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Home My WebLink AboutR-11468 approving re-allocation of funds from THMA to HASLO for the Maxine Lewis Apartment ProjectR 11468 RESOLUTION NO. 11468 (2024 SERIES) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, AMENDING RESOLUTION NO. 11321 (2022 SERIES) AND RESOLUTION NO. 11411 (2023 SERIES) TO RE- ALLOCATE STATE AND LOCAL FISCAL RECOVERY FUNDS WITHIN THE AFFORDABLE HOUSING FUND FROM TRANSITIONS MENTAL HEALTH ASSOCIATION FOR THE PALM STREET STUDIOS PROJECT TO THE HOUSING AUTHORITY OF SAN LUIS OBISPO FOR THE MAXINE LEWIS APARTMENT PROJECT IN THE AMOUNT OF $300,000, AND DESIGNATE THE PALM STREET STUDIOS PROJECT AS HAVING FIRST PRIORITY FOR FUTURE CONSIDERATION OF AFFORDABLE HOUSING FUND AWARDS WHEREAS, the City Council of the City of San Luis Obispo met in the Council Chamber of City Hall, 990 Palm Street, San Luis Obispo, California, on April 19, 2022, approving Resolution No. 11321 (2022 Series) for affordable housing fund (AHF) assistance for the proposed project, Palm Street Studios by Transitions Mental Health Association (TMHA), in accordance with the eligibility criteria established by the City Council in Resolution No. 9263 (2001 Series); and WHEREAS, the City Council of the City of San Luis Obispo met in the Council Chamber of City Hall, 990 Palm Street, San Luis Obispo, California, on April 18, 2023, approving Resolution No. 11411 (2023 Series) for AHF assistance for the proposed project, 736 Orcutt Road Apartments (now called the Maxine Lewis Apartment Project), by The Housing Authority of San Luis Obispo (HASLO), in accordance with the eligibility criteria established by the City Council in Resolution No. 9263 (2001 Series); and WHEREAS, the Maxine Lewis Apartment Project (previously known as ‘736 Orcutt Road Apartments’) by The Housing Authority of San Luis Obispo (HASLO) has requested additional AHF awards in the amount of $300,000, and the request meets the eligibility criteria established by the City Council in Resolution No. 9263 (2001 Series); and WHEREAS, the proposed project Palm Street Studios by Transitions Mental Health Association (TMHA), has incurred unforeseen project delays due to unanticipated financial circumstances due to outside factors, and supports the reallocation of previously awarded funds in the amount of $300,000 to the HASLO Maxine Lewis Apartment Project and requests designation of the Palm Street Studios Project as having first priority for future consideration of City AHF awards as funds become available; and WHEREAS, Housing Element policies and programs encourage and support the preservation and rehabilitation of affordable housing in the City; and Resolution No. 11468 (2024 Series) Page 2 R 11468 WHEREAS, the City Council has duly considered all evidence, including the testimony of the applicant, interested parties, and the evaluation and recommendations by staff at the said meeting. NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo as follows: SECTION 1. Findings. The City Council does hereby make the following findings in support of the proposed AHF awards: 1.Eligibility: Use of the AHF for the requested purposes will increase or improve the City's affordable housing inventory and promote General Plan policies regarding housing, as follows: The Maxine Lewis Apartment Project is eligible for Affordable Housing Funds because it improves and preserves the City's affordable housing inventory and implements several General Plan policies regarding housing. The project will preserve the supply of affordable housing for extremely low, very low, and low-income households with the construction of 40 units. 2.Need: There exists a substantial or overarching need for the types of units to be assisted, as follows: Below Market Rate housing is a critical need in the City and County of San Luis Obispo. Rapidly rising rents have increased the financial burden on low- income people and the median rental household in the County spends 38% of its income on housing. The City’s 6th Cycle Housing Element, adopted in 2020, documents substantial unmet need. HASLO will use its affiliate non- profit, San Luis Obispo Non-Profit Housing Corporation, as managing general partner in the Limited Partnership ownership entity formed for purposes of the LIHTC program. As property management agent, HASLO coordinates with area non-profit service providers to accept homeless and other special high need referrals and provides resident and supportive services. 