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AGENDA REPORT �iib��� /0ry
DATE: March 25, 2002 w
TO: Honorable Mayor and City Council
THRU: John B. Bahorski, City Manager
FROM: Lee Whittenberg, Director of Development Services
SUBJECT: ADOPTION OF RESOLUTION - FINDING THAT THE
USE OF TAXES FROM THE RIVERFRONT
REDEVELOPMENT PROJECT AREA FOR THE
RENOVATION OF AN APARTMENT BUILDING AT
1119 OCEAN AVENUE AND THE PROVISION OF LOW -
AND MODERATE -INCOME HOUSING OUTSIDE THE
BOUNDARIES OF THE PROJECT AREA WILL
BENEFIT THE PROJECT AREA
SUMMARY OF REOUEST:
Adopt Resolution Number A Resolution of the City Council of the City of Seal
Beach Finding that the Use of Taxes from the Riverfront Redevelopment Project Area for
the Renovation of an Apartment Complex Located at 1119 Ocean Avenue and the
Provision of Low - And Moderate - Income -Housing Outside the Boundaries of the
Riverfront Redevelopment Project Area will be of Benefit to the Riverfront
Redevelopment Project Area.
BACKGROUND:
Overview of Previous Agency Actions /Direction to Staff:
On January 28, 2002, the Redevelopment Agency authorized staff to work with housing
providers to address the lack of low - moderate income housing opportunities within Seal
Beach. That authorization allows the Agency Executive Director and other City staff to
work with various persons and organizations that wish to explore opportunities and
develop relationships with the Redevelopment Agency in regards to the utilization of the
Agency "housing set - aside" funds as a financing mechanism to encourage the provision
and retention of low - moderate income housing within the City. Given the previous
concerns presented to the Agency regarding "excess surplus funds ", it was very important
that the City staff be allowed the opportunity to discuss various projects for potential
participation by the Agency in a timely manner.
AGENDA ITEM
CAMy DOC m%\RDA \1119 O Mn Avenue Pmjmt CC Staff Report.dmcLW`a3 -21 -02
Resolution No. ZfZ,; finding Use of Agency Funds Outside Project Area Benefits Project Area
1119 Ocean Avenue Rehabilitation Project
City Council Staff Report
March 25, 2002
As indicated in the January 28, 2002 Agency Staff Report, several recent contacts with
housing providers have focused on the possible private acquisition of existing apartment
buildings within the City, and the Agency providing second trust deeds at either reduced
or zero interest rates to rehabilitate the units and rent to low- moderate income persons
and families. The assisted units would then be restricted to certain rental rates to ensure
occupancy by the target income population groups, with rental assistance funding
provided by the Redevelopment Agency.
The City has received a proposal to assist in the rehabilitation and rental subsidy program
for three units in an existing four -unit apartment building located at 1119 Ocean Avenue
(the "Property") by a local developer (the "Developer "). In exchange for Agency
assistance, the Developer will cause one of the apartment units to remain available to
lower income persons and two of the apartment units to remain available to low or
moderate income persons at an affordable rent for a period of at least 55 years. The
subject property is located outside of the Riverfront Redevelopment Project area, and
therefore certain findings must be made by the City Council and Redevelopment Agency,
which are discussed below.
The Redevelopment Agency has previously approved the project and this action is
necessary to comply with the provisions of Redevelopment Law regarding the use of
Agency funds outside of the Riverfront Redevelopment Project Area boundaries.
Use ofA¢encv Funds Outside Redevelopment Proiect Area• Necessity of City Council
Findines:
Pursuant to California Health and Safety Code Section 33334.2(g), an agency may use
monies from its Low and Moderate Income Housing Fund outside the redevelopment
project area only if both the Agency and the City Council adopt a resolution which makes
a determination that the affordable housing project in question will benefit the project
area. Therefore, because the Property is outside the Riverfront Project Area, the Agency
and the City Council must each adopt a resolution making a finding that the renovation of
the Property by the Developer will benefit the Riverfront Project Area. The Agency has
taken that action earlier this evening.
