03-09-2004 CC RPT 25 - Laserfiche WebLink

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People Serving People CITY OF RIVERSIDE CITY COUNCIL MEMORANDUM Riverside ~lFAmerlca Clt~ HONORABLE MAYOR AND CITY COUNCIL DATE: March 9, 2004 ITEM NO: 25 SUBJECT: REQUEST ADDITIONAL ALLOCATION OF FUNDS FOR TOPAZ & TURQUOISF AFFORDABLE HOUSING PROJECT - SUPPLEMENTAL APPROPRIATION BACKGROUND: On May 6, 2003, the City Council and Redevelopment Agency board approved the Topaz & Turquoise project, which consists of the acquisition and substantial rehabilitation of sixteen (16) fourplexes and two (2) vacant lots located between Topaz Drive and Turquoise Street. The City and Agency are assisting this project, which is being undedaken by the Southern California Housing Development Corporation, DBA Riverside Housing Partners LP ("Developer"), an experienced and successful non-profit affordable housing developer that operates throughout southern California. When the project was approved in May 2003, the total cost for the project was originally projected to be $10,261,962, of which the City and Agency were contributing $3,675,269, or $60,551 per unit. Since then, the Developer has been able to gather more specific information on costs to the project and sources of funding, which has resulted in several adjustments to the project budget. The Topaz and Turquoise Revised Sources and Uses, attached as Exhibit A, shows the original budget, the revised figures, and the reasons for each adjustment. Staff is currently requesting a funding increase of $200,000 for the project, or $3,125 per unit. As shown in the Budget, there have been increased project costs of $979,307. These costs are due to a variety of reasons, including: · More accurate construction estimates based on invasive examination of a vacant unit; · The addition of carports to the project; · Additional operating reserves required by the State for the Multi-family Housing Program; · Increased acquisition costs above the original appraisal amounts (as already approved by Council in closed session); · Revised costs for permits, fees, and soft costs (architectural, engineering) based on proposals received by the Developer; and · A slight increase in insurance and contingency amounts due to overall higher construction costs. However, these cost increases are off-set by additional revenues that the Developer is bringing to the project - specifically, an increase in the allocation of federal Iow-income housing tax credits, and an increased permanent loan amount due to a slightly higher Area Median Income for 2004. These increased revenues off-set the higher costs by $797,307. Given this additional revenue, there remains a gap of $200,000 that the Developer is requesting the City to fund. This would bring the City's total commitment to the project up to $4,075,269, or $63,676 per unit. 25-1