MAY 25, 2005
CALL TO ORDER
Chair Matt Small called the meeting to order at 4:10 p.m. at the Community Development and Engineering Services building in the Siskiyou Room located at
Commissioners Present: Matt Small, Chair
Carol Voisin (arrived at 5:00 p.m.)
Absent Members: Kim Miller
Council Liaison: Cate Hartzell (arrived at 4:20 p.m.)
Staff Present: Brandon Goldman, Housing Specialist
Sue Yates, Executive Secretary
APPROVAL OF MINUTES
Weisler/Mackin m/s approval of the minutes of the April 27, 2005 meeting.
AARON BENJAMIN spoke at the Parks Commission meeting held on May 23rd, and asked the Commission if they would be willing to sell or donate a half-acre of the one and one-half acres of land they own on
Small suggested an agenda item to discuss having a Housing Commission liaison present at planning commission, council and school board meetings to make sure affordable housing is always part of the discussion.
John McLaughlin, Planning Director, said when the
Hartzell suggested building relationships with various public groups and resume discussions concerning employer assisted housing. She would like to include SOU and invite their housing specialist to the Housing Commission meetings. She thought they were included as ex-officio member of the Housing Commission.
Goldman announced there would be a Workforce Housing Summit sponsored in part by the State of Oregon in October. The focus is how businesses, developers, affordable housing providers work together to reduce regulatory and financial barriers to affordable housing. Hartzell asked Goldman to produce a calendar of upcoming meetings and events. She would like to start planning for the Workforce Housing Summit now to start with our local groups making sure they know what the
Weisler noted that the subcommittees need to start meeting again. Street volunteered to be on the Education subcommittee.
HOME Consortium Progress
Goldman said he has met with the
Hartzell suggested putting this item on the calendar for a future review. Is there something we could build on that came from these discussions that could help us move more quickly the next time? Goldman said the housing provider meeting concluded they should continue the discussions at least toward a coordinated approach to pushing forward HOME eligible projects. They are having monthly meetings of the Jackson County Housing Coalition.
Cate asked for a change to the minutes of April 27, 2005. Page 2, Kim Miller was saying “The only issue he has as a non-profit developer is that a consortium use the same social service grant application.” There was no motion to make the change.
Lithia Parking Lot Proposals
Small recused himself due to a conflict of interest. Street read the minutes, attended one meeting, read the materials in the packets and would like to participate in the hearing. The Commissioners allowed Street to participate.
Included in the packet is a memo from Goldman addressing some of the points of concern. If the RFP was insufficient in issuance or if the proposals are insufficient, the appropriate process would be to re-issue the RFP, leaving it open to any and all respondents. With regard to housing costs, the memo recommends using the HOME program for those units that are at 50 to 60 percent income. Rents levels under the Ashland Affordable Housing Program SDC Deferral would then not exceed 30 percent of a household’s income. Other items covered in the memo are income ranges, as well as parking issues and impacts on
There is a strong recommendation to support the commercial component within the project. Staff is recommending that the Commission forward their support of the Kendrick Enterprises proposal with certain conditions to the Council. The conditions would include: (1) That the rents are adjusted to be consistent with the HOME program, (2) That the subsurface parking scenario be a condition of that selection.
Other conditions that have come up since the memo was written are:
Operating costs – if the Commission feels that the proposals are inadequate with regard to having a reserve fund for ongoing maintenance of the project (memo distributed at this meeting), this would be an opportunity to elaborate on that condition.
§ Recommend that another proposal be selected as presented, or specific suggestions for modification of the proposal using conditions.
§ Recommend a new RFP be issued with greater specificity.
§ The Commission could recommend to Council suggested components without recommending any individual proposals.
Hartzell asked from where the recommendation to select Kendrick came. Goldman said he drafted the memo and it was reviewed by John McLaughlin. It has the full support of the Planning Department. The recommendation comes from evaluation of the proposals and ranking the proposals numerically using the criteria. Staff determined that the Kendrick proposal met the provisions of the RFP for the affordable housing and looking at the consistency with the Downtown Design Standards and the intent of the Commercial zone.
