Rose CLERK ADMINISTRATOR TOWN OF LOS GATOS, CALIFORNIA N:\DEV\RESOS\RDARESO]P2009.DOC i FINAL Five -Year Implementation Plan FY 2009/10—FY 2013/14 Prepared for: Los Gatos Redevelopment Agency November 2009 Seifel CONSULTING INC. 221 Main Street Suite 420 San Francisco CW 94105 415.618.0700 fax 415.618.0707 www.seifel.com Attachment 2 Table of Contents Los Gatos Redevelopment Agency Five -Year Implementation Plan FY 2009/10—FY 2013/14 I. Introduction I-1 A. Organization I-1 B. Description of the Redevelopment Plan and Project Area I-1 C. Agency Accomplishments FY 2004/05-FY 2008/09 I-4 II. Five -Year Redevelopment Program II-1 A. Goals and Objectives II-1 B. Redevelopment Program for FY 2009/10-FY 2013/14 II-1 C. Linkage Between Program and Elimination of Blighting Influences II-3 D. Five -Year Implementation Plan Revenues II-4 E. Five -Year Implementation Plan Expenditures II-7 III. Housing Component HI-1 A. Housing Production Plan and Affordable Housing Obligation III-1 B. Replacement Housing III-5 C. Low and Moderate -Income Housing Fund III-5 D. Affordable Housing Program III-11 E. Completion of Housing Obligations III-15 Los Gatos Redevelopment Agency i Seifel Consulting Inc. Five -Year Implementation Plan FY 2009/10-FY 2013/14 November 2009 Table of Contents Los Gatos Redevelopment Agency Five -Year Implementation Plan FY 2009/10—FY 2013/14 (cont.) Table of Figures Figure I-1 Boundaries of the Central Los Gatos Redevelopment Project Area I-3 Table of Tables Table I-1 Summary of Existing Time and Fiscal Limits Los Gatos Redevelopment Project Area I-2 Table II-1 Projected Revenues Available for Non -Housing Projects and Activities FY 2009/10 to FY 2013/14 II-6 Table 11-2 Summary of Projected Five -Year Non -Housing Redevelopment Program Expenditures II-7 Table III-1 Housing Production and Affordable Housing Obligation III-4 Table III-2 2009 Santa Clara County Maximum Incomes III-6 Table III-3 Affordable Housing Cost III-6 Table III-4 Projected Revenues Available for Housing Program I1I-9 Table 111-5 Projected Housing Program Expenditures III-10 Table 11I-6 ABAG Regional Fair Share Allocations 2007-2014 III-13 Table III-7 Housing Fund Expenditures Requirement Non -Age Restricted Housing III-14 Table III-8 Low and Moderate -Income Housing Fund Expenditures Targeted by Income 1/1/2002-6/30/2014 III-15 Table 1II-9 Low and Moderate -Income Housing Fund Expenditures Targeted Non -Age Restricted Housing 1/1/2002-6/30/2014 III-15 Appendices Appendix A. Actual Housing Program Expenditures Los Gatos Redevelopment Agency ii Seifel Consulting Inc. Five -Year Implementation Plan FY 2009/10—FY 2013/14 November 2009 I. Introduction This document is the Five -Year Implementation Plan for the Central Los Gatos Redevelopment Project Area (Project Area) administered by the Los Gatos Redevelopment Agency (Agency). The California Community Redevelopment Law (CRL) requires each redevelopment agency administering a redevelopment plan to prepare and adopt a Five -Year Implementation Plan. A public hearing must be held on the Implementation Plan prior to its adoption by the Agency. In addition, the CRL requires an agency to hold,between two and three years after the plan's adoption, a public hearing to review the Implementation Plan and evaluate the agency's progress. The principal goal of this document is to guide the Agency in implementing; its redevelopment programs over the next five years while providing flexibility so it may adjust to changing circumstances and new opportunities. This document outlines the proposed program for revitalization, economic development and affordable housing activities of the Agency for the five-year Implementation Plan period, FY 2009/10 through FY 2013/14. It includes goals, activities, estimates of revenues and expenditures, and a description of how the activities will alleviate blight and meet affordable housing requirements. A. Organization Generally, the Implementation Plan must contain the following information: 1. Goals and objectives for the next five years for both the housing and non -housing activities. 2. Programs and expenditures for the next five years for both housing and non -housing activities. 3. An explanation of how the goals, objectives, programs, and expenditures will assist in the elimination of blight and in meeting affordable housing obligations. 4. Other information related to the provision of affordable housing. Chapter I provides an overview of the CRL requirements, a description of the Project Area and a summary of Agency accomplishments to date. Chapter II includes five-year goals and objectives for the Project Area, the activities and related revenues and expenditures for the next five years, and a description of the blighting conditions and how they will be alleviated by the activities. Chapter III, the Housing Component, addresses affordable housing activities and expenditures and charts the Agency's progress in meeting its affordable housing obligations. Chapter III also includes the Affordable Housing Production Plan and a description of actions the Agency will undertake to fulfill its affordable housing obligations. B. Description of the Redevelopment Plan and Project Area The Central Los Gatos Redevelopment Plan (Redevelopment Plan) was adopted by the Los Gatos Town Council by Ordinance 1882 in November 1991. The Central Los Gatos Redevelopment Project Area consists of 441 acres including the Central Business District, the Civic Center and the Historic Downtown residential neighborhoods. Figure I-1 shows the Project Area. The purpose of establishing the Redevelopment Plan was to provide a financing tool to assist the Town and its residents in repairing damage from the Loma Prieta earthquake and completing Los Gatos Redevelopment Agency 1-1 Seifel Consulting Inc. Five -Year Implementation Plan FY 2009/10—FY 2013/14 November 2009 seismic strengthening and safety programs to ensure the public's safety and welfare. The Redevelopment Project was also intended to be a financing mechanism to assist in alleviating blighting conditions, revitalizing the downtown commercial area and reconstructing deteriorated infrastructure. All rehabilitation and development activities outlined in the Redevelopment Plan must conform to the Town's existing and future planning programs, including the General Plan. The Redevelopment Plan identified the following general categories of public infrastructure, commercial rehabilitation and housing improvement projects to be funded by the Agency: Street reconstruction Alley improvements Improvements to the Downtown - Streetscape improvements - Loans for seismic strengthening - Loans/assistance for geologic investigations and structural analysis - Facade improvements - Parking facilities - Hazardous waste removal • Improvements to community facilities (including library and police facilities) - Structural analysis - Seismic strengthening and repair • Public transit facilities • Assistance to increase and improve the supply of low and moderate income housing Table I-1 provides a summary of the time and fiscal limits of the Redevelopment Plan for the Project Area. Table 1-1 Summary of Existing Time and Fiscal Limits Los Gatos Redevelopment Project Area Ba kground InfoYmation� Total Acres 441 Date of Adoption 11/25/1991 me Lmuts Incurring Debt 11/25/2011 Plan Effectiveness (Project Activities) 11/25/2031 TI Collection/Repayment of Debt 11/25/2041 Eminent Domain omain 12/25/2015 Fnncxal 1inu s 3,�� *��� Tax Increment Cap $250 million Bond Limit $52 million Source: Los Gatos Redevelopment Agency. Los Gatos Redevelopment Agency 1-2 Five -Year Implementation Plan FY 2009/10-FY 2013/14 Seifel Consulting Inc. November 2009 (tf aS m 0- 0 CD to ii .4) L Rf c 0 CO Redeye opmen 1 z C/) IX 0 a(�m O 44 q� 0 PfN� Od -.JAL L7 A C. Agency Accomplishments FY 2004/05—FY 2008/09 Over the past five-year period, the Agency's investments in downtown commercial revitalization, public improvements and facilities, and affordable housing have helped to improve conditions in the Project Area, as well as serve as catalysts for other non -Agency -assisted development. These activities have