PLANNING AND HOUSING COMMISSION
STAFF REPORT
DATE: 06/10/2024
TO: Honorable Chair and Commissioners
FROM: Community Services Department
APPLICATION REQUEST:
Title
Review of the sale of one acre owned by the Corona Housing Authority for the 2nd Street Permanent Supportive Housing Project generally located at the southwest corner of Buena Vista Avenue and Second Street and a General Plan Consistency Determination (Portion of APN 118-270-055) (Applicant: Community Services Department)
End
RECOMMENDED ACTION:
Recommended action
That the Planning and Housing Commission:
1. Recommend to the Corona Housing Authority the approval of the sale of one acre for the development of an affordable housing project consisting of 25 Permanent Supportive Housing units subject to the approval of development applications.
2. Adopt Resolution No. 2636 determining that the sale of a one-acre parcel generally located at the southwest corner of Buena Vista Avenue and Second Street is in conformance with the City’s General Plan (Portion of APN 118-270-055).
Body
ANALYSIS
BACKGROUND
Section 2.58.070 of the Corona Municipal Code states the Housing Commission of the City of Corona shall serve in an advisory capacity to the Corona Housing Authority and shall review and make recommendations on matters to come before the Housing Authority. This includes the sale of property owned by the Corona Housing Authority for the development of affordable housing.
Property Owned by the Corona Housing Authority
On April 3, 2019, the Corona Housing Authority Board (Authority) authorized the purchase of three parcels abutting the newly expanded 91 FWY, located along Second Street and South Buena Vista Avenue. Riverside County Transportation Commission (RCTC) acquired these properties in furtherance of the 91 FWY Expansion Project and, at the culmination of the project, per the Surplus Land Act, before opening the sale of land to the public, RCTC must offer properties to agencies and entities in furtherance of the priority uses under the law. One of the priorities is the development of affordable housing.
The Authority purchased the properties for $2 million to partner with an affordable housing developer on the future construction and long-term management of affordable housing units. The lots purchased are 4.82 acres comprised of two lots, Assessor Parcels 118-270-055 & -053 (Large Lot), located at the southwest corner of Second/Buena Vista, and a noncontiguous 0.20-acre lot (Small Lot), Assessor Parcel 118-302-030, located at the southeast corner of Second/Buena Vista.
City’s Request for Qualifications
The City Council directed staff to conduct a Request for Qualifications and Proposal for an affordable housing development. Concurrently, the City was also developing its homeless strategies; therefore, staff included preferences in its RFQ/P for homeless and homeless prevention housing to maximize the use of the Large Lot. On October 17, 2020, a 60-day RFQ/P process was opened. Six (6) proposals were received and reviewed by a 5-member panel made up of City staff in the Housing Division, the City’s Homeless Coordinator, the Deputy City Attorney, and an independent financial consultant who specializes in affordable housing financing. Two (2) developers were invited to an interview: C&C Development, Orange Housing & Mercy House, and Related Housing California. The panel recommended the proposal by C&C Development. On June 16, 2021, the Authority directed staff to proceed with their recommendation.
Sale of Corona Housing Authority Property for an Affordable Housing Project
C&C Development, Orange Housing & Mercy House (Developer) proposal contained two developments: 1) permanent supportive housing, and 2) multifamily development. The developments were separated to maximize available financial subsidies and opportunities. As a result, the Developer's projects are being submitted separately for legal purposes.
This staff report focuses on the Permanent Supportive Housing Project.
Under this project proposal, the Developer requests to build a 25-unit permanent supportive housing development on approximately 1 acre of land. This Large Lot is currently approximately 4.82 acres in size and will be reduced through lot line adjustment to 3.82 acres for the multifamily project and to a 1-acre lot for the Permanent Supportive Housing (PSH) Project. PSH developments are specialized housing for chronically homeless persons due to a diagnosed illness. Eligibility for this housing type is regulated and organized at the County level through the Riverside Continuum of Care’s Coordinated Entry System. Given this population’s propensity for homelessness, these housing projects are highly subsidized to cover the cost of building and maintenance and to ensure the needed support and social services are provided to help achieve housing stability.
