Title:
Title
(City Council/Housing Authority) Northlake Senior Apartments Tax Equity and Fiscal Responsibility Act Hearing Approval of Tax Exempt Bonds (Noticed on 09/11/2020)
End
FileID
File ID: 2020-00900
Location
Location: NW Corner of CA-99 and I-5, District 1
End
Recommendation:
Recommendation
Conduct a public hearing and upon conclusion adopt: 1) a City Council Resolution indicating the City Council has conducted a Tax Equity and Fiscal Responsibility Act (TEFRA) public hearing related to the proposed construction and financing of the Northlake Senior Apartments and approving the issuance of tax-exempt bonds by the Housing Authority; and 2) a Housing Authority Resolution a) indicating the intention of the Housing Authority of the City of Sacramento to issue up to $30,000,000 in tax-exempt mortgage revenue bonds to provide acquisition, construction and permanent financing for the Project, b) authorizing an application to the California Debt Limit Allocation Committee (CDLAC) for allocation authority to issue bonds, and c) authorizing the Executive Director, or designee, to execute necessary documents associated with the transaction.
FileName
Contact: Christine Weichert, Assistant Director, (916) 440-1353, Tyrone Roderick Williams, Deputy Executive Director, (916) 440-1316, Sacramento Housing and Redevelopment Agency
Body
Presenter: Christine Weichert, Assistant Director, (916) 440-1353, Sacramento Housing and Redevelopment Agency
Attachments:
1-Description/Analysis
2-Vicinity Map
3-Residential Project Summary
4-Cash Flow Proforma
5-Maximum Income and Rent Limits
6-Scope of Development
7-City Council Resolution - TEFRA Hearing
8-Housing Authority Resolution - Tax Exempt Bonds
Description/Analysis
Issue Detail: Northlake Senior Apartments is a new construction affordable senior housing development located on 7.54 vacant acres in the Greenbriar Subdivision near Elkhorn Boulevard and State Highway 99. A vicinity map is included as Attachment 2.
St. Anton Communities, LLC (Developer) has applied to SHRA for the issuance of up to $30,000,000 in tax exempt mortgage revenue bonds that will be privately placed with Citibank N.A. The project is anticipated to be funded with four percent Low Income Housing Tax Credits (LITHC’s), a deferred developer fee, a general partner capital contribution, and a conventional loan.
Description of Development: St. Anton Communities, LLC proposes to develop Northlake Senior Apartments, a new construction affordable senior housing development. The development will have 155 one-bedroom units and 36 two-bedroom units as well as a 3,350 sq. ft. community room. The project will consist of six one-story and 10 two-story buildings of five different types as well as one single-story community building. The residential buildings will be wood framed construction with stucco exteriors and concrete tile roofs. The exteriors include varying fenestration accented with extensive trim and multi-color painting scheme. Each apartment will contain wall to wall carpeting, central heating and air, and energy efficient appliances. Details of the scope of development are included as Attachment 6.
The community building will be orientated around a centralized open space for outdoor activities. The feature amenities will be an exterior swimming pool with a landscaped patio and picnic area as well as various open spaces with flexible functionality. The remaining open space areas will have lush landscaping and tree planting.
Mixed Income Housing Ordinance compliance: The Mixed Income Housing Ordinance, adopted by the City Council in 2015, requires large subdivisions such as Greenbriar to provide housing for a variety of incomes and family types. On May 30, 2017, Council adopted the Mixed Income Housing Strategy for Greenbriar, an approximately 577-gross acre site in the North Natomas neighborhood generally located northwest of the intersection of State Route 99 and Interstate 5. Greenbriar is a master planned area that will be a transit oriented, mixed-use community with residential, commercial, recreational parks, lakes, open space and public land used incorporating a light rail station along the planned Downtown-Natomas-Airport line.
To meet the Mixed Income Housing Ordinance obligation for the single family homes, the developer proposes to receive fee credits by building the 191-unit affordable North Lake Senior development which includes two exempt management units.
Resident Services: Resident Services will be offered by Pacific Housing, Inc. who will provide a minimum of 15 hours of on-site resident services per week. These services will consist of four hours where a resident services coordinator is on-site and 11 hours of services tailored to seniors. Specific programs will be determined after a resident needs assessment is completed.
Property Management: The Project will be managed by St. Anton Multifamily, Inc, a property management company with staff experienced in operating affordable apartment communities. SHRA staff, has reviewed and approved the management plan including daily operations, leasing procedures, maintenance, and eviction procedures and has ensured that the company meets SHRA’s requirements for property management. St. Anton Multifamily, Inc. has 21 affordable properties in their portfolio.
