RESOLUTION NO. 109-2006 

 

 

 

AUTHORIZING A TAX INCREMENT PREDEVELOPMENT LOAN AGREEMENT IN AN AMOUNT NOT TO EXCEED $439,640 TO EM JOHNSON INTEREST INC., A CALIFORNIA CORPORATION, IN CONJUNCTION WITH THE DEVELOPMENT OF AFFORDABLE HOUSING FOR FIRST TIME HOMEBUYERS ON PARCEL EE-2 LOCATED AT WHITNEY CIRCLE AND HUDSON AVENUE; HUNTERS POINT REDEVELOPMENT PROJECT AREA; CITYWIDE TAX INCREMENT HOUSING PROGRAM

 

 

BASIS FOR RESOLUTION

 

1. In furtherance of the objectives of the California Community Redevelopment Law (Health and Safety Code Section 33000 et seq., the “Law”), the Redevelopment Agency of the City and County of San Francisco (the “Agency”) undertakes programs for the reconstruction and rehabilitation of slums and blighted areas in the City and County of San Francisco (the “City”).

 

1.   The redevelopment plan, referred to as the “Hunters Point Redevelopment Plan,” was adopted in response to community concern over the physical and economic decline in the Hunters Point community.  In cooperation with the City, the Agency is responsible for implementing the Hunters Point Redevelopment Plan.

 

3.      On February 10, 1997, the Board of Supervisors certified the election of the Bayview Hunters Point Project Area Committee (the “PAC”).  The PAC worked with Agency staff to develop the Bayview Hunters Point Community Revitalization Plan (the “Concept Plan”).  The PAC adopted the Concept Plan at its regular meeting in November 2000.  In 2004, the PAC completed the Framework Housing Program that described an array of affordable housing programs and policies supported by the PAC.

 

4.      On June 5, 2001, after a completive selection process, the Agency by Resolution No. 100-2001 entered into exclusive negotiations with Em Johnson Interest, Inc., a California corporation (‘EJI”), and Habitat for Humanity San Francisco, a California nonprofit public benefit corporation (“Habitat”), (collectively the “Developer”) to negotiate exclusively for the development of  24 low and moderate income for-sale housing for first time homebuyers (the “Project”) located at the corner of Whitney Young Circle and Hudson Avenue (“Parcel EE-2” or the “Site”).  The Project is consistent with the PAC’s Concept Plan and the Framework Housing Program.

 

1.   The Developer has submitted a request to re-enter into exclusive negotiations for the development of 24 affordable homeownership units at the Site.

 

6.             EJI has submitted a request for predevelopment funding to the Agency for the purpose of refining the development proposal for 17 of the 24 units proposed at the Site.

 

7.             The Citywide Affordable Housing Loan Committee reviewed Agency staff’s evaluation for the request for funding at its meeting on March 3, 2006, and recommended that the Agency Commission enter into a Predevelopment Loan Agreement with EJI in an amount not to exceed $439,640.

 

8.             The Developer has met with the Housing Committee, the Land Use Committee, and the Health and Environment Committee of the PAC.  On May 18, 2006, the Developer described the Project to the full PAC at its regular meeting who voted to endorse the Project concept and funding request. 

 

RESOLUTION

 

ACCORDINGLY, IT IS RESOLVED by the Redevelopment Agency of the City and County of San Francisco that the Executive Director is authorized to enter into a Tax Increment Predevelopment Loan Agreement with Em Johnson Interest, Inc., a California corporation, in an amount not to exceed $439,640 in conjunction with the development of 17 affordable homeownership units at Parcel EE-2, within the Hunters Point Redevelopment Project Area, as part of the Citywide Tax Increment Housing Program, substantially in the form lodged with the Agency General Counsel.

