REPLACEMENT HOUSING PLAN
VILLA SERENA II
CITY OF SAN MARCOS
LOCATED IN THE RICHMAR NEIGHBORHOOD AND IN THE
FORMER REDEVELOPMENT PROJECT AREA I
April 2019
UPDATED December 2021
Prepared By:
Affordable Housing Services Information, LLC
3830 Valley Centre Drive #705-641
San Diego, CA 92130
Prepared For:
City of San Marcos
Development Services Department
1 Civic Center Drive
San Marcos, CA 92069
i
TABLE OF CONTENTS
I. INTRODUCTION 1
II. EXECUTIVE SUMMARY 1
III. PROJECT DESCRIPTION 2
IV. LOCATION 2
V. FINANCING 3
VI. INAPPLICABILITY OF ARTICLE XXXIV 4
VII. RESIDENTIAL UNITS TO BE REMOVED AND REPLACED 5
VIII. TIMETABLE 7
APPENDIX A – GIS Exhibit 8
APPENDIX B - Timetable 10
1 I. INTRODUCTION
This Replacement Housing Plan for the Villa Serena II Project in the City of San Marcos has been developed pursuant to Health and Safety Code 33413.5.
A continued goal of the City of San Marcos is the revitalization of the Richmar Neighborhood. The Villa Serena II project is a key component toward the initiative to create a family centered, safe environment in what was once an area of blight and underdevelopment in the City of San Marcos. Additionally, providing affordable housing is a commitment the City of San Marcos continues to foster through alliances with affordable housing developers that have proven themselves to be capable of providing affordable housing developments acceptable to the public, meeting sustainability standards and serving very low, low and moderate income families.
The current Villa Serena project, originally an acquisition/rehabilitation family project by National CORE (formerly SoCal Housing) in the year 1997, combined two separate market-rate entities – the Lido and Imperial Apartments. The current Villa Serena Project is a mix of 1, 2, and 3-bedroom units that serves 136 households.
II. EXECUTIVE SUMMARY
All demolition of affordable units and subsequent replacement of those units will be done on site within the Project boundaries. The project will consist of two phases. In the first phase, existing units lying to the west of Marcos Street will be demolished and replaced with 85 units along with the creation of a new multi-story parking garage. The second phase will witness demolition of the units to the east of Marcos Street, to be replaced with 63 units. A total of 148 units will replace the existing 136 unit complex. A map depicting the project site is provided in Appendix A.
2 III. PROJECT DESCRIPTION
The Villa Serena II affordable housing project will demolish and replace, within the same project footprint, twelve buildings that previously underwent moderate rehabilitation. The Villa Serena I project was placed in service in 1998. Two of the original buildings were built in 1965, and the remaining buildings date back to 1972. The rehabilitated development, now passing 20 years of operation as an affordable housing project, is beyond the original projected service life of the buildings. The developer, National Community Renaissance, will be applying for additional funding to demolish and replace the structures. Villa Serena II is one of the few remaining traditional “redevelopment” projects in the previously distressed, blighted and underdeveloped Richmar neighborhood. The demolition and construction of a new multi-family residential project will serve to further enhance the continuing revitalization of the Richmar neighborhood.
The project also serves to support the goals of the City’s General Plan to preserve the affordable housing stock and using Smart growth principles, locate affordable housing in areas that are within walking distance to parks, schools, commercial retail, and transit facilities.
The new project will consist of 148 units. The development will occur in two phases. Of the 148 units total units developed, two will be unrestricted manager units, and the rest of the units shall be restricted at or below sixty percent of the area median income. Phase I will consist of 85 units with one unrestricted manager unit, and Phase II will consist of 63 units with one unrestricted manager unit.
IV. LOCATION
The Property is located at 339 and 340 Marcos Street in the City of San Marcos and is
3 located within the boundaries of what was previously designated as the City of San Marcos Redevelopment Project Area I. Appendix A contains a map of the project and its surroundings.
The property is more specifically described as: Parcels 1, 3, 5, 6, 7, & 8, Portion of Lots 1 & 2, Block 50 of Rancheros Los Vallecitos de San Marcos, in the City of San Marcos, County of San Diego, State of California, according to Map No. 806 filed in the County Recorders of San Diego County, December 21, 1895. Assessor’s Parcel No.: 220-100-65-00, 220-100-69-00, 220-112-09-00 & 220-112- 10-00 (City of San Marcos, 2016a).
