HomeMy Public PortalAboutReport on Affordable Housing Obligations
INTEROFFICE MEMORANDUM
Date: September 4, 2018
To: Mayor Marchand and City Council Members
From: Jason R. Alcala, City Attorney
Subject: Affordable Housing Obligations – Livermore Village
On April 23, 2018, at the request of Vice-Mayor Woerner, the City Council directed the
City Attorney to report on the affordable housing obligations for the Livermore Village
site and to identify the documents showing those obligations. Here is that report.
Introduction
The Livermore Village site consists of approximately 5.8 acres of land, as shown in
Attachment 1. The properties that make up the site were acquired for redevelopment by
the City and the former-Redevelopment Agency of the City of Livermore (the “former-
RDA”). Consistent with the Downtown Specific Plan and the former-RDA’s plans, the
goal was to assemble the properties for a project to create retail and office space,
community amenities, and affordable housing opportunities.
The properties were transferred between the City and the former -RDA through a
number of transactions. When the State dissolved the former-RDA, the California
Department of Finance authorized the Livermore Village site properties to be transferred
to the City as governmental purpose properties and as housing assets.
This memorandum provides information on the housing asset properties that make up
the Livermore Village site, which are identified in Attachment 1 as follows:
1. Anderson Pacific Property (which was subdivided into the Remainder Parcel, the
Regional Theater Parcel, and the Plaza Parcel);
2. Harris Property; and,
3. Kibler Property.
This memorandum is accompanied by a whitepaper for each property that identifies the
staff reports, resolutions, agreements, and other documents showing the property’s
acquisition and proposed use as a housing asset. This memorandum is also
accompanied by whitepapers providing information about the funding sources and
obligations that resulted in the designation of those properties as housing assets.
September 4, 2018
Page 2 of 6
Executive Summary
The Livermore Successor Agency’s Long Range Property Management Plan
designates the Livermore Village site properties as housing assets because they were
acquired with either Livermore Affordable Housing Fees (Fund 611), or a combination of
those fees and funds from the California Housing Finance Authority’s (“CalHFA”)
Residential Development Loan Program.
The California Department of Finance approved the transfer of the housing asset
properties to the City because it elected to perform the former-RDA’s housing
functions.1 Those housing functions include administering and enforcing the former -
RDA’s affordability covenants, as well as monitoring affordable housing made available
to persons and families of low or moderate income through redevelopment .2
The affordable housing obligations related to the funding sources are as follows:
Livermore Affordable Housing Fees (Fund 611). The City has limited discretion
to determine how to satisfy the Affordable Housing Fees obligation. The City
collects these fees from developers to increase the supply of affordable housing
due to the impact of their projects. The obligation to create affordable housing
opportunities may be satisfied through one, or a combination of, the following: the
housing assets themselves can be used to create affordable housing
opportunities; they can be exchanged with other land or otherwise leveraged to
create affordable housing opportunities in other locations; or, the fees can be
repaid to Fund 611 so they can then be used to create affordable housing
opportunities elsewhere. This restriction affects each of the housing asset
properties.
CalHFA Residential Development Loan Program (“RDLP”) Funds. The City has
very little discretion to determine how to satisfy the RDLP fund obligation. These
funds were loaned from CalHFA to the City, and then from the City to the former-
RDA, to acquire and specifically create affordable housing opportunities on the
Anderson Pacific Property. To ensure that obligation was satisfied, CalHFA
required a Notice of Affordability Restriction on Transfer of Property and
Declaration of Covenants and Restrictions to be recorded against the property to
require it be developed to provide 28 owner-occupied low-income housing units
and 56 owner-occupied moderate-income housing units. A copy of the covenant
is attached at Attachment 2. The covenant allows for a change in use (for
example a change from ownership housing to rental housing), but it requires the
property to still be used to benefit individuals and families whose incomes do not
exceed 120 percent of the median income in Livermore.
1 City Council Resolution No. 2012-06; See also, Health & Safety Code § 34176.
2 See, Health & Safety Code §§ 34176(c) and 33418.
September 4, 2018
Page 3 of 6
Discussion
The affordable housing obligations for the Livermore Village site are derived from the
fact that the housing asset properties that make up the site were acquired with housing
funds, and because the City elected to perform the former -RDA’s housing functions.
