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AUGUST 17, 1995
I
ADJOURNED REGULAR MEETING OF THE CITY COUNCIL
OF THE CITY OF SAN JUAN CAPISTRANO, CALIFORNIA
The Adjourned Regular Meeting of the City Council of the City of San Juan Capistrano, California
was called to order by Mayor Nash at 4:03 p.m. in the City Council Chamber, to hold a joint Work
Session with the Community Redevelopment Agency regarding a proposed affordable senior
apartment project.
ROLL CALL: PRESENT: Carolyn Nash, Mayor
Collene Campbell, Council Member
Wyatt Hart, Council Member
Gil Jones, Council Member
David Swerdlin, Council Member
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STAFF PRESENT: George Scarborough, City Manager; Richard K. Denhalter, City Attorney;
Cheryl Johnson, City Clerk; Tom Tomlinson, Planning Director; William Huber, Engineering and
Building Director; Cynthia Pendleton, Administrative Services Director.
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Written Communications:
(1) Report dated August 15, 1995, and resubmitted August 17, 1995, from the Planning
Director. The Report advised that the proposed affordable senior apartment project
consisted of 112 units, with 105 uncovered parking spaces, on 3.2 acres at the
southwest comer of Ortega Highway and Rancho Viejo Road. The application also
included a 10,000 -square -foot remainder parcel for construction of a future single-
family detached unit at the most westerly portion of the property. The applicant had
requested $1.4 million in financial assistance from the Community Redevelopment
Agency in the form of a 5% low-interest loan to be paid back over a 30 -year period.
In return for the loan, there will be income and rent restrictions on all units for a
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period of 55 years, in accordance with tax credit requirements. The site is zoned
Planned Community District with a Senior/Household Affordable Housing Overlay.
The project may be allowed subject to approval of a Density Bonus Permit by the City
Council. The Report set forth issues relating to density; vehicular access from the
Capistrano Collection; the proposed single-family lot; parking and numerical
standards; and, the appropriateness of financial assistance. The City Council had been
requested to identify any issues that should be addressed during formal discretionary
review by the Planning Commission.
The Director of Planning made an oral presentation. Area photographs, colored renderings,
and the conceptual grading plan were on display. Mr. Tomlinson noted staffs intent to return
with an Owner Participation Agreement, which would be heard concurrently with the
development applications in a joint meeting of the City Council and Community
Redevelopment Agency, if the City Council felt the project was reasonable. Mayor Nash
advised that this was a work session only; review would still be required by the appropriate
City Commissions prior to final approval.
Applicant's Presentation:
Michael Costa, President of Kaufman & Broad Multi -Housing Group; Tom Erickson, project
manager for this project; and, Manny Gonzalez, project architect, were present to provide
information about their proposal.
Mr. Gonzalez described the layout and visual aspects of the project, noting that it had been
designed so that individuals could circulate through the development without having to cross
the parking lot. In response to Council Member Campbell, Mr. Gonzalez advised that there
would be a pool and spa, a passive rose garden and benches placed through the development.
Mr. Costa advised that experience had shown that some outdoor amenities, such as
shuffleboard were not used, while swimming pools were used extensively.
Public Comments:
(1) Pauline Leonard, 27589 Brookside Lane, concurred with the 55 -year age limit and
advised she had no issues with the structure, arrangement of amenities, etc. Her
concerns centered around the potential financial commitments. She inquired
regarding the following, stating that these issues should be addressed prior to making
the final commitment: (1) whether all the units would be affordable and what criteria
was used to measure income levels; (2) when the pay back would begin; (3) whether
market studies were done to indicate the need for this project in the City; (4) whether
a method to monitor the project for continued affordability would be included; and,
(5) whether a change in status would be requested if the units could not be totally
filled by senior residents. She was advised that all of the units would be designated
as affordable; that State Housing and Urban Development guidelines were used to
measure income levels, with those guidelines being incorporated into Owner
Participation Agreement; that the pay back will begin when the project is leased out;
that the Owner Participation Agreement will provide obligations for affordability that
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must be met and the loan would be contingent on meeting those obligations; and, the
market study indicating the need for senior housing in the City will be made available
to Mrs. Leonard.
Mr. Costa added that there would be deed restrictions recorded against the property
relating to age and affordability. Whoever owns the property until the end of the 55 -
year term would have to comply with those restrictions. He emphasized the
developer's financial obligations regardless of whether all the units are leased. He
further advised that their own market studies assured a tremendous demand for
affordable senior housing in the City.
(2) Ken Friess, 31506 Paseo Christina, Executive Director of Mary Erickson Foundation,
stated that their primary concerns were financial because the majority of reserved
funds for affordable housing would be put into this single project if it is approved. He
further noted that the budget for the project indicated that over 30% is financed by
public funds; therefore, there must be strong guarantees that the project will do what
it is intended to do. He stated that the Owner Participation Agreement should define
the rent structure and provide for an audit and enforcement of the affordability
requirements.
Mr. Tomlinson advised that income levels, broken down by county, are defined by
the State and Federal governments and will be included in the proposed Owner
Participation Agreement.
