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HomeMy WebLinkAbout110194 RDA AgendaAGENDA CITY OF TEMECULA OLD TOWN REDEVELOPMENT ADVISORY COMMITTEE A REGULAR MEETING TEMECULA CITY HALL - MAIN CONFERENCE ROOM 43174 Business Park Drive NOVEMBER 1, 1994- 6:30 PM CALL TO ORDER: Flag Salute ROLL CALL: Committee Members: Chairman Dallas Gray presiding. Agency Member Jenkins Bridges, Gray, Jenkins, Reed, Walton PUBLIC COMMENTS A total of 15 minutes is provided so members of the public can address the Council on items that are not listed on the Agenda or on the Consent Calendar. Speakers are limited to two (2) minutes each. If you desire to speak to the Council about an item not listed on the Agenda or on the consent Calendar, a pink "Request To Speak" form should be filled out and filed with the City Clerk. When you are called to speak, please come forward and state your name and address. For all other agenda items a "Request To Speak" form must be filed with the City Clerk before the Council gets to that item. There is a five (5) minute time limit for individual speakers. COMMITTEE BUSINESS 1 MinUtes RECOMMENDATION: 1.1 Approve the minutes of October 4, 1994 2 Draft RedeveloDment Implementation Plan and Proposed Amendment to the Temecula RedeveloDment Plan RECOMMENDATION: 2.1 Provide comments and recommend approval of the proposed Implementation Plan and the mandated Redevelopment Plan Amendments to the Redevelopment Agency 2/agend~/11/1/94 10/26/94 3. Proposed RDA Commercial Rehabilitation Small Business Loan - Temecula Shuttle RECOMMENDATION: 3.1 Review and provide comments to the Redevelopment Agency. EXECUTIVE DIRECTOR'S REPORT COMMITTEE MEMBER REPORTS ADJOURNMENT Next regular meeting: December 6, 1994, 6:30 PM, Temecula City Hall, Main Conference Room, 43174 Business Park Drive, Temecula, California EXECUTIVE DIRECTOR'S REPORT COMMITTEE MEMBER REPORTS ADJOURNMENT Next regular meeting: December 6, 1994, 6:30 PM, Temecula City Hall, Main Conference Room, 43174 Business Park Drive, Temecula, California Item I MINUTES OF A REGULAR MEETING OF THE CITY OF TEMECULA REDEVELOPMENT ADVISORY COMMITTEE OCTOBER 4, 1994 A regular meeting of the City of Temecula Old Town Redevelopment Advisory Committee was called to order on Tuesday, October 4, 1994, 6:30 P.M., Temecula City Hall Main Conference Room, 43174 Business Park Drive, Temecula, California, Chairman Dallas Gray presiding. Committee Member Bridges led the flag salute. PRESENT: 5 COMMITTEE MEMBERS: Bridges, Gray, Jenkins, Reed, Walton ABSENT: 0 COMMITTEE MEMBERS: None Also present were City Manager Ron Bradley and Recording Secretary Gall Zigler. City Manager Bradley read into the record a letter of resignation from Committee Member Constance Pelonero. PUBLIC COMMENT None COMMITTEE BUSINESS 1. Minutes 1.1 Approve the minutes of August 2, 1994. It was moved .by Committee Member Reed, seconded by Committee Member Walton to approve the minutes of August 2, 1994. The motion was carried by the following vote: AYES: 5 COMMITTEE MEMBERS: Jenkins, 1.2 Bridges, Gray, Reed, Walton NOES: 0 COMMITTEE MEMBERS: None ABSENT: 0 COMMITTEE MEMBERS: None Approve the minutes of August 22, 1994. Committee Member Walton stated that he was absent at the August 22, 1994 meeting, however the motion to adjourn the meeting reflected his second to the motion. OTRDACIO/04/94 1 10/11/94 OLD TOWN REDEVELOPMENT ADVISORY COMMITTEE MINUTES OCTOBER 4, 1994 It was moved by Committee Member Reed, seconded by Committee Member Bridges to approve the minutes of August 22, 1994, as corrected. The motion was carried by the following vote: AYES: 5 COMMITTEE MEMBERS: Bridges, Gray, Reed, Walton NOES: 0 COMMITTEE MEMBERS: None ABSENT: 0 COMMITTEE MEMBERS: None Jenkins, Consideration of Additional Plannine Exoenses for Old Town Entertainment Project City Manager Ron Braaley presented the staff report and answered questions about the Old Town Entertainment Proposal. Committee Member Bridges asked about the status of the Old Town Specific Plan and the money that has already been spent preparing that document. City Manager Bradley explained the City plans to distribute a Redevelopment Newsletter to the community to outline Redevelopmerit issues in the community and provide updates on the status of the Old Town Specific Plan. Therese McLeod, 42200 Main Street, #F128, expressed her opposition to the Old Town Entertainment Proposal. She asked why there has not been a feasibility study on the Old Town Specific Plan. Ms. McLeod said Old Town is already viable and expressed her concern that the M.O.U. is too rigid. She asked why Mr. Buffman is allowed to hold up the Old Town Specific Plan. It was moved by Committee Member Bridges to recommend to the City Council/Redevelopment Agency approval of consultant contracts not to exceed ~65,000 for additional consultant services for the Old Town Entertainment Project. The motion failed due.to a lack of second. ADorooriation and Authorization to Release Funds for Old Town SDecific Plan Billboard Sign Lease City Manager Ron Bradley presented the staff report. Due to conflict of interests with the Committee Members who belong to the Old Town Merchants Association which caused a lack of quorum, the Committee did not vote on this issue. O~DAC10/04/94 2 10/I 1/94 OLD TOWN REDEVELOPMENT ADVISORY COMMITTEE MINUTES OCTOBER 4, 1994 4. Status RePort on ProDosed Purchase Of Rancho West APartments City Manager Ron Bradley advised that the City is working with the RTC on the purchase of the Rancho West Apartments. He stated the City has been receiving periodic updates from Washington advising they are still reviewing the matter. City Manager Bradley said staff is in the process of developing the City's Redevelopment Housing Program which must be adopted by the Council nolater than December 31, 1994, which provides low to moderate income housing. If not approved, the City will lose 25% of it's set-aside money to the County, and if delayed another twelve months, the City will lose 50% of the set-aside money. 5. Reoort on the Status of the Old Town RedeveloDment Advisory Committee City Manager Ron Bradley advised the Committee on Tuesday, October 11,1994, the Redevelopment Agency will vote on whether or not they will file an amendment to the stipulated judgement and on the number of members to serve on the Old Town Redevelopment Advisory Committee. Committee Member Reed asked if the Committee Members could attend the Redevelopment Agency meeting and discuss the concerns they have regarding the stipulated judgement., City Manager Bradley said he feels the Committee Members should attend the meeting or appoint one member to go before the Redevelopment Agency on behalf of the Advisory Committee. It was moved by Committee Member Reed, seconded by Committee Member Walton to appoint Chairman Dallas Gray as representative of the Redevelopment Advisory Committee to attend the October 11,1994 Redevelopment Agency meeting to address the Committee's concerns regarding the changes to the Stipulated Judgement. The motion was carried by the following vote: AYES: 5 COMMITTEE MEMBERS: Bridges, Walton NOES: 0 COMMITTEE MEMBERS: None Gray, Jenkins, Reed, ABSENT: 0 COMMITTEE MEMBERS: None The Committee members re-stated their concerns regarding the proposed modifications to the judgement as follows: Item 1. Uncomfortable with the language "without apportionment". Item 2. No specific language regarding the percentage of improvements to be OTRDAC 10/04194 3 10/11/94 OLD TOWN REDEVELOPMENT ADVISORY COMMITTEE MINUTES OCTOBER 4, 1994 spent in Old Town. The Committee feels a minimum of 50% of the tax increment revenue should be spent in Old Town with no cap. Item 4. The Old Town Redevelopment Advisory Committee should remain a seven member committee, Committee Member Walton said he would like to encourage a member of the Redevelopment Agency to attend the Old Town Redevelopment Advisory Committee meetings to hear the concerns and comments of the committee members. EXECUTIVE DIRECTOR'S REPORT None COMMITTEE MEMBER REPORTS Committee Member Reed reported on the Old Town Specific Plan proposed Billboard lease. Committee Member Reed said since the billboard went up, there has been a sizable increase in the number of visitors coming to Old Town just from seeing the sign. Committee Member Walton said he would rather see a permanent sign instead of continuing to rent a sign space. Chairman Gray said he feels the sign should be used to advertise special events and not to advertise private entities. Committee Member Reed said she would take the Committee's comments back to the Old Town Merchant's Association. Committee Member Walton said he would like the Redevelopment Advisory Committee to send a letter to the City Council recommending the 9100,000 cap be increased on the Redevelopment Agency Loan Program and that the public be advised. The Committee unanimously agreed to appoint Committee Member Walton to go before the City Council and request that they re-evaluate the denial of the loan request of Ladd Penfold/Scarcella's Pizza