Housing Department NORTHWEST COMMISSION Heritage Square Senior Housing Project Update William K. Huang, Housing Director Philip Williams, BRIDGE Housing Anna Slaby, BRIDGE Housing Lynnelle Bryant, MasBuild November 7, 2013
Heritage Square Senior Project Update Housing Department Background–Critical Need for Affordable Senior Housing • Soaring growth in senior population � Baby boomer generation began aging past 65 in 2011 � Growth in LA Co senior population in coming 20 years quadruple the growth in the previous 20 years � Senior population in LA Co projected to grow by 90% over next two decades � quadruple the growth in the previous 20 years 2008 2010 2035 Growth 2008-2035 Seniors (65+) 992,000 1,066,000 1,885,000 90% Total Population 9,771,000 9,819,000 11,348,000 16% Seniors/Total Pop. 10% 11% 17% - 2
Heritage Square Senior Project Update Housing Department Background–Critical Need for Affordable Senior Housing • Seniors not making ends meet at Federal Poverty Level � Elder Index* quickly replacing outdated Federal Poverty Level (FPL) as new standard for evaluating needs of seniors in California � Elder Index measures actual costs of basic necessities for older adults. FPL is based only on cost of food. � Income needed by elderly couple to meet basic needs (LA Co, 2009): $14,570 FPL vs. $29,741 Elderly Index (Very Low Income limit for Heritage Square = $34,200) * UCLA and Insight Center for Community Economic Development 3
Heritage Square Senior Project Update Housing Department Fair Oaks Avenue Orange Grove Blvd BRIDGE Housing Asset Site SENIOR HOUSING (future development) DEVELOPMENT SITE
Heritage Square Senior Project Update Housing Department Background - Project Site • 2.8 acre block acquired by City between 2004 and 2008 with local, state and federal affordable housing funds • BRIDGE senior housing project to be developed on the northern half of the block 5
Heritage Square Senior Project Update Housing Department Background - RFP and Developer Selection • RFP was developed by the Heritage Square RFP Working Group: 2 reps from Fair Oaks PAC, 2 reps from Northwest Commission, and 2 Housing staff • Working Group convened 33 meetings between May 2009 and April 2011 • RFP issued in Feb. 2011 • Proposals were submitted by BRIDGE Housing, Mercy Housing, and National CORE 6
Heritage Square Senior Project Update Housing Department Background - RFP and Developer Selection • Third party housing consultants reviewed/scored the proposals • 5-member Independent Review Panel (IRP) reviewed housing consultants’ determinations and recommended selection of BRIDGE in Aug. 2011 • IRP was comprised of 3 local affordable housing professionals and 1 rep each from Northwest Commission and Fair Oaks PAC 7
Heritage Square Senior Project Update Housing Department Background – Key Public Meetings July 23, 2009 (joint meeting of NWC, FOPAC): Introduce • Working Group, mission statement, tasks & responsibilities October 7, 2009 (EDTech Committee): general update on • Working Group activities December 5, 2009: Update on Working Group activities, • church demolition, site concept plans) April 22, 2010 (joint meeting of NWC, FOPAC): Review • first draft RFP May 5, 2010: (EDTech Committee): Review of first draft • of RFP and update on Working Group activities 8
Heritage Square Senior Project Update Housing Department Background – Key Public Meetings October 14, 2010 (joint meeting of NWC, FOPAC, CDC): • Review updated draft RFP September 12, 2011 (City Council): Approve Exclusive • Negotiation Agreement with BRIDGE November 2 & 7, 2011 (EDTech/City Council): Approve • development agreement with BRIDGE April 18 & 23, 2012 (EDTech/City Council): Approve • amendments to development agreement including $600k loan and Section 8 project-based vouchers for 69 units 9
Heritage Square Senior Project Update Housing Department Project Status - City Planning Entitlements • Land Use/Zoning � MCUP approved by Hearing Officer on Sept. 19, 2012 • Project Design � Concept Design Review approved by Design Commission on December 10, 2012 � Ad hoc subcommittee of 3 from Design Commission and 3 from Northwest Commission met on Jan. 3 & 17, 2013 to conduct a 50% Advisory Review � Final Design Review approved by Design Commission on March 4, 2013 � The process resulted in a better design, more responsive to the community’s desires 10
Heritage Square Senior Project Update Housing Department 11
