20-0317_JAMBOREE HOUSING CORPORTATION_Agenda Report_F1aCity of San Juan Capistrano
Agenda Report
TO : Honorable Mayor and Members of the City Council
FROM : ~njamin Siegel, City Manager
SUBMITIED BY: Joel Rojas , Development Services Director
PREPARED BY: Laura Stokes, Housing Supervisor I Associate Planner
DATE : March 17, 2020
3/17/2020
F1a
SUBJECT: Exclusive Negotiation Agreement Between the City of San Juan
Capistrano and Jamboree Housing Corporation for Potential
Development of an Affordable Housing and City Hall Project at the
City-owned Property Lo cated at 32400 Paseo Ade lanto (Portion of
Assessor Parce l N umber 668-101-23)
RECOMMENDATION:
Approve and authorize the City Manager to execute an Exclusive Negotiation Agreement
("ENA") with Jamboree Housing Corporation, substantially in the form attached, for the
potential development of an affordable housing project and City Hall facility on a 2.5-acre
portion of City-owned property.
EXECUTIVE SUMMARY:
In 2016, the City Counci l changed the zoning and General Plan Land Use Designat ion of
2.5 ac res of the 5.7-acre City Hall property fr om Commercial Manufacturing and Quasi-
Indu st ri a l to Very High Density Residential (Attachment 1 ). The purpose of this change
was to accommodate additional housing units to meet the City's Regional Housing Needs
Assessment (R HN A) of 638 housing units for the 2013-2021 planning period.
Subsequently, in 2017, the City Council amended the City's Gene ral Plan Hous ing
Eleme nt to ident ify th e 2.5 -a cre City Hall property as an affordab le housing site capable
of accommodating up to 61 affordab le housing un its. S i nce that time, staff has been
contacted by several affordable housing develope rs that have expressed an interest in
the site. After reviewing various concept proposals with different approaches to product
type and relocation of City Hall , staff is recomm end ing that the City Council enter into an
Exclus ive Neg otiation Agreement (ENA) with Jamboree Hous ing Corporation (Jambore e)
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March 17, 2020
Page 2of6
to explore the feasibility of developing the site with up to 40 units of permanent supportive
affordable housing, integrated with a new City Hall facility (Attachment 2). The proposed
ENA would establish a four-month period for the City and Jamboree to assess the viability
of this innovative concept, conduct outreach with neighbors and the community and, if
warranted, negotiate the key terms of a Disposition and Development Agreement.
Approval of the ENA would not bind the City in any way to a specific project or future sale
of the property to Jamboree.
DISCUSSION/ANALYSIS:
Pursuant to state law, the Southern California Association of Governments (SCAG) is
responsible for developing the Regional Housing Needs Assessment (RHNA) for the six-
county SCAG region. Taking into account population projections and economic forecasts,
SCAG calculates the future housing need for every city and county within its jurisdiction
for a specified eight-year planning period. The calculated RHNA represents the existing
and future housing need of different income groups in each city. Below is the City of San
Juan Capistrano's RHNA calculated by SCAG in 2012 for the current eight-year planning
period of October 2013 through October 2021:
RHNA 2013-2021
Income Group Percentage of Family of Four Income 2013 Total Percentage of
County Area Categories (2018) Housing Units Units
Median Income Allocated
ExtremelvNerv Low 0-50% $0-$54,650 147 23%
Low 51-80% $54,651-$87,450 104 16%
Moderate 81%-120% $87,450-$111,250 120 19%
Above Moderate 120%+ $111,251 + 267 42%
Total 638 100%
City's Housing Element
State law requires that each city plan for the existing and future housing need identified
in its RHNA allocation. This is done through the Housing Element of a city's General Plan.
Once a city receives its RHNA allocation from SCAG, it must amend its Housing Element
to demonstrate that the projected housing needs identified in its RHNA can be
accommodated for all income groups.
In order to accommodate San Juan Capistrano's RHNA allocation, the City Council
amended the City's Housing Element in 2014 and 2017 to identify a list of sites where the
City's RHNA allocation (638 housing units) could be built (Attachment 3). The list includes
four sites that could accommodate the 371 "affordable" housing units designated for Very
Low, Low, and Moderate income groups. As part of this effort, the City Council approved
General Plan Amendments and Rezones to allow very high density residential
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March 17, 2020
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development on the following three sites: Ventanas (which is proposed to be developed
with a 132-unit market rate residential project referred to as Tirador), the Groves {which
was approved by the City Council and anticipated to be developed this year with a 75-
unit senior affordable housing project), and a 2.5 acre portion of the current City Hall site.
The City Hall Site
The City Hall site is a 2.5-acre portion of the larger 5. 7-acre City-owned property that was
acquired by the City in the mid 1960s. The 2.5-acre site is bounded by Trabuco Creek on
the west, railroad tracks on the east, the Groundwater Recovery Plant and Descanso
Park on the south, and private office/industrial buildings to the north. Across Trabuco
Creek from the site is a mobile home park, and across the railroad tracks from the site is
a commercial center.
City Hall itself has been considered a temporary facility on the site for the past thirty years,
and there have been various efforts to identify a suitable site in the community to allow
for relocation of City Hall. In 2016, the City Council changed the zoning and General Plan
Land Use Designation of the 2.5-acre site to Very High Density Residential and identified
the site in the City's Housing Element as being able to accommodate 61 affordable
housing units. Since that time, staff has had informal conversations with affordable
housing developers regarding potential development of an affordable housing project on
the site. However, one of the primary challenges in developing the site with affordable
housing has been finding an alternative location for City Hall that would meet the City's
needs and be financially viable.