based on the following: The real estate collateral is in excess of the total loan amount. The three individuals involved in the project are upstanding citizens in the community with businesses outside of Old Town. and to request the City Council to re-evaluate the $100,O00 CAP on the loan amount. OTRDAC10/04/94 4 10/11194 OLD TOWN REDEVELOPMENT ADVISORY COMMITTEE MINUTES OCTOBER 4, 1994 Committee Member Walton asked the City Manager to provide the Committee with a copy of the loan package. Committee Member Walton asked that the Ladd Penfold/Scarcella's Pizza loan requests be placed on the next available agenda. Committee Member Reed said she received a letter from Cal Trans regarding the Old Town Merchants Association request for a freeway sign. She said Cal Trans representative Ken Steele sent a letter indicating Cal Trans has corresponded with the City of Temecula Planning Director regarding a request for a freeway sign for Old Town Temecula and he is waiting for a response from Mr. Thornhill. City Manager Bradley said he would follow-up on the letter with Director Thornhill and report back to the Committee. ADJOURNMENT It was moved by Committee Member Walton, seconded by Committee Member Reed to adiourn at 8:30 P.M. The motion was unanimously carried. The next regular meeting of the City of Temecula Old Town Redevelopment Advisory Committee will be held on Tuesday, November 1, 1994, 6:30 P.M., Temecula City Hall Main Conference Room, 43174 Business Park Drive, Temecula, California. ATTEST Chairman Dallas Gray Redevelopment Secretary June S. Greek OTRDACIO/04/94 5 10/11/94 Item 2 TO: FROM: DATE: SUBJECT: OLD TOWN REDEVELOPMENT ADVISORY COMMITTEE AGENDA REPORT Members of the Old Town Redevelop?2/~ Advisory Executive Director/City Manager ~ November 1, 1994 Committee Draft Redevelopment Implementation Plan and Proposed the Amendment to the Temecula Redevelopment Plan PREPARED BY: David W. Hogan, Associate Planner RECOMMENDATION: Provide comments on, and recommend approval of, the proposed Implementation Plan and the mandated Redevelopment Plan Amendments to the Redevelopment Agency. BACKGROUND: The State enacted Assembly Bill (AB) 1290 in 1993. AB 1290 required that certair, amendments be made to all adopted Redevelopment Agency IF'fans and Programs, Thu required changes are the inclusion of certain time limits on redevelccpment activities into the Redevelopment Plan and the preparation of a Five-Year Redevelopm,;nt Implementation Plan. Specifically, AB 1290 requires that Redevelopment Agencies: 1. Prepare Implementation Plans that: Provide specific short-term goals; Identify specific projects and expenditures for the next five year period; Identify how these projects will alleviate blight; and, Specify how the goals and objectives intend to eliminate blight and provide additional low and moderate income housing. Amend the Redevelopment Plan to incorporate the following State-mandated dates to provide that: No loans, advances, or indebtedness be established or incurred after July 12, 2008; All Plan activities terminate by July 12, 2028; and, No tax increment receipts shall be received after July 12, 2038, except for certain obligations incurred prior to July 1,1994. The Redevelopment Agency will be considering the adoption of the Five-year Implementation Plan and the Amendment of the Redevelopment Plan at its November 29, 1994 meeting. A copy of the draft Implementation Plan will be provided to you no later than the Committee's November 1, 1994 meeting. DRAFT IMPLEMENTATION PLAN FOR THE REDEVELOPMENT PROJECT NO. I - 1988 REDEVELOPMENT AGENCY OF THE CITY OF TEMECULA TABLE OF CONTENTS II. III. IV. V. VI. VII. VIII· IX. X.- XI. XII. Appendix A. Legislative Requirements ........................... Background .................................... Identified Conditions of Blight ....................... Long Term Objectives of the Redevelopment Plan .......... Five Year Project Goals ............................ Proposed Implementation Activities ................... Relationship Between Implementation Activities and Redevelopmerit Plan Findings of Blight ............... Inclusionan/& Replacement Housing Requirements .......... Housing Set-Aside Requirements ...................... Long Term Housing Goals and Policies .................. Five-Year Housing Goals ........................... Financial Assistance Developer Participation .............. .. 7 · 8 16 18 20 22 23 IMPLEMENTATION PLAN FOR THE TEMECULA REDEVELOPMENT PROJECT PLAN I. LEGISLATIVE REQUIREMENTS Assembly Bill 1290, also known as the Community Redevelopment Law Reform Act of 1993, effective January 1, 1994, enacted numerous revisions to the California Community Redevelopment Law including a requirement for the adoption of an implementation plan. The California Community Redevelopment Law, Health and Safety Code Section 33490 now requires that each redevelopment agency adopt an implementation plan prior to December 31, 1994 and each five years thereafter for each redevelopment project area. The implementation plan must contain the specific goals and objectives of the Redevelopment Agency for each project area; the potential projects and estimated expenditures proposed to be made during the five year period of the plan; and, an explanation of how the goals and objectives, potential projects and estimated expenditures will eliminate blight within the project area, and implement the housing related requirements of Code Sections 33334.2, 33334.4, 33334.6, and 33413. The implementation plan must contain, for each year of the five year period, an annual housing program, including estimates of the number of housing units destroyed and/or removed, and the number of units developed, rehabilitated, price restricted and/or otherwise assisted. Further, the implementation plan must describe the Agency's plans for the use of the annual deposits in the low and moderate income housing fund during each of the next five years. Additionally, if the implementation plan contains a project or projects for which the Redevelopment Agency is providing financial assistance, and which will result in the destruction or removal of dwelling units housing persons and families of low or moderate income, the implementation plan must identify proposed locations suitable for replacement housing units. In accordance with Code Section 33490(c), the Agency must conduct a public hearing and hear testimony of all interested parties relative to the Redevelopment Plan and the implementation plan at least once within the five year term of the Implementation Plan. The hearing must take place no earlier than two years and no later than three years after adoption of the implementation plan. Notice of public hearings conducted regarding the adoption of the implementation plan must be published pursuant to Code Section 6063 of the Government Code and posted in at least four permanent places within the project area for a period of three weeks. Publication and posting must be completed not less than 10 days prior to the date set for hearing. II. BACKGROUND The Redevelopment Plan for Redevelopment Project No. 1-1988 was adopted by the Riverside County Board of Supervisors by Ordinance No. 658 adopted on July 12, 1988. The City of Temecula was incorporated on December 15, 1989. Subsequently, on April 9, 1991, the City Council approved Ordinance No. 91-14 activating the Redevelopment Agency of the City of Temecula (Agency) and Ordinance No. 91-15 adopting the County of Riverside Redevelopment Plan No. 1-1988. Project Area Description The project area includes approximately 1,635 acres of land within four sub- areas described on the attached maps (Attachments A-1 through A-4). Sub- Areas Nos. 1, 2, and 3 are all located west of Interstate 15. Sub-Area No. 4 straddles Interstate 15 along Winchester and Ynez Roads, Sub-Area Descriptions\Current Land Uses Subarea I is located south of the Old Town area along Front Street. The primary land uses in this sub-area are highway and locally-serving commercial with some office and industrial uses interspersed. The area west of Front Street is mostly vacant or is the channel of Murrieta Creek. Subarea 2 contains the historic core of Old Town Temecula. It is generally located between First and Sixth Streets and contains the only residential units within the Redevelopment Area. The primary land uses in the sub-area are commercial, office, and residential. The channel of Murrieta Creek also crosses this sub-area. Subarea 3 is located north of the Old Town core. It is generally situated between Sixth Street and Winchester Road. The primary land uses are commercial and industrial. Most of the commercial properties are located along Front Street and Jefferson Road. The area west of Murrieta Creek is primarily industrial. There is very little vacant land in this sub-area. The channel of Murrieta Creek also crosses this sub-area. Subarea 4 includes property north of Winchester Road and east of Interstate 15. The primary land uses in this sub-area are commercial and industrial. Most of