APPROVED AS TO FORM:

_________________________

James B. Morales

Agency General Counsel

 

 

108-13306-002                                                                                Agenda Item No. 4 (j, k & l )

July 20, 2006                                                                                         Meeting of August 1, 2006

 

 

MEMORANDUM

 

 

TO:                 Agency Commissioners

 

FROM:           Marcia Rosen

                        Executive Director

 

SUBJECT:     Authorizing an Owner Participation Agreement with Jos Levin Realty Corporation of San Francisco, a California corporation, for the proposed development at 1618, 1620, and 1630 Jerrold Avenue, located between Third and Phelps Streets (Assessor’s Block 5272, Lots 11, 14, and 15); Bayview Industrial Triangle Redevelopment Project Area

 

                        Conditionally approving the schematic design for the proposed development at 1618, 1620, and 1630 Jerrold Avenue, located between Third and Phelps Streets (Assessor’s Block 5272, Lots 11, 14, and 15); Bayview Industrial Triangle Redevelopment Project Area 

 

                        Approving the Replacement Housing Plan related to the proposed development at 1630 Jerrold Avenue located between Third and Phelps Streets (Assessor’s Block 5272, Lots 14, and 15); Bayview Industrial Triangle Redevelopment Project Area

 

EXECUTIVE SUMMARY 

 

Jos Levin Realty Corporation of San Francisco, a California corporation (the "Owner"), owns approximately 0.3 acres located at 1618, 1620, and 1630 Jerrold Avenue (the "Site") in the Bayview Industrial Triangle Redevelopment Project Area (the "Project Area ").  The Site fronts Jerrold Avenue between Third and Phelps Streets. 

 

Ewing Irrigation Products, Inc., a California corporation (the "Developer"), has a 10-year ground lease agreement to operate a landscape and irrigation wholesale business at 1618 and 1620 Jerrold Avenue.  The Developer would like to expand its business next door onto the Owner’s property at 1630 Jerrold Avenue, which is currently improved with a vacant two-bedroom, single-family house.

 

The Owner wishes to enter into an Owner Participation Agreement (the “OPA”) to demolish the existing vacant house at 1630 Jerrold Avenue and allow the Developer to groundlease the property for its business expansion.  The Developer proposes to install a new fence with landscaping at 1630 Jerrold Avenue as well as new street trees and landscape planters in the sidewalk in front of the Site.  The Developer will also refurbish its existing warehouse building with new paint, lighting, and signage (collectively, the "Development"). 

The proposed Development complies with the requirements of the Bayview Industrial Triangle Redevelopment Plan (the "Plan") and the Bayview Industrial Triangle Design for Development (the "Design for Development").  The Developer is not seeking any Agency financial assistance or variances from the Plan or Design for Development.  In addition, the Developer has agreed to participate in the Agency’s small business enterprise, construction workforce, and permanent workforce programs.

 

The Developer is also requesting approval of the schematic design for the proposed Development.  Staff has reviewed the schematic design and finds it acceptable subject to conditions of approval described below.  Staff has determined that the proposed Development is categorically exempt from environmental review pursuant to California Environmental Quality Act (“CEQA”) Guidelines Section 15301(1)(1).

 

Staff has also prepared a replacement housing plan to comply with the requirements of California Health and Safety Code Section 33413.5, which requires a replacement housing plan when low- or moderate-income housing units are demolished or lost under the auspices of a public agency action.  This replacement housing plan describes how the Agency will meet its obligation to replace the one vacant very low-income housing unit located at 1630 Jerrold Avenue (the “Replacement Housing Plan”). 

 

The Development was reviewed at numerous subcommittee meetings of the Bayview Hunters Point Project Area Committee (the “PAC”) in March, April, and July 2006.  The Replacement Housing Plan was distributed to the PAC on July 7, 2006, and was reviewed at subcommittee meetings of the PAC in July 2006.  The full PAC endorsed the Development and the Replacement Housing Plan at its meeting of July 20, 2006.

 

Staff recommends approval of the proposed Owner Participation Agreement, conditional approval of the schematic design, and approval of the Replacement Housing Plan.

 

DISCUSSION

 

Project Summary

 

• The Development –   The Site is approximately 11,848 square feet of contiguous land.   The Developer operates an existing landscape and irrigation wholesale business, Ewing Irrigation Products, Inc., in a warehouse facility located at 1618 and 1620 Jerrold Avenue.  The warehouse building is located immediately adjacent to a vacant, single-family house located at 1630 Jerrold Avenue.  The Developer plans to demolish the house and will use the 1630 Jerrold Avenue site for off-street loading and inventory storage, which will allow the Developer to expand its business operations at its warehouse.  The Developer will install a new fence with landscaping to screen the loading and storage uses at 1630 Jerrold and will install new street trees and landscape planters in the sidewalk in front of the Site.  The Developer will also refurbish its existing warehouse building with new paint, lighting, and signage.

