October 30, 2020 – Page 2 – Pacific Development Group

South Lake Tahoe City Council sets stage for future discussion on possible Loop Road vote

SOUTH LAKE TAHOE, Calif. — City Council solidified its desire Tuesday to have a say in the development of affordable housing related to the U.S. 50 South Shore Community Revitalization Project. It also set the stage for a future discussion on a possible ballot question asking voters if they support the project — commonly referred to as the Loop Road.

Councilor Tamara Wallace received support from Councilor Devin Middlebrook to put the discussion on a future agenda at the end of Tuesday’s meeting. Wallace and others have argued that a vote is crucial to help determine how the city should proceed regarding the controversial project.

Residents attempted to take similar action in 2016 when they successfully put Measure T on the ballot. Not to be confused with 2018’s Measure T that deals with vacation home rentals, the 2016 ballot question asked voters if city decisions on the Loop Road project should be put to a vote of the people.

Measure T opponents argued that the Loop Road project is a federal project and the city has little to no decision making power on whether the project proceeds.

A court eventually ruled the measure was unconstitutional.

Despite being struck down, Loop Road opponents say the outcome of the 2016 Measure T is evidence that South Lake Tahoe residents want to have a say when it comes to the Loop Road.

Wallace wants to discuss, and hopefully put forward, an advisory question asking people if they support the Loop Road project. An advisory question would not bind the city to a specific course of action.

Middlebrook said he supported having the discussion but at the appropriate time. He pointed to work on the Main Street Management Plan, which is focused on what the old U.S. 50 alignment will look like once the highway is realigned behind the Stateline casinos and Heavenly Village area, as an example of unknown details that he would like to have before discussing a ballot question.

Wallace also wants to see a citywide study on the potential economic impact of the Loop Road. A previous analysis looked at the impact on the project area and found that would lead to increased sales. Wallace said she would support the city making a financial contribution for the study in order to keep it impartial.

Middlebrook also seconded having that discussion at a future meeting.

AFFORDABLE HOUSING
Prior to that direction, much of the debate Tuesday centered on whether council’s approval of two memorandums of understanding dealing with affordable housing represented support for the overall Loop Road project.

The MOUs involve the city, the Tahoe Transportation District (TTD) and two developers that have an interest in building new deed-restricted, affordable housing.

TTD — the lead agency on the Loop Road — is required to construct 109 units of replacement housing in order for the project to move forward. Of those 109 units, 102 will be deed restricted for low-income people, while the other seven will be deed restricted for moderate-income people.

The units would replace housing eliminated as part of the Loop Road. As many as 76 housing units in the Rocky Point neighborhood could be eliminated.

In July a pair of MOUs between TTD and the developers came before the district’s board. Councilor Cody Bass, who represents the city on the TTD board, voiced his desire to see the city be part of the MOUs because the proposed projects fall within city limits.

The board agreed and the MOUs were presented to council at its Aug. 6 meeting. The matter was postponed until the Aug. 20 meeting to allow Mayor Brooke Laine, who was absent, to participate.

WHAT DO THEY DO?
As staff explained Tuesday, the MOUs are largely a first step in the process. They are not approvals of the actual development projects — that would come later. Rather, they’re agreements stating all the involved parties will work together.

The MOUs grant the city the ability to review preliminary budgets for the project costs. They also allow the developers to request the city apply for grants to assist with financing or to offset funding shortfalls. It also allows the city, TTD and developers to continue working together to identify additional funding opportunities and additional sites that could be used for affordable housing.

The MOUs also acknowledge that TTD and the developers may seek to amend the city’s tourist core area plan in order to annex parcels owned by the developers.

A SIGN OF SUPPORT?
Slight changes were made between the Aug. 6 and 20 meetings, including the addition of a paragraph stating that the MOUs express support for affordable housing, not the Loop Road project, which the city reserves judgement on.

Still, Loop Road critics called on council to reject the MOUs as written.

Former City Manager David Jinkens described the MOUs as a “trap” to advance the Loop Road project. He said they were “bad public policy.”

Longtime resident Lou Pierini said approval of the MOUs would advance the Loop Road project and put the issue of eminent domain — the process by which the government seizes private property — on council’s plate.

