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2009-11 RESOLUTION NO. CRA-2009-11 A RESOLUTION OF THE GRAND TERRACE COMMUNITY REDEVELOPMENT AGENCY ADOPTING THE 2010-2014 FIVE- YEAR IMPLEMENTATION PLAN FOR THE GRAND TERRACE REDEVELOPMENT PROJECT AREA AND FINDING THE IMPLEMENTATION PLAN EXEMPT FROM THE PROVISIONS OF THE CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) WHEREAS,the Redevelopment Plan for the Grand Terrace Redevelopment Project Area("Project Area") of the Grand Terrace Community Redevelopment Agency was approved by the City of Grand Terrace City Council by Ordinance No. 25, adopted on September 27, 1979; WHEREAS,the Redevelopment Plan was subsequently amended on March 20, 1998 by Ordinance No. 31, on July 15, 1981 by Ordinance No. 52, on July 22, 1999 by Ordinance No. 187, on September 12, 2002 by Ordinance No. 202 and on July 22, 2004 by Ordinance No. 212; WHEREAS, Section 3 3490(a)(1(A) of the California Community Redevelopment Law ("CRL") Health and Safety Code 33000 et. seq. requires all redevelopment agencies to adopt an implementation plan every five years, following a noticed public hearing; WHEREAS, Section 3 3490(a)(1(A)requires that that the Implementation Plan contain the specific goals and objectives of the agency for the project area,the specific programs, including potential projects, and estimated expenditures proposed to be made during the next five years and an explanation of how the goals, objectives, programs and expenditures will eliminate blight within the project area and implement the requirements of Sections 33334.2, 33334.4, 33334.6, and 33413 of CRL; WHEREAS,pursuant to Section 33490 of CRL,the Agency has prepared the 2010-2014 Implementation Plan for the Project Area, as contained herein as Exhibit A; and WHEREAS, on December 8, 2009, the Agency conducted a duly noticed public hearing at the City Council Chambers located at 22795 Barton Road, Grand Terrace, CA 92319. NOW, THEREFORE, THE GRAND TERRACE COMMUNITY REDEVELOPMENT AGENCY DOES HEREBY RESOLVE AS FOLLOWS: SECTION 1. The Agency finds and declares that the consideration and approval of the 2010-2014 Implementation Plan is exempt from the requirements of the California Environmental Quality Act(CEQA)pursuant to Section 15262 because the 2010-2014 Implementation Plan does not constitute the approval of any specific program,project or Page 2 of 2 -v. expenditure and does not change the need to obtain any required approval of a specific program, project or expenditure from the Agency. SECTION 2. The Agency finds and determines that the 2010-2014 Implementation Plan covers all implementation plan components required by statute to be addressed, identified, described, estimated or otherwise included in the implementation plan and does hereby approve and adopt the 2010-2014 Implementation Plan for the Grand Terrace Redevelopment Project Area, in the form attached hereto as Exhibit A. PASSED,APPROVED AND ADOPTED this 8th day of December, 2009 1 Chairm of the Community Redev opment Agency ATTEST: City Clerk of the City of Grand Terrace I, BRENDA MESA, City Clerk of the City of Grand Terrace, do hereby certify that Resolution No. CRA-2009- 11was introduced and adopted at a regular meeting of the Grand Terrace Community Redevelopment Agency held on the 8th day of December, 2009, by the following vote: AYES: Agency Members Cortes, Miller and Stanckiewitz; `Lice-Chairman Garcia and Chairman Ferre NOES: None ABSENT: None ABSTAIN: None Brenda Mesa, City Clerk Approved as to orm: �11ft City Attorney Exhibit A City of Grand Terrace Community Redevelopment Agency 2010-2014 Implementation Plan Grand Terrace Redevelopment Project Area Adopted: December 8, 2009 Grand Terrace Redevelopment Project Area Five-Year Implementation Plan 2010 through 2014 Contents Page Introduction 1 About the Redevelopment Plan and Project Area 2 Proposed Amendment to the Redevelopment Plan 3 Recent Accomplishments 4 Redevelopment Plan Goals 6 Projected Tax Increment Revenues 7 Proposed Redevelopment Program 8 Housing Set-Aside Requirements 9 Proposed Affordable Housing Program 11 Housing Program Compliance Objectives 12 Housing Compliance Plan 14 Available Low/Mod Housing Funds 14 Housing Production 15 Replacement Housing 17 Proportionality Requirements 17 Proportionality Expenditures Based on Household Income Groups 18 Proportionality Expenditures Based on Senior and Non-Senior Population 19 Housing Units Constructed Without Low/Mod Funds 20 Housing Production Goals 21 Plan Administration 22 i Grand Terrace Redevelopment Project Area Five-Year Implementation Plan 2010 through 2014 INTRODUCTION This document is the Five-Year Implementation Plan for the Grand Terrace Community Redevelopment Project of the City of Grand Terrace.Community Redevelopment Agency (Agency). In fulfillment of Article 16.5 of California Community Redevelopment.Law (CRL), the.Agency has prepared the Implementation Plan for the Grand Terrace Redevelopment Project Area, and this Implementation Plan was adopted by the Agency following a duly noticed public hearing held on December 8, 2009. The Implementation Plan presents the Agency's goals and objectives, anticipated projects and programs, and estimated expenditures for the five-year planning period, 2010 to 2014. It also addresses the Agency's affordable housing production and replacement housing needs and achievements. The Implementation Plan conforms to the City's General Plan and has been prepared according to guidelines established in the programs and goals outlined in the Housing Element of the