CITY OF POMONA
COUNCIL REPORT
February 5, 2024
To: Honorable Mayor and Members of the City Council
From: Anita D. Gutierrez, Acting City Manager
Submitted By: Kirk Pelser, Economic Development Director SUBJECT: APPROVING A FIRST AMENDMENT TO AN AFFORDABLE HOUSING DISPOSITION & DEVELOPMENT AGREEMENT BETWEEN THE CITY OF POMONA AND NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA ______________________________________________________________________________ RECOMMENDATION:
It is recommended that the City Council take the following actions:
Adopt the following Resolutions No. 2024-16 (Attachment No. 1) and 2024-19 (Attachment No. 2):
RESOLUTION NO. 2024-16 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF POMONA, CALIFORNIA, APPROVING A FIRST AMENDMENT TO AN AFFORDABLE HOUSING DISPOSITION AND DEVELOPMENT AGREEMENT BETWEEN THE CITY OF POMONA AND NATIONAL COMMUNITY RENAISSANCE OF CALIFORNIA FOR THE DEVELOPMENT OF CERTAIN REAL PROPERTY LOCATED AT 501 EAST MISSION BOULEVARD (APN: 8335-014-907, 910, 915, 916, 919, 920 & 921) PURSUANT TO GOVERNMENT CODE SECTION 37364, AND FINDING THE SAME CATEGORICALLY EXEMPT FROM CEQA RESOLUTION NO. 2024-19 - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF POMONA, CALIFORNIA, APPROPRIATING $1,500,000 OF AVAILABLE SERIES AQ HOUSING BOND PROCEEDS TO PROJECT NO. 247-6201-52966-72067, AN AFFORDABLE HOUISNG PROJECT BY NATIONAL COMMUNITY RENAISANCE OF CALIFORNIA Authorize the City Manager to execute the First Amendment to an Affordable Housing Disposition & Development Agreement (Exhibit A to Attachment No. 1) (The “First Amendment”) and all necessary associated documents, in substantially the form submitted herein.
EXECUTIVE SUMMARY:
The City of Pomona is the fee owner of approximately 1.45 acres of real property located at 501 East Mission Boulevard at the northeast corner of East Mission Boulevard and South Palomares Park Street (the “Site”). In order to provide for the development of the Site as affordable housing, on June 6, 2022, the City approved entering into an Affordable Housing Disposition & Development Agreement (the “Agreement”) with National Community Renaissance of California, which will allow the City to sell the Site to National Community Renaissance of California, (the “Developer”) for development of a 75 unit affordable housing project.
In order to be financially viable, a project must have an allocation of Low-Income Housing Tax Credits from the California Tax Credit Allocation Committee (TCAC). These tax credits are awarded twice each year in a highly competitive process. Successful applications rely on significant local financial contributions from the host jurisdiction. The purpose of the proposed First Amendment is to enhance the project’s likelihood of successfully securing the needed 9% tax credits in the February 2024 TCAC application process.
FISCAL IMPACT:
The Agreement was approved in June 2022 (see Attachment No. 3) and provided for financial assistance to the project as follows:
Sale of City-owned land with a Land Note of $4.5 million An ARPA Grant of $550,000
A loan of approximately $775,000 for the project’s Development Impact Fees (DIF) The purpose of the proposed First Amendment is twofold. First, based on a current land value appraisal, the land loan amount will be increased from $4,500,000 to $4,730,000 with the following loan terms:
A 55-year loan term from the date on which the Developer’s construction financing converts to a permanent loan
3.00% simple interest rate
Annual payments of 50% of residual receipts (prorated between the other soft financing sources) Any outstanding balances will be due and payable at the end of the 55-year term Second, an additional loan amount of $1,500,000 will be added to the previously approved $775,000 DIF Loan with the same terms as previously approved, as noted below:
A 55-year loan term from the date on which the Developer’s construction financing converts to a permanent loan
3.00% simple interest rate
The Developer may make annual payments towards the principal loan amount based on residual receipts, as determined by the Developer, which are generated by the project The source of the additional $1,500,000 loan amount is available bond proceeds from Series AQ Housing Bond that were recently paid back to the City from the prior sale in 2006 of 1731 and 1752 W. Holt Avenue (Pomona Housing Partners Project – Tivoli Gardens), ending a loan agreement with Shield of Faith. An appropriation of $1,500,000 is needed in the Series AQ Housing Fund (account #247-6201-52966-72067).
PRIOR COUNCIL ACTIONS:
On June 6, 2022, the Council approved an Affordable Housing Disposition and Development Agreement with the Developer. A copy of that approving agenda staff report is found in Attachment No. 2 On December 7, 2020, the Council approved an Exclusive Negotiation Agreement (“ENA”) with the Developer. The ENA was executed on February 1, 2021.
BACKGROUND & DISCUSSION:
The Property was transferred to the City pursuant to Health and Safety Code (“HSC”) Section 34176, when the City of Pomona (“City”), as the entity that authorized the creation of the dissolved Redevelopment Agency of the City of Pomona (“RDA”), elected not to retain the housing assets and functions previously performed by the RDA, and instead elected to transfer all rights, powers, assets, liabilities, duties and obligations associated with the housing activities of the RDA, excluding any amounts on deposit in the Low and Moderate Income Housing Fund, to the City, as provided in Resolution No. 2012-16 adopted on January 30, 2012.
The purpose of the June 2022 Agreement and the proposed First Amendment is to implement the City’s objective of improving and increasing the supply of affordable housing in the City of Pomona.
A comprehensive summary of the approved Project, its scope of development, and the terms of the June 2022 Agreement can be found in Attachment No. 3. In connection with the approval of the June Agreement, the City declared the Property as exempt surplus land. The only modifications being made to the previously approved Agreement are described in the First Amendment – Attachment No. 1.
Environmental Review
The City Council of the City hereby finds and determines that the Agreement, as amended by this First Amendment, involves the sale of surplus government property, and the sale of surplus government property is exempt from environmental review under the California Environmental Quality Action pursuant to a Class 12 categorical exemption. Specifically, the government property is not located in an area of statewide, regional or area wide concern as defined in State CEQA Guidelines, section 15206(b)(4). The Property is not located in any of the following: the Lake Tahoe Basin, the Santa Monica Mountains Zone, the California Coastal Zone, an area within ¼ mile of a wild and scenic river, the Sacramento-San Joaquin Delta, the Suisun Marsh, or the jurisdiction of the San Francisco Bay Conservation and Development Commission. Therefore, the City Council’s adoption of this Resolution and approval of the Agreement is exempt from CEQA review. The City Council of the City hereby further finds and determines that none of the exceptions to the categorical exemptions in State CEQA Guidelines, section 15300.2 applies. Specifically, the proposed project would not result in a cumulative impact of successive projects of this same type in the same place. The City can only sell this Property once. Moreover, the City’s disposal of this surplus land does not involve a reasonable possibility that the sale will have a significant effect on the environment due to unusual circumstances. There is nothing unusual about the disposal of surplus land that would lead to an environmental effect. The Property is not located within or adjacent to a highway officially designated as a state scenic highway. Thus, the sale of the Property would not result in damage to scenic resources within such a designated highway. The Property is not on the Cortese list compiled pursuant to Government Code Section 65962.5. The Property is not a historical resource, and thus, the sale of it would not impact such a resource. Thus, none of the exceptions to the categorical exemptions apply. The First Amendment is exempt from environmental review, and no further environmental documentation is required by the California Environmental Quality Act.
COUNCIL PRIORITIES & GOALS:
City Council Priority 2: Economic Development – Goal J: Encourage the development and maintenance of quality housing opportunities for all.
Prepared by:
________________________
Kirk Pelser
Economic Development Director
ATTACHMENT(S):
Attachment No. 1 - Resolution No. 2024-16 with Exhibit A – First Amendment to Affordable Housing Disposition & Development Agreement between the City of Pomona and National Community Renaissance of California Attachment No. 2 - Resolution No. 2024-19
Attachment No. 3 – June 6, 2022 Agenda Staff Report Approving the Agreement Approval of First Amendment to Agreement with National Community Renaissance of California and Appropriation of Funds to the Project