Loading...
1996-03-05 Special CIC Minutes211- MINUTES OF SPECIAL COMMUNITY IMPROVEMENT COMMISSION MEETING MARCH 5, 1996 The meeting was convened at 7:30 p.m., with Chair Appezzato presiding. Reverend Lois "Suji" Hochenauer, Home of Truth Spiritual Center, gave the invocation. ROLL CALL - PRESENT: Commissioners DeWitt, Lucas, Mannix and Chair Appezzato - 4. ABSENT: Commissioner Arnerich - 1. MINUTES (96-05) Minutes of the Special Community Improvement Commission Meeting held February 20, 1996. Approved. Commissioner Lucas moved approval of the Minutes. Commissioner Mannix seconded the motion, which carried by the following voice vote: Ayes: Commissioners, DeWitt, Lucas, Mannix and Chair Appezzato - 4. Noes: None. Absent: Commissioner Arnerich - 1. REPORTS AND RECOMMENDATIONS (96-06) Report from Community Development Director regarding Potential Tax Exempt Bond Issue for Bridgeport Apartments. Accepted. Don Roberts, Alameda, stated that Alameda currently had too much low-income housing; that there were approximately 160 units at the Bridgeport Apartments receiving Section 8 Vouchers; that the Ecumenical Association for Housing (EAH) desired to make all 600 units at Bridgeport Apartments low-income or affordable housing; that Alameda had done more than its share.in providing low-income housing in the Bay Area; that the West End had done more than its share in providing low-income housing; that he believed there was a State law that prohibited the concentration of low-income housing in one particular area; the City was going to put its credit reputation on the line for a $22 million bond issue to benefit Ecumenical Association for Housing; the properties would be taken off the tax roll, and questioned the impact on the Benefit Assessment District. Martha Caron, Alamedans for a Better City (ABC), requested public disclosure and discussion on the proposal. Chair Appezzato stated that there would be no vote taken tonight, and the report was for informational purposes only. Special Meeting, Community Improvement Commission March 5, 1996 1 21 The Community Development Director gave an overview of the report; stated that the intent of the report was to apprise the Commission of the discussions currently underway; that there were management issues at the Bridgeport Apartments; that neighboring citizens, Bridgeport Apartments residents, and Police were concerned; Bank of America had foreclosed on the Bridgeport Apartments; properties would be sold; that a very experienced non - profit corporation had been negotiating with the Bank of America to acquire ownership; that the benefits in negotiating with potential buyers were to exert some control on the extent to which new owners would invest in the complex to provide high - quality management and to enhance the physical appearance of the complex; that discussions, to date, regarded the ability of buyer to create smaller communities within the large complex, to improve management and appearance; that the non - profit corporation wanted the Commission to issue tax exempt bonds secured by the property; that the very low- and low - income units proposed to be in the deed restrictions would do two things: 1) satisfy the City's obligation under the 1995 ABAG goals, and, therefore, allow the City to fully comply with the ABAG fair -share goals for very low- and low- income housing, and release the City from the terms of the Guyton Settlement and the Court Order; and 2) allow potential developers, e.g. Syufy parcel, to satisfy requirements under State law for affordable housing; that the City's credit reputation was not at stake; that the matter of exemption from property tax of said units was currently being negotiated; and that the fiscal impacts and trade -offs would be part of a report at the time the Commission had a proposed agreement. In response to Chair Appezzato's inquiries, the Community Development Director stated that there was no liability to the City of Alameda; that the bond issue would not affect the City's bond rating; and that an alternative was the Bank of America would choose a developer they desired. Discussion was held regarding imposed deed restrictions. In response to Chair Appezzato's inquiry regarding the affects on the Naval Air Station [property] if placed into a redevelopment zone, the Community Development Director stated that the current proposal was that the availability of the Bridgeport Apartments would benefit the Business and Waterfront Improvement Project Area, and that that benefit could be extended to the Naval Air Station, if there was a desire to do so. In response to Chair Appezzato's inquiry regarding monies lost from the tax rolls, the Community Development Director stated that the number [of dollars] or off -sets had not been developed yet. Chair Appezzato stated that an off -set would be necessary, in lieu Special Meeting, Community Improvement Commission March 5, 1996 2 21c` of taxes. The Community Development Director stated that off-sets were being negotiated. In response to Chair Appezzato's inquiry regarding the next step, the Community Development Director stated that staff would come back to the Commission and the City Council with the initial steps to the financing process. In response to Chair Appezzato's inquiry regarding Housing Commission input, the Community Development Director stated that the Housing Commission had no regulatory role in the matter; however, that there was nothing to preclude information items going to the Commission for their input. Don Roberts, Alameda, expressed concern regarding pledging Commission tax increment funds for credit enhancement purposes. The Executive Director [City Manager] stated that the issue about financing was a perceived issue in terms of credit risk to the City and the Commission; that the only recourse a bond buyer would have was the property; that bond buyers were generally sophisticated individuals who would know their only security was the asset. Martha Caron, Alamedans for a Better City, stated that she had no position, but was encouraged that there was discussion on and exploration of the Bridgeport Apartments matter; and inquired whether the proposal would satisfy any of the terms of the Guyton Settlement, and whether a position had been negotiated with the plaintiff's representative at Legal Aid. Chair Appezzato responded in the affirmative. Ms. Caron commented on