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HomeMy WebLinkAboutFORD LAND AFFORDABLE HOUSINGI llllgll llll111lull lllllll lull llllll llll �l llll *NEW FILE* FORD LAND AFFORDABLE HOUSING 0 AGENDA Ford Land Affordable Housing Task Team April 18,1996 TIME: 9:00 am PLACE: City Council Conference Room 1. Call to Order 2. Acceptance of minutes 3. Public Comments 4. Discussion of affordable housing proposals a) Newport Village 5. Review of draft RFP 6. Review of draft staff report 7. Items to be placed on a future agenda 8. Adjournment Minutes Ford Land Affordable Housing Task Team March 15,1996 Members Present: Watt, Ridner, Temple , p lti, (fir Members Absent: Burnham.W&MOvIl'u", Public Present: Bob Wynn, Phil Sansone, Norm Witt, Barry Kamel, Rich Lamprecht 1. Call to Order The meeting was called to order by Chairperson Watt at 9:12 am. 2. Acceptance of Minutes The minutes were not ready for approval. 3. Public Comments: The Irvine Company/ Line Housing reported to the committee that Kaufinan & Broad will be replaced by Irvine Apartment Communities. They also indicated that technical studies are underway, and requested that the project be placed on the next agenda. Mr. Ridner commented that the City intends to circulate an RFP. 4. Discussion of affordable housing projects. There was no discussion of projects. 5. Review of draft UP RFP procedures were discussed by the committee. Tim Ridner presented a draft RFP to the committee. Several items in the RFP are to be filled in by staff. The committee discussed the timing of the proposal, particularly how much time should be given to develop proposals. 6. Items to be placed on a future agenda. The next meeting was scheduled for April 18, 1996. The agenda will include the Newport Village project. 7. The meeting adjourned at 10:32 am. u 0 Minutes Ford Land Affordable Housing Task Team February 2,1996 Members Present: Watt, Ridner, Temple Members Absent: Burnham. Public Present: Bob Wynn, Phil Sansone, Tom Redwitz, Norm Witt, Barry Kamel Call to Order The meeting was called to order by Chairperson Watt at 9:10 am. 2. Acceptance of Minutes The minutes were approved as written. 3. Public Comments: No public comments. 4. Presentation by The Irvine Company Representatives of The Irvine Company reviewed an affordable senior housing project proposed for the Newport Village site. The project would consist of 305 dwelling units, 50% of which would be affordable to persons at 60% of Orange County Median Family Income. The project would utilize IRS Code Section 42 tax credits and tax exempt bond financing. Due to site preparation and infrastructure costs, there is a $1.2 million gap in the financing. 5. Review of draft RFP RFP procedures were discussed by the committee. The RFP is still in preparation. 6. Items to be placed on a future agenda. The next meeting was scheduled for March 15, 1996 The meeting adjourned at 10:45 am. rt-Costa Mesa -Irvine Family YMCA 2300'Onivetsity Drive, Newport Beach, CA 9266033 (714)642.9990 FAX (714)645.3570 Community Counseling Services #2 Executive Circle, Suite 280 Irvine, CA 92714 (714)442.1000 FAX (714)442.1004 Irvine Facility 295A East Yale Loop Irvine, CA 92714 (714)552-9323 FAX (714)552.4991 Proposed Senior Housing Development Project Cost/Funding Summary January 1996 This 'order of magnitude" Project Cost/Funding Summary is based on an assumed 93 unit project built on existing YMCA property overlooking the Upper Newport Bay. Project Value Land Value Construction Cost On -Site Improvements Building Construction Cost Total Construction Cost Soft Cost (including interest and pre -opening marketing) Total Project Value Source of Funds Land Equity City/Ford Funds County RDA Debt Financing (23% Loan to Value) Total Funds $ 550,000 3,300,000 $1,500,000 3,850,000 1,150,000 $6,500,000 $1,500,000 2,000,000 1,500,000 1,500,000 $6,500,000 A 4- 1,� ilea , t� :;� - a, t'r,Cs> -�LL "'Oto w We build strong kids, strong jamllles, strong communities. 231kwport-Costa Mesa-lrvine Family, YMct* tuvecsity Drive, Newport Beach, CA 926643313 (714)642.9990 FAX (714)645.3570 Community Counseling Services #2 Executive Circle, Suite 280 Irvine, CA 92714 (714)442.1000 FAX (714)442.1004 Irvine Facility 295A East Yale Loop Irvine, CA 92714 (714)552.9323 FAX (714)552.4991 Proposed Senior Housing Development Advantages January 1996 The YMCA believes there are several advantages in beginning serious discussions with the City of Newport Beach with respect to providing quality affordable senior housing opportunities through a project associated with the YMCA. The major advantages identified to date are: • Minimum of 80 - 100 units at a single location • Quality view site overlooking the Newport Upper Bay • Programmatic relationship available for active senior lifestyle • Marriage of City funds with County Redevelopment Agency funds to achieve maximum economic leverage into $6+ Million project • YMCA land is available now for the project • Existing long term local relationship between City and YMCA • Project economics easily allow for affordable rates & future profits can be plowed into ongoing YMCA community benefit programs • Adds new additional quality units to City's affordable housing inventory • Not a new idea - ready to move forward with development strategy supported by a local team of Entitlement/ Finance / Design / Marketing / Operation expertise We build strong kids, strongjamities, strong communities. • AGENDA Ford Land Affordable Housing Task Team January 12, 1996 TUVIE: 9:00 am PLACE: City Council Conference Room 1. Call to Order 2. Acceptance of minutes 3. Public Comments 4. Presentation by YMCA Re 5. Discussion OfBayside Vill; 6. Review of draft RIP 7. Items to be placed on a futi 8. Adjournment Minutes Ford Land Affordable Housing Task Team November 29, 1990, Members Present: Watt, Ridner, Temple, Burnham Members Absent: Delino Public Present: Bob Wynn, Pat Shelton, Jim White, John McCray 1. Call to Order The meeting was called to order by Chairperson Watt at 9:04 am. 2. Acceptance of Minutes The minutes were corrected to reflect the attendance of Roger Grable at the meeting as well as to refine the assignments made at the previous meeting. 3. Public Comments: There were no comments from the public. 4. Presentation by Mesa Development - Jim White, John McCray Mesa Development reviewed with the task team the projects which the Company has been involved with in County. They also suggested that there are several opportunities for rehabilitation projects in the City of Newport Beach. Discussion included land write -down programs, as well as the impact of ADA requirements on the cost of rehabilitation projects. 5. Discussion ofBayside Village Proposal Pat Shelton gave the task team a update on the legal situation of the Bayside Village Land Company, indicating the a bankruptcy filing had been made. 6. Review of draft site selection matrix. The task team reviewed the site selection matrix prepared by staff. Several of the rankings where changed, and it was agreed that the low ranking properties would be segmented from the main matrix. 7. Items to be placed on a future agenda. Staff was directed to invite representatives of the YMCA to the next task team meeting. Discussion of a draft RFP was also placed on the agenda. 8. The meeting adjourned at 10:40 am. R. v.�J6 -P ty-t�. v►O 1- chi S.e 5 i-�s TURNER, COOPER AND REYNOLDS A LAW CORPORATION ATTORNEYS AT LAW 19400 VON KARMAN AVE.. SUITE SOO IRVINE. CALIFORNIA 92715.1514 (714) 474-6900 FAX: 474-6907 November 28, 1995 VIA FACSIMILE AND U.B. HAIL Robert Burnham Office of the City Attorney City of Newport Beach P. O. Box 1768 Newport Beach, CA 92658-8915 Re: Bayside Land Company Dear Mr. Burnham: �NOV 2 :? 1995 OUR FILE NO. raT� ,.H r�tv OF NFkypOR7 BEACH Thank.you for your letter of November 16;.1995. As you are aware, I am the attorney for Bayside Land Company and I an writing to you on its behalf. This letter will respond to -the questions you raised in your November 16, 1995 letter. CURRENT -STATUS OF PENDING LITIGATION A class action was filed -by the tenants who rent mobilehome park spaces from De Anza challenging the rent raise instituted by De Anza effective January 1, 1994. The challenge by the tenants questioned whether the rent raise was -allowed under the rental agreements between the tenants and De Anza. This'matter went to trial and the jury found in favor of .the tenants. At the insistence of De Anza, the court required the plaintiffs/tenants to name Bayside Land Company in this action as a Defendant. Bayside Land Company is being provided a defense by its general liability carrier. The Bayside Land Company took the position that the tenants were correct in their evaluation that De Anza had improperly raised their rent. This litigation will not.have any adverse impact upon the proposal submitted by Bayside Land Company mentioned in your November 16, 1995 letter. This matter is now on:appeal filed by De Anza. Bayside. Land Company is also defending two judicial foreclosure actions filed.against it. The first action was' filed by Far -'East National - Bank on its first deed- of•trust: The second foreclosure action was filed by Morgan Flagg who holds a second deed of trust. These actions also have the typical ancillary tort claims. Bayside 520U.11853197.003UW Ll Robert Burnham November 28, 1995 Page - 2 - Land Company is also being defended in each of these action by its general liability carrier. Far East National Bank has indicated that they would resolve this matter and refinance the first deed of trust if Bayside Land Company is successful in working out something close to the proposal that Bayside Land Company has submitted to the City of Newport Beach. Morgan Flagg has indicated to a member of the Land Company that all he is interested in receiving is the Marina and will resolve all other claims if he receives clear title to the Marina. This I believe to be the likely outcome of these .claims. BANKRUPTCY PETITION It is anticipated that Bayside Land Company will file a Chapter 11 Bankruptcy Petition this week. IMPACT OF BANKRUPTCY FILING If the Bayside Land Company is successful in working out a proposal for low income housing with the City of Newport Beach resulting in the availability of $2.5 million dollars, Far East National Bank has indicated it will accept that amount as a partial pay down on the first deed of trust and refinance the balance of its loan with terms that the Bayside Land Company can meet. This will allow Bayside Land Company to deed the Marina to Mr. Flagg which will satisfy in full the note and second deed of trust held by Mr. Flagg. The proposal to the City could be part of a plan for reorganization approved by the Bankruptcy Court. In fact, the bankruptcy filing would solidify the validity of any agreement entered into between the City of Newport Beach and Bayside Land Company when approved by the Bankruptcy Court. FEASIBLE PLAN WITHOUT THE CITY Bayside Land Company is very hopeful that it will be able to work out an arrangement with the City providing for affordable housing at the mobilehome park. Its main focus for a bankruptcy reorganization plan is centered upon working out such an arrangement with the City of Newport Beach. However, it has not given up and will not give up the pursuit of other possible resolutions. There is substantial equity in the property owned by the Bayside Land Company as reflected in two MAI appraisals, one obtained by Far East National Bank and the other obtained by Bayside Land Company. FEASIBLE PLAN WITH THE CITY Bayside Land Company has already received a verbal approval from the bank of a potential bankruptcy reorganization plan for the Bayside Land Company with the infusion of .$2.5 million dollars of low income 52044.11853197.00 UW Robert Burnham November 28, 1995 Page - 3 - housing money from the City of Newport Beach. Far East National Bank has verbally indicated that it will restructure the remainder of its loan to allow the Bayside Land Company time to pay off this debt. The use of the $2.5 million from the low income housing funds as a payment to Far East National Bank will allow the Bayside Land Company to grant deed the Marina to Morgan Flagg which would result in the cancellation of his note secured by a second deed of trust against the property. A feasible plan for reorganization assuming the City's grant of•$2.5 million dollars of •low income .housing' funding id'. -very possible and very feasible. LENDER APPROVAL As indicated previously, Far East National Bank has indicated its willingness, desire and approval of the affordable housing proposal. Morgan Flagg has indicated to a representative of Bayside Land Company that all he is interested in is that the Marina be grant deeded to him. He has indicated he will release all other claims he has on the property including any first right of refusal or option. If you have any further questions or comments, please feel free to contact me at your convenience. I am available to meet with you and furnish you with any other information you would like. Thank you for your kind attention to the foregoing. Very truly yours, jLe—�- � C:�f \� FREDERICK E. TURNER FET\pmm cc:, Pat Shelton 52044.1\853197.003 M AGENDA Ford Land Affordable Housing Task Team November 29,1995 TRAE: 9:00 am PLACE: City Council Chambers 1. Call to Order 2. Acceptance of minutes 3. Public Comments 4. Presentation by Mesa Development 5. Discussion Of Bayside Village Proposal 6. Review of draft site selection matrix 7. Items to be placed on a future agenda 8. Adjournment P. O. Box 3546 Newport Beach, California 92659 • Phone: (714) 723-0317 • Fax: (714) 723-0345 (Cook) Phone: (714) 675-4060 • Fax: (714) 675-8450 (Shelton) fci.w�kucv of PLANNING DEPARTMENT CITY OF NEWPORT REACH November 10,1995 AM [d0U 13 1995 pM Affordable Housing Task Team 8,9110111112111213141516 City of Newport Beach 3300 Newport Blvd. Newport Beach, California 92659-1768 Attention: Jean H. Watt, City Council Member & Task Team Chairman Regarding: BAYSIDE VILLAGE PROPOSAL Dear Task Team Members, On behalf of the Board of Directors, we want to thank you for the time you granted us on October 26 for the Bayside Land Company presentation, and for your consideration of our proposal. During the presentation, several questions were raised which may not have been adequately addressed. The following is provided for further clarification. • 1. LOT VALUE - A question was raised concerning the basis for establishing the individual lot values at $30,000; which in turn was used in calculating the number of lots or lot revenue acquired for $2,500,000 in affordable housing fees. [$30,000 x 84 = $2,520,000]. In establishing the value assigned to individual lots, we used both the residential park 1993 MAI established leased fee estate appraisal value and the percentage of park revenue for south side spaces. (For data confirmation, please refer to the Revenue Detail sheet in Section 3, and Appraisal Summary in Section 4 of the presentation binder.) Parcel 1 & 2 appraisal value, leased fee estate (1993): $13,660,000 South side percentage revenue calculation: a ) Total annual south side revenue to BLC = $199,584 b) Total annual park revenue to BLC = $520,608 c) South side percentage, "a" divided by "b" = 38.34% d) South side total value = park total appraised value times south side percentage of revenue, $13,660,000 x 38.34% _ $5,237,244 e) South side individual lot value = total south side value divided by total south side lots, $5,237,244/126 lots = $41,565 f) Lot value discounted to 72°/u of value = $30,000 g) Total lots dedicated to affordable $2,500,000 divided by $30,000 = 83.3 rounded up = 84 If we were to dedicate lots to affordable housing based upon the calculated value without • discounting, the City would receive income from only 60 lots. Understanding the City's goal of maximizing use of affordable housing funds, we have discounted the foregoing calculated individual lot value to approximately 729/6, setting the value at $30,000; thereby increasing the number of lots and granting a greater return to the City for the funds invested. Affordable Housing Task Team Page 2 • City of Newport Beach November 10,1995 • 2. AGGREGATE LOT VALUE Total value received by the City in return for the $2,500,000 affordable housing fees can be calculated several ways. The simplest is the total lots dedicated times the value per lot, as calculated in the foregoing items "a" through "e": 84 lots x $41,565 per lot = $3,491,460 A second way of determining the total present value to the City is shown in the notes at the bottom of the City 20-year Cashflow in Section 3 of the small presentation binder. The notes refer to the value of the City share. It is stated that although the City's percentage of the total number of lots is 31.1%, since the rent levels are lower on the south side, the City's share of the revenue calculates to 23.6% of the total park revenue. We have used that percentage to calculate the total value of the 84 lots: Parcel 1 & 2 appraisal value, leased fee estate (1993): $13,660,000 City value received, based on percentage of revenue: a ) Gross annual income of park to BLC = $520,608 b) Gross annual income of 84 lots to City = $133,056 c) 84 lot percentage of appraisal value = $133,056 divided by $520,608 = 25.56% d) Aggregate lot value, $13,660,000 x 25.56% _ $3,491,496 3. AFFORDABLE HOUSING RENT CEILINGS - Concern was expressed that the space rent levels of south side Bayside Village spaces would exceed the amount allowable under affordable housing guidelines. We mentioned that we had discussed affordable housing rent and income levels with Craig Bluel, of the City's Planning Department, in early September. Bayside's situation is unique in that it is neither strictly a rental project (wherein the entire apartment is rented), nor is it strictly a resident owned apartment (condominium) project. As such, it would require that some formula be established that would apply to Bayside's unique situation. As I understood his comments, setting up criteria suitable to the Bayside situation could be worked out. Mr. Bluel commented that although at Bayside the home is resident owned, while only the space it sits on is rented, there are other amenities provided to residents at Bayside that typically are not included in an affordable housing project, such as clubhouses, swimming pools, recreational areas, laundry facilities, etc. As I understand it, the affordable criteria for ranking an apartment project is as follows: Size of unit Maximum Monthly ent 1 bedroom $716 2bedroom $885 • Almost all of Bayside's homes are two bedroom. The south side space rent is well below the $885 per month two bedroom maximum rent, but we also need to consider the mortgage payment the homeowner might make: $885 less $660 = $225 available for mortgage payments. Most of the homes are low cost and owned outright, with no mortgage payments to be considered. Affordable Housing Task Team Page 3 City of Newport Beach November 10,1995 4. AFFORDABLE HOUSING INCOME LEVELS Although the income ceilings established for affordable rental projects differ from those for affordable condominium projects, whether Bayside Village were classified as rental, condominium, or somewhere in between, eligibility of its residents should not present a problem. Many of Bayside's residents receive only Social Security and/or a small pension. There are not many whose income would exceed the ceilings set by affordable guidelines. At the appropriate time, prior to entering into a contract with the City, we would need to conduct an eligibility survey of south side residents. We will need to discuss when and how the survey is to be conducted, so that it meets the City's requirements. As discussed during our presentation, the Bayside Village proposal may appear to have a number of negative factors. However, we believe that the positive benefits far out weigh the negatives: the project is already completed, there is no risk of construction over -runs, it is already accepted by its surrounding neighbors, there will be no additional costs to the City, and it will ensure the continuation of existing respectable affordable housing that is of a quality suitable to its location within the boundaries of the City of Newport Beach. Most importantly, provision of in -lieu affordable housing fees to Bayside Village will ensure the continuation of an existing affordable housing sanctuary for the City's older citizens, and will result in an immediate income stream to the City. . Again, we thank you for taking the time to meet with us and consider our proposal. We look forward to hearing from you, and will be pleased to provide any additional information you may require. Sincerely, BAYSIDE LAND COMPANY Board of Directors Patricia A. Shelton can D. Berry Financial Officer/Consultant Director 0 ' CITY OF NEWPORT BEACH OFFICE OF THE CITY ATTORNEY October 30, 1995 TO: Ken Delino, Assistant City Manager Patricia Temple, Planning Dept. FROM: Bob Burnham, City Attorney RE: Affordable Housing Taskforce RFP For Affordable Housing I have attached a copy of the request for proposal prepared by IAC regarding Bayview Landing and two sites in Irvine. Hopefully, this RFP will help you or Tim Ridnor in preparing a draft RFP for committee consideration. I do not hav Tim's address or I would have sent him a copy directly. H. Burnham RB:sd cc: Jean Watt wb\AFF-HSG.MEM IRMNE APARTMENT COMMUNMES June 8, 1994 Mr. Richard H. Tourtelot Executive Vice President ARV Housing Group 245 Fischer Avenue, D-1 Costa Mesa, CA 92626 Re: RFP for Development of Three Apartment Projects Dear Mr. Tourtelot: The purpose of this correspondence is to request a proposal for development of three sites for affordable apartment projects. It is currently contemplated that Irvine Apartment Communities (the "Company") would purchase sites from The Irvine Company ("TIC") and subsequently enter into a ground lease agreement with one or more developers which would be responsible for the development, construction, operation and financing of the projects. It is requested that your firm provide proposals and possible alternatives which would best achieve the Company's objectives as follows: • Maximize the net present value of cash flows to the Company from the properties; • Eliminate development or construction equity or other requirements for support from the Company; and Maximize the amount of affordable housing units to be utilized as credit for market -rate housing requirements placed upon the sites. 550 Newport Center Drive, Suite 300, Newport Beach, California 92660-0711 • (714) 720.5500 • Fax (714) 720.5550 Page 2 RFP for Development of Three Apartment Projects June 8, 1994 Site Descriptions and General Development Parameters The three contemplated sites and the jurisdictional requirements on the sites are summarized below: • Bayview Landing - a 4.0 acre site located at the intersection of Jamboree and Back Bay Drive in the City of Newport Beach. The site has General Plan approval for 120 senior affordable units at rents no greater than $752 per month for one bedroom units and $915 per month for two bedroom units. (HUD "Fair Market" rents) See attached vicinity map at Exhibit A. • Westpark Area 7C - An approximately 3.6 acre site located at the intersection of Veneto and Main Street in the Village of Westpark, City of Irvine. The site has General Plan approval and existing zoning allowing up to 31 units per acre, or a total of approximately 119 units. The current affordable housing agreement between TIC and the City of Irvine has designated that this site provide 119 units at rents no greater than $588 per month for one bedroom units, $661 per month for two bedroom units and $735 per month for three bedroom units (50% of HUD median income adjusted for bedroom count). See attached vicinity map at Exhibit B. Westpark II, Lot 16 - (Legal description is actually Tract # 14814, Lot 96) - a 4.0 acre site located on Santa Clara and Santa Alicia in the Village of Westpark, Phase II, City of Irvine. The site has General Plan approval and existing zoning allowing up to 31 units per acre, or a total of approximately 124 units. The current affordable housing agreement between TIC and the City of Irvine has designated that this site provide 124 units at rents no greater than $588 per month for one bedroom units, $ 661 per month for two bedroom units and $735 per month for three bedroom units (50% of HUD median income adjusted for bedroom count). See attached vicinity map at Exhibit C. The type of development to be identified for the above sites is one of the items to be suggested as part of the proposal, except for the Bayview Landing site which requires senior affordable housing only. The Company is also interested in reviewing alternatives including, for at least one site, an option of providing less than 100% of the units at rent restricted rates and 25% of the units at "market" rents. Page 3 RFP for Development of Three Apartment Projects June 8, 1994 Proposal Guidelines Proposals should at a minimum address the items outlined below. Proiect development and construction: Project design must be compatible with surrounding projects, (primarily stucco/tile roofing). The actual building type (2-story walkup, etc.) should be identified as part of the proposal. We are not anticipating any site plans architectural drawings, etc. as part of the proposal. Plan for management of design and construction including names of preferred architects, general contractors, etc. Please include the resumes of the individuals which will be responsible for various project functions. Support for your firm's specific expertise in development of the proposed product type including an outline of your track record in developing within budget and on time, and your specific expertise in the identified product types. Please submit, if possible, summary construction budgets and actuals for past projects as part of your package. Lease -up and operations management: • Lease -up and operating plan for the subject properties including marketing strategy, target renter profiles, and pricing strategy. • Summary overview of the market for the proposed projects including an analysis of demand and supply, market occupancies, rents and predicted absorption for the identified properties. • Recommended management team including management company, if applicable, and identification of other parties and specific roles. Please include the resumes of the individuals which will be responsible for these projects. • Support for your management firms' specific expertise in the proposed product type including management's track record in leasing and operations of the identified product types. Please submit lease -up and stabilized financial statements for other projects as part of your package. Page 4 RFP for Development of Three Apartment Projects June 8, 1994 Structure: A ground lease structure is being considered as the optimal method to enable the selected firm(s) to maximize the available funding on the property while maintaining the highest potential cash flow to the Company. It is contemplated that the Company would lease the land to the selected developer and the developer would seek to qualify for tax credits under either a 4% or 9% tax credit program. The developer would then sell a limited partnership interest to a tax credit buyer(s) which would contribute cash equity toward the development of the project. It is also contemplated that tax-exempt financing could be used as additional support to the project if a 4% tax -credit were selected. The Company would additionally be pleased to receive alternative approaches to a structuring of this transaction, including for at least one site an option of providing less than 100% of the units at rent restricted rates and 25% of the units at "market" rents. Ground lease: Please provide a summary of the financial terms and conditions which you would include in a ground lease agreement. Included in the financial terms should be ground rent, participation in cash flows in excess of ground rent, term of lease, and any other essential terms and conditions. Fees: All fees contemplated during construction and operations should be specifically identified including amounts, what the fee is paid for, and what party is to receive the fee. Funding: Several elements will likely comprise the funding of the project and should be addressed in your proposal including: Construction financing or credit enhancement provider - Please identify the likely provider of construction financing or credit enhancement and the expected terms and conditions of the financing including interest rate, term, and advance rates. Permanent take-out financing or longer term credit enhancement provider - Please identify the likely permanent financing source and the expected terms and conditions of the financing including interest rate, term, and amortization. Page 5 RFP for Development of Three Apartment Projects June 8, 1994 • Tax Credits - Discussion on availability, method of application, 'experience, etc. • Tax credit buyer(s) - Please identify the likely tax credit buyer(s) and the terms and conditions of the tax credit purchase including the payment in cents per dollar of total tax credits provided by the project, timing of receipt of cash payments, and other considerations such as requirements for sharing of project cash flows. • Identify sources and amounts of development equity if not from tax credit buyer(s). • Identify other potential sources of financing assistance, i.e., Orange County Housing Authority, etc. • Specifically identify any financial support beyond the ground lease which you require of the Company. • Please include your track record in funding similar projects and include lender and tax credit buyer references. Financial moiections: Please provide financial projections (in periods no less than quarterly) of cash flow from beginning of development through stabilization. Financial projections should include detailed line item assumptions including the following: • Development/construction expenditures in the following detail: • Direct building costs; • Direct sitework/landscaping costs, • General site conditions (supervision, etc.), • Design consultant fees, • Jurisdictional fees, • Construction interest and financing fees(listed separately), • Developer/contractor fees, • Other items as necessary; • Unit delivery and absorption; • Operating revenues and expenses; • Funding sources including financing terms and conditions, calculations of interest reserves, net equity funding requirements, and amount and timing of tax credit payments. Page 6 RFP for Development of Three Apartment Projects June 8, 1994 Financial statements: Please provide us with three years of your financial statements and the financial statements of other sponsoring entities which are to be involved in the development of the projects. Additionally, provide credit and other pertinent business references. Deadline for Submission of Proposals It is requested that you submit proposals on each of the properties on a stand alone basis and include as much detail as possible. RFP's are to be submitted to Richard E. Lamprecht, Vice President Development no later than 12:00 noon, Friday June 24, 1994. Your principal contacts at the Company are: For development and construction issues: Richard E. Lamprecht, Vice President Development (714) 720-5565 For funding issues: James E. Mead, Senior Vice President and Treasurer (714) 720-5557 We are appreciative of your interest in working with us on the development of these projects. We look forward to speaking with you soon. Sincerely, Richard E. Lamprecht Vice President Development REL:sc 't Minutes Ford Land Affordable Housing Task Team October 26, 1995 Members Present: Watt, Ridner, Temple, Delino, Burnham Members Absent: None Public Present: Bob Wynn, Pat Shelton, Lynn Cook l 'Ao�Q#-q rabL& 1. Call to Order The meeting was called to order by Chairperson Watt at 9:08 am. Item 5 was moved to the top of the agenda. 5. Discussion of Bayside Village Proposal Representatives of Bayside Village made a presentation to the Task Team. The presentation included a review of the development and ownership history, a presentation of financial projections (including monthly and annual revenue, cashflow projections) and legal issues. Upon conclusion of the presentation, the task team determined that additional review of this proposal was warranted. The City Attorney was directed to investigate the legal issues associated with the /� project. Tim Ridner was directed to review the financial analysis. -b l� ' I - C UJIKt.ULAW . 2. Acceptance of Minutes The minutes were corrected to reflect the attendance at the meeting as well as to correct a name included in the minutes. 3. Public Comments: There were no comments from the public. 4. Review of Draft Goals and Priorities. No further review of the Goals and Priorities was necessary. 6. Review of draft site selection matrix. P. Temple presented the format of the site selection matrix. The general form of the matrix was accepted by the committee. The completed matrix will be placed on the next agenda for further review. K. Delino discussed the use of the Ford Land affordable housing funds for gap financing. It was indicated that the money available could translate into an 8 to 10 million dollar project. He suggested the task force draft an RFP, to solicit additional iMeas on the potential use of the affordable housing funds available through Ford Land. %/'n /'i/6�&U W'# fti¢,PW �y nr-l' • 7. Items to be placed on a future agenda. • ,.. ,... .. . _ .. _ ..___._ r— rrn.:a....«a r«1« Tdnf`�ua ..f Mnca Tlrvrinnment to the next task AGENDA Ford Land Affordable Housing Task Team October 26, 1995 TRAE: 9:00 am PLACE: City Council Chambers 1. Call to Order 2. Acceptance of minutes 3. IIPublic Comments 4. (Revi of r oa s n i Options 05. Discussion Of Bayside Village Proposal — 0 Review of draft site selection matrix 7. Items to be placed on a future agenda 8. Adjournment Dtq-/- Meeting Notes Ford Land Affordable Housing Task Team October 2,1995 Members Present: Watt, Ridner, Temple, Delino Members Absent: Burnham Public Present: Bob Wynn, Pak - The meeting was called to order by Chairperson Watt at 10:05 am. i. Public Comments: There were no comments from the public. 2. Review of Draft Goals and Priorities. The committee extensively discussed the draft Goals and Priorities distributed by staff. The changes, which have been incorporated into the revised Goals and Priorities, included refinement of the draft Goals, the listing of the Priorities as Options, the addition of Options in the areas of conversion of existing residential and the use of entitlement as leverage. A number of additional sites were added to the site list, including the YMCA Site, the Old Newport Boulevard commercial area, the residential development on Placentia Avenue, and the Irvine Industrial Tract on Campus Drive. The site selection criteria was revised to include compatibility, timing and availability. The committee also determined that the ranking of each criteria would be numerically 1 to 5, least to most. 3. Discussion of site potential field trip. On Thursday, September 1 ppotential sites were visited by task team members. The persons included, Tim Ridner, Ha1Q Bob Wynn and Patricia Temple. A number of sites throughout the City were visited, including various mobile home parks, the Monrovia Avenue area, the Placentia Avenue area, the school district parcel, the Old Newport Boulevard area and the school district administrative/Bank of Newport site. The Shores Apartments and the Newport Village site had also been visited by Ford's consultants. The general sense of the participants was that preferred project would either be a vacant parcel, or the reuse of an already consolidated property. 4. Items to be placed on a future agenda. Staff was directed to develop a draft site selection matrix with ranking of site potential. 5. The meeting adjourned at 12:00 noon. AGENDA Ford Land Affordable Housing Task Team October 2, 1995 TWE: 10:OOam PLACE: Council Conference Room 1. Public Comments 2. Review of Draft Goals and Priorities 3. Discussion of site potential field trip 4. Items to be placed on a future agenda 5.• Adjournment 4 YOE,& � Pr U` 4 a CITY OF NEWPORT BEACH -Planning Department - September 25, 1995 TO: Ford Land Affordable Housing Task Team FROM: Planning Manager SUBJECT: Draft Goals and Priorities Goals: 1. New production of affordable units, which achieves Ford's requirement of 15% of the units constructed on its site. 2. To produce the affordable units as efficiently as possible, preferably on a single site. Priorities: 1. To possibly convert under performing commercial areas to residential development. 2. To examine projects which have a potential for City ownership and income. Options: 1. To leverage the $2.5M into more affordable units, possibly through loan guarantees. 2. To examine existing City properties through the conversion of existing leaseholds. 3. To examine the use of County Redevelopment Agency Low and Moderate Income Housing set aside funds. 4. To form a partnership with The Irvine Company or other land owners or builders to identify a building site and development strategy. Potential Sites: Site Selection Criteria: 1. Bayside Village 1. Political Feasibility/Acceptability 2. Bayview Landing 2. Financial Feasibility 3. Newport Village 3. Entitlement 4. 15th Street Trailer Parks 4. Legal Issues 5. The Shores Apartments 5. Size 6. Marinapark/American Legion Hall 6. Access 7. Cloobeck Property 7. Ownership S. 32nd Street 9. School District Administrative Facility 10. CalTrans West 11. Surplus School Site/16th Street CITY OF NEWPORT BEACH -Planning Department - October 17, 1995 TO: Ford Land Affordable Housing Task Team FROM: Planning Manager SUBJECT: Draft Goals and Priorities Goals and Priorites: 1. To maximize the production of high quality affordable units, which, at minimum, achieves Ford's requirement of 15% of the units constructed on its site. 2. To produce the affordable units as effectively as possible, preferably on a single site. Options: 1. To leverage the capital contribution of Ford Land into more affordable units, through loan guarantees or other financial mechanisms which would maximize available funds. 2. To examine existing City properties through the conversion of existing leaseholds. 3. To examine the use of County Redevelopment Agency Low and Moderate Income Housing set aside funds. 4. To form a partnership with other land owners or builders to identify a building site and development strategy. 5. To possibly convert under performing commercial areas to residential development. 6. To examine projects which have a potential for City ownership and income. 7. To examine conversion of existing residential to the affordable category. 8. To leverage entitlement to accommodate affordable units. Potential Sites: Vacant Sites: 1. BayviewLanding 2. Surplus School Sitell6th Street 3. Newport Village 4. CalTrans West Trailer Parks: 5. BaysideVillage%ke64=- YPML- 6. 15th Street T3ai{er Parks Existing Residential: 7. The Shores Apartments 8. Placentia Avenue 4'1 • • Commercial Conversion: 9. 32nd Street 10. School District Administrative Facility/ Bank of Newport 11.Old Newport Boulevard area 12. Campus Tract City Property: 13. Marinapark/American Legion Hall Non-profit: 14. YMCA Site Site Selection Criteria: 1. Political Feasibility/Acceptability 2. Financial Feasibility 3. Entitlement 4. Legal Issues 5. Size 6. Access 7. Ownership 8. Land Use Compatibility 9. Timing 10. Availability Ranking will be from 1 to 5, least to most. No weighting is proposed at this time. CITY OF NEWPORT BEACH -Planning Department - September 25, 1995 TO: Ford Land Affordable Housing Task Team FROM: Planning Manager SUBJECT: Draft Goals and Priorities m`a�a O;P- Goals: n i h� 1. 4maffordable units, i constructed on its site. 2. To produce Ike affordable units astc k, ch,achieves Ford's requirement of 15% of the units on a single site. rrrorrnes 0 ��7 XA !, �„�k 1, o possibly convert under performing commercial areas to residential development. 2. To examine projects which have a potential for City ownership and income. Options: OA 1. To leverage the %*W �'n,to more affordable wi[t� ssr y through loan guarantees. 2. To examine existing City properties through the conversion of existing leaseholds. -mzJ-d; 3. To examine the use of County Redevelopment Agency Low and Moderate Income Housing W set aside funds. 4. To form a partnership with other land owners or builders to identify a buildi g site �and �development strategy.5. ror Potential Sites: Bayside Village 2. Bayview Landing 3. Newport Village 4. 15th Street Trailer Parks -5. The Shores Apartments 6. Marinapark/American Legion Hall Site �S,e^l-ec_tion Criteria: j Cor' %% / ICttJ 1. Political Feasibility/ cceptability 2. Financial Feasibilit 3. Entitlement— �r�ow�ca 1�co�t`°a 4. Legal Issues 5. Size ( �k o�- U Oi'k 6. Access 7. Ownership 8. 32nd Street T14-n� 9. 10. 11. l2 School District Administrative Facility) CalTrans West +Vlul� Surplus School Site/16th Streeg +3,0w t( wpw PalvA. PSiaR-�a tvve-� i6 Coanpay `R�mr.� 110�y�,�� e2- "-& q 0-kw:J� Rr—P for A#V&A (e PkOJ O-CIS FORD LAND AFFORDABLE HOUSING TASK FORCE AGENDA September 15, 1995 City Council Conference Room 10:00 a.m. Call to Order: 1. Public Comments - On non -agenda items. 2. Committee Organization 3. Determination of meeting schedule 4. Discussion of goals and priorities 5. Discussion of Bayside Village project 6. Items to be placed on the next agenda 7. Adjournment J RESOLUTION NO. 95-I8 _ A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH ESTABLISHING THE FORD LAND AFFORDABLE HOUSING TASK TEAM WHEREAS, the adoption of Development Agreement No. 8 for the Ford Land Development project in Newport Beach called for the provision of affordable housing as required by the City's Housing Element; and WHEREAS, in order to satisfy this requirement the agreement called for the establishment of a Task Team to identify, evaluate and implement one or more affordable housing projects to satisfy Ford Land's affordable housing obligations. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Newport Beach does hereby establish the Ford Land Affordable Housing Task Team BE IT FURTHER RESOLVED that the Conunittee shall have the following responsibilities and characteristics: Y 1. Membership shall consist of four (4) members and one (1) ex officio member appointed by the Mayor: a) One (1) City Council member, b) One (1) representative of Ford Motor Land Development Corporation c) Two (2) staff members; d) One (1) staffmember as an ex officio member. 2. The duties and responsibilities of the task team shall be to identify, evaluate and implement one or more affordable housing projects to satisfy Ford Land's affordable housing obligation as set forth in Development Agreement No. 8. 3. The task force shall consult with property owners, builders and persons experienced in the development of affordable housing as needed on a case by case basis. 4. The meeting schedule of the Task Team shall be as determined by the Task Team. 1 5. The term of the Task Team shall be two years, unless extended by mutual agreement of the City and Ford Land. 6. The.task team shall submit a statement of goals and priorities to the City Council within 90 days of the appointment of the task team 7. The task team shall report to the City Council no less than once every 90 days after the submittal of its goals and priorities. 8. The goal of the task team shall be to submit to the City Council, within two years, a report identifying one or more affordable housing projects which can be funded pursuant to the provisions of Development Agreement No. 8. ADOPTED this 28th day of August . 1995. ATTEST: i PLT:..Q%W W WORD\CCTZAM-R- 0C ,\ J Mayor 2 SAN DIEGO CREEK NORTH 217195 SITE DEVELOPMENT COST ESTIMATE Item Quantity Unit Estimated Description I Price Cost BAYVIEW EXTENSION Jamboree Road to 600 ft. easterly Bayview Roadway Costs In Newport Beach ( 600) AC Pavement, 6"AC/12"AB 50400 SF $2.90 /SF $146.000 Curb & Gutter 1200 LF $15.00 /LF $18'000 Sidewalk 12000 SF $3.00. /SF $36,000 Traffic Signal modifications@ Jamboree 1 LS $20,000.00 /LS $20,000 Traffic Signal @ Ramp 1 LS $80,000.00 /LS $60,000 Signing and Striping 1 LS $8,000.00 /LS $8,000 Storm Drain improvements 1 LS $6,000.00 /LS $6,000 Construction Contingency and Administration, 15%, = $46,000 Bayvlew Extension Subtotal = $340,000 UTILITIES Water Service to Site (12") 1900 LF $125.00 /LF $247,000 Sewer Service to Site 1 LS $250,000.00 /LS $250,000 Relocate SCE 66kv Power Lines 4 EA $75,000.00 /EA $300,000 Gas Service to Site 500 LF $15.00 /LF $8,000 Telephone/ Electrical Service to Site 500 LF $50.00 /LF $25,000 Total Utilities cost = $830,000 SITE Grading Excavation - Below Ramp JR-5 Site Preparation Transportation Related Fees 40,000 CY 80,000 CY Fairshare Fees 1291 trips SJHTC Fees 75000 SF Miscellaneous Building Related Fees Building Excise Tax Fee Building, Planning, EIR, School Dist., Etc. SITE DEVELOPMENT COST ESTIMATE WITHOUT CONNECTION TO MACARTHUR Unknown Cost is 1.1 Acre Caltrans Surplus R/W Parcel ATTACHMENT $7.50 ICY $300,000 $7.50 /CY $600.000 Grading total = $900,000 $121.14 /trip $157,000 $2.80 /SF $210,000 Fee total = $367,000 $16,000 $80,000 PROJECT TOTAL = $2,533,000 Page 1 of 2 i • IBAYSI DS W161LAGIR & i`QQA>l MA BAYSIDE LAND COMPANY De Anna Pro Forma Cashflow - (In 000s dollars) Lease (Affordable Fees: $2.5 Million) Refinan Expires 1 96 9/30/13 CASHFLOW - 20 YEARS Description 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Total Beginning Balance - Operating Resery 50 528 661 822 1,022 1,228 1 445 1 673 1 912 2163 2,426 2,701 2 988 3 287 3.600 3.655 3 724 3,805 4,622 11,229 REVENUE & LOANS Lease Revenue- Park Gross @ 20% 487 499 512 524 537 551 565 579 593 608 623 639 655 671 688 705 723 1,482 9,035 9,261 29,938 Lease Revenue - Marina -(d%) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Sale of Shares - Deposit $2,500 each 25 12 12 5 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 01 55 Shareholder Notes -Begin 580$3,600 227 252 270 270 270 270 270 270 270 170 270 270 270 270 0 0 0 0 0 0 3,719 Refinance First Mortgage/HUD \ 6;500 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 6,500 Affordable Housing Fees 2,500 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2,500 TOTAL REVENUE & LOANS 9,739 764 794 799 807 821 835 849 863 878 893 909 925 941 688 705 723 1 482 9 035 9 261 42,711 EXPENSES Refinancing of First Mortgage (8,500) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 (8,500) Administrative Expenses (12) (13) (13) (14) (15) (15) (16) (17) (18) (19) (20) (21) (22) (23) (24) (25) (26) (48) (1,807) (1,852) (4,017) City Fees 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Legal, Escrow, Other Fees (30) (30) (31) (33) (35) (36) (38) (40) (42) (44) (47) (49) (51) (54) (57) (59) (62) (65) (69) (150) (1,024) Rescinded Member Payments (36) (36) (36) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 (108) Contingency (10) (10) (10) (10) (10) (10) (10) (10) (10) (10) (10) (10) (10) (10) (10) (10) (10) (10) (10) (93) (283) TOTAL EXPENSES(8,588)189 91 57 59 62 64 67 70 73 76 79 83 87 90 94 99 123 (1,886)1 (2,095) (13,931) DEBT SERVICE Debt Service ,FirsfMoigage:$.5 atiltion@8.0% (542) (542) (542) (542) (542) (542) (542) (542) (542) (542) (542) (542) (542) (542) (542) (542) (542) (542) (542) (5,942) (16,247) Finance Fees -2pts. (130) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 (130) Debt Service - Second Mortgage Interest @ 9%; Principal $697,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 TOTAL DEBT SERVICE 672 542 542 542 542 542 542 542 542 542 542 542 542 542 542 542 542 542 542 (5,942) (16,377) ANNUAL CASHFLOW 528 133 161 200 206 217 228 239 251 263 275 287 300 312 55 69 82 816 6,607 1,224 12,453 CUMULATIVE CASHFLOW 528 661 822 1,022 1,228 1,445 1,673 1,912 2,163 2,426 2,701 2,988 3,287 3,600 3,655 3,724 3,805 4,622 11,229 12,453 12,453 Debt Service Ratios 1.17 2.38 2.68 2.99 3.37 3.78 4.20 4.65 5.12 5.61 6.12 6.66 7.21 7.80 7.91 8.04 8.201 9.75 25.18 3.45 Cashflow - $2.5 Affordable Housing Fees/8% Financing Notes & Assumptions: Revenue & Loans 1. Lease Revenue -Park: 20% of gross lease revenues fromDe Anza. Calculations use rates setbyjudgment, with 2.5% CPI increase each year. Assume 90%occupancy. Year 19-20: shows 100%of park/BLC revenues. • 2. Lease Revenue- Marina: no revenue to BLC; Marina fee title transferred to new owner. 3. Revenue from sale of shares: deposits at $2500 each; 10 sales in year one, 5 in year two, 5 in year three, 2 in year 4, total membership of 80. 4. Revenue from shareholder notes: beginning year 1-58 members paying $3,600 per year. Membership increases as shown in note 3. 5. Pay down first mortgage to$63million with MID mobilehomepark financing. 6. City Affordable Housing Fees: $2.5 million; used to pay down debt level. Expenses - Administrative & Other 7. Refinance First Mortgage: existing First Mortgage paid down to $6.5 million with Affordable Housing Fees. 8. Administrative: hazard insurance; accounting service; miscellaneous. Liability insurance provided by lessee, De Anza Corpomtion. Year 20: increase upon assumption of park management, estimated at 30% of BLC share of park revenues (excludes city expenses and revenues). 9. City Fees - Street, levy for Bayside Drive upgrade required by City for subdivision of four parcels by Irvine Company. 10. Legal, Escrow, Other Fees -year l: Legal$30,000; on -going legal services as needed. Expenses - Debt Service 11. Debt Service -Fust Mortgage of $6.5 million @ 8.0% fixed and amortized over 40 years. 12. Finance Fees: 2 pts on refinanced loan 13. Debt Service -Resident Lenders: $697,000 @9% interest. • 14. First Mortgage 40 year loan balance paid off in year 20: $5.4 million principal balance plus year 20 interest. Prepared by: Shelton 1/9/96 Site Selection Criteria Matrix Site Political FeasibilityRank Financial Fe ibil' Entitle nt Rank Legal Issues Rank Size Rank Access Rank Land Use Compatibility Rank Timing Rank Availabil' Rank Rank Total The Shores Apts. Yes 1 Maybe 2 14 du's 1 No 1 1 Yes 1 B of A 2 Excellent 1 2 nos 1 Possibly 2 13 YMCA Yes 1 es Institutional 2 No 1 2 Yes 1 1 Good 3 2 mos 1 Yes 1 14 Yes 1 Yes 1 20 du'stacre 1 No 1 2 Yes 1 3 Excellent 1 2 mos 1 Possibly2 14 16th Street School Site Yes 1 Yes 2 OfficenmilRes. 3 No 1 1 Yes 1 N-M School 1 Good 2 6-8 mos 3 Yes 1 16 Marinapark Ma be Yes 1 Open S ace No 4 1 Yes 1 CNB 1 Excellent 1 after lease 4 Yes in time .x 16 N-M AdmirBank of Newport Yes 1 Maybe 2 Commercial 3 No 1 2 Yes 1 1 Good 2 4-6 mos 2 Yes 1 16 a 'ew Landin Yes 1 Yes 2 120 du's 3 No 1 3 Yes 1 TIC 2 Good 2 2 mos 1 Possibly,2 18 5th Street Trailer Parks Yes 2 Questionable 4 20 du'sfacre 1 No 1 Yes 1 Various 4 Excellent 1 4-6 mos 2 Unknown 4 21 NewPort Village _ Questionable 4 Yes 2 Open Space 5 No 1 1 Yes=5CalT 1 Good 2 6-8 mos 3 Yes 1 21 Ba side Village Yes 2 Questionable 5 397 du's 1 Yes 5 1 Yes 5 Excellent 1 immediate 1 Yes 1 23 Old Newport Boulevard Maybe 2 Maybe 2 Commercial 2 No 1 4 Yes 3 Good 3 6-8 mos 3 Possibly3 24 32nd Street Questionable 3 May be 3 Commercial 3 No 1 3 Yes3 Good 3 4-6 mos 2 Unknown 4 26 Cam us Tract Maybe 2 May be 2 Office 3 No 1 3 Yes 3 Poor 5 6-8 mos 3 Possibly3 26 CalTrans West Questionable 5 May be 4 160 du 's 1 No 1 1 No 2 Good 2 with oil field 5 Yes 1 27 DRAFT: The mattlx is still a work in progress, as you can see. The fill in information is not expected to alter the rankings. An updated chart will be distributed at the next meeting. Patty is Site Selection Criteria Matrix Site Political FeasibilityRank Financial Feasible Rank Entitlement Rank Legal Issues Rank Size Rank Access Rank Ownershi Rank Land Use Com tibil' Rank riming Rank AvailabilityRank Rank Total YMCA Yes 1 Yes 1 Institutional 2 No 1 2 Yes 1 YMCA 1 Good 3 2 mos 1 Yes 1 14 16th Street School Site Yes 1 Yes 2 OfficeAndJRes. 3 No 1 1 Yes 1 N-M School 1 Good 2 6.8 mos 3 Yes 1 16 N-M AdminBank of N Yes 1 Maybe 2 Commercial 3 No 1 2 Yes 1 1 Good 2 4-6 mos 2 Yes 1 16 The Shores Apts. Yes 1 Questionable 5 149 dues 1 No 1 1 Yes 1 B of A 3 Excellent 1 2 mos 1 Possibly2 17 Ba iewLandin Yes 1 Yes 2 120du's 3 No 1 3 Yes 1 TIC 2 Good 2 2mos 1 Possbl 2 18 Newport Village Questionable 4 Yes 2 Open Spa 5 No 1 1 Yes 1 TIC 1 Good 2 6-8 mos 3 Yes 1 21 Ba side Village Yes 2 Questionable 5 397 du's 1 Yes 5 1 Yes 1 _ Man 5 Excellent 1 immediate 1 Yes 1 23 15th Street Trailer Parks Yes 2 Questionable 4 20 du'slacre 1 Yes 4 1 Yes 1 Various 4 Excellent 1 4-6 mos 2 Unknown 4 24 Old Newport Boulevard Maybe 2 Maybe 2 Commercial 2 No 1 4 Yes 1 Various 3 Good 3 6-8 mos 3 Possibl 3 24 32nd Street Questionable 3 Maybe 3 Commercial 3 No 1 3 Yes 1 3 Good 3 4-6 mos 2 Unknown 4 26 Campus Tract Ma be 2 Maybe 2 Office 3 No 1 3 Yes 1 Various 3 Poor 5 6-8 mos 3 Possibly 3 26 Marina ark Questionable 5 Yes 1 Open Sace 4 Yes 4 1 Yes 1 CNB 1 Excellent 1 after lease 4 Yes in time 4 26 CalTrans West Questionable 5 Ma be 4 160 du's 1 No 1 1 No 5 CalTrans 2 Good 2 with of field 5 Yes 1 27 is Rank Total Bayview Landing -Yes Yes 120 du's No Yes TIC Good 16th Street Scholl Site Yes Yes Office/Ind./Res. No Yes N-M Scholl Good Newport Village Questionable Yes Open Space No Yes TIC Goad CaRransWest Questionable Ma 160du's No No CaRwns Good _ Ba ills Village Yes Questionable 397 dU's Yes Yas Many I Excellent 15th Street Trailer Perks Yes Questionable 20du'alacre No Yes Excellent The Shores Apts. Yea Maybe 149 du's No Yea B of A Excellentil Placentia Avenue Yes Yes 20du's/acre No Yes Excellent 32nd Street Questionable Maybe Commercial No Yes -Good N-M AdminlBank of Newport Yes Maybe Commercial _ No Yes Good ON Newport Boulevard Maybe Maybe Commercial No Yes Good Campus Trod Maybe Ma Office No Yes Poor Marinapark Ma be Yes Open S ce No Yes CNB Excellent YMCA Yes Yes Instdutional No Yes YMCA Good Political Financial L 1 Land Use Rank Site Feasibildy Rank Feasibility Rank Entitlement Rank Issues Rank S¢e Rank Access Rank Ovrtretshi Rank CompatilAlityl Rank Timingi Rank Availabilityl Page 1 a�W,bkr CITY OF NEWPORT BEACHEAgenda Date: May 13,1996 �9 PLANNING\BUILDING DEPARTMENTm No.: moo NEwPORT BOULEVARD erson: Patricia L. Temple NEWPORT BEACH, CA 92658 (714)644-3228 (714) 644-3;Z, FAX (74) 644-325- REPORT TO THE MAYOR AND CITY COUNCIL SUBJECT: Ford Land Affordable Housing SUMMARY: Report from the Ford Land Affordable Housing Task Team on its activates. RECOMMENDED ACTION: Authorize staff to circulate the attached Request for Proposals; authorize the Affordable Housing Task Team to review and evaluate the proposals; and direct the task team to recommend to the City Council and affordable housing project to satisfy the requirement of the Ford development project. Discussion The Ford Land Affordable Housing Task Team (FLAHTT) has been meeting since established by the City Council. As required by the Resolution which established the team, Goals and Priorities have been adopted (copy attached). FLAHTT then developed a list of potential affordable housing sites and visited each. Site selection criteria and a ranking matrix was then developed. This matrix has been used regularly by the task team to evaluate the potential sites. A copy of the current matrix is also attached. Potential providers/developers of affordable housing have been invited to the meetings of the task team, to make presentations of potential projects. Presentations have been received from: 1. The Bayside Land Company (Bayside Village Mobile Home Park) 2. Mesa Development 3. The Newport -Costa Mesa -Irvine Family YMCA 4. The Irvine Company/LINC (Newport Village) FLAHTT has also discussed the possibility of circulating a Request for Proposals (RFP), and has determined that this would be the best approach to identifying the best project to satisfy Ford'd affordable housing requirements. This could solicit participation from non-profit housing companies or developers new to Newport Beach. An RFP has been drafted, and will be circulated if authorized by the City Council. PLANNING DEPARTMENT Un PatriciaL. Temple Acting Planning Director Attachments: 1. Draft RFP 2. Task Force Goals and Priorities 3. Site Matrix F:1W PS 1 \PLANNING1l CC-RPTNCC9601221A837.D DC Ford Land Affordable Housing Task Team, May 13, 1996 Page 2 DRAFT DRAFT DRAFT. DRAFT DRAFT DRAFT CITY OF NEWPORT BEACH REQUEST FOR PROPOSAL (RFP) FOR AFFORDABLE HOUSING PROJECTS I. INTRODUCTION The City of Newport Beach is inviting developers to submit proposals for the development of a minimum of 60 for -rent affordable housing units to be constructed within the City boundaries. The successful candidate will be a development firm or team that has the full capability to plan, construct and manage a high -quality affordable project. Project selection will be based primarily on the following criteria: • Quality of the development team as evidenced by previous work. • The amount of creativity shown by the development team in exceeding the project objectives as stated in this document. • Financial capability/resources-of the development team to implement the project. • Responsiveness to this RFP. The Request for Proposal must be received by 4:00 pm, June 8, 1996. Proposals should be submitted to: Patricia Temple Planning Department City of Newport Beach 3300 Newport Blvd. P.O. Bo c 1768 Newport Beach, CA 92659-1768 II. ASSISTANCE FROM THE CITY The City of Newport Beach will receive substantial affordable housing in -lieu fees as part of a recently -approved residential project. The amount to be paid to the City is estimated presently to be $2 million, but could be as much as $2.5 million. These funds will be received by the City in partial payments beginning and continuing for a period of approximately five years. The City also may provide financial assistance in the form of Community Development Block Grant (CDBG) funds. In addition, the City may provide entitlement assistance ranging from -2— assistance with zoning and density issues, to the waiver of certain discretionary fees and project studies. III. PROJECT OBJECTIVES It is the City's goal to leverage its financial contribution and entitlement assistance, through the selected development team, to achieve the following objectives: • Create a minimum of 60 affordable for -rent units. Ideally, this goal will be accomplished within a single project. Consideration will be given, however, to smaller projects that, in aggregate, will result in a minimum of 60 affordable units. • The project may include both affordable and market rate units. At least 50% of the affordable units must be for tenants of very -low income, and the remaining affordable units must be for tenants of low income. The definition of very -low and low income is defined by the City's Housing Element. Affordable housing standards are attached to this RFP. • Provide housing units that are both functional and aesthetically pleasing. The project should be harmonious with the surrounding neighborhood and compatible with adjacent uses. • Provide landscaping, usable open space and site amenities, as feasible, that will enhance the living environment for the project's residents and their guests. • Provide a safe living environment with sufficient and convenient off-street parking. • Preference may be given to projects that have the potential to generate long-term income for the City. IV. SUBMISSION REQUIREMENTS A. Identification of the Firm: • Name, address, telephone number, principal contact. • Length of time in business. Ownership structure (individual company, corporation, partnership, joint venture, other). • Applicable Experience B. Proiect Team • Identification of roles of principals, project manager, and staff. Please identify the individual(s) who would be responsible for the day-to-day contact with the .iro,a aoe 311� -3- City, and to what extent this individual would have authority to negotiate the agreement. • Please identify the architect, engineer, geotechnical specialist, construction contractor, economic advisor and/or other principal associates or consultants Who would work with the developer on.a project at this site. C.Experience • First, please describe your experience in developing and/or rehabilitating single and/or multi -family housing, apartment buildings, single resident occupancy (SRO) housing and/or senior citizen housing projects. Second, please identify any experience your project team may have in the operation and management of affordable housing complexes. • Please describe your current and past projects. by providing the following information for each project: project name and location: how the project was financed; rendering of the project to show the quality of architectural/landscape design; description of the project type, scope, size and value; ownership of the project; management of the project; start and completion dates (if the project was not on schedule, describe how problems were resolved); and utilization, if applicable, of local, State and Federal housing financing programs and density bonus programs. D. Proiect Management • Please describe your ability to manage housing projects, from pre -design through the completion of construction and. if applicable, into property management. If you do not manage such projects, please provide all relevant information and experience concerning the entin.(ies) that you utilize for day-to- day management. E. Financial Capabilities/Resources: • Please provide an audited financial statement indicating total net worth and, to the extent that a portion of the net worth is real estate, the mechanism used for establishing the value of such real estate, i.e., cost or market (if market, based on appraisal judgment). These statements should correspond to the most recent full calendar or fiscal year. • Please identify the amount of available credit extended from each bank to each developer on your team. Provide the name, address and phone number for a minimum of three credit references, preferably ones involved in financing droll da 3/14/96 4- projects of similar scope. Please execute a copy of the sample release letter (Attachment A) on your firm's letterhead for each credit reference listed above. Please indicate whether your firm is involved in any litigation or other disputes that could result in a financial settlement having a material adverse effect on the ability to execute this project. If this is the case, please explain. Please indicate whether your firm, or any named individuals in the proposed project, ever filed for bankruptcy or had projects that have been foreclosed. If so, please list the dates and circumstances. F. Proiect Submission The narrative portion of the project submission should include the following information: • Description of the proposed site • Type of development including nature, size, scope, scale, mix, appearance, layout and design concept • Project schedule • Method of project financing, including funding requirements of the City • Nature of entitlement assistance, if any, required from the City Architectural drawings, elevations, a site plan, or renderings, while not required as part of the submission, are encouraged and will accepted to support the narrative description of the projects. A financial proforma for the project will be required to support requests for financial assistance from the City. V. RIGHTS OF THE CITY By submitting a response to the RFP, the developer waives all rights to protect or seek any legal remedies or compensation regarding any aspect of this RFP or the City's acceptance or rejection of it. The City believes the information contained in the RFP to be generally correct; however, no liability is assumed for total completeness or accuracy of all the information by independent means. The City reserves the right, at its'sole discretion, to reject any and all offers for any reason. It should also be understood that the City reserves the right to consider factors other than economic factors in its selection. Upon selection of the potential developer(s), the City will enter into a ninety (90) day period of exclusive negotiations to attempt to negotiate terms and conditions of development. If an agreement is not reached, the City, at its sole option, may then select another proposer with whom to negotiate. dibrd ax 31141% -5- The City is a governmental entity exercising police power and other governmental powers and duties. The solicitation will not in any way affect the exercise of those powers and duties. The City does not discriminate on the basis of race, color, religion or sex. Contact by the developer with respect to the proposal shall be limited to Patricia L. Temple, Acting Planning Director [(714) 644-3200)]. Contact by a developer, regarding the RFP, with individual City Council members or media prior to selection or invitation to interview is expressly prohibited and will cause the disqualification of the developer. VI. SELECTION PROCESS The Affordable Housing Taskforce, appointed by the City Council, will review the qualifications received and, based primarily on proposer's development capability, will select those from whom to request specific proposals. Interviews may be held with some or all of the selected proposers. Following the proposal process, the selection committee will prepare a recommendation to the City Council for the awarding of an exclusive right to negotiate The preliminary schedule for reviewing submittals is as follows: 1. May 15, 1996 2. June 8, 1996 3. June 10-14, 1996 4. June 17- 21, 1996 5. July 8, 1996 RFP Released to qualified firms Submission Deadline Review of Submissions by the Taskforce Interviews of selected firms Report and recommendation from Taskforce to the City Council • fo,d doe 3/I4M -6- ATTACHMENT A Financial Information Release Authorization Contact Person Financial Institution Address (Finn Name) has submitted a statement of qualifications to the Newport Beach Redevelopment Agency in consideration of a potential development participation venture in the City of Newport Beach. As part of the screening process, the Agency may need to contact you about our banking relationship. I (we) authorize you to provide the Agency's representatives with the information provided it will be kept confidential to the extent permitted by law. Very Truly Yours, •Plod ax 3/14/% AGENDA ITEM No. S22 April 28, 1997 0 April 18, 1997 TO: Mayor and Members of City Council FROM: Affordable Housing Task Team RE: Development Agreement No. 8 Staff Report On July 10, 1995, the City Council approved a Development Agreement between the City of Newport Beach and Ford Motor Land Development Corporation (in 1996 the Development was amended to specify Pacific Bay Homes - a subsidiary of Ford - as the developer). The Development Agreement authorized Pacific Bay to construct 500 residential units on the site formally occupied by Ford Aeronutronics. The Development Agreement contains numerous provisions relative to affordable housing which can be summarized as follows: 1. Ford's affordable housing percentage was established at 15% of the number of units constructed; • 2. An Affordable Housing Task Team was established to identify offsite affordable housing projects which could satisfy Ford's obligation; 3. Ford is obligated pay $2.5 million (less $5,000 for each unit which Ford agrees in writing not to build) to the City in the event that Task Team identifies a project which would, when constructed, satisfy Ford's obligations. 