04 Staff Report - Very Low-Income Senior Housingow N aF MEETING DATE: 6101/09
ITEM NO: j
CONSENT I
!ps GAZES
REDEVELOPMENT AGENCY AGENDA REPORT
DATE: May 26, 2009
TO: CHAIR AND MEMBERS OF THE REDEVELOPMENT AGENCY
FROM: GREG LARSON, TOWN MANAGER/EXECUTIVE DIRECTOR
SUBJECT: ADOPT RESOLUTION AUTHORIZING THE EXECUTIVE
DIRECTOR TO APPROVE AN AMENDMENT TO THE GRANT
AGREEMENT WITH SENIOR HOUSING SOLUTIONS INCREASING
THE COMMITMENT OF REDEVELOPMENT HOUSING FUNDS TO
$922,700 FOR THE ACQUISITION AND DEVELOPMENT OF FIVE
UNITS OF VERY LOW-INCOME SENIOR HOUSING.
RECOMMENDATION:
Adopt resolution (Attachment 5) authorizing the Executive Director to approve an
amendment to the Grant Agreement with Senior Housing Solutions (SHS) increasing the
commitment of Redevelopment housing funds to $922,700 for the acquisition and
development of five units of very low-income senior housing.
BACKGROUND:
On December 3, 2007, the Town of Los Gatos Redevelopment Agency (RDA) Board
approved a funding commitment of $777,700 to SHS to purchase and rehabilitate a home
in Los Gatos to create five units of senior housing. The five rooms would be rented to
very low-income seniors whose incomes are $1,000 per month or less. Details are
contained in the December 3, 2008 Agency staff report (Attachment 1).
On April 7, 2008, the RDA Board reviewed a request from SHS for an additional $55,000
(for a total of $832,700 commitment) modification of the terms of the loan. The RDA
Board also directed staff to negotiate the loan documents. Details are contained in the
Agency staff report (Attachment 2).
(Continued on page 2)
PREPARED BY: '`Wendie R. Rooney, Deputy Executive Director
Reviewed by: Assistant Town Manager/Deputy Director Town
AttoTey/General Counsel Clerk Administrator/Secretary n Finance
V Community Development
. PAGE 2-
MAYOR AND TOWN COUNCILICHAIR AND MEMBERS OF THE
REDEVELOPMENT AGENCY
SUBJECT: ADOPT RESOLUTION AUTHORIZING AN AMENDMENT TO GRANT
AGREEMENT WITH SENIOR HOUSING SOLUTION INCREASING
COMMITMENT OF FUNDS FOR FIVE UNITS OF VERY LOW-INCOME SENIOR
HOUSING.
May 26, 2009
On May 19, 2008, the RDA Board approved the increased funding commitment of
$55,000 to SHS, modified the terms of the loan, and approved a Revocable Grant
Agreement, Regulatory Agreement and Declaration of Restrictive Covenants, and Deed
of Trust. Details are contained in the Agency staff report (Attachment 3).
SHS has acquired the property and awarded the bid for the rehabilitation of the home
located at 185 Anne Way. Two changes impacting the project budget occurred. First, the
rehabilitation costs are higher than previously projected, which raised the project budget
by $36,093 plus an additional ten percent for estimated change orders ($25,609). Second,
SHS would like to install solar panels on the home which raised the budget by $34,893,
leaving a total funding gap of $96,595.
DISCUSSION:
1. Request from Senior Housing Solutions:
SHS requests that the RDA Board increase its funding commitment for their project
by $90,000 from $832,700 to $922,700 to fill the majority of the aforementioned
shortfall. SHS's revised pro forma includes funding from the following sources
(Attachment 4):
Town of Los
County
Housing
Senior
TOTAL
Gatos
CDBGCIHome
Trust
Housing
Program
Solutions
$922,700*
$150,000
$455,000
$35,610
$1,563,310
*Includes the existing commitment of $832,700 plus the SHS request for an additional
$90,000
In order to amend the grant to SHS, staff is requesting the RDA Board direct staff to
amend the existing Revocable Grant Agreement.
2. General Terns of the Revocable Grant Agreement:
The general terms of the existing Revocable Grant Agreement are as follows:
Loan/revocable grant does not have a specific repayment date.
Grant is repayable upon sale of the property or default on any of .the RDA
conditions.
• Units must be rented to seniors that qualify as a Very Low Income Household
until loan is repaid.
PAGE 3
MAYOR AND TOWN COUNCIL/CHAIR AND MEMBERS OF THE
REDEVELOPMENT AGENCY
SUBJECT: ADOPT RESOLUTION AUTHORIZING AN AMENDMENT TO GRANT
AGREEMENT WITH SENIOR HOUSING SOLUTION INCREASING
COMMITMENT OF FUNDS FOR FIVE UNITS OF VERY LOW-INCOME SENIOR
HOUSING.
May .26, 2009
• Preference is given to seniors that live or work in Los Gatos.
The grant will be repayable upon sale of the property or default on the Agency's
requirements. Should default occur, the repayment of the grant will be required in
addition to interest equivalent of five percent per year from the date of the loan.