affordable housing requirements; she requested that the City consider impacts due to developers not meeting affordable housing requirements; questioned value of security bonds; and suggested that the City explore home ownership subsidization for the project, rather than tenant-occupied affordable housing. Pat Payne, Alameda, requesting information regarding Commissioners and Commission's funding. The City Attorney stated that the Commissioners' obligations and liabilities solely rested with a separate corporation. In response to Ms. Payne's inquiry regarding funding, the Executive Director explained, in part, that the Commission was a redevelopment agency under State law; that redevelopment agencies Special Meeting, Community Improvement Commission March 5, 1996 3 21 obtain funding by borrowing money in order to provide funding for projects and administration; that redevelopment projects borrow money from the City's General Fund; that the City receives higher property taxes (tax increments) as properties develop; and tax increments repay the indebtedness of redevelopment areas. In response to Ms. Payne's inquiry regarding loans, the Executive Director explained that bonds were the funding mechanism for the project; for example, borrowing money from individuals who expect a return on the investment over time; and that payments would come from increased level of property taxes in the improved area. In response to Ms. Payne's inquiry regarding restrictions on use of funds, the Executive Director remarked that there were certain State law requirements. Ms. Payne stated that she heard Catholic Charities intended to build 192 low- income units across the street from the Bridgeport Apartments. Commissioner Lucas stated that the Alameda Reuse and Redevelopment Authority was considering allowing Catholic Charities use of some military housing. In response to Ms. Payne's inquiry regarding low - income housing, Chair Appezzato stated that the proposal [Bridgeport Apartments], if approved, would stop all further requirements of the Guyton Lawsuit and also the 20% set aside in the redevelopment area. The Executive Director stated that the Section 8 Program was separate and apart from this project; that the Section 8 Program provided funding to private property owners to subsidize tenants; and that the Bridgeport Apartments currently had Section 8 tenants. Ms. Payne stated that she would like to see exact numbers, and questioned the actions of the Commission at the February 20th Meeting. Chair Appezzato stated that the Commission meets periodically; that this project had not been discussed previously; and that the Minutes of the February 20th Commission Meeting were available. Gary McAfee, Alameda, stated that he was concerned Bank of America would write off south of Atlantic Avenue so it could finance new housing along the Estuary. Neil Patrick Sweeney, Alameda, suggested that the Department of Housing and Urban Development visit the Bridgeport Apartments; and commented on Section 8 certificates. Special Meeting, Community Improvement Commission March 5, 1996 4 21 Grey Alves, Alameda, stated that a low- income property the size of the Bridgeport Apartments was too difficult to manage; that his company had successfully managed smaller properties consisting of no more than 250 units; suggested that it would be a prime opportunity to convert the apartments into home- ownership properties for low- income households; that many people who were considered low- income were single people making $24,000 and more who could afford to purchase the apartments as condominiums; commented on other companies who work together with cities to develop home ownership opportunities; and requested that Council consider same. In response to Commissioner Lucas's inquiries, Mr. Alves stated that he worked for a private, for - profit organization that owned and managed low - income housing; that his organization had 600 units of low- income housing in San Francisco, Marin and Contra Costa Counties; that the Ecumenical Association for Housing was a good company; that his organization's properties were not removed from the tax rolls and paid full taxes; expressed concern that HUD was cutting back its funding; stated that tenants were going to have their own vouchers and certificates of which they could leave the projects; that the non- profit organizations were going to have a difficult time making mortgage payments once the building subsidies were gone; that questionable financial aspects were an active concern of non- profit housing professionals; that it was his understanding the Alameda Reuse and Redevelopment Authority's Plan consisted of 168 units of low- income housing that would be within the vicinity of Atlantic Avenue; and that with the 120 units of low- income housing at the Esperanza project, it was a heavy concentration of low- income housing in one neighborhood. Barbara Kerr, Alameda, stated that the proposal would create 600 units of low- income housing in one place; suggested that the low - income housing obligations be scattered throughout the City; referred to a recent newspaper article regarding management and existing problems at the Bridgeport Apartments; and spoke in opposition to the proposal. Gerhard Degemann, Alameda, stated that the City should further investigate the Ecumenical Association for Housing and its method of operation. William McCall, Sr., Alameda, spoke in opposition to the property being taken off the tax rolls; commented on the Bridgeport Apartments' current bankrupt status; spoke in opposition to bailing the Bank of America out; and discussed current problems at that complex. In response to Commissioner Lucas's inquiries, the Community Development Director explained the Department of Housing and Urban Special Meeting, Community Improvement Commission March 5, 1996 5 21C Development's portability process; stated that said process had been in effect for five years; that the Bridgeport Apartments had lost approximately 30 certificates and vouchers in that time period; that there were 455 units occupied in a private market situation; and that type of subsidy, controlled by the client, was used by a relatively small percentage of the existing tenants. Discussion was held regarding occupancy rates for Section 8 low- income housing. In response to Commissioner Lucas's inquiries, the Community Development Director