 

• Permitted Land Use and Compliance with Development Standards – The Site is located within the District 1, light industrial, land use district of the Plan, and the proposed Development is a permitted use.  The proposed Development provides appropriate screening of loading and storage uses as required by the Design for Development. Although not required by the Design for Development, off-street loading will be provided on the expansion site which will improve traffic conditions on Jerrold Avenue.

 

• Schematic Design –  The proposed schematic design for the project is intended to complement the immediately adjacent Palm Broker garden center project through the use of similar landscaping and fence materials.  The public streetscape on this section of Jerrold Avenue will be further enhanced with the installation of street trees and landscape planters in the sidewalk.  See attachments 1, 2, 3, and 4 for a vicinity plan, demolition plan, site plan, and elevations.  Staff recommends that the following typical design details be resolved in the next phase of design:

 

 

• Environmental Review – Agency staff has determined that the proposed Development is categorically exempt from CEQA environmental review pursuant to CEQA Guidelines Section 15301(1)(1), demolition of a single-family residence. 

 

Proposed OPA Terms and Conditions

 

The following briefly outlines key provisions of the proposed OPA:

 

• Small Business Enterprise (“SBE”), Construction Workforce, and Permanent Workforce – The Owner has agreed to comply with the Agency’s SBE program and has agreed to give first consideration to Bayview Hunters Point residents for any permanent or temporary workforce hires and to utilize Young Community Developers as a resource for any hiring referrals.  The Developer expects to hire at least one additional person as result of the proposed expansion.

 

• Schedule of Performance – Although the Developer expects to commence construction in December 2006, with expected occupancy in February 2007, the OPA provides for the following outside key performance dates as follows:

 

Submission – Preliminary Construction Documents	Within 120 days of Commission approval of the OPA
Submission – Final Construction Documents	Within 120 days after Agency staff approval of the Preliminary Construction Documents
Commencement of construction	Within 30 days after issuance of the Building Permit by the City of San Francisco
Completion of construction	Within 6 months of issuance of the Building Permit by the City of San Francisco

 

Replacement Housing Plan

 

According to rental records provided by the Owner, the single-family, two-bedroom house at 1630 Jerrold Avenue was formerly occupied by a very low-income tenant from September 1989 through October 2001.  On November 3, 2001, the Owner removed the house from the rental market pursuant to the Ellis Act.  The house has been vacant since October 2001.

 

California Health and Safety Code Section 33413.5 requires a replacement housing plan when low- or moderate-housing units are demolished or lost under the auspices of a public agency action.  Therefore, in this case, staff prepared a Replacement Housing Plan which describes how the Agency will meet its obligation to replace the one vacant very low-income housing unit located at 1630 Jerrold Avenue, which will be demolished to make way for the Developer’s business expansion under the proposed OPA (See Attachment 5, Replacement Housing Plan).

 

Based on this action, the Agency has an obligation to provide for replacement units on a 1-for-1 basis within a redevelopment project area and on a 2-for-1 basis outside of a redevelopment project area pursuant to California Health & Safety Code § 33413(b)(2)(A)(ii).  To meet this obligation, the Replacement Housing Plan provides that the Agency will provide one replacement housing unit in either the Hunters Point Shipyard or South of Market Redevelopment Project Areas or two replacement housing units in the Mid-Market Redevelopment Survey Area or elsewhere within the territorial jurisdiction of the Agency.

 

The affordability level of the replacement unit(s) will be at the affordability level of the unit removed from 1630 Jerrold Avenue and the replacement unit(s) will be two-bedroom units in order to target the same household size as the unit removed from 1630 Jerrold Avenue.  An adequate means of financing the development of the replacement housing unit(s) exists.  The Agency currently has funds set aside for affordable housing development in, or of benefit to,its redevelopment project areas, and will increase such funds through its annual budget process as approved by the Agency Commission.  

 

The Replacement Housing Plan also provides thatthe Agency will ultimately work with a housing developer to develop the replacement unit(s).  Construction of the one or two replacement housing units will be completed within the four-year timetable identified in California Health and Safety Code Section 33413(a).

