HomeMy WebLinkAbout0576.000..
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MoVQmber 1S t 1990
THE HONORABLE C I'ri COtJNCIL
PALO ALTO .. CA
DJ!IQ11IO. POI HI PlJRcu.SB or 639 !.OS ROBLBS AVENUE BY THE PALO ALTO
_008n.o COllPOBATI01l
Members of the Council:
leport. ip Bria'
This report is a follow-up to the report (CMR~559:0) recommending
funding to assist the Palo Alto Housing Corporation (PAHC) in
purchasinq 630 Los Robles Avenue, approved by council on November
St 1990. This report requests the vithdrawal of $2.1 million from
the Housing-Reserve Fund t to be deposited in escroW' for the
purchase of 630 Los Robles Avenue by the PARe, and an amendment to
the existing ROusi"9 Reserve Guidelines adopted in 1986.
Mel!:qroup4
on November 5, 1990, Council approved funding of $2.1 million from
the Residential-Miscellaneous account of the Housing Reserve Fund
to the. PARe tor its pu:t.'chase of a J 3 unit townhouse complex at 630
Los Robles Avenue. Council also approved a loan of $1 million from
the Industrial-Commercial account of the Fund to the Residential
Miscellaneous account. CUrrently, the Residential-Miscellaneous
account ha~ only $1.1. million. The combined $2.1 million is to be
placed in escrow to be used toward the purchase of 630 Los Robles
Avenue.
The use of these tunas is made with the understanding that there
viII be n~otiations with local representatives regarding the
possible use of Community Development Block Grant (COBG) funds tor
the qran~ instead of the $1 million from the Industrial-Commercial
account. It is staff's understanding that if COBG funds are not
available just prior to clcse of es~r~w (December 14, 1990), the
Industrial-Commercial account monies will he loaned to the
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Residential-Miscellaneous account and used. If this occurs,
Council also required that any monies deposited in the future in
the Residential-Miscellaneous account must 'be used to I"eimburse the
Industrial-Commercial account until the $1 million loan is
replaced. No interest is to be charged, and the reimbursement to
the Industrial-CQmmercial account will also include either $352, SOO
or 50 percent of the proceeds (whichever is larger) from the sale
of the Bryant Street Well site. In addition. the City Manager and
city Attorney Blust review and approve the LEvel One hazardous
material study being conducted concerning thE"-property; and the
PAHC must notify the City if any change in the transaction
materially affects the purchase price.
Staff bas prepared the a't-tached Budget Amendment Ordir.a:nce to
authorize the loan from the Industrial-Commercial account and the
withdrawal of $2.1 million fronl the Residential-Miscellaneous
account ~or de~sit in Ticor Title Insu~ance Escrow No. 0593919
towards the purchase of 630 Los Robles Road.
Housing Reserve Gyidelines Modification
Council's action on November 5th also requires adoption of a
modification to the 1986 Housing Reserve Guidelines permitting the
loan from the Housing Reserve Industrial-Commercial account. The
lIIodl:fication as proposed by staff will add a sentence to the
guidelines to read as fol1o~s:
-However, no-interest loans may be made on a case-by-case
basis, as determined by the City Council., from the
I.ndustrial-Commercial account to the Residential
Miscelianeous account to support the aCq'..Jisitioll of
eXisting housing to he used for low and moderate income
families. III
The entire HQusinq Reserve Guidelines with the proposed
modifications underlined is attached as Exhibit A~
Bpvlronmental Review
This use of housing reserve funds is not considered a project under
CEQA requirements. Therefore, no environ'mental findings are
required by the city.
Regop.&n4atiop
Staff recommends that Council:
1) Itdept the Budget Alnendment Ordinance mak.ing $2.1 million
available to the PARC toward the purchase of 630 Los Robles
Avenue, 'With the condition that the City Manager and City
Attorney review and approve the Level One hazardous materials
report and City staff review the possibility of using COSG
funds, and
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2) Authori~e a no-interest loan ot $1.0 million from the
Industrial-Commercial account to the Residentio&l-Miscellaneou9
.ccou.nt~
3) Adopt the attached llIodification to the existing Housing
Reserve Guidelines to allow-, on a case-by-case basis with
Council approval, loans to the Residential-Miscellaneous
account trom the Industrial-Commercial account.
4} Authorize the city Manaqe~ to execute any documents necessary
to complete the funding process.
