CLEARLAKE ? The Clearlake City Council authorized staff May 14 to proceed with a proposal submitted by AMG & Associates. The proposal includes a loan request for a senior housing project located at the southwest corner of Austin Drive and Old Highway 53, identified as the Edgewater Senior Housing Project.
According to City Administrator Dale Neiman, execution of such an agreement would secure affordability covenants on 32 low-income housing units, which he said would result in the Redevelopment Agency fully satisfying its legal obligation in providing such units.
California Redevelopment Law requires that at least 15 percent of all housing units developed within the redevelopment project area for the 20-year implementation period (1990-2010) be occupied by low- and moderate-income residents at an affordable cost. This is commonly referred to as “housing production requirement.” Eligible units must have affordability covenants that require the dwellings remain affordable for 55 years for rental units and 45 years for owner-occupied units.
Neiman reported that between 1990 and 2008 a total of 1,118 housing units were built in the RDA project area. As a result, the agency must secure affordability covenants on a total of 168 units. The agency has commitments in place on 144 units at present.
“State law requires that we obtain another 24 units,” Neiman reported. “If we proceed with this proposal we will have satisfied our legal obligation for the housing production requirement.”
The Edgewater project will build 32 units limited to senior citizens. If the agency agrees to the proposal, the developer will apply for nine percent tax credits in the June 2009 round of applications. The developer is requesting a loan from the agency in the amount of $800,000 or $25,000 per unit.
Neiman said the developer will also prepare an application for a HOME grant for the project. The grant would range between $1.0 to $2.0 million. The city would receive the grant and then loan the money to applicant. The loan would be repaid to the city and the city would be able to loan the money again. The agency/city will receive approximately $100,000 to pay the staff cost associated with managing the grant.
“They will hire a consultant to prepare the grant application at their cost,” Neiman said. “The potential return to us would be $1.0 to $2.0 million.”
According to Neiman, there are sufficient funds available to proceed with the proposal. The item will come back before the council for actual loan approval and authorization for filing the grant application.
Contact Denise Rockenstein at drockenstein@clearlakeobserver.com or call her directly at 994-6444, ext. 11.