Although most did, not everyone who spoke opposed the Loop Road project. Tamara Allen, a Rocky Point resident who sits on the stakeholder working group for the Main Street Management Plan, said she supports the highway realignment project but would like to see the replacement housing built closer to the Rocky Point neighborhood.

One of the developers, Pacific Development Group, is proposing affordable housing at the corner of Ski Run Boulevard and Pioneer Trail, which is farther away from the job hub of Heavenly Village and Stateline.

Carl Hasty, TTD district manager, explained that in order to develop housing in Rocky Point now, somebody would have to acquire a parcel, demolish what is currently on it and then build.

He said the timeline for developing the replacement housing — 76 units need to be constructed before the start of the Loop Road project while the other 33 will be constructed concurrent with the project — is designed to allow for the possible construction of housing within the project site, which might be more feasible once the land for the highway realignment has been acquired.

DEVELOPMENT DETAILS
Local attorney Lew Feldman, speaking as a representative of Pacific Development Group, said it actually started the process of acquiring land at the corner of Ski Run Boulevard and Pioneer Trail two years, long before TTD was required to build replacement housing as part of the Loop Road.

The company, Feldman said, has a history of developing affordable housing in the community, including the Sierra Garden apartments.

Pacific actually approached the previous City Council about a possible partnership opportunity but that council did not express any interest in the idea, Feldman said. That led Pacific to turn to TTD for a potential partnership.

Echoing a point frequently iterated by builders and developers, Feldman said the only way affordable housing can pencil out financially is if a subsidy is provided.

Pacific, he added, welcomes involvement by the city but if the deal were to fall apart then the company would likely look to develop market-rate condos on the parcels.

That argument — that development is moving ahead with or without the city’s involvement — stuck with a majority of the councilors.

However, Wallace objected to the MOUs because of the connection to the Loop Road.

She suggested removing TTD entirely from the agreement and entering into an agreement with the developers. She also suggested striking a majority of the MOUs’ recitals, which are primarily statements of fact — and do not have any legal bearings on the MOUs — regarding the Loop Road and various entities involved in the MOUs.

After a lengthy and detailed discussion, council came to an agreement on language that was less binding for the city and less ambiguous in terms of withholding support for the Loop Road project.

Council also added a line allowing each party to exit the MOU with five days notice — a provision that Bass said was in the original MOUs between TTD and the developers.

Council approved the revised MOUs 4-0. Councilor Jason Collin was absent.

The MOUs are slated to be considered at the TTD board meeting in September.

State backs affordable-housing towers

A state agency is inclined to provide $130 million for a developer to build two apartment towers near Aloha Stadium for low-income households despite contentious community meetings over much of the project earlier this year.

Board members of the Hawaii Housing Finance and Development Corp. gave unanimous preliminary approval Thursday to finance the plan containing 302 homes with monthly rents as low as $568.

The approval followed three Aiea Neighborhood Board meetings earlier this year where the project encountered opposition, got scaled back and then attained neighborhood board approval even though there were lingering concerns.

Joe Michael, a principal of Halawa View Housing Partners LP heading the project, was gratified by the state’s commitment to provide tax-exempt bonds, low-interest loans and state and federal tax credits.

“This is a huge milestone, and it’s exciting to be kind of a catalyst for the neighborhood to spur redevelopment of the area around (transit-oriented development),” he said after the HHFDC decision.

Halawa View Housing figures it could start construction in April and be done by September 2021.

The project considered by HHFDC represents two of three pieces in a bigger development plan by Halawa View Housing for three new towers. The plan entails a total of 458 homes next to an existing Halawa View Apartments complex that has 121 low-income rental homes in a roughly 140-foot tower, and two three-story buildings about a half-mile from the stadium.

Halawa View Housing’s three-tower plan encountered heated opposition from residents living near the project site during Aiea Neighborhood Board meetings in January and February, largely over fear that it would produce an overflow of cars from tenants trying to park in the surrounding neighborhood filled with single-family homes.

The development partnership, formed by Michael’s California- based Pacific Development Group and the local nonprofit Hawaiian Community Development Board, had initially proposed 524 predominantly affordable homes in three towers each rising 250 to 276 feet, which would exceed the property’s 150-foot height limit. The initial plan also provided for 652 parking stalls that didn’t meet a city minimum.