Should the grantee act in a manner inconsistent with any of the grant documents, the
Agency can call the loan and initiate foreclosure.
At this stage in the funding process, this request is only for a commitment of funding
from the RDA. RDA staff would then proceed to amend the existing Revocable
Grant Agreement with SHS, which would be brought back to the RDA Board for
approval.
3. Consistency-with Flaps:
This request is consistent the following Town plans as summarized below:
• General Plan Housing Element: The Housing Element and Housing Element
Appendix acknowledge the need for housing at various affordability levels and
for senior housing. The Element states that population of seniors in the Town will
increase 90 percent from 2000 to 2020.
® Redevelopment Plan and Redevelopment Law: State Redevelopment Law and
the Redevelopment Plan require the expenditure of 20% of redevelopment tax
increment revenues for affordable housing. The funding of the SHS request will
fall within the timeframe required by State law for expenditure of moiues from
the Los Gatos RDA's Housing Fund.
• Redevelopment Implementation Plan: These funds would target low-income
households as encouraged by the Implementation Plan and State Redevelopment
Law.
The Plan and State law require that a minimum of 84.7% of the RDA Housing
Fund expenditures target non-age restricted housing within the implementation
period of 2002-2014. With approval of the subject loan, the RDA would be
required to spend a minimum of roughly $6,800,000 on non-senior housing.
When evaluating requests for RDA or Below Market Rate Program funds, staff
generally uses the guide of expending approximately $200,000 per unit. The SHS
additional funding request for five units is within this guideline. Moreover, as
noted above, the Agency has considerable funding available for both age
PAGE 4
MAYOR AND TOWN COUNCIL/CHAIR AND MEMBERS OF THE
REDEVELOPMENT AGENCY
SUBJECT: ADOPT RESOLUTION AUTHORIZING AN AMENDMENT TO GRANT
AGREEMENT WITH SENIOR HOUSING SOLUTION INCREASING
COMMITMENT OF FUNDS FOR FIVE UNITS OF VERY LOW-INCOME SENIOR
HOUSING.
May 26, 2009
restricted and non-age restricted funding and projects an additional $1,2 million in
revenues in this and future fiscal years. Consequently, staff finds that the request
for $90,000 additional funds can be supported.
CONCLUSION:
The revised request is consistent with State Redevelopment Law and the Redevelopment
Plan. An increased funding commitment of $922,700 to Senior Housing Solutions will
facilitate a five unit, very low-income senior housing project. The project would be
funded with RDA's. Housing Funds that must be spent on affordable housing projects.
The facility would utilize an existing house in Los Gatos and is anticipated to be
operational in approximately six months.
ENVIRONMENTAL ASSESSMENT:
Is not a project defined under CEQA, and no further action is required. A categorical
exemption will need to be granted when the Agency Board considers the final loan
agreements.
FISCAL IMPACT:
Funding for this $922,700 request would come from the Redevelopment Agency Housing
Fund. The Fund has a current balance of approximately $7.2 million.
Attachments:
1. Agency staff report of December 3, 2007 (attachments not included)
2. Agency staff report of April 7, 2008 (attachments not included)
3. Agency staff report of May 19, 2008 (attachments not included)
4. Senior Housing Solutions proforma
5. Resolution
Distribution:
Bob Campbell, Senior Housing Solutions, 512 Valley Way, Milpitas, CA 95035
N:IDEVCNCLRPTS120091srhousingsolutions060109,d6c
11D+NN o,MEETING DATE: 1213107
ITEM NO:
ion,~s COUNCIL/AGENCY AGENDA REPORT
s c At
DATE: November 27, 2007
TO: CHAIR AND MEMBERS OF THE REDEVELOPMENT AGENCY
FROM: PAMELA S. JACOBS, INTERIM EXECUTIVE DIRECTOR
SUBJECT: DIRECT STAFF TO NEGOTIATE AN AGREEMENT TO LOAN
$777,700 OF REDEVELOPMENT AGENCY LOW AND MODERATE
INCOME HOUSING FUND MONIES TO SENIOR HOUSING
SOLUTIONS TO ACQUIRE AND REHABILITATE A HOME TO
PROVIDE FIVE UNITS OF VERY LOW-INCOME SENIOR
HOUSING.
RECOMMENDATION:
Direct staff to negotiate an agreement to loan $777,700 of Redevelopment Agency Low
and Moderate Income Housing Fund monies to Senior Housing Solutions to acquire and
rehabilitate a home to provide five units of very low-income senior housing.
BACKGROUND:
1. Low and Moderate Income Housing Fund:
Under California Redevelopment Law, 20 percent of all redevelopment tax increment
revenues must be set-aside in a separate account to be used for the purposes of
affordable housing. These funds can only be used to retain or increase the supply of
affordable housing in the community.
