San Diego Housing Commission Lofts at Normal Heights ... · • “Dual track” applications to...

San Diego Housing CommissionLofts at Normal Heights Apartments Loan RecommendationFebruary 10, 2017

J.P. CorreiaProject ManagerReal Estate Division

Ted Miyahara Director of Housing FinanceReal Estate Division

That the San Diego Housing Commission (SDHC):

1. Approve a proposed residual receipts loan of up to $5,200,000 to Normal Heights CIC L.P., to facilitate new construction of 52 affordable rental housing units for homeless Veterans, to be located at 3808 El Cajon Boulevard, San Diego:

• Will remain affordable for 55 years;• Loan contingent upon receiving necessary third-party

funding;• “Dual track” applications to the California Tax Credit

Allocation Committee (TCAC) for allocation of either 4% tax credits or 9 percent tax credits;

SDHC – Lofts at Normal HeightsPartnership Development

Recommendations

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2. Authorize President & Chief Executive Officer to:

• execute documents;• implement approvals,(actions necessary, convenient, and/or

appropriate to implement with General Counsel advice);• adjust financing terms and conditions; and • allow substitution of funds as necessary up to $5,200,000

(total loan may not increase).

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Recommendations (Cont.)

• Supports HOUSING FIRST - SAN DIEGO, SDHC’s three-year Homelessness Action Plan (2014-17):

‒ 52 Federal Project-Based Housing Vouchers for homeless Veterans

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HOUSING FIRST – SAN DIEGO

• Proposed new construction of 52 affordable rental housing units and 1 manager’s unit:

− One three-story building;

− Over one level of underground parking with 40 parking spaces;

− Mix of studios and one-bedroom units; and

− Vacant site – no relocation necessary.

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Development Summary

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SDHC – Lofts at Normal HeightsPartnership Development Development Summary (Cont.)

Address 3808 El Cajon Boulevard, San Diego, CA 92105Council District 3Community Plan Area Normal Heights in the Mid-City Communities PlanDevelopment Type New construction Construction Type Type V over Type IParking Type Subterranean (40 parking spaces)Housing Type Permanent supportive housing Lot Size 0.52 acre (22,651 square feet)Units 53Density 102 dwelling units per acre (53 units ÷ .52 acres)Affordable Unit Mix 32 studio units, 20 one-bedroom units, and 1 two-bedroom manager’s

unit

Gross Building Area 38,566 square feetNet Rentable Area 26,225 square feetProject Based Vouchers 52 Section 8 Project-Based Housing Vouchers dedicated for homeless

Veterans

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SDHC – Lofts at Normal HeightsPartnership Development Development Summary (Cont.)

ROLE FIRM/CONTACT

Developer Chelsea Investment Corporation

Architect The McKinley Associates Inc.

Borrower Normal Heights CIC LP

Prevailing Wage Monitor Labor Compliance Consultants of Southern California

General Contractor Emmerson Construction Inc., (an affiliate of Chelsea)

Property Management Royal Property Management

Supportive Services Provider Alpha Project

Construction and Permanent Lender To be determined

Tax Credit Equity Partner To be determined

• $5,200,000 SDHC residual receipts loan; and

• 52 Federal Project-Based Housing Vouchers, awarded by SDHC.

• Developer is Chelsea Investment Corporation:− Experienced, for-profit developer; and− Developer is in full compliance with previous SDHC loans.

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Developer’s Request

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Location Map - 3808 El Cajon Blvd., San Diego

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Location Map - 3808 El Cajon Blvd., San Diego (Cont.)

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Site Photo

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Site Photo (Cont.)

• Estimated Total Development Cost Per Unit (for 53 Units) = $355,510

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Financing Sources Amounts Financing Uses Amounts Per Unit

Permanent loan (Multifamily Housing Revenue Bonds) $650,000 Acquisition: $2,600,000 $ 49,057

Veterans Housing & HomelessnessPrevention Program (VHHP) loan $5,615,000 Hard costs (with contingency) $10,020,106 $189,059

SDHC proposed loan $5,200,000 Financing costs $943,901 $17,809

Soft loan interest $296,400 Architect/Engineering - $ 813,000Fees and permits - 1,344,909Other soft costs - 621,951Soft costs contingency - + 84,353Subtotal - $2,864,213 $2,864,213 $54,042

4 percent tax credit equity $6,528,262 Developer fee $1,952,347 $36,837

Developer fee contribution $552,347 Reserves $461,442 $8,706

Total Development Cost $18,842,009 Total Development Cost $18,842,009 $355,510

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Estimated Sources and Uses Permanent Financing

Unit Type AMI Number of Units Gross TCAC Rent

Studio 30% 12 $446

Studio 35% 5 $520

Studio 40% 5 $595

Studio 45% 5 $669

Studio 50% 5 $743

1 Bedroom 30% 7 $478

1 Bedroom 35% 3 $557

1 Bedroom 40% 4 $637

1 Bedroom 45% 3 $717

1 Bedroom 50% 3 $796

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Affordability and Monthly Estimated Rent Table

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Milestone Estimated Date• VHHP Application Date . . . . . . . . . . . . • VHHP Award Announcement . . . . . . . . • CTCAC Application for Tax Credits. . . .• CDLAC Application for Bonds Allocation• Housing Commission Final Review . . . • CDLAC Allocation Meeting. . . . . . . . . . . • TCAC Allocation Meeting . . . . . . . . . .• Housing Authority Final Review . . . . . . .• Estimated Escrow/Financing Closing. . .• Estimated Construction Start . . . . . . . . .• Estimated Construction Completion. . . .

February 21, 2017June 2017August 19, 2017August 2017October 6, 2017October 18, 2017October 19, 2017 October 31, 2017December 2018December 2018January 2019

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Development Timeline

• Proposed bond issuance up to $10,569,325.

• Developer responsible for paying all costs of issuing bonds.

• Issuance pursuant to Housing Commission’s bond policy.

• Bonds issuance will not create financial liability to SDHC, or to Housing Authority or to City.

• Neither full faith and credit nor taxing power of the City nor full faith and credit of the Housing Authority will be pledged to payment of the bonds.

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Bond Issuance Summary

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Artist’s Rendering