Weisler asked how much we can go with Kendrick and how much can be negotiated? Goldman said the City can select any proposal and provide conditions of selection and if the applicant did not want to comply with those, the application would dissolve and we would be back to a new RFP. Hardesty wondered about Kendrick’s willingness to go along with any conditions.
Hardesty dealt with RFP’s in her past career and they always followed the criteria and whoever followed the RFP would be the one chosen to get the job. She is not used to negotiating. She would like to see more evidence that whoever gets this project is going to be willing to do things that we find most important. What does the commercial space do for affordable housing? It has to be very clear what the developer is going to do with the advantage of the commercial component for affordable housing in
Hardesty said the Housing Authority of Jackson County did not have drawings and the Commission was not excited about how it looked. She remembered Goldman saying that we weren’t looking at site design and aesthetics in the proposals as these can be altered.
How much subsidy does the commercial component contribute, asked Hardesty? She believes we should have evidence of a significant contribution by the for-profit developer to affordable housing that is agreeable to the Council and to the City. She did not see any evidence in the proposal from Kendrick that the commercial portion would revert to the City. Goldman said they stated under “period of affordability” that the assets would revert to the City at the conclusion. It could be written in a lease.
Hardesty was confused about the mixed use, 65 percent of the ground floor must be permitted use. There was discussion in Goldman’s memo about whether the parking would qualify as a basement or whether it would be considered ground floor. Is residential not permitted use in this area? Goldman said 65 percent is intended for permitted use and those are listed. Residential is a ‘special permitted’ use. Hardesty wondered if that should have been clear in issuing the RFP. Goldman said if the parking is on the ground floor, public parking is a permitted use. The concern in the application is the sinking of the parking. If they sink it too far, it becomes a basement. If they sink it just a little bit, it is considered a ground floor. It would have an impact in terms of raising the profile of the subsurface parking. Goldman said they can expect minor changes to occur after going through the public review process.
Hardesty felt the Housing Authority was the most responsive to the RFP. Maybe commercial is desirable, but maybe it’s not necessary. The rest of the area on
Peck responded that the commercial aspect provides vitality to the downtown area. With people living above the commercial at night it gives the town a more lived in rather than vacant feel.
Street asked the visual size of the commercial space along
Hartzell wondered if Kendrick included a funding performa. Goldman said they provided the unit cost for the residential component. They don’t provide how much the commercial component will cost or income. Hartzell is not willing to go with the Kendrick proposal or to any proposal that includes commercial without understanding about the potential income over a 40 year period. It seems like the City is handing over income for valuable commercial space for a period of 40 years without even knowing how much we are handing over. The developer is saying they need the income because they are taking the risk but they are taking the risk with private money. What if they are going out for public money too? Goldman said public money would go exclusively to the developer of housing units.
Hartzell corresponded with Diana Goodwin-Shavey, a former Housing Commissioner. Shavey said if you build affordable but you don’t have someone manage it well, the rest of the community will look at it and say they don’t want any more affordable housing. She would like to have weighted management experience into the proposal significantly more than we did. Who will not only build it, but who will take care of it and what experience have they had in doing so? Kendrick’s proposal said they will do underground parking unless it is cost prohibitive. What if it is cost prohibitive? The only way Hartzell could support Kendrick’s proposal is if the commercial funds the affordable housing.
Mackin would recommend we reject all of the proposals and start over. The RFP is not specific and that’s why we have the disparity in proposals. We need to know where want to be and we clearly have two options. He would recommend to the Council that Kendrick would have to commit to either Option A or Option B. Disregard the ACLT because they were presenters of the proposal but they may or may not be the manager. If ACLT cannot get HOME funds, Kendrick would go with another non-profit. He believes there is undue influence being placed by a party to one of the proposals that may or may not be in the final selection. The LDC proposal eliminates the community parking. Sandler’s proposal includes a buy-back at the end. The second option is Housing Authority of Jackson County.
Mackin reminded the Commission that they took the RFP to the Council. He thinks it was their expectation that they would get a purely housing response. Yet, they got a mixed use response and elements of it are exciting, but he doesn’t know if it is supportable by the Council.
