(March 3) The county of San Bernardino is investing in the ongoing revitalization effort aimed at reversing the deteriorating economic and physical condition of the county seat. Once proud San Bernardino, which remains the county’s largest city population wise, has been in eclipse for a generation. In 2012, the city of 209,000 filed for Chapter Nine bankruptcy protections, and a pendency plan has been formulated but has yet to be fully approved by the federal bankruptcy judge, Meredith Jury, hearing the case.
Efforts to resuscitate the city through the redirection of government resources have been ongoing for some time, as was evinced with the construction of the 11 story San Bernardino Justice Center, which is located at 247 West Third Street in downtown San Bernardino and into which San Bernardino County Presiding Judge Marsha Slugh last year transferred the lion’s share of the 20,000 square mile county’s civil cases.
This week, the board of supervisor leapt once more into that effort, agