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Santa Rosa City Council OKs bond sale for affordable housing

By KEVIN McCALLUM

THE PRESS DEMOCRAT

Santa Rosa last week approved the sale of nearly $30 million in bonds to help fund three affordable housing projects, including the sale and renovation of the city’s tallest building, the 14-story Bethlehem Tower.

Bethlehem Tower (JOHN BURGESS/ PD)

The decision by the City Council last Tuesday will help the developers of the three projects — two remodels and one new development — get the financing they need to move forward.

The city says it isn’t incurring any debt or liability in the transactions, nor is it guaranteeing the bonds. The decision merely helps project lenders tap a tax-exempt source of funds and allows the developers to access other tax credits.

The bonds, known as multifamily housing revenue bonds, are commonly used in affordable housing projects. But three projects coming forward at the same time is unusual and a sign of the tight lending environment.

“A lot of the funding for affordable housing has been drying up,” said Marjorie Jackson, a program specialist in the city’s housing department.

The most visible of the projects is the sale and rehabilitation of the 40-year-old Bethlehem Tower, which has 159 affordable apartments for seniors.

The landmark Tupper Street tower opened in 1972 as a partnership between Bethlehem Lutheran Church, a local congregation that had its original church on the site, and the federal government’s urban development agency, which provided a construction loan.

The loan was paid off in March, which would have allowed the building to begin charging market rate for 58 of the units. But the board of the nonprofit that owns the building, Bethlehem Tower, Inc., was looking to increase affordability of the building, not reduce it, said Tom Torgerson, board president.

“Our mission has always been from day one to offer low-income housing to seniors,” Torgerson said.

The board was in the process of investigating how to extend the affordability of the complex when it accepted a purchase offer from Reiner Communities, an Irvine firm that specializes in the renovation and management of multifamily affordable housing, Torgerson said.

The sale and renovation of the building is something the federal Department of Housing and Urban Development supports as a way to keep affordable housing stock in a community, Torgerson said.

“For them it’s cheaper to keep an existing building in place than to go out and build a new one, so this was their way of doing it,” Torgerson said.

The bonds approved by the council will cover up to $19 million in project costs. The total purchase and renovation, including temporary relocation of the residents, will cost nearly $27 million, said Sean Burrowes, investment director at Reiner.

That includes a $15 million purchase price and $6 million for upgrades, with the balance covering various project and transaction costs. The sale is expected to close in November, with work beginning in early 2013. Construction is expected to take about eight months, he said. Typical upgrades would include new windows, cabinets and floor coverings, he said. Common areas and the exterior also will be spruced up.

“You shouldn’t see anything too dramatic other than everything just looking better,” Burrowes said.

Residents will be displaced for less than a week each, and they’ll be fully compensated for their trouble, he said.

If completed, the sale would extend the building’s life as an affordable housing complex for 55 years. About 80 percent of the units would be dedicated to low-income seniors, defined as those earning less than 60 percent of the median income for the area. The balance of the units would be for very-low-income seniors, or those earning less than 50 percent of median.

Some residents contacted Monday had no idea the building was being sold. Others were skeptical of the deal.

Retired commercial painter Sam Daw, 72, said he attended a meeting where a company representative said the only changes would be for the better.

“I’ve had sunshine blown up me before,” Daw said.

Daw pays $346 a month for a 14th-story studio apartment, with subsidies covering the balance. While he worries about changes, he would welcome the sale if it would oust current management, which he said banned poker games and potlucks and failed to fix his leaking ceiling for years.

Resident Mark Johnson, a 70-year-old tai chi instructor, said he doesn’t want any upgrades to his one-bedroom unit, which offers him sweeping views of Taylor and Bennett mountains. He built elaborate shelves when he moved in seven years ago and wants them left just as they are.

“I’ve told them to just leave me alone,” Johnson said.

He worries the buyer will raise rents to get a better return on its investment, but company officials say that can’t happen. The entire building will be covered under a HUD contract, instead of about 62 percent currently. That means everyone in the building will receive rent subsidies, which will help the new buyer afford the upgrades.

“Everyone gets to stay in their homes. Everyone is protected with rent subsidies,” Burrowes said.

City Council members unanimously supported the bond sales and urged the developer to be as sensitive as possible to the low-income seniors during the remodel.

“It’s fairly delicate what you’re doing. It’s very important that it be done right,” Councilman Jake Ours said.

The other rehabilitation project is for the 43-unit Sonoma Creekside project on Boas Drive off Highway 12 in east Santa Rosa. The project was built in 1996 and is managed by EAH Housing. The council authorized up to $6.5 million in bonds for that project.

The third project is North Village II, which proposes to build 31 new affordable units off Fulton Road in the city’s northwest corner. The project is being headed by developer Hugh Futrell, who built the adjoining North Village subdivision. The council qualified the project for up to $4 million in bond funding.