 

Community Input

 

While no formal community advisory body exists for the Bayview Industrial Triangle, the Agency consults with the PAC on matters related to the Project Area.  The PAC Land Use, Economic Development, and Executive Committees reviewed the Development in March, April, and July 2006.  The Replacement Housing Plan was distributed to the PAC on July 7, 2006, and was reviewed at the Economic Development/Housing and Executive subcommittee meetings of the PAC in July 2006.  The full PAC endorsed the Development and the Replacement Housing Plan at its meeting of July 20, 2006.

 

Originated by Tiffany Bohee, Development Specialist,

 and Saiful Abedin, Architectural Associate

 

 

 

 

Marcia Rosen

Executive Director

 

Attachments:    

Attachment 1 –  Ewing Irrigation Vicinity Plan

Attachment 2 –  Ewing Irrigation Demolition Plan

Attachment 3 –  Ewing Irrigation New Site Plan

Attachment 4 –  Ewing Irrigation Elevations

Attachment 5 –  Replacement Housing Plan

 

RESOLUTION NO. 105-2006

 

 

 

AUTHORIZING AN OWNER PARTICIPATION AGREEMENT WITH JOS LEVIN REALTY CORPORATION OF SAN FRANCISCO, A CALIFORNIA CORPORATION, FOR THE PROPOSED DEVELOPMENT AT 1618, 1620, AND 1630 JERROLD AVENUE, LOCATED BETWEEN THIRD AND PHELPS STREETS (ASSESSOR’S BLOCK 5272, LOTS 11, 14, AND 15); BAYVIEW INDUSTRIAL TRIANGLE REDEVELOPMENT PROJECT AREA

 

 

BASIS FOR RESOLUTION

 

 

1. Jos Levin Realty Corporation of San Francisco, a California corporation (the "Owner"), owns approximately 0.3 acres (11,848 square feet) located at 1618, 1620, and 1630 Jerrold Avenue (the "Site") in the Bayview Industrial Triangle Redevelopment Project Area (the "Project Area ").  The Site fronts Jerrold Avenue between Third and Phelps Streets. 

 

1. Ewing Irrigation Products, Inc., a California corporation (the "Developer"), has a 10-year ground lease agreement to operate a landscape and irrigation wholesale business at 1618 and 1620 Jerrold Avenue.  The Developer would like to expand its business next door onto the Owner’s property at 1630 Jerrold Avenue, which is currently improved with a vacant two-bedroom, single-family house.

 

1. The Owner wishes to demolish the existing vacant house at 1630 Jerrold Avenue and allow the Developer to ground lease the property for its business expansion.  The Developer proposes to install a new fence with landscaping at 1630 Jerrold Avenue as well as new street trees and landscape planters on the sidewalk in front of the Site.  The Developer will also refurbish its existing warehouse building with new paint, lighting, and signage (collectively, the "Development"). 

 

1. The Bayview Industrial Triangle Redevelopment Plan (the “Plan”) designates the Site as part of the District 1, light industrial, land use district.  The Bayview Industrial Triangle Design for Development (the “Design for Development”) imposes certain development standards on the Site.

 

1. The proposed Development complies with the requirements of the Plan and the Design for Development.

 

1. The Owner and Developer have agreed to comply with the Agency’s small business enterprise, construction workforce, and permanent workforce programs for the Development.

 

1. The proposed Development is categorically exempt from California Environmental Quality Act (CEQA) environmental review pursuant to CEQA Guidelines Section 15301(1)(1), demolition of a single-family residence. 

 

1. The Plan provides for owners to participate in the redevelopment of private property in the Project Area.  This Owner wishes to participate and to enter into an Owner Participation Agreement.

 

 

RESOLUTION

 

ACCORDINGLY, IT IS RESOLVED by the Redevelopment Agency of the City and County of San Francisco that the Executive Director is authorized to execute an Owner Participation Agreement and related documents with Jos Levin Realty Corporation of San Francisco, a California corporation, for the proposed development at 1618, 1620, and 1630 Jerrold Avenue, located between Third and Phelps Streets (Assessor’s Block 5272, Lots 11, 14, and 15); in the Bayview Industrial Triangle Redevelopment Project Area, substantially in the form lodged with the Agency General Counsel.

