HomeMy WebLinkAbout8 Gray's Crossing Updateenda Item
To: Board of Directors
From: Jeremy Popov
Date. March 15, 2017
Subject: Gray's Crossing CFD Update
1. WHY THIS MATTER IS BEFORE THE BOARD
This workshop provides an overview of near term Gray's Crossing actions, including a
summary of next steps towards the establishment of a community facilities district.
This workshop also provides an update regarding the current development concept
and provides an updated schedule for review.
2. HISTORY
The Board has taken several actions in support of the continued effort to stabilize fhe
Grays Crossing Community Facilities District (CFD).
On October 2016 the Board adopted foreclosure Resolution 2016-23 authorizing staff
and special counsel to proceed with the foreclosure process on all parcels with
delinquent assessments within the CFDs. The Board also adopted Resolution
2016-25 permitting the waiver of redemption penalties under certain findings and
determinations as authorized under Section 53340(f) of the California Government
Code.
On January 19, 2017 the Board approved the
by and among Truckee Donner Public Utility
District Community Facilities District No. 04-1
LDK GC81, LLC.
Memorandum of Understanding (MOU)
District, Truckee Donner Public Utilities
(CFD), Triumph Development LLC, and
The MOU outlined the plan to stabilize the CFD and also identified the roles and
responsibilities of the parties who are signatory.
3. NEW INFORMATION
Update and near -term steps:
The MOU is now approved and fully executed by all parties.
As outlined in the MOU, the next step is to begin efforts towards the formation of a
new Community Facilities District. As part of the stabilization effort the parcels of
concern are anticipated to make a prepayment to the existing CFD in order to fully
satisfy their obligation to the CFD. The prepayment will be made with funds acquired
through the sale of new bonds under a new CFD. In order to take such efforts to form
a new CFD the current owners of the parcels of interest identified in the MOU need to
request that TDPUD form a new CFD. This is done through a formal petition process
which also requires a public hearing.
To that end, staff is working with Gray's Station LLC and LDK GC81 LLC (the current
property owners of the parcels of interest within the MOU), to draft a petition that will
be brought to the Board for formal consideration. The petition will request institution of
proceedings for the establishment of a community facilities district.
The petition will have seven sections and each is summarized in this report:
1. Petitioner: Grays Station LLC and LDK will provide the petition as current owners)
of Nevada County Assessor's Parcel Number(s) 19-770-02 (Gray's Station LLC),
43-010-05 (LDK), and 43-010-07 (LDK).
2. Proceedings Requested: Formation of a new community facilities district. The new
CFD would be designated the "Truckee Donner Public Utility District Community
Facilities District No. 17-1 (Gray's Crossing II). The CFD would levy special taxes on
the taxable property within the new CFD and authorizes issuance of bonds.
3. Boundaries of Community Facilities District: The proposed territory consists of the
three Nevada County APNs provided above.
4. Purpose of Community Facilities District:
(a) to provide funds to prepay in full the special taxes that have been, and may
in the future be, levied on the properties identified above; thereby repaying a portion of
the indebtedness of CFD No. 04-1;
(b) to finance any additional amounts that may be necessary for costs of any
public improvement identified on Exhibit A of Attachment 1 (no current additional
infrastructure financing anticipated);
(c) to finance the costs of issuing the bonds and provide a reserve fund for the
bonds;
(d) to pay costs of administering the Community Facilities District and the
bonds.
5. Elections: The petition will request that:
(a) the special elections to be held under the Act authorize the levy of special
taxes and the issuance of the bonds and establish an appropriations limit for the
Community Facilities District be consolidated into a single election,
(b) the election be conducted by the TDPUD and it's officials using mailed or
hand -delivered ballots;
(c) such ballots be opened and canvassed and the results certified at the same
meeting of the Board as the meeting at which the Board conducts the public hearings
on the Community Facilities under the Act or as soon thereafter as possible.
6. Waiver: The petitioners are expected to waive all notices of hearings (other than
published notices required under the Act), all notices of elections, all applicable
waiting periods under the Act for the elections, all ballot analysis and arguments for
the election, and all requirements as to the form of the ballot.