this sub-area is currently vacant. The channel of P:~SyERSIGIMPLPLAN,TWO 1111/94 dwh 2 Murrieta Creek forms the westerly boundary of this area. Most of the new building activity is occurring in this Sub-area. III. IDENTIFIED CONDITIONS OF BLIGHT The report to the Riverside County Board of Supervisors (Report) prepared in connection with the adoption of Redevelopment Plan No. 1-1988 identifies the blighting conditions within the Project Area that the Redevetopment Plan is intended to remedy. The blighting conditions that were identified in the Report are as follows: The age, obsolescence, deterioration, mixed character or shifting of uses. The subdividing and sale of lots of irregular form and shape, and inadequate size for proper usefulness and development. The existence of inadequate public improvements, public facilities, open spaces, and utilities which cannot be remedied by private or governmental action without redevelopment. A prevalence of depreciated values, impaired investments, and social and economic maladjustment. · The defective design in character or physical condition. IV. LONG TERM OBJECTIVES OF THE REDEVELOPMENT PLAN The Project Area includes a number of conditions which are specified in the California Community Redevelopment Law as characteristics of blight. The objective of the Redevelopment Plan is to eliminate such conditions of blight by providing needed public improvements, by encouraging rehabilitation and repair of deteriorated structures, by facilitating land assembly and development which will result in employment opportunities and an expanded tax base; and by promoting development in accordance with applicable land use controls. The Redevelopment Plan includes the following general objectives: 1) Provide a broad range of public service infrastructure improvements to induce private investment in the Project Area. Such improvements could include the construction or reconstruction of roads, streets, curbs and gutters, sidewalks, the installation of street lights, the construction and reconstruction of water storage and distribution facilities, the construction and reconstruction of sewage collection systems, development of drainage and flood control facilities, and the construction and reconstruction of overpasses and bridges. P:L~YPA~IGIMPLPLAN.TWO 1111/94 dwh 3 2) Where appropriate to enhance the public health, safety and welfare, provide new or improved community facilities such as fire stations, park and recreational facilities and other public facilities. 3) Promote the preservation and enhancement of Old Town Temecula following goals established for the Historic Overlay Area. 4) Promote the improvement and centralization of industrial areas to make the provision of public services more efficient and to relieve development pressure on agricultural lands. 5) Promote the expansion of the County's industrial and commercial bases and local employment opportunities to provide jobs to unemployed and underemployed workers in the County. 6) Assist economically depressed areas and reverse stagnant assessed valuation trends. 7) Protect the health and general welfare of low and moderate-income residents within the Project Area by utilizing 20% of tax increment revenue to increase and improve the supply of Iov~ and moderate income housing both inside and outside the Project Area. 8) Upgrade the physical appearance of the Project Area. 9) Encourage investment in the Project Area by the private sector. 10) Remove economic impediments to land assembly and in-fill development in areas which are not properly subdivided for development. 11) Consolidate parcels as needed to induce new or expanded, centralized commercial development in the Project Area. 12) Buffer residential neighborhoods from the intrusion of incompatible land uses and noise. 13) Encourage the cooperation and participation of Project Area property owners, public agencies and community organizations in the elimination of blighting conditions and the promotion of new or improved development in the Project Area. V. SHORT TERM (FIVE YEAR) GOALS FOR THE PROJECT AREA The priority short term goals for the Project Area are intended to guide the City's redevelopment program from 1995 to 2000. It is anticipated that the majority of the projects and activities undertaken by the Redevelopment Agency P:\SYERSIGIMPLPLAH.TWO 11/1/94 dwh 4 (except those resulting from emergency situations) will meet these goals. Provide a broad range of public infrastructure improvements to induce private investment in the Project Area. This Goal will be achieved through the design and construction of needed public improvements (Long Term Objective 1 ). Enhance the public safety, safety and welfare by providing improved community services. This goal will be achieved through the design and construction of needed public facilities and utilities. (Long Term Objective 2). Promote the preservation and enhancement of Old Town Temecula. This goal will be achieved through the regulation of land uses, the establishment of development standards and the rehabilitation and improvement of obsolete, deteriorated, or inappropriate buildings. (Long Term Objective 3). Promote expansion of the industrial and commercial economic and job bases. This goal will be achieved through the retention and expansion of existing businesses and the encouragement of new businesses in and around the Project Area. (Long Term Objective 5). Preserve, improve and expand housing opportunities for low and moderate income residents. This goal will be achieved through the rehabilitation, repair, and replacement of currently marginal or substandard residential units, by providing subsidies or other support to qualified low- and moderate-income households, and encouraging the development of new affordable housing resources (Long Term Objective 7). Remove economic impediments to land assembly and in-fill development in areas which are not properly subdivided for development through the consolidation of existing parcels to induce or expand centralized commercial development. (Long Term Objective 10 and 11 }. VI. IMPLEMENTATION ACTIVITIES TO ACHIEVE SHORT-TERM GOALS To achieve these short-term redevelopment goals, the City of Temecula proposes to undertake the following blight elimination and community improvement programs. Design and construct needed oublic imorovements. Typical examples include, but are not limited to: the Winchester Road Interchange, the Sixth Street Parking Area, the First Street Road Extension and Bridge, the realignment of Felix Valdez Street, the Sixth Street Bridge, the Main Street Bridge, the Old Town Water and Sewer Lines, the Western Bypass Corridor, and drainage and storm water improvements. Provide improved community services. Typical examples include, but are not limited to: the Northwest Sports Park, the Demonstration Block, the improvements to Sam Hicks Monument Park, the Boys and Girls Club. Preservation and enhancement of Old Town Temecula. Typical examples include, but are not limited to projects which implement the Old Town Specific Plan, the General Plan and Development Code, the Demonstration Block, the Non-conforming Sign Removal Program, the Old Town Facade Improvement Program, Old Town Gateway Arch and Landscaping, Main Street Program, and the Shopping Center Improvement Program. Also proposed is the Old Town Entertainment Project, a project which would include a 4,800 seat "Wild West" Arena, a 2,200 seat Opera House, two Cabaret Theater of 900 seats and 600 seats of two Virtual Reality Theaters, two Cabaret Theaters, a Production Studio, a "Town Square" with outdoor entertainment. Exoand the industrial and commercial economic and lob bases. Typical examples include, but are not limited to: the Main Street Program, the Business Assistance and Recruitment Group, the Old Town Billboard Lease, economic development and relocation programs, and public-private joint ventures, such as the proposed Old Town Entertainment Project. Improve housing oDoortunities for low and moderate income r~sidents. Typical examples include, but are not limited to: the replacement or repair of marginal or substandard dwelling units, providing financial subsidies to qualified low and moderate income households, and programs that reduce land, site development and/or construction costs for low and moderate income housing. Assemble land in areas which are not ProPerlY laid out for develooment. Typical examples include, but are not limited to: the acquisition, assembly, marketing, and resale of property to support area redevelopment activities. VII. RELATIONSHIP BETWEEN IMPLEMENTATION ACTIVITIES AND THE FINDINGS OF BLIGHT The preliminary list of redevelopment program activities scheduled for the next five years are shown in Table I. The purpose of this list is to identify which blighting condition(s) a particular project is expected to address and is not intended as a complete or final list of needed improvements within the Redevelopment Project Area. Most of the information and cost estimates are based upon the 1994-1999 Capital Improvement Program and have been rounded to the nearest thousand dollars. The costs depicted below are estimates and are subject to change as additional information becomes available or as local circumstances and needs change. 