 

 

APPROVED AS TO FORM:

 

 

 

                                               

James B. Morales

Agency General Counsel

RESOLUTION NO. 106-2006

 

 

 

conditionally approving the schematic design for the PROPOSED development AT 1618, 1620, AND 1630 Jerrold AVENUE, LOCATED BETWEEN THIRD AND PHELPS STREETS (ASSESSOR’S BLOCK 5272, LOTS 11, 14 AND 15); Bayview Industrial Triangle

Redevelopment Project Area

 

 

BASIS FOR RESOLUTION

 

 

1. San Francisco, a California corporation (the "Owner"), owns approximately 0.3 acres (11,848 square feet) located at 1618, 1620, and 1630 Jerrold Avenue (the "Site") in the Bayview Industrial Triangle Redevelopment Project Area (the "Project Area ").  The Site fronts Jerrold Avenue between Third and Phelps Streets.

 

1. California corporation (the "Developer"), has a 10-year ground lease agreement to operate a landscape and irrigation wholesale business at 1618 and 1620 Jerrold Avenue.  The Developer would like to expand its business next door onto the Owner’s property at 1630 Jerrold Avenue, which is currently improved with a vacant two-bedroom, single-family house.

 

1. 1630 Jerrold Avenue and allow the Developer to ground lease the property for its business expansion.  The Developer proposes to install a new fence with landscaping at 1630 Jerrold Avenue as well as new street trees and landscape planters on the sidewalk in front of the Site.  The Developer will also refurbish its existing warehouse building with new paint, lighting, and signage (collectively, the "Development").

 

1.   The Bayview Industrial Triangle Design for Development (the “Design for Development”) imposes certain development standards on the Site.

 

1. The proposed Development complies with the requirements of the Plan and the Design for Development.

 

1. Staff recommends approval of the schematic design, subject to satisfactory resolution of the following design concerns in the next design phase:

 

• Detailed drawings indicating the details for the landscaping, grading, and signage shall be submitted for Agency staff review and approval.

 

• Samples of all exterior materials and colors shall be submitted for Agency staff review and approval.

 

• Detailed drawings of the sidewalk, driveway, and all streetscape improvements including street trees, tree wells and sidewalk scoring shall be submitted for Agency staff review and approval.

 

• The screening elements for the loading gate and fence shall be further studied and submitted for Agency staff review and approval.

 

• Detailed drawings indicating the design details for signage and articulation of proposed building materials shall be submitted for Agency staff review and approval;

 

1. The proposed Development is categorically exempt from the California Environmental Quality Act (CEQA) environmental review pursuant to CEQA Guidelines Section 15301(1)(1), demolition of a single-family residence.

 

 

RESOLUTION

 

ACCORDINGLY, IT IS RESOLVED by the Redevelopment Agency of the City and County of San Francisco that the schematic design for the proposed development at 1618, 1620, 1630 Jerrold Avenue (Assessor's Block 5272, Lots 11, 14 and 15) in the Bayview Industrial Triangle Redevelopment Project Area, proposed by Jos Levin Realty Corporation of San Francisco, a California corporation, is approved conditionally in the form submitted, subject to resolution of the conditions of approval set forth above, together with such refinements as the Executive Director may approve which do not materially alter the schematic design.

 

 

APPROVED AS TO FORM:

 

 

 

_________________________

James B. Morales

Agency General Counsel

MEMORANDUM

TO:                 Agency Commissioners

FROM:           Marcia Rosen, Executive Director

 

SUBJECT:      Authorizing Exclusive Negotiations with Habitat for Humanity San Francisco, a California nonprofit public benefit corporation, and Em Johnson Interest, Inc., a California Corporation, for the disposition of Agency Parcel EE-2, located at Whitney Young Circle and Hudson Avenue to develop affordable housing for first time homebuyers; Hunters Point Redevelopment Project Area.

Authorizing a Tax increment Predevelopment Loan Agreement in an Amount not to exceed $439,640 to Em Johnson Interest, Inc., a California Corporation, in conjunction with the development of affordable housing for first time homebuyers on Parcel EE-2 located at Whitney Circle and Hudson Avenue; Hunters Point Redevelopment Project Area; Citywide Tax Increment Housing Program.