V. FINANCING
At present, the project cost for Phase I is estimated to be $44,635,416 and the project cost for Phase II is estimated to be $38,623,389. Therefore, the total project cost is estimated to be approximately $83,258,805.
The City of San Marcos in its capacity as the Successor Housing Agency (SHA) to the former Redevelopment Agency (RDA) to the City of San Marcos elected to retain the housing assets of and select functions of the RDA.
To commence funding the construction of Villa Serena II (Phase I), the developer applied for and was awarded in June 2020, 9% low income housing tax credits. Multiple funding sources are integrated into the Developer’s funding plan for Phase I. They include, but are not limited to, State of California Multifamily Housing Program (MHP), County of San Diego Innovative Housing Trust Fund, Mental Health Services Act (MHSA), Affordable Housing Program grants from the Federal Home Loan Bank, National CORE equity and the roll-over of a portion of the existing debt from the legacy RDA loan extended to the original Villa Serena. Following a successful application by Phase I, Villa Serena II (Phase II) will likewise apply for low housing tax credits as soon as feasible. Multiple funding sources are integrated into the Developer’s funding plan for Phase II. In addition to the low income housing tax credits, other anticipated
4 funding sources are very similar to those for Phase I, including a portion of the roll-over of existing debt from the legacy RDA loan extended to the original Villa Serena. Permanent financing will also include a conventional bank loan.
VI. INAPPLICABILITY OF ARTICLE XXXIV
Article XXXIV of the California Constitution states that “No low rent housing project shall hereafter be developed, constructed, or acquired in any manner by any state public body until, a majority of the qualified electors of the city, town or county, as the case may be, in which it is proposed to develop, construct, or acquire the same, voting upon such issue, approve such project by voting in favor thereof at an election to be held for that purpose, or at any general or special election.”
To clarify the requirements of Article XXXIV, the Legislature enacted the Public Housing Election Implementation Law (California Health and Safety Code Sections 37000- 37002). The Villa Serena II Project is excluded from the definition of “low-rent housing project” as defined in Section 1 of Article XXXIV of the California Constitution, and therefore does not trigger the voting requirement, because it meets the criteria defined in Health and Safety Code Section 37001(f), that is, the Villa Serena II project consists of the replacement of dwelling units of two previously existing low-rent housing projects.
Additionally, the project may also be excluded from the definition of “low-rent housing project” pursuant to Health and Safety Code section 37001(g), which excludes developments consisting of “acquisition, rehabilitation, reconstruction, improvement, or any combination thereof, of a rental housing development which, prior to the date of the transaction to acquire, rehabilitate, reconstruct, improve, or any combination thereof, was subject to a contract for federal or state public body assistance for the purpose of providing affordable housing for low-
5 income households and maintains, or enters into, a contract for federal or state public body assistance for the purpose of providing affordable housing for low-income households.” As noted above, this project involves the acquisition, demolition and reconstruction of existing affordable housing units which received public assistance and were subject to regulatory agreements relating to maintenance of affordable housing, and the project will apply for low income housing tax credits for the purpose of providing and maintaining affordable housing for low income households.
Accordingly, based on the foregoing, the proposed replacement housing is excluded by Health and Safety Code section 37001 from the definition of “low-rent housing” and therefore does not require the approval of voters pursuant to Article XXXIV of the California Constitution.
VII. RESIDENTIAL UNITS TO BE REMOVED AND REPLACED
As the City of San Marcos currently monitors the existing 136-unit Villa Serena complex, the unit bedroom size and restrictions by unit were readily available for analysis.
An analysis of the unit composition revealed the following data:
VL L M Total
Units to Be Destroyed 82 54 136
Bedrooms to Be Destroyed 143 95 238
The Villa Serena II Project will replace 100% of the units/bedrooms destroyed. The plan increases the current development unit/bedroom counts with 10 additional units and 69 additional bedrooms. The following is a table showing the unit composition of the proposed project for Phase I and Phase II:
6 VL L M Total
Units to Be Built 93 53 146
Bedrooms to Be Built 188 119 307
These numbers do not include the two 3-bedroom unrestricted manager units that bring the totals to the 148 unit development (i.e. 146 plus 2 manager units) consisting of 313 bedrooms (i.e. 307 plus 6 bedrooms, 2 3-bedroom units).