0 (J {,- "r r'~ LU ~- UJ O_ ~ 1,~ LZJ 0 0 O,, U,, 0 0 (/') O_ 0 (,,) "' c o ~' Eo ¢, w -~ . ~ ~ o . c "E ~ o ~w Z o ?-2 ' E E~ ,. ~ w~- =>~ Ew c. c ,.o,~w~ ~" ~wE o ~ oE .~__E ~-< ~ 5 ~...~ ~'~ ~. ~ ,~ ._ _ a~ ~au-O~-.u-m~ZOn O{Jc~ c:F eeeeee®®®®eee c: oleoeeoc®e® VIII. INCLUSIONARY AND REPLACEMENT HOUSING REQUIREMENTS Legislative ReQuirements Effective January 1, 1992, AB315 required that an affordable housing plan be prepared by each redevelopment agency that has adopted, or amended to add land area, a redevelopment plan after December 31, 1995. The Community Redevelopment Law Reform Act of 1993 (AB1290) encompassed the former AB315 requirements within the requirement to adopt an annual housing program as a part of the mandated implementation plan. The implementation plan must include the number of housing units developed, substantially rehabilitated, price- restricted, otherwise assisted, or destroyed. The implementation plan must also describe the Agency's plans for using annual deposits in the low and moderate income housing fund. If the implementation plan contains a project that will result in the destruction or removal of dwelling units that will have to be replaced pursuant to Code Section 33413, the implementation plans shall identify proposed locations suitable for those replacement dwelling units. Code Section 33413 of the Community Redevelopment Law requires that: (a) Whenever dwelling units housing persons and families of low or moderate income are destroyed or removed from the low and moderate income housing market as part of a redevelopment project which is subject to a written agreement with the Agency or where financial assistance has been provided by the Agency, the Agency shall, within four years of the destruction or removal, substantially rehabilitate, develop, or construct, or cause to be substantially rehabilitated, developed, or constructed, for rental or sale to persons and families of low or moderate income, an equal number of bedrooms as those destroyed or removed units at affordable housing cost within the territorial jurisdiction of the Agency. When dwelling units are destroyed or removed after September 1, 1989, 75 percent of the replacement dwelling units shall replace dwelling units available at affordable housing cost in the same income level of very low income households, lower income households, and persons and families of low and moderate income, as the persons displaced from those destroyed or removed units. (b) (1) At least 30 percent of all new and substantially rehabilitated dwelling units developed by an agency shall be available at affordable housing cost to persons and families of low or moderate income. Not less than 50 percent of the dwelling units required to be available at affordable housing cost to persons and R:~IOUSING~MI'PLAN.DOC 11/1/94 sdl 10 families of low or moderate income shall be available at affordable housing cost to, and occupied by, very low income households. (2) At least 15 percent of all new and substantially rehabilitated dwelling units developed within a project area under the jurisdiction of an agency by public or private entities or persons other than the Agency shall be available at affordable housing cost to persons and families of low or moderate income. Not less than 40 percent of the dwelling units required to be available at affordable housing cost to persons and families of low or moderate income shall be available at affordable housing cost to very low income households. Additional Inclusionarv Housing Reouirements On September 28, 1994, the passage of SB732 incorporated additional requirements that call for the 8gency's inclusionary housing requirements to be met every ten years. If the requirements are not met within the applicable ten year period, the agency must fulfill its inclusionary housing requirements on an annual basis. Further, if the agency exceeds their inclusionary housing goals during a given ten year period, the excess housing units can be counted towards inclusionary housing goals in the subsequent ten year period. For example, if 100 new housing units are developed or substantially rehabilitated in a project area within ten years of the initial implementation plan by entities other than the redevelopment agency, 15 of those units must be affordable to low and moderate income households (of which 6 must be affordable to very low income households). If more than 15 units are developed or substantially rehabilitated as units affordable to low and moderate income households during this ten year period, the affordable units in excess of 15 may be counted toward the agency's requirements for the next ten year period. However, if fewer than 15 units are affordable to low and moderate income households at the end of the ten-year period, the agency must meet its production goals on an annual basis until the requirements for the ten-year period are met. Affordability Reouirements Housing costs for low and moderate income housing developed pursuant to Sections 33413 must be affordable to persons and households whose income do not exceed 120 percent of the area family income. For purposes of the Implementation Plan, the following income limits are used: · Very Low Income (0-50 percent of area median family income) · Low Income (51-80 percent of area median family income) · Moderate Income (81-120 percent of the area median family income) The area median family income limits are adjusted for household size, with smaller households having lower income limits. The 1994 HUD median family income adjusted for a four-person household in Riverside County is $42,300. Thus by definition, 1994 maximum income is $21,150 for a very low income four-person household, $33,840 for a low income four-person family and $51,840 for a four- person moderate income family for jurisdictions in Riverside County. Department of Housing & Community Development - Income Limits Table 2 RIVERSIDE Area Median: $42,300 Very low 14800 16900 19050 21150 22850 24550 26250 27900 income Lower income 23700 27050 30450 33850 36550 39250 41950 44650 Median 29600 33850 38050 42300 45700 49050 52450 55850 Moderam 35550 40600 45700 50750 54800 58850 62950 67000 income Affordable Housing Costs Table 3 Income Levels Very Low (0-50%) Low (51-70%) · Owner· Costs· 30% of 50% 121 of adj. AMI 30% of 70% of adj. AMI Renter Costs·: ':;:'.'..'...: 30% of 50% of adj. AMI 30% of 60% of adj. AMI (70-80%) Option: Max: 30% of gross hh inc. (61-80%) Moderate (81-120%) Min: 28% of gross hh inc. Max: 35% of 110% of adj. AMI Option: Max: 30% of gross hh inc. 30% of 110% of adj. AMI (111-120%) Option: Max: 35% of gross hh inc. Option: Max: 30% of gross hh inc. Household income levels relative to area median income. Area median income adjusted for family size appropriate for the unit. R:XHOUSlN(I~MPPLAIq.lX)C 11/1/94 Duration of Affordability Section 33413(c) says, in part, that "The agency shall require that the aggregate number of ..dwelling units rehabilitated, developed, constructed or price-restricted pursuant to subdivision (a) or (b) remain available at affordable housing cost to persons and families of low income, moderate income, and very low income households, respectively, for the longest feasible time, as determined by the agency, but for not less than the period of the land use controls established in the redevelopment plan, except... [if] a longer period of time may be required by other provisions of law..The agency may permit sales of owner-occupied units prior to the expiration of the period of the land use controls established by the agency for a price in excess of that otherwise permitted under this subdivision pursuant to an adopted program which protects the agency's investment of moneys from the Low and Moderate Income Housing Fund. If land on which those dwelling units are located is deleted from the project area, the agency shall continue to require that those units remain affordable as specified in this subdivision." Section 33413(g) adds that "'Longest feasible time,' as used in this section, includes, but is not limited to, unlimited duration." Subdivisions 33413(c) and (g) are somewhat less flexible than the general affordability criteria for agency-assisted units set forth in Section 33334.3(f). The latter requires that all new or substantially rehabilitated housing units developed or otherwise assisted with monies from the low and moderate income housing fund on or after January 1,1988, shall remain affordable for the longest feasible time but not less than fifteen years for rental units and ten years for owner-occupied units. This potentially lesser standard only applies to agency-assisted units which are not counted as contributing to the agency's obligations under Section 33413(a) or (b). Section 33413(b)(2)(C) adds that "long-term affordability covenants purchased or otherwise acquired pursuant to subparagraph (B) shall be required to be maintained on dwelling units at affordable housing costs for not less than 30 years." Replacement Housing Reouirements The Redevelopment Agency is required to replace low and moderate income housing units destroyed or removed as a part of a project development with another Low or Moderate Income Unit within four years. The Agency may replace destroyed or removed dwellings with fewer units if the replacement units have a greater or equal number of bedrooms and are affordable to the same income level households. Seventy-five percent of the replacement units shall be available at affordable housing cost to the same income level as persons displaced. R:tI4OUSING~PLAN.DOC 11/1/94 The Reolacement Housing Plan Consistent with the Community Redevelopment Law and Redevelopment Plan, this Replacement Housing Plan sets forth the City of Temecula Redevelopment Agency's plan for the development and construction of replacement dwellings within four (4) years following the date of destruction of affordable dwelling units removed or destroyed in connection with certain Capitol Improvement Projects within the redevelopment area. The Temecula Capitol Improvement Program (CIP) currently contains three road and bridge improvements that may result in the loss of 15 residential units. The following table describes the projects, the number of units estimated to be displaced and the number of bedrooms in each unit. Table 4 CIP Projects Project Description Number of Units Bedroom Size 1st Street Bridge 12 2 Felix Valdez/ Pujol Streets Realignment 3 3 Replacement dwelling units will be located within the boundaries of the project area. Alternative sites for affordable housing within the project area, suitable for projects which will provide replacement dwelling units, will be selected within four years following the removal of the units. The Redevelopment Agency plans to meet its replacement housing requirements pursuant to Section 33413(a) on both an opportunity and funds available basis, through one or more Federal, State, County or City sponsored housing programs including without limitation the following programs: 2. 3. 4. 5. 6. 7. Community Development Block Grant Program Home Program Section 202 Program Redevelopment Tax Increment Funds Redevelopment Section 108 Funds Redevelopment Tax Credits Density Bonus Ordinance The specific funding for replacement units will be derived from one or more of these sources. This portion of the Temecula Redevelopment Area Implementation Plan shall constitute the Replacement Housing Plan as required by Section 33413.5 R:~'IOUSlN~.DOC 1111/94 sdl 14 Existing Housing Production in Project Area Since the adoption of the Redevelopment Plan, there have been no Agency assisted housing units developed or substantially rehabilitated within the project area. Nor has there been any privately developed or substantially rehabilitated housing units constructed within the project area. Based upon this information, the Temecula Redevelopment Agency has no current inclusionary housing requirements. Residential Production Potential in Project Area This section analyzes the residential production potential in the Temecuia Redevelopment Project Area. Site Inventory The Temecula Redevelopment Area encompasses approximately 1,757 acres of land, of which 42 acres are currently occupied by residential uses. A total of 399 existing residential units can be found within the project area. Another 6.75 acres are currently vacant, but have a residential land use designation. A total of 87 new housing units may be added to the Project Area through the development of currently vacant land. Recycling of currently occupied land would result in a net gain of 132 units. The Temecula Redevelopment Agency currently has no plans for the direct development of housing units. Given a private residential build out of 219 new units in the project area, future inclusionary housing requirements are estimated at 34 units for lower and moderate income households, of which 14 units must be affordable to very low income households. Site Inventory Existing Units TEMECULA REDEVELOPMENT PROJECT AREA RESIDENTIAL SITE INVENTORY TABLE 5 Potential Buildout Acreage (Dwelling Units) 42 399 Development of Vacant Land Low Medium (3-6 DU/AC) 1.50 7 Medium (7-12 DU/AC) 1 10 High (13-20 DU/AC) 4.25 70 Subtotal 6.75 87 Recycling of Underutilized Land .... 132 Total 48.75 618 Ten Year Housing Projections The Temecula Redevelopment Plan was adopted in July 1988 and will expire in July, 2028. This Implementation Plan extends for the ten year period between 1994 and 2004, and establishes how the Agency intends to fulfill inclusionary requirements for housing produced during this time frame. Based on the estimated buildout of 219 new units over the next 33 years, a constant pace of residential development would yield an annual housing production of 7 units in the project area. Thus the ten year housing projection for the Project Area would be 70 units. This rate of development would require a total of 11 affordable units to be constructed within the Project Area during the next ten years. Seven (7) of these units would be for low and moderate income households and 4 units for very low income households. These ten year projections are very general and based on economic conditions. They have been included in the Implementation Plan' as a means of gauging future residential growth to enable the Agency to develop an appropriate strategy to fulfill inclusionary requirements. However, the Agency's only commitment at the end of the ten year period is to have provided for the inclusion of Iow/mod units based on actual development. IX. HOUSING SET-ASIDE REQUIREMENTS The Temecula Redevelopment Agency is required to set-aside twenty percent (20%) of the gross annual tax increment into the low and moderate income housing fund. The purpose of the housing set-aside fund is to produce, increase, improve and preserve the community's supply of low and moderate income housing. In carrying out the annual housing set-aside requirements, the Agency may exercise any or all of P,:~OUSn~O~V~PLAN,DOC 1111/94 ~fi 16 its powers, including the following: Acquire real property or building sites subject to the provisions of Code Section 33334.16, California Community Redevelopment Law. Improve real property or building sites with onsite or offsite improvements, but only if the improvements directly and specifically improve or increase the community's supply of low or moderate income housing. · Donate real property to private or public persons or entities. · Finance insurance premiums. · Construct buildings or structures. · Acquire buildings or structures. · Substantially rehabilitate buildings or structures. Provide subsidies to, or for the benefit of, very low-income households, as defined by Code Section 50105, lower income households, as defined by Code Section 50079.5 or persons and families or low or moderate income, as defined by Code Section 50093, to the extent those households cannot obtain housing at affordable costs on the open market. (Housing units available on the open market are those units developed without direct government subsidies.) Develop plans, pay principal and interest on bonds, loans, advance, or other indebtedness, or pay financing or carrying charges. · Maintain the community's supply of mobile homes. Preserve the availability to lower income households of affordable housing units in housing developments which are assisted or subsidized by public entities and which are threatened with imminent conversion to market rates. The twenty percent housing set-aside fund monies can also be used for planning and general administrative costs, when directly related to programs and activities associated with Code Section 33334.2(e). This includes the following activities: Costs incurred for salaries, wages, and related costs of the Agency's staff or for services provided through inter-agency agreements, and agreements with contractors, including usual indirect related costs. Costs incurred by a non-profit corporation which are not directly attributable to a specific project. R:~HOUSlN(I~MPPLAN.DOC 11/1/~S rail 17 Legal, architectural, and engineering costs and other salaries, wages, and costs directly related to the planning and execution of a specific project which are authorized under subdivision (3) of Code Section 33334.2 and which are incurred by a non-profit housing sponsor and are not planning and administrative costs for the purpose of this section, but are, instead, project COSTS. Housina Set-Aside Fund Estimate In order for the Agency to estimate the number of units it could develop in the next five years, a projection of twenty percent (20%) of the tax increment revenue was developed for the period FY 1994-95 through FY 1999-2000. These monies would be allocated towards the preservation, development and/or substantially rehabilitation of very low, low and