EXECUTIVE SUMMARY

On August 15, 2000, the Agency issued a competitive Request For Proposals (“RFP”) for development of Agency-owned land known as Parcel EE-2 (“the Site”).  On June 5, 2001 the Commission authorized the Executive Director to enter into Exclusive Negotiations with the partnership of Em Johnson Interest (“EJI”) and Habitat for Humanity San Francisco (“Habitat”) (collectively the “Sponsors”) for hundred and twenty (120) days period for the purchase of the Site.  The ENA expired in December of 2001 and staff proceeded to negotiate a Disposition and Development Agreement with the sponsors.  At the request of the Sponsors and with the support of Agency staff, these negotiations were put on hold.  This delay allowed the Em Johnson Interest to devote their time and energy to completing the Agency sponsored development, Keith Street Homes (Site X) and start construction at Site 732-A, the Agency sponsored mixed-use development in the Fillmore Jazz Preservation District.

The Sponsors are now ready to move forward on the development of the Parcel EE-2.  The Sponsors have asked to re-enter exclusive negotiations for the purchase and development of the Site.  Separately, Em Johnson Interest is requesting a predevelopment loan of $439,640 to refine the basic design concept on his portion of the development. 

Staff recommends that the Commission re-enter into exclusive negotiations with Habitat for Humanity SF and Em Johnson Interest.

Staff recommends authorization of a tax increment predevelopment loan to Em Johnson Interes. in an amount not to exceed $439,640.

 

DISCUSSION

History

On August 15, 2000, the Agency issued a competitive RFP for development of Agency-owned site known as Parcel EE-2 (“the Site”).  On June 5, 2001 the Commission authorized the Executive Director to enter into a Exclusive Negotiations Agreement (“ENA”) with the partnership of Em Johnson Interest and Habitat for Humanity San Francisco (“the Sponsors”) for hundred and twenty (120) days period for the purchase of the Site.  Though ENA expired in December of 2001, staff continued to negotiate a Disposition and Development Agreement with the Sponsors. However, these negotiations stalled over the evidence of construction financing.   Additionally, problems began to arise on the Keith Street (Site X) project.  These problems included settlement problems in the foundations of the 10 single-family homes and lapses in the insurance coverage during the course of construction. These problems were ultimately resolved by the Developer to the satisfaction of the Agency.

Because of the challenges that arose during the construction of the 10 homes on Keith Street, Agency staff opted to put negotiations for the purchase of Site EE-2 on hold and directed the EJI to concentrate on completing the Site X development.  Additionally, in September of 2002, EJI entered into an ENA to develop the project at 732-A, an 80 unit condominium project in the Agency’s Jazz Preservation District of the Western Addition.  Staff and the developer again both concurred that EJI should concentrate on getting that complex project under construction.  The decision to put the Project on hold was well timed.  In July of 2004 the City’s Department of the Environment and the State Air Quality Resources Control Board identified the property as a data collection site for air quality monitoring.  From 2004 to July 2005 the Site was used for data collection and no grading, drilling or soils movement of any kind was permitted.

Citing concerns that the proposed per-unit costs were too high, staff directed EJI to explore the feasibility of using the “Now House” pre-engineered system.  Manufactured by Clever Homes LLC, the Now House offered environmentally sensitive design features as well as a potential construction costs savings.  EJI staff spent 6 months working with Clever Homes LLC to determine the cost effectiveness of bringing the Now House building system to site EE2.  However, Agency staff ultimately learned that the system had not been approved by the San Francisco Department of Building Inspections (“DBI”) and that certification of the system would take additional time and clearly offset any cost saving.  The Clever Homes development concept was abandoned.

Now that the development of site 732-A is under construction, all the homes at Keith Street (Site X) have been completed and sold, and the EE-2 site is no longer being used as an air quality monitoring station, EJI and Agency staff would like to move forward on the development of site EE-2.  Additionally, Agency staff has confirmed that EJI has sufficient staff capacity for the Project.