General Plan. Page 1 of 22 Adopted December 8, 2009 Grand Terrace Redevelopment Project Area Five-Year Implementation Plan 2010 through 2014 ABOUT THE REDEVELOPMENT PLAN AND PROJECT AREA The Redevelopment Plan for the Grand Terrace Community Redevelopment Project was originally adopted by the City Council in 1979 via Ordinance No.25 and comprised a 640-acre Project Area. In accordance with California Community Redevelopment Law (CCRL; California Health and Safety Code Section 33000, et seq.), it provides the Agency of the City of Grand Terrace with powers, duties and obligations to implement a program for the redevelopment, rehabilitation, and revitalization of areas within the Redevelopment Plan boundaries. The Redevelopment Plan has since undergone additional amendments. Ordinance No. 31 was adopted on March 20, 1980 and it provided for allocations to affected taxing agencies. Ordinance No. 52 was adopted on July 16, 1981, which expanded the Project Area to include all lands within the City thereby increasing the limits of the Project Area. City Council approval of Ordinance No. 187 in 1999 authorized the use of eminent domain to acquire non-residentially zoned property, or with the owner's consent. A fourth amendment was adopted via Ordinance No. 202 in September 2002 to clarify the description of the Redevelopment Plan's dollar limit on tax revenue. The fifth and most recent amendment occurred in 2004 when the City Council adopted Ordinance No. 212 to extend the duration of the Redevelopment Plan and the time limit on paying indebtedness or receiving property taxes pursuant to the Plan to July 15, 2027. i Table 1: Revised Grand Terrace Community Redevelopment Project Adoption date 1979, amended 1981 Expiration of Plan 2017 No time limit for non-residentially .Time Limit for Use of Eminent Domain zoned properties, no authority for residentially zoned properties Time Limit to Incur Debt 2017 Time Limit to Repay Debt 2027 The entire City limits are located within the Project Area, which allows the Agency to embark on infrastructure, economic development, affordable housing, and other initiatives to mitigate blight in the community. Redevelopment in the Project Area has been responsible for development of much of the City's public infrastructure, preservation of the community's supply of affordable housing and development of new affordable residential properties, and expansion of recreational and community facilities. The Redevelopment Plan provides the Agency the resources to finance and complete these projects without burdening property owners. The Agency has the authority to complete redevelopment projects for the next seven and one-half(7'/2) years, until the Redevelopment Plan's effectiveness expires in July of 2017. Page 2 of 22 Adopted December 8, 2009 Grand Terrace Redevelopment Project Area Five-Year Implementation Plan 2010 through 2014 PROPOSED AMENDMENT TO THE REDEVELOPMENT PLAN An amendment to the Redevelopment Plan is currently underway, and is expected to be considered for adoption in 2010, subsequent to the adoption of this Implementation Plan. The proposed amendments to the Redevelopment Plan include: • Extending the duration of the Redevelopment Plan and time limit to collect tax increment revenue by seven years, pursuant to Section 33333.6 of Community Redevelopment Law; • Increasing the limitation on the amount of tax increment that can be allocated to the Agency from the Project Area from $70 Million to $225,000 Million; • Increasing the limitation on the amount of bonded indebtedness that can be outstanding at one time from $15 Million to $65 Million; • Replacing the description of land uses in the Redevelopment Plan with language that directly refers to the City's General Plan, Zoning Code, and other applicable land use policies and standards, as they currently exists and may be hereafter amended; and • Amending and restating the Redevelopment Plan to incorporate prior amendments into a single document. If approved, the amendment will modify time and financial limits on the Redevelopment Plan for the Project Area. The amendment is being proposed because the current limits will not allow the Agency to implement projects and programs necessary to alleviate blight and provide affordable housing within the Project Area. The-current financial cap of$70 Million over-the life of the Plan will only allow the Agency to collect tax increment revenue approximately through fiscal year 2011-2012, at which time the Agency's debt will not have been completely paid off and the Agency's housing obligations will not have been completed. The Agency will not have revenue to implement any programs or projects beyond the 2011-12 fiscal year. If the amendment is approved, it is anticipated that the mid-term review of this Implementation Plan will be updated to reflect the Redevelopment Plan Amendment. Page 3 of 22 Adopted December 8, 2009 Grand Terrace Redevelopment Project Area Five-Year Implementation Plan 2010 through 2014 RECENT ACCOMPLISHMENTS In the last five years,.the Agency has championed many successful projects and programs in the Project Area. Public Infrastructure • High School and Public Infrastructure Improvements. Through a partnership with the Colton Joint Unified School District, property was assembled for the new high school and businesses were relocated. A City of Riverside 48-inch water line was relocated and water line easements were transferred to the City of Riverside for maintenance. Negotiations continue with Riverside County Transportation Agency and Union