4. In the event the Task Team does not identify a project, Ford can satisfy its affordable housing obligation by constructing or rehabilitating offsite residential units, paying an affordable housing in lieu fee of $5,500 for each residential permit issued, or a combination of the foregoing. The Affordable Housing Task Team has conducted a series of meetings, and issued a request for proposals on June 21, 1996 and received proposals from Linc Housing Corporation and Irvine Apartment Communities and Catellus Residential Properties. These proposals have been evaluated by the Task Team and an affordable housing expert from Keyser Marston. The Task Team has determined, after a thorough evaluation of the proposals and other potential sites for affordable housing, that the proposal from Linc and Irvine Apartment Communities to construct approximately 285 senior affordable units on Newport Village is the most appropriate project worthy of . recommendation to the City Council. This proposal will result in a greater number of affordable units with a lower contribution of funds form the City. Representatives of Ford • concur in this recommendation. The Affordable Housing Task Team therefore recommends the City Council take the following action: 1, Accept the Affordable Task Team's recommendation to identify the Irvine Company/Irvine Apartment Communities Senior Affordable Housing Project on Newport Village as the affordable housing project recommended for implementation; 2. That the City Council require Ford to contribute to $2.025 million (Ford has agreed in writing to construct only 404 residential units); 3. Direct the Newport Center Economic Opportunities Committee to discuss possible terms and conditions relative to implementation of the Newport Village Affordable Housing Project in the context of the Newport Center Expansion Proposal or as a "stand alone" affordable housing agreement. RHB:kh FAca\cdslmemolbob•ccme mo 2 u c Cityof Newport Beach COMMUNITY SERVICES April 25,1997 NEWPORT BEACH PUBLIC LIBRARY 1000 AVOCADO AVENUE NEWPORT BEACH. CA 92660.7916 Mayor and Members of City Council City of Newport Beach 3300 Newport Boulevard Newport Beach, CA 92658 Dear Mayor and Members of City Council: PHONE 714.717.3800 FAX 714.640-5681 The supplemental agenda of Monday, April 28,1997, contains the recommendation of the Ford Land Affordable Housing Task Team of the City of Newport Beach to adopt a plan for an affordable senior housing project (the "Project") on the property immediately north of the Central Library site to San Miguel, between Avocado Avenue and MacArthur Boulevard. Our primary concern in connection with the Project is the accompanying loss of the only remaining solution for present and future inadequate library parking. The Library Board has long been concerned with meeting the parking needs of the library customers; and we believe that we need at least 100 additional parking spaces dedicated to library customer use to adequately serve the Central Library facility. When the Central Library site was selected and the library facility was planned, the vision of shared use of a common driveway and parking areas with the future Newport Harbor Art Museum was acceptable because of the similar anticipated uses of the property and typical scheduling of activities which would allow for convenient and easy use of the driveway and parking facilities. The planned use of the property north of the library as a City park filled out the compatible uses of the three sites. No such harmony would exist with the development of the Corona del Mar Plaza, but the prospect of the availability of additional parking to the north of the library remained as an alternative remedy. The conversion of use of the property from a City park to the Project, as proposed by the Task Team, will eliminate the only remaining resource for parking deficiencies, unless conditions of development of the Project require the provision of the additional 100 needed parking spaces. 0 Mayor and Members of City Council Page 2 At the time of approval of the Corona del Mar Plaza in November,1995, the Board of Library Trustees presented its concerns about that project to you, as a result which certain conditions were adopted. Those concerns were directed primarily at traffic circulation within the project, ingress and egress to the library, and protecting against the loss of library parking places. Recently, The Irvine Company has agreed to meet some of our continuing concerns regarding traffic circulation by agreeing, in addition to the conditions of approval, to add a third exit lane to the jointly shared driveway at the intersection of the driveway and Avocado Avenue as a right turn onto Avocado north. Further, we have received signs of cooperation related to the Project in terms of meeting library parking needs. The Central Library averages 2,000 customers per day, and during the five hours of service on Sunday, an average of 1,750 customers use the library. Because of the high customer demand for parking on Sundays, the Community Room is generally unavailable for use on that day, and use on other days is limited for the same reason. The Coast HigInmylMacArthur Retail Center Traffic Analysis (August 1995) indicated the observed occupancy rate at the Central Library was 1.17 library customers per car. Applications of the observed vehicle occupancy rate to the average daily customers (1,709 automobiles for 2,000 customers;1,495 automobiles for 1,750 customers) competing for the use of the 210 available parking places used by both the staff and the public illustrates the burden which is placed on exiting parking. We request that any approval related to the affordable Senior Housing Project be subject to the conditions requiring the provision of at least 100 additional parking spaces dedicated to library customer use. nnett Jac s n, Jr. tairman Board of Libra Trust es cc: Kevin Murphy, City Manager L 74� AGENDA + FORD LAND AFFORDABLE HOUSING TASK TEAM APRIL 18, 1997 Time: 8:00 a.m. Place: City Council Chambers 1. Call to Order 2. Public Comments 3. Discussion of Proposed Senior Affordable Project on Newport Village 4. Discussion of Report to City Council Recommending Use of Ford Land Money to Assist in Funding Newport Village Project 5. Items to be placed on future Agenda 6. Adjournment FAcat\daXmemo\bob\fordagen.doc �a�WPpa' CITY OF NEWPORT BEACH G O' PLANNING\BUILDING DEPARTMENT t 33 O NEWPORT BOULEVARD U _ NEWPORT BEACH, CA 92658 (714) 644-3200; FAX (7x4) 644-3250 SUBJECT: SUMMARY: Agenda Item No.: Staff Person: Patricia L. Temple (714) 644-3228 REPORT TO THE MAYOR AND CITY COUNCIL RECOMMENDED ACTION: Discussion Ford Land Affordable Housing Report from the Ford Land Affordable Housing Task Team on its activites. Authorize staff to circulate the attached Request for Proposals; authorize the Affordable Housing Task Team to review and evaluate the proposals; and direct the task team to recommend to the City Council and affordable housing project to satisfy the requirement of the Ford development project. The Ford Land Affordable Housing Task Team (FLAHTT) has been meeting since established by the City Council. As required by the Resolution which established the team, Goals and Priorities have been adopted (copy attached). FLAHTT then developed a list of potential affordable housing sites and visited each. Site selection criteria and a ranking matrix was then developed. This matrix has been used regularly by the task team to evaluate the potential sites. A copy of the current matrix is also attached. Potential providers/developers of affordable housing have been invited to the meetings of the task team, to make presentations of potential projects. Presentations have been received from: 1. The Bayside Land Company (Bayside Village Mobile Home Park) 2. Mesa Development 3. The Newport -Costa Mesa -Irvine Family YMCA 4. The Irvine Company/LINC (Newport Village) FLAHTT has also discussed the possibility of circulating a Request for Proposals (RFP), and has determined that this would be the best approach to identifying the best project to satisfy Ford'd affordable housing requirements. This could solicit participation from non-profit housing companies or developers new to Newport Beach. An RFP has been drafted, and will be circulated if authorized by the City Council. PLANNING DEPARTMENT Un PatriciaL. Temple Acting Planning Director Attachments: 1. Draft RFP 2. Task Force Goals and Priorities 3. Site Matrix FAWP5IT ANNINGII CC-RPINCC960122N837.DOC DRAFT DRAFT DRAFT, DRAFT DRAFT DRAFT CITY OF NEWPORT BEACH REQUEST FOR PROPOSAL (RFP) FOR AFFORDABLE HOUSING PROJECTS I. INTRODUCTION The City of Newport Beach is inviting developers to submit proposals for the development of a minimum of 60 for -rent affordable housing units to be constructed within the City boundaries. The successful candidate will be a development firm or team that has the full capability to plan, construct and manage a high -quality affordable project. Project selection will be based primarily on the following criteria: • Quality of the development team as evidenced by previous work. • The amount of creativity shown by the development team in exceeding the project objectives as stated in this document. • Financial capability/resources of the development team to implement the project. • Responsiveness to this RFP. The Request for Proposal must be received by 4:00 pm, June 8, 1996. Proposals should be submitted to: Patricia Temple Planning Department City of Newport Beach 3300 Newport Blvd. P.O. Box 1768 Newport Beach, CA 92659-1768 II. ASSISTANCE FROM THE CITY The City of Newport Beach will receive substantial affordable housing in -lieu fees as part of a recently -approved residential project. The amount to be paid to the City is estimated presently to be $2 million, but could be as much as $2.5 million. These funds vwill be received by the City in partial payments beginning and continuing for a period of approximately five years. The City also may provide financial assistance in the form of Community Development Block Grant (CDBG) funds. In addition, the City may provide entitlement assistance ranging from 2- assistance with zoning and density issues, to the waiver of certain discretionary fees and project studies. III. PROJECT OBJECTIVES It is the City's goal to leverage its financial contribution and entitlement assistance, through the selected development team, to achieve the following objectives: • Create a minimum of 60 affordable for -rent units. Ideally, this goal will be accomplished within a single project. Consideration will be given, however, to smaller projects that, in aggregate, will result in a minimum of 60 affordable units. • The project may include both affordable and market rate units. At least 50% of the affordable units must be for tenants of very -low income, and the remaining affordable units must be for tenants of low income. The definition of very -low and low income is defined by the City's Housing Element. Affordable housing standards are attached to this RFP. • Provide housing units that are both functional and aesthetically pleasing. The project should be harmonious with the surrounding neighborhood -and compatible with adjacent uses. • Provide landscaping, usable open space and site amenities, as feasible, that will enhance the living environment for the project's residents and their guests. • Provide a safe living environment with sufficient and convenient off-street parking. • Preference may be given to projects that have the potential to generate long-term income for the City. IV. SUBMISSION REQUIREMENTS A. Identification of the Firm: • Name, address, telephone number, principal contact. • Length of time in business. Ownership structure (individual company, corporation, partnership, joint venture, other). • Applicable Experience B. Project Team • Identification of roles of principals, project manager, and staff. Please identify the individual(s) who would be responsible for the day-to-day contact with the era aoo W14% -3- City, and to what extent this individual would have authority to negotiate the agreement. • Please identify the architect, engineer, geotechnical specialist, construction contractor, economic advisor and/or other principal associates or consultants who would work with the developer on a project at this site. C. Experience • First, please describe your experience in developing and/or rehabilitating single and/or multi -family housing, apartment buildings, single resident occupancy (SRO) housing and/or senior citizen housing projects. Second, please identify any experience your project team may have in the operation and management of affordable housing complexes. • Please describe your current and past projects by providing the following information for each project: project name and location: how the project was financed; rendering of the project to show the quality of architectural/landscape design; description of the project type, scope, size and value; ownership of the project; management of the project; start and completion dates (if the project was not on schedule, describe how problems were resolved); and utilization, if applicable, of local, State and Federal housing financing programs and density bonus programs. D. Project Management • Please describe your ability to manage housing projects, from pre -design through the completion of construction and, if applicable, into property management. If you do not manage such projects, please provide all relevant information and experience concerning the entity(ies) that you utilize for day-to- day management. E. Financial Cavabilities/Resources: • Please provide an audited financial statement indicating total net worth and, to the extent that a portion of the net worth is real estate, the mechanism used for establishing the value of such real estate, i.e., cost or market (if market, based on appraisal judgment). These statements should correspond to the most recent full calendar or fiscal year. • Please identify the amount of available credit extended from each bank to each developer on your team. Provide the name, address and phone number for a minimum of three credit references, preferably ones involved in financing amba« 3114M 4- projects of similar scope. Please execute a copy of the sample release letter (Attachment A) on your firm's letterhead for each credit reference listed above. Please indicate whether your firm is involved in any litigation or other disputes that could result in a financial settlement having a material adverse effect on the ability to execute this project. If this is the case, please explain. Please indicate whether your firm, or any named individuals in the proposed project, ever filed for bankruptcy or had projects that have been foreclosed. If so, please list the dates and circumstances. F. Project Submission The narrative portion of the project submission should include the following information: • Description of the proposed site • Type of development including nature, size, scope, scale, mix, appearance, layout and design concept • Project schedule • Method of project financing, including funding requirements of the City • Nature of entitlement assistance. if any, required from the City Architectural drawings, elevations, a site plan, or renderings, while not required as part of the submission, are encouraged and will accepted to support the narrative description of the projects. A financial proforma for the project will be required to support requests for financial assistance from the City. V. RIGHTS OF THE CITY By submitting a response to the RFP, the developer waives all rights to protect or seek any legal remedies or compensation regarding any aspect of thjs RFP or the City's acceptance or rejection of it. The City believes the information contained in the RFP to be generally correct; however, no liability is assumed for total completeness or accuracy of all the information by independent means. The City reserves the right, at its sole discretion, to reject any and all offers for any reason. It should also be understood that the City reserves the right to consider factors other than economic factors in its selection. Upon selection of the potential developer(s), the City will enter into a ninety (90) day period of exclusive negotiations to attempt to negotiate terms and conditions of development. If an agreement is not reached, the City, at its sole option, may then select another proposer with whom to negotiate. dr«aa� 519 The City is a governmental entity exercising police power and other governmental powers and duties. The solicitation will not in any way affect the exercise of those powers and duties. The City does not discriminate on the basis of race, color, religion or sex. Contact by the developer with respect to the proposal shall be limited to Patricia L. Temple, Acting Planning Director [(714) 644-3200)]. Contact by a developer, regarding the RFP, with individual City Council members or media prior to selection or invitation to interview is expressly prohibited and will cause the disqualification of the developer. VI. SELECTION PROCESS The Affordable Housing Taskforce, appointed by the City Council, will review the qualifications received and, based primarily on proposer's development capability, will select those from whom to request specific proposals. Interviews may be held with some or all of the selected proposers. Following the proposal process, the selection committee will prepare a recommendation to the City Council for the awarding of an exclusive right to negotiate The preliminary schedule for reviewing submittals is as follows: 1. May 15, 1996 2. June 8, 1996 3. June 10-14, 1996 4. June 17- 21, 1996 5. July 8, 1996 RFP Released to qualified firms Submission Deadline Review of Submissions by the Taskforce Interviews of selected firms Report and recommendation from Taskforce to the City Council afford doe 3/IV96 0 ATTACHMENT A Financial Information Release Authorization Contact Person Financial Institution Address Dear, (Firm Name) has submitted a statement of qualifications to the Newport Beach Redevelopment Agency in consideration of a potential development participation venture in the City of Newport Beach. As part of the screening process, the Agency may need to contact you about our banking relationship. I (we) authorize you to provide the Agency's representatives with the information provided it will be kept confidential to the extent permitted by law. Very Truly Yours, %ffW &C 114,96 Ford Land Affordable Housing Task Team Roster: Jean Watt Vv,ssi�,/(714) 673-8164 (�71,4) 6733-6109 (FAX) Tim kdner WN (408) 2624885 (408) 942-8897 (FA7Q ,.-,Bob Burnham p\C (714) 644-3131 (714) 644-3139 OFW Patricia Temple 0 k (714) 644-3228 (714) 644-3250 (FAX) ✓f{en Delino (714)644-3222 (714) 644-3250 (FAX) Interested Parties: *Bob Wynn (714) 644-8576 714) §444065 \°l!