Housing Department

PASADENA CITY COUNCIL

Herkimer Gardens411- 415 N. Raymond Avenue

William Huang, Housing Director

June 13, 2011

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Herkimer Gardens

Staff Recommendation:

Approve key business terms of development agreement with Heritage Housing Partners for Herkimer Gardens affordable ownership housing development at 411-415 N. Raymond Ave.

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Herkimer Gardens

Project Merits

• Provides first time homebuyer opportunities• Targets large low-income households • Removes blight• Preserves at-risk historic structures• Strengthens neighborhood’s historic character• Expends hard to use State CalHOME funds• Expends State BEGIN funds

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Boadway Apts

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Herkimer Gardens

Project Concept• Four units of affordable ownership housing for

lower income families • Project was originally planned as market rate but

was converted to affordable housing due to economic downturn

• New construction of one 1-bedroom unit• Historic restoration of three units with 4- and 5-

bedrooms

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Herkimer Gardens

Project Concept• Historic Herkimer Arms (Greene & Greene) and

Hammond House originally located at Fuller campus; slated for demolition, relocated & saved by the developer

• Construction of detached garage for parking off Maple Street

• One-bedroom loft unit above the garage

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Herkimer Arms as originally located at Fuller Theological Seminary campus

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Herkimer Gardens site plan

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Photo rendering of Herkimer building at current location

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Neighborhood Properties

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Herkimer Gardens

Development Cost & Financing

$3.0 million total development cost

$1,800,000 conventional construction loan$ 610,000 City construction loan$ 232,500 other private sources$ 357,500 developer equity$3,000,000 Total

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Herkimer Gardens

Homebuyer Loan Assistance Funding$ 610,000 Recast of City construction loan $ 240,000 State Calhome homebuyer funds$ 586,075 State BEGIN homebuyer funds$1,436,075 Total

• City applied for State BEGIN funds for Herkimer in May 2010 but Gov. Brown froze BEGIN (and other State housing funds) in February 2011 before awards were made, delaying this project. The freeze has been lifted and the Herkimer award letter has been received.

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Herkimer Gardens

Affordable Sales Prices*

*Contract sales prices will include soft loans

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Low Income Limits

HH Size

Max. Income

2 $53,000

4 $66,250

6 $76,850

8 $87,450

HousingUnit

Affordable

Price

1-Bedroom $267,000

4-Bedroom $394,000

5-Bedroom $423,000

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Herkimer Gardens

Key Terms of Agreement

• City loan assistance (all sources) totals $1,436,075• Developer ‘break-even’ financial position on project• 45-year regulatory agreement w/ City right of first

refusal to purchase resale units• Scope Of Work and Schedule Of Performance• Water- and energy-saving design• First Source ordinance• Local Preference (buyer selection)

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Herkimer Gardens

Purchase Selection Process• HHP commenced marketing in January 2011 to

establish applicant list

• Selection based on application score, with City Local Preference for those who: 1) live & work in the city; 2) live in the city; 3) work in the city; 4) displacees

• Housing Dept. to approve income eligibility

• Selected applicants to obtain mortgage

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Herkimer Gardens

Housing DeveloperHeritage Housing Partners • Pasadena non-profit established in 1998• Specializing in affordable ownership housing

communities and historic preservation• Successful track record• 8 completed Pasadena projects (49 units)• Doran Gardens in Glendale (60 units)

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Sam Merrill House

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Sam Merrill House

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South Pasadena Houses

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Fair Oaks Court

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Fair Oaks Court

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Haskett Court

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Gartz Court – Pasadena Heritage

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Herkimer Gardens

City Policy Considerations

• Improve/support quality of life and local economy (City Council Strategic Planning Three-Year Goals)

• Housing Element of General Plan

• Regional Housing Needs Assessment

• Five-Year Consolidated Plan

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Herkimer Gardens

Project Approval Schedule

• Neighborhood meeting - February 12, 2011• NW Commission – May 12, 2011 (approved)• Community Dev’t Committee – May 26, 2011 (approved)• Economic Dev’t & Technology Committee – June 1, 2011

(cancelled)• City Council – June 13, 2011