Pacific Railroad to complete improvements to Main Street. • Property Acquisition for Project Site Assembly. Property acquisition for both the freeway- oriented 100-acre project (former Outdoor Adventure Center) and the Town Square Commercial Project has been underway in partnership with private development partners. In addition, the Agency is pursuing additional opportunities while sales prices are low to assemble property for projects at other locations that will provide new jobs and services for residents. • Commercial Improvement Grant Program. This program is available to property owners and/or business owners as an economic incentive to rehabilitate existing commercial structures. Implementation of the program is expected to eliminate blight, yield a stronger commercial presence, and increase the likelihood of new business development. The program focuses on the exterior improvement of commercial buildings, including new paint/stucco, new doors and windows, decorative awnings, signage, landscaping and lighting. One major project is underway and a second has been submitted. Both are shopping center rehabilitations. • Completed design plans to underground overhead utility lines along a segment of Barton Road. • Completed design of community signs to strengthen civic and cultural functions. • Acquired property along Barton Road and demolished abandoned on-site structures. • Acquired property along Vista Grande Avenue and demolished abandoned on-site structures for a future park facility. • Updated the BRSP design policies. • Initiated design to reconstruct Grand Terrace Road, west of the 1-215. • Started the preliminary design for a new baseball field. Housing Page 4 of 22 Adopted December 8, 2009 Grand Terrace Redevelopment Project Area Five-Year Implementation Plan 2010 through 2014 • Blue Mountain Senior Villas and Senior Center. This project includes the construction of 120 affordable rental apartment units, a 7,000 square foot senior center, and a 2-acre passive park. The project will house 72 very low income, 36 low income, and 12 moderate income senior households. • Neighborhood Improvement Grant Program. The program grants up to $1,000 per household to purchase landscaping and irrigation materials for front yard improvements and exterior paint. The goal of this program is to reduce blight and property depreciation caused by deteriorated exterior paint, poor front yard maintenance and the lack of front yard landscaping. Though this program would not result in substantial rehabilitation to assist in meeting long-term affordable housing production goals, these efforts are critical to reducing the number of deteriorating and/or at-risk housing units in the City. Forty-five projects have been completed. • Canal Street Project. The Agency is continuing to work with a developer to construct approximately 23 rental units affordable to low income families, and purchased property in the R3 (Medium Density) zoning district. t Page 5 of 22 Adopted December 8, 2009 Grand Terrace Redevelopment Project Area Five-Year Implementation Plan 2010 through 2014 REDEVELOPMENT PLAN GOALS Adopted in 1979 and amended in 1981, the Redevelopment Plan establishes a variety of goals for redevelopment of the Project Area. These goals frame the near term redevelopment objectives for the 2010-2014 Implementation Plan period. 1. Eliminate Blight: The elimination of blighting influences and the correction of environmental deficiencies in the Project Area. 2. Strengthen Commercial Use: Strengthen retail and other commercial functions. 3. Strengthen Economic Base: The strengthening of the economic base of the Project Area and the community by the installation of needed site improvements. 4. Improve Parking and Open Space: The provision of adequate land for parking and open spaces. 5. Civic and Cultural Enhancement: Enhance the role of the City by strengthening civic, community and cultural functions. 6. Historical Preservation: Preserve artistically, architecturally, and historically worthwhile structures and sites. 7. Design Criteria: The establishment and implementation of performance criteria to assure high site design standards and environmental quality and other design elements that provide unity and integrity to the entire Project. 8. Strengthening Existing Housing: Strengthen and upgrade existing residential uses. 9. Improve Utilities: Provide adequate streets, curbs, gutters, drainage facilities, and street lights and permit improved pedestrian and/or vehicular circulation in the Project Area. Cause the undergrounding of unsightly overhead utility lines. i Page 6 of 22 Adopted December 8, 2009 Grand Terrace Redevelopment Project Area Five-Year Implementation Plan 2010 through 2014 PROJECTED TAX INCREMENT REVENUES Table 2, below, reflects projected gross tax increment revenues that are anticipated during the 2010-2014 Implementation Plan period, which does not include deductions for pass through payments, debt services or administrative costs. As previously indicated, the Redevelopment Area is expected to reach its limit on the amount of tax increment during the Implementation Plan period and no tax increment will be generated in the last two years of the Implementation Plan planning period. This will limit the Agency's ability to reach the goals established when the Redevelopment Plan was adopted. Table 2: Projected Tax Increment Revenues 2010-2014 (Without Amendment) 2009-10 2010-11 2011-12 2012-13 2013-14 Tax Increment $7 288,333 $7,457,636 $4,486,796 $0 $0 Revenue Non-Housing $5,830,656 $5,966,109 $3,589,437 $0 $0 Revenue (Gross) Housing Set-Aside $1,457,667 $1,491,527 $897,359 $0 $0 Revenue (Gross) The Agency is currently processing an amendment to the Redevelopment Plan that would, among other things, increase the amount of tax increment revenue that could be collected during the life of the Redevelopment Plan. Provided that the amendment to the Redevelopment Plan is adopted, tax increment revenues could be collected during the life of the Implementation Plan to allow the Agency to address the goals of the Redevelopment Plan. Table 3 reflects projected tax increment revenues that could be collected during the 2010-2014 Implementation Plan period with the adoption of the amendment to the Redevelopment Plan. Table 3: Projected Tax Increment Revenues 2010-2104 (With Amendment) 2009-10 2010-11 2011-12 2012-13 2013-14 Tax Increment $7,371,325 $7,62„770 $7,891,908 $8,163,971 $8,444,195 Revenue Non-Housing $5,897,060 $6,102,216 $6,313,556 $6,532,794 $6,755,356 Revenue (Gross) Housing Set-Aside $ 147,4265 $1,525,554 $1,578,382 $1,63,2794 $1,688,839 Revenue (Gross) Page 7 of 22 Adopted December 8, 2009 Grand Terrace Redevelopment Project Area Five-Year Implementation Plan 2010 through 2014 PROPOSED REDEVELOPMENT PROGRAM The list of potential non-housing redevelopment program activities scheduled for the next five years is shown in Table 4 below. The purpose of this list is to identify which blighting condition(s) a particular project is expected to address and is not intended as a complete or final list of needed improvements within the Project Area. The completion of identified redevelopment program activities will ensure continued progress toward the alleviation of existing blighting conditions by: Table 4: Proposed 2010-2014 Non-housing Redevelopment Projects Project Description Preliminary Cost Estimate Goals Achieved Mixed Use Specific Plan-Continue land $2,000,000 1, 2, 3, 9 assembly Barton Road Infrastructure Improvements $500,000 1, 2, 3, 5 High School Storm and Signal Improvements $230,000 1, 5, 9 Senior Center Commercial Kitchen Improvements $80,000 5 Grand Terrace Road Reconstruction $150,000 1, 3, 9 Grand Terrace Road Landscaping $40,000 1, 3 Land Assembly on Barton Road $500,000 1, 2, 3, 7 Barton Road Utility Undergrounding $275,000 1, 2, 3, 7, 9 Michigan Street Improvements $400,000 1, 2, 9 Update of the BRSP $150,000 1, 2, 4, 6, 9 Commercial Improvement Grant Projects $300,000 1, 2, 3, 7 Public Message Sign Project $70,000 2, 3, 5 Baseball Park Project $175,000 4, 5 Vista Grande Park Project $70,000 4, 5 Page 8 of 22 Adopted December 8, 2009 Grand Terrace Redevelopment Project Area Five-Year Implementation Plan 2010 through 2014 HOUSING SET-ASIDE REQUIREMENTS The Grand Terrace Redevelopment Agency is required to set-aside twenty percent (20%) of its annual tax increment into a low- and moderate-income housing fund. This set-aside is referred to as the Low/Mod Housing Fund within the Implementation Plan. The purpose of the Low/Mod Housing Fund is to produce, increase, improve and preserve the community's supply of low- and moderate-income housing. In carrying out the annual housing set-aside requirements, the Agency may exercise any or all of its powers, including the following: • Acquire real property or building sites subject to the provisions of H&S Code § 33334.16. • Improve real property or building sites with on-site or off-site improvements, but only if the improvements directly and specifically improve or increase the community's supply of low or moderate income housing. • Donate real property to private or public persons or entities. • Finance insurance premiums. • Construct buildings or structures. • Acquire buildings or structures. • Rehabilitate buildings or structures. • Provide subsidies to, or for the'benefit of, very low-income households, as defined by H&S Code § 50105, lower income households, as defined by H&S Code § 50079.5, or persons and families or low or moderate income, as defined by H&S Code § 50093, to the extent those households cannot obtain housing at affordable costs on the open market. (Housing units available on the open market are those units developed without direct government subsidies.) • Develop plans; pay principal.and interest on bonds, loans, advance, or other indebtedness or pay financing or carrying charges. • Maintain the community's supply of mobile homes. • Preserve the availability to lower income households of affordable housing units in housing developments which are assisted or subsidized by public entities and which are threatened with imminent conversion to market rates. • The agency may use these funds to meet, in whole or in part, the replacement housing provisions of state redevelopment law. • The Low/Mod Housing Fund can also be used for planning and general administrative costs, when directly related to programs and activities associated with H&S Code § 33334.2(e). This includes the following activities: Page 9 of 22 Adopted December 8, 2009 Grand Terrace Redevelopment Project Area Five-Year Implementation Plan 2010 through 2014 o Costs incurred for salaries, wages, and related costs of the Agency's staff or for services provided through inter-agency agreements, and agreements with contractors, including usual indirect related costs. o Costs incurred by a non-profit corporation, which are not directly attributable to a special project. o Legal, architectural, and engineering costs and other salaries, wages, and costs directly related to the planning and execution of a specific project which are authorized under