3.Suitability: The projects to be assisted are appropriate for its location both in terms of land use and design, as follows: The Maxine Lewis Apartment Project is located 2.5 miles to County Services and 1.7 miles to downtown SLO; 1,200 feet from the railroad safety trail, which conveniently and safely connects pedestrians quickly to downtown; and less than 3/4 of a mile away from a grocery store that offers fresh produce, meat, and other staples. Resolution No. 11468 (2024 Series) Page 3 R 11468 4.Timing: The project would better serve the City's needs if it was built immediately as opposed to later, as follows: The Maxine Lewis Apartment Project, has site control, building permits and state tax credit award financing. If the project is not awarded funding now, it may not be constructed, and HASLO may be unable to apply for state tax credit financing for two-years in penalty. This would impact HASLO projects countywide. The provision of below market rate rental housing units will advance the City Major City Goal for Housing and Homelessness; implement the City’s Homelessness Response Strategic Plan; and make progress on state Regional Housing Needs Allocations (“RHNA”) for housing affordable to residents or families in low or extremely low-income categories. The funding request is for low- and below-income levels reducing the City’s current remaining RHNA for these categories from 331 to 291 units. 5.Financial Effectiveness: But for the requested funding, the project would not be economically feasible; or AHF funding "leverages" significant additional funding from other sources, as follows: Even with an increase in funding request, the project offers a highly effective use of the City AHF. Funding for the Maxine Lewis Apartment Project would constitute 10.2% of project funding. The project leverages Housing Trust Fund ($1,000,000), County and City funds ($420,541) and low-income housing tax credits ($11.7 million). 6.Readiness: The project has all necessary City approvals and is ready to proceed, as follows: The Maxine Lewis Apartment Project does not need to obtain any further City discretionary approvals, building permits are issued, and the project has received tax credit financing award from the State. SECTION 2. Environmental Determination. The project to award affordable housing funds is exempt from environmental review per the California Environmental Quality Act as it does not apply to the recommended actions in this report, because the action does not constitute a “Project” under CEQA Guidelines Sec. 15378. SECTION 3. Amend Resolution No. 11321 (2022 Series) to defund the AHF Award for Transitions Mental Health Association (TMHA) for the Palm Street Studio Project in the amount of $300,000; and Resolution No. 11468 (2024 Series) Page 4 R 11468 SECTION 4. Amend Resolution No. 11411 (2023 Series) to increase the AHF Award to The Housing Authority of San Luis Obispo (HASLO) by an amount not to exceed $300,000, for the Maxine Lewis Apartment Project located at 736 Orcutt Road, subject to the following condition of approval: 1. Prior to release of any portion of the AHF award, the applicants shall enter into an affordability agreement with the City. x For HASLO’s Maxine Lewis Apartment Project, it shall be for forty (40) for- rent affordable housing units located at 736 Orcutt Road, for a term of fifty- five (55) years, which will be recorded against the title of the property. Resolution No. 11468 (2024 Series) Page 5 R 11468 SECTION 5. Place the Transitions Mental Health Association’s (THMA) Palm Street Studios Project as the first priority for future Affordable Housing Fund award considerations as funds become available, on the condition that the Palm Street Studios Project meets AHF award criteria at the time of funding consideration. Upon motion of Vice Mayor Pease, seconded by Council Member Shoresman, and on the following roll call vote: AYES: NOES: ABSENT: The foregoing resolution was adopted on this 9th day of January 2024. ___________________________ Mayor Erica A. Stewart ATTEST: ____________________________ Teresa Purrington, City Clerk APPROVED AS TO FORM: ____________________________ J. Christine Dietrick, City Attorney IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, on ______________________. ___________________________ Teresa Purrington, City Clerk Council Member Francis, Marx, Shoresman, Vice Mayor Pease, and Mayor Stewart None None