Project Description:
The project development is designed as a two-story building with 17 parking spaces, a courtyard with BBQ pavilion, lawn games area, drought-tolerant landscaping, a great room and multiple community rooms, offices, laundry facilities, and access to the adjacent development pool facility, common area facilities, and outdoor recreation lot at the Small Lot. This property is conveniently located within walking distance to commercial centers with grocery stores, public transportation, public parks and open spaces, and civic services. Each of the 24 one-bedroom apartments is 528-square-foot sized for individuals and couples.
Unit amenities will include energy-efficient appliances and HVAC systems to decrease residents' utility costs, the use of low VOC and other sustainable building products to improve resident indoor environmental air quality, recessed lighting, durable plank vinyl flooring, large windows for natural lighting, shaded balconies, kitchens, living rooms, and in-suite bathrooms. The development includes one onsite Manager Unit.
Supportive and Social Services:
Supportive and Social Services are a paramount component of PSH projects. Mercy House, the City’s current wraparound homeless service provider, will provide these services in partnership with the Developer. Mercy House designs its PSH services based on Housing First principles and ongoing education and supportive services focusing on chronically homeless individuals. Their supportive services are designed to focus on intensive case management, emphasizing behavioral health and primary health issues, independent living skills, and employment/educational goals. Intensive case management includes individualized service planning and goal setting, coordination of services, counseling and support, crisis intervention, and intensive assistance accessing mainstream services and other community-based resources. Mercy House will continue its partnership with the Centro Medico Community Clinic (CMCC) to provide behavioral health, medical, and oral services to residents as well as supportive services. CMCC, with support from the City, operates a Federally Qualified Health Center (FQHC) that provides medical, behavioral health, oral care, and post-hospital recuperative care services to at-risk and homeless residents of the City.
Affordability Term:
A critical factor in the selection of the Developer was their proposed affordability term. The Developer agreed to maintain the legally required 55-year affordability term in perpetuity at the extremely low category of 30% Median Family Income (MFI).
Affordability Levels:
The tables below are based on the 2024 Income Limits published by the California Department of Housing and Community Development, Division of Housing Policy Development, on May 9, 2024.
2024 Household income
|
Household #: |
1 |
2 |
|
30% Extremely Low |
$21550 |
$24600 |
2024 Rents
|
30% |
|
Studio |
$512 |
|
1-Bedroom |
$548 |
Project Financials:
The total cost for this project is currently estimated at $16,337,115. To fund this PSH project, the Developer is seeking funding from the following sources: 9% private equity through the California Tax Credit Allocation Committee process, local housing funds, HUD grants from the City’s CDBG, HOME, and HOME-ARP allocations, and deferred local Development Impact Fees. The total construction per-unit cost is $653,484.60. Noteworthy is the per-unit cost to the Authority and City. Based on actual cash contribution, our per-unit cost is $91,297 (this assumes the cost paid). This cash investment will provide extremely low affordable units in perpetuity, dedicated to some of the community's most vulnerable persons.
The following is a breakdown of the Authority and City project loans that will be repaid within a 55-year amortized period.
1. Authority Loan Amounts:
a. Land: TBD based on Appraised Value
b. Cash: $681,508
2. City Loan Amounts:
a. Land: TBD based on Appraised Value
b. Cash: $1,000,000 (HOME-ARP)
c. Cash: $200,000 (HOME)
d. DIF: TBD
The total purchase price of the Large and Small Lots was $2,004,650, which is an estimated per-acre cost of $400,930. The City Council approved using $600,000 of Community Development Block Grant (CDBG) towards the purchase price. The remainder of the purchase price, $1,404,650, was paid from the Housing Fund Balance. The contribution breakdown equals to 30% City and 70% Housing Successor. Therefore, when the land loan is paid, at a reappraised amount, 30% of the value will be paid to the City and deposited into the CDBG Fund and reprogrammed for CDBG-eligible activities and 70% will be deposited into the Housing Fund for the Authority.