Jamboree's Proposal
Jamboree is a full-service real estate development company with more than 30 years of
experience, specializing in the construction, acquisition, and management of affordable
housing for lower income households. Jamboree has developed, managed, and
maintained ownership of over 9,000 residential units for lower income families and seniors
throughout California.
Jamboree has evaluated the 2.5-acre City Hall site and is proposing to construct a three-
story, 40-unit affordable housing development project that would include a new City Hall
facility. Based on preliminary design concepts submitted by Jamboree {Attachment 4), a
15,000 square foot two-story City Hall building could be constructed in the general
location of the current City Hall, with a three-story affordable housing component located
behind the new City Hall. The affordable housing component would involve two levels of
residential units above a garage level, as well as residential amenities such a courtyard
and community garden. The preliminary proposal would provide a total of 144 parking
spaces {there are currently 119 parking spaces on site) and maintain access to the
Groundwater Recovery Plant, public works yard, and police services building. The 40
residential units are proposed as permanent supportive housing for very low income
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March 17, 2020
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households (earning below 50% of the county's median income, or less than $59,350),
and one on-site manager. The permanent supportive housing units would be occupied by
individuals identified by the County of Orange and Jamboree as previously being
homeless or at risk of becoming homeless, and who have a high likelihood of success in
long term housing. The tenants of permanent supportive housing would also receive 24n
support services through Jamboree management and County social services staff with
offices onsite. Additionally, Jamboree has informed the City that tenant selection for the
proposed development could include a "local preference" so that San Juan Capistrano
residents have a higher priority for vacancies.
Based on Jamboree's preliminary financial analysis, the project would cost roughly $23
million to construct. Jamboree provided the City with their anticipated financing structure,
which includes approximately $12,300,000 from state tax credits and $5, 100,000 as a
permanent loan from a third-party lender that is to be determined. This financing structure
results in an anticipated $5.6 million gap in financing, which Jamboree proposes to cover
using the City's available housing funds. The City currently has approximately $5.9 million
of unencumbered Successor Agency housing bond monies, which can only be spent on
the provision of affordable housing in the community.
Proposed Exclusive Negotiation Agreement
The City Attorney's office has drafted an ENA that has been reviewed and approved by
Jamboree. The proposed ENA provides that the City and Jamboree would negotiate
diligently and in good faith toward the goal of producing a mutually acceptable Disposition
and Development Agreement (DOA). The proposed ENA includes the parameters for
negotiations, a $25,000 deposit from Jamboree to cover staff and legal costs, term of the
agreement, milestone schedule, City and Jamboree obligations, and a provision requiring
Jamboree to fund a third party consultant to conduct an independent review of the City
Hall component's design and cost in order to assess feasibility.
Staff recommends that the City Council enter into an ENA with Jamboree due to the
quality of similar Jamboree developments throughout the region, the proposed product
and financing structure, and the schedule proposed by Jamboree's development team.
The City is in a unique position to advance its housing goals as there is available land,
sufficient funding, and a highly qualified developer. Furthermore, timely construction of
the proposed project and inclusion of forty units for very low income households would
assist the City in meeting its RHNA.
With that said, an action by the City Council to enter into an ENA should not be interpreted
as an intent to approve such a housing project. Entering into the proposed ENA would
allow staff and Jamboree to explore the feasibility of this project concept, conduct
meetings with neighboring property owners, tenants and interested community members,
and negotiate a DOA, which would then have to be approved by the City Council. If and
when a DOA is approved by the City Council, Jamboree would then file the appropriate
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March 17, 2020
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development applications which would undergo review for compliance with the California
Environmental Quality Act (CEQA) as well as review by the Design Review Committee,
Cultural Heritage Commission and Planning Commission.
FISCAL IMPACT:
Approval of the ENA would have no fiscal impact to the City. All expenses during the term
of this ENA for consultants and other professional planning/engineering services, as well
as any costs associated with CEQA documentation, would be the sole responsibility of
the applicant. Jamboree would also provide a $25,000 deposit to cover initial staff and
City Attorney costs.
ENVIRONMENTAL REVIEW:
In accordance with the California Environmental Quality Act (CEQA) the recommended
action is exempt from CEQA per Section 15061 (b)(3), the general rule that CEQA applies
only to projects which have the potential for causing a significant effect on the
environment. Where it can be seen with certainty that there is no possibility that the
activity in question may have a significant effect on the environment, the activity is not
subject to CEQA. Should the development project move forward for discretionary actions,
the appropriate documentation will be provided consistent with CEQA Guidelines.
PRIOR CITY COUNCIL REVIEW:
On May 3, 2016, the City Council changed the zoning and General Plan Land Use
Designation of a 2.5-acre portion of the City Hall site from Commercial Manufacturing and
Quasi-Industrial to Very High Density residential, and identified the site in the City's
Housing Element as being able to accommodate 61 affordable housing units.
COMMISSION/COMMITTEE/BOARD REVIEW AND RECOMMENDATIONS:
Not Applicable.
NOTIFICATION:
• Jamboree Housing
• Milestone Housing Group
• Alipaz Community HOA
• Spaulding Properties
• Plaza Del Rio c/o Westwood Financial
Corp.
• C&C Development Co., LLC
• Meta Housing Corporation
• San Juan Mobile Estates HOA
• Millennium Housing
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March 17, 2020
Page6 of6
ATTACHMENT:
Attachment 1 -Site Map
Attachment 2 -Exclusive Negotiation Agreement
Attachment 3 -Housing Opportunity Sites
Attachment 4 -Jamboree Proposed Site Plan & Elevations