REDEVELOPMENT FUNDS

Village One Town Center Project

Background

Village One Town Center Project In January 2003     The City of Modesto allocated $245,000 to the Housing Authority for the pre-development of the Village One project.

Several neighborhood meetings were held.

A design committee was formed.

The City and the Village One residents invested a substantial amount of time in this project.

Background

    These actions assisted the Housing Authority to complete the pre-development phase with neighborhood participation. The neighborhood has accepted this project and is looking forward for its completion.

Units will provide decent, safe and sanitary housing to low-income households.

January 2007 the Housing Authority Requested from the Redevelopment Agency $450,000 to complete the long term financing for the project.

Background

 The total development costs for the project are currently estimated at $7,244,626.

 The Housing Authority proposed to develop 20 affordable rental units, (five two story buildings with two-bedroom/one bathroom and three bedroom/ two-bathroom units) a community center.

Affordability Mix

 The Housing Authority is now proposing the following affordability mix:    1 units – to be rented at 80% Area Median Income level 15 units – to be rented at 65% Area Median Income level 4 units – to be rented at 50% Area Median Income level

Sources of Funds for the Project

SOURCE OF FUNDS: Percentage of Funds City of Modesto Home Funds $933,600.00

$1,030,791.00 $785,307.00

$450,000.00

$2,864,187 39.52%

5.42% City of Modesto Redevelopment Funds Housing Authority Loan (Land) Housing Authority Loan Farmers & Merchant Loan Debt Amount

Total Permanent Financing

$495,000.00 $2,144,626.00 $1,407,495.00 Amortized loan 5.25% $7,246,819.00 6.83% 29.59% 18.63% 100.00%

Village One Site Plan

Village One Front Elevation

Village One Floor Plan Bldg. 1

Reasons for Recommendation

  There is a high demand for affordable housing units.

 The Village One project will add 20 affordable rental units to the City’s housing stock.

Housing Authority is capable of developing affordable housing for very-low and low-income persons due to their financing leverage of $495,000 for the cost of the land, a $2,639,626 investment of Housing Authority funds, and a $1,407,495 loan from Farmers and Merchants Bank amortized for 30 years with a loan rate initially set at 60 basis point above the 10 year treasury note rate, and reset in years 11 and 21 using the same formula.

Reasons for Recommendation

Recommended Action

Questions?

Cost Comparison of Two Current Projects by the Housing Authority Village One

$7,246,819 $362,341 $281.99

$27,400 10(2)/10(3)

Yes Las Palmas $4,828,405 $201,183 $284.82

$1,725* 24(1) Yes

Notes: 1. The Las Palmas Senior Housing project had most of the offsite work completed prior to the Housing Authority developing the site, which lowered the project cost.

* The fees per unit was lower due to CFF waivers, school fees are not charge for senior housing, water and sewer fees were $3,648.