resulted in the alleviation of blighting conditions in the Project Area and are the foundation for the Agency's efforts for the next five years. The Agency achieved a number of non -housing and housing projects and activities in the Project Area during the last five-year Implementation Plan period, FY 2004/05 through 2008/09, including the following: • Street improvements along Main Street and Santa Cruz Avenue. • Beautification of the Main Street Bridge. • Reconstruction of the Bus Depot (South Side) and Verizon (Montebello) parking lots and installation of wayfmding markers in the Downtown commercial core. • Street and drainage improvements in alleys throughout the Project Area. • Completion of initial planning stages for gateway improvements on N. Santa Cruz Avenue and Wood Road. • Support for local businesses through marketing promotion, business assistance and location assistance. • Annual grants to the Housing Trust of Santa Clara County for increasing the supply of affordable housing in the Town of Los Gatos. • Assistance for affordable housing development for low income seniors in partnership with Senior Housing Solutions. Los Gatos Redevelopment Agency 1-4 Five -Year Implementation Plan FY 2009/10—FY 2013/14 Seifel Consulting Inc. November 2009 II. Fide -Year Redevelopment. Program This chapter describes the five-year Redevelopment Program, including the goals, project and activity descriptions, deficiencies to be corrected, and estimated revenues and expenditures. As they are implemented, the: projects: and activities may be modified to better serve the purposes of redevelopment. The cost estimates: are preliminary and subject to refinement as redevelopment planning and implementation proceed. Some of these projects and activities may not be completed within the next five years, and thus, related costs may not be incurred in the next five years. A. Goals and Objectives The implementation plan provisions of the CRL require the Agency to establish goals and objectives for the Project Area for the five-year planning period. The following major goals and objectives to be pursued by the Agency are the same as those for the overall Redevelopment Program: • The elimination of blighting influences and the correction of environmental deficiencies in the Project Area, including among others, obsolete and aged building types, substandard alleys and inadequate or deteriorated public improvements, facilities and utilities. • The assembly of land into parcels suitable for modern, integrated development with improved pedestrian and vehicular circulation in the Project Area. • The replanning, redesign and development of undeveloped areas, which are stagnant or improperly utilized. • The provision of opportunities for owner and tenant participation in the revitalization of their properties. • The strengthening of retail and other commercial functions in the downtown area. • The strengthening of the economic base of the Project Area and the community by the installation of needed site improvements to stimulate new commercial/light industrial expansion, employment and economic growth. • The provision of adequate land for parking and open spaces. • The establishment and implementation of performance criteria to assure high site design standards and environmental quality and other design elements, which provide unity and integrity to the entire Project Area. • The expansion and improvement of the community's supply of low and moderate income housing. B. Redevelopment Program for FY 2009/10-FY 2013/14 The Agency has been and will continue to undertake projects and activities to alleviate blighting conditions and attain the five-year Redevelopment Program goals. These projects and activities can be categorized into four program categories, as described below: Los Gatos Redevelopment Agency 11-1 Seifel Consulting Inc. Five -Year Implementation Plan FY 2009/10—FY 2013/14 November 2009 1. Downtown Commercial Revitalization Plan An objective of the Redevelopment Program for FY 2009/10 through FY 2013/14 is to continue to implement the Downtown Commercial Revitalization Plan, as funds are available. Projects and activities may include the following: • Continue to implement the Parking Management Program to make better use of existing parking, and identify new parking opportunities and methods of financing new parking facilities. • Provide support for local businesses through marketing promotion, business assistance and location assistance. • Implement a facade grant program. 2. Public Improvements, Facilities and Utilities The Agency has been and will continue to repair or reconstruct damaged, inadequate or deteriorated public improvements, facilities and utilities in the Project Area through the following: • Assist Town in the remodeling and construction of the new Police Operations Building. • Assist Town in funding the conceptual design, entitlement, and construction of new library facility. • Provide gateway projects at Wood Road and South Santa Cruz Avenue. • Reconstruct deteriorated streets. • Improve curbs, gutters and sidewalks: • Underground utilities. • Make Americans with Disabilities Act (ADA) accessibility improvements. 3. Affordable Housing The Affordable Housing Program promotes residential development on vacant and underutilized sites in the Project Area and throughout the Town. Through this program, the Agency will increase, improve and preserve housing affordable to very low, low and moderate income households. Components of this program include assistance for the construction of affordable housing, acquisition of property to be developed for affordable housing, acquisition of affordability covenants, and other housing activities. The Affordable Housing Program is described in greater detail in Chapter III. 4. Agency Administration The Agency will continue to have various administration and operational requirements associated with implementing the above projects and activities. These will include program staff, planning functions and legal and other technical assistance. Los Gatos Redevelopment Agency 11-2 Seifel Consulting Inc. Five -Year Implementation Plan FY 2009/10—FY 2013/14 November 2009 C. Linkage Between Program and Elimination of Blighting Influences The CRL requires that the Implementation Plan provide an explanation of how the goals, objectives, programs, and expenditures for the next five years will serve to eliminate blight in a project area. The five-year Redevelopment Program will continue to improve the Project Area and alleviate remaining blighting conditions. This section describes how deficiencies will be corrected by the projects and activities proposed for the five-year period. The Project Area was established prior to the adoption of the current blighting condition definitions, as amended by SB 1206 in 2006. As such, this section describes remaining blight in the Project Area under the blight definitions that were in effect at the time of project area adoption, as well as under current defmitions. 