01/18/2000 RA RPT 06 - Laserfiche WebLink

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rni CITY OF RIVERSIDE COUNCIL/AGENCY MEMORANDUM Honorable Mayor & City Council and Redevelopment Agency Date: January 18, 2000 Item. NO.: 6 Subject: REQUEST AUTHORIZATION TO TRANSFER TITLE OF THE GOLDWARE SENIOR HOUSING SITE FROM THE CITY TO THE REDEVELOPMENT AGENCY AND THE AGENCY TO LEASE THE SITE TO DEVELOPER AND TO COMMIT CITY HOME FUNDS TO PROJECT Background At the October 19, 1999 Joint Council/Agency meeting, staff was directed to execute an Exclusive Negotiating Agreement (ENA) between the City, Agency and Thomas Safran and Associates (TSA). The ENA allowed TSA to incur the necessary expenses to prepare and submit one or more applications to the California Tax Credit Allocation Committee (a division of the State Treasurer's Office) for Federal and State Tax Credits. The feasibility of the proposed Goldware Senior Housing hinges on the! success of TSA in obtaining suitable financing, and the Tax Credits would require the least City /Agency subsidy. The Agency /Council staff report mentioned that after further analysis of the Tax Credit application process, TSA might return to the Agency and/or Council for additional commitments in order to make the Tax Credit application more competitive. The proposed project would have approximately 160 units, in two -story buildings. Approximately with about 10% of the units will be 2- bedrooms and 90% one - bedrooms. Amenities on the 6.3 acre site would include a swimming pool, tennis courts and club house, some of which will be shared with the Goeske Senior Center. There will be about 219 parking spaces. If the developer is successful in obtaining the 9% tax credits, rents would range between $400 to $600. The unit sizes would be between 558 and 889 square feet. Current Issue The new State Treasurer is currently reviewing the Tax Credit funding guidelines, which include the scoring system for Tax Credit applications. Draft guidelines were published January 7, 2000 and final ones will be out on February 2, 2000. Once the final guidelines are published, TSA and staff will further refine the best strategy for structuring the Tax Credit application. Until then, staff and TSA must make some general assumptions regarding how best to structure the most competitive application with the least amount of City /Agency subsidy. As required by the ENA, TSA has analyzed all of the successful and unsuccessful Tax Credit applications from the last Tax Credit funding cycle in 1999 (attached). Staff received TSA's analysis on November 29, 1999. Assuming the Tax Credit guidelines remain the same, TSA's analysis suggests how best to structure a Tax Credit application for the Goldware project. This analysis emphasized the competitiveness of the process - Riverside County had the lowest success rate in the State, due to the number of applications submitted (2 out of 25 applications were funded). Nevertheless, TSA is well versed in Tax Credit financing in that they had two projects funded in the last funding cycle. 6 -1