TITLE
Recommendation to adopt resolution authorizing the submission of an application to the California State Department of Housing and Community Development for up to $13,350,000 in loan and grant funds available through the Transit-Oriented Development Housing Program; and
Authorize City Manager, or designee, to execute all documents and agreements necessary to apply for and utilize these funds for the construction of the affordable senior housing project proposed for development at 901-945 East Pacific Coast Highway, and related public infrastructure improvements. (District 6)
DISCUSSION
On August 13, 2019, Mercy Housing California (MHC), was selected in connection with a City of Long Beach (City) Request for Proposals (RFP) to purchase and develop the City-owned property at 925-945 East Pacific Coast Highway (Property). MHC subsequently entered into a Purchase and Sale Agreement with the City for the Property, and in January 2020 MHC purchased an adjacent property at 901-917 East Pacific Coast Highway. The combined properties comprise the proposed 31,590-square-foot development site (Site). A site map is attached for your reference (Attachment A). Over the past 10 months, MHC has prepared plans and identified funding for the development of a 68-unit senior affordable rental housing project on the Site. The Long Beach Community Investment Company (LBCIC) awarded $3,000,000 in financial support to the project on March 18, 2020. It is anticipated that MHC will receive project entitlements by the end of 2020. MHC is now assembling the remaining financing for the project, which includes Transit-Oriented Development Housing Program (TOD Program) funds available from the California State Department of Housing and Community Development.
The TOD Program is funded by Proposition 1, the Veterans and Affordable Housing Bond Act of 2018. Its primary objectives are to increase the overall supply of housing, increase the supply of affordable housing, increase public transit ridership, and minimize automobile trips. The program seeks to accomplish these objectives by providing financial assistance for the development of housing and related infrastructure near public transit stations. Under the TOD Program, low-interest permanent loans are available as gap financing for rental housing developments that include affordable housing units. In addition, grants are available for infrastructure improvements necessary for the development of affordable housing, or to facilitate connections between these developments and transit stations.
The TOD Program application guidelines require housing developers to apply jointly with local jurisdictions if a request for infrastructure improvement grant funds is included in the application. If approved, MHC and the City will apply for up to $13,350,000 in funding for the Project, which will include a 68-unit, mixed use building serving extremely low- to low-income seniors, including 33 senior and senior veteran households that have experienced homelessness. In addition to 68 studio and one-bedroom apartment units, this four-story building will contain 4,000 square feet of ground floor community-serving commercial space. Residential amenities will include an onsite resident manager, supportive services office space, a resident lounge, laundry facilities, a large community room, bicycle storage, and a private courtyard with a community garden, fireplace, and outdoor seating.
If the application is successful, funds of up to $10,000,000 will be awarded to MHC as a low-interest loan and will be used to help finance the senior housing portion of the proposed development. The loan will be secured by the property, and MHC will be responsible for repayment of the loan with rental revenue generated by the project. In addition, up to $3,350,000 in grant funds will be awarded to the City for infrastructure improvements and transportation amenities surrounding the project. These improvements include alley repair and widening, a new bus shelter, new short-term bike parking racks, public art, and street trees. The grant funds do not need to be repaid provided that the project is completed.
MHC and the City will be jointly liable for ensuring that the project is completed, and will be liable for the repayment of disbursed grant funds if the project is not completed. MHC has agreed to provide the City with an Indemnification Agreement that will cause MHC to be solely responsible for the repayment of grant funds. In addition, the City will require a Payment and Performance Guarantee, and payment and performance bonds, which will ensure the project is completed.
This matter was reviewed by Deputy City Attorney Richard F. Anthony on June 17, 2020 and by Budget Analysis Officer Julissa José-Murray on June 26, 2020.
TIMING CONSIDERATIONS
City Council action is requested on July 21, 2020, as the application is due on July 30, 2020. A Resolution authorizing the submittal of the application is required in the application package.
FISCAL IMPACT
The joint application will be submitted for an amount of up to $13,350,000, the maximum amount allowed under the TOD Program funding announcement. Matching grant funds are not required, and the agreed-upon Indemnification Agreement will exempt the City from any obligation to repay the funds, if awarded. This recommendation has no staffing impact beyond the normal budgeted scope of duties and is consistent with existing City Council priorities. There is no fiscal or local job impact associated with this recommendation.
SUGGESTED ACTION
Approve recommendation.
BODY
[Enter Body Here]
Respectfully Submitted,
OSCAR W. ORCI
DIRECTOR OF DEVELOPMENT SERVICES
APPROVED:
THOMAS B. MODICA
CITY MANAGER