Weisler thought consensus had been reached at the previous meeting that they were for mixed use and no one wants to do a giveaway. Do we go back to Kendrick saying we will only select them if they commit to parking and reduce the rents before they issue another RFP? She doesn’t want to delay and if there is a way to move forward without reissuing the RFP that would be in the best interest of the City. The 40 years could be negotiated.
Hardesty wondered if the rest of the Commissioners are committed to mixed use. She wasn’t at the last meeting when consensus was reached. Street felt that in looking at the two designs, mixed use is much more attractive. Goldman said the proposals on the table have already been designed by architects. How much influence does the City want to have in putting together a project?
Mackin said the option of moving forward without a lot of reservations involves the Housing Authority proposal going forward. But because the mixed use proposal is so exciting in concept, he is in favor of delaying the process with another RFP. He would rather see two viable proposals that address Hartzell’s concerns about giving away public land for private benefit. He is less inclined to control what the return would be on the commercial. He would rather see two proposals with commercial components and choose on the merits of the two proposals.
Weisler asked about a timeline if a new RFP is issued. Goldman said the RFP was issued February 2004. Adding a couple of months for remaking the RFP, it would probably take around a year before a selection could be
Mackin asked Hartzell if we can get some consensus back from the Council on June 7th for a pure housing proposal versus a pure mixed use proposal. Hartzell responded that it would depend on the work Staff does or the work done here. She did not feel the RFP was ready to begin with. The Commission could get some indication if Staff prefaced the whole discussion to look at what it is we are really talking about – parking and management. She doesn’t want to go through it again unless we have an educated Council that is really looking at the questions and not deferring to Staff to put something out that’s quick and dirty. She thinks it is worth delaying because the group went into this saying we can’t have the parking garage, then let’s do an experiment on a small space and see how it goes. We have blundered through this experience knowing we haven’t done what we thought we wanted to do, and then we aren’t that much further ahead.
Weisler is frustrated at being a year down the road and a selection hasn’t been made. She would like to try negotiations to see how much Kendrick would be willing to negotiate those profits back into housing. We might have something as opposed to tabling or starting the process over again. So much energy has gone into it. Let’s see what we can repair from here.
Goldman said the with regard to how the commercial component benefits the housing is by providing the operating expense for the maintenance of the facility and set a dollar amount per unit. Shavey in her memo, suggested $4000 per unit as a HUD average.
Hartzell asked why the commercial costs have not been calculated. Goldman said the memo points out that the profit cannot be determined. That would be dependent on the type of business. The average lease amount downtown could be determined. How much is profit is a different question. LDC Design Group assumed the commercial component would cost about $4 million for construction. Much of the calculation is speculation and that is why Staff has not provided those figures. We could ask the applicant to provide a Performa on the commercial space.
Street suggested if we want the mixed use that we reissue the RFP so there is competition. We don’t know what that competition might bring because people did not know the possibilities of mixed use the first time around. If we don’t want to open up a new RFP, he believes we should go with the Housing Authority.
Goldman warned there is a fine line in determining what loses the incentive for a private developer to participate in a process. Staff is not sure we would receive any more proposals and reissuing the RFP might not generate the proposals that the Commission is anticipating. We received two proposals with commercial components, and the development community that received the RFP had the opportunity to call and question if commercial was acceptable. Two felt it was acceptable without a clarification, so he is not sure we’d receive many more proposals.
Peck said there are now the following points of negotiation: Management, profit of retail, amount of rent, median income at 60 percent and below. Is this still staying within the RFP? It’s a legal question.
Hardesty liked Street’s suggestion except if we go with the Housing Authority, we should stipulate they provide an acceptable design. Goldman said that would ultimately go before the Historic Commission and the Planning Commission to determine compliance with the Site Design and Use Standards as well as the Downtown and Historic Design Standards.