You can reach Staff Writer Kevin McCallum at 521-5207 or kevin. mccallum@pressdemocrat.com.





21 Responses to “Santa Rosa City Council OKs bond sale for affordable housing”

  1. Missy says:

    Affordable housing is not needed, period. Stop subsidizing illegals and welfare scum.

    Thumb up 3 Thumb down 8

  2. Lets be Reasonable says:

    @Skippy – “You guys are gonna need a new playbook if you want to politically survive the tsunami of reality that is about to sweep you off your rock.”
    .
    What reality are you living in? This is a liberal county in a liberal state where conservatives have marginalized themselves.
    .
    Ever since the Supreme Court decided to uphold Romneycare, Obama’s poll numbers have been going up. It looks like we may just get another 4 years from that Socialist Kenyan…

    Thumb up 7 Thumb down 16

  3. Skippy says:

    “These are seniors living on the retirement that you would like us all to have – virtually nothing. Living on cat food is not enough, you would like them to be homeless as well!? Shame on you.”
    Doh!
    You have figured us out.
    We really do want the poor disabled seniors eating cat food and living on literally nothing.
    Since many conservatives and Big Govt spending hawks are older folks, it is logical to assume we want all Americans of a certain age to subsist on nothing but cat food.
    Of course we do. It tastes just like chicken; yummy!
    We have been seeking this outcome since the day R. Reagan was elected.
    I know that because every liberal has been repeating it for 32 years. It must be true!
    (sarc off)
    Same old fear-inciting threats from desperate liberals defending the indefensible monster of Big Govt by decrying every attempt at sanity as being motivated by cruelty and hate.
    You guys are gonna need a new playbook if you want to politically survive the tsunami of reality that is about to sweep you off your rock.

    Thumb up 11 Thumb down 5

  4. Ruth Summers says:

    Santa Rosa should end property tax, sales tax and every other tax they receive and just pass all city government expendures over to bonds they approve. It all seems so easy.

    No pesky voter approvals needed and unlimited funds to play with and spend. It is found money in the new world of public finance. No accountablility, no mad, crazed taxpayers demanding tax cuts.

    This is a liberal’s dream come true.

    Thumb up 15 Thumb down 5

  5. Working Class says:

    I can spend my life working marginally, or not at all, never save a penny for retirement or emergencies, and be rewarded for my minimal efforts by getting an apartment for 1/4 the market rate, reduced fees from the utility, full coverage medical care from Medi-Cal, free food from the Food Stamps program, free food from local food banks, a housekeeper & personal driver paid for by IHSS, *and* get my apartment renovated at no cost to me? Oh, and I get to complain about being displaced for a whole week while someone else pays for my new carpet and kitchen cabinets. I get all this free stuff and I don’t even have to be grateful.

    Why have I bothered to work 40 hours a week for the last 21 of my 38 years of life, live within my means, put money into a retirement fund, and pay out-of-pocket for my food and medical care? I need my head examined.

    My next life strategy will be to claim total disability, get on social security, obtain subsidized housing, Medi-Cal, Food Stamps, IHSS, and make sure my children get all the same benefits so they know how to work the system when they get older. If I’m denied any of these benefits, I’ll get free legal counsel to fight it and I’ll probably win. What a racket.

    By the way, before you feel too bad about the poor seniors at Bethlehem Towers, know that they aren’t all seniors. They have residents younger than 55 living there.

    Thumb up 15 Thumb down 8

  6. Lets be Reasonable says:

    Did any of you actually read this story!?
    .
    “The city says it isn’t incurring any debt or liability in the transactions, nor is it guaranteeing the bonds. The decision merely helps project lenders tap a tax-exempt source of funds and allows the developers to access other tax credits.”
    .
    These are seniors living on the retirement that you would like us all to have – virtually nothing. Living on cat food is not enough, you would like them to be homeless as well!? Shame on you.

    Thumb up 9 Thumb down 9

  7. RICHARD says:

    “…rehabilitation project … 43-unit Sonoma Creekside project on Boas Drive… The council authorized up to $6.5 million in bonds for that project.”

    That is more than $ 151,162 per unit for only a rehab.

    ““… It’s very important that it be done right,” Councilman Jake Ours said.”

    At more than $ 150K per rehab it does not seem like it’s being done right. But then again, for whom is it being done?

    Seems uneconomical and inefficient.

    Thumb up 20 Thumb down 7

  8. good one says:

    Again the myth of “affordable housing”. Subsidized housing will always be a burden on the rest of the City. Once a person is in affordable housing, they DON’T LEAVE. So how many folks are we talking about? Couple of dozen? A hundred? and we’re going to pay over $30 Million? And “affordable housing” does not cover the costs of the housing lot itself: ie, police, fire, ambulance, etc. The property taxes do not cover basis City services. This is such a outrage. Oh sure, say it’s for the seniors…but only a part will go to that project. NO on all “affordable housing” projects. Cripes, it would be more affordable to just buy each one a house. I mean if the average sales price is somewhere around $300K right now for a single family home, you could buy 100 homes that are existing. Think about it!