moderate income housing units. It is expected that these funds will be leveraged in concert with one of the housing programs cited in Section XIII. Projected Housing Set-Aside Years Estimated Twentv Percent Tax Increment 1994-95 1995-96 1996-97 1997-98 1998-99 1999-2000 1,168,662 1,192,035 1,215,876 1,240,193 1,264,997 1,290,297 Total 7,372,060 X. LONG TERM HOUSING GOALS AND POLICIES The General Plan Housing Element has five separate and distinct goals developed to address the various housing needs of the City. These are explicitly stated in order to give latitude and authority to design and address the implementation of the housing program. They are as follows: Goal I A diversity of housing opportunities that satisfy the physical, social and economic needs of existing and future residents of Temecula. Policy 1.1 Provide an inventory of land at varying densities sufficient to accommodate the existing and projected housing needs in the City. Policy 1.2 Encourage residential development that provides a range of housing types options in terms of cost, density and type, and provides the opportunity for local residents to live and work in the Policy 1.3 Policy 1.4 Policy 1.5 Policy 1.6 Goal 2 Policy 2.1 Policy 2.2 same community by balancing jobs and housing types. Require a mixture of diverse housing types and densities in new developments around the village centers to enhance their people- orientation and diversity. Support the use of innovative site planning and architectural design in residential development. Encourage the use of clustered development to preserve and enhance important environmental resources, and maintain important areas in open space. Promote the development of compatible mixed use projects that promotes and enhances the village concept, facilitates the efficient use of public facilities, and supports alternative transit options. Affordable housing for all economic segments of Temecula. Promote a variety of housing opportunities that accommodate the needs of all income levels of the population, and provides opportunities to meet the City's fair share of low- and moderate- income housing. Support innovative public, private and non-profit efforts in the development of affordable housing, particularly for special needs groups. Policy 2.3 Encourage the use of non-traditional housing models, including single-room occupancy structures (SRO) and manufactured housing, to meet the needs of special groups for affordable housing, temporary shelter and/or transitional housing. Policy 2.4 Pursue all available forms of private, local, state and federal assistance to support development and implementation of the City's housing programs. Goal 3 Removal of governmental constraints in the maintenance, improvement and development of housing, where appropriate and legally possible. Policy 3.1 Provide reasonable processing time and fees for new construction or substantially rehabilitation of housing. Policy 3.2 Consider mitigating development fees for projects providing affordable and senior citizen housing. R:~HOUSING~I~PPLAN.I~C 1111/9~ zdl 19 Policy 3.3 Periodically review City development standards to ensure consistency with the General Plan and to facilitate high-quality affordable housing. Goal 4 Conservation of the existing affordable housing stock. Policy 4.1 Monitor and regulate, if necessary, the number of affordable units eligible for conversion to market-rate units and develop programs to minimize the loss of these units. Policy 4.2 Develop rehabilitation programs that are directed at preserving the integrity of the housing stock. Policy 4.3 Support the efforts of private and public entities in maintaining the affordability of units through implementation of energy conservation and weatherization programs. Goal 5 Equal housing opportunity for all residents in Temecula. Policy 5.1 Encourage and support the enforcement of laws and regulations prohibiting the discrimination in lending practices in the sale or rental of housing. Policy 5.2 Assure and support the efforts of others to ensure that unrestricted access to housing is available to all segments of the community. Policy 5.3 Encourage housing design standards that promote the accessibility of housing for the elderly and disabled. Policy 5.4 Encourage and consider supporting local private non-profit groups that address the housing needs of the homeless and other disadvantaged groups. XI. FIVE-YEAR HOUSING GOALS During the five year period of the implementation plan, the Redevelopment Agency of the City of Temecula will facilitate the preservation, new construction and/or substantial rehabilitation of affordable housing projects which will support the following goals: Satisfy the replacement housing requirements of community redevelopment law as they relate to any housing units displaced by Redevelopment Agency activities. Satisfy the inclusionary housing requirements of community redevelopment law as they relate to the provision of affordable housing and as a percentage of new ikxnous~G~eL,e~.noc n/t,~4 ,,a or substantially rehabilitated housing constructed within the redevelopment project area. 3. Meet the City of Temecula's fair share regional affordable housing goals. 4. Support overall community development, economic development, and redevelopment/revitalization efforts within the City of Temecula. It is anticipated that the Redevelopment Agency will couple housing set aside funds with other public and private funding sources as described below. The Redevelopment Agency will seek to generate the construction, substantial rehabilitation, and/or purchase of affordability covenants through public and/or nonprofit sponsors. The City of Temecula has no Article 34 authority and it is not anticipated that the Redevelopment Agency or the City will directly own and manage affordable housing projects. Projects seeking financial assistance from the Redevelopment Agency's Low and Moderate Income Housing Fund will be evaluated on a case by case basis based on the following criteria: 1. Ability of the project to generate other public/private funding in support of housing set aside funds. 2. Degree to which the proposed project meets multiple community goals in addition to affordable housing goals. These goals include but are not limited to the following: a. Replacement housing requirements. b. Inclusionary housing requirements. c. Fair share regional housing requirements. Achieve community goals for redevelopment, neighborhood revitalization and economic development. The cost benefit of the proposed affordable housing program as defined by the ratio of affordable housing assistance requested to number of affordable housing units provided. The financial track record, management and development experience of the proposing sponsor. The number of affordable housing units to be developed over the five year implementation plan period will depend in large part on market conditions, availability of funding to supplement housing set aside funds and the degree to which proposals are submitted which satisfy the stated goals and objectives. Subject to these limiting factors, the following are the production goals for the five year implementation plan: NUMBER OF UNITS 1995 7 1996 7 1997 7 1998 7 1999 7 2000 7 TOTAL 35 Limiting Factors A number of conditions may limit the ability of the Redevelopment Agency to meet Implementation Plan goals. Among them are the existing land uses and socioeconomic characteristics of the project area, limited funds available from the Agency's Low and Moderate Income Housing Funds and other funding sources, and changing market calculations. ReQional Housing Needs Plan The Housing Element of the General Plan identified the future housing needs for the period from July, 1988 to July, 1994. Since that time the State has suspended funding of the mandate for The Southern California Association of Governments to update its Regional Housing Needs Plan. Therefore no additional needs determinations have been calculated. The annual housing projections contained in the above Ten Year Projections and Five Year Goals will assist the fulfillment of the City's future housing needs. XII. FINANCIAL ASSISTANCE/DEVELOPER PARTICIPATION The Agency's philosophy with regard to providing financial assistance in the development of affordable housing has been to leverage low and moderate income funds with other sources of funds. There are numerous federal, state, county or city programs in which an agency or developer may participate. In addition, the Agency may establish local programs to assist in the establishment and preservation of low and moderate income housing. Apendix A, contains a brief description of these various programs. R:mOUSING~II~LAN.DOC 11/1/94 sdl 22 APPENDIX A. HOME Prooram The HOME Program is a federally funded grant program for housing. Funds are allocated by formula to participating jurisdictions who are allowed great flexibility with respect to the types of properties to be assisted, the types of development (new construction, modest or major