The Seal Beach Redevelopment Agency desires to make a forgivable loan to the
Developer in an amount not to exceed $150,000.00, using monies from the Agency's
Low and Moderate Income Housing Fund, in order to (1) facilitate the rehabilitation of
the 4 -unit apartment complex located on the Property and the restriction of 3 of these
units for affordable housing, and (2) obligate up to $250,000 of the same funds to provide
rental assistance in the form of rent subsidies to be granted directly to the ownedlardlord
of the Property. The total project obligations would not exceed $400,000.00. The
Property lies adjacent to but outside the Riverfiont Project Area, but is located within 800
feet of the Riverfront Project Area's boundaries.
1119 Ocean Avmue PmjmtCC Staff Rc ft
Resolution No. Yp9a. Finding Use of Agency Funds Outside Project Area Benefits Project Area
1119 Ocean Avenue Rehabilitation Project
City Council Staff Report
March 25, 2002
It is the opinion of staff that the renovation of the Property will constitute a benefit to the
Riverfront Project Area. There are no currently existing multi - family rental housing
located within the Riverfront Project Area, other than the Oakwood Apartments building
which is not in need of rehabilitation assistance. As there are no other multi- family
developments within the Riverfront Project Area, it is not possible to provide multi-
family residential rehabilitation programs within this project area. The Property is
located in an area immediately adjacent to the Riverfront Project Area and is within
walking distance of the Riverfront Project Area, just 800 feet away. Due to the proximity
of the Property to the Riverfrom Project Area, the rehabilitation of the apartment building
on the Property by the Developer will serve to increase the supply of affordable housing
to residents of the Riverfront Project Area and in this manner will benefit the Riverfront
Project Area as well as the surrounding Seal Beach community as a whole.
FISCAL IMPACT:
Commitment of a maximum of $400,000 of "Housing Set- Aside" Funds from the
Riverfront Redevelopment Project "Housing Set- Aside" Fund. This fund has in excess of
$1,600,000 available.
RECOMMENDATION:
Adopt Resolution Number y9fA, A Resolution of the City Council of the City of Seal
Beach Finding that the Use of Taxes from the Riverfront Redevelopment Project Area for
the Renovation of an Apartment Complex Located at 1119 Ocean Avenue and the
Provision of Low - And Moderate - Income Housing Outside the Boundaries of the
Riverfront Redevelopment Project Area will be of Benefit to the Riverfront
Redevelopment Project Area.
e Whittenberg
Director of Development Servii s
Attachments: (2)
Attachment 1: Resolution Number YSya, A Resolution of the City
Council of the City of Seal Beach Finding that the Use of
Taxes from the Riverfront Redevelopment Project Area for
the Renovation of an Apartment Complex Located at 1119
Ocean Avenue and the Provision of Low - And Moderate -
Income Housing Outside the Boundaries of the Riverfront
1119 Ocean Avenue RojectCC stiff Report
Resolution No. _ Finding Use of Agency Funds Outside Project Area Benefits Project Area
1119 Ocean Avenue Rehabilitation Project
City Council StaJfReport
March 25, 2002
Redevelopment Project Area will be of Benefit to the
Riverfiont Redevelopment Project Area
Attachment 2: California Health and Safety Code Section 33334.2(g)
1119 dean Av.P jcm.CC Staff Report
Resolution No. §,7 i, Finding Use of Agency Funds Outside Project Area Benefits Project Area
1119 Ocean Avenue Rehabilitation Project
City Council Staj/Report
March 25, 2002
ATTACHMENT 2
CALIFORNIA HEALTH AND SAFETY
CODE SECTION 33334.2(g)
"(g) (1) The agency may use these funds inside or outside the project area.
The agency may only use these funds outside the project area upon a
resolution of the agency and the legislative body that the use will be of
benefit to the project. The determination by the agency and the legislative
body shall be final and conclusive as to the issue of benefit to the project
area. The Legislature finds and declares that the provision of replacement
housing pursuant to Section 33413 is always of benefit to a project. Unless
the legislative body finds, before the redevelopment plan is adopted, that
the provision of low- and moderate- income housing outside the project
area will be of benefit to the project, the project area shall include property
suitable for low- and moderate - income housing."
1119 Ocean Avmw Pn4mt.0 StaffReport