But even after trimming the number of homes to 458 and reducing tower heights to between 211 and 229 feet as well as adding enough parking (658 stalls) to comply with city requirements, the neighborhood board balked at a requested endorsement in February. Then on Monday the neighborhood board voted unanimously to endorse the project, which would help address Honolulu’s chronic undersupply of low- income housing.

Under state law, developers can obtain zoning exemptions through HHFDC that allow affordable- housing projects to exceed building heights, density limits and other limitations.
Halawa View Housing said its project warrants the extra density and height in part because it is within a half-mile of a planned city rail station near the stadium, though the project site isn’t within a zone providing development bonuses under a draft city zoning plan for transit-oriented development.

The developer considered seeking an amendment to the city plan, but Michael said the exemption process under HHFDC provided a quicker route.

Much private and public land near the stadium is expected to be redeveloped over the next several years in anticipation of the rail line opening from Kapolei to the stadium late next year.
The state also enacted a law earlier this month to provide $350 million for replacing Aloha Stadium with a new facility that could be tied to residential, retail and other commercial development on the roughly 100-acre stadium site owned by the state.

Halawa View Housing acquired its 3-acre site in 2014, and renovated the existing affordable- housing apartments on the property with HHFDC financing.

For the planned addition endorsed by HHFDC, most of the 302 apartments would be two- bedroom units with monthly rents between $705 and $1,493. There also would be studios, one-bedroom units and four-bedroom units. The monthly rent range for all units is forecast to be $568 to $1,898.

Tenants would be limited to earning no more than 60% of the median income in Honolulu, which equates to $50,640 for a single person or $83,880 for a family of six. Some units also would be limited to households earning half these amounts.

The affordable rents and income restrictions would have to last 56 years under terms of the state’s financing arrangement.

Housing Advocates Might Love This Project, But The Neighbors Don’t

A 52-unit affordable housing project on private property in Maili has received most of the city approvals it needs, but it’s still generating friction between the developer and residents of the quiet neighborhood.

Hale Makana O Maili is expected to break ground before the end of this year, according to developer Kali Watson, president of the nonprofit Hawaii Community Development Board. The $23 million project would be open to households earning 30% to 60% of area median income.

It’s the type of project that affordable housing advocates often say is desperately needed on Oahu.

But that’s no solace to some of the residents on Kulaaupuni Street who still hope to stop it. They complain it was rushed through the Honolulu City Council, could make the area more flood-prone and overtax the neighborhood infrastructure.

Watson said the project is already fully financed with help from grants secured from the Hawaii Housing Finance and Development Corp. and the city, along with state housing tax credits.

The project still needs various building permits from the city, including approval for electrical work and construction.

Part of the conflict seems to stem from a lack of communication between the developer and residents.

Watson said the project has been in the planning phase for four years, and that he’s made at least two appearances at neighborhood board meetings and several other community meetings to gather input.

But several residents, including Kathy Kamada, said they didn’t know about it until they found surveyors walking around their yards in February.

“It’s not as if I read the minutes for neighborhood board meetings every day,” Kamada said.

In April, Watson wrote a six-page response letter to the area residents addressing some of their concerns. Regarding the neighborhood board presentations, Watson said he wasn’t required to provide advance notice.

Watson says he is committed to creating affordable housing units for local families.

The former head of the Department of Hawaiian Home Lands also led development of a similar housing project in Nanakuli called Hale Makana O Nanakuli, part of the long-planned Nanakuli Village Center that Watson hopes to finish by December.

Oahu will need over 26,000 additional housing units to meet demand by 2025, according to a 2015 study of housing demand by the state Department of Business, Economic Development and Tourism.

Construction Exemptions
Hale Makana O Maili would include five units for people making less than 30% of area median income, 10 units for people making less than 50%, and 36 units for those making less than 60%, plus a unit for an on-site property manager.

At the low end, a family of four would need to make less than $30,100 to qualify.

“Not many guys want to do these kinds of projects,” Watson said.

And not many neighborhoods of mostly single-family homes want an apartment complex in their midst.