rehab, etc.) to be undertaken, the forms and amounts of financing to be offered, the quality and type of housing provided, the households assisted and procedures for running programs. The intent of HOME is: · To expand the supply of decent, safe sanitary and affordable housing. · To strengthen the abilities of state and local governments to provide housing. To assure that federal housing services, financing, and other investments are provided to state and local governments in a coordinated, supportive fashion. HOME is designed as a partnership among the federal government, sate and local governments and those in the for-profit and non-profit sectors who build, own manage, finance and support low income housing initiatives. CDBG In FY 1993/94, $206,771 in CDBG allocation and program income was available to Temecula. Currently, the City uses CDBG funds primarily for program planning and supportive services. Should the need arise to use these funds for affordable housing production in the future, a portion of the City's annual CDBG allotment could potentially be redirected. Other Funding Sources Low Income Housing Tax Credit |LIHTC) As part of the Tax Reform Act of 1986, Congress created the Low Income Housing Tax Credit (LIHTC), which provides a tax shelter for limited partners in low income housing projects. Although recently expired, this program will represent an important financial resource for affordable housing development by the private sector. Private Institutions Under the Community Reinvestment Act (CRA), private lending institutions such as banks, thrifts, and their affiliated mortgage banking subsidiaries are required to annually assess the credit needs of the communities in which they operate. The City has and will continue to hold meetings with lenders to discuss local needs and potential programs that may be within the guidelines of community reinvestment. Savings Association Mortgage Comoanv {SAMCO) SAMCO is a statewide organization supported by stockholder savings institutions that assists in the development and financing of socially-oriented affordable housing projects. SAMCO's Board of Directors reviews and selects projects to be offered in loan pools for participation purchase by its members. The pooling process has enabled SAMCO and its members to invest additional funds in low and moderate income communities. SAMCO has worked extensively with non-profit developers and financed a variety of housing projects that utilize joint public/private resources. California Community Reinvestment Corporation (CCRC) CCRC is a non-profit mortgage banking consortium specifically designed to provide long-term debt financing for affordable housing developments. Created in 1989, the CCRC is comprised of fifty-six banks representing all areas of the State. The CCRC finances loans by pooling funds from each of its member banks, CCRC has its own staff, which screens applications and provides technical assistance to developers. A loan committee, consisting of senior credit officers from member banks, approves all loans on behalf of member banks. When the loan committee approves a loan, CCRC draws funds from each bank in proportion to their size. CCRC enters into "partnership" with cities to leverage public monies (redevelopment low and moderate income housing funds, CDBG, etc.) with CCRC private funds to construct low and moderate income housing. Five different 30 year fixed rate loans products are offered, with affordability required to be maintained for the life of the loan. Below market interest rates are provided to both non-profit and for-profit sponsors (Treasury bonds of comparable maturities plus 100 basis points for non- profits, plus 200 basis points for profits.) Federal Home Loan Bank The affordable housing programs mandated by the Financial Institutions Reform, Recovery and Enforcement Act {FIRREA) of 1989 and the Community Reinvestment Act are now being implemented through the 12 Federal Home Loan Banks. By law, the affordable housing provisions call for, among other things, a requirement for interest-subsidized loans to be extended to low income homebuyers, as well as a variety of lending activities that fall under the "community investment" heading. The FHLB of San Francisco (Eleventh District - California, Arizona and Nevada) initiated its Affordable housing Program in early 1990. In the first 18 months of operation, the program provided $8.9 million in subsidies to 1,342 affordable housing units. Subsidies ranged from 85,100- 818,000 per single-family mortgage, to $1,200- 817,500 per multi-family rental over the life of the loan. R:~HOUSlN(3',IM~PI~.DOC 1111/~4 sdl 24 Though the Affordable housing Program, the FHLB provides interest rate subsides on advances to member banks that engage intending for long-term low to moderate income owner-occupied or affordable rental housing. Loans that qualify for the program include those used to finance homeownership by low income families, and loans which finance the purchase, construction or rehabilitation of rental housing, of which at least 20 percent will be occupied by very low income households. In addition to the Affordable Housing Programs, the FHLB also implements a Community Investment Program. Through this program, each district bank appoints a community investment officer and provides "community-oriented" mortgage loans to members at its own cost of funds. Loans that qualify for the program include those used to finance the purchase or rehabilitation of homes by borrowers earning 115% or less of the are median income, and those that finance commercial or economic development projects that benefit low and moderate income families. Deed-Restrict Existing Projects The City has numerous multi-family projects in the Project Area that are currently occupied by lower income tenants. The City/Agency may negotiate deed restrictions with owners of these existing projects to restrict rental rates to levels affordable to lower income households. Low and moderate income housing funds for rehabilitation of the buildings may be offered as an incentive in exchange for deed restrictions. Assistance to the existing rental stock should be publicly advertised to solicit applications from existing owners. Extend Existing Deed Restrictions The City has two multi-family projects in the Project Area that assist lower income tenants. Each project has 48 assisted units. Creekside, a senior apartment complex receives assistance from the FMHA, New Construction Section 15, and is not eligible to convert until August 27, 2037. However, Temecula Villas, which receives Section 8, New Construction assistance is eligible to convert on January 29, 1995. The Agency will work with the owners of the Temecula Villas to provide incentives to extend this deed restriction 33 years, to the life of the Redevelopment Plan. Conversion of Commercial Development to Mixed-Use Development The City of Temecula's General Plan and Old Town Specific Plan both contains policies that encourage the use of Mixed-Use development. Within the project Area and particularly within Old Town these policies could facilitate the conversion of second and third story office/retail space to affordable units. Low and moderate income housing funds for rehabilitation of the space may be offered as an incentive for conversion to affordable units. As part of the funding assistance the City/Agency should consider placing deed restrictions on these converted units to ensure unit affordability. Subsidized New Construction/Purchase of Existing Housing New construction of rental housing for lower income households traditionary represents one of the Agency's primary options to fulfill its inclusionan/housing production requirements. The gap between market rents and rents affordable to very low and low income households, typically require subsidies to achieve affordability. The amount of subsidy required depends on the type and size of housing to be developed. Given the current availability of housing products at costs below replacement costs, purchase of existing housing presents a more cost effective option. Substantial Rehabilitation Rehabilitation of existing rental properties is a cost-effective program option to fulfill the Agency's affordable housing production requirements. The Agency may use redevelopment low and moderate income housing funds to provide financial assistance for the rehabilitation of private non-profit and for-profit rental properties. The City/Agency will study the cost effectiveness of establishing its own rehabilitation program. As an option the City/Agency may wish to contract with the Riverside County Economic Development Agency to carry out a rehabilitation program. Currently, this Agency operates a home improvement loan program, a senior home repair program and is about to re-establish rental rehabilitation program. These programs are available to people residing within Temecula. Mobilehome Park Assistance Proqram Currently, a single mobile home park exists in the City. The City may develop a program using