1. Blighting Conditions in the Project Area a. Unsafe and Unhealthy Buildings The Project Area contains numerous public, commercial and residential buildings that do not meet current public safety codes due to lack of seismic reinforcement and age. A survey conducted in 1991 showed that 30 percent of the 1,200 buildings in the Project Area had significant deficiencies, and a minimum of 280 homes in the Project Area were constructed prior to 1900. In addition, areas exist within the Project Area that have poorly maintained commercial and residential buildings, some of which cannot be used and necessitate significant code enforcement oversight. b. Conditions Hindering Viable Use of Buildings or Lots The Central Business District, which forms the core of the Project Area, is primarily characterized by small lots under separate ownership. These small lots are of inadequate size to meet current retail standards. Further, the majority of businesses located in this area do not have adequate on -site parking. The 1989 Loma Prieta earthquake caused significant damage to streets, sidewalks, water lines and storm drains. The heaviest damage in the Town occurred in the Project Area. For example, the Almond Grove neighborhood required substantial street reconstruction due to earthquake damage and age. The Project Area also contains alleys, which are inadequately paved and require drainage improvements to prevent flooding. The storm drains in the Project Area also require reconstruction to prevent flooding. In addition, the Project Area has facilities that do not comply with the ADA, creating unsafe conditions for disabled persons. The Project Area contains irregularly shaped lots with limited access. These lots prevent viable commercial or residential uses and development opportunities. c. Inadequate Public Improvements The Project Area contains inadequate infrastructure resulting from deterioration and insufficient capacity. The deficiencies necessitate improvement and reconstruction of streets, sidewalks, storm drains, water lines, sewer lines, undergrounding utilities, electrical upgrades and conduit upgrades. Los Gatos Redevelopment Agency II-3 Seifel Consulting Inc. Five -Year Implementation Plan FY 2009/10—FY 2013/14 November 2009 The Project Area also suffers from inadequate community facilities. For example, there is no performing arts center, and the library, police and neighborhood center facilities are too small to meet the needs of Project Area residents. 2. How the Agency's Proposed Goals, Objectives, Programs and Expenditures Will Eliminate Blighting Conditions The Agency's proposed five-year goals, objectives, programs and expenditures will help eliminate the remaining blighting influences in the Project Area. The ongoing improvements of public facilities and utilities, such as the Police Operations Building and the new library building, will signal to the private sector the Town's commitment to improving the Project Area.' These projects will have a significant positive impact on the residents and businesses and enhance the competitiveness of the Project Area. This program makes evident the Town's continuing interest in making the Project Area a better place to live, work and conduct business. The projects and activities that will improve the deteriorated conditions of streets, sidewalks and curbs in the Downtown will create safer and more pleasant conditions for both vehicular and pedestrian traffic. The Downtown Commercial Revitalization Plan projects and activities remove existing impediments to the development and expansion of Downtown commercial facilities. The projects and activities will also address the current lack of parking through the implementation of the Parking Management Program. The expansion of the affordable housing program will allow the Agency to continue to provide increased affordable housing opportunities for Los Gatos residents through assistance for newly constructed units, acquisition of property for the development of affordable housing, purchase of affordability covenants, and the provision of a loan program for secondary dwelling units. The Agency's Housing Fund will be utilized throughout the Project Area and the Town. Chapter III presents the Housing Program in more detail. D. Five -Year Implementation Plan Revenues Over the next five years, the Agency will undertake those activities that can be financially supported by its revenue stream. The Agency's revenue sources include annual tax increment revenues, other Agency income and non -Agency fmancial resources.' 1. Annual Tax Increment Revenues Tax increment revenues totaling approximately $41 0 million generated during the five-year Implementation Plan period will be used for the Housing Fund, pass -through payments, debt service payments, Town loan repayments, and Agency administration. As shown in Table II-1, ' While the Police Operations Building is not located within the boundaries of the Project Area, the Agency has made a finding that this project would benefit and help alleviate blight in the Project Area. 2 All historical and projected revenues and expenditures in this document are expressed in future value dollars, also referred to as nominal dollars. Los Gatos Redevelopment Agency 11-4 Five -Year Implementation Plan FY 2009/10—FY 2013/14 Seifel Consulting Inc. November 2009 the tax increment revenues that remain after the Agency has met its obligations will be used for non -housing projects and activities.' 2. Other Agency Income The Agency receives additional revenues from interest income. Approximately $0.3 million in other Agency income is projected during the five-year Implementation Plan period. 3. Non -Agency Financial Resources Wherever possible, the Agency has been and will continue to leverage other funds in connection with its redevelopment efforts. The Agency has targeted local, state and federal funding sources to assist in financing eligible projects. As permitted by law, possible funding sources include government grants and assistance programs, as well as private sector sources. To a limited extent, the Town's development impact fees generated from new development may be a source of public infrastructure and facilities funding when feasible. The Agency will also pursue funds from federal programs including CDBG and HOME funds, in addition to state and county funds. 4. Revenues Available for Non -Housing Program As indicated on Table II-1, the Agency is projected to receive approximately $41 0 million in gross tax increment revenues during the five-year Implementation Plan period. After deducting obligations including the Housing Fund deposits, pass -through payments, County property tax administration fee, debt service payments and other loan payments, and Agency administration costs, the Agency will have available approximately $4.3 million in net tax increment available for non -housing expenditures during the five-year Implementation Plan period. After taking into account the Agency's year-end balance for FY 2008/09 and other Agency income, the total funds available for non -housing projects and activities over the five-year period is $16.2 million. 3 With a continuing major budget deficit in FY 2009/10, in late July 2009 the State Legislature approved and the Governor signed into law AB 26 4x, which seeks to require that redevelopment agencies contribute a statewide total of $1.7 billion in FY 2009/10 and an additional $350 million in FY 2010/11 to a new ERAF-related fund (called "Supplemental ERAF" or "SERAF") to meet the State's educational funding obligations. The constitutionality of these State takeaways from redevelopment agencies is currently being challenged in court. This latest budget legislation, if held constitutional, would require the Agency to contribute to the SERAF approximatdly $2.2 million in FY 2009/10 and an additional $0.5 million in FY 2010/11. As such, the Agency's net funds for non -housing projects and activities over the Implementation Plan period would be reduced by the SERAF payment amounts. Los Gatos Redevelopment Agency 11-5 Seifel Consulting Inc. Five -Year Implementation Plan FY 2009/10—FY 2013/14 November 2009 Los Gatos Redevelopment Agency Total O O rh O 'd' 69 O O CT N 00 64 I $ 32,835,000 I 0 O oO ON 00" 69 $ 493,000 $ 4,648,000 $ 750,000 O O ,m-, cri 69 $ 4,314,000 I $ 323,000 0u,, 0 t` be ,t 69 a_ FY 2013/2014 o 0 0 V) 00 69 $ 1,713,000 O 0 0 � CO "O 64 o 0 0 Ln CS M 69 O 0 0 0 .-, 69 $ 930,000 0 0 0 r( ,-. 64 $ 787,000I $ 931,000 000'99 $ O 0 0 rn ON 64 O 0 0 00 rt r~ 69 FY 2012/2013 0 0 0 o`oo m 00 64 0 00 0 t. \O ,--1 69 0 O 0 t- \. 69 $ 3,870,000 0 0 o 0 ,-, 64 $ 932,000 O 000• 0 0r ,- 69 0 Q. VD t� 69 0 Q. rn 00 00 0 0 Q. 0 64 $ 956,000 0 0 0 00 rr to r. 69 FY 2011/2012 000`50Z`8 $ 0 0 cF lO ,--- 69 0 0 VD VI '0 69 CO 0 l� m 69. 