7. Mailing Address: Provides the address of each the petitioners.
In addition, the petition is to be accompanied by a Rate and Method of Apportionment
(RMA). Explained simply, the RMA is the description of how the Special Tax
assessment will function. The RMA will include an accounting of the debt (bond)
amount to be issued, the method in which the taxes are to be levied between the
properties, and other instruction and/or legal information that may be necessary for
the future administration of the CFD.
Staff is working with third party consultants to draft the RMA. The form of the RMA
depends on the development concept and may take one of several possible forms.
A recent change is the possibility of a single developer (Triumph) developing all three
parcels rather than two as is currently anticipated by the MOU. A single developer
owner would simplify the bond sale process, simplify engagement with the Town of
Truckee, and provide for a more flexible RMA.
Further, under the scenario of a single owner, the RMA could take an alternate form
in which the three parcels are considered in total and the assessment is determined
by best alignment to the housing type anticipated. In this scenario, the lien of the
bonds could be more flexibly aligned to the entitlements anticipated. This is the
preferred scenario as it has the highest likelihood of best addressing overall
affordability targets.
Alternatively, under the scenario of multiple owners, it is very likely that the RMA will
be drafted using an approach more We a traditional assessment district. In this
scenario, the RMA would likely require each parcel to "stand on it's own", meaning
that each parcel in the new CFD would be responsible to maintain it's proportionate
share of the bonds to the total of all three parcels as to the proportionate share of the
amount required to prepay each parcels' obligation to the existing CFD as compared
to the total prepayment amount of all three parcels' to the existing CFD. This
assessment district approach would likely be necessary due to the complexity of
multiple owners who are anticipated to have different development interests.
Discussions are underway to determine whether one developer or two will finally
develop these parcels. TDPUD is not directly involved in those discussions. This
process has delayed the schedule approximately 60 days, however this delay is
anticipated to be worthwhile in the long term if a single developer results which
reduces the complexity of the CFD formation and final bond sale and increase the
overall probability of success.
Development Concept:
The diversified housing opportunity at Gray's Crossing is tremendous.
The concept is constantly evolving, however currently between the three parcels
(Parcel D, the Cottages, and Parcel F) the following is anticipated:
• Parcel D - 40 Townhomes, 10 income restricted to median / moderate levels,
and 30 townhomes market rate but 100% restricted to locals. Pricing is
anticipated to begin from the mid $300's.
• The Cottages - 89 smaller footprint single family homes, likely 1300 - 1600sf.
59 of the Cottages restricted to locals / workforce, with pricing anticipated from
the mid $400's.
• Parcel F - 45 to 50 single family homes. Likely to be higher end, a necessity of
the CFD (will incur a higher pro -rats share of the bonds) and proforma(s) to
offset the extensive locals and more affordable opportunities on Parcel D and
the Cottages.
The development concept is evolving as conversations continue and analysis is
refined. Beyond the current concept, any additional quantity of housing restricted to
locals or income restricted is largely dependent on the financial contributions of non-
profits and local agencies. With the potential for over 200 affordable by design units
in total (including the Villages parcel), nearly 50%, if not more, could be further
restricted to locals / workforce and likely priced to meet the 110% - 180% area median
family income (AMFI) range.
The need for housing in this price range is supported by the recent housing studies
which show that 37% of unmet housing demand is for families with >120% AMI, and
an additional 21 % of unmet housing demand is for families in the 80% to 120% AMFI
range.
Thus, 58% of unmet demand is right in the market range of this project. Although the
anticipated pricing is not inexpensive, it is important to note the housing studies
demonstrate demand in this range, and, these anticipated prices are comparable, in
some cases lower, than current market comps which are often 30+ years old and may
require substantial further investment to return to a like new condition.
The housing studies further support that a larger percentage of unmet demand for
lower AMFI levels may be best aligned to rental housing, particularly because the
studies also show that renter households by income category are nearly equally
dispersed at around 20% of each income range, including the lower income ranges
from 50% to 100% of AMFI. Only 20% of renter households are in the above
moderate -income range, as compared to 57% of owners who are in the same
category. Considering that demographic statistic together with the unmet demand
statistic it is reasonable to conclude that the current development concept aligns to the
unmet demand.
To maximize the community benefit, staff has also been meeting with representatives
of local non-profit organizations who may be interested in providing down payment
assistance programs. Such a program(s), paired with the housing opportunity of
3ray's Crossing, could provide some very real near term housing relief for local wage
earning families.
In order to be successful in providing this housing inventory to market it is critical that
the Town of Truckee also recognize the benefit of the development concept and
support the effort via acceptance of an alternate equivalent proposal which would be
prepared by the developer(s). It is important to understand the history of the parcels
as it relates to the current concepts. When the subdivision was originally approved
the Town of Truckee entered into a development agreement with the prior (now
defunct) owner to provide very prescriptive income -restricted housing (over 60%
income restricted housing on each of the three parcels of concern, as compared to
only 15% which is required by the basic development code). However that original
development agreement is now in default, and the original developer filed bankruptcy
and is no longer engaged in possible development of the parcels. It is reasonable to
assume that the prior developer agreed to such levels of income -restricted housing in
order to receive approval for the complete Gray's Crossing development, and that
affordability to do so must have been balanced over the economics of the entire
development. Unfortunately the original phased development approach, which
anticipated build -out of a significant potion of the Cottages in Phase I, did not result as
planned.
Today, it is critical to understand that all the single family parcels have since sold to
individual owners, the original developer is no longer anticipated to develop, and there
is no longer an opportunity to leverage the entire subdivision of nearly 400 high -end
single parcels to subsidize development of more affordable units on the three multi-
family parcels. Thus, the economics of the current situation require the parcels "stand
on their own". We must find an economically feasible solution which aligns to current
community needs and meets the original intent, as best as is possible.
For perspective,based on the current proformas, even with Townhomes starting in the
mid $300's and new freestanding 3 bedroom homes starting in the mid $400s, and
even assuming a 10% down payment assistance program, it would still likely take over
$15M of subsidy to meet exactly the inclusionary housing requirements levied over a
decade ago. Because the original developer entered bankruptcy and is no longer
engaged in finishing development, and because it is exceedingly unlikely that $15M of
subsidy is available (nor a good investment necessarily), it is critical that the
developer, TDPUD, and the Town of Truckee find that the current development
concept of affordable by design for -sale housing, restricted in a large part to locals,
and possibly matched with a down payment assistance program, meets the needs of
the community today. The simple practicality is that any possible development today
must require consideration of the economics of new construction, the burden of the
additional special taxes of the CFD, and the possible availability and/or best use of
subsidy. Staff believes the current concept is a balance, largely based on the
practical macro -economic reality of new construction costs in the local region.
Staff has requested the Town of Truckee proactively work with the TDPUD to explore
this market rate, but affordable by design and smaller footprint, housing opportunity
that is further intended (to a large degree) to include some type of locals / workforce
restriction.
Importantly to the success of the overall CFD stabilization effort and to the resultant
housing opportunity explained here, the Town of Truckee must find that such a
development concept (as may be adjusted) meets current community needs.
Receiving the Town of Truckee's conceptual support is necessary prior to the formal
application process to ensure the limited time to enact this plan is not wasted
inefficiently. During the ongoing collaborative process with the developers and the
Town of Truckee, TDPUD will continue considering actions in support of progress and
each will be brought forward for Board consideration in future meetings of the Board of
Directors.
Schedule:
Due to the many involved parties and the complexity of the effort, the schedule is
constantly evolving.
• May 2017 -Consider approval of the resolution of intention to form the new
CFD and schedule a public hearing
• June 2017 - Election and formation of new CFD / JPA; Approve debt policies
for each CFD and JPA
• July 2017 - Consider Resolution, documents, and Preliminary Official
Statement
• August 2017 - Final RMA; price and sell bonds; close transaction
• September 2017 - Call 2004 and 2005 Special Tax Bonds
• 2018 - Development could possibly commence
4. FISCAL IMPACT
There is no direct fiscal impact to Truckee Donner Public Utility District.