subdivision (3) of H&S Code § 33334.2 and which are incurred by a non-profit housing sponsor and are not planning and administrative costs for the purpose of this Section, but are, instead, project costs. Page 10 of 22 Adopted December 8, 2009 Grand Terrace Redevelopment Project Area Five-Year Implementation Plan 2010 through 2014 PROPOSED AFFORDABLE HOUSING PROGRAM The list of potential affordable housing program activities scheduled for the next five years is shown in Table 5, below. The purpose of this list is to identify which blighting condition(s) a particular project is expected to address and is not intended as a complete or final list of needed improvements within the Project Area. Table 5: Proposed 2010-2014 Affordable Housing Program Project Description Preliminary Cost Estimate Goals Achieved Canal Street Rental Housing $1,000,000 8 Neighborhood Improvement Grant Program $150,000 8 Purchase, Rehab and Re-sell Program $400,000 8 Home Improvement Loan Program $150,000 8 Mobile Home Park Upgrade and/or Expansion Program $150,000 8 Senior Home Repair Program $100,000 8 i Page 11 of 22. Adopted December 8, 2009 Grand Terrace Redevelopment Project Area Five-Year Implementation Plan 2010 through 2014 HOUSING PROGRAM COMPLIANCE OBJECTIVES This section of the Implementation Plan addresses specific requirements in State law with respect to prior affordable housing activities and the anticipated housing program in the future. Redevelopment agencies use implementation plans to establish ten-year objectives to achieve compliance with State law in its affordable housing programs. These housing goals generally fall into three categories: Housing Production — based on the number of housing units constructed or substantially rehabilitated over a ten year period, a redevelopment agency is to ensure that a percentage of these units are affordable to very low, low and moderate income households. Replacement Housing —another legal obligation for redevelopment agencies is to ensure that any housing units destroyed or removed as a result of an Agency redevelopment project that housed low to moderate income households be replaced within four years at the same household income levels. Expenditures by Household Types—specific requirements on the amount of housing set-aside funds an agency must spend over a 10-year period on housing affordable to very low income households, low income households, and housing for residents under the age of 65. Household Income Limits -Area median income is established by the Secretary of Housing and Urban Development, and adopted by the California Department of Housing. The Income limits are generally adjusted annually, and are based on the Section 8 income limits for the Riverside-San Bernardino-Ontario, CA SMA. Extremely low income households are defined as families and persons whose income does not exceed 30% of area median income. Very low income households are defined as families and persons whose income does not exceed 50% of area median income. While low income households are defined as families and persons whose income does not exceed 80% of area median income. Lastly, moderate income households are defined as families and persons whose income does not exceed 120% of area median income. Page 12 of 22 Adopted December 8, 2009 Grand Terrace Redevelopment Project Area Five-Year Implementation Plan 2010 through 2014 Table 6 represents the 2009 income thresholds for the various target housing populations in the City. Table 6: Income Table* Extremely Low Very Low Moderate Household Income Income Low Income Income Size (30% of Area (50% of Area of Area (120% of Area Median Income) Median Income) Meth°dian Income) Median Income) 1 14,000 23,300 37,300 54,200 2 16,000 26,650 42,650 61,900 3 18,000 29,950 47,950 69,650 4 20,000 33,300 53,300 77,400 5 21,600 35,950 57,550 83,600 6 23,200 38,650 61,850 89,800 7 24,800 41,300 66,100 96,000 8 26,400 43,950 70,350 1,02,150 *2009 Median Income$64,500 for a household size of four persons. Source: California Department of Housing Page 13 of 22 Adopted December 8, 2009 Grand Terrace Redevelopment Project Area Five-Year Implementation Plan 2010 through 2014 HOUSING COMPLIANCE PLAN Health and Safety Code § 33490(a)(2)(A) requires that the Agency develop a Compliance Plan to ensure that the required number of very low, low and moderate income housing units will be produced or substantially rehabilitated within the Project Area. Available Low/Mod Housing Funds As of July 1, 2009, the Agency had approximately $998,000 available in its Low/Mod Housing Fund. To estimate the Agency's ability to develop and preserve low and moderate income housing, a projection of Housing set-aside revenue was developed for the Five-Year Implementation Plan planning period (Table 7). Projections were based on anticipated tax increment revenue and known fixed fund obligations. These monies are allocated towards the preservation, development and/or rehabilitation of very low, low and moderate income housing units Table 7: Projected Net Annual Low/Mod Housing Fund Revenue 2010-2014 2010 2011 2012 2013 2014 Gross Set-aside $1,457,667 $1,491,527 $897,359 $0 $0 Estimated Debt Service $619,301 $619,268 $667,792 $0 $0 - Estimated Residual for Administration and $838,365 $872,259 $229,567 $0 $0 Programs Based on the above income projection table, and the current balance of$998,000 in the Low/Mod Housing Fund, the Agency anticipates that it will have approximately $2,938,191 in Low/Mod Housing Funds available during the planning period. This amount is.net of anticipated