0 0 ON 69 $ 928,000 0 O I ,-, 69 $ 742,000 0 o V CO 64 $ 65,000 $ 933,000 0 0 N N d ti 00 FY 2010/2011 O O O 00 69 0 O 0 64 $ 6,424,000 $ 3,698,000 0 0 ON 69 $ 927,000 CO O () 64 $ 720,000 0 O cn 69 O O b 69 $ 896,000 0 0 a N en r-4 69 FY 2009/2010 CO• O t-- Vl t. 69 0 O ,-+ t'- VI „ 69 O 0 CO N 'O 69 $ 3,620,000 0 0 V O\ 00 0 0 ,--, m Cr)0 64 0 0 O VI 69 0 0 G\ ON 64 0 0 N Cs l� 69 0 O m 000 SS $ 855,000 $ 12,400,000 Fund Balance through FY 2008/09 ,�` S- 7. t F 4i"S tf , Yi ji -s ems- s2 ." in r-1 69 Gross Tax Increment' Less: Housing Set -Aside` Tax Increment for Non -Housing Projects and Activities Less: Pass -through Payments Less: County Administration Fee Less: COP Debt Service Less: Town Loan Repayment' Less: Non -Housing Agency Administration Subtotal: Net Tax Increment for Non -Housing Projects and Activities Additional Revenues: Other Sources` Net Funds for Non -Housing Projects and Activities Cumulative Funds for Non -Housing Projects and Activities Source: Los Gatos Redevelopment Agency, Seifel Consulting Inc. E. Five -Year Implementation Plan Expenditures' Table II-2 summarizes estimated non -housing program expenditures during the five-year Implementation Plan period. The nature and scope of the activities and expenditures have been shaped primarily by the Agency goals and objectives for the Project Area, available revenues for funding projects and activities, and blighting conditions to be eliminated within the Project Area. The projected expenditures on Agency non -housing projects and activities included in Table II-2 represent an estimate based on reasonable assumptions regarding potential tax increment revenues over the next five years and are organized by the Redevelopment Program activities. Table 11-2 Summary of Projected Five -Year Non -Housing Redevelopment Program Expenditures FY 2009/10—FY 2013114 Los Gatos Redevelopment Agency Non -Housing Program Category and Project Description Projected Agency Expenditures FY 2009/10 - FY 2013/14a Downtown Commercial Revitalization Plan <No Anticipated Projects> $0 Public Improvements, Facilities and Utilities Police Operations Building $264,000 Library Facility (COP Debt Service Payments)" $6,000,000 Almond Grove Concrete Rehabilitation $78,000 S. Santa Cruz/Wood Gateway $65,000 Subtotal $6,407,000 Unanticipated Opportunities (at approx. 12% of subtotal) $769,000 Total $7,176,000 a. The listed expenditures represent RDA expenditures only and may not represent the complete cost of each project. b. Represents total debt service payments for five year peiod on a $14 million COP issue. Note: All values are rounded to the nearest $1,000. Source: Los Gatos Capital Improvement Program 2009-2014, Los Gatos Redevelopment Agency, E. Wagner & Associates, Inc., Seifel Consulting Inc. 4 All historical and projected revenues and expenditures in this document are expressed in future value dollars, also referred to as nominal dollars. Los Gatos Redevelopment Agency 11-7 Seifel Consulting Inc. Five -Year Implementation Plan FY 2009/10-FY 2013/14 November 2009 III. Housing Component According to the CRL, the housing portion of the Implementation Plan is required to set forth housing goals and objectives for the five-year Implementation Plan period (FY 2009/10 through FY 2013/14), present estimates of Housing Fund deposits and describe potential projects and estimated expenditures planned for the five-year Implementation Plan period. The CRL also requires the housing portion to explain how the stated goals, objectives, deposits, programs, projects, and expenditures will produce affordable housing units to meet CRL obligations. In addition, an implementation plan must include the following affordable housing planning components: • The Housing Production Plan, including the number of affordable and total housing units estimated to be produced for two time periods: — Ten year compliance period, and — Over the life of the Redevelopment Plan. • Identification of proposed locations for replacement housing that the Agency would be required to produce if a planned project results in the destruction of existing affordable housing. • A description of the Agency's affordable housing expenditures and activities over the previous five-year Implementation Plan period. • The amount available in the Housing Fund, estimates of annual deposits into the Housing Fund during the five-year Implementation Plan period and the Agency's plans for using the annual deposits to the Housing Fund. • The Affordable Housing Program, with estimates of the number of new or rehabilitated price -restricted affordable housing units to be assisted by the Housing Fund during each of the five years. • A description of how the Affordable Housing Program will implement the Housing Fund expenditure targeting and other requirements. • For plans that are within six years of completion of project activities, a detailed description of how the Agency will meet its affordable housing production and expenditure targeting obligations prior to termination of the plan. Pursuant to state law, the Agency is guided by the Town's adopted and certified General Plan Housing Element. The Agency intends to implement all relevant goals, policies, strategies, and programs from the Housing Element, as generally described in this chapter. A. Housing Production Plan and Affordable Housing Obligation This section constitutes the Housing Production Plan for the Agency's ten-year housing compliance period and over the life of the Project Area. It includes estimates of housing production subject to the affordable housing production requirement and the Agency's strategy for meeting its affordable housing production obligation. The Project Area was established after 1976 and is therefore subject to the affordable housing production requirement. When new dwelling units are developed in a project area by public or private entities other than the agency or when housing is substantially rehabilitated in a project area by public or private entities with agency assistance, the CRL requires that at least 15 percent Los Gatos Redevelopment Agency III-1 Five -Year Implementation Plan FY 2009/10—FY 2013/14 Seifel Consulting Inc. November 2009 of these units be affordable to very low, low or moderate income households. Of those units, at least 40 percent must be affordable to very low income households.' Units produced toward the Agency's affordable housing production obligation are also required by the CRL to have affordability covenants restricting their use to affordable housing for a specified time period. Over the life of the Redevelopment Plan, the duration requirements for affordability covenants have changed. Currently, affordability covenants are to be in place for no less than 55 years for rental units and 45 years for owner -occupied units to meet CRL housing productionrequirements. Units counted towards the Agency housing production obligation and regulatory agreements reflect these changes to state law. The Agency's affordable housing production requirement must be satisfied in the aggregate for the ten-year compliance period as well as over the life of the Redevelopment Plan. Consequently, the Housing Production Plan is organized to keep track of both historical and projected housing production for the following time periods: • Through FY 2003/04 • FY 2004/05 through FY 2013/14 • Over the life of the Redevelopment Plan 1. Historical Housing Production, Obligation and Compliance (Through FY 2003/04) The Agency has met and exceeded its affordable housing production requirements through FY 2003/04. The Agency reports that 120 housing units were developed or substantially rehabilitated in the Project Area from the inception of the Redevelopment Plan in FY 1991/92 through FY 2003/04, as shown in Table III-1. The housing obligation, as defined by the CRL, requires that of the 120 housing units produced through FY 2003/04, 18 must be affordable units (15 percent), of which 8 units (40 percent) must be affordable to very low income households. Through FY 2003/04, 55 affordable units were developed, of which 27 were made affordable to very low income households.' 