A. Affordable Housing Opportunities & Density on the Livermore Village Site
The Livermore Village site shown in Attachment 1 is approximately 6 acres. If the site
was used exclusively for housing, the Downtown Specific Plan would allow for the
development of up to approximately 330 units (based upon an allowed density of 30-55
units to an acre and without taking into consideration the adjacent roadways). The
Livermore Village site is located in the Downtown Specific Plan area that requires 10%
of the residential units be set aside for affordable housing opportunities.3
In 2006, Livermore Village I LLC secured land use entitlements for the 5.5 acre portion
of the Livermore Village site known as the Anderson Pacific Property to develop a 281
unit attached housing development with an affordable housing component, an artist
community center, and approximately 7,000 square feet of retail and office space.4 That
project would have resulted in the creation of 28 affordable housing units (10% of the
218 residential units). However, the amount of affordable housing was increased to 84
units by leveraging a loan of Livermore Affordable Housing Fees. The Great Recession
prevented this project from being realized.
In 2010, the former-RDA entered into an Exclusive Negotiating Rights Agreement with
Eden Housing Inc. for a mixed-use retail and affordable residential project on the Harris
and Kibler properties to complement the proposed regional theater project. The former-
RDA’s dissolution and market conditions prevented this project from being realized.
In 2016, the City Council authorized an Exclusive Negotiating Rights Agreement with
Lennar Multifamily Communities after the applicant submitted its qualifications and
conceptual vision to develop the Livermore Village site for residential and commercial
uses, with up to 263 units of housing. In 2017, the City Council declined to extend the
agreement with Lennar and it expired.
In 2018, the City Council directed that a portion of the Livermore Village site (consisting
of the Harris and Kibler properties, and the Regional Theater Parcel and the Plaza
Parcel subdivided from the Anderson Pacific Property) be exchanged for City property
at the Civic Center Campus, to satisfy all or a portion of the obligation arising from the
use of Livermore Affordable Housing Fees to acquire those properties. The City Council
also directed the creation of up to 130 units of workforce rental housing on an
approximately two acre portion on the Remainder Parcel. Those opportunities are under
development.
3 Livermore Municipal Code § 3.23.050.A.1.b.
4 City Resolution No. 2006-247, adopted October 30, 2006; City Ordinance No. 1803, adopted November
23, 2006.
September 4, 2018
Page 4 of 6
B. Election to Perform the former-RDA’s Housing Functions
The use of redevelopment powers to rejuvenate a community is balanced against the
impact it causes on housing for low-income persons. One of the former-RDA’s primary
purposes was to increase, improve, and preserve the supply of affordable housing.
On January 9, 2012, the City elected to retain the housing assets and functions
previously performed by the former-RDA and became its “Housing Successor.” That
election imposed a statutory obligation on the City, as the Housing Successor, to
enforce the affordability covenants and perform related activities, including monitoring
housing affordable to persons and families of low or moderate income developed o r
otherwise made available through redevelopment.5
The City and the former-RDA are the parties to the Notice of Affordability Restriction on
Transfer of Property and Declaration of Covenants and Restrictions that was recorded
against the Anderson Pacific Property. As the Housing Successor to the former -RDA’s
functions, the City has a statutory obligation to ensure that covenant is enforced.
C. Livermore Affordable Housing Fees (Fund 611)
Each of the housing asset properties that make up the Livermore Village site were
acquired in whole or in part with Livermore Affordable Housing Fees. The use of those
fees imposes an obligation to provide affordable housing opportunities consistent with
Chapter 3.26 of the Livermore Municipal Code. Those opportunities include:
Mortgage subsidies and down payment assistance
Site acquisition
Banking of land for use in the development of affordable housing
Rental subsidies
Construction financing
Issuance of bonds
Providing predevelopment funds
Providing rehabilitation funds to preserve existing affordable housing stock
Other assistance increasing or maintaining affordable housing in Livermore.
In 2018, the City Council directed that Affordable Housing Fee obligations associated
with the Harris and Kibler properties, and the Regional Theater Parcel and the Plaza
Parcel, to be satisfied in whole or in part through an exchange for City property at the
Civic Center Campus. The Council further directed staff to determine how much of the
obligation is satisfied by the affordable housing project for the Civic Center Campus.
The City Council also directed staff to pursue the creation of up to 130 units of
workforce rental housing on the Remainder Parcel.
A separate whitepaper accompanying this report provides additional information about
the Affordable Housing Fee.