Heritage Square Senior Project Update Housing Department 12
Heritage Square Senior Project Update Housing Department 13
Heritage Square Senior Project Update Housing Department 14
Heritage Square Senior Project Update Housing Department Project Funding Sources • Total $25,539,877 City of City of B of A B of A Tax Credit Pasadena Pasadena Permanent Permanent Equity Land Loan Loan “A” Loan “B” Amount $4,353,000 $600,000 $1,166,505 $2,549,333 $16,871,039 Yes Yes Yes Yes No Secured? • Bank of America Loan “B” is underwritten with City of Pasadena Section 8 Project-Based rental vouchers 15
Heritage Square Senior Project Update Housing Department Why Heritage Square did not receive Tax Credits • BRIDGE submitted application in 1 st funding round, March 2013 � Application did not get funded � Knocked out of competition due primarily to a technical deficiency � Conventional permanent lender commitment letter did not acknowledge that underwriting was based in part on City’s Section 8 Project- Based rental subsidy � The letter has been corrected 16
Heritage Square Senior Project Update Housing Department Why Heritage Square did not receive Tax Credits • Edged out of 2 nd funding round, July 2013 � Funding in one of two eligible categories that the project competed in was fully allocated � Statewide 15% senior housing cap was hit before we could compete in the second category • 99 applications were submitted, 44 funded • Heritage Square had the highest score among 5 competing projects in the LA County region (excluding LA City projects) 17
Heritage Square Senior Project Update Housing Department Why Heritage Square did not receive Tax Credits • However, tax credit allocations are not made strictly by score � Funding is first allocated among the various Setaside pools � And then allocated by geographic region � Projects serving homeless populations are given priority over other projects with higher scores 18
Heritage Square Senior Project Update Housing Department Why Heritage Square did not receive Tax Credits • There are 4 Setaside pools: Nonprofit, Rural, At-Risk, Special Needs. Heritage Square can compete only in the Nonprofit Setaside pool. Competition in NONPROFIT SETASIDE Pool Project Housing City Score Credits Name Type (Tie Breaker) Whittier Place Homeless SN Unincorp. LA 59.496 $764,973 Carondelet Aps Homeless SN Los Angeles 54.025 $1,089,512 1701 MLK Jr. Way Homeless SN Oakland 42.960 $962,405 Maybell Orchard Senior Palo Alto 58.334 $1,087,124 Heritage Square Senior Pasadena 56.151 $0 – Not Homeless 19
Heritage Square Senior Project Update Housing Department Why Heritage Square did not receive Tax Credits • There are 11 Geographic Regions: City of LA, Balance of LA County, and 9 other regions statewide. Heritage Square can compete only in Balance of LA County. Competition BALANCE OF LA COUNTY Region Project Housing City Score Credits Name Type (Tie Breaker) Vernon Family Apts Large Family Vernon 49.147 $807,053 El Monte Gateway Large Family El Monte 44.835 $2,091,546 Harding Apts Large Family San Fernando 38.520 $756,163 Long Beach & 21 st Apts Special Needs Long Beach 27.521 $1,192,699 Heritage Square Senior Pasadena 56.151 $0 – Snr Cap 20
Heritage Square Senior Project Update Housing Department Why Heritage Square did not receive Tax Credits • A senior project (Inglewood) applied in and was funded from the At-Risk Setaside pool, but the funding was still counted towards the statewide 15% senior housing cap. • A senior project (Half Moon Bay) competed in the Rural Setaside pool and applied for an unusually high funding amount (over $2.4M). This caused the 15% senior housing cap to be maxed out earlier than usual. 21
Heritage Square Senior Project Update Housing Department Moving Forward • BRIDGE to apply for tax credits in Spring 2014 � Per City development agreement � Fewer projects competing � Proposed regulatory changes work in our favor by reducing the number of rehab projects and senior projects which will count against the senior cap � Possible additional financial leveraging to increase score 22
Heritage Square Senior Project Update Housing Department Moving Forward (after tax credits are secured) • Relocate Historic Decker House � Identification of relocation site in progress � Requires Historic Preservation Commission to approve Certificate of Appropriateness 23
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