2. Ten -Year Production, Obligation and Compliance (FY 2004/05 through FY 2013/14) The Agency anticipates that it will meet its affordable housing production requirement for the ten-year compliance period. As shown in Table Ill-1, the Agency estimates 41 housing units will be developed or substantially rehabilitated in the Project Area during the current compliance period. Based upon this forecast, the Agency will have an obligation to ensure production of ' For agency -produced housing units, the CRL inclusionary housing obligation requires at least 30 percent of all new or substantially rehabilitated housing units to be available at affordable housing cost to persons and families of very low, low or moderate income. Of those units, at least 50 percent must be affordable to very low income households. This requirement applies only to units developed by an agency and does not apply to units developed by housing developers pursuant to agreements with an agency. The Agency has not directly developed housing in the past, nor does it have plans to do so in the future: Therefore, the Agency does not have an affordable housing production requirement of 30 percent with respect to agency -developed housing. 6 Affordable units developed inside the Project Area count on a one -for -One basis; affordable units developed outside the Project Area count on a two -for -one basis. All affordable units produced were within the Project Area boundaries. Los Gatos Redevelopment Agency III-2 Seifel Consulting Inc. Five -Year Implementation Plan FY 2009/10—FY 2013/14 November 2009 7 affordable units, of which 3 must be affordable to very low income households. The Agency estimates that 37 housing units affordable to very low, low and moderate income households will be produced. Of these, 4 units are anticipated to be affordable to very low income households. Therefore, the Agency is expected to exceed its affordable housing production obligation during the current compliance period. 3. Production, Obligation and Compliance over the Life of the Redevelopment Plan The Agency has evaluated the potential for future housing production in the Project Area through the end of the Redevelopment Plan. Based on historical housing development and trends in the Project Area, the Agency estimates that a total of 243 units will be constructed within the Project Area over the life of the Redevelopment Plan. Table TTT-1 summarizes the units projected to be produced through the end of the Redevelopment Plan. Based on the projection of 243 housing units, the Agency will have an obligation to ensure 37 units (15 percent) are affordable to very low, low and moderate income households. Of these, 15 units (40 percent) must be available at affordable housing cost to very low income households, as shown in Table III-1. The Agency anticipates that over the life of the Redevelopment Plan, 166 housing units affordable to very low, low and moderate income households will have been developed, and of these, 39 units will be affordable to very low income households. Thus, the Agency expects that it will meet and exceed its affordable housing production obligations over the life of the Redevelopment Plan. 4. Agency's Plan to Meet Its Affordable Housing Obligation The Agency has supported, and plans to continue to support increasing, improving and preserving the supply of affordable housing within the Project Area. The Agency plans to meet and exceed its obligation through Agency assistance for affordable housing development, negotiated inclusionary requirements with housing developers, and affordability covenant purchases of rental and ownership housing units. Anticipated future projects will continue the Agency's compliance over the current ten-year compliance period and through the remaining life of the Redevelopment Plan. Los Gatos Redevelopment Agency III-3 Seifel Consulting Inc. Five -Year Implementation Plan FY 2009/10—FY 2013/14 November 2009 d ca cis 0 V C o N a'a 0 cp▪ a • O O O w • d d - fl •a cn O C u) O O a7 O 0 tw d G O H O a" cn N 4-1 N Nl 0 M N N FY 2013/14a N 00 N ti z CRL Affordable Housing Obligation M 00 CO 0 0 Very Low, Low and Moderate Affordable Housing Production 0 Cr) 1-1 O M o\ 0 Very Low, Low and Moderate •b b ' 0 g aan O U G 000 UO N U O O b ca d , Q W O g O + F" • bA U CO 5 o N —0; md.' O 0, O �O a) o a,w • ca No 4-, ▪ ybA W 'd .i ... cd O W • cV Oa'C vO o - a w9vo0 • O O\ U G ,a- eno 5 U O. Ne` • O 0 a) O v • i. -0 • b0 'o Cr)4. Cc) tea) o o ' a, 'o a' o • �, al cu a) -d f• a. Oz a) p • U O ▪ Q 4-+• • 0 O Iy O O O • ++ U a) I r OOa) U_ n n=iR U 'b U 'b s. a ▪ . o . C Q' p 'p GL ▪ cd ro O '_' w a) .�"�. b COC O O 5 cd O. •O s: . m au • U • U ,-.. b�rA 4'"' O bA O 'A (I) • y ▪ O b C co0 › O b a) a) e", -. Up N o a) N ow `� cd 0 a-,0 O ..0 45, O gyp,, 0 m Fr)O" ,.O N • f� ▪ 2 CO +• '-1- O y O g a▪ O 5O g c ,z. 1/40 V) a) >+ U y 'd • b `� 'd gl) 9„ ,9 • O P. Q 44-4 o y r�' O 44-1 a'' • • o 0 0 CO cn o¢ ▪ QHz 2.5z o1:4 z cv .a ci 'U ai 4-4 Source: Los Gatos Redevelopment Agency, Seifel Consulting Inc. CV CJ LL i rn 0 A N 0 >- =u_, 0) Q CL o c eli a E Q E o a41 N 4) J 1 B. Replacement Housing The Agency did not have any replacement obligations during the last five-year Implementation Plan period and has no plans to destroy or remove any residential units housing low or moderate income persons. As the Agency does not expect the displacement of any households in the next ten years, it does not expect to incur an obligation to replace any units. In the event that the removal of housing were to become a necessity in the future, the Town and Agency would follow all state requirements for replacement housing and relocation, and make every effort to relocate persons as close as possible to their current place of residence. C. Low and Moderate -Income Housing Fund The CRL requires an agency to set aside 20 percent of its annual tax increment revenues into the Housing Fund for the purpose of increasing, improving and preserving the community's supply of affordable housing.' The primary funding source for the Agency's affordable housing activities during the Implementation Plan period will be the Housing Fund. The Agency will also seek to combine its Housing Fund revenue with other funding sources devoted to the provision of affordable housing to maximize the number of affordable units that can be developed or rehabilitated with available Housing Funds. Another potential source of local funding available for housing is the Town's Below Market Price Program In -Lieu Fee Fund. Federal funding sources include HOME Investment Partnership funds and Community Development Block Grants (CDBG). The Agency's nonprofit partnerships allow the Town to leverage local funds with other outside sources, such as the California Housing Finance Agency (Ca1HFA), the California Department of Housing and Community Development (HCD), the low income Housing Tax Credit program, and private investments. The history, status and estimated future level of deposits to the Housing Fund are described below. 1. Income Levels and Affordable Housing Costs Agencies are required to expend their Housing Fund moneys to assist very low, low and moderate income households, generally defined as: • Very Low Incomes: Up to 50 percent of area median income, adjusted for household size; • Low Incomes: From 50 percent up to 80 percent of area median income, adjusted for household size; and • Moderate Incomes: From 80 percent up to 120 percent of area median income, adjusted for household size. ' The CRL requires the placement and recordation of affordability controls on any new or substantially rehabilitated housing assisted by Housing Fund moneys. As of January 1, 2002, the controls are as follows: for rental housing, the assisted housing must remain affordable for 55 years, and for owner -occupied housing, the units must remain affordable for 45 years. Los Gatos Redevelopment Agency III-5 Seifel Consulting Inc. Five -Year Implementation Plan FY 2009/10—FY 2013/14 November 2009 Table III-2 shows the maximum income limits for each income level by household size, published in 2009 by HCD utilizing income limits prepared by the U.S. Department of Housing and Urban Development (HUD) for Santa Clara County. Table III-2 2009 Santa Clara County Maximum Incomes By Income Category and Household Size Los Gatos Redevelopment Agency Income Category Household Size 1 2 3 4 5 6 7 8 Extremely Low $22,300 125,500- $28,650 $31,850 $34,400 $36,950 $39,500 $42,050 Very Low $37,150 $42,450 $47,750 $53,050 $57,300 $61,550 $65,800 $70,050 Low $59,400 167,900"' '' $76,400 $84,900 $91,650 $98,450 $105,250 $112,050 Median $73,850 $84,400 $94,950 $105,500 $113,950 $122,400 1130,800 $139,250 Moderate $88,600 1101,300_ $113,950 $126,600 $136,750 $146,850 $157,000 $167,100 Source: U.S. Departmen of Housing and Urban Development, issuedby State of California Department of HCD Apri12, 2009. Housing assisted by the Housing Fund must be available to and occupied by low and moderate income households at an affordable liousing cost in accordance with the CRL. The affordable housing cost definitions presented in: Table III-3 apply. Table III-3 Affordable Housing Cost Los Gatos Redevelopment Agency Income Level Rental Housings Ownership Housing % Income Spent on Housin g % of Area median Income a % Income Spent on Housingb % of Area median Income Very Low 30% 50% 30% 50% Low 30% 60% -30%c 70% Moderate 30% 110% 35W 110% a. Rental housing costs include rent and utility allowance. b. The CRL requires HCD median income figures published by HCD, and not HUD, to be utilized. In many instances, this causes CRL-restricted rents to be lower than HOME rents and low income housing tax credit rents. In the instance a project receives Housing Fund and HOME or tax credit assistance, the owner must comply with all applicable legal requirements and the lower CRL- restricted rents will prevail. Median income and thus affordable housing costs differ based on number of persons in household. c. With optional higher housing cost linked to actual income at upper end of income category. Source: CRL Sections 50052.5 and 50053(b). Los Gatos Redevelopment Agency III-6 Seifel Consulting Inc. Five -Year Implementation Plan FY 2009/10-FY 2013/14 November 2009 As an illustration, a four -person household with an annual income of less than $84,900 (80 percent of AMI) qualifies for low income housing in the Project Area, as shown in Table III-2. The maximum rent the family would pay for their rental unit, as shown in Table III-3, would be 30 percent of 60 percent of AMI, or $18,990 per year, including an allowance for utilities. 2. Housing Fund Revenues and Expenditures During the Previous Implementation Plan Period The Agency has made deposits to the Housing Fund in an amount not less than 20 percent of the cumulative tax increment revenue allocated to the Agency. The Housing Fund balance is approximately $8 4 million at the end of FY 2008/09. CRL Section 33490(a)(2)(C)(iv) requires that agencies report the amounts of Housing Fund moneys utilized to assist units affordable to, and occupied by, extremely low-income, very low- income and low-income households during the previous Implementation Plan period. In addition, agencies must indicate the number, location and level of affordability of units newly constructed with other locally controlled governmental assistance (but without Agency assistance). Finally, agencies must also report on the amount of Housing Fund moneys utilized to assist housing units not restricted to seniors (non -age restricted housing), and the number, location, and level of affordability of those units. During the previous Implementation Plan period the Agency spent roughly $3.0 million from the Housing Fund to support housing for very low income households and $0.5 million for low income households.' The number, location and level of affordability of units constructed with Housing Fund assistance during the previous Implementation Period are shown in Appendix A. No affordable housing units were constructed with other (non -Agency) locally controlled governmental assistance and without Agency assistance during the previous Implementation Plan period. Roughly $1.5 million was spent during the previous Implementation Plan period to support non -age restricted housing, as shown in Appendix A. The number, location, and level of affordability of those units are shown in Appendix A. 3. Estimated Revenues During the Implementation Plan Period The Agency plans to continue to deposit funds from its Project Area into the Housing Fund. Based on the Agency's projections, the Agency estimates that the cumulative deposit of tax increment revenue into the Housing Fund between FY 2009/10 and FY 2013/14 will be $8 2 million as shown in Table III-4. After accounting for other revenues, the Agency will have approximately $17.7 million available for its Housing Program through FY 2013/14, including the current balance in the Housing Fund as of July 1, 2009. 8 As income and age -restricted targeting requirements went into effect on January 1, 2002 and the first ten year compliance period begins on this date, figures reported here for the past Implementation Plan period include 2002 through the end of FY 2008/09. The Agency did not assist any extremely low income units during this period. Los Gatos Redevelopment Agency III-7 Seifel Consulting Inc. Five -Year Implementation Plan FY 2009/10—FY 2013/14 November 2009 4. Estimated Expenditures During the Implementation Plan Period To carry out the Agency's Affordable Housing Program described below in Section D, the Agency estimates expenditures for housing activities and housing administration costs of approximately $17.7 million, as shown in Table III-5. Projected tax increment revenues over the next five years and the current Housing Fund balance will be sufficient to cover the Agency's planned housing expenditures during the Implementation Plan period. The Agency plans to spend its Housing Fund as required by the CRL and as described below in Section D below. The Agency will make every effort to encourage the development of housing affordable to a variety of income levels and needs. By combining various funding sources, and in partnership and collaboration with others dedicated to the development of affordable housing, the Agency is confident it will be able to meet its housing expenditure obligations. Los Gatos Redevelopment Agency III-8 Seifel Consulting Inc. Five -Year Implementation Plan FY 2009/10—FY 2013/14 November 2009 E l0 L 2 d 0) N 0 L 0) t6 cc 7/1 40 'o CL FY 2009/10 to FY 2013/14 Los Gatos Redevelopment Agency Total 0 O O N 00 64 $ 1,020,000 CD O N N GS . ` == 74,1 FY 2013/14 O O O O O O O O O O O O cn oo N N r-+ l O N N a\ N VD .—I ,--I ti 69 00 64 69 M r1 O O 000`90Z $ O O O O N H O N N N \p M 00 00 1. to N PT-( 69 69 6l9 FY 2011/12 O O O O O O O O O O O O .--, ' r N vi 00. N 000 - , 0rj H 69 6S 69 HS FY 2010/11 O O O O O O O O O O O O \O N 00 t-Z O 1/4.O O N O 00 N O ry b4 69 64 00 FY 2009/10 O $ 200,000 O O — 61 N N .-� v.: t� N ,--4 - p '-( 64 64 69 Fund Balance through FY 2008/09 00 f� y3 7r _�4 00 Go Housing Fund Deposits' Additional Revenues" Funds Available for Affordable Housing Program Cumulative Source: Los Gatos Redevelopment Agency, Seifel Consulting Inc. rn Housing Fund Expenditures Total 0 0 0 0 O 0 0 0 0 0,0 0 0 0 0 0 0 0 .� 0., 0 0 0 ,-i et 0 0 0 vi M 0 0 0 N 01 N .--t 69 O'N 00 0 N O. N 1- 0Vj 64 00 64 1•••1 69 64 r1 69 FY 2013/14 0 0 0 0 O 0 O 64 69 64 0 0 0 0 0 0. O O 00 00 N 0. N N 't 40 N N 64 N 64 00 00 1M•1 $0 00 609 0 O $419,000 0 N O O O .