debt service, and prior to consideration of operational and personnel expenses. However, as indicated the Agency will no longer be able to collect tax increment revenue beyond 2012, and no housing set aside revenue will be collected to implement housing programs and meet the Agency's housing obligations within the last two years of the planning period. This $2,938,191 constitutes the funds that are available to provide housing program and assist the City in meeting its inclusionary housing requirements. Although it would be difficult to meet its housing obligations with less than $3 Million for program funding, the Agency is still expected to meet its housing obligation throughout the planning period and the life of the Redevelopment Plan. The Agency would need to seek other funding sources to produce affordable housing units, such as, but not limited to, Federal HOME Funds, State Low Income Housing Tax Credits, Multi-Family Mortgage Revenue Bonds. Page 14 of 22 Adopted December 8, 2009 Grand Terrace Redevelopment Project Area Five-Year Implementation Plan 2010 through 2014 Housing Production To estimate the number of housing units that need to be affordable to very low, low and moderate income households the Agency estimated the total number of units to be constructed or .substantially rehabilitated in the Project Area and applied formulas established in State law. Prior to the time limit on the effectiveness of the redevelopment plan, at least 15 percent of all new and substantially rehabilitated units developed within a project area under the jurisdiction of an Agency, by public or private entities or persons other than the Agency, shall be available at affordable housing cost to households of low or moderate income. Not less than 40 percent of the 15 percent the dwelling units must be affordable to very low income households. Table 8 summarizes the production goals over various time periods as required by Redevelopment Law. The number of affordable units required is based on statutory thresholds, and the Agency is responsible for ensuring that the appropriate number of affordable units is created during a ten-year period. Table 8: Actual and Projected Housing Production Needs by Time Period Actual/Assumed Housing Units Required Affordable Units Time Period Constructed and Substantially Rehabilitated in Project Area Total Very Low Plan Adoption to 1995 1,336 200 80 Previous 10-Year Period' 1995 to 2004 123 18 7 10-Year Planning Period 2005 to 2009 (Actual)2 172 26 10 2010 to 2014 (Forecast)3 45 7 3 2015 to 2017 (Forecast)3 25 4 2 Redevelopment Plan Duration 1981-20174 1,701 255 102 Notes: ' All required units based on 15 percent of actual/assumed units developed by entities other than the Agency. No units developed by the Agency. 2 Total units produced within the Project Area based on actual units per City planning department or projections by Agency Staff. Includes 120 units at the Blue mountain Senior Villas. 3 Affordable units produced based on estimated affordable units produced (or covenants purchased) during each planning period inside or outside the Project Area. 4 The surplus affordable units in a ten year period may be applied against the unit production requirements during the following ten-year compliance period,while any deficit affordable units must be first produced during the following ten-year compliance period. As shown above, based on actual housing production from adoption of the Redevelopment Plan to 2009, the Agency has an affordable housing production need of 244 affordable housing units, including 97 low income units. It is also forecasted that within this Five-year Implementation Plan planning cycle (2010 to 2014) another 4 affordable units (including two 2 low income units)will be Page 15 of 22 Adopted December 8, 2009 Grand Terrace Redevelopment Project Area Five-Year Implementation Plan 2010 through 2014 required. In total, the Agency's inclusionary housing obligation over the life of the Redevelopment Plan is 255 affordable housing units with at least 102 of those units affordable to low income households. Fulfillment of these production goals is shown in Table 9. Table 9: Fulfillment of Affordable Housing Production Requirements by Time Period Time Period Units Required Units Produced Additional Units Net Surplus (see Table 8) Required Units Produced Total VL' Total VL Total VL Total VL Plan Adoption to 1995 200 80 0 0 200 80 0 0 Previous 10 Year Period 18 7 118 7 0 0 100 0 1995 to 2004' 10-Year Planning Period 2005 to 2009 (Actual)4 26 10 113 29 0 0 87 19 2010 to 2014 (Projected) 7 3 15 8 0 0 8 5 2015 to 2017 4 2 - - - - - - Redevelopment Plan 255 102 246 44 9 58 - - Duration (1981-2017)5 Notes: VL=Very low income 2 Affordable Units Required based on actual total Units Produced during the planning period and includes 111 units produced at Highland Apartments and 7 units produced from Blue Mountain Senior Apartments. 3 The surplus affordable units in a ten-year period may be applied against the unit production requirements during the following ten-year compliance period,while any deficit affordable units must be first produced during the following ten-year compliance period. 4 Affordable units required based on actual total units produced during the planning period and includes 113 units produced at Blue Mountain Senior Apartments. 