redevelopment low and moderate income housing funds to assist lower and moderate income mobilehome park tenants in stabilizing their rents. This may result in the conversion of a park to tenant-owned. A City program should be in conjunction with the State Mobilehome Park Conversion Assistance Program. Affordability controls on mobilehome parks can be achieved through different approaches: The City may assist tenant purchase of individual spaces. Permanent financing of lots may be provided through conventional financing, the State's Mobilehome Resident Ownership Program, redevelopment low and moderate income housing funds, and other public/private subsidies for lower income households. The City may provide technical assistance in the formation of a tenant association, which will then purchase the park with financial assistance from the City, State, or other sources. In return, the association will be required to either maintain the existing income mix of tenants or through time, restrict the renting of spaces to lower income tenants. In order to count mobilehome parks towards fulfillment of very low income inclusionary production requirements, space rents would need to be deed-restricted R:~IOUSIN(~IMI~PLAN.DOC 1111,~4 ~dl :~6 for the life of the Redevelopment Project, and restricted to occupancy by very low income households. First-Time Homebuyers Program The First-Time Homebuyers Program (FTHB) is a down payment assistance program for low and very low income homebuyers, Qualified buyers are eligible to receive up to $20,000 is assistance for the purchase of a primary residence. HUD requires that buyers participating in the program agree to an affordability period of 20 year for new construction and 15 years for all other property, If the property is sold prior to the end of the affordability period, and the purchaser is not eligible for the program, the assistance funds must be repaid, and the County shares in the equity with the seller, The funds are returned to the program to provide assistance to new participants. The program can also be structured as an interest rate buy-down program. Mortgage Credit Certificate Program The Mortgage Credit Certificate Program (MCC} is available for first-time homebuyers who have not had an ownership interest in a principal residence within the previous three years. Buyers interested in participating in the program make application through their lender at the time they apply for a home loan. The MCC provides a tax credit which allows the borrower to qualify for a larger mortgage. This tax credit is calculated a 20% of the annual interest paid on the primary mortgage, and can be no greater than $2,000 per year. Single Family Mortgaae Revenue Bond Program The County coordinates interested lenders and developers who wish to participate in a single family tax exempt bond program. The County issues tax exempt bonds to generate e pool of funds from which mortgages will be drawn. The developers and/or lenders pay the up front costs for the financing and reserve a portion of the pool to originate mortgages in their projects. The individuals purchasing the homes must be first time homebuyers and fall within certain income parameters. Ultimately, the first time homebuyer can qualify for a larger mortgage because the interest rate is lower than market rate. The developer/lender can use the mortgage pool to more effectively market their homes. Multi-Family Bond Program The Multi-Family Bond Program provides long term financing for multi-family projects at tax exempt rates. The program requires that 20% of the units be reserved for low and moderate income residents. Project owners are required to provide a letter of credit, insurance or other credit, insurance or other credit enhancement for the financing. It:~HOUSlNO~I'PLAN.DOC 1111/9~ .dl :~? Item 3 OLD TOWN REDEVELOPMENT AGENCY COMMITTEE AGENDA REPORT TO: FROM: DATE: SUBJECT: Members of the Redevelopment Advisory Committee Ro.a,d E. B.ad,ey. E ec..t,ve Di.ector November 1, 1994 Review and Comment on Proposed R~)A Commercial Rehabilitation Small Business Loan Prepared by: Mary Jane McLarney RECOMMENDATION: Review and provide comments to the Redevelopment Agency Board. DISCUSSION: The City has received a revised application from Temecula Shuttle to construct a 1740 square foot building located at 41593 Main Street, Temecula, CA. The business is owned by Ed and Kathleen Pool who are currently in the process of purchasing the land at the above location. The Agency Members previously approved an RDA loan for Temecula Shuttle in the amount of $82,585 on January 26, 1994 for the purpose of purchasing equipment and a modular building. This loan did not fund because the borrower has been in the process of revising his business plan. The facility would feature: Temeeula Shuttle Offices/lobby/ticket windows, public restrooms and day lockers, picnic/snack area, tour coach/wine tour loading/discharge area and rental office space. The public restrooms and facilities would be maintained by Temecula Shuttle. The Planning Department has reviewed the proposed facility for conformity with the Old Town Specific Ran. The site is located on the major east-west street in the heart of the Tourist Retail Core (TRC) District of the Old Town Specific Plan. Based upon this review, the Planning Director has determined that if the majority of the uses (by floor area) are consistent with the Plan, then the proposed facility may be included as a subordinate or accessory use. The Council's approval of the proposed loan will not eliminate the need for the applicant to apply for, and obtain approval of, a Plot Plan prior to developing the site. It should be noted that the proposed project location falls within the Old Town Entertainment proposed area. Although the Temecula Shuttle may be a compatible use with the Old Town Entertainment Project, neither the entertainment project architects nor the project proponent (Zev Buffman) have reviewed the Temecula Shuttle proposal. The new construction loan amount is $100,O00amortized over twenty years due in 5 years. This loan would be secured by a second trust deed on the subject property located at 41593 Main Street, Temecula, behind a senior lien in the amount of $74,000 carried by the seller. The loan would also be secured by an Assignment of Note secured by Deed of Trust owned by Mr. and Mrs. Dool on a parcel of land located in Wilmington, California. This loan approval would be contingent upon receipt of an appraisal on the Wilmington property with a minimum valuation of $350,000. The appraisal has been ordered and is expected to be completed by November 4, 1994. This note is a seasoned note having had 52 monthly payments. The assigned Note will be collected under terms of an installment collection contract at a financial institution acceptable to both the borrower and the City whereby the City will be notified in the event of any default of payment or payments in excess of scheduled payments. The proceeds of this loan will be handled by a fund control agent to ensure proper funding with periodical inspections for payments of materials and lien releases. In connection with the revised plan, Mr. Dool is requesting three exceptions: NOT RECOMMENDED BY STAFF: 1) Because his original loan request was granted using the 26-week T-Bill index, he is requesting this loan be granted using the same index rather than Prime +2%. Council is restrained from granting the request under the terms of the stipulated judgement. (The revised judgement authorizing a rate of Prime + 1% has not yet been approved by the court). STAFF RECOMMENDS COUNCIL CONSIDER: 2) The City grant a 6-month loan payment and fee grace period--from the completion of construction. Interest would accrue but payments would not be required. 3) If the Wilmington property note is paid off, Temecula Shuttle may pay off the balance of the first trust deed on the Temecula property. The City's second position would then become a first position and the Assignment on the Wilmington note would no longer be required. This would be acceptable subject to a new appraisal paid for by Dual Development. 4) If the Temecula Shuttle project proceeds without incorporation into the planning efforts underway for the Old Town Entertainment Project, conflicts could occur which could jeopardize the success of both projects. 5) The Council may wish to approve the loan application contingent on the incorporation of the Temecula Shuttle in the Old Town Entertainment Project. If the Council desires to accept this option, staff should be directed to initiate negotiations immediately with representatives of Dual Development and T.Z.B.G., Inc. Mr. Dool contends his project will improve the City of Temecula by providing for the construction and maintenance of public restrooms and day lockers. This loan has been reviewed and approved by our independent loan committee consisting of a local bank official and a Certified Public Accountant. FISCAL IMPACT: To date the City has funded ~ 109,400 in Redevelopment loans.