Phase I will consist of the following new construction unit/bedroom counts by income category:
VL L M Total
Units to Be Built 52 32 84
Bedrooms to Be Built 106 69 175
Phase II will consist of the following new construction unit/bedroom counts by income category:
VL L M Total
Units to Be Built 41 21 62
Bedrooms to Be Built 82 50 132
These numbers assume that the project is awarded 9% low income housing tax credits. If this is not the case, the distribution may change. However, all units will be at or below 60%AMI.
The project developers shall contract with a company expert in relocation to create and implement a relocation plan that best serves the tenants currently occupying units that will be demolished.
7 VIII. TIMETABLE
For the Project’s timetable, please refer to Appendix B.
8 APPENDIX A – GIS Exhibit
Henson Heights Dr
CanopyDr
Canopy DrLiberty Dr
Westlake Dr
Richmar Ave
Marcos St
Private Rd
Allison Ln
Bush Ln
Alley
LibertyDr
Barnaville Ln
FitzpatrickRd
Fitzpatrick
Rd
Autumn Dr
W Mission Rd
E v e r y e f f o r t h a s b e e n m a d e t o a s s u r e t h e a c c u r a c y o f t h e m a p s a n d d a t a p r o v i d e d ; h o w e v e r , s o m e i n f o r m a t i o n m a y n o t b e a c c u r a t e o r c u r r e n t . T h e C i t y o f S a n M a r c o s a s s u m e s n o r e s p o n s i b i l i t y a r i s i n g f r o m u s e o f t h i s i n f o r m a t i o n a n d i n c o r p o r a t e s b y r e f e r e n c e i t s d i s c l a i m e r r e g a r d i n g t h e l a c k o f a n y w a r r a n t i e s , w h e t h e r e x p r e s s e d o r i m p l i e d , c o n c e r n i n g t h e u s e o f t h e s a m e . F o r a d d i t i o n a l i n f o r m a t i o n s e e t h e D i s c l a i m e r o n t h e C i t y s w e b s i t e .
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W M i s s i o n R d
S R a n c h o S a n t a F e R d
N
T w i n
O a k s V a l l e y R d
F u l t o n R d
L a s F l o r e s D r R a n c h e r o s D r B o r d e n R d
S m i l a x R d
S a n E l i j o R d
G r a n d A v e
B e n n e t t A v e W
o o d w a r d
S t
E O l i v e S t
S S a n t a F e A v e
E M i s s i o n R d
W B o r d e n
R d
A u t u m n D r
C r a v e n R d
M u l b e r r y D r
Current and proposed redeveloped Villa Serena
project site
Villa Serena parcels owned by National CORE
Parcels
X : \ P r o j e c t s \ R i c h m a r \ M a p s \ V i l l a S e r e n a . m x d 8 / 4 / 2 0 1 4 2 : 0 5 : 2 5 P M Site of Villa Serena affordable
housing community owned by
National CORE
10 APPENDIX B - Timetable
11 TIMETABLE
Date Event
10 Jan 2012 City Council appoints itself as the Successor Housing Agency (SHA) to the former San Marcos RDA with Resolution No. 2012-7607
1 Feb 2012 RDA dissolved by the State of California
9 Sep 2014 SHA authorized Exclusive Negotiating Agreement and $750,000 predevelopment loan with Resolution No. SHA 2014-009
9 Dec 2014 SHA authorized Supplemental Housing Support Agreement with Resolution No.
SHA 2014-011
14 Jun 2016 SHA approval of California Debt Limit Allocation Committee approval letter for future bond funding application with Resolution No. RDA 2016-019
Feb 2017 Villa Serena II receives entitlements from the City Council. Developer begins assembling funding commitments from other sources external to the SHA
June 2020 Developer applied at TCAC for Phase I 9% low income housing tax credits. The successful award of the tax credits triggered demolition of existing buildings on the Phase I project site.
March 2021 Developer closed financing and commenced construction of Phase I.
June 2023 Projected date for the Developer to apply at TCAC for Phase II 9% low income housing tax credits. A successful award of the tax credits will trigger demolition of existing buildings on the Phase II project site.
March 2024 Projected date for Developer to close finance and commence construction of Phase II.