Mackin said if they take the Kendrick proposal as it stands, the applicant has tried to balance a free standing housing facility offset by a private commercial investment. The commercial investment is intended to give an adequate return for that investor to make that commitment. If the Commission now wants to negotiate with that applicant (lower rents, specific proposal on management) in effect they are reducing the viability of the housing proposal to be free-standing. The cash flow is being eroded. It is going to have to be subsidized by the commercial. The suggestion is to negotiate with Kendrick as much of the housing element as possible knowing full well it is coming from the commercial until you get to the point where the applicant says that’s all he is going to give. At the same time, the investor is taking all the risk on the commercial side. There is no assured return, no grants involved, vacancies, economic downturns, and competition that is all part If the Commission thinks there are elements of the housing proposal in Kendrick that don’t meet the criteria and it needs fine-tuning, then let’s try having Staff negotiate and make the housing element 60 percent of median. It is a matter of just how far will the applicant go. The bottom line is there is no standard. He believes all the applicants are good faith applicants. Is there a consensus to give that a try and is Staff willing to give it a try? Ultimately, Staff will stand in front of the Council to answer if this is a fair return on the City’s asset.
Mackin/Weisler m/s to defer a final recommendation until the next meeting. Between now and the next meeting, Staff will attempt to negotiate with Kendrick in hopes they will come back to the next meeting with a negotiated proposal that we can support and the Commission can move forward to the Council. At the same time, from now until then, keep the Housing Authority of
Goldman listed the items for negotiation:
§ Rent levels
§ Operating expenses
§ Support of the non-profit – maintaining the independent nature of the housing component from the commercial and the proceeds from the lease. It seems what would be negotiated would be the front end purchase price of the affordable housing units to ensure there is an adequate income stream from the rentals to provide the necessary money for operating expenses, support of the non-profit and target the lower income levels. Is that requesting negotiation of lowering the income levels that are provided? Staff is recommending they provide a mix of income levels.
§ Is the parking Option A or Option B?
McLaughlin said he’ll have to check with Legal on how far we can negotiate without discussing it with other applicants.
Hardesty will vote “no” because this feels too complicated. The Housing Authority meets the criteria and if they change their design it should be fine.
Street does not feel it would be meaningful at this point. Kendrick needs to make their proposal knowing they are competing against other firms who know they have the option of designing commercial.
Peck is still not sure if the Council is supportive of the commercial aspect.
Weisler urged everyone to give it one more month to see if something can be carved out rather than throwing it all out. We might not even have as good a proposal next time.
Hartzell will vote against the motion. The Housing Authority is showing 6800 square feet of housing versus the Kendrick proposal at 6240 square feet.
Voice Vote: Mackin and Weisler voted in favor, Hardesty, Street and Hartzell voted against, Peck abstained and Voisin recused herself. The motion failed.
Street/Hardesty m/s to recommend to the Council that if they choose to have a mixed use development on this land that we open up a new RFP. If they do not choose mixed use, the Commission would recommend the Housing Authority of
Hardesty noted that this will leave the decision up to the Council without a recommendation from the Housing Commission.
Mackin interpreted Street’s motion as a recommendation that the Housing Authority goes forward as a recommendation for housing only if that’s the Council’s preference and the Kendrick’s proposal is sent forward as an alternative.
Voice Vote: Hartzell, Street, Hardesty voted in favor, Peck, Mackin and Weisler voted against. Voisin recused herself. The motion failed.
Mackin favored going back and negotiating with Kendrick. Take a month. Mackin/Weisler m/s that we reschedule this issue for the next meeting of the Housing Commission in order to make a recommendation of one or more proposals to the Council. In the meantime, we ask Staff to attempt to negotiate with Kendrick to see if they can address some of the concerns that have been expressed by Staff and the Housing Commission.
Weisler offered a friendly amendment. Instead of it coming back to us in a month, send it to the Council with a recommendation that if they like mixed use, they then direct the negotiation with the items the Housing Commission has identified. She dropped her amendment for lack of a second.
Voice Vote: The motion carried with Peck, Mackin, Weisler, Hardesty voting in favor, Hartzell and Street voting against, and Voisin recusing herself.
Housing Commission Meeting Time/Place Change Discussion
The Commission decided to change their meeting day to the third Monday of every month from 6:30 to 8:30 p.m. in the Siskiyou Room of the Community Development and Engineering Services building. However, the June meeting will be held on June 13, 2005 from 6:30 to 8:30 p.m. in the Siskiyou Room. Staff will send out a revised calendar.
ADJOURNMENT – The meeting was adjourned at 6:55 p.m.