5. RECOMMENDATION
File this report and provide input to staff.
F
Jeremy Popov
Administrative Services Manager
Michael D.
Holley
General Manager
Table 38: Unmet Workforce Housing Demand by Unit Size, Affordability Level, and
Worker Type, Truckee North Tahoe Study Area
Unmet Year -Round Resident Workforce Housing Demand (a)
Income Category
Extremely Low Income (5 30% of AM)
Very Low Income (> 30% 5 50% of AMD
Low Income (> 50% <_ 80% of AMD
Moderate (> 80% :5120% of AMD
Above Moderate (>120% AM)
Total, All Income Categories
Unit Size
Studio
1-Bedroom
2-Bedroorm
3+Bedrooms
137
96
22
124
90
210
140
0
146
371
255
112
89
349
376
188
59
512
631
195
1,579
1,498
516
508
iUnmet Seasonal Resident Workforce Housing Demand (a) -
Income Category
Extremely Low Income
Very Low Income (> 30% <_ 50% of AM)
Low Income (> 50% :5 80% of AMDModerate (> 80% <— 120% of AMD
Above Moderate (>120% AMD
Total, All Income Categories
Unit Size
Studio
1-Bedroom
2-8edroorm
3+Bedrooms
29
130
57
57
53
32
97
86
11
79
157
45
19
65
75
9
35
80
65
15
285
523
212
176
Total,
All Units
379
440
884
1,001
1,396
4,100
Total,
All Units
274
269
291
168
194
1,196
(Unmet Non -Resident Workforce Housing Demand (b) , j
Income Category
Extremely Low Income (<_ 30% of AMI)
Very Low Income (>
Low Income (> 50% 5 80% of AMD
Moderate (> 80% <_ 120% of AMD
Above Moderate (>120% AMD
Total, All Income Categories (b)
Unit Size
Studio 1-Bedroom
43 0 129 86
129 171 472 214
214 429 601 128 "
301 301 515 214
258 11244 11029 386
944 2,145 21746 11029
2-Bedrooms 3+Bedrooms
!Worker Housing Demand, All Type -
Income Category
Extremely Low Income (5 30% of AMI)
Very Low Income (>
Low Income (> 50% 5 80% of AMDModerate (> 80% 5 120% of AMD
Above Moderate (>120% AM)
Total, All Income Categories
Unit
Size
Studio
!Worker Housing Demand, All Type -
Income Category
Extremely Low Income (5 30% of AMI)
Very Low Income (>
Low Income (> 50% 5 80% of AMDModerate (> 80% 5 120% of AMD
Above Moderate (>120% AM)
Total, All Income Categories
Unit
Size
Studio
1-Bedroom
2-Bedrooms
3+Bedrooms
354
165
166
225
272
414
709
300
371
879
11014
285
409
714
965
411
351
11836
1,724
596
4,009
11757
41766
11627
Total,
All Units
258
986
1,373
1,330
2,917
6,864
Total,
All Units
911
1,695
2,548
2,499
4,507
12,160
(a) Unmet resident workforce housing demand estimates are based on gross detrnnd for year-round resident and seasonal resident
workforce housing reported in Appendix K, multiplied by the proportion of households w ithin each income category that experienced one of
the four HUD defined housing problems between 2008 and 2012, as reported in the HUD Comprehensive Housing Affordabil ty Strategy
(CHAS) dataset.
(b) Unmet non-resident workforce housing demand estimates are based on gross demand for housing by in-comrruters who indicated
that they would relocate into the Study Area if affordable and adequate housing options were made available, reported in Appendix K.
Sources: Census Bureau, 2010-2014 American Community Survey, Public Use Microdata Sample, 2016; Bureau of Labor Statistics,
Quarterly Census of Employment and Wages, 2016; U.S. Census Bureau, Nonemployer Statistics, 2016; California Department of Housing
and Community Development, Income Limits, 2016; Department of Housing and Urban Development, 2008-2012 Comprehensive Housing
Affordability Strategy, 2016; BAE, 2016.
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