R •• pectfully submitted,
~ttachaents: BAO
EYJbibit A -Housinq Reserve Guidelines
ce~ Palo Alto Housing corp.
Related 0IRs:
CJIR:S59:0
CIIR,576:0 3
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ORDINANCE NO.
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ORDINANCE OF THE COUNCIL OF THE CITY OF PALO ALTO
AMENDING THE BUDGET FOR THE FISCAL YEAR 1990-91 TO ESTABLISH
AN APPROPRIATION IN i"IIE HOUSING RESERVE FUND RESIDENTIAL ACCOUNT
FOR CONTRIBUTION TO THE PALO ALTO HOUSING CORPORATION FOR
PlJRCHASE OF 530 LOS ROBLES AVENUE
WHEREAS # pursuant to the provisions of Section ~2 of Article
III of th~ Charter of the City of Palo Alto, the Council on June
18, ~990 did adopt a budqet for fiscal year 1990-91; and
l.~EREAS, the Palo Alto Housing Corpo:r~tion (=PAHC·) has
requested financial assistance from the City to purchase a 33-unit
townhouse complex located at 630 Los Robles Avenua (-Property-),
Which vill be used for additional low and moderate income housing
in the City; and
WHEREAS, the Residential-Miscellaneous account of the Housing
P..eserve. Fund (-Residential account .. } was established to provide
adJ.itional affordable housing: in the City and the account has
available funds for this purpose; and
WHEREAS, the council has authorized a no-interest loan from
the Industrial-Commercial account of the Housing Reserv~ FUnd
(-Industrial-Commercial account-) to the Residential account under
this ordinance, to supplement the funds available in that account
tor con~ribution to t~e PARe for its purchase of the property; and
WHEREAS, tha Council intends that the Industrial-Commercial
account will be reimbursed for the loan to the Residential account
from fifty percent of the proceeds from the sale of the Bryant
street veIl site, but in no event less than $362,500, and from
future contributions to the Resiaential ac~ount; and
WHEREAS, the Council also intends that the PAHe will provide
the City, for its review and 6pproval, the Phase I geotechnical
investiqation report on t,he Proper~y and will notify the City of
any changes in the transaction ~hich ~ould materially affect the
costs associated with the purchase of the property;
NOW, THEREFORE, the Council of the City of Palo Alto does
ORDAIN as follows:
SECTION 1. One Million Dollars ($1,000,000) shall be
transferred froll the Industrial-Commercial account of the Housing
Reserve Fund to the Residential account of said Fund and the
followinq two (2) receivables shall be established in the
Industrial-ColRJDercial account: (1) Three Hundred Sixty-two Thousand
piv. Hundred Dollars ($352,500), payable from the Capital Improve
ment Fund; and (2) the balance of the One Killion Dollars
($l,OOO,~OO), payable from future contributions to the Residential
account~
SECTIOH 2. The receivables est~blished under Section 2 shall
be adjusted to reflect the aotual net proceeds from the sale of the
Bryant Street well site, with the Capital Improvement Fund payment
to the Industrial-Commercial account to be fifty percent (50') of
those proceeds but in no event less than ThrEe Hundred sixty-two
Thousand Five Hundred Dollars ($362,500).
SECTION 3. The sum of Two Hi 11 ion One Hundred Thousand
Dollars ($2,100,000J is hereby appropriated to the Residential
Account General Expenses Account for payment to the PARe in escrow
for purchase of the Property" and the Residential account is
ccrrespondingly reduced. However-" such payment to the PAHC is
subject to the city's review and approval of the Phase I qeotechni
cal investiga.tion report on the Property and. PARe's: notification to
the City at any changes in the transaction ~hich would materially
affect the costs associated ~ith the purchase of the Property.
SECTION". This transaction will reduce the Housing Reserve
Fund balance from $3,545,141 to $1,782,,541 as of OCtober 31" 1990.
Tbe CApital Improvement Reserve will be reduced from $5,,037,,553 to
$4~675,OS3 as of october 31, 1990.
SECTION 5. The Council of the City of Palo Alto hereby fin4s
that the enact1nent of this ordinance is not a project under the
california Environmental Quality Act and" ther-efore, no environmen
tal l~pact assessment is necessary.
SECTION 6.
Municipal Code,
adoption.