5 The Redevelopment Plan's effectiveness currently expires July 15, 2017. As shown in Table 9, the Agency has been able to fulfill the majority of its obligation through the construction of the Blue Mountain Senior Villas. However, it is also anticipated that at the end of the term of the Redevelopment Plan there is the potential for a deficiency of 9 low income units, and 58 very low income units. As described earlier in this Implementation Plan, the Agency is actively engaged in programs to provide additional affordable units in the Project Area. At present, the Canal Street Rental Housing project is expected to be constructed within this Implementation Plan period and will fulfill the Agency's affordable housing obligation during the Five-Year planning period, as well as provide a surplus of 13 affordable units. However, as indicated, at the end of the Redevelopment Plan (2017) the Agency may still have an outstanding housing production obligation of 67 units. Therefore, the Agency will continue to work diligently to fulfill the remaining affordable housing production deficit on an annual basis by facilitating the creation of projects that feature long-term affordability covenants. Page 16 of 22 Adopted December 8, 2009 Grand Terrace Redevelopment Project Area Five-Year Implementation Plan 2010 through 2014 Replacement Housing Pursuant to Section 33413 of CRL, whenever dwelling units for persons or families of low or moderate income are displaced or removed from the low and moderate income housing market as part of an Agency assisted redevelopment project, the Agency must replace the same number of units affordable to the same income levels of those removed within four years of their removal. During the Implementation Plan period, the Agency does not anticipate that any Agency-assisted projects will result in the displacement or removal of affordable housing units. Consequently, the Agency does not anticipate that any housing will need to be replaced. Proo6rtionality Reauirements At the beginning of the Implementation Plan period on July 1, 2009, the Agency's Low/Mod Housing Fund had an available balance of$998,000. Over the five-year period ending on June 30, 2014, staff conservatively estimates that the Project Area will generate approximately $1,940,181 in 20-percent housing set aside revenue. Pursuant to Section 33334.4(a) of the Law, Low/Mod Housing Fund expenditures on low and very low income housing projects must be at least in proportion to the City's fair share of the Regional Housing Need Assessment (RHNA). The number of units required in each income category may be adjusted for units not assisted by the Agency that feature 55 year (for tenant-occupied units) or 45 year (for owner-occupied units) covenants. According to the City's 2006-2014 Draft Housing Element, the current RHNA figures for the City indicate a Citywide need for 80 very low income units, 55 low income units, and 63 moderate income units. Based on these figures and the proportionality requirements of.CRL, at least 40% of Agency's Low/Mod Housing Fund expenditures must target very low income households, 20% must target low income households, and at least 32% must target moderate income households. Section 33334.4(b) requires that Low/Mod Housing Fund expenditures for senior housing also be in proportion to the community's population of seniors according to the most recent Census. Based on the 2000 Census, 1,245 (10.7%) of the City's 11,626 residents were over the age of 65. As such, not more than 10.7% of the Agency's available Low/Mod Housing Fund revenues may be expended on senior housing projects. The remaining 89.2% must be expended on non-senior housing projects. Page 17 of 22 Adopted December 8, 2009 Grand Terrace Redevelopment Project Area Five-Year Implementation Plan 2010 through 2014 Proportionality Expenditures based on Household Income Groups Table 10 presents the expenditure requirements based on proportionality requirements for the 2010 to 2014 Implementation Plan period. Table 10: Thresholds for Housing Program Expenditures Household Type Census/RHNA Allocation Minimum Percentage of Housing Set- Household Aside Expenditures over Implementation Plan period Total Population of the City 11,626 Total Population Under Age 65' 10,381 89.3% Total Population Over Age 65 1,245 10.7% Very Low Income Households 80 40%2 Low Income Households 55 20%2 Moderate Income Households 63 32%2 Total 198 100% Notes: ' Percentage of total households under the age of 65 based on the 2000 census data (www.census.00v). Percentage of households in each income-level based on the City of Grand Terrace Regional Housing Needs Assessment for 2007 through 2014. Expenditures after 2006 are subject to new RHNA numbers as shown above. Targeting requirements prior to 2006 based on prior RHNA Housing Needs Allocation (31%for Very low-income and 24%for Low-income Housing Units). Using the data in Table 10, Table 11 reflects the established thresholds for the use of Low/Mod Housing Funds for programs and capital expenditures based on the Agency's estimated $2,938,191 in the Low/Mod Housing Fund through the Implementation Plan planning period, and based on the City's RHNA allocation for affordable housing units. Table 11: Low Mod Housing Fund Expenditures Based on Income Category Income Category RHNA Allocation Minimum Projected Expenditure Required Very Low Income 80 $1,175,276 Low Income 55 $587,638 Moderate Income 63 $940,221 Above Moderate Income 131 N/A Total 329 $2,703,135 Page 18 of 22 Adopted December 8, 2009 Grand Terrace Redevelopment Project Area Five-Year Implementation Plan 2010 through 2014 These proportionality requirements affect expenditures over a ten-year period, although the law permits the compliance initially for a period beginning in January 2002 and ending in June 2014. Table 12 documents the amount of low and moderate income housing fund revenue used since January 2002 for these income categories. Table 12: Housing Expenditures and Proportionality since 2002' Time Household Income Category Period Very Low Low Moderate Total Expenditures 2002 through $4,125 0.7% $3,975 0.7% $600,204 98.7% $608.304 20004 2005 $176,964 40.5% $170,529 39.5% $89,244 20.4% $436,738 2006 $1,128,155 45.8% $1,087,132 44.2% $246,143 10.0% $2,461,430 2007 $410,543 45.8% $395,614 44.2% $89,573 10.0% $895,730 2008 $1,561,742 45.8% $1,504,951 44.2% $340,744 10.0% $3,407,436 2009 $1,171,313 45.8% $1,128,720 44.2% $255,559 10.0% $2,555,593 Total $4,452,843 43% $4,290,921 41% $1,621,467 16% $10,365,231 Notes: Based on Agency's Annual Housing and Community Development Reports. 