    Thumb up 14 Thumb down 8

  9. Stands with a fist says:

    So we elect the most clueless people in our society,then give them complete control over our lives.
    Great plan

    Thumb up 17 Thumb down 5

  10. Big Jim says:

    House prices have dropped 50% and mortgage rates are at all-time lows – houses are already “Affordable” so why does government need to get involved? This just rewards some people at the expense of others, just like all the government actions related to housing. I as a middle income taxpayer shouldering more than my fair share of the burden am sick of these handouts. Work hard and prosper, or suffer the consequences. Government should only be ensuring everyone gets equal opportunity, not deciding winners and losers.

    Thumb up 21 Thumb down 9

  11. Lets be Reasonable says:

    @Truth “More money and entitlements for those who don’t work paid for by those who do.”
    .
    Give me a break – these are retired folks, living off social security.

    Thumb up 8 Thumb down 16

  12. Citizen says:

    “‘I’ve told them to just leave me alone,’ Johnson said.”

    Nice attitude from a welfare recipient who’s living on public funds. How about being grateful that the citizens of this county are willing to support the lifestyle of those who can’t afford to live in one of the most expensive states in the nation, rather than acting entitled?

    Thumb up 19 Thumb down 5

  13. truth in news says:

    More money and entitlements for those who don’t work paid for by those who do. I guess someone has to pay for a place for Ken Churchills employees to live!

    Thumb up 14 Thumb down 6

  14. Grapevines says:

    Margaret Gonzales says “Lazyness spreads like the flu. It transfers from one generation to the next. Government needs to help break the cycle.”

    Trouble is that the Government jerks that are elected by the “lazyness”, don’t want to break the cycle. They are contributing to it. Pensions, housing, you name it. If it gets the likes of Evans, Brown, Vas Dupre, and company elected; that’s all we can expect out of them is to continue it.

    Thumb up 14 Thumb down 6

  15. Alex says:

    Seriously affordable housing bond in this market? If you cannot afford to buy something today, then seriously, you are an idiot. It is extremely affordable. The government just loves their bonds and taxes…bonds are just another way of saying a huge debt to pay in the future or consider it a tax.

    Thumb up 15 Thumb down 12

  16. bill says:

    How can the City Council sell bonds? I do not remember giving my permission? I do not remember a bond measure on the ballot. I do remember the Governor ridding us of the redevelopment pork barrel. So how can this be happening? We need some open explanation of why and how such debt can be allowed in our names?

    Thumb up 23 Thumb down 6

  17. Steveguy says:

    Only $30 Million ? With the fake Government monies being thrown around, we should have asked for $30 BILLION !!!!!

    Meanwhile, we close Parks and fire teachers.

    Keep the ADMINISTRATORS paid !! Pay the Millions a year, not just HUNDREDS of THOUSANDS for Life !

    Yes, for life, pat the HUNDREDS of THOUSANDS for LIFE to — Rip you and all of us off.

    They laugh all the way to the bank. Every month. With FULL benefits after a very rich salary.

    Our ‘public servants’ are not that anymore.

    Thumb up 16 Thumb down 6

  18. Jim Bennett says:

    More mechanisms to install Smart Growth.

    ‘Affordable Housing’.
    Add that to your list of warm ‘n fuzzy terms that represent anything but.

    Why such a resolve to build that which isn’t currently commercially viable?
    Because once the Agenda has incrementally coerced you out of country, rural, single family home life…
    that’ll be the most desireable real estate in town.

    You subsidize your own oppression.

    See, this isn’t a traditional free market dynamic.
    As Susan Gorin says:
    ‘It’s a brave new world’.

    Thumb up 17 Thumb down 6

  19. RICHARD says:

    ” Santa Rosa City Council OKs bond sale for affordable housing ”

    What? City officials weren’t speaking the truth about the need for redevelopment to fund affordable housing.

    The city’s statements regarding the loss of redevelopment are not to be trusted.

    Thumb up 32 Thumb down 7

  20. Maria says:

    If everyone had one of those juicy public pensions, we’d all be able to buy a home !!

    Thumb up 23 Thumb down 11

  21. Margret Gonzales says:

    There is no such thing as affordable housing in Sonoma County or Santa Rosa. There is only taxpayer subsidized housing which is called “affordable housing.”

    Don’t we have enough welfare in this town? No one starves, goes without. All welfare does is make it easy for people who don’t want to work hard, not to have to work hard or in too many cases find a job.

    We need to be getting people off welfare and working whether they like it or not.

    Lazyness spreads like the flu. It transfers from one generation to the next. Government needs to help break the cycle.

    Thumb up 38 Thumb down 12

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