Future Development Applications to be reviewed by the Planning and Housing Commission
The entitlement for the project will involve the review of the following development applications, which are anticipated to be reviewed by the Planning and Housing Commission on July 8, 2024.
PP2023-0011: Precise plan to review the site plan and other aspects of the project for the development of 25 permanent supportive housing units on approximately one acre.
AHDB2023-0003: Affordable Housing Density Bonus Agreement to support the development of 25 permanent supportive housing units on approximately one acre.
General Plan Consistency Determination
The Authority and City seek a General Plan Consistency Determination for the 1-acre property associated with this PSH project, located on a portion of 206 South Buena Vista Avenue (APN 118-270-055). A site map of the property is attached as Exhibit 2, and a project rendering is attached as Exhibit 3. The property is zoned Mobile Home Park and undeveloped. It is surrounded by the 91 FWY to the north, a commercial center to the west, an affordable housing development to the east, and a Corona Norco School District facility to the south.
California Government Code Section 65402 requires that when a local agency plans to acquire, dispose of, or vacate real property or easements for public purposes, the Planning Agency of the city in which the property is located must first issue a report addressing whether the activity conforms with the General Plan.
The City’s plan to dispose of the Property is in conformance with the following General Plan goals:
|
General Plan Policy |
Policy Reason |
|
Policy LU-4.1, Accommodate future growth and development in accordance with figure LU-1 of the Land Use Plan. |
Following the General Plan land use designation, the Property, a portion of APN 118-270-055, located at 206 South Buena Vista Avenue, is currently designated as High-Density Residential. |
|
Policy LU-3.3, Allows flexibility in the defined land use types, densities, and intensities to account for changes in housing needs and characteristics. |
The Property was purchased under the State’s Surplus Land Act to construct new affordable housing units in furtherance of the City’s Homelessness Strategic Plan and in conformity with the surrounding land uses to the east, which includes a regulated affordable housing development. |
|
Policy H-1.1, Supports public and private sector nonprofit and for-profit organizations in their efforts to construct, acquire, and improve housing to provide access to affordable housing to lower and moderate-income households. |
This Property will be developed in partnership with a private sector non-profit entity to provide affordable housing to extremely low-income chronically homeless person(s) following the City’s General Plan and Homelessness Strategic Plan. |
Development plans, environmental reviews, project contracts, and loan documents are underway in partnership with the Developer. By August 2024, all entitlement and project activities are anticipated to be completed and ready for the Authority Board and City Council review.
Staff requests that the Planning and Housing Commission support this proposed development of 25 PSH units, recommend approval to the Authority Board and City Council, and find that the proposed sale of approximately 1.0 acre of property, which is a portion of APN 118-270-055, located at 206 South Buena Vista Avenue, conforms with the City’s General Plan.
ENVIRONMENTAL ANALYSIS
The General Plan consistency determination is not a project under the California Environmental Quality Act and, therefore, does not require environmental review.
FISCAL IMPACT
There is no fiscal impact associated with this action.
PUBLIC NOTICE AND COMMENTS
California Government Code Section 65401 does not require public notification for a General Plan Consistency Determination.
PREPARED BY: CYNTHIA LARA, COMMUNITY ASSISTANCE MANAGER
REVIEWED BY: DONNA FINCH, COMMUNITY SERVICES DIRECTOR
SUBMITTED BY: JOANNE COLETTA, PLANNING & DEVELOPMENT DIRECTOR
Exhibits:
1. Exhibit 1 - Resolution No. 2636
2. Exhibit 2 - Location Map
3. Exhibit 3 - Project Rendering