-I O 00 •7 00 et N ‘to N w N 00 N 0 0 00 FY 2011/12 0 0 0 0 0 0 0 64 6A 64 0 0 0 N O 0 00" N 0 0 r <F O 0 er b N N 6' N 64 69 6R FY 2010/11 0 0 0 0 0 0 0 64 64 64 0 0 O 0 O 0 O 0 00 V' N 00 e. N 0', M 0, et 4O Cs) 64 00 00 FY 2009/10 0 0 0 0 0 0 O 0 0 0 E3 00 0 0 0 0 0 O M M 0 ES. 0 ' "4 to 0 CO M CS 0 69 69 AS 00 00 Number of Units by Targeting 0) Iu= I TBD A q 011'y 0 O az " ai' dm a E+ E■x=" Total Affordable I TBD TBD . I At least 37 n=t a :z Moderate Income en O M (a CC) $ . (-' E - Low Income 27 I TBD Q At least 30 01 CO Very Low Income TBD I TBD At least 4 Project Name Ditto's Lane 224 W. Main Street Housing Trust of Santa Clara County Other Agency -assisted housing° 0 a Housing Administration Costs `° 0 ci 0 E- Source: Los Gatos Redevelopment Agency, Seifel Consulting Inc. D. Affordable Housing Program During the five-year Implementation Plan period, the Agency will concentrate on housing activities that are most applicable to the Agency's goals and objectives in order to increase, improve and preserve the supply of affordable housing. In developing its Affordable Housing Program, the Agency has been guided by the goals, policies and programs of the Town's HCD-certified Housing Element. The Town's Housing Element is incorporated into this Implementation Plan by this reference. The goals stated in the Town's Housing Element are:9 • Expand the choice of housing opportunities for all economic segments of the community through a variety of housing types and sizes, including a mixture of ownership and rental housing. • Preserve existing residential opportunities and encourage additional residential use that is compatible with the neighborhood and community. • Preserve the existing affordable housing stock. • Ensure that all persons have equal access to housing opportunities. • Retain and expand affordable housing opportunities for seniors. • Mitigate Town governmental constraints to affordable housing development. • Encourage residential construction that promotes green building and energy conservation practices. • Provide adequate management and staffing of affordable housing funds and programs. The Agency is committed to creating affordable housing that assists the Town in achieving the goals presented in the Housing Element, as permitted under the CRL. In August 2009, the Town adopted the Affordable Housing Strategy to guide the Town and Agency in the use of the Below Market Price Program's In -Lieu Fee Fund and Housing Fund revenues for affordable housing projects and activities. This Implementation Plan also incorporates the strategies and recommendations outlined in the Affordable Housing Strategy. The Agency recognizes the important role of the Affordable Housing Program and its activities in its overall Redevelopment Program. Consequently, the proposed Affordable Housing Program should be viewed not simply as the means of implementing the Agency's stated goals and objectives related to affordable housing, but as a key element in its overall blight alleviation and revitalization efforts. 1. Proposed Affordable Housing Activities The Agency plans to target its Housing Fund to provide affordable housing units for the changing needs of the community. The Housing Fund will be utilized in conjunction with other funding sources, such as the Town's Below Market Price Program's In -Lieu Fee Fund and state and federal funds. These various funding sources will be used to serve very low, low and moderate income households based on the community's fair share of regional housing needs as determined by the Association of Bay Area Governments and the Agency's determination and prioritization of the community's housing needs. 9 Town of Los Gatos Draft Housing Element Update (2009). Los Gatos Redevelopment Agency III-11 Seifel Consulting Inc. Five -Year Implementation Plan FY 2009/10—FY 2013/14 November 2009 As presented in the Town's Affordable Housing Strategy, the Agency's proposed affordable housing activities during the Implementation Plan period may include: • Issue Notice of Funding Availability (NOFA) for Multifamily Housing • Create a Property Acquisition Fund • Purchase Affordability Covenants in Existing Apartments and New Housing Developments • Provide Zero Interest Loans for Secondary Dwelling Units • Provide Grants to the Housing Trust of Santa Clara County 2. Affordable Housing Assisted by Housing Fund Over the Implementation Plan period, the Agency expects to take advantage of opportunities as they arise and to initiate actions as necessary to facilitate the development of and preserve housing affordable to households whose basic needs are not being met by the private sector. All Agency actions and expenditures will be consistent with the CRL, the Town's Housing Element and the Town's Affordable Housing Strategy. As articulated in the Affordable Housing. Strategy, the Agency intends to spend a significant portion of its Housing Fund revenues by FY 2013/14. Table III-5 presents the housing units to be assisted by the Housing Fund over the Implementation Plan period. In FY 2009/10, the Agency will provide funding assistance for the development of at least 37 affordable housing units on potential development sites identified by Agency staff. The number of units that will be assisted during the other fiscal years of the Implementation Plan period are unknown at this time. The tenure mix of the new units may vary, but all units will be affordable to very low, low and moderate income families, as projected in Table III-5. During the Implementation Plan period, the Agency has plans to invest Housing Fund money in two particular development projects located in the Project Area. The Agency has provided land acquisition assistance for Dittos Lane, a 32-unit housing development that will be affordable to very low and low income households.10 This project will demolish an existing blighted building as well as address challenging site access issues. The Agency also has plans to redevelop 224 W. Main Street as a mixed use project with six affordable housing units and a parking facility to help alleviate the parking needs of the commercial district in Downtown Los Gatos. In addition, the Agency anticipates providing a grant to the Housing Trust of Santa Clara County to use the funds to produce affordable housing in the Town of Los Gatos, as in previous years. It should be noted that several factors may result in estimated expenditures and unit production being either less than or greater than what is projected during the Implementation Plan period and for any given year. These factors include the timing of the development process, the levels of Housing Fund revenues and availability of other public assistance, development opportunities, land availability, the cost of construction material and labor, the availability and cost of fmancing, neighborhood acceptance, environmental issues/concerns, and other issues. to This project includes 31 affordable units and one manager's unit. Los Gatos Redevelopment Agency III-12 Seifel Consulting Inc. Five -Year Implementation Plan FY 2009/10—FY 2013/14 November 2009 3. Housing Fund Targeting Requirement The CRL imposes Housing Fund expenditure requirements based on the proportion of unmet need for housing affordable to households of very low, low and moderate incomes. It also limits the percentage of Housing Fund expenditures that can be spent on age -restricted housing. These targeting obligations must be met over the 10-year compliance period. However, the initial period for meeting this requirement is January 1, 2002, the date the targeting requirement became effective, through the 10-year compliance period. The following sections describe in greater detail the Agency's requirements to target the Housing Fund expenditures by income need and non -age restricted housing. a. Targeting According to Income Need Agencies must target the use of Housing Fund moneys to specific income levels in proportion with the community's need for very low, low and moderate income housing. The regional fair share housing need allocation must be used to determine the targeting obligation. The Association of Bay Area Governments (ABAG) has determined the affordable housing need for the Town of Los Gatos in its regional fair share allocation for 2007 through 2014. Table III-6 shows the fair share allocation applicable to the Agency for housing affordable to persons at or below 120 percent of median income. Table III-6 ABAG Regional Fair Share Allocations 2007-2014 Affordable Housing Need by Income Category Town of Los Gatos Income Group and Relation to County Median Income Total Housing Units Needed Expenditure Percentage Need by Income Level Very Low (0-50%) 154 At least 41% Low Income (51-80%) 100 At least 27% Moderate (81-120%) 122 No more than 32% Total 376 100% Source: ABAG Final Regional Housing Needs Allocation (May 2008), Seifel Consulting Inc. As Table Ill-6 indicates, the Agency is required to expend Housing Fund moneys in the following proportions: at least 41 percent for units affordable to very low income households, at least 27 percent for units affordable to low income households, and no more than 32 percent on housing affordable to moderate income households. However, the Agency is entitled to expend a disproportionate amount of