The Town of Los Gatos Redevelopment Agency (RDA) currently has a balance of
roughly $6.5 million in its Housing Fund. Redevelopment Law requires that an
agency expend- or-encumber the money in its housing fund- within specified
timeframes. Specifically, housing fund amounts that exceed the aggregate amount
deposited into the housing fund during the preceding four fiscal years is deemed to be
"excess surplus." Agencies have three years in which to expend their excess surplus
PREPARED BY: Bud N. Lortz, Deputy Executive Director
NADEV\CNCL.RFTS1200713rhousino solutions 120307.doc
Reviewed by: Assistant Town Manager/Deputy Director Town
Attorney/General Counsel Clerk Administrator/Secretary Finance
Community Development
ATTACHMM 1
PAGE 2
CHAIR AND MEMBERS OF THE REDEVELOPMENT AGENCY
SUBJECT: COMMITMENT TO LOAN REDDEVELOPMENT HOUSING FUNDS
TO SENIOR HOUSING SOLUTIONS FOR ACQUISITION AND
REHABILITATION OF SENIOR HOUSING
November 27, 2007
housing funds. Under the excess surplus requirements, the RDA must encumber
$519,000 from its Housing Fund by July 1, 2008.
2. Senior Housing Solutions:
Senior Housing Solutions (SHS) was formerly called Project Match. Their mission is
to provide affordable housing to very low income seniors with annual incomes of less
than $12,000. SHS typically purchases an existing single family home which it
rehabilitates to provide four or five senior housing units/bedrooms. Under their
program, each senior is provided with an independent bedroom while the other living
spaces are shared. SHS currently provides 42 units of senior housing in nine single
family homes in Santa Clara County.
In 2003, the Town Ioaned SHS (then Project Match) roughly $262,000 to purchase
and rehabilitate a home in Los Gatos. The loan led to the purchase of the home at
14390 Blossom Hill Road.
DISCUSSION:
1. Request from SHS:
SHS requests $777,700 of support from the Town to purchase and rehabilitate a
second home in Los Gatos for five units of senior housing (Attachment 1). The five
rooms would be rented to very low-income seniors whose incomes are $1000 per
month or less.
SHS proposes to fund this project from the following sources:
Town of Los
County
Housing
Senior
TOTAL
Gatos
CDBG/Home
Trust
Housing
Pro ram
Services
$777,700
$450,000
$100,000
$4,700
$1,332,400
When SHS has secured a financing commitment from the Town, they will submit
applications to the County and the Housing Trust to obtain funding from those
agencies. SHS targets May 2008 to secure all funding for the project. Subsequently,
SHE will purchase a home and proceed with rehabilitation and conversion of the
home to a senior residence. They hope to have the home complete in December 2008
with full rental by March 2009. A more detailed schedule is attached to their letter
(Attachment 1).
PAGE 3
CHAIR AND MEMBERS OF THE REDEVELOPMENT AGENCY
SUBJECT: COMMITMENT TO LOAN REDDEVELOPMENT HOUSING FUNDS
TO SENIOR HOUSING SOLUTIONS FOR ACQUISITION AND
REHABILITATION OF SENIOR HOUSING
November 27, 2007
2. General Terms of Loan and Agreements:
At this stage in the funding process, this request is only for a commitment of funding
from the RDA. RDA staff would then proceed to draft the formal agreements with
SHS, which would be brought back to the RDA Board for approval.
Staff proposes that this loan mirror the terms contained in the previous loan to Project
Match approved by the RDA Board in 2003. Those terms are summarized as
follows:
■ Loan term of 99 years at which time the loan will be due and payable in full or the
property would revert back to the Town.
■ 3% interest rate with deferred payments for the term of the loan.
■ Units must be rented to seniors that qualify as a Very Low Income Household.
Affordability restrictions will run for the 99-year period.
■ Preference is given to seniors that live or work in Los Gatos.
These terms are similar to those used by other cities that have funded SHS projects.
3. Selection of Property:
Once SHS has secured all its financing, it can search for and enter into a contract to
purchase a suitable home in Los Gatos. Typically, SHS tries to locate a home that
can be modified to provide five bedrooms. Given the cost of housing near Downtown
in the Redevelopment Project Area, it is likely that the home will be outside of the
Project Area. When the RDA Board reviews the loan documents and agreements,
staff will also include a resolution with findings to allow for Redevelopment Housing
Funds to be expended outside of the Project Area, as allowed by Redevelopment
Law.
When SHS has purchased a home, it will obtain building permits for any
rehabilitation work. No conditional use permit is required, as State law preempts
local government from regulating group homes of six or fewer individuals. However,
SHS does coriTticf substantial outreach to tFie nexghboihood-iia which the project Will
be located and the projects are generally well received once neighbors understand
seniors will occupy the home.
PAGE 4
CHAIR AND MEMBERS OF THE REDEVELOPMENT AGENCY
SUBJ`ECT: COMMITMENT TO LOAN REDDEVELOPMENT HOUSING FUNDS
TO SENIOR HOUSING SOLUTIONS FOR ACQUISITION AND
REHABILITATION OF SENIOR HOUSING
November 27, 2007
4. Consistency with Plans:
This request is consistent the following Town plans as summarized below:
General Plan Housing Element: The Housing Element and Housing Element
Appendix acknowledge the need for housing at various affordability levels and
for senior housing. The Element states that population of seniors in the Town will
increase 90 percent from 2000 to 2020.