stated that the preponderance of units were in the two- and three-bedrooms category; that there was no reason to believe there would be any more people occupying the units than currently; and that the proposal included 15 units for other purposes, and the population would decline slightly. In response to Commissioner Lucas's inquiry, the Community' Development Director stated that if the [Bridgeport Apartments] property failed, the Community Improvement Commission's funds would not have to pay off the bonds; the bonds would be sold on the private market and income from the Bridgeport Apartments would pay bonds off; and that the only relationship with the bond transaction, over time, would be certain reporting responsibilities. In response to an inquiry from Commissioner Lucas, the Community Development Director reported that the Association of Bay Area Governments imposes new requirements every five years; that her understanding was the State had not permanently suspended its housing element requirements; that the Association would submit fair-share goals and the City would decide whether to comply; that she did not believe most communities were able to comply with the Association's requirements for low-income housing; that staff believed there were benefits that would come from not only satisfying the Guyton requirements, but major benefits in facilitating investment in the existing Business and Waterfront Improvement project: allowing market rate residential units built, e.g. drive-in theater site; Bridgeport Apartments complex was challenging to manage due large number of units; and that staff was concerned there be the highest quality of management possible. Discussion was held regarding large concentrations of poverty, and high-rise family development for low-income housing. The Community Development Director stated that through a bond issue, the Community Improvement Commission could have some involvement in the process. Commissioner Lucas stated requested salaries of the Ecumenical Special Meeting, Community Improvement Commission March 5, 1996 6 217 Association for Housing top ten employees be provided; and questioned the feasibility of converting the Bridgeport Apartments into home ownership opportunities for low- income Alamedans. The Community Development Director stated that the Bank of America had an accepted offer from the Ecumenical Association for Housing and are in escrow; that the property was not currently available; that the previous owner would not accept an offer that allowed the City to invest enough money for improvements; and that staff prioritized working with private owners. In response to Commissioner Lucas's inquiry, the Executive Director stated that the City had looked at home ownership of said property in the past; that staff had been an advocate of same and investigated the feasibility; a substantial amount of money would need to be added to the property, in addition to the purchase price; that staff looked at another $6 million on top of the [purchase price]; when these properties are purchased by the City, the level of scrutiny was substantially more; that the matter could be further investigated to determine if there was any opportunity for the City to participate; the property was in escrow, with a contingency that the City participate; the property could fall out of escrow if the Ecumenical Association for Housing was not willing to proceed; there was a much greater liability for the City, than for a private entity to purchase the property; and that the City would be at risk financially. Commissioner Lucas requested that staff explore whether the Ecumenical Association for Housing would be willing to consider making home ownership available for low - income housing; she commented on the benefits; and stated she would like to see home ownership opportunities increased. The Community Development Director stated that the Ecumenical Association for Housing had discussions with Legal Aid, and that Legal Aid had been very positive because of the Association's reputation for management. Commissioner Lucas stated that she would support home ownership opportunities at that location, but she would not support making property available for low- income people. The Executive Director stated that non - profit corporations that hold property are not subject to property tax; that Bridgeport Apartments paid approximately $180,000 in property taxes; the City's share was approximately $50,000 due to the State taking taxes for schools; the City would negotiate annual payments for City services, or payments in lieu of taxes from the Bridgeport Apartments; and that non - profit entities were not exempt from the benefit assessment districts. Special Meiling, Cmimunity Improvement Commission March 5, 1996 7 218 Commissioner Mannix stated that there are good and bad people in all economic classes of society and everyone can fit into the community of Alameda; he was concerned about removing the Bridgeport Apartments off the tax rolls, unless there is an equitable offset: payment in lieu of taxes; and he was interested in ownership-type programs which should be explored more. In response to Don Roberts' concern regarding a pledge from the Commission's tax increment funds for credit enhancement, the Community Development Director stated that there has been discussion about using money currently in the Business and Waterfront Improvement Project Area, low- and moderate income set aside, to pay for a letter of credit; and any credit enhancement would be brought back with the total package. Chair Appezzato stated that it was clear more information needs to be provided; and there needs to be town hall meetings in the neighborhoods. Commissioner Lucas moved acceptance of the report. Commissioner Mannix seconded the motion, which carried by unanimous voice vote - 4. (Arnerich - absent). ORAL COMMUNICATIONS, NON-AGENDA (Public Comment) (96-06) Gerhard Degemann, Alameda, stated concern regarding motorcycles stored on second-story balconies [building located on Kitty Hawk Road). COMMISSION COMMUNICATIONS (Communication from Commissioners) None. ADJOURNMENT Chair Appezzato adjourned the meeting at 8:56 p.m. Respectfully subm'tt d, DINE B. FELSCH, CMC Secretary The agenda for this meeting was posted in advance in accordance with the Brown Act. Special Meeting, Community Improvement Commission March 5, 1996 8