April 21, 2010 > Mid Pen housing project takes the next step
Mid Pen housing project takes the next step
By Shavon Walker
Union City's Redevelopment Agency (RDA) Board approved a second amendment to the Disposition and Development Agreement (DDA) with Mid-Peninsula Housing
Coalition (Mid-Pen) and its associated documents on April 13. The changes embodied in the second amendment have no significant fiscal impact on the RDA.
Mid-Pen plan will build 155 affordable, residential units in two phases, two managers units, 8,750 sq. ft. of retail/commercial space, and a six-story 284 stall-parking garage with 117 public parking stalls on what is known as Block 4 of Union City's Intermodal Station District The project is a mixed-use, high-density and high-quality development with a higher per-residential-unit cost than a lower-density affordable project because the former requires a parking structure.
This project will have an average density of 75 units per acre, akin to Avalon Bay, and will incorporate green standards to acquire LEED Gold Certification. A Project Labor Agreement with the Alameda County Building Trades has also been signed.
Low-density, affordable housing developments are usually funded by tax credits, free conveyance of property and a small RDA grant or loan. Tax credits will only cover a portion of the Mid-Pen project's construction costs with the RDA contributing the remaining balance. According to Redevelopment law; 20 percent of any RDA's tax increment revenue must be set aside for housing. When a RDA issues tax-exempt bonds, to finance affordable-housing construction, it cannot charge market-rate business terms on affordable housing loans.
The project's development cost amounts to $66.5M and includes developer fees, special district fees, city fees, construction, and construction management. The City will receive $3.5M in development and building fees; Mid-Pen will receive $2.8M in developer fees of which $700,000 will be deferred and paid from residual cash flow after the development's completion. Special districts will receive $1.9M in fees.
The current DDA authorizes a RDA loan up to $20,617,498 and RDA grant up to $4,084,176 to support public parking. The second amendment does not alter the total RDA contribution of $24,701,674 but reallocates funds to an Agency loan of up to $21,791,587 for Phase 1 and Phase 2 housing and an agency grant of up to $2,910,087 to support public parking. The loan will be funded by tax-increment funds and tax-exempt bond funds. Mid-Pen has also arranged construction and permanent financing through Union Bank and tax credit investor equity through JP Morgan.
The second amendment to the DDA modifies the project description; reallocates the RDA loan and grant among project components; modifies the interest rate for some components of the loan; modifies some marketing obligations for the retail/commercial space; grants the RDA certain rights to purchase the retail/commercial space component of the project with associated parking; and specifies parties' roles and responsibilities for the development and operation of each project component. The retail area will be subject to certain restrictions - drug and alcohol treatment programs, massage, adult book services and liquor stores would not be allowed. Live performances will need a use permit from the city.
Phase 1 construction of 99 affordable, residential units, one manager's unit, 8,750 sq. ft. of retail and commercial space, and the 284 space parking garage. The Project Labor Agreement between Mid-Pen, Barry Swenson Builder and the Alameda County Building Trades has been executed.
Phase 2 will have 56 affordable, residential units and a manager's unit. Mid-Pen's financing must be secured for this phase within three years. In June 2010, Mid-Pen will find out if its March 2010 application for 9 percent tax-credit financing is successful. and it will then be determined if Mid Pen will continue to the second round of tax-credit competition. The intent is to construct Phases 1 and 2 concurrently. Non-profit housing providers must have better than a perfect score to receive 9-percent tax credits.
For more information, visit www.UnionCity.org