�t— b-GD� l� 0\, o-w. A60- &A \ate - a�� CITY OF NEWPORT BEACH OFFICE OF THE CITY ATTORNEY P.O. BOX 1768, NEWPORT BEACH, CA 92658-8915 (714) 644-3131 October 1, 1996 Kathe Head Keyser Marsten 500 S. Grand Avenue Suite 1480 Los Angeles, CA 90071 Re: TICS/IAC Affordable Housing Project Newport Village Site Dear Kathe: I have enclosed a copy of the following excerpts .from LINC Housing Corporation and Irvine Apartment Communities' response to the City's request for proposals for affordable housing projects: c 1. Executive Summary; 2. Project Team Identification; 3. Development Description; 4. Financing; 5: Proforma; and 6. Preliminary Development Schedule I have also enclosed a copy of Tim Ridner's evaluation of the LINC/IAC proposal (Ridner is an executive with Ford Loral and a member of the City's Affordable Housing Task Team). The LINC/IAC proposal requires the City to rezone a portion of the Newport Village Site - a parcel which has been the proverbial goose that laid the golden eggs. Newport Village was originally entitled for 120,00 square feet of commercial and 200,000 square feet of office. This entitlement was gradually transferred to other areas in Newport Center through a series of general plan amendments until only 58,750 square feet of commercial entitlement remained. The City then reentitled Newport Village for 360 DU's for affordable housing. The remaining commercial was transferred to Fashion Island and the residential was transferred to North Ford. The City then re-reentitled the site for 100,00 square feet of museum development and 65,000 square feet of library development in conjunction with the library exchange agreement which required the City to grant additional entitlement in Civic Plaza (57,150 square feet) and additional entitlement in 3300 Newport Boulevard, Newport Beach Corporate Plaza West. Just recently, the museum entitlement was converted to 105,00 square feet of commercial retail. Interestingly, the recent conversion of museum entitlement to commercial office entitlement included a restriction on access to the site from Mac Arthur - a condition which upset TIC. I called your office today and found out you would not be back until Thursday, October 3rd. We have an exploratory meeting with TIC at 9:30 on October 4th. I would consider it a great favor if you could review this material upon your return and, sometime prior to 9:30 on October 4th, give me your initial reaction to the TIC/LINC proposal. Very, ruly yours, lk-o—bert Burnham City Attorney for the City of Newport Beach RB:cI cc: Sharon Wood, Assistant City Manager Jean Watt, Council Member Patty Temple, Planning Dept. encl. F:\cat\cds\1efter\bobXhead.doc *SEASONS Senior Apartments at Newport •Center* Newport Beach, California EXECUTIVE SUMMARY Introduction SEASONS Senior Apartments at Newport Center is a proposed 285-unit, $20.6 million rental apartment development restricted to seniors to be located in the prestigious Newport Center area of the City of Newport Beach. The project will be co -developed by LINC Housing Corporation, an experienced, regional, 501(c)(3) non-profit affordable housing development corporation specializing in the development of affordable senior rental apartments, and Irvine Apartment Communities, one of the largest and most successful developers and owner/operators of apartment communities in Southern California. The 100% affordable community is proposed to be financed through the issuance of tax-exempt mortgage revenue bonds, with the sale of Low Income Housing Tax Credits to a Limited Partner investor and municipal "gap" funding. The project site will be conveyed to Irvine Apartment Communities from The Irvine Company in return for the right to apply the units . created in this development toward their requirement to provide affordable units for their . other Newport Beach developments. IAC, as Lessor, will contribute the property to the development partnership on a long-term subordinated land lease. Project Description The SEASONS at Newport Center will be one of Orange County's largest affordable senior housing developments consisting of 285 units. The site is ideally located for seniors housing; in close proximity to retail, medical, transportation and entertainment facilities, with convenient access to the new Newport Beach Public Library. In conjunction with the grading and construction operation for this project, 30 parking spaces will be added to the rear library lot to lessen a current.shortage of parking for library employees and the public. SEASONS will consist of230 (80%) 1-bedroom/1-bath units of approximately 550 square feet, and 55 (20%) 2-bedroom/1-bath units of approximately 725 square feet, with a total development of approximately 170,000 square feet. SEASONS will distinguish itself by being 100% affordable according to the City's low and very low income standards, with units targeted to seniors (age 55+) with incomes limited to 50% and 60% of HUD Median Income levels for Orange County. - The project will be a two story, garden apartment community, planned at an average density of 25 dwelling units per acre, with surface parking provided at a ratio of 1:1. In addition, approximately 28 parking spaces will be provided for the employees of the adjacent Newport Beach Public Library. The community will have a separate, centrally located 4,000 +/- sq.ft. v recreation/administration building with a pool and spa. Exterior architectural design elements will be selected topromote consistency with the surrounding neighborhood and compliance with the City's municipal requirements. Project Alternative The current site plan is designed around an existing retention basin of approximately one acre necessary to maintain adequate upstream drainage without overloading the downstream storm drain system. Per discussions with representatives of The Irvine Company, if the City were to find it beneficial to allocate an additional $300,000 to this project enabling development of 20 to 25 additional affordable units, The Irvine Company would accelerate construction of downstream storm drain improvements, thus eliminating the need for the retention basin on the site. The site plan has been designed to easily incorporate the additional units. The project team feels this is a benefit to the City for three reasons: • Increased number of seniors affordable units on the site, • Improved site plan due to deletion of the retention basin, and • Accelerated improvements to the downstream drainage system. Development Team A team of local, highly skilled design, development, finance and management professionals have been assembled who have both proven experience in multi -family senior product and a firm commitment to the mission of providing affordable housing. This project team approach will be coordinated by and receive direction from, LINC Housing Corporation (LINC) and Irvine Apartment Communities (IAC) , as Co -Developers. 'IAC's expertise in, the area of project development will ensure quality and timely construction completion. Newport Beach Seniors, L.P., a to -be -formed California Limited Partnership, will be the Owner/Borrower, with LINC acting as 1% Managing General Partner. This non-profit sponsorship will effectively enable the project to maximize the financing and operational benefits accorded to LINC's 501(c)(3) tax-exempt status. Development quality will be maximized and costs will be minimized given the careful attention to efficiency, value engineering, and the project's economies of scale. Marketing SEASONS will be professionally managed and marketed do create and maximize market identification. Cross -referrals, multiple project advertising, and interactive on -site social and recreational programs will reinforce the bond between SEASONS at Newport Center and LINC's other SEASONS communities throughout Southern California. Additionally, referrals from IAC's extensive multifamily portfolio in the Cities of Newport Beach, Irvine and Tustin will ensure strong market demand. J Financing Plan LINC and IAC have extensive experience in structuring and arranging funding for affordable housing projects like SEASONS at Newport Center. The structure proposed to finance the project is commonly used, and IAC and LINC's involvement provides for the most efficient and low cost affordable housing financing available today. The proposed financing for the $20.6 million total cost is summarized below: • Land conveyed to IAC by The Irvine Company followed by IAC's contributing the land to a new to -be -formed partnership between LINC and IAC in the form of a subordinated ground lease. • Construction financing to be arranged by IAC either through outside banks or via IAC's internal $175 million line of credit. • Permanent project debt to be issued in the form of tax-exempt multifamily revenue bonds under an existing arrangement between IAC and FNMA. • Project equity to be obtained through the sale of low income housing tax credits in the form of a limited partnership interest in the above - noted partnership to a tax credit financial investor. • Gap financing to be provided by The, City of Newport Beach, with repayment over the same term as the permanent project debt. Addressing City Objectives The City has set forth an objective of creating 60 affordable for -rent units split evenly between Very Low and Low rent levels. SEASONS at Newport Center will not only provide the units requested by the City, but also will provide an additional 66 Very Low units and 159 units at 60% of HUD Area Median income, with rent levels significantly below the City's Low income requirements as set forth in the RFP. The City desires housing units which are both functional and aesthetically pleasing. The SEASONS at Newport Center has been sensitively planned to meet the needs of the Newport Beach senior population, harmonize with the adjacent=land uses, and promote a sense of community within the development. The project development team has worked diligently to assure that SEASONS will provide high quality affordable housing, consistent with the elegant design standards of Fashion Island and the adjacent Newport Beach/Corona Del Mar residential neighborhoods. Landscaping, usable open space, and site amenities that enhance the living environment for the project's residents and their guests is a primary objective of this RFP. A central. single -level clubhouse facility of approximately 4,000+/- square feet will be provided for the SEASONS residents. This conveniently located recreational facility will house a large multipurpose "social room" equipped with a wide screen television, comfortable lounge seating, game tables, and a library/quiet reading area with books and a computer for the resident's use. This area also will incorporate an on -site administrative office for the Resident Manager, a full service kitchen, coin -operated laundry facilities and central mail distribution area. A large heated swimming pool and a spa, along with sundecks and extensive landscaping, will compliment the recreational facility. The SEASONS at Newport Center also addresses the City's objective of creating a safe living environment with sufficient, convenient off-street,parking. For resident security and peace of mind, the development will be enclosed with a combination of decorative walls and wrought iron fences. Vehicular entry to the community will be centrally located at the signal on Farallon with transmitter -controlled electronic gates providing access to private parking. Surface parking for residents and guests will be provided on - site at an overall ratio of 1 space per unit, with an additional 9 spaces for apartment leasing and 2 spaces allocated for the resident manager. In addition, 30 parking spaces will be provided along the •southern property line for use by employees of the adjacent Newport Beach Public Library. • Finally, the City prefers projects which generate long-term income for the City. SEASONS at Newport Center has been structured to return the City's in -lieu fee contribution from project cash flows. In addition, an annual contribution of $10,000 will be provided to the City to, help support the operations of the local OASIS Senior Center. Benefits Contributions SEASONS Senior Apartments at Newport Center Schedule of Benefits/Contributions by Party 1"ine Apartment Limited Partner CiN of Naiynnrt Reich fsmniunity The Irvine Commmnv Communities LINC Housing Investor 21IS affordable senior Affordable seniors Obtains credits toward meeting Development Fees Fulfills non-profit mission Tar b ncfm apartments: housing serving current affordable unit requirements of providing affordable 96units (34%) 0 Very Low, residents and parents for other Newport Beach Subordinated ground lease housing Project cash flow 199 units (66%) ® 60% of of current residents developments payments subject to available Median Income cash flow Development & mgmt. Improved funding for Creates bank of additional fee to further mission 35 year affordability OASIS senior center affordable credits for future development Assists in compliance with City Housing Element requirements Premium seniors housing location Retain of City contribution plus interest out of project cash flow Additional parking spaces for Newport Beach Public Library Approximately S1.5 million in Development Fees' Annual contribution to OASIS center Process rezoning of land for Creative use of "low Contribution of land Development expertise Senior housing property Project Equity residential use quality' opea space with a value ranging from marugenient expertise S6 TO SI I million Constmction/permanem Investment of financing Community outreach approximately S6,000/unit Community issues mgmt. coordination required to make the Subordinated ground project feasible Development expertise lease to partnership Tax credit processing & offshe engineering Constmctiomlease-up 'Season marketing guarantees program I. II. III *SEASONS Senior Apartments at Newport Center* Newport Beach, California PROJECT DEVELOPMENT TEAM IDENTIFICATION OWNEWSPONSOR Newport Beach Seniors. L.P., a to -be - formed CA Limited Partnership General Partner LINC Housing Corporation A 501(c)(3) non-profit public benefit corpo- ration 4 Venture, Suite 275 Irvine, CA 92618-3324 Barry J. Karriel, Board Member Michelle De'Koter, Vice President (714) 453-1330 FAX: (714) 453-1231 Co -General Partner Irvine Apartment Communities, Inc. 550 Newport Center Drive Newport Beach, CA 92660-0711 Richard Lamprecht, Vice President (714) 720-5565 FAX: (714) 720-5550 Limited Partner/ Investor To Be Determined PROJECT DEVELOPMENT Co -Developers LINC Housing Corporation Irvine Apartment Communities Inc. LAND LESSOR Irvine Apartment Communities. Inc. (land to be conveyed to IAC by The Irvine Company in return for affordable credits toward meeting its affordable requirements with the City) (N IV• PROJECT DESIGN Architecture Landscape Architecture The KTGY Group Inc. 17992 Mitchell South Irvine, CA 92714 Stan Braden, President/Principal (714) 851-2133 FAX: (714) 851-5156 Mitchell-Lacoss Land Solutions 22982 El Toro Road Ste. B Lake Forest, CA 92630 Robert Mitchell, Principal (714) 581-2112 FAX: (714) 581-5809 Civil En i¢ neer ._ Adams -Streeter. Civil Engineers 15 Corporate Park Irvine, CA 92714 Jan Adams and Randy Streeter, Principals (714) 474-2330 FAX: (714) 474-0251 V. CONSTRUCTION General Contractor Reefs Contractors. L.P. (A Division of SARES-REGIS Group) 18802 Bardeen Avenue Irvine, CA 92715-1521 John Townsend, President (714) 756-5959 FAX: (714) 756-5955 VI. PROPERTY MANAGEMENT rrq e�rty Manager SARES-REGIS Group Residential Property Management Division 18802 Bardeen Avenue Irvine, CA 92715-1521 Jim Thomas,Senior Vice President (714) 756-5959 FAX: (714) 756-5955 VII. MARKETING Marketing_ Consultant VIII. TITLE COMPANY IX. COMMUNITY LIAISON Market Profiles --Residential Trends 3188 Airway Avenue Costa Mesa, CA 92626 Annie Gerard, Senior Vice President (714) 546-3814 FAX: (714) 546-0953 First American Title Insurance Company 114 East Fifth Street P.O. Box 267 Santa Ana, CA 92702 Steven F. Ball, Subdivision Manager Government Solutions 120 Newport Center Drive, #290 Newport Beach, CA 92660 Coralee Newman, Principal (714) 717-7944 *SEASONS Senior Apartments at Newport Center* Newport Beach, California DEVELOPMENT DESCRIPTION General The proposed SEASONS Senior Apartments at Newport Center will be an affordable, senior citizen multi -family' rental development. It will consist of 285 dwelling units on approximately 11 acres located between MacArthur Boulevard and Avocado and San Miguel and the Newport Beach Public Library. Access will be from a signalized intersection to be placed at Farallon. The target market segment shall be independent -living seniors, over the age of 55 years, of limited financial means - a large and growing segment of our local population. While occupancy cannot be legally restricted to residents of Newport Beach, market studies on senior housing have concluded that a majority of residents come from within a 5-15 mile radius of the development. SEASONS at Newport Center will be an asset to, and address the needs of, the local Newport Beach senior community. Without any outside marketing, an interest list of over 100 seniors has already been compiled by LINC Housing. Background LINC Housing Corporation's (LILAC) unique level of professional experience and senior housing expertise in this specific market area will ensure that the community's planning, design, development, construction and on -going property and asset management will be of high quality and industry distinction. LINC is a 501(c)(3), non-profit, regional affordable housing development corporation serving the five Southern California counties of Los Angeles, Orange, Riverside, San Bemadino and Ventura and specializing in affordable senior apartments. In conjunction with our affiliate non-profit, Corporate Fund for Housing, LINC currently owns/asset manages 1,044 units, 936 of which are located in six SEASONS senior communities. In addition, LINC currently has an additional 406 senior units under construction. All of these affordable senior apartments are marketed under LINC's service -marked "SEASONS" banner. Irvine Apartment Communities is a publicly -traded, self-administered; real estate investment trust committed to the ongoing, development and management of high quality apartment communities on the Irvine Ranch. The company owns and operates a stabilized portfolio of 43 communities containing 11,334 rental units. Five new properties with 2,207 rental units, begun in 1994, will be completed and fully stabilized by year-end 1996, increasing the company's portfolio to 13,541 units. Construction is also underway on three new communities, totaling 772 additional rental units to be completed by year-end 1997. Currently, Irvine Apartment Communities has a total market capitalization of over $1.4 billion and had total revenues for 1995 of over $136 million. In addition, Irvine Apartment Communities is among the most experienced developers of affordable rental housing in Orange County. The Company's current portfolio contains over 2,800 units that are subject to differing levels of income and rent restrictions and ongoing compliance and reporting requirements. For further information on LINC's SEASONS Senior Communities and IAC's extensive development experience, please refer to the Project Development Team Developer Qualification material presented in this proposal. Site Location/Description SEASONS at Newport Center will be ideally situated to serve the needs of Newport Beach's seniors. The approximately 1 I acre site is located between MacArthur Boulevard to the east, Avocado Avenue to the west, San Miguel Drive to the north, and the Newport Beach Public Library to the south. The site is adjacent to Fashion Island, the City of Newport Beach's premiere retail/office center. Grocery stores are located nearby at Fashion Island and Harbor View Center, as well as retail„ banks and restaurants which will be utilized by the residents of SEASONS. Medical offices and pharmacies are located at the intersection of Avocado Avenue and San Miguel. Entertainment is readily available at the newly expanded Edwards Cinemas. Educational opportunities are available -through the nearby OASIS Senior Center and the Newport Beach -Public Library. Transportation assistance will be available through the OASIS Senior Center, and the OCTA Newport Transportation Center at Avocado and San Joaquin Road. The Corona Del Mar State Beach and the Sherman Library and Gardens are only a short drive away. Land Use Entitlement The proposed site for this development is currently owned by The Irvine Company. The existing General Plan and zoning designation for this site is Open Space. Per the City of Newport Beach Circulation and Improvement Open Space Agreement, affordable housing is a permitted use in an open space parcel. To develop the property, LINC, IAC and The Irvine Company will process a request to rezone the property allowing residential affordable housing use along with a tentative map and site plan. The development partnership is aware of the community sensitivity related to this project, especially as it relates to the "view plane" as it extends -over Newport Center. Preliminary development of the site plan includes an assumption that a significant amount of earth will be exported from the site to keep the roofs of the proposed development beneath the implied view plane in this area. Studies will be provided to the City staff during the entitlement process addressing this issue in detail. Planning & Architectural Design The SEASONS at Newport Center has been sensitively planned to meet the needs of the senior population, harmonize with the adjacent land uses, and promote a sense of community within the development. The project development team has worked diligently to assure that SEASONS will provide high quality affordable housing, consistent with the elegant design standards of Fashion Island and the adjacent Newport Beach/Corona Del Mar residential neighborhoods. SEASONS at Newport Center been designed with an internal, community focus. The residential buildings have been situated around a central pedestrian promenade, with tree - lined walks promoting a "village" atmosphere. As currently planned, based on construction and management efficiencies, SEASONS will be a two story, garden apartment community planned at a density of approximately 25 dwelling units per acre. The wood framed, slab on grade construction will have back-to-back and stacked unit layout to maximize design, construction, and operational efficiencies. The apartments along MacArthur Boulevard have been integrated into the sound wall to minimize sound interference. No units have doors or windows facing towards MacArthur which will minimize noise disruption to our residents and further support the internal locus of the community. SEASONS at Newport Center has been carefully planned not to interfere with the view plane of the adjacent residential neighborhoods. Four building types are planned as follows: Building # of UniLs # of 1 BR 2 BR Tyne Buildings Units Units Total I 4 3 6 6 12 II 8 6 24 24 48 III 8 4 32 0 32 IV 16 12 168 24 192 284 Manager's Unit 1 285 J The residential buildings are planned around a central, single level clubhouse facility of approximately 4,000+/- square feet. This conveniently located recreational facility will house a large multipurpose "social room" equipped with a wide screen television. comfortable lounge seating, game tables, and library/quiet reading area with books and a computer for resident's use. This area also will incorporate an on -site administrative office and residence for the community's Resident Manager, a full service kitchen, coin -operated laundry facilities and a central mail distribution area. The recreation room, which is a key element of the community's ongoing social programs, will be professionally decorated. thematic to our SEASONS concept and sensitively planned to address the very special needs of the senior residents. A large heated swimming pool and a spa, along with sundecks and extensive landscaping, will compliment the recreation facility. For tenant security and peace of mind, the development will be enclosed with a combination of decorative walls and wrought iron fences. Entry to the community will be centrally - located at the traffic signal on Farallon with transmitter -controlled private parking access. This traffic signal and pedestrian crossings will facilitate residents' access to the adjacent commercial/shopping and medical facilities. Surface parking for residents and guests will be provided on -site at an overall parking ratio of 1 space per unit, with an additional 9 spaces for apartment leasing and 2 spaces allocated for the Resident Manager. In addition, 30 parking spaces will be provided for employees.of the Newport Beach Public Library. Two single