“It’s not serving our interests,” resident Gary Shinsato said. “This street alone there’s already a lot of low-income housing.”

About a mile away at the other end of Kulaaupuni Street is a state funded, 78-unit transitional housing project, Villages of Maili, which is run by Catholic Charities of Hawaii and has begun providing services to homeless on Oahu’s Leeward Coast.

Shinsato said that he and the other residents along Kulaaupuni Street aren’t necessarily opposed to more affordable housing, but he takes issue with sorme of the exemptions the city granted the development.

The City Council approved a number of construction exemptions for the project in October, including waiving about $156,118 worth of application and review fees. It also allowed the developer to build the apartment complex in a residential zone, which typically limits the allowed amount of multi-family dwellings.

Resolution 18-206 also exempted Watson’s development from a city ordinance that would otherwise require the development to conform to development standards for concrete sidewalks and gutters.

Watson said he would put in an asphalt sidewalk fronting the housing project. Right now, Kulaaupuni Street just has dirt on both sides of the road.

The council’s resolution, which passed unanimously, also requires construction to start before October 2020.

Councilwoman Kymberly Pine included an amendment in a draft of the resolution that made clear that the development meets the minimum health and safety requirements to receive the exemptions under state law, according to minutes of the October City Council meeting.

Pine did not respond to a request for comment Thursday.

Shinsato said he wants the development scaled back to comply with the usual residential zoning restrictions, similar to four duplexes several lots over from Hale Makana O Maile. He also said the residents want better infrastructure, like gutters and sidewalks, if the development is built.

“That’s all the community is asking for,” he said.

The site is in Maili’s tsunami evacuation zone.

Watson said that the 71-stall parking lot would have an exit onto Milikami Street in case evacuation is required.

Neighbors are also concerned about traffic. They say the narrow Kulaaupuni Street could become congested once the apartments go up.

There could be an additional 439 vehicular trips daily coming out of Hale Makana O Maili, according to a study conducted by traffic consultants Fehr & Peers.

Watson said he wants to work with the community to place speed bumps along the street to slow down drivers.

‘Make It A Better Neighborhood’
While the project may appear to be on a fast track with the council-granted exemptions, it took him four years to compile reviews and studies to apply for those exemptions from the city, he said.

Watson noted that while the development would provide affordable housing, it’s not public housing.

“The idea is to make it a better neighborhood and a better place and ideally get some of the homeless people off the street,” Watson said.

The 2-acre parcel where Hale Makana O Maili is to be built was previously owned by Team Real Estate, a property management company based in Haleiwa and Makaha. Property documents show the sale was completed in 2018 for $2.25 million.

The property currently has 10 houses on it. Four of them on the mauka side would be demolished, and residents in three of them were given 90 days to vacate earlier this year, said Realtor Maria Abella. One tenant is still on the property looking for a place to move to.

Watson said he’s required by federal law to provide the tenants with financial assistance for their relocation.

The other six houses on the makai side of the property are supposed to be refurbished and then sold at market rate, according to the environmental assessment on the project. Those houses still have tenants living in them, like Megan and Iokepa Waialae, who moved in about a year ago.

The Waialaes hope they won’t have to move.

“We like it. Nobody bothers. It’s real low-key. We got a big yard,” Megan Waialae said. “If they give us the option to buy, we’d like that opportunity.”

$15M remodel underway on South Lake Tahoe affordable housing complex

A South Lake Tahoe affordable housing complex is currently undergoing a $15-million renovation.

Sierra Garden Apartments, located at 1801 Lake Tahoe Blvd., is jointly owned by Pacific Development Group, a Lodi-based affordable housing developer, and St. Joseph Community Land Trust, a local nonprofit.

St. Joseph Community Land Trust was established in 2002 “in response to the rising housing costs and the negative impacts of these costs to the broad social fabric, well-being, and sustainability of communities around Lake Tahoe,” according to the organization. The faith-based membership organization acquires real estate and develops housing programs to assist those who might not otherwise be able to afford a home in the basin. The funds are raised through membership fees, donations, tax credits and grants.

St. Joseph Community Land Trust became an owner of the 76-unit affordable housing complex in 2004, at which time a few upgrades were made to the apartments.

