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HomeMy WebLinkAboutRA Minutes 2000-07-17IN THE COUNCIL CHAMBER OF THE CITY OF SAN RAFAEL. MONDAY. JULY 17. 2000 AT 7:30 P.M. Regular Meeting: Present: Albert J. Boro, Chairman San Rafael Redevelopment Agency Barbara Heller, Vice -Chair Paul M. Cohen, Member Cyr N. Miller, Member Gary O. Phillips, Member Absent: None Also Present: Rod Gould, Executive Director Gary T. Ragghianti, Agency Attorney Jeanne M. Leoncini, Agency Secretary ORAL COMMUNICATIONS OF AN URGENCY NATURE: None. CONSENT CALENDAR: 7:43 PM Member Phillips moved and Member Miller seconded, to approve the following Consent Calendar items: Y"►9,1 RECOMMENDED ACTION 1. Approval of Minutes of Regular Meeting of Monday, Approved as submitted. July 3, 2000 (AS) 2. Resolution Authorizing Grant Agreement for Ritter RESOLUTION 2000-23 - House (RA) —File R-392 RESOLUTION AUTHORIZING A GRANT AGREEMENT WITH RITTER HOUSE FOR HOUSING SUPPORT PROGRAM IN AMOUNT OF $40,000 3. Resolution Authorizing Economic Development Director to Amend the Existing Contract with Richard Bornholdt Consulting Group Through June 30, 2001 for a Fee Not to Exceed $30,000 (RA) — File R-173 x (SRCC) 187 RESOLUTION NO. 2000-24 - RESOLUTION AUTHORIZING ECONOMIC DEVELOPMENT DIRECTOR TO EXECUTE AN AMENDMENT TO THE EXISTING CONTRACT WITH RICHARD BORNHOLDT CONSULTING GROUP THROUGH JUNE 30, 2001 FOR A FEE NOT TO EXCEED $30,000 AYES: MEMBERS: Cohen, Heller, Miller, Phillips & Chairman Boro NOES: MEMBERS: None ABSENT: MEMBERS: None SRRA Minutes (Regular) 7/17/00 Page 1 AGENCY CONSIDERATION: 4. RESOLUTION APPROVING THE EXECUTION OF A LOAN TO MARIN HOUSING IN AN AMOUNT NOT TO EXCEED TWO HUNDRED AND FIFTY THOUSAND DOLLARS ($250,000) FOR THE PURCHASE OF A BELOW MARKET RATE UNIT AT BAYPOINT LAGOONS (RA) — File R-433 x (SRCC) 229 Senior Development Specialist Stephanie Lovette reported that this item is a request for a loan to Marin Housing Authority for the purchase of a Below Market Rate (BMR) unit at Baypoint Lagoons. The property owner has filed for bankruptcy, and property foreclosure proceedings are slated to commence. Ms. Lovette noted that the Marin Housing Authority's representative Maurice Wolohan and Housing Consultant Dick Bornholdt were both on hand to answer the Agency's questions. Member Heller inquired of Ms. Lovette if she felt the estimated $10,000 for refurbishment of the unit represents an accurate figure for repairing the unit. Ms. Lovette responded that the cost of refurbishment would depend primarily on what shape the owner leaves the unit in upon vacating the building. Given the owner's financial situation, the assumption is that the property will need refurbishment to some degree. Member Phillips asked Staff to expand on their belief that the unit will likely be sold quickly. Ms. Lovette noted that the regular market price units are selling in the range of $300,000 to $500,000. Mr. Wolohan explained that the below market rate program currently has 380 families on its waiting list. Of those 380 families, 15 individuals are San Rafael City employees who would receive priority consideration for any properties the city is selling or reselling within San Rafael. Newly built properties would be priced in the range of $190,000 to $220,000, based on the City's present inclusionary ordinance for homeownership. The $187,000 repurchase price of this property is directly in line with those figures and is affordable to approximately 90 to 100 percent of median. The Marin Housing Authority does not anticipate any difficulty reselling the property once they clear the legal encumbrances and gain control of the unit. Member Phillips asked if clearing the legal issues would guarantee that the City would not be strapped with any other legal considerations. Mr. Wolohan responded that the Housing Authority has built in a worst-case scenario for legal costs in dealing with the bankruptcy. The scenario includes a lawsuit to regain the property, if necessary. At this time, it is unclear as to whether the Authority will have the owner's cooperation, which would greatly facilitate the sale of the property as well as reduce the anticipated costs. Member Phillips then asked Mr. Wolohan if he understood correctly that the $34,000 figure listed under the "Schedule of Estimated Costs" represents a reasonable maximum. Mr. Wolohan replied he believed that to be the case. Chairman Boro recalled the Marin Lagoons property, a project in which the city had recent involvement. In that circumstance, there were issues pending on the properties that the City had no control over. As a result, the MHA and the redevelopment staff recommended the City not purchase those properties for resale. In contrast, the only issue concerning this property is that of bankruptcy. Mr. Wolohan concurred, offering additionally that in this case, there are no outstanding issues regarding construction defects or other long-term legal problems such as Marin Lagoons was experiencing. SRRA Minutes (Regular) 7/17/00 Page 2 Member Cohen inquired as to what party or parties would be responsible for the interest on the loan for the unit. Ms. Lovette suggested the City consider a scenario often implemented by other cities, whereby the Housing Authority could use another city's money, paying that City the LAIF (Local Agency Investment Fund) rate for the time they are using the money. The Housing Authority would then pay that amount back to the City, which in this case is calculated to be $7,000, based on six months' interest. Member Cohen asked if he understood correctly that the $7,000 would have to be factored into the resale price of the unit. Mr. Wolohan responded that was correct. Member Cohen noted his request for the Agency to have an opportunity to discuss the resale issue before the unit is priced for resale. Chairman Boro asked Staff how the $49,000 in costs associated with the unit would be repaid. Ms. Lovette explained that the City could either resell the unit for the amount that it costs to acquire the unit, clear the title and refurbish the property or sell it for the BMR purchase price. She pointed out that if the unit is sold for an amount that recovers the full costs expended, the property would always be more expensive than the other BMR units. Chairman Boro stated that while he had no problem with maintaining the unit and advancing the loan, he had great concern for setting a precedent of tying up that much of the cost that it took to get the property back on the market. He suggested the unit be priced at a higher rate. Ms. Lovette clarified that if the unit is priced at a higher rate, it will still be considered affordable housing. Member Cohen agreed that until the Agency knows the hard numbers associated with this project, they would be unable to evaluate what amount of subsidy would be required to keep it affordable, and what that would buy versus what it might buy elsewhere as a housing subsidy. Member Cohen moved and Member Miller seconded, to adopt the resolution approving the execution of a loan to Marin Housing in an amount not to exceed $250,000 for the purchase of a Below Market Rate (BMR) unit at Baypoint Lagoons. RESOLUTION NO. 2000-25 - RESOLUTION APPROVING THE EXECUTION OF A LOAN TO MARIN HOUSING IN AN AMOUNT NOT TO EXCEED TWO HUNDRED FIFTY THOUSAND DOLLARS ($250,000) FOR THE PURCHASE OF A BELOW MARKET RATE UNIT AT BAYPOINT LAGOONS AYES: MEMBERS: Cohen, Heller, Miller, Phillips and Chairman Boro NOES: MEMBERS: None ABSENT: MEMBERS: None There being no further business to come before the Redevelopment Agency, the meeting was adjourned at 7:53 p.m. JEANNE M. LEONCINI, Agency Secretary SRRA Minutes (Regular) 7/17/00 Page 3