5 See, Health & Safety Code § 33334.2.
September 4, 2018
Page 5 of 6
D. CalHFA Residential Development Loan Program Funds
On November 7, 2006, California voters approved Proposition 1C, The Housing and
Emergency Shelter Trust Fund Act of 2006, for the sale of $2.85 billion in general
obligation bonds to support a variety of affordable housing and housing-related
infrastructure programs. The California Housing and Finance Authority (“CalHFA”)
created the Residential Development Loan Program (“RDLP”) to utilize Prop 1C bond
proceeds to create affordable housing opportunities through an innovative loan program
available to local government entities.
In 2007, CalHFA awarded the City an RDLP loan in the amount of $5,000,000 for the
acquisition and pre-development of the Livermore Village Site.
1. Covenant to Build Affordable Housing on the Anderson Pacific Property
In 2009, the City and the former-RDA entered into a Cooperation and Repayment
Agreement for the City to loan the former-RDA $5,000,000 in RDLP funds, for the
acquisition of the Anderson Pacific Property. As a condition of drawing the RDLP funds
from CalHFA, the City and the former-RDA were required to record the Notice of
Affordability Restriction on Transfer of Property and Declaration of Covenants and
Restrictions on the Anderson Pacific Property to secure the obligation for its
development to provide 28 owner-occupied low-income housing units and 56 owner-
occupied moderate-income housing units.
As the Housing Successor to the former-RDA’s functions, the City has a statutory
obligation to ensure that covenant is enforced. That duty of enforcement may include
changing the use for the property (for example changing the use from ownership
housing to rental housing) while ensuring it will be used to benefit individuals or families
whose incomes do not exceed 120 percent of median income in Livermore.
2. Anderson Pacific Property
In 2010, to accommodate the regional theater, the Anderson Pacific Site was
subdivided into the Remainder Parcel, the Regional Theater Parcel, and the Plaza
Parcel.
In 2014, the Disposition and Development Agreement between the City, the former -
RDA, and LVPAC (“regional theater DDA”) was formally terminated and removed from
the title for the Regional Theater Parcel, and the Plaza Parcel.
In 2015, the California Department of Finance confirmed that the Regional Theater
Parcel and the Plaza Parcel reverted to housing assets following the termination of the
regional theater DDA, and it approved the transfer of all three of the subdivided
Anderson Pacific Property parcels to the City as the former-RDA’s housing assets.
In 2018, the City Council directed the creation of up to 130 units of workforce rental
housing on the Remainder Parcel.
September 4, 2018
Page 6 of 6
3. Modification to Affordability Covenant Required to Change Use from
Owner-Occupied to Rental Housing Opportunities
The RDLP covenant requires the development of 84 units of owner-occupied affordable
housing units on the Anderson Pacific Property. The Council’s direction to develop up to
130 units of workforce rental housing on the Remainder Parcel will require a change in
the property’s affordability use restrictions from owner-occupied to rental.
The covenant allows for the change so long as the property is still used to benefit
individuals and families whose incomes do not exceed 120 percent of the median
income in Livermore.
The following factors weigh in favor of the change:
Increasing the number of affordable units,
Extending the affordability restriction period for a longer period of time, and
Expanding the scope of the affordability restriction to lower-income households.
The amendment to the covenant to reflect this change in use will be processed for the
City Council’s approval along with the entitlements for the affordable housing project on
the Remainder Parcel.
Attachments
1. Livermore Village Site
2. Notice of Affordability Restriction on Transfer of Property and Declaration of
Covenants and Restrictions
Whitepapers and Supporting Documentation
1. Anderson Pacific Property
2. Remainder Parcel
3. Regional Theater Parcel
4. Plaza Parcel
5. Harris Property
6. Kibler Property
7. Livermore Affordable Housing Fee
8. Residential Development Loan Program
cc: Marc Roberts, City Manager
Douglas Alessio, Administrative Services Director
Paul Spence, Community Development Director
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A. Housing Asset Proper�es
1. Anderson Pacific Property
(a) Remainder Parcel
(b) Regional Theater Parcel
(c) Regional Theater Plaza Parcel
2. Kibler Property
3. Harris Property
4. Driveway Parcel
5. Train Sta�on Depot Building
B. Governmental Purpose and City
Proper�es
6. Garage Site
7. Alleyway Site
Livermore Village Site
Attachment 1
Attachment 2
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