the funds for very low income households, and to subtract a commensurate amount from the low and/or moderate income thresholds. Similarly, the Agency can provide a disproportionate amount of funding for low income housing by reducing the amount of funds allocated to housing affordable to moderate income households. In no event can the expenditures targeted to housing affordable to moderate income households exceed the threshold amount (32 percent). Los Gatos Redevelopment Agency III-13 Five -Year Implementation Plan FY 2009/10-FY 2013/14 Seifel Consulting Inc. November 2009 b. Targeting to Non -Age Restricted Housing In addition to the requirement outlined above, as of January 1, 2002, a_defined minimum percentage of Housing Fund moneys must be spent on housing available to all persons regardless of age. This minimum was originally defined as the share of a community's population under the age of 65 compared to the total population. In Los Gatos, this was 85 percent, as 24,208 of Los Gatos' 28,592 residents were under 65 according to the 2000 U.S. Census. In 2005, the CRL was amended to modify the method of determining the minimum percentage of Housing Fund moneys spent on non -age restricted housing. This minimum is equal to the percentage of Los Gatos's low income households with a member under age 65, as reported in the most recent US Census as compared to all low income households. The 2000 Census indicates that 58 percent of the Town's low income households have a householder under 65 years of age." (Refer to Table III-7.) Thus, the Agency must expend at least 58 percent of its funds on housing that does not impose age restrictions on residents. This targeting obligation must be met over the compliance period. Table III-7 Housing Fund Expenditures Requirement Non -Age Restricted Housing Town of Los Gatos Age Targeting' Low Income Households" Expenditure Percentage At least 58% No more than 42% Non Age -Restricted Housing Age -Restricted Housing - 2,216 1,580 Total 3,796 100% a. "Non age -restricted housing" is housing that is not designated for senior housing. b. Includes households earning 80% or less of AMI based on limits published by HCD in 2000. Based on Census data showing household income by householder age. Source: 2000 U.S. Census, HCD Income Limits 2000. c. Agency Compliance with.Targeting Requirements The Agency will monitor Housing Fund expenditures in order to ensure compliance with the expenditure requirements through the end of the compliance period in 2014 based on income need levels outlined in ABAG's fair share housing allocations as well as non -age restricted housing. Tables III-8 and III-9 show that the Agency's actual and anticipated expenditures from January 1, 2002 through the end of the compliance period meet the targeting requirements of the CRL. As Table III-8 shows, the Agency will target most of its Housing Fund money to assist in the development of very low and low income housing in the Project Area. Over the compliance period ending in 2014, the Agency will have targeted 44 percent of its Housing Fund ii The Census does not report low-income household information according to the age of household members, but rather identifies households by the age of the householder. Los Gatos Redevelopment Agency III-14 Seifel Consulting Inc. Five -Year Implementation Plan FY 2009/10-FY 2013/14 November 2009 expenditures to assist very low income households and 36 percent to assist low income households. Thus, the Agency expects to meet the expenditure targeting requirements by income. Table III-8 Low and Moderate -Income Housing Fund Expenditures Targeted by Income 1/1/2002-6/30/2014 Los Gatos Redevelopment Agency Income Targeting 1/1/2002-6/30/2009 7/1/2009-6/30/2014 Over Comp lance Period CRL Required Target LMIIHF Expenditures' Percent Targeted LIVILHP Expenditures" Percent Targeted LMTH Expenditures Percent Targeted Very Low S3,046,000 73.0% S6,568,000 37% S9,614,000 44% At least 41% Low S460,000 11.0% S7,333,000 41% S7,793,000 36% At least 27% Moderate S665,000 15.9% S3,775,000 21% S4,440,000 20% No more than 32% Total $4,171,000 100 % $17,676,000 100 % $21,847,000 100% 100 % a. Includes Agency actual expenditures as shown in Appendix A b. Includes Agency projected expenditures as shown in Table lII 5. Note: Numbers rounded to the nearest thousand. Source: Los Gatos Redevelopment Agency, Seifel Consulting Inc. As Table I1I-9 shows, the Agency will spend significant funds to assist the development of non -age restricted housing in the Project Area. Between July 1, 2009, and the end of the compliance period, the Agency will target the majority of its Housing Fund expenditures on housing units that are not restricted to senior households. In so doing, the Agency expects to meet the expenditure targeting requirements for non -age restricted housing. Table III-9 Low and Moderate -Income Housing Fund Expenditures Targeted by Non -Age Restricted Housing 1/1/2002-6/30/2014 Los Gatos Redevelopment Agency Age Targeting 1/1/2002-6/30/2009 7/1/2009-6/30/2014 Over Compliance Period CRL Required Target LMIHP Expenditures' Percent Targeted L�1tHF Expenditures' Percent Targeted LMIRF Expenditures Percent Targeted Age -restricted housing $2,642,000 63% $1,119,000 6% $3,761,000 17% No more than 42% Non -age restricted housing $1,529,000 37% $16,557,000 94% $18,086,000 83 % At least 58% Total $4,171,000 100 % $17,676,000 100 % $21,847,000 100 % 100 % a. Includes Agency actual expenditures as shown in Appendix A. b. Includes Agency projected expenditures as shown in Table III-5. Note: Numbers rounded to the nearest thousand. Source: Los Gatos Redevelopment Agency, Seifel Consulting Inc. The Agency plans to meet its income and non -age restricted housing targeting requirements from January 1, 2002 through the end of the 10-year compliance period. E. Completion of Housing Obligations The CRL requires that the Agency comply with and fulfill its affordable housing responsibilities, including housing fund, replacement housing, and affordable housing production responsibilities, over the 10-year compliance periods and prior to the expiration of the time limit on redevelopment plan effectiveness. A redevelopment project cannot be terminated if an agency has not complied with its affordable housing obligations. The law further requires that for a Redevelopment Project that is within six years of reaching its limit on plan effectiveness, the Los Gatos Redevelopment Agency III-15 Seifel Consulting Inc. Five -Year Implementation Plan FY 2009/10—FY 2013/14 November 2009 Implementation Plan needs to address the ability of the agency to comply with its housing responsibilities. This FY 2009/10 through FY 2013/14 Implementation Plan is not required to address this issue because the plan effectiveness time limit will not be reached until November 25, 2031. Los Gatos Redevelopment Agency III-16 Seifel Consulting Inc. Five -Year Implementation Plan FY 2009/10-FY 2013/14 November 2009 Appendix A: Actual Housing Program Expenditures Expenditure Targeting Distribution Non Age Restricted O0 69 69 so I O 69 O 69 EA 0 O M EA M 69 0 - O GS a N EA Total'. Expenditure 0 0 O O m 69 cr 0 O C. 6A O 0 O N C 69 0 -0 O �. •--+ 69 $0 CD 0 69 $455,000 0 0 EA 'O O C EA'-"' p p r as FA 'O .�i M. Moderate Income 509 609 EA 000`SL$ 0 60 0 9 E9 $24,000 C O O 69 0 O h EA 0 O Vi 69 O E O C — 0 .a 0 EA 0 EA 0 EA 000`SL$ ' 0 0 69 O 69 0 Op CO0 EA $83,000 $377,000 0 0 O V Very Low Income o 0-+ fA kD 6N9 N 6A 0 000'09$ 6EA 0 0 0 N9 6 0 0 O f9 O en Number of Units Assisted for Targeting Non Age Restricted .--i 0 0 \O tr 's' d7 V H Total Affordable a y. ff N Moderate Income 0 o O cn m ' , } Low Income Very Low Income ig= 0 Ecz V 2003 2003 Future Future 2003 w .:! In Project Area? Yes I °N z >. z No Varies Expenditure Description Agency Expenditures Habitat for Humanity E y o w Anne Way 224 W. Main Street L 0 'O 0 0 W cn cr 0 F a E c Blossom Hills Anne Ways w. 4 o 0 (Agency Housing Administration Costs' Total Housing Program Expenditures 0 Source: Los Gatos Redevelopment Agency, Town of Los Gatos Donor Report Overview to HTSCC (as of 2/11/2009), Seifel Consulting Inc.