City Council Comments:
Council Member Swerdlin noted his support for the project and inquired about the following;
(1) A variable interest rate; (2) the definition of full occupancy for beginning the loan pay
back; (3) seniors who can no longer live independently; (4) the parking arrangements; (5)
the percentage of units assigned for low-income versus very low-income; and, (6) the affect
of the $1.4 million loan on set-aside funds.
Mr. Scarborough advised that a variable interest rate and a fixed date -certain for occupancy
could be negotiating points. He noted, however, that a variable interest rate was complicated
to administer, the 5% interest rate was close to the Agency's rate of return; and, obtaining a
return on an affordable housing loan was unusual since most affordable housing projects were
funded by grants or no -interest loans. Mr. Costa explained the program for helping residents
find assisted -living housing when they are no longer able to live alone. With regard to
parking, Mr. Costa advised that the goal was a ratio of one parking space per unit. He
advised that many residents will not have cars and he felt this project probably had more
parking than would be needed. Mr. Costa stated that low income restrictions were defined
as up to 80% of median income. Rent calculated at 80% of median income was at market
level today. Kaufman & Broad would restrict all of the units to 60% of median income,
which would meet State and Federal guidelines for certain tax credits. Mr. Scarborough
' advised that the Director of Administrative Services had prepared a memorandum dated
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August 17, 1995, forwarding a cash flow projection for Agency funds which indicated the
loan could be feasible even if Depot did not sell. —
Council Member Jones felt the grading and layout were good. He felt there would be no
problem obtaining full occupancy and that the project would be a good economic stimulus for
the Ortega commercial area. He stated he supported the project and had no problem using
all available funds for the proposed loan. Council Member Hart stated his support of the
project as well. He felt it was well-designed and that the Council's concerns regarding the
contractual agreement and liability would be addressed. He suggested that law enforcement
be involved in areas such as security, safety of individuals, locks, visibility, etc., to provide
as much safety to the residents as possible.
Mayor Nash stated she was in favor of senior housing, but was hesitant about the proposed
location and the benefit to seniors living there. She cited the following concerns: (1) the
proposed single-family parcel was not appropriate in this zoning; (2) the project was too
dense and without adequate open space, and suggested removal of one building; (3) the
driveway location on Rancho Viejo Road may be problem for the residents; (4) inquired
regarding the height of retaining walls in the interior of project and felt there were an
inadequate number of trees in the project; (5) objected to the 12 -foot retaining wall in front
of the project, and suggested it could be further stepped down to retain views to the east; (6)
the eucalyptus trees on adjacent properties should be protected and preserved; (7) the colors
shown on the rendering were too harsh; and (7) inquired about future ownership of the
project.
Mr. Tomlinson clarified that the placement and two-level construction of the 12 -foot retaining
wall was included for drainage purposes between two properties; when Ortega Properties
developed and graded the area the first level of the wall would not be visible. Mr. Costa
stated that Kaufinan & Broad would maintain the project for at least 15 years because of tax
credits; that subsequent owners would have restrictions through the Owner Participation
Agreement; and, that tax credit program financing did not allow for assisted living in the
project.
Council Member Campbell cited concerns regarding (1) the lack open space and outdoor
recreational amenities; (2) whether the parking should be covered; and, (3) the need to retain
the street trees. Discussion ensued regarding covered parking. Mr. Costa advised that
experience had shown that parking should be either entirely covered or entirely open. He
advised that one reason parking had been left uncovered was due to street views. He advised
that in some projects parking had been replaced with greenscape, with the stipulation that
should it be needed, the area would be returned to parking. Mr. Jones and Mrs. Campbell
subsequently stated opposition to carports. Mr. Costa described the proposed outdoor areas,
stating that there was more open space than may be apparent. He noted that three-story
buildings would allow for additional open space, but the two-story garden -style buildings
avoided an institutional look. He offered to schedule a field trip to similar developments for
interested Council Members.
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Council Member Hart stated support for the concept of certain parking areas being converted
to greenscape areas, and that it should be left to staff to determine if and when those areas
should be re -converted to parking. He stated he would appreciate viewing other projects.
Council Member Swerdlin also wished to view other projects and stated his concern that open
space should be emphasized. Council Member Campbell requested a list of similar projects
and reiterated her concern for outdoor space and activities. Mr. Costa advised he would
review the possibility of additional outdoor amenities.
There were no Closed Session items listed on the Adjourned Regular Meeting Agenda; however, at
5:35 p.m., Council re -convened in an advertised Special Meeting to conduct a Closed Session for a
conference with Legal Counsel, Anticipated Litigation, per Government Code Section 54956.9(c),
for the initiation of litigation in one case.
There being no further business before the Council, the meeting was adjourned at 5:35 p.m. to the
next regular meeting date of Tuesday, September 5, 1995, at 7:00 p.m. in the City Council Chamber.
Respectfully submitted,
CHERYL JO SCjI ,CITY CLERK
ATTEST:
CAROL NASH, MAYOR
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