 

Development Concept

The Sponsors propose to develop a total of twenty-four single family homes at the site.  EMJ will build 17 three-bedroom homes on what will either be a planned cul de sac that will be maintained by a homeowner’s association or dedicated to the City.  The 17 three-bedroom homes will be affordable to families earning 75% to 85% of area median income (“AMI”).  Habitat will build 7 four-bedroom homes along Whitney Young Circle.  The 7 four-bedroom homes will be affordable to families earning 40% to 60% of AMI.  To advance the development concept, EMJ is requesting a predevelopment loan of $439,640.  These funds would be used to pay for the soft cost items detailed below:

 

Predevelopment Budget
Performance Deposit	7,100.00
Architecture	231,640.00
Survey, Topo, Soils	19,000.00
Phase I and II/Initial Study	5,000.00
Civil Engineer	35,500.00
Landscape Architect	7,200.00
Structural Engineer	32,000.00
Market Study	13,680.00
Soft Cost Contingency	38,520.00
Administrative Overhead	50,000.00
Total	439,640.00

 

Financing Plan

 

The Sponsors estimate the total development cost of the Project to be $10,800,000, based on the fair market value of the Site.  The homes built by EJI will cost approximately $479,000 per unit, and the homes built by Habitat will cost approximately $339,000 per unit.  Under the preliminary financing plan, exclusive of the acquisition costs, a total of $3 million in Agency tax increment funds are needed to subsidize the project’s development.  The overall feasibility of the Project is also dependent on Habitat’s ability to raise $1.3 million to off-set the costs of the 7 4-bedroom homes. To further subsidize the development cost, EJI and Habitat will be submitting an application to the Federal Home Loan Bank Board for an Affordable Housing Program (“AHP”) grant for the Project.  The Sponsors are requesting $10,000 per unit for a total grant request of $240,000.  If an AHP grant is secured, the funds will be used to defray some of the Project’s site work cost.  The financing plan for the development also assumes $70,000 in financing from the Self-Help Homeownership Opportunity Program (“SHOP”).  SHOP funds are available through Habitat International and are available for site and foundation work.   Staff at Habitat anticipates that other construction costs will be paid for with private donations and a small construction loan to be paid off with mortgage proceeds.

To ensure the permanent affordability of each of the 17 homes constructed by EJI, the Agency’s limited equity model of homeownership, adopted by the Commission in January 2004 by Resolution No. 4-2004, shall be applied to each purchase.  Under this model, the purchase prices (at the initial sale and at resale) are determined by what a family at 75% to 85% of area median income can afford.  When a household decides to sell, the resale price will be set at the same affordability level that established the original purchase price.  The “equity” due to the first eligible buyer will come primarily from the change in AMI over time.  The market value of each home will not factor into the original sale or the resale price.  To help ensure that buyers do not lose money by participating in its Limited Equity Affordable Homeownership Program, the Agency has included certain protections for buyers in the program, including a guarantee that owners can recoup their down payments and closing costs if resale prices are not high enough to cover these values.  The Agency will also allow buyers to increase the applicable AMI levels used to calculate their resale prices if their original AMI levels do not cover the full value of their first mortgage loans, though only up to a maximum resale price at 120% of AMI. 

In the event there is a sale of any of the seven homes constructed by Habitat, the organization will retain a right of first refusal.  If a home is to be sold within 15 years, Habitat has the right to purchase the property for the difference between the original purchase price and the outstanding principle balance, plus an interest amount tied to the Consumer Price Index.  If the home is to be sold in year 16, Habitat has only the right of first refusal.  The Agency would maintain a secondary right of first refusal.  The Agency’s land contribution would be reduced by 1/45 for every year the home is occupied by a qualified purchaser.   

On March 3, 2006, the Citywide Loan Committee reviewed and approved EJI’s loan request.  The recommendation to re-enter exclusive negotiations and the predevelopment request also received the support of the Bayview Project Area Committee’s (“the PAC”) Land Use, Housing and Economic Development, and Health and Environment Committees.  On May 18, 2006 the full PAC voted to endorse the Commission’s  approval of both items.

Exclusive Negotiations

The proposed ENA gives EMI and Habitat site control in return for agreeing to meet various performance milestones.  As evidence of Site control, the proposed ENA will also strengthen the Sponsors application for an AHP grant.  The term of the ENA would be 12 months with possible extensions granted by the Agency Executive Director of up to nine (9) months.  The ENA would terminate at the earlier of the Commission’s approval of a Disposition and Development Agreement or the Sponsors’ failure to meet any of the performance criteria or other terms or conditions of the ENA.

