ASHLAND HOUSING COMMISSION

MINUTES

JUNE 19, 2006

CALL TO ORDER – Chair Faye Weisler called the meeting to order at 6:35 p.m. at the Community Development and Engineering Services Building, 51 Winburn Way, Ashland, OR.

APPROVAL OF MINUTES – Henderson/Street m/s to approve the minutes of the May 15, 2006 meeting.  Voice Vote:  Approved.

PUBLIC FORUM

RON DEMELE, Rogue Valley Community Development Corporation (RVCDC), commented on the issue of Systems Developments Charges (SDC’s), an item on the Council’s June 20^th agenda (Resolution amending Resolution 2005-46).  Demele had a concern with 3.1.c. - “not to exceed 30 percent of an individual’s monthly income.”  Rural Development (RD) allows 33 percent and he would like the City to be consistent with the federal program.  Demele questioned 3.1.d., using Oregon Bond Loan.  RD can make a more favorable loan to a buyer in our area other than Oregon Bond.  Goldman said the Oregon Bond rate index is a loan that anyone could apply for from the 80 to 120 percent income levels.  RD is targeted to those 80 percent and below.  Demele questioned 1.4.  Goldman said a change in the resolution was to not allow a voluntary buyout of the SDC program.  An owner would have to sell their unit to a household that qualified at the original low income level. 

Hartzell arrived at 6:50 p.m.

The Commission discussed whether or not to move this item to the Council or pull it from the agenda and discuss it at length at a future meeting.  Mackin/Hardesty m/s, in response to Demele’s comments, that the Commission recommend Demele go to the Council if he wants to delay this agenda item and let the Council decide.  The partners will have the opportunity to speak at the Council meeting.  Voice Vote:  Approved.

OTHER BUSINESS FROM HOUSING COMMISSION MEMBERS

Housing Project Task Force – Hartzell would like to discuss setting up either an ad hoc or on-going housing project task force to meet regularly or when there are projects that run into glitches to help keep projects moving forward.  The Commission agreed to put this item on next month’s agenda.

Ballot Measure regarding RETF – Street would like to, as a Commission, once again endorse the concept of the voters approving any kind of transfer tax.  Though all the Commissioners are in support of the concept, they decided not to vote on it again. 

NEW BUSINESS

PREAPPLICATION REVIEWS

RVCDC Park Street Project – Ron Demele said they are proposing two three-bedroom units (1100 square feet) and four two-bedroom units (980 square feet) that will sell between $124,000 and $148,000 on Siskiyou and Park.  The buyers are owner/builders and most are single parents.  This is another Self-Help program.  Everything is very similar to the project on Siskiyou and Faith currently under construction.  The City has an issue with the owners as builders.  Demele felt short-changed by the City’s pre-application process.  Weisler asked Demele to submit his suggestions in writing so the Commission can use his comments to see how the Housing Commission should better review pre-applications.

Park Street Condo Conversion

Mark Knox, Urban Development Services, LLC is representing Bob and Lynn Mayers and Steve Lawrence regarding their apartment conversion at 719 Park Street to “for purchase” condominiums.  He stated that the project consists of 30 two-bedroom, two bath units within four buildings (all first and second floor units).  The conversion is requested under 18.28.030.I where it states 25 percent of the units must be affordable.  The eight affordable units are proposed to be located in Building A on the north side of the building.  There will be no changes to the buildings.  The applicants are doing the conversion to make financing easier.  Interest rates are lower and loans are more attainable when financing individual units rather than one large project.  They are targeting 80 percent median income.  Knox understood that it is more difficult for buyers to obtain financing if the affordable housing is scattered throughout the project. 

Mary Hart, ACCESS, said ACCESS prefers “for sale” units that are scattered throughout a project, but “for rent” units are best in one building.  However, trying to get funding to buy eight existing units is not that easy. 

The Commissioners noted that the current rents ($700/month) on the apartment units are lower than the City’s rental rates at 80 percent ($805/month). They also noted the city stands to lose between 22 and 30 affordable housing units.  

Hardesty/Street m/s that the Housing Commission makes the following recommendations:

1.     Either these units be for sale at the 80 percent level or they be for rent at 60 percent or below, regardless of what the rules are currently, in the spirit of affordability.

2.  That the applicants try to disperse the affordable units throughout the condominium plan. 

Peck amended the motion to add that if they are left at 80 percent and left as rental units, the Housing Commission does not back this as an affordable project even though the applicants are following the existing rules.  Hardesty accepted the amendment.  Street seconded.  Voice Vote:  Unanimous.

Goldman announced there will be a Joint Study Session with the Planning Commission and Housing Commission, June 27, 2006 a 7:00 p.m. at the Council Chambers to discuss condominium conversions. 

LITHIA LOT PROPOSAL

Mary Hart, Access, Inc. And Bob Kendrick, Kendrick Enterprises

Goldman explained the City has been meeting with Kendrick for many months since the time Kendrick Enterprises was selected to do the Lithia Lot project, coming to a greater understanding of how the project is financed.  Instead of ten units, they are proposing 13 units, with each unit less than 500 square feet with three units to be market rate for sale.  The proceeds from the sale of the three units will be used to help close the funding gap that has been identified for the affordable housing component. 

Kendrick said this project is market and subsidized driven.  He offered several spreadsheets showing the different components of the project and the cost breakdown.  The cost for the affordable units comes out close to $2 million.  Kendrick’s contribution is close to $600,000.  He believes this is a great opportunity to show how we can deliver a market looking quality product to an affordable market.  It has always been his intent to not take the affordable units as an owner but to turn it over to a non-profit.  The units will be affordable forever.  He believes his contribution exceeds the value of the land.  Goldman said the City had an opinion evaluation done and the land was valued at $212,000.  If it was market rate with no restrictions on it, the value would be considerably higher.