“The reason that we were brought into it back in 2004 is that the deed restriction for the affordability was expiring,” said Cathy Kope, executive director for the land trust. “We were instrumental in keeping those 76 units at an affordable rent as opposed as going to market rate which could have very well happened.”

Now the land trust has raised $15 million through Low-Income Housing Tax Credits and tax-exempt bonds to remodel the units, including improvements to kitchens, bathrooms, floor coverings, fresh paint, new wall heaters and LED lighting fixtures. Eight of the units will become 100-percent ADA accessible.

Construction will continue into 2018 with the creation of a new resident activity center with computer stations, drought-resistant landscaping and new BBQ areas.

“It is the mission of St. Joseph Community Land Trust to provide quality and affordable housing for the community,” said Lyn Barnett, St. Joseph Community Land Trust board president. “This project improves the living conditions of the residents and the new activity center and common areas will help create a greater sense of community.”

Sierra Garden Apartments is not the only way the land trust is working to create more affordable housing.

Back in 2004, St. Joseph Community Land Trust took a parcel donated by the city of South Lake Tahoe and built a three-bedroom, deed-restricted home for a moderate-income family.

“What the community land trust model does with the program we have right now, it keeps the housing affordable by taking the land out of the purchase price,” explained Kope. “At the time of that sale, the unimproved land was appraised at $140,000 and by taking that out of the purchase price we were able to sell that house in Al Tahoe for just under $270,000. So the land trust maintains title to just the land and then the home buyer leases the land from us by paying a monthly ground lease fee to the land trust.”

If the house goes on the market, it must be sold to another moderate-income family.

Currently the land trust is growing its housing fund in order to purchase and rehabilitate another property in the Tahoe Basin. The organization is also looking into a “homeowner initiated program.”

“That’s a program where a home buyer can come in and select a home that they want in a neighborhood of their choosing and the land trust could possibly come in with public-private partnerships to purchase the land and then that would come out of the purchase price as far as what the buyer has to come up with,” explained Kope.

Pismo moves forward with affordable senior housing project

Pismo Beach could soon be home to another set of affordable housing units.

At a meeting on April 7, Pismo Beach City Council unanimously voted to begin negotiations with the Housing Authority of San Luis Obispo (HASLO) regarding a proposed mixed-use senior housing project at 2655 Shell Beach Road. Although the potential project has a long way to go before it’s officially approved, council members showed overwhelming support for the initial proposal.

“This particular housing plan is exactly what I’ve been looking for for a long, long time,” Councilmember Sheila Blake said at the April 7 meeting, later adding, “These places are desperately needed.”

If approved, the project would include 21 affordable one-bedroom senior apartments, one two-bedroom manager’s unit, a 1,030-square-foot common space, a manager’s office, laundry facilities, and a 550-square-foot retail space, according to a city staff report. The proposed location is close to shopping and public transit, the facility wouldn’t block coastal access or views, and the housing units would be reserved for seniors earning 60 percent of the area’s median income or less.

The city first discussed the possibility of such a project in November 2019, when Pismo passed its fifth cycle Housing Element and fell into compliance with the California Department of Housing and Community Development’s housing regulations. After a Planning Commission review of HASLO’s conceptual plan for the project on Feb. 25, HASLO requested that Pismo commit housing in-lieu fee funds, which could be used to leverage state funds and low-income housing tax credits, to help finance the project.

The HASLO project is similar to another Pismo is working on with Peoples’ Self-Help Housing (PSHH) on 4th Street in Pismo Beach, according to Community Development Director Jeff Winklepleck. Pismo’s housing in-lieu fee fund is currently made up of about $3 million reserved for supporting housing projects, $2 million of which is already going to the PSHH project. With City Council’s April 7 approval, at least some portion of the remaining $1 million will be dedicated to the proposed HASLO project, Winklepleck said.

Although council members had some concerns regarding cash flow and funding, considering the financial hit Pismo Beach is taking due to the coronavirus pandemic, city staff assured them that the project is within the city’s means.

“I’m really excited about this project,” Mayor Ed Waage said at the meeting. “I think it’s a great fit for that location, it’s a great fit for our community, and I’m really looking forward to moving forward with it.”

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