 

Timing and Next Steps

With approval of this request, and assuming the Sponsors meet the performance schedule under the ENA, staff will return to the Commission in one year to request approval to enter into a two separate DDA’s with Habitat and with EJI to purchase the Site.  The Site will then be transferred to the Sponsors prior to the planned construction start in summer of 2007.

Originated by Vanessa Dandridge, Development Specialist

 

Marcia Rosen
Executive Director

Attachments:

1. Loan Evaluation

 

RESOLUTION NO. 108-2006

 

 

 

AUTHORIZING AN EXCLUSIVE NEGOTIATIONS AGREEMENT WITH Habitat FOR HUMANITY SAN FRANCISCO, A CALIFORNIA NONPROFIT PUBLIC BENEFIT CORPORATION, AND Em Johnson Interest, Inc., A CALIFORNIA CORPORATION, FOR THE DISPOSITION OF AGENCY PARCEL EE-2, Located AT Whitney Young Circle and Hudson Avenue TO DEVELOP AFFORDABLE HOUSING FOR FIRST TIME HOMEBUYERS; Hunters Point REDEVELOPMENT PROJECT AREA

 

 

BASIS FOR RESOLUTION

 

1.         In furtherance of the objectives of the California Community Redevelopment Law (Health and Safety Code, section 33000 et seq., the “Law”), the Redevelopment Agency of the City and County of San Francisco (the “Agency”) undertakes programs for the reconstruction and construction of slums and blighted areas in the City and County of San Francisco (the “City”).

2.         On January 20, 1969, by Ordinance 25-69, the Board of Supervisors of the City (the “Board of Supervisors”) adopted the Hunters Point Redevelopment Project Area in response to community concern over the physical and economic decline in the community.

3.         On February 10, 1997, the Board of Supervisors certified the election of the Bayview Hunters Point Project Area Committee (the “PAC”).  The PAC worked with Agency staff to develop the Bayview Hunters Point Community Revitalization Concept Plan (the “Concept Plan”).  The PAC adopted the Concept Plan at its regular meeting in November 2000.  In 2004, the PAC completed the Framework Housing Program that described an array of affordable housing programs and policies supported by the PAC.

4.         On June 5, 2001, after a competitive selection process, the Agency by Resolution No. 100-2001 entered into exclusive negotiations with Habitat for Humanity San Francisco, a California nonprofit public benefit corporation, and Em Johnson, Interest, Inc., a California corporation, (together the “Developer”) to negotiate exclusively for the development of 24 low and moderate income for-sale housing for first time homebuyers (the “Project”) located at the corner of Whitney Young Circle and Hudson Avenue (“Parcel EE-2” or the “Site”).  The Project is consistent with the PAC’s Concept Plan and Framework Housing Program.

5.         On October 5, 2001, before reaching a final agreement, the exclusive negotiations expired between the Agency and the Developer.

6.         The Developer still desires to develop the Site and has met with the Housing Committee, the Land Use Committee, and the Health and Environment Committee of the PAC.  On May 18, 2006, the Developer described the Project to the full PAC at its regular meeting who voted to endorse the Project concept and funding request. 

7.         The Developer will enter into an Exclusive Negotiation Agreement (“ENA”) with the Agency for a term of one year with three ninety day options to extend the term, at the discretion of the Executive Director, to enable the Developer to pursue predevelopment activities for the construction and marketing of the Project.  The ENA will further define a series of milestones that will result in the execution of a development and disposition agreement for consideration by the Agency Commission after a public hearing, as required by law.

 

 

RESOLUTION

 

ACCORDINGLY, IT IS RESOLVED by the Redevelopment Agency of the City and County of San Francisco that the Executive Director is authorized to enter into an Exclusive Negotiations Agreement with Habitat for Humanity San Francisco, a California nonprofit public benefit corporation, and Em Johnson Interest, Inc., a California corporation, for a term of one year with three ninety day options to extend the term, at the discretion of the Executive Director, to enable the Developer to pursue predevelopment activities and negotiate a disposition and development agreement leading to the development of 24 affordable homes for first time homebuyers, substantially in the form lodged with the Agency General Counsel.

 

 

APPROVED AS TO FORM:

 

 

 

_________________________

James B. Morales

Agency General Counsel