As provided in Section 2.04.375 of the Palo Alto
this ordinanca shall become effective upon
INTl\C.'OOCED AND PASSED,
AYES,
!IDES:
Ar..sTENTIONS:
ABSENT:
ATTEST: APPROVED,
city C~l~er~k------------Mayor
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APPROVED AS TO FORK,
city Attorney
APPROVE!):
city Manager
DIrector of Finance
D~rector of Planning
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EXHIBIT A
HOUSING RESERVE GtTIDKLTNES
PUrpoRt
The Hou8inq Reserve (the Reserve) is a separate City fund set 6side
for the specific purpose of assisting in the development ot housing
that is affordable to low, moderate and middle income families and
in assistinq in the housing needs of 10\1 and JIIoderate income
persons~ All monies contributed to the Reserve end interest
earnings accrued shall be used solely for these purposes, subject
to guidelines set forth below.
The Reserve is Blade up of t'Wo accounts, the -Industrial-Commercial
and the -Residential-Miscellaneous· accounts. Monies received from
industrial and commercial developers, pursuant to Chapter 16.47 of
the Palo Alto Municipal Code*, are deposited by the City Finance
Department in the Industrial-commercial account~ Monies received
from residential developers" in-lleu of providinq housing under the
City"s Below Market Rate (BMRj Proqra~ (Program 12 of the Housing
El_ent), are deposited by the Finance Depa:rbnent in the
Residential-Miscellaneous account. This second account also
includes .onies from miscellaneous sources that ara intended for
Oousinq purposes (e.q." Mortgage Revenue Bond fee paY!Dent, Webster
Wood payments, and any repayment of loans from the Reserve)~
Eligible Uses
The Reserve will be used to reduce the cost of housing to levels
that are affordable to low, moderate and middle income families, as
defined in the City's Comprehensive Plan. A preference ~ill be
qiven to projects with housing for families ~ith minor children,
however, this prererence does not preclude the use of funds tor
other types of housinq affordable to the low, moderate and middle
incoae. Monies that have been cradite~ to the Industrial
Commercial account must be used to support the construction of new
housing development l whereas monies credited to the Residential
Miscellaneous account may be used for either new or existing
bousinq. However, no-interest loans may be made on a case-by-case
basis Ie deternined by the City coun_c::il from the Industrial
Commercill Account to then Residential-Miscellaneoys account to
aupport the acquisition of existing housing to be used for l~
I'Merote income families. Eligible uses include, but are not
limited to, the followinq:
.Including payments required pursuant to the California
Environmental Quality Act prior to enactment of Chapter 16~47.
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Eligible UB •• in Support of New Lo~/noderatelMiddle Income Housing
J>evelop."nt.
l~ Purchase ot land or air riqhts for resale to developers at a
reduced coat to facilitate housing development tor low,
moderate and .iddle income households;
2. Reduction ot interest rates for construction loans or
peraan.nt financinq used by developers or purchasers of low#
moderate And aiddle income housing;
3. Payment ot predevelopment and development costs .. including the
cost. associatea with obtalninq Mortgage Revenue Bond
tinanclfl<~H and
Payment ot off-site costs directly relating
and middle income housing development
connections .. road improvements).
to low, moderate,
(e.q., utility
Eligible Uses in SUpport of Existing Low/ModerAte Ingom@ Housing
1. Costs in support ot the City'S Rental Housinq Acquisition
Program; and
2'. Reesonable expenses necessary to acm.inistar the City~s BeloW'
Market Rate Program or other City-sponsored housing p~ograms.
Request for use of the Reserve funds shall be submitted to the City
Xar~qer for review and recommendation ~o the City Council~
A request for funding should provide the following minimum
information:
1~ SiZe of loan or grant requested;
2~ A description of the proposal tc be tunded a~d the
orqanizations involved in the project~ Public benefit and
relevant Comprehensive Plan Housinq policies and programs.
should be identified;
3.. IdentlficCition ot the number of low, Itoder.itte, and middle
income persons to be assisted and the specific income Lange of
those assisted;
.c ~ Reasons why a grant, rather than a loan, is requested (if
applicable);
5. Identification of loan rate and terms .. security or collateral,
and source of repayment funds {if applicableJ ~ and
6. Identification of leverage .achieVed throuqh City grant or
loan~
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A~ the cIa.. of .ach fiscal year, the Director of Finance and the
Director of PlannIng> and COllllllunity Environment shall report on
activity during thc previoc.s year (deposits and transfers) and
available fu.nds.. Ttl"! city Auditor's Office shall periodically
.xaalne t:b.J.. report. and all HousiTl9 Reserve funds, and shall report
on the results ot thla examination~