Redevelopment Plan and Redevelopment Law: State Redevelopment Law and
the Redevelopment Plan require the expenditure of 20% of redevelopment tax
increment revenues for affordable housing. The funding of the SHS request will
fall within the timeframe required by State law for expenditure of monies from
the Los Gatos RDA's Housing Fund.
Redevelopment Implementation Plan: These funds would target low-income
households as encouraged by the Implementation Plan and State Redevelopment
Law.
The Plan and State law require that a minimum of 84.7% of the RDA Housing
Fund expenditures target non-age restricted housing within the implementation
period of 2002-2014. With approval of the subject loan, the RDA would be
required to spend a minimum of roughly $6,800,000 on non-senior housing. Staff
sees no issues with this amount given the current Housing Fund balance of
roughly $6.2 million and roughly $1.2 million in revenues deposited into the fund
annually in this and future fiscal years.
CONCLUSION:
A funding commitment of $777,700 to Senior Housing Solutions will facilitate a five
unit, very low-income senior housing project. The project would be funded with monies
from the RDA's Housing Fund that must be spent on affordable housing projects. The
facility would utilize an existing house in Los Gatos and is anticipated to be operational
in roughly one year. If this commitment is -authorized, staff will return with the necessary
agreements for Board approval in early 2008.
ENVIRONMENTAL ASSESSMENT:
Is not a project defined under CEQA, and no further action is required. A categorical
exemption will need to be granted when the Agency Board considers the final loan
agreements.
PAGE 5
CHAIR AND MEMBERS OF THE REDEVELOPMENT AGENCY
SUBJECT: COMMITMENT TO LOAN REDDEVELOPMENT HOUSING FUNDS
TO SENIOR HOUSING SOLUTIONS FOR ACQUISITION AND
REHABILITATION OF SENIOR HOUSING
November 27, 2007
FISCAL IMPACT:
Funding for this $777,700 request would come from the Redevelopment Agency Housing
Fund. The Fund has a current balance of approximately $6.5 million.
Attachments:
Letter from Senior Housing Solutions
Distribution:
Bob Campbell, Senior Housing Solutions, 512 Valley Way, Milpitas, CA 95035
N:\DEVICNCLRPTS120071sr housing solutions 120307.doc
ovtn aF MEETING DATE: 417108
ITEM NO:
{y~wn
io .•05 COUNCIL/AGENCY AGENDA REPORT
S G pt
DATE: March 31, 2008
TO: MAYOR AND TOWN COUNCIL/CHAIR AND MEMBERS OF THE
REDEVELOPMENT AGENCY
FROM: GREG LARSON, TOWN MANAGER/EXECUTIVE DIRECTOR
SUBJECT: INCREASE A PREVIOUS COMMITMENT TO LOAN $777,700 OF
REDEVELOPMENT AGENCY LOW AND MODERATE INCOME
HOUSING FUND MONIES TO $832,700 FOR SENIOR HOUSING
SOLUTIONS TO ACQUIRE AND REHABILITATE A HOME TO
PROVIDE FIVE UNITS OF VERY LOW-INCOME SENIOR
HOUSING, MODIFY THE TERMS OF THE LOAN, AND DIRECT
STAFF TO NEGOTIATE THE LOAN DOCUMENTS
RECOMMENDATION:
Increase a previous commitment to loan $777,700 of Redevelopment Agency Low and
Moderate Income Housing Fund monies to $832,700 for Senior Housing Solutions to
acquire and rehabilitate a home to provide five units of very low-income senior housing,
modify the term of the loan, and direct staff to negotiate the loan documents.
BACKGROUND:
On December 3, 2007, the Town of Los Gatos Redevelopment Agency (RDA) Board
approved a funding commitment of $777,700 to Senior Housing Solutions (SHS) to
purchase and rehabilitate a home in Los Gatos for five units of senior housing. The five
rooms would be rented to very low-income seniors whose incomes are $1000 per month
or less. Details are contained in the Council/Agency Staff Report for that meeting
(Attachment 1). At that time SHS presented a pro forma budget of $1,332,400 which
assumed the purchase price of a single family home to be $965,000.
Two changes impacting the project budget have occurred. First, the acquisition and
rehabilitation costs are higher than previously projected which raised the project budget
by roughly $110,000 to $1,442,595. Second, SHS was able to obtain only $150,000 of
funding through the Santa Clara County CDBG program rather than $450,000 as shown
in the pro forma, leaving a total funding gap of $410,000.
PREPARED BY: Bud N. Lortz, Deputy Executive Director
Reviewed by: Assistant Town Manager/Deputy Director Tawn
Attorney/General Counsel Cleric Administrator/Secretary Finance
Community Development
ATTACMffiNT 2
PAGE 2
MAYOR AND TOWN COUNCIL/CHAIR AND MEMBERS OF THE
REDEVELOPMENT AGENCY
SUBJECT: INCREASE A PREVIOUS COMMITMENT TO LOAN $777,700 OF
REDEVELOPMENT AGENCY LOW AND MODERATE INCOME
HOUSING FUND MONIES TO $832,700 FOR SENIOR HOUSING
SOLUTIONS
March 31, 2008
To assist SHS in addressing the funding gap, staff worked with the Housing Trust of
Santa Clara County to increase their investment in the project by $350,000 to a tptal of
$450,000. This represents the balance of funds that the Town has contributed to the
Housing Trust.
With the increased investment from the Housing Trust, the shortfall is roughly $60,000.
SHS will invest an additional $5,000 of its own funds in the house, leaving a remaining
shortfall of $55,000.
DISCUSSION:
1. Request from Senior Housing Solutions:
SHS requests that the RDA Board increase its funding commitment for their project
from $777,700 to $832,700 to fill the remaining shortfall. SHS's revised pro forma
includes now includes funding from following sources (Attachment 2):
Town of Los
county
Housing
Senior
TOTAL
Gatos
CDBG/Home
Trust
Housing
Pro ram
Services
$832,700
$150,000
$450,000
$9,895
$1,442,595
SHS has made an offer to purchase a single family home in Los Gatos. The offer
contains a financing contingency which expires on April 17, 2008.
2. General Terms of Loan and Agreements:
At this stage in the funding process, this request is only for a commitment of funding
from the RDA. RDA staff would then proceed to draft the formal agreements with
SHS, which would be brought back to the RDA Board for approval.
At the previous-RDA Board meeting, staff proposed that this loan mirror the terms
contained in the previous loan to Project Match approved by the RDA Board in 2003.
Those terms are summarized as follows:
■ Loan term of 99 years at which time the loan will be due and payable in full or the
property would revert back to the Town.
■ 3% interest rate with deferred payments for the term of the loan:
■ Units must be rented to seniors that qualify as a Very Low Income Household.
PAGE 3
MAYOR AND TOWN COUNCILICHAIR AND MEMBERS OF THE
REDEVELOPMENT AGENCY
SUBJECT: INCREASE A PREVIOUS COMMITMENT TO LOAN $777,700 OF
REDEVELOPMENT AGENCY LOW AND MODERATE INCOME
HOUSING FUND MONIES TO $832,700 FOR SENIOR HOUSING
SOLUTIONS
March 31, 2008
■ Preference is given to seniors that live or work in Los Gatos.
SHS has requested that the loan term be modified. They propose a loan/revocable
grant that does not have a specific repayment date, but would be repayable upon sale
of the property or default on any of the Town's conditions, SHS states this type of
funding would eliminate the impact of a deferred loan on their balance sheet by
eliminating the annual accrued interest liability. This approach continues to ensure
that SHS re-pay the Town including interest upon sale or default. SHS also states
they are willing to designate this property as. affordable housing in perpetuity if the
Town is willing to finance the project with the revocable grant. The City of Campbell
recently used a similar financing vehicle for a project in their jurisdiction.
3. Consistency with Plans:
This request is consistent the following Town plans as summarized below:
General Plan Housing Element: The Housing Element and Housing Element
Appendix acknowledge the need for housing at various affordability levels and
for senior housing. The Element states that population of seniors in the Town will
increase 90 percent from 2000 to 2020.
E Redevelopment Plan and Redevelopment Law: State Redevelopment Law and
the Redevelopment Plan require the expenditure of 20% of redevelopment tax
increment revenues for affordable housing. The funding of the SHS request will
fall within the timeframe required by State law for expenditure of monies from
the Los Gatos RDA's Housing Fund.
Redevelopment Implementation Plan: These funds would target low-income
households as encouraged by the Implementation Plan and State Redevelopment
Law.
The Plan and State law require that a minimum of 84.7% of the RDA Housing
Fund expenditures target non-age restricted housing within the implementation
period of 2002-2014. With approval of the subject loan, the RDA would be
required to spend a minimum of roughly $6,800,000 on non-senior housing. Staff
sees no issues with this amount given the current Housing Fund balance of
roughly $6.2 million and roughly $1.2 million in revenues deposited into the fund
annually in this and future fiscal years.
PAGE 4
MAYOR AND TOWN COUNCIL/CHAIR ANa MEMBERS OF THE
REDEVELOPMENT AGENCY
SUBJECT: INCREASE A PREVIOUS COMMITMENT TO LOAN $777,700 OF
REDEVELOPMENT AGENCY LOW AND MODERATE INCOME
HOUSING FUND MONIES TO $832,700 FOR SENIOR HOUSING
SOLUTIONS
March 31, 2008
CONCLUSION:
The revised request is consistent with State Redevelopment Law and the Redevelopment
Plan. An increased funding commitment of $832,700 to Senior Housing Solutions will
facilitate a five unit, very low-income senior housing project. The project would be
funded with monies from the RDA's Housing Fund that must be spent on affordable
housing projects. The facility would utilize an existing house in Los Gatos and is
anticipated to be operational in roughly one year. If this commitment is authorized, staff
will return with the necessary agreements for Board approval.
ENVIRONMENTAL ASSESSMENT:
Is not a project defined under CEQA, and no further action is required. A categorical
exemption will need to be granted when the Agency Board considers the final loan
agreements.
FISCAL IMPACT:
Funding for this $832,700 request would come from the Redevelopment Agency Housing
Fund. The Fund has a current balance of approximately $6.5 million.
Attachments:
1. Council/Agenda Staff Report for the meeting of December 3, 2007
2. Senior Housing Solutions Budget
Distribution:
Bob Campbell, Senior Housing Solutions, 512 Valley Way, Milpitas, CA 95035
N:IDEVICNCLRPTS120081sr housing solutions 040708.doc
ow of MEETING DATE: 5119108
ITEM NO:
's COUNCIL/AGENCY AGENDA REPORT
~g GASH
DATE: May 15, 2008
TO: MAYOR AND COUNCIL MEMBERS
CHAIR AND MEMBERS OF THE REDEVELOPMENT AGENCY
BOARD
FROM: GREG LARSON, TOWN MANAGER/EXECUTIVE DIRECTOR
SUBJECT: ADOPT CONCURRENT RESOLUTION OF TOWN COUNCIL/
REDEVELOPMENT AGENCY APPROVING GRANT OF
REDEVELOPMENT HOUSING FUNDS TO SENIOR HOUSING
SOLUTIONS (IS5 ANNE WAY)
RECOMMENDATION:
Adopt concurrent resolution approving grant of Redevelopment housing funds to Senior
Housing Solutions.
BACKGROUND:
On December 3, 2007, the Town of Los Gatos Redevelopment Agency (RDA) Board
approved an increased funding commitment of $832,700 to Senior Housing Solutions
(SHS) to purchase and rehabilitate a home in Los Gatos for five units of senior housing.
The five rooms would be rented to very low-income seniors whose incomes are $1,000
per month or less. Details are contained in the Council/Agency Staff Report for that
meeting (Attachment 1). The RDA Board had previously committed $777,700 to SHS
(Attachment 2).
DISCUSSION:
1. Grant Documents:
SHS is in contract to purchase a home at 185 Anne Way in Los Gatos. This is
currently a four bedroom home of which SHS will undertake an interior remodel to
create a fifth bedroom. The funding sources for the purchase and rehabilitation of the
home are shown in the following chart.
PREPARED BY: BUD N. LORTZ,
DEPUTY EXECUTIVE DIRECTOR
Reviewed by: Assistant Town Manager/Deputy Director Town
Attorney/Gencral Counsel Clerk Administrator/Secretary Finance
Conununity Development
ATTACHAiENT 3
PAGE 2
MAYOR AND TOWN COUNCIL MEMBERS/CHAIR AND MEMBERS OF THE
REDEVELOPMENT AGENCY BOARD
SUBJECT: ADOPT A RESOLUTION APPROVING GRANT DOCUMENTS FOR
THE SENIOR HOUSING SOLUTIONS PROJECT
May I5, 20,08
Town of Los
County
Housing
Senior
TOTAL
Gatos
CDBG/Home
Trust
Housing
Pro ram
Services
$832,700
$150,000
$450,000
$9,895
$1,442,595
In order to finalize the grant to SHS, staff is requesting RDA Board approval of three
documents that have been prepared by Goldfarb & Lipman, outside RDA counsel, in
conjunction with staff'.
• Revocable Grant Agreement
• Regulatory Agreement and Declaration of Restrictive. Covenants
• Deed of Trust
As stated in the previous staff report, the general terms of the grant documents are as
follows:
• Loan/revocable grant does not have a specific repayment date.
• Grant is repayable upon sale of the property or default on any of the RDA
conditions.
• Units must be rented to seniors that qualify as a Very Low Income Household
until loan is repaid.
• Preference is given to seniors that live or work in Los Gatos.
The grant will be repayable upon sale of the property or default on the Agency's
requirements. Should default occur, the repayment of the grant will be required in
addition to interest equivalent of five percent per year from the date of the loan.
Should the grantee act in a manner inconsistent with any of the grant documents, the
Agency can call the loan and initiate foreclosure.
2. Occupancy Requirements:
The-units will be made available to senior 62 years of age or older. The residents of
the units must qualify as very low-income, meaning they will make less than 50% of
the median county income. These requirements are contained in the Regulatory
Agreement and will be in effect in perpetuity, even if the Agency's grant is repaid.
PAGE3
MAYOR AND TOWN COUNCIL MEMBERS/CHAIR AND MEMBERS OF THE
REDEVELOPMENT AGENCY BOARD
SUBJECT: ADOPT A RESOLUTION APPROVING GRANT DOCUMENTS FOR
THE SENIOR HOUSING SOLUTIONS PROJECT
May 15, 2008
3. Location of Horne:
The Anne Way property is located outside of the Central Los Gatos Redevelopment
Project Area. Given the cost of housing within the Redevelopment Area, it is
infeasible for SHS to purchase a home within the RDA boundaries. State law allows
the use of RDA Housing Funds to be used outside of the Redevelopment area with
the adoption of the finding contained in the attached resolution (Attachment 3). No
discretionary permit, such as a conditional use permit, is required as State law
preempts local government from regulating senior group homes with six or fewer
individuals.
4. Consistency with Plans:
This request is consistent with the following Town plans as summarized below:
• General Plan Housing Element: The Housing Element and Housing Element
Appendix acknowledge the need for housing at various affordability levels and
for senior housing. The Element states that population of seniors in the Town will
increase 90 percent from 2000 to 2020.
• Redevelopment Plan and Redevelopment Law: State Redevelopment Law and
the Redevelopment Plan require the expenditure of 20% of redevelopment tax
increment revenues for affordable housing. The funding of the SHS request will
fall within the timeframe required by State law for expenditure of monies from
the Los Gatos RDA's Housing Fund.
Redevelopment Implementation Plan: These funds would target low-income
households as encouraged by the Implementation Plan and State Redevelopment
Law.
The Plan and State law require that a minimum of 84.7% of the RDA Housing
Fund expenditures target non-age restricted housing within the implementation
period of 2002-2014. With approval of the subject loan, the RDA would be
required to spend a minimum of roughly $6,800,000 on non-senior housing. Staff
sees no issues with this amount given the current Housing Fund balance of
roughly $6.2 million and roughly $1.2 million in revenues deposited into the fund
annually in this and future fiscal years.
CONCLUSION:
Approval of the grant documents will implement the RDA Board's funding commitment
to SHS of $832,700. The request is consistent with State Redevelopment Law and the
PAGE 4
MAYOR AND TOWN COUNCIL MEMBERS/CHAIR AND MEMBERS OF THE
REDEVELOPMENT AGENCY BOARD
SUBJECT: ADOPT A RESOLUTION APPROVING GRANT DOCUMENTS FOR
THE SENIOR HOUSING SOLUTIONS PROJECT
May 15, 2008
Redevelopment Plan. The RDA's funding will enable the creation of a five-unit, very
low-income home for seniors. The project is funded with monies from the RDA's
Housing Fund that must be spent on affordable housing projects.
ENVIRONMENTAL ASSESSMENT:
Is a project as defined' under the California Environmental Quality Act but is
Categorically Exempt per Section 15301.
FISCAL IMPACT:
Funding for this $832,700 request comes from the Redevelopment Agency Housing
Fund. The Fund has a current balance of approximately $6.5 million.
Attachments:
1. Council/Agenda Staff Report for the meeting of April 7, 2008
2. Council/Agenda Staff Report for the meeting of December 3, 2007
3. Resolution
4. Revocable Grant Agreement
5. Regulatory Agreement and Declaration of Restrictive Covenants
6. Deed of Trust
Distribution:
Bob Campbell, Senior Housing Solutions, 512 Valley Way, Milpitas, CA 95035
BNL:RT:mdc
N:IDDVICNCLRPTS120081sr housing solutions 051908.doc
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ATTACIMNT 4
RESOLUTION 2009-
RESOLUTION OF THE REDEVELOPMENTAGENCY OF THE TOWN OF LOS GATOS
AUTHORIZING THE EXECUTIVE DIRECTOR TO APPROVE AN AMENDMENT TO THE
GRANT AGREEMENT WITH SENIOR HOUSING SOLUTIONS INCREASING THE
COMMITMENT OF REDEVELOPMENT HOUSING FUNDS TO $922,700 FOR
ACQUISITION AND DEVELOPMENT OF FIVE UNITS OF VERY LOW-INCOME SENIOR
HOUSING AND MAKING RELATED REQUIRED FINDINGS
WHEREAS, the Town Council (the "Town Council") of the `Down of Los Gatos (the
"Town") adopted the Redevelopment Plan Jor the Central Los Gatos Redevelopment Project by
Ordinance No. 1882, adopted on November 25, 1991, as amended by Ordinance No. 1992,
adopted on December 5, 1994 (the "Redevelopment Plan"), setting lorth the plan for
redevelopment of the Central Los Gatos Redevelopment Project Area (the "Project Area"); and
WHEREAS, the Redevelopment Agency of the Town of Los Gatos (the "Agency") is
responsible for implementation of the Redevelopment Plan; and
WHEREAS, a central objective of the Redevelopment Plan and the California
Corni-nunity Redevelopment Law, Health and Safety Code Section 33000 et seq. (The
"Redevelopment Law"), is the creation of new housing to provide long-term affordable housing
opportunities for low and moderate income households; and
WHEREAS, the Agency has established a Low and Moderate Income Housing Fund
(the "Housing Fund") pursuant to Health and Safety Code Section 33334.2; and
WHEREAS, Senior Housing Solutions, a California nonprofit public benefit corporation
(the "Developer"), requested a grant of Housing Fund monies from the Agency, to be utilized to
acquire a single family home in the Town, which Developer intends to rehabilitate and operate
as five units of affordable rental housing for very low income senior citizens (the "Property");
and
WHEREAS, on May 1.9, 2008 the Agency approved an Eight }Iundred 't'hirty-`l~wo
Thousand Seven Hundred Dollar ($832,700) grant (the "Grant") to the Developer to assist in
financing the acquisition and rehabilitation of the Property; and
WHEREAS, the Developer requested an additional Ninety Thousand Dollars ($90,000) be
added to the Grant to the Developer that the Agency approved on May 19, 2008 to assist in
financing the acquisition aznd rehabilitation of the Property; and
WHEREAS, the property is located outside of the Project Area; and
ATTACDMNT 5
WHEREAS, the provisions of the Redevelopment Law applicable to the establisl-n-nent
and use of proceeds of the Housing Fund (Health and Safety Code Sections 33334,2 and
33334.3) expressly conie«iplate and permit the use of proceeds from the Housing Fund outside
the Project Area upon findings by the Town and the Agency that such use will be of benefit to
the Project Area; and
WHEREAS, the acquisition and rehabilitation of the Property as affordable senior
housing will benefit the Project Area and seine major Redevelopment Plan goals and objectives by
increasing the amount of housing available at affordable housing cost in the community; and
WHEREAS, the acquisition, rehabilitation, and operation of the Property by Developer
will be consistent with the Agency's Implementation Plan (the "Implementation Plan") for the
Project Area; and
WHEREAS, provisions of Redevelopment Law (Health and Safety Code Section
33334.30)) expressly allows for the use of Housing Fund monies to finance more than fifty
percent (50%) of the cost of a project if the use of the funds is necessary when commercial or
private financing is unavailable to finance the units at the level of affordability and quantity; and
WHEREAS, no alternate private or commercial financing is available with terms similar
to those proposed in this Grant that would allow Developer to provide five units of very low-
income housing for seniors at affordable rents; and
WHEREAS, on May 19, 2008 the Agency approved a Revocable Grant Agreement, Deed
of Trust, and Regulatory Agreement (the "Agency Grant Documents") setting forth the terns and
conditions of the Grant, including the requirement that Developer operate the Property as
affordable rental housing for very low income senior citizens, which Agency Grant Documents are
on file with the Agency Secretary; and
WHEREAS, by staff reports accompanying this Resolution and incorporated into this
Resolution by this reference (the "Staff Reports"), the Agency and the Town has been provided
with additional information upon which the findings and actions set forth in this Resolution are
based, and.
WHEREAS, for the purpose of compliance with the California Environmental Quality
Act ("CEQA"), the Town and the Agency have determined that, pursuant to the California Code of
Regulations Section 15301, the making of the Grant and the acquisition and rehabilitation of the
Property is categorically exempt from CEQA.
NOW, THEREFORE, BE IT RESOLVED THAT the Agency Board hereby find and
determine that the above Recitals are true and correct and serve as the basis, in part, for the
findings and actions of the Town and the Agency set forth below.
BE IT FURTHER RESOLVED that, based on information and analysis set forth in the
above Recitals and contained in the Staff Reports, the Town and the Agency hereby find and
determine: (i) pursuant to Health and Safety Code Section 33334.2(g) that the use of additional
moneys from the Housing Fund to fund the acquisition, rehabilitation, and operation of the Property
will be of benefit to the Project Area and the program of redevelopment pursuant to the
Redevelopment Plan, and (ii) pursuant to Health and Safety Code Section 33334.36) that the use
of the Grant is necessary because the Developer has made a good faith attempt, but has been
unable to obtain commercial or private means of financing the units at the same level of
affordability and quantity.
BE IT FURTHER RESOLVED that the Agency hereby allocates an additional Ninety
Thousand Dollars ($90,000) of Agency Housing Fund monies to the Grant to the Developer that the
Agency approved on May 19, 2008, and hereby amends the Agency's budget to the extent
necessary to provide for such allocation.
BE IT FURTHER RESOLVED that the Town and the Agency hereby approve the
amended Grant on the terms and conditions and with the affordability requirements set forth in
the Grant Documents approved on May 19, 2008.
BE IT FURTHER RESOLVED that the Agency hereby approves the amended
Agency Grant Documents and authorizes the Agency Executive Director to execute the
documents in substantially the form on file with the Agency Secretary, with such minor
revisions as are deemed necessary and appropriate by the Agency Executive Director, subject
to Agency Counsel's approval, and to take all actions necessary to provide and implement the
Grant.
PASSED AND ADOPTED at a regular meeting of the Town Council of the Town of
Los Gatos and the Redevelopment Agency of the Town of Los Gatos held on the 1 st day of
.tune, 2009, by the following vote:
COUNCIL/AGENCY MEMBERS:
AYES
NAYS :
ABSENT:
ABSTAIN:
SIGNED:
MAYORICBAIR OF THE REDEVELOPMENT
AGENCY OF THE TOWN OF LOS GATOS
LOS GATOS, CALIFORNIA
ATTEST:
CLERK ADMINISTRATOR/SECRETARY OF THE
REDEVELOPMENT AGENCY OF THE TOWN OF LOS
GAfOS
LOS GATOS_ CALIFORNIA