level apartment floor plans will be provided -- 1 bedroom/1 bath .units at approximately 550'square feet, and 2 bedroom/l bath units at approximately 725 square feet. One unit shall be designated for the full-time, on -site Property Manager, and located above the clubhouse. All units will have fully equipped; all electric kitchens, wall-to-wall carpeting, non-skid/no-wax vinyl flooring, recessed dining area lighting, forced air heating and private balconies or enclosed patios. All units will be unfurnished. All living units, as well as all public common areas, will be designed under current Federal, State and local building codes to be 100% handicapped accessible and/or adaptable, with grab bars, wheelchair turning radii, etc., as required. Several of the units will be fully equipped for handicapped use. There will be no elevators. To harmonize with the architectural character of the nearby Fashion Island retail center and the local, residential neighborhoods, the use of lightly textured stucco, painted wood trim with timbered trellis and overhang members will give the impression of California Mediterranean architectural style. Landscaping An environmentally sensitive, aesthetically attractive, ecologically conservative and low maintenance landscape plan with a moderately drought tolerant plant palette will be developed to minimize on -going water usage and landscape maintenance costs. All hard surfaced walks and drives will be carefully designed to accommodate the needs of the seniors, with minimal sloping and steps. Heavy textures, which are not conducive to walkers and wheelchairs, will be avoided. Project Alternative The current site plan is designed around an existing retention basin of approximately one acre necessary to maintain adequate upstream drainage without overloading the downstream storm drain system. The Irvine Company initiated a study of the drainage area to come up with a conceptual storm drain system to eliminate the existing retention basin located within the proposed senior affordable housing project. The proposed system provides for existing storm drain systems from adjacent residential neighborhoods, MacArthur Boulevard, the library and .within Corporate Park West to be intercepted. These drainage area interceptions will cause a reduction in the flows (Q's) in the existing undersized Pacific Coast Highway (PCH) storm drain system, thus allowing deletion of the retention basin on site. Per discussions with representatives of The Irvine Company, if the City were to find it beneficial to allocate an additional $300,000 to this project enabling development of 20 to 25 additional affordable units, The Irvine Company would accelerate construction of the above -noted downstream storm drain improvements, thus eliminating the need for the retention basin on the site. Affordability Various rental -limitations, secured by recorded Regulatory Agreements, will ensure the projects 100% affordability to senior citizens of limited financial means for a 35 year period. Affordable rent levels will be targeted to meet the City of Newport Beach's affordability requirements and meet the Federal and State affordability levels imposed by the TCAC's program structure and regulations. The preliminary, proposed, affordable levels may be summarized as follows: Affordability: 100% Affordability • 96 units (34%) @ 50% of Median Income -"Very Low Income" • 189 units (66%) @ 60% of Median Income- "Low Income" Based upon HUD's Fiscal Year 1996 Median Family Income for Orange County, the following affordable rent matrix', which adjusts for unit size, has been developed: Income Definition Very Low Income (50% of HUD Median Income) Low Income (60% of HUD Median Income) 1 Bedroom Maximum 2 Bedroom Maximum (1.5 Persons) Rent 3 Persons Rent $22,975 $574 $27,600 $690 $27,570 $689 $33,120 $828 ' Rents shown include the costs of utilities to be paid separately by the residents. Utility allowances are assumed to be $43 and $55 for I and 2 bedroom units, respectively. Construction The site's sloping topography will require extensive grading, and the large number of units being provided will result in an extended construction timeline of approximately 20 months. Construction phasing, subcontractor scheduling, and unit turnover will be carefully planned to support and accommodate pre -leasing marketing activities and enable Management to achieve strong absorption and early occupancies during the critical lease -up stage. A post - construction Customer Service Program will be developed to effectively and sensitively address the follow-up concerns of both Management and the senior residents. Property Management & Marketin!? To ensure operational success, professional on -going property management and marketing for SEASONS at Newport Center will be contracted to Regis Property Management Company. Regis Property Management Company was formed in 1975 and currently manages nearly 7,000 apartment units in 24 communities, including some properties owned by IAC. The majority of these apartments are located in Southern California. Asset management services will be provided by LILAC Housing. J I I V Fair market rent schedule: EFF I -BR Income limits: EXHIBIT 1 Affordable housing Standards MANUFACTURED 2-BR 3-BR 4-BR HOME SPACE $860 $1,197 $1,333 $449 NUMBER OF PERSONS IN FAMILY STANDARD 1 2 3 4 5 6 7 8 Very low income ' 21450 24500 27600 30650 33100 35550 38000 40450 Low income 29100 33300 37450 41600 44950 48250 51600 54900 The FMRs are E Revised per HUD Notice CALIFORNIA, .X CREDIT ALLOCATION COMMITTEE effective: January 28, 1996 1996 MAXIMUM INCOME LEVELS County One Two Three Four Five Six Seven Eight Person Person Person Person Person Person Person Person MONO 100% Income Level $29,300 $33.400 $37,600 $41,800 $45,100 $48,500 $51,800 $55,200 60% Income Level $17.580 $20,040 $22,560 $25,080 $27,060 $29,100 $31.080 $33.120 50% Income Level $14,650 $16,700 $18,800 $20.900 $22,550 $24,250 $25,900 $27.600 40% Income Level $11.720 $13.360 $15,040 $16.720 $18.040 $19,400 $20,720 $22,080 30% Income Level $8,790 $10,020 $11.280 $12.540 $13.530 $14.550 $15.540 $16,560 100%-Income Level $31.700 $36,200 $40,800 $45.300 $48,900 $52,500 $56,200 $59.800 60% Income Level $19,020 $21,720 $24,480 $27,180 $29,340 $31,500 $33,720 $35.880 50% Income Level $15.850 $18,100 $20,400 $22.650 $24,450 $26.250 $28,100 $29.900 40% Income Level $12.680 $14,480 $16,320 $18,120 $19.560 $21,000 $22,480 $23,920 30% Income Level $9,510 $10.860 $12.240 $13,590 $14.670 $15,750 $16,860 $17.940 NAPA 100% Income Level $34,400 $39.400 $44,300 $49,200 $53,100 $57.100 $61,000 $64,900 60% Income Level $20,640 $23,640 $26,580 $29,520 $31.860 $34,260 $36.600 $38,940 50% Income Level $17,200 $19.700 $22.150 $24.600 $26,550 $28,550 $30,500 $32.450 40% Income, Level $13,760 $15.760 $17,720 $19,680 $21,240 $22,840 $24.400 $25.960 30% Income Level $10,320 $11,820 $13,290 $14,760 $15,930 $17,130 $18.300 $19,470 NEVADA 100% Income Level $30,300 $34.600 $39.000 $43.300 $46,800 $50,200 $53.700 $57.200 60% Income Level $18.180 $20,760 $23,400 $25,980 $28,080 $30,120 $32,220 $34.320 50% Income Level $15,150 $17,300 $19,500 $21,650 $23.400 $25,100 $26.850 $28.600 40% Income Level $12,120 $13.840 $15,600 $17,320 $18,720 $20,080 $21,480 $22,880 30% Income Level $9,090 $10.380 $11.700 $12,990 $14,040 $15.060 $16.110 $17,160 ORANGE 100% Income Level $42.900 $49,000 $55,200 $61.300 $66,200 $71,100 $76,000 $80.900 60% Income Level $25.740 $29,400 $33,120 $36,780 $39,720 $42.660 $45.600 $48.540 50% Income Level $21.450 $24.500 $27.600 $30.650 $33.100 $35,550 $38,000 $40,450 40% Income Level $17.160 $19,600 $22,080 $24.520 $26.480 $28,440 $30,400 $32,360 30% Income Level $12.870 $14.700 $16,560 $18.390 $19,860 $21.330 $22.800 $24,270 Revised per HUD Notice CALIFORNI AX CREDIT ALLOCATION COMMITTEE effective January 28, 1996. 1996 MAXIMUM RENTS FOR PROJECTS RECEIVING CREDITS FROM CEILINGS PRIOR TO 1990 One Two Three Four Five Six Seven Eight County Person Person Person Person Person Person Person Person NEVADA 60% Income Level $454 $519 $585 $649 $702 $753 $805 $858 50% Income Level $378 $432 $487 $541 $585 $627 $671 $715 40% Income Level $303 $346 $390 $433 $468 $502 $537 $572 ORANGE 60% Income Level $643 $735 $828 $919 $993 $1.066 $1,140 $1,213 50% Income Level $536 $612 $690 $766 $827 $888 $950 $1.011 40% Income Level . $429 $490 $552 $613 $662 $711 $760 $809 PLACER 60% Income Level $487 $556 $627 $696 $751 $807 $862 $918 50% Income Level $406 $463 $522 $580 $626 $672 $718 $765 40% Income Level $325 $371 $418 $464 $501 $538 $575 $612 PLUMAS 60% Income Level $360 $411 $463 $514 $555 $597 $637 $679 50% Income Level $300 $342 $386 $428 $462 $497 $531 $566 40% Income Level $240 $274 $309 $343 $370 $398 $425 $453 RIVERSIDE 60% Income Level $454 $519 $585 $649 $702 $753 $805 $858 50% Income Level $378 $432 $487 $541 $585 $627 $671 $715 40% Income Level $303 $346 $390 $433 $468 $502 $537 $572 SACRAMENTO 60% Income Level $487 $556 $627 $696 $751 $807 $862 $918 50% Income Level $406 $463 $522 $580 $626 $672 $718 $765 40% Income Level $325 $371 $418 $464 $501 $538 $575 $612 SAN BENITO 60% Income Level $472 $540 $607 $675 $729 $783 $837 $891 50%-Income Level $393 $450 $506 $562 $607 $652 $697 $742 40% Income Level $315 $360 $405 $450 $486 $522 $558 $594 Page 5 ORANGE COUNTY HOUSING AUTHOR= Gas Heat Gas Cook Gas Hot Water Baslc Electric TOTAL Ravoc TOTAL Gas Heat Electric Cook Gas Hot Water Basic Electric TOTAL Heat Cook Basic Hot Water Heater TOTAL Water Refrigerator Stove j UTILITY ALLOWANCE SCHEDULE for SECTION 8 EXISTING HOUSING Effective dote: October 1, 1995 rz.Ss Rent. Gas Cook • Gas Hot Wntor . Baslc Electric O:B�cI 'rn ij�t3edion`tn �'S�odrAam:a:T3r�ltoom g���ioom S:BBdroom 9 11 14 17 22 25 2 2 2 3 3 5 3 3 5 6 7. 8 4 15 20 22 '24 27 tag.$ im58 sass ��_ ^-4 -5 -5 _ _ •6 .6 241 27t 361 431 501 59� re.,a w—, _ Finetrlc Cnny _ GMe Hnt Wntor . Rasic Electric 0•Bedrodm:1•Bedroarn 2t3ed'room 3 Bedroom'4=8edioorn $tBedroom 9 111 141 171 221 25 `4 51 91 121 14 17 13 31 51 61 71 8 ---j4j 151 20 221 241 27 All Elnntrie O:,BeSlroom 1-Bedroom 2=8td'rtiom 3;Bedtliom p:Bedroom SiBedroom t 19 22 27 31 34 !4 5 9 12 141 17 1p 15 20 22 24 27 71 10 15 19 22 Addltinnal U lity Allowances O��• Bedroo '1.�Bedroorn r 9edroom 2�vo 3�Ee'droom d-Bedroom 5-Bedroom • 10 n 14 16 1s 4 4 4 4 4 3 3 3 3 3 Mobile Homes Single I Double 8 13 2 2 3 5 9 9 29 Mobile Homes Single I Double 8 13 5 5 3 5 9 9 •.25 ; . 32 Mobile Homes Single • Doubt= 15 20 5 5 9 9 6 7 Mobile Homes Single D:'.-le 91 10, 41 •t *SEASONS Senior Apartments at Newport Center* Newport Beach, California FINANCING PLAN Overview LINC and IAC have extensive experience in structuring and arranging funding for affordable housing projects. The structure proposed to finance SEASONS Senior Apartments at Newport Center is commonly used and IAC and LINC's involvement provides for the most efficient and lowest cost affordable housing financing available today. SEASONS at Newport Center is proposed to be financed with a combination of construction financing provided by IAC or a commercial bank and permanent financing provided by the sale of low income housing tax credits (LIHTC), issuance of tax-exempt bonds and gap financing from the City of Newport Beach. The proposed structure is driven by the desire to raise equity by selling tax -credits to a tax -credit investor. To facilitate this, a partnership will be formed comprised of I'AC and LINC as co - general partners, and a future limited partner who would purchase a limited partnership interest at project stabilization in return for the benefit of the tax -credits. The land component of the development will be contributed by IAC in the form of a subordinated ground lease. The following summarizes the essential elements of the Financing Plan Ground Lease In return for the entitlement credits to be created by providing the affordable housing on the site, The Irvine Company, the current land owner, will convey the site to IAC. IAC will then contribute the site to a new, to -be -formed, California limited partnership, Newport Beach Seniors, L.P. in the form of a subordinated ground lease. The ground lease will be structured to provide an adequate return to IAC on the value of its land contribution. The proposed structure would have a base rent of $100,000 per year grown at inflation and then a participation in cash flow after debt service and repayment of the Newport Beach Loan (see section titled "Newport Beach Loan"). The ground lease would be subordinated to the permanent tax-exempt financing. Base rent payments would be senior to repayment of the Newport Beach Loan. - -- Conctructinn Financing The project will require construction financing to fund all project costs through stabilization of the property. IAC has several alternatives to provide construction financing. These include arranging a traditional construction loan with a commercial bank and arranging credit enhancement for the issuance of tax-exempt bonds through the construction period. Alternatively, IAC could provide construction funding to the project itself by borrowing on its own line of credit. It has been assumed that a loan would be made to the project with 1.5 % upfront fees and and interest rate of Prime plus 1 % (9.25%). IAC has had experience for over 25 years in financing construction for development of rental properties. Its relationships with Wells Fargo and Bank of America date back for more than three decades. Additionally, IAC has relationships with an assortment of major US, European and Asian commercial banks: The Company currently has $175 million in available bank line commitments. Permanent Financing The project would be financed at stabilization with a combination of the sale of tax credits to the future limited partner, tax-exempt financing and gap financing, as proposed, to be provided by the City of Newport Beach. Sale of Tax Credits: IAC and LINC have elected to propose the use of 4% tax credits from the California Tax Credit Allocation Committee (TCAC) to avoid the competitive process required to gain 9% credits. Given the current bias of TCAC toward family projects in specified census tracts, the proposed project would have little chance of winning a competitive bidding for 9% credits. The process for obtaining project equity via the sale of the tax credits requires that IAC and LINC form a partnership and at project stabilization sell a limited partnership interest to an investor who is seeking to purchase the benefits of the tax credits. The capital invested by the limited partner would provide part of the necessary "equity" needed to support a tax-exempt bond offering. The price assumed in this proposal for the sale of tax credits is $0.62 per $1.00 of tax credits. Tax -Exempt Financing: Utilizing a 4% tax credit program allows tax-exempt bonds to be used to provide permanent low cost financing for the property. It is proposed that tax-exempt bonds would be issued at stabilization of the property to provide the permanent financing for the project. IAC has an existing $330 million tax-exempt bond program with credit enhancement and liquidity support provided by Fannie Mae and issued through California Statewide Community Development Authority (CSCDA). The Fannie Mae program was created with an open indenture which contemplated adding new properties over time. It is proposed that upon project stabilization and the sale of tax credits the project would be placed into the Fannie Mae program which would provide for 30-year tax-exempt financing. It is assumed that the project could support approximately $14.5 million in tax-exempt debt with a coverage ratio of 1.2 times at stabilization with a loan constant of 8.26% (the underwriting criteria used on the existing $330 million program). The costs of this financing are estimated to be approximately $580,000 in upfront fees for legal, Fannie Mae and tax-exempt bond underwriters, and a long-term fixed interest rate of 6.5 % (based upon today's interest rate swap market and including Fannie Mae's credit enhancement fee, remarketing and other costs) with 30 year amortization. City of Newport Beach Loan A key element in the project's feasibility is .the award of $1.7 million in financing by the City of Newport Beach to fill the gap between the costs of developing the project and the available tax- exempt financing and proceeds from the sale of tax credits. It is proposed that the funds be loaned into the project in five equal annual installments beginning when the funds become available in 1997, coinciding with a proposed construction start in the October 1997. The proposed terms are as follows: The City loan is subordinated to the tax-exempt loan (as will be required by Fannie Mae) and the minimum ground lease payment (see "Ground Lease" above). The loan would be interest free. The loan repayment schedule would be established to be consistent with the 30 year term of the tax-exempt financing. It is proposed that repayment would begin in the year following receipt of the final loan installment in the following schedule: $25,000 per year for the first four years, $50,000 per year for the following ten years, $100,000 per year for the following eleven years. Repayment of these funds would permit the City to reinvest the proceeds in other future affordable projects. SEASONS Seniors Apartments at Newport Center Proforma Income and Expense Summary Median Current Tenant Current Current Floorplan Number Square Income Maximum Utility Monthly Mondily Annual Type of Ut its Footage Category Rent Allowance Rent Rent Rent One Bedroom 78 546 50% $574 $43 $531 Two Bedroom 18 682 50 % $690 $55 $635 One Bedroom 152 546 60% $689 $43 $646 Two Bedroom 3Z 682 60% $828 $55 $773 Totals 285 Growth Factor to Stabilization Gross Annual Revenues at Stabilization Vacancy Allowance Net Rental Income Other Income Total Project Revenue Operatine Ee na r Personnel/Admin, Costs Marketing Expense Repairs and Ongoing Maintenance Insurance Utilities Management Fee 4.50% Property Taxes Total Operating Expenses Capital Reserves Net Operating Income J $41,418 $497,016 $11,430 $137,160 $98,192 $1,178,304 $3.43,212 $28,601 179 641 $2,155,692 L04 $2,241,920 5% (111096) $2,129,824 36,000 $2,165,824 $260,000 40,000 144,000 40,000 95,000 97,462 00 681 462 (681,462) (21000) t$ ,462,362 SEASONS Seniors Apartments at Newport Center Development Costs/Sources and Uses Construction Funding - IAC Line of Credit $20,566,000 (a) Permanent Financing - Multifamily Revenue Bonds $14,500,000 (a) Equity Contribution - Tax Credit Limited Partner 4,366,000 (b) City Funding 1,700,000 Total Permanent Financing 20�,566,000 Uses of Funds-, Development/Construction Cods: Total Building Construction $49/sq. Jt. $8,000,000 Total Sitework Costs (including soil export) 2,375,000 Total Common Area/Landscape Costs 1,265,000 Total General Conditions/Soft Costs 1,750,000 Total Permits & Fees 1,500,000 Total Architectural/Engineering Costs 925,000 Development/Contractor Fees 1,800,000 Models & Recreation Building Costs 200.000 Construction Commgency 550,000 Land 0 (e) Total Development/Construction Costs $18,365,000 rinannc /Carry/l,c n-up Costs Construction/Lease-up Interest 2,428,000 Income During Lease -up (1,128,000) Coastrucdoa/Permaneot Loan Fees 551,000 Lease -up Marketing Costs 300,000 Tax Credit Application Fees 50,000 Total Finance/Carry/Lease-up Costs $2,201.000 Total Project Costs 20$ ,566.000 (a) Financing asumptions included in Financing Plan section of this proposal. (b) T" Credit Calculation. Total Project Cats. $20.566.000 Less costs not allowed in basis _ (i S85. 