Low-Income Set-Aside Requirements: As a condition of receiving tax credits and the benefits of tax-exempt bond financing, federal law requires that a number of apartments be set-aside for targeted income groups. Income restrictions from Low-Income Housing Tax Credit (LIHTC) financing require that no households have income higher than 60 percent of the Area Median Income (AMI). Maximum rent and income limits can be found in Attachment 5. Project affordability restrictions will be specified in regulatory agreements with the Developer. The anticipated sources and their affordability requirements are summarized in the following table:
Northlake Senior Apartments
|
Unit Type |
Units |
% of Units |
Affordability Restriction (55 years) |
|
4% LIHTC, State Tax Credits, Tax-exempt Bonds |
58 |
30% |
Very-Low Income 50% of Area Median Income (AMI) |
|
4% LIHTC, State Tax Credits, Tax-exempt Bonds |
131 |
69% |
Low Income 60% of AMI |
|
Management Unit |
2 |
1% |
Exempt Management Units |
|
Total |
191 |
100% |
|
Policy Considerations: The recommended actions are consistent with a) SHRA’s approved Multifamily Lending and Mortgage Revenue Bond Policies; b) the 2013-2021 Housing Element, encourages the development of senior housing, particularly in neighborhoods that are accessible to public transit, commercial services, and health and community facilities (Resolution No. 2013-415.). Additionally, on May 30, 2017, the City of Sacramento approved the Mixed Income Housing Strategy as part of the Development Agreement. Regulatory restrictions on the property will be specified in regulatory agreements between the Developer and the Housing Authority for a period of 55 years for the mortgage revenue bond assisted units. Compliance with the regulatory agreements will be monitored by SHRA on an annual basis. All units will be regulated for a period of 55 years as a Low Income Housing Tax Credit funding requirement.
Economic Impacts: This multifamily residential project is expected to create an estimated 273.37 total jobs (153.47 direct jobs and 119.90 jobs through indirect and induced activities) and create an estimated $23,979,988 in total economic output ($14,737,094 of direct output and another $9,242,894 of output through indirect and induced activities).
The indicated economic impacts are estimates calculated using a calculation tool developed by the Center for Strategic Economic Research (CSER). CSER utilized the IMPLAN input-output model (2009 coefficients) to quantify the economic impacts of a hypothetical $1 million of spending in various construction categories within the City of Sacramento in an average one-year period. Actual impacts could differ significantly from the estimates and neither the City of Sacramento nor CSER shall be held responsible for consequences resulting from such differences.
Environmental Considerations: California Environmental Quality Act (CEQA): The Project previously underwent environmental review as part of the Greenbriar Development Project which was approved by the Sacramento City Council in 2008 when a program-level Environmental Impact Report (EIR) was certified. An addendum to the EIR was adopted in 2017 to allow for project-level implementation of the Greenbriar Project. Therefore, the St. Anton project is exempt from environmental review under CEQA pursuant to CEQA Guidelines Section 15182, Projects Pursuant to a Specific Plan.
Sustainability: The proposed project has been reviewed for consistency with the goals, policies and targets of the Sustainability Master Plan and the 2030 General Plan. If approved, these projects will advance the following goal, policy and target of goal number one - Energy Independence, specifically by reducing the use of fossil fuels and providing long-term affordable and reliable energy.
Commission/Committee Action: Sacramento Housing and Redevelopment Commission: At its September 2, 2020 meeting, the Sacramento Housing and Redevelopment Commission reviewed the staff recommendation for this item. The votes were as follows:
AYES: Alcalay, Morgan, Nunley, Osmany, Staajabu, Woo
NOES: None
ABSENT: Griffin
Not present to vote: Boyd, Starks
Rationale for Recommendation: The actions recommended in this report enable SHRA to continue to fulfill its mission to provide a range of affordable housing opportunities in the City and are consistent with the SHRA’s approved Multifamily Lending and Mortgage Revenue Bond Policies, the City of Sacramento’s 2013-2021 Housing Element, and the Ordinance No. 2017-040 adopting the Mixed Income Housing Strategy as part of the Development Agreement.
Financial Considerations: SHRA will receive a one-time issuance fee of 0.25 percent of the bond amount, which is payable at bond closing; and annual payment for monitoring the regulatory restrictions and administration of the bonds of 0.125 percent of the bond amount or an amount not to exceed $25,000 for the term of 55 years. The Developer will be responsible for payment of all costs, fees, and deposits relating to the bond application. Mortgage revenue bonds do not represent a financial obligation of SHRA, Housing Authority, or City of Sacramento. The law firm Orrick, Herrington and Sutcliffe, LLP, is acting as bond counsel for the Housing Authority.
Local Business Enterprise (LBE) - M/WBE and Section 3 requirements: Minority and Women’s Business Enterprise requirements and Section 3 will be applied to all activities to the greatest extent possible and as required by federal funding and in accordance with SHRA’s Section 3 Economic Opportunity Plan. The Developer and General Contractor will work with SHRA’s Section 3 Coordinator, Sacramento Employment and Training Agency, the Greater Sacramento Urban League or similar programs, to promote employment opportunities.