2 Targeting requirements prior to 2006 based on prior RHNA Housing Needs Allocation (31%for Very low- income and 24%for Low-income Housing Units). Expenditures after 2006 subject to new RHNA numbers as shown in prior table. Proportionality Expenditures based on Senior and Non-Senior Population Based on the distribution of the City's senior and non-senior population, a minimum of$2,623,805 (89.3%) of the estimated Low/Mod,Housing Fund available for housing programs and capital expenditures must benefit persons and households under the age of 65. Table 13: Proportionality Expenditure for Senior and Non-Senior Population Age Category % of Total Population Minimum Projected Expenditure Required -Under 65 89.3% $2,623,806 65 and Over 10.7% $314,386 Page 19 of 22 Adopted December 8, 2009 Grand Terrace Redevelopment Project Area Five-Year Implementation Plan 2010 through 2014 State law also requires a recap'of the number of projects assisted by the Low/Mod Housing Fund over the past implementation period, divided by family projects (under age 65) and senior projects (restricted to residents age 65 and older). Table 14 summaries these statistics from the last planning period (2005 to 2009). This Table shows that 100% of the Low/Mod Housing Funds expended by the Agency during the previous Implementation Plan were used for senior housing. Table 14: Proportionality Expenditures Based on Senior and Non-senior Population Housing Units Assisted by Housing Set-Aside Fund Set-Aside (July 2005 to June 2009) Expenditures Extremely Very Low Low Moderate Total Low Family Projects $0 0 0 0 0 0 (Non-Senior) 0% Senior Projects $9,320,189 0 55 53 12 120 Total $9,320,189 0 55 53 12 120 (100%) Housina Units Constructed Without Low/Mod Housina Funds No other funding source was used by the Agency to construct affordable units featuring long-term covenant restricted units (affordable units with covenants of at 45 years for ownership housing or 55 years for rental housing) during the 2005-2009 Implementation Plan. However, because the Agency will not generate any revenue past 2012, it is likely that the Agency will need to seek other funding sources to meets is affordable housing obligation. Page 20 of 22 Adopted December 8, 2009 Grand Terrace Redevelopment.Project Area Five-Year Implementation Plan 2010 through 2014 HOUSING PRODUCTION GOALS CRL requires that the Agency provide a Ten-Year Housing Compliance Plan that depicts the Agency's housing production goals. The Ten-Year Compliance Plan began with the previous 2005 to 2009 Implementation Plan and continues through to 2014. Table 15 shows the actual number of affordable housing units developed, rehabilitated, or assisted by the Agency between 2005-2009, while Table 16 represents a projection of the housing units to be developed, rehabilitated, or assisted by the Agency over the five-year period of the 2010-2014 Implementation Plan. Table 15: 2005-2009 Housing Production Housing Units Year Low/Mod Income Very Low Income 2005 0 0 2006 0 0 2007 0 0 2008 0 0 2009 65 55 Total 65 55 Table 16: 2010-2014 Production Goals' Housing Units Year Low/Mod Income Very Low Income 2010 0 0 2011 7 5 2012 8 3 2013 2 1 2014 2 1 Total 19 10 Notes: The degree to which the stated five-year housing production goals can be met is dependent on market conditions and the availability of supplemental funding from identified resources. Page 21 of 22 Adopted December 8, 2009 Grand Terrace Redevelopment Project Area Five-Year Implementation Plan 2010 through 2014 PLAN.ADMINISTRATION The Agency of the City of'Grand Terrace shall be responsible for administering this Implementation Plan and for monitoring redevelopment activities or programs undertaken pursuant to the Redevelopment Plan and this Implementation Plan. PLAN REVIEW At least once during the five-year term of this Implementation Plan, the Agency shall conduct a public hearing and hear testimony of all interested parties for the purpose of reviewing the Implementation Plan, and evaluating the progress of Agency Activities. The public hearing shall be held no earlier than two years and no later than three years after the date of adoption of this Implementation Plan. Notice of the public hearing to review the Redevelopment Plan and Implementation Plan shall be published pursuant to Section 6063 of the Government Code and posted in at least four permanent places within the Merged Project Area for a period of at least three weeks. Publication and posting of the notice shall be completed not less than 10 days prior to the date set for hearing. Pursuant to Article 16.5, this Implementation Plan may from time to time be amended after holding a public hearing on the-proposed amendment. Page 22 of 22 Adopted December 8, 2009