000) Total Basis $18.981.000 Current Total Credit Percentage 37,10% Gras Credit 7.041.931 Estanated Pricing 50.62 Total Errbnated Equity Contribution ,V.366 010 t leare. (c) Land contributed by'14C via 7heIrvine Company in theform ofsubordbwed ground SEASONS Seniors Apartments at Newport Center Proforma 15 Year Cash Flow Statement YcuI I Year 1 Ycec3 1 Yc4r4 I Ycet5 I Ycar6 I Yar7 I Yw9 1 Yeu9 I Yur 10 1 Yurll 1 Yur12 I Yeertl I Yee, 14 1 Yur 15 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Inm,Inn A.mmpOnn. Attend locame lvcrtun 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% Annud Ezpcme lncrtue, 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% pm(M Revenuer a"R.Dul Income 3 2,241920 S 2,309.178 5 2.378,453 5 2,449.807 $ 2,523,301 5 2,599,000 1 2.676.970 S 2.757,279 3 2,839,997 S 2,925,197 S 3.012,953 S 3.103.342 S 3,196,442 5 3.292,335 S 3,391,105 Leu: Vuendy 5% (1170963 (115,4591 (1189231 (172A901 (126.1651 (129.9501 (133.84B1 (137,8641 (142,0001 (146.7601 (1506481 _O55.1671 11598771 (164.6171 (169,55A Net Recul h4mme 2,129,824 2,193,719 2.259,530 2.327.316 2.397.136 2.469.050 2.543.121 2.619.415 2.697.997 2,778.937 2,862,305 2.949.175 3,036,620 3.127,718 3.221..550 Cher lnoome 36000 37080 38.192 39338 40918 41734 42996 44.275 45,604 46972 48181 49832 51327 52.867 SIA53 Tetel Reemue4 2.165,874 2.730199 7197373 2366.653 2 437 654 _2 510 784 7.596.107 2 663.690 2,743,631 7,825909 2,910,686 2 998 007 3.081.947 3 I M 586 3276 (103 P,leet Ce"d rn• Property Ezp=es (579,000) (596.370) (614,261) (632.689) (651.670) (671.220) (69050) (712.097) (733,460) (755,464) (779.129) (801.471) (825,516) (850.280 (875.789) Maopemem F. 4.50% (97,462) (100.386) (103,398) (106,499) (109,694) (112.985) (116,375) (119.866) (123.462) (127.166) (130,921) (134.910) (138.958) (143.126) (147,420) Property Tezce (5.000) (5,100) (5.202) (5,306) (5,412) (5,520) (5.631) (5.743) (5,858) (5.975) (6.095) (6.217) (6,341) (6,468) (6,597) Ceplul Reeve, (72000) (400001 (67,090) (96.0(101 (122.0001 (135,0001 (1430001 (151,0001 (1600001 1169,0001 (178,000f (199000) (199boo •_(211000) (1730001 Total Ezpeadlwes l7034621 (741.8561 (7848611/8404941 (893.7761 1924.125 1956,3621 (988.7063 (1,022,7801 11.057.60D (10911031 (1 131 5 (1,169,8141 (12109751 (1 152@2T Net Ope eli gJerome S 1,467362 5 1.488943 S 1 512,862 S 1,526_160 S L. 13.878 S 1,586058 S 1.629,745 S 1,674.984 S 1120121 5 1768304 S 1.817A83 S 1.866408 S 1,918,133 5 1 969710 S 2073,196 Pe cnl Debt Sa4a(1) (1,100.000) (1.100,000) (1.100.000) (1.100.000) (1,100,000) (1,100,000) (1,100,000) (1,100,000) (1.100.000) (1,100,000) (1,100,000) (1,100,000) (1,100.000) (1.100.000) (1,100,000) ParlaenhlP%1aaa-ent Fee (35.0001 136,0501 071321 OU451 (39,3931 (40.57A (41,7921 (43.046) (4433T (45.6671 (47.03T (48.44B1 (49.9071 (513991 (529411 Cob floe, roc Diettlulo. S 327,362 S 352.89) S 375731 S 387.914 S 404485 S 445.484 S 487.953 S 531,938 S 576,484 S 622,637 S 670.446 5 717.9M S 768,231 S 818.311 S 870.256 Cash flow DLe butlov: Minimum Lu,e Pa),tnem S 100.000 S 103.000 $ 106.090 S 109,273 S 112.551 S 115.927 S 119.405 S 122987 1 126.677 S 130,477 $ 134.392 S 138,423 S 142,576 S 146.853 5 151.259 OASIS Cem. Con46bu4(on 10,000 10.000 10.000 10.000 10.000 10,Wo 10.000 10,000 10.000 10,000 10.000 10,000 10.0D3 10.000 10,000 City Ines Rcpaymmt (2) - 25.000 25.000 25.000 25,000 50,000 50.000 50,000 50.000 50,000 50,000 50,000 50.000 50.000 DI.Wbudoo to Petmm 217362 739.893 234.641 143,642 256.934 _794.556 300,548 348,951 389,807 432,160 476,054 519,537 565.655 611458 658997 Tool G.h Fbw Dlrtribullon 5 327.362 S 352,893 S 375731 S 387914 (I) Srrdltcuedan of p...t bme ..Pao., fa F m,cins Fba scmS .. (2) Srr ducatdan of City tom,fundnl endnp4 ,a aveupdana 7n Fin. n, F(on uctlun, Task Namc 1) Conceptual Product Development 2) City RFP Process 3) Preparation of Entitlement Application 4) Entitlement Processing - City 5) Preparation of Construction Plans 6) City Processing of Construction Plans 7) CDLAC Allocation Process (a) 8) Tax Credit Application Process (b) 9) Closing of Project Financing 10) Project Construction SEASONS Senior Apartments at Newport Center Preliminary Development Schedule August 1996 Aug Sep Oct Nov Dec Jan IFeb JMarJApJMayJJun JAugJSep 10ct JNovJDecJJan IFeb IMar C Submission of RFP Proposal ; Approval of City Funding Alloc ulon Submittal for Tone Chang. EIR, 77M, Site Plan Approval 11) Project Opening a) CDLAC- California Debt Limit Allocation Committee (Project Debt) b) TCAC - Tar Credit Allocation Committee (Project Equity) City Council Approval Submittal of Construction Drmvxngs Grading/Building Penn irs CDL1CA11ocadon T= Credit Allocation Tax-e enyn Band Sale Total of 20 Months Nov-98 LINC Housing and Irvine Apartment Communities PROPOSAL To develop 285 100%affordable senior -citizen rental units. The units will be restricted to citizens who are 55 years in age and older with incomes limited to 50% and 60% of HUD Median Income levels for Orange County. PROJECT NAME SEASONS Affordable Senior Apartments at Newport Center LOCATION/ACREAGE Approximately 11.0 acres bounded by: MacArthur Boulevard to the east, Avocado Avenue to the west, San Miguel Drive to the north, and the Newport Beach Public Library to the south. The site is adjacent to Fashion Island and Harbor View Center. There is also a nearby OASIS Senior Center. The proposed site is currently owned by the Irvine Company and is zoned Open Space. The land must be re -zoned for residential affordable housing in order to develop the project. PROGRAM Number of Units Buildings Ibr/lba 2br/iba Total 4 3 6 6 12 8 6 24 24 48 8 4 32 0 32 16 12 168 24 192 230 54 284 Manager's Unit I 1 55 285 PROJECT COST $20.6 million COMPLETION Construction to be complete within approximately 20 amonths SCHEDULE FUNDING REQUESTS Cover Letter, 1 1 Funding request: $ 1,700,000 Optional project: Obtain additional funding of $2,000,000 to construct 20 - 25 additional units. FACTORS ENABIANG DEVELOPMENT Cover Letter 2 1 (see FINANCING MEANS below) The Partnership is able to provide below market -rent levels with affordability to 100% of the units by: 1. Utilizing 4% tax credits to obtain project equity. 2. Issuing municipal, tax-exempt, mortgage revenue bonds for below -market rate financing. 3. Securing a subordinated ground lease to obtain site control. This land is being contributed to the Partnership by The Irvine Company through a long-term land lease in exchange for the right to apply the units created in this development toward its requirement to provide affordable units for its other Newport Beach Developments. OPTIONAL 20-25 UNITSExecutive Summary.2.Proiect Alernative.t By allocating an additional $300,000 to the project, The Partnership would develop an additional 20-25 units. In addition to creating additional affordable senior rental units, The Partnership would delete the retention basin which is necessary to maintain adequate upstream drainage without overloading the downstream drain system. In its place, The Irvine Company would accelerate construction of downstream storm drain improvements. 9/25/96 520 AM AFFRDBLE.XLT LINC Housing and Irvine Apartment Communities FINANCING MEANS Executive Summry3Financingl/Fin�ncine13 The proposed financing for the $20.6 million is to be achieved by : 1. Obtaining a long-term ground lease from IAC for a rent of $ I00,000 with an escalation equal to the inflation rate. 2. IAC providing construction financing though with outside banks or its own $175 million internal line of credit. 3. Issuing project debt in the form of tax-exempt multi -family revenue bonds. 4. Obtaining project equity through the sale of low-income housing tax credits in the form of a limited partnership interest. The price assumed for the sale of tax credits is $0.62 per $1.00 of tar credits. Upon project stabilization and the sale of the tax credits, the project would be placed into the Fannie Mae program which would provide for 30-year tax-exempt financing. 5. Obtaining gap financing of$1.7 million from The City of Newport Beach. It is proposed that the funds be loaned into the project in five equal annual installments beginning when the funds become available in 1997, coinciding with a proposed construction start in October 1997. CATMPYING CITY RFP/SI0.000 ANNUAL CONTRIBUTION TO CITY Executive Summiry 4 Addressing City Obiectives.1 This project will provide 126 affordable rental units (66 more than that required by The City) that are split between Very Low and Low rent levels, and an additional 159 units at 60% of HUD Area Median income with rent levels below the City's low income requirements that were established in the RFP. Additionally, this project provides for an annual contribution of $10,000 to the City to support the operations of the OASIS Senior Center. Owner/Sponsor General Partner Co -General Partner Limited Partner/Investor Co -Developers Land Lessor Architecture Landscape Architecture Civil Engineer General Contractor Newport Beach Seniors, L. P. LINC Housing Corporation Irvine Apartment Communities, Ind. TBD LINC Housing Corporation Irvine Apartment Communities, Inc. Irvine Apartment Communities, Inc. The KTGY Group, Inc. Mitchell-Lacos Land solutions Adams -Streeter, Civil Engineers Regis Contractors, L. P. Property Manager SARES-AEGIS Group Marketing Consultant Market Profiles -Residential Trends Title Company First American Title Insurance Company _ Community Liason Government Solutions EXISTING SENIOR CTTIZF.N TNTRRF.ST Develonment Descrintion.I.General.l There is an existing interest list of over 100 seniors. 9/25/96 5:20 AM AFFRDBLE.XLT LINC Housing and Irvine Apartment Communities °(�1'�RY 1 OW"LOGY Development Description 5 Affordability 1 The affordability of the project is guaranteed for a 35-year period. Units % Affordability 96 34% 50% of Median Income -"Very Low Income" 189 66% 60% of Median Income -"Low Income" Minimum Salary for INCOME DEFINITION lbr-1.5 Persons Very Low -Income 50% of HUD $ 22,975 Median Income Low -Income 60% of HUD Median Income $ 27,570 Minimum Maximum Salary for Maximum Rent 2br-3 Persons Rent S 574 S 27,600 $ 690 $ 689 $ 33,120 $ 828 9/25/96 5:20 AM AFFRDBLE.XLT ag1.Y r '. ., LVQ � li n�ll�`LG3 V 1l La L�1l11�S.J+' L:�' Cti JIVJldl�di�1LLH.V i � .�'i1 , INFORMATIONAL MATERIALS & PROPOSAL, } 7�t Prepared by The Baysid'e"Land Company ' October 24, 1995 `-� . _-' a�.'-'+R�+�'-. \� :`'� .r. - !i,.• vie '. i/// -�� �.•��/J. s� .- •"'+ . - i*-�'•-.ram;:.-.. .- ..-Ala +j _, _ yam►•/•,'•� �•s•~ � J-� ' _y G 9► .w - + . - o :ate 4r�. � '� � �i,Y�� - , �'� ""ram• �, . * �:�h. � ^ r; iJ; f , ,,.. . may: � 4�7 UPPER NEWPORT BAY -- ' E: :;- .` t N • {b 0 I \ 1 iP 0 I TENTATIVE PARCEL. MAP 93- 1 1 1 IN THE CITY OF NEWPORT BEACH, COUNTY OF ORANGE STATE OF CALIFORNIA LEGAL DESCRIPTION • THAT PWTIDN OF BL=S BI AM ss DF IRVIM'S SUBDIVISION. ' AS PER NAP HEMMED Del BOOB 1. PAM DD DF NISCELLAP,Ed RECORD NAPS IN THE OFFICE DF 1NE MAME MMTY REMRDER. wmcz,un Nvm) LEGEND: ���� •' PAOP0.5ED PMCEL M. �I�I -•' - r EAST MAST NIGtAtAYNYAT r• r rWDT Nwr�• E _ -PROPOSED PARCEL LINE - - - IT II VICINY NAP •I T ' I I BATSIDE DRIVE m PARCEL SUMMARY • . PARCEL • AREA LAND USE NA INT. SEW ,,. ••••'�`'•-K,.W.IgoNl•54K11 mm s .ru aYu.Ke `., �%�) cc�� ) 7,OMOf/VNwMM,NGI GENERAL NOTES OWNER / SUBD[V[DER. N��I! I. oau[M, 3ww eeK�'n �1` = 1A,N[ [alert u`� `;>� .'\ G a. AAomIu wo,rx.� ,,,,,�,,,•,,,�„•,,, CIVIL ENGSNEER: %,� .� Pee,I„ m.�. xsxw i 0 BAYSIDE VILLAGE & MARINA TABLE OF CONTENTS Section INTRODUCTION 1 Cover Letter BACKGROUND SUMMARY 2 Bayside Village & Marina FINANCIAL SECTION 3 Monthly & Annual Revenue Detail Cashflow Projections - City of Newport Beach Cashflow Projections - Bayside Land Company Cashflow Assumptions - BLC DOCUMENT & DATA SUMMARIES 4 Appraisal Summary Legal Summary Ground Lease Summary APPENDIX - PRESENTATION BOARDS 5 Project Benefits Development History Fee Title - Lease - Option Proposal Proposed City Revenue 0 1BAVOUPIR UTAMID COMIPAMY P. O. Box 3546 Newport Beach, California 92659 • Phone: (714) 723-0317 • Fax: (714) 723-0345 (Cook) Phone: (714) 675-4060 • Fax: (714) 675-8450 (Shelton) October 24,1995 Affordable Housing Task Team City of Newport Beach 3300 Newport Blvd. Newport Beach, California 92659-1768 Attention: Jean H. Watt, City Council Member & Task Team Chairman Regarding: BAYSIDE VILLAGE PROPOSAL Bayside Village Mobilehome Owners Association, dba Bayside Land Company (a mutual benefit non-profit corporation) Gentlepersons, During the past several months, prior to the establishment of the Affordable Housing Task Team, representatives of Bayside Land Company have met with City staff and Council Members concerning our preliminary affordable housing proposal to the City of Newport Beach. In addition, our initial proposal was reviewed and evaluated for the City by Keyser Marston Associates. We appreciate this • opportunity to now present our proposal for consideration by the Task Team. Bayside Village & Marina - Acquisition & Current Status The City was initially approached by the Bayside resident group in the summer and fall of 1993 for the purpose of investigating the City's potential interest in purchasing the Bayside Marina, concurrent with the residents' purchase of the adjacent residential Park. The residents primary interest, of course, was and is in owning the fee title to the land beneath their homes, and in preserving the residential park as a low and moderate income housing alternative in the City of Newport Beach. They felt at that time, and still do, that the ideal partner for them would be the City of Newport Beach. They believed the City would want to provide affordable senior citizen housing, and would particularly want to preserve low density development in the Back Bay region of Newport Beach. The City was not interested in pursuing the Marina acquisition at that time. In December 1993, the residents arranged financing for the acquisition of the Park and Marina through Far East National Bank, along with an investor who accepted a second mortgage position, plus an option to purchase the Marina. The bank provided a short term variable interest rate loan. Currently the interest rate is 11.5%. In addition, the interest rate on the second mortgage with investor Morgan Flagg stands at 12%. Mr. Flagg holds an option to purchase the marina, and intends to exercise that option. Debt service for the mortgages is met through ground lease income to the land company, and also by land company shareholder payments. Income from the ground lease with the De Anza Corporation, the entity which manages and leases the park and marina from the land company, is paid monthly at the rate of twenty percent (20%) of the residential park gross revenues, and thirty percent (30%) of the marina gross revenues. The ground lease expires in the year 2013, at which time one hundred percent . (100%) of the revenue will be paid to the land company, less expenses for management and maintenance. Land company member payments vary according to individual contracts, but average $300 per month per shareholder. 11 • Affordable Housing Task Team . City of Newport Beach October 24, 1995 Page 2 Park demographics and a physical description are included in the accompanying Background Summary, and space rent rates may be found in the financial tables. The park, divided into south and north sections by Bayside Drive, offers more affordable space rents to its south side residents due to the distance from the bay, size of lots, and other factors. Most of the residents on the south side of the park have not become members of the non-profit land corporation established to buy the fee title to the property, probably due to resident income level and the cash requirements for participation. Affordable Housing In -Lieu Fees To maintain in perpetuity the affordable housing component of Bayside Village & Marina, the Bayside Land Company proposes that the Ford Land in -lieu housing fees be dedicated to that purpose. The fees would be used to reduce the resident land company debt level, which along with refinancing of the mortgage through HUD or other low interest rate funds, would ensure the success of the project. In return, some of the revenue which the land company receives from sites on the south side of the park would be dedicated to the City. Of the 126 sites on the south side, 84 would be selected for dedication as affordable housing. Eighty-four sites at $30,000 per site calculates to $2.52 million, which would round out to $2.5 million in affordable fees. The legal structure for dedication of the sites as affordable housing would be worked out to the satisfaction of the City. Fee title to the sites could be acquired by the City, or if the City prefers, arrangements can be made to dedicate the revenue from the sites, without assumption of title to the • land. Financial Projections We are including Revenue Detail and two twenty-year cashflow projections for Bayside Village & Marina with this proposal. One of the cashflows illustrates the financial return to the City over the next twenty years; the second cashflow demonstrates the land company's cashflow and ability to service its debt, and is provided for informational purposes only. We have purposely excluded Marina revenue data, since that revenue will go directly to the new owner. Until the year 2013, when the De Anza Corporation ground lease expires, the City's income would be twenty percent (20%) of the gross revenue from the 84 affordable housing sites. After the ground lease expires in the year 2013, the income to the City would increase to one hundred percent (100%) of the gross revenue from those 84 sites. As shown in the projections, cumulative cashflow over the next 18 years should result in a total to the City of approximately $2.8 million. In the final two years of the twenty year cashflow, the City share is estimated to be approximately $2.0 million, bringing the twenty year cumulative City cashflow total to approximately $4.8 million. Following expiration of the ground lease, the cashflow assumes administrative/management/maintenance expenses of approximately 25%. The cashflow projections assume no improvements to facilities, and no substantial increase in occupancy level. As such, the residential revenue to BLC is shown lower than it should be, as is explained in the legal summary. Residential revenue is based upon market rates set by the jury in the recent judgment obtained by the homeowners in their legal action against De Anza concerning terms of the resident • lease. We have assumed that a uniform lease will be negotiated for all residents, so that all will be paying the same basic rate for any specific location within the park. Should that not be the case, revenues will probably be slightly higher. • • Affordable Housing Task Team City of Newport Beach October 24, 1995 Land Company Refinancing Page 3 The twenty year cashflow spreadsheet for the Bayside Land Company is provided so that you will be aware of its ability to meet its financial commitments. The BLC needs to refinance its short term loan with Far East National Bank. Among the refinancing alternatives are HUD funds for mobilehome parks and tax exempt bonds. Our cashflow for the BLC assumes HUD financing, showing the interest rate at 8%. Summary In summary, the Bayside Land Company proposes that the City of Newport Beach acquire the fee title and/or revenue rights to 84 sites at Bayside Village through the application of Ford Land in -lieu affordable housing fees. The rights thereto will provide the City with 20% of the gross lease revenue until expiration of the De Anza ground lease in the year 2013, and 100% of the lease revenues following termination of the ground lease. We have provided the Task Team with a binder containing relevant documents for review. These include the Bayside Village & Marina background summary, financial section, legal summary, corporate documents, land documents, property appraisal, the full ground lease and ground lease summary. Other documents available, upon request, include a second property appraisal, land company By -Laws, sample corporate membership documents, and sample resident space leases. Again, we thank you for your time and consideration of our proposal. Should you need additional information or documents, please contact us at (714) 675-4060. Sincerely, BAYSIDE LAND COMPANY Board of Directors L . Cook f Pre ' ent Patricia A. Shelton Financial Officer/ Consultant BAYSIDE VILLAGE & MARINA BACKGROUND SUMMARY General Description - Bayside Village Bayside Village is a retirement community located in the Back Bay region of Newport Beach. The residential area is divided into a north and a south side, consisting of 13.5 acres and 11.3 acres of land, respectively. The total area of 24.8 acres is directly adjacent to Bayside Marina, which consists of 31.6 acres of land and the land beneath the waters of the Marina. Bayside Village is, in many ways, an anomaly. It is a mobilehome park, that at first glance, does not appear to be one. Its outward appearance is that of a small residential village. It is affordable housing, yet it is located on prime land. Its choice location belies its affordability. It is centrally located within the City, with every convenience just minutes away, yet its setting appears rural and secluded. Within the heart of the City of Newport Beach, it is surrounded by water and an ecological preserve. The Village consists of 270 residential spaces, private roadways, community buildings, and recreational facilities. As shown in the accompanying parcel map, the residential area is divided into north and south sides, each with its own clubhouse and recreational facilities. Many of Bayside's homes are "manufactured homes", rather than "mobile". And whatever the case, the term "mobilehome park" is a misnomer. All homes have been expanded with the custom construction of additions: living and dining rooms, full roofs, carports, arld enclosed landscaped patios. Many have ceramic tile or shake roofs. Most are two bedroom/two bath. A number of the homes are situated along or near the water, with views of the Back Bay, marina, and conservation areas. The Village is well landscaped, with mature pine, olive and ficus trees. Two attractive and comfortable clubhouses offer facilities for private parties and other activities. Recreational facilities include two large outdoor swimming pools for year-round swimming, two spas, pool shower and dressing rooms, shuffle board courts, a billiard room, 60-inch television, and karaoke. A sandy beach fronts the north clubhouse, adjacent to the marina. Movies, entertainment, and other social activities are regularly scheduled. Other community facilities include laundry and storage areas, and the administrative offices. Bayside Village Demographics Although there are no accurate demographics of record for Bayside Village, the following information provides a general profile of Bayside's residents. The majority of the residents are 55 years of age and older. The average age of residents appears to be late 60's to early 70's. Some residents are younger than fifty-five, but park restrictions require that at least one member of the household be 55 or older. No children under the age of 18 are permitted as permanent residents. (Guests who are younger that 18 may visit a resident for a limited time.) • Bayside Village & Marina -- Page 1 • General Description - Bayside Marina Bayside Marina, consisting of 224 spaces, is located adjacent to the Village and protected from the main channel by a narrow sand spit and small islands. As Bayside Village is an anomaly among its peers, so also is Bayside Marina. Its uniqueness lies in its status as the only marina in the state of California whose land beneath its waters is privately owned. The Marina covers an area of 31.6 acres of both land and water, and includes docks, boat slips, a private paved access roadway, utilities, storage facilities adjacent to the docks, parking, and dry land storage facilities. Ownership & Lease A resident owned corporation, the Bayside Village Mobilehome Owners' Association, dba Bayside Land Company, acquired fee title to the land under Bayside Village and Marina from the Irvine Company in December 1993. Prior to its development, the Bayside property was dedicated to its current use in the Irvine Company's master plan. De Anza Newport Mobile Estates currently holds a ground lease on the land which expires in 19 years. De Anza manages both the park and marina, and collects the rents from the individual residents and boat owners. Terms of the ground lease call for monthly payments to the resident corporate land owner equal to 20% of the gross park rent receipts, plus 30% of the marina rent receipts, and 5% of miscellaneous revenues. Purchase of the property by the resident corporation was effected through a loan from Far East National Bank, plus resident funds, and an investment of funds securing an option on the Marina. The investor has expressed the desire to exercise his option to purchase the Marina for his $2.5 million investment. Subdivision of the Land The residents' primary purpose in acquiring Bayside Village was to ensure the future of their homes, and to maintain an affordable housing alternative in Newport Beach. The eventual subdivision of the land so that homeowners could own the land beneath their homes, and eliminate the payment of "space rent", required a two-step process. Step #1 has been achieved. Step #2 will occur some time in the future, due to the "sandwich lease" which must be eliminated prior to subdivision of lots. 1. To effect the sale of the property to the resident corporation, the Irvine Company subdivided the Bayside lands into four parcels. Parcels 1, 2, and 3 were acquired by the resident land company. Parcel 4, a utility and parking area on the ocean side of the Pacific Coast Highway, was retained by the Irvine Company. Parcel 3 encompasses the Marina, while Parcels 1 and 2 are, respectively, the south and north sections of the Village. 