The Commissioners who were not involved in the on-going discussions feel this is a significantly different proposal than what was approved in the beginning.  Kendrick explained the smaller the unit, the more subsidy you get.  Peck noted that when Ashland Community Land Trust (ACLT) put this proposal together, they offered a package with different funding sources.  Hart (ACCESS) said when they became involved they looked at funding resources from the State and what would fit the state’s criteria.  The per square foot cost the State was willing to fund was lower than what they had in the budget.  Switching to ten studio units reduces the cost per square foot per unit adding in the other components, making it more acceptable to the state.  They can carry a larger debt because they have more income.  She cautioned, the longer this goes on, the higher the interest rate goes, and the less amount of debt they can carry.  It’s a moving target.

Goldman said it’s the City Attorney’s legal opinion that the project is in substantial conformance with what went before the Council previously because it is still providing underground parking, a commercial space, and ten units.  The City Attorney did not feel adding the three market rate units created a substantial shift from the original proposal.  The unit size reduction is a significant change.

Hart said if they are awarded funding from Oregon Affordable Housing Tax Credit, the rents could potentially be from $310 to $420/month for renters income ranges from 38 percent to 50 percent of median.  Without the tax credit, the rents would be $422/month.

Benjamin believes this project concept is far superior to the first one.  He always questioned whether it was appropriate for families with kids to live downtown.  This can meet the definition of affordable workforce housing.  Tenants will probably work downtown and may not own cars.  He is against the three condominiums for tourist accommodations. 

Kendrick said this project will put more bodies on the street in the downtown.  People living downtown will be vested in the community.  The tourist accommodations were added to cover his risk.  If the units sell or he can remove the accommodations, he will do it.  He wants to make sure the $1 million is there to pay the loan down.  The goal is to pay down the shortfall.

Peck explained to the other Commissioners how the project got to where it is today.  The state funding was a large obstacle and she appreciated Hart putting out “real” funding sources.  In order to get the needed funding, they had to reduce the unit sizes.  The smaller units still give us affordable units in the heart of downtown.  If we want to develop parking lots (requiring BOLI wages), in order to fund them, we’ll need many sources of funding such as the retail space and the market rate units in order to get affordable housing. The City Attorney calculated there will not be a profit margin on this project.  Henderson added it’s because Kendrick is putting up $600,000 of his own money.   

Hartzell is reticent to give up the potential of the Lithia Lot to market rate and commercial. 

Kendrick stated this is a great example of a project of non-profit, for-profit and government working together.  This is a pilot project.  Let’s learn what happens when we do something on this lot.

Hartzell left the meeting at 8:45 p.m.

Lisa Burn lives in a studio at Parkside Court, a project owned by ACLT.  She spoke to her positive experience of living in affordable housing.  She has a low utility bill, no car, uses public transportation, taxis and carpools,  no noise because of a good design, no roommate, no infestation of pests, no absent landlord, no yard work, safe, economical, efficient and more.  Her home is 374 square feet.  She has an office space, sleeping area, kitchen, dining area, laundry room downstairs, peace, comfort, stability and a tight-knit community.  This type of rental unit is greatly needed.

Goldman said Kendrick will be taking their proposal to the City Council, potentially on July 18^th. 

Weisler expressed her frustration with the process.  Hardesty believes the proposal has changed so much without giving the original proposers a fair chance.  She would recommend putting out another RFP or in some way acknowledging that the other proposers were at a disadvantage.

Peck argued that as a pilot project, this is a way of gaining ten affordable units in the heart of downtown and to use this experience as a learning tool for developing other public property. 

Henderson said the Housing Authority of Jackson County would have been a battle.  She believes there would have been considerable opposition from the downtown neighbors regarding the design.  That is why Kendrick was chosen.  This is the project we have and it can and will go.  Are we going to stop it by putting it back for an RFP?

Mackin agreed with everything that was said.  The project was misrepresented (not intentionally) in the beginning.  Now we are back to where we should have been in the beginning.  We were first told we couldn’t negotiate with Kendrick by the City’s Legal Department.  After it went to the Council, Legal changed their mind and said negotiations were allowed.  The proposal is different than how it was presented in the beginning.  He believes it is better than where we were.  We have learned a lot.  The RFP could have been more specific but in the end, he’s not sure we’d end up in any different place than where we are right now. 

Weisler agreed that the process was flawed, but she does not want to block a project so she will be abstaining from a vote.

Benjamin/Peck m/s that the Housing Commission approves of the workforce affordable housing project (this project) using air rights over downtown City owned property.

Street will vote for it.  He feels we need to move forward in spite of the mistakes we’ve made and even though the project has changed.

Voice Vote:  Street, Henderson, Mackin, Peck and Benjamin voted “yes,” Hardesty voted “no” and Weisler abstained. 

Hart suggested the next time the Commission does this, they should first ask for a Request for Qualifications.  This allows for more participants and partnering.

Mackin left the meeting at 9:10 p.m.

Liaison Reports – No reports.

COMMISSION COORDINATION

There will be a Joint Planning and Housing Commission meeting on June 27, 2006 at 7:00 p.m. at the Council Chambers to discuss condominium conversion. 

Goldman will be presenting the SDC resolution at the June 20, 2006, 7:00 p.m. meeting at the Council Chambers. Commission members are welcome to attend.

Potentially, the Kendrick proposal could go to the Council on July 18, 2006 to bring forward the Lithia Lot proposal.

JULY 17, 2006 MEETING AGENDA ITEMS

• Task Force
• Pre-Application Review Process

ADJOURNMENT – The meeting was adjourned at 9:15 p.m.

Respectfully submitted by,

Susan Yates, Executive Secretary