SR 05:026 - Laserfiche WebLink

While not stated specifically in the project goals, the Task Force indicated an interest in continuing its review of a joint project between Kottinger Place and Pleasanton Gardens. However, at this stage of the project, there has been little exploration of the issues involved with merging or consolidating Kottinger Place and Pleasanton Gardens. There have, however, been discussions highlighting the potential positive operating efficiencies that could develop from consolidating project management and construction activities. In addition, the Task Force has been informed that the Board of Pleasanton Gardens is open to working with the City towards exploring a joint development that utilizes the Pleasanton Gardens site to assist with the project. As a result, there seem to be an opportunity for some sort of "merger" and it is anticipated that this concept will explored more fully during the next phase of the project. To assist the Task Force with tasks three and four, the City secured the services of Danny Fred Consulting. The primary focus of this work was two fold, first to determine if HUD would be amenable to allowing the projects to be redeveloped and secondly to determine if funding sources are available to pursue the project. Regarding the first issue, the consultant determined that based on HUD policy and recent practice with other projects, HUD would most likely authorize a demolition and disposition of Kottinger Place in favor of a new development that was not part of the City's Housing Authority. The consultant also indicated the City would be required to follow a detailed HUD review process. In addition, the consultant determined that following the end of Pleasanton Garden's HUD commitments in 2010, it would not be restricted from redeveloping. Finally, the consultant indicated that funding sources for project renovation and expansion were quite limited Regarding potential funding opportunities for a new development, the consultant indicated that a project as outlined in the Task Force's goals, may qualify for either HUD 202 financing or 9% tax credits that could pay for a significant portion of project development. As an example of this, the consultant estimated that a 150 unit development would have a development cost of approximately $27 million of which up to a maximum of 74% could met with 9% tax credits. The remaining funding could be generated from City contributions, permanent bank loans, HUD funding such as HOME loans, Contributions from Pleasanton Gardens and other sources. While utilizing these funding sources may meet project funding needs, obtaining 9% tax credits is extremely competitive and only a few of the projects applying for this funding are approved. In the past, the City has not been successful with these credits and has settled for the 4% tax credits that yield significantly less capital. Nevertheless, the consultant's analysis indicates these funding opportunities warrant further review. Tax-Credits a Brief Summary Because staff has discussed the potential for using tax credits on this project, it is providing a brief and limited summary outlining the program. The federal tax credit program has been in place since 1987 for the purpose of providing corporations with tax incentives to invest in affordable housing projects. A number of projects in SR 05:026 Page 4