2. Subdivision of the individual lots requires retirement of the ground lease with De Anza. It is expected that this event will occur prior to the end of the remaining 18 years of the ground lease period. 0 Bayside Village & Marina -- Page 2 0 11 Section 3 FINANCIAL PROJECTIONS 1. Monthly and Annual Revenue Detail Bayside Village Residential Spaces 2. Cashflow Projections - 20 Year City of Newport Beach Affordable Lot Acquisition 3. Cashflow Projections - 20 Year Bayside Land Company 4. Cashflow Notes & Assumptions Bayside Land Company REVENUE DETAIL - BAYSIDE VILLAGE RESIDENTIAL SPACES Using residential lease rates set by July 1995 Judgment. BAYSIDE VILLAGE ANNUAL SPACE REVENUE - CURRENT Revenue adjusted to 90% Occupancy Location Total Number Spaces Monthly Rent per S ace De Anza Gross BLC Annual 20 Monthly Rent Annual Rent #1-Southside of Bayside Drive 126 660 83,160 997,920 199,584 #2-Northside,"Off Water' 72 770 55,440 665,280 133,056 #3-Northside,"Across from Water' 26 800 20,800 249,600 49,920 #4-Northside,"Waterfront Adjacent" 16 970 15,520 186,240 37,248 #5- Northside,"Waterfront" 30=216 504,000 100,800 Totals 270 2,603,040 520,608 Adjust for rents not effected b 'ud ent 102036 20407 Adjust for 10% vacancy/subsidyvacancy/subsidy factor 270 508 54 102 Total adjusted revenue 2 434 568 486 914 BAYSIDE ANNUAL SPACE REVENUE - CITY PROPOSAL Revenue shown ® 90% Occupancy Total Number Spaces Total BLC S aces BLC Annual 20 % Total City Spaces City Annual 20 126 42 66,528 84 133,056 72 72 133,056 0 0 26 26 49,920 0 0 16 16 37,248 0 0 30 30 100,800 0+ 0 270 186 387,55 84 133,056 _ __ --- _ 20,407 (40.796) _—_ _ 0 (13,306) 1367,163 119 750 0 Is 1! r1 0 1BAifSMD3 CNILIAGE & MAWNk CITY OF NEWPORT BEACH Pro Forma Cashflow - (In 000s dollars) De Anna Crty Lease cgwr Expires Lots 9/30/13 CASHFLOW - 20 YEARS Description 1996 1997 1998 1 1999 2000 2001 1 2002 2003 2004 1 2005 1 2006 2007 2008 2009 2010 2011 7.012 1 2013 1 2014 2015 Total Beginning Balance - Operating ResprvF 0 120 242; 368 497 6291 765, 904 1,0461 1192 1.342 1 495 1,652 1,813 1,978 2147 2,3211 2,499 2,8061 3.806 REVENUE & LOANS Lease Revenue -Park 020%-84 Lots 120 123 126 129 132 135 139 142 146 150 153 157 161 165 169 173 178 364 1,333 1,367 5,563 Lease Revenue - Marina -(0%) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Affordable Housing Developer Fees 2,500 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2,500 TOTAL REVENUE & LOANS 2,620 123 126 129 132 135 139 142 146 150 153 157 161 165 169 173 178 364 1,333 1,367 8,063. EXPENSES Acquisition of Bayside Lots/Lot Revenue (2,500) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 (2,500) Administrative Expenses 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 (57) (333) (342) (732) Other 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 TOTAL EXPENSES 2500 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 57 333 342 3232 DEBT SERVICE Debt Service None 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Finance Fees -None 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 TOTAL DEBT SERVICE 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 ANNUAL CASHFLOW 120 123 126 129 132 135 139 142 146 150 153 157 161 165 169 173 178 307 1,000 1,025 4,831 CUMULATIVE CASHFLOW 120 242 368 497 6: 765 904 1,046 1,192 1,342 1,495 1,652 2,813 1,978 2,147 2;321 2,499 2,806 3,806 4,831 4,831 Annual Return on Investment 4.79% 4.91% 5.03% 5.16-16L 5.29% 5.42% 5.55% 5.69% 5.84% 5.98% 6.13% 6.28% 6.44% 6.60% 6.77% 6.94% 7.11% 12.30% 40.00% 41.01 11 Cashflow - $2.5 Million Affordable Fees Notes & Assumptions: Revenue & Loans 1. Acquisition of 84 lots at Bayside Village, Southside, from BLC. Affordable housing fees dedicated to acquisition of fee interest in lots or revenue rights thereto: $30,000 per lot x 84 lots = $25 million. 2. Lease Revenue- Park: Southside, 200/6 of gross lease revenues from De Anza for 84 spaces. Calculations use July 1995 Judgmentmtes, with 25% cpi minimum increase per year. Assumes 90% occupancy for affordable spaces. Years 19 and 20:100% of space revenue to City. 3. Lease revenue -Marina: 0%. Marina title transferred to new owner. Expenses - Administrative & Other 4. Acquisition of fee or revenue rights to 84 Bayside Village lots: paid be developer affordable housing fees. S. Administrative: Liability insurance provided by lessee, De Anza Corporation. On lease termination: management/maintenance expenses shown Expenses - Debt Service 6. Debt Service -none. Cashflow & Return on Investment 7. Annual Return on Investment Annual cashflow divided by affordable housing fees (investment). 8. Estimated value of land acquired: 84 spaces divided by 270 total spaces = 31 % of park. Gross monthly income of $660 x 84 = $55,440 divided by total monthly income of $216,920 = 25.6% of income. Value of City's interest =25.6% x appraised value of$13.6 Million =53.48 million. Prepared by: Shelton 10/24/95 • 11 IBAYSR D16 V1111AGE & MAMMA BAYSIDE LAND COMPANY De Ai 7a Pro Forma CashOow - (In OOOs dollars) Payoff Lease (Affordable Fees: $2.5 Million) Refmanc Second Expires 1/96 Mo a 9/30/13 CASHFLOW - 20 YEARS Description 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2,015 Total Beginning Balance - Operating Resery 100 146 116 111 141 125 120I 133 157 145 152 274 404 542 690 576 REVENUE & LOANS 471 375 827 5,657 Lease Revenue -Park Gross 20% 367 376 386 395 405 415 426 436 447 459 470 482 494 506 519 532 545 1,117 6,813 6,984 22,575 Lease Revenue - Marina -(0%) 0 0 0 0 0 0 0 0 Sale of Shares- Deposit$2,500 each 25 12 12 5 0 0 0 0 0 0 0 0 0 0 0 0 0 Shareholder Notes -Begin 580$3,600 227 252 270 270 0 270 0 270 0 270 0 270 0 270 0 270 0 270 0 270 0 270 0 270 0 0 0 0 0 0 55 Refinance First Mortgage/HUD 6,500 0 0 0 0 0 0 0 0 0 0 0 0 3,719 Affordable Housing Fees ' 2,500 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 6,500 TOTAL REVENUE & LOANSI 9 619 641 668 670 0 675 0 685 0 696 0 706 0 717 0 0 0 0 0 0 0 0 0 0 0 2,500 EXPENSES 729 740 752 764 776 519 532 545 1,117 6,813 6.984 35 349 Refinancing of First Mortgage (8,500) 0 0 0 0 0 0 0 Administrative Expenses (12) (13) (13) (14) (15) (15) (16) (17) 0 (18) 0 (19) 0 (20) 0 (21) 0 (22) 0 (23) 0 (24) 0 (25) 0 (26) 0 (48) 0 (1,363) 0 (1,397) (8,500) (3,117) City Fees 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Legal, Escrow, Other Fees (30) (30) (31) (33) (35) (36) (38) (40) (42) (44) (47) (49) (51) (54) (57) (59) (62) (65) (69) (150) (1,024) Rescinded Member Payments (36) (36) (36) 0 0 0 0 0 0 Contingency (10) (10) (10) (10) (10) (10) (10) (10) (10) 0 (10) 0 (10) 0 (10) 0 (10) 0 (10) 0 (10) 0 (10) 0 i(10) 0 (10) 0 (10) 0 (70) 106 (260) TOTAL EXPENSES (8,588) 89 91 57 59 62 64 67 70 73 76 79 83 87 90 94 99 123(1.441 (1,614 (13.009)1 DEBT SERVICE Debt Service First Mortgage - $6.5 million® 8.0% Finance (542) (542) (542) (542) (542) (542) (542) (542) (542) (542) (542) (542) (542) (542) (542) (542) (542) (542) (542 (5,942) (16) Fees-2pts. (130) 0 0 0 0 0 0 0 0 0 Debt Service - Second Mortgage 0 0 0 0 0 0 0 0 0 0 (130(130) Interest® 9%; Principal$697,000 (313) (40) (40) (40) (90) (86) (77) (72) (118) (106) 0 0 0 0 TOTAL DEBT SERVICE 985 583 583 583 633 628 619 615 660 648 542 542 542 542 0 542 0 542 0 542 0 542 0 542 0 (5.942)1 (982) 17 359 ANNUAL CASHFLOW 146 (30) (5) 31 (17) (4) 12 25 (13) 8 122 130 139 147 (114) (105) (96) 452 4,829 (575) 5,081 CUMULATIVE CASHFLOW 146 116 111 141 125 120 133 157 145 152 274 404 542 690 576 471 375 827 5,657 5,081 5,081 Debt Service Ratios1 0.731 1.351 1.35 1.34 1.29 1.29 1.321 1.37 1.33� 1.35 1.65 1.89 2.15 2.43 2.23 2.041 11.87 2.75 14.09 2.13 Cashflow - $2.5 Affordable Housing Fees/HLID Financing Notes & Assumptions: Revenue & Loans 1. Lease Revenue -Park 200/. of gross lease revenues from De Anza. Calculations use rates set by judgment, with 2.5%CPI increase each year. Assume 90 % occupancy. Year 19-20: shows 100 % of park/BLC revenues. 2. Lease Revenue - Marina: no revenue to BLC; Marina fee title transferred to new owner. 3. Revenue from sale of shares: deposits at $2,500 each; 10 sales in year one, 5 in year two, 5 in year three, 2 in year 4, total membership of 80. 4. Revenue from shareholder notes: begimmng year 1- 58 members paying $3,600 per year. Membership increases as shown in note 3. 5. Pay down First mortgage to $6.0 millionwith HUD mobilehomepark financing. 6. City Affordable Housing Fees: $2.5 million; used to pay down debt level. Expenses - Administrative & Other 7. Refinance First Mortgage: existing First Mortgage paid down to $6.5 million with Affordable Housing Fees. B. Administrative: hazard insurance; accounting service; miscellaneous. Liability insurance provided by lessee, De Anza Corporation. Year 20: increase upon assumption of park management; estimated at 30%of BLC share of park revenues (excludes city expenses and revenues). 9. City Fees -Street: levy for Bayside Drive upgrade required by City for subdivision of four parcels by Irvine Company. • 10. Legal, Escrow, Other Fees - year 1: Legal $30,000; on -going legal services as needed. Expenses - Debt Service 11. Debt Service - First Mortgage of $6.5 million 0 8.0% fixed and amortized over 40 years. 12. Finance Fees: 2 pts on refinanced loan. 13. Debt Service- Resident Lenders: $697,00009% interest, with periodic paydown. Paid in full by year 10. 14. First Mortgage 40 year loan balance paid off in year 20: $5.4 million. Prepared by: Shelton 10/24/95 0 • n u Section 4 DOCUMENT & DATA SUMMARIES Appraisal Summary Legal Summary Ground Lease Summaries C, J 0 i 1-1 L E IBAYNDI5 W11AGM & MAIRRHA APPRAISAL SUMMARY Professional praisals Appraisal Dates Appraisal Date Item# Description 9115/93 - 11/23/93 12/13/93 1 Leased Fee Estate- Residential Park $13,829,000 $13,660,000 2 Leasehold Estate - Residential Park 17,921,000 14,550,000 3 Leased Fee Estate - Marina 3,085,000 3,420,000 4 Leasehold Estate - Marina 4,115,000 2,280,000 $38,950,000 $33,910,000 Total Appraised Value r,IL Notes: C� Appraisals dated 9/15/93 and 11/23/93 prepared for Bayside Land Company by Harry B. Holzhauer & Associates, Capistrano Beach, California. Appraisal dated 12/13/93 prepared for Far East National Bank by CKQ Incorporated, Irvine, California. BA41IDE VILLAGE & MARINA LEGAL CASES - SUMMARY • Superior Court of the State of California County of Orange Class action suit by residents in behalf of all residents (space lessees) of Bayside Village against De Anza Assets (ground lessee and sub -lessor), et al., for failure to provide an acceptable, assignable lease to residents who have built or bought homes in the Village. De Anza filed a cross -complaint against the land company (ground lessor) on various issues, including "interference with contract". The land company filed a cross -complaint against De Anza for numerous instances of failure to lease spaces and maximize lease income, essentially for breach of lease, requesting that the lease be rescinded or voided, and for indemnification according to the terms of the lease. Plaintiffs: Duane Leathers, et al. Defendants: De Anza Assets, Inc., et al. Bayside Land Company (made defendants at the insistance of De Anza) Cross -Complainants: De Anza Newport Mobile Estates, Newport Back Bay Realty Company Cross -Defendants: Bayside Land Company, et al. Cross -Complainants: Bayside Land Company, et al. Cross -Defendants: De Anza Assets, et al. • Judgment, July 1995: In favor of the Plaintiffs. Case #740724 Filed January 27 1995 Suit by Morgan Flagg against the bank for misrepresentation and fraud, and against the land company to effect exercise of option and payment of interest. Plaintiff: Morgan Flagg Defendants: Bayside Village Mobilehome Owners Association, Far East National Bank, Gordon Olsen, et al. Cross -Complainant: Far East National Bank Cross -Defendant: Bayside Village Mobilehome Owners Association Cross -Complainant: Bayside Village Mobilehome Owners Association Cross -Defendant: Morgan Flagg; Far East National Bank; Gibbs, Dunham & Gibbs Gerald R. Gibbs, David L. Gibbs, Kathleen Dunham Case #742893 Filed February 15. 1995 Land company's attorney served De Anza with a sixty day eviction notice for failure to pay (unlawful detainer). De Anza filed Ex Parte to shorten time and obtain a restraining order against initiation or prosecution, claiming to be a stake holder only, and not in default. De Anza has not paid back rent, some of which is more than a year past due. An interpleader is not appropriate when there is dispute over the amounts due. De Anza requested attorney and court • fees; motion was denied by the Court. Plaintiff: De Anza Newport Mobile Estates Defendants: Bayside Village Mobilehome Owners Association, Far East National Bank • BAYSIDE VILLAGE & MARINA GROUND LEASE & AMENDMENT SUMMARY Base Lease: 55 years-10/1/58 to 9/30/13 Principal Operation - Residential park and retail store. Secondary Operation - Marina and yacht brokerage in adjoining private lagoon. Amendments: 1 12/31/59 - Adds 6.5 acres to park; parcels 1A and 3A, Acknowledges assignment of lease to Back Bay Park. Increases base rent. 2 12/30/60 - Provides for landscaping and screening from highway by lessee. Limits sublease to residents beyond 9/30/85 to terms of two years without lessors consent. 3 4/30/62 - On early termination of lease, sub leases vest in and belong to Lessor. 4 12/1/63 - Trailer sales excluded as gross rental receipts. Trailer sales share to be paid lessor: 50%. Profit defined as difference between Lessee's invoiced cost, and the gross resale price. 5 2/17/64 - Permits subletting of area for Marina to Dick Brown Associates, Inc. Additional rent of 20% of gross receipts from sub lessee to lessee to be paid lessor, • excluding taxes. 6 6/15/65 - Base rental adjusted. Added 10% of taxes from sub lessees to be paid lessor. First revised Exhibits "A" & "B". 7 2/22/66 - Description of leased land amended. Second revised Exhibits "A" & "B". 8 5/18/70 - Percentage rental amended to add: revenue for launching vessels: 20%; revenue from parking vehicles: 5%; revenue from sale of goods connected with launching operations, such as gasoline: 5%. 9 2/25/71- Description of leased land revised. Third revised Exhibits "A" & "B". 10 6/28/71 - Description of leased land revised. Fourth revised Exhibits "A" & "B". 11 1/21/83 - Lessor reacquired title to parcels 3, 3-A from County, added back into lease. Fifth revised Exhibits "A"& "B". 12 11/15/84 (unnumbered) - Lessor contribution toward increased taxes, due to Lessor (internal) transfer of stock which resulted in higher tax assessment for Bayside land. 13 6/17/86 - Transfer from state to lessor of land formerly occupied by old bridge over Coast Highway; said property included in lease. Lessee agrees to use Parcel 3B for construction and operation of a boat launch facility and to build a commercial • building for such use. 0 • BAYSIDE VILLAGE & MARINA Ground Lease & Amendment Summary - (Continued) Amendments: 14 7/24/89 - Acknowledgement that land transferred to City for widening of Coast Highway; land removed from lease. Sixth revised Exhibits "A" & "B". 15 9/24/93 - Lessee granted right to encumber leasehold value, with Lessor approval. Sets forth guidelines for encumbrance and approval. Lessor granted easement for parking in area later subdivided out as parcel 4 and retained by Irvine Company at time of sale to resident land company. Also sets forth: Lessor's non -liability and indemnification; revision of section concerning eminent domain; Lessee insurance requirements; and approval procedure that Lessee must follow to make alterations and additions to improvements. • RYSIDE GROUND LEASE Base Lease • Lessor: Irvine Company Lessee: Duffield, Carlton & Lohman Premises: Parcels 1, 2, and 3; Subject to recorded easements and right-of-way. Term: 55 years-10/1/58 to 9/30/13 Rent: Base rent: $666.66/mo. years 1- 2 1,333.33/mo. year 3 3,333.33/mo. years 4 - 5 4,000.00/mo. years 6 - 55 Plus percentage rent: 20% of gross receipts from trailers/mobile home park. 30% of gross receipts from boating facilities except yacht brokerage; 5% gross receipts on all other operations. Due on the 15th of the month. All records of receipts to be kept on a cash basis. Lessee to produce monthly receipt statement with each monthly percentage rent payment. All records to be open for inspection by Lessor on reasonable basis. is Triple Net: All real and personal property taxes. Lessee to maintain at least one-half million general liability insurance and $50,000 property damage/fire insurance. Lessee has all maintenance and repair obligations. Assignment: None without Lessor's prior written consent, including encumbrances, but may assign to wholly owned corporation without consent. Termination: Lessee to remove all buildings and structures except paving and underground utilities. Eminent Domain: Except as noted, condemnation terminates the lease. Lessee gets money for buildings and improvements; Lessor gets land value. If partial operations would be available upon completion of condemnation, rent would be adjusted pro rats. Includes formula for loss of boat operations. Use Restrictions: Primary Use - Trailer park and appurtenant facilities including market with food, wine, and beer. Secondary Use - Boat docks, slips, ramps for mooring, launching, landing, and service of pleasure boats and operations of yacht brokerage. • All buildings and facilities limited to foregoing uses without prior written consent. Improvements: Lessees to construct a 200 space trailer park. Finish by 10/1/61. Includes secondary (boating) facilities. u BAYSIDE GROUND LEASE As Amended Lessor: Irvine Company Lessee: Newport Back Bay Realty Company De Anza Newport Mobile Estates Premises: Parcels 1,1-A, 2, and 3-A per 6th revised Exhibits "A" & "B". Subject to recorded easements and right-of-way. Term: 55 years-10/1/58 to 9/30/13 Subleases: All boating operations subleased to Dick Brown Associates, Inc. 2/17/64. Rent: Base rent: $666.66/mo. years 1- 2 1,333.33/mo. year 3 3,333.33/mo. years 4 - 5 4,428.55/mo. years 6 - 55 Plus percentage rent: 20% of gross receipts from mobile home park; (except sale of mobilehomes; 50% of profit based on invoice of sale). • Due on the 15th of the month. 30% of gross receipts from boating facilities except yacht brokerage; 20% of gross receipts on launching boats; 5% gross receipts on all other operations. All records of receipts to be kept on a cash basis. Lessee to produce monthly receipt statement with each monthly percentage rent payment. All records to be open for inspection by Lessor on reasonable basis. Trailer Sublease Restrictions: All trailer/mobilehome subleases shall incorporate all ground lease terms by reference. All such subleases are limited to a maximum two year term without Lessor's consent. All rent must be adjusted every two years. Other Terms: All other terms of the base lease remain the same. 0 • • • Section 5 PRESENTATION BOARDS: 1. Project Benefits 2. Development History 3. Fee Title - Lease - Option 4. Proposal 5. Proposed City Revenue CJ o ( 11 &DE V onlaE ° �&mw� PROJECT BENEFITS 1. GOOD FINANCIAL RETURN TO CITY: OVER 20 YEARS $4.8 MILLION 2. NUMBER OF AFFORDABLE UNITS: 84 3. SITE EVALUATION: • CENTRALLY LOCATED • ACCESS TO BUS LINES & STORES • COMPATIBLE WITH NEIGHBORHOOD • LOW CRIME RATE • ATTRACTIVE & WELL MAINTAINED • QUALITY PROJECT • LARGE UNITS • NO ADDITIONAL COSTS TO CITY 4. RESIDENT OWNED - CITY PARTNERSHIP 6. SENIORS AFFORDABLE HOUSING 6. EXISTING PROJECT - NO CONSTRUCTION RISKS 7. TIMING: IMMEDIATE FINANCIAL RETURN TO CITY • o Cnmsmrg' muarp' tmma Development History 1958: 55 Year Ground Lease - Irvine Company granted to Duffield, Carlton & Lohman. 1960: Construction completed & Park opened. 1971: Ground Lease acquired by Newport Back Bay Realty Company; a Gelfand entity. 1971: Ground Lease sub -leased to De Anza Newport Mobile Estates, De Anza Harbor, Inc., and De Anza Management Co. ---all Gelfand entities. 1993: Fee Title to Park & Marina acquired: Irvine Company sold to resident owned Bayside Village Mobilehome Owners Assoc. (dba Bayside Land Company). 1993: Marina Option granted by BVMOA/BLC to Morgan Flagg. 2013: Ground Lease terminates. 10 0 Fee Title Lease Option 1. PARK & MARINA FEE INTEREST OWNER • BAYSIDE LAND COMPANY 2. PARK & MARINA "GROUND" LESSEE • DE ANZA CORPORATION 3. INDIVIDUAL SITE/SLIP LESSEES • HOME OWNERS • BOAT OWNERS 4. MARINA FEE INTEREST OPTIONEE (Parcel 31 • MORGAN FLAGG • o if ��IJ V ���li-ti1 ° tmml PROPOSAL • $2.5 million in Affordable Housing Fees to Bayside Land Company. • 84 Bayside Village homesites on South Side set aside as Affordable Housing. • Affordable Fees used to pay down first mortgage with bank. • Revenue from 84 homesites dedicated to the City of Newport Beach. • Annual Year 1 return to City: $120,000. Twenty-year return: $4.8 million. (at 90% occupancy level) (iz1 UVI1IJ V IJI�L�Ir��7 ° timmrA 0 PROPOSED CITY REVENUE • ANNUAL REVENUE, YEAR 1: $1205000 • ANNUAL REVENUE, YEAR 20: $1,025.000 (NET) • ANNUAL INCREASES: CPI (est. 2.5%) • PERCENTAGE OF GROSS REVENUE: 20% GROUND LEASE GROSS UNTIL 2013 • PERCENTAGE OF GROSS REVENUE: 100% GROSS REVENUE AFTER GROUND LEASE TERMINATION - YEAR 2013 Calculations - Year 1: 84 spaces @ 20% of $660/month/space; 20% x $660 x 84 = $11,088/month. Year 1: 12 x $11,088 = $133,056/year; x 90% occupancy = $120,000/year.