Housing Department

Northwest Manors IICity Council through

Economic Development and Technology Committee

James WongSenior Project Manager

July 20, 2015

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Housing Department

Staff Recommendation

• Find that the proposed acquisition/rehab of the Northwest Manors II apartment buildings is categorically exempt under Class 1 (“Existing Facilities”) of CEQA

• Approve key terms of HOME Loan Agmt with Community Housing Works as a City-Certified Community Housing Dev’t Organization

• Recognize HOME revenues and appropriate $470,000 the Housing and Career Services FY 2016 Operating Budget for Northwest Manors II project.

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Housing Department

Northwest Manors II

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Housing Department

700 E. Mountain St. (26 units)

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Housing Department

965 N. Raymond Ave. (18 units)

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Housing Department

Background

• Northwest Manors II: 44-unit HUD rental project for low/very low income families, built in 1956 and 1963, owned and operated last 40 years by nonprofit Westminster Housing Group

• Proposed to be acquired by Community Housing Works, a San Diego-based nonprofit housing developer with 33-year track record including 32 rental projects (over 2,000 units) completed and operating in Southern California and 750 more units in the pipeline.

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Housing Department

Background

• CHW currently in purchase escrow with Westminster Group

• Project to be acquired, owned, rehabilitated, and operated under a limited partnership formed by CHW which will be the General Partner member/manager

• $14.5M total dev’t cost to be financed primarily w/ State sources: 4% low income housing tax credits and multifamily housing bond -- applied on 5/15/15, awarded on 7/17/15

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Housing Department

Background

• CHW will obtain a 20-year extension of the HUD project-based Section 8 rental subsidies which currently serve Northwest Manors

• Long-term housing affordability will also be achieved with a 55-year regulatory agreement under the State tax credits

• Add’l $470,000 City funding is proposed, primarily to assist with rehab, capital upgrades and energy efficiency and sustainability improvements -- $10,682/unit subsidy

• CHW to re-name the project

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Housing Department

Loan Agmt-Key Business Terms

• City loan to be funded with federal HOME and HOME/CHDO monies

• Funds to be used for hard and soft costs related to rehab, capital upgrades, energy and water efficiency upgrades, purchase escrow costs, and project management costs (less than10% of loan)

• City loan to be secured by a deed of trust, repaid from project residual receipts at 3% simple fixed interest w/ 20-year term

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Housing Department

Loan Agmt-Key Business Terms

• The City’s HOME loan will also have an affordable housing regulatory agreement w/ a 20-year term (operating under the 55-year tax credit affordable housing covenants)

• City loan assignable to the limited partnership formed by CHW to own, rehabilitate, and operate the project.

• CHW shall comply with all applicable City policies including First Source local hiring.

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Housing Department

Project Schedule

• EDTech Council Committee – 7/9/15• Northwest Commission – 7/14/15 –

recommended City Council approval• State awarded tax credits and bond

financing to project – 7/17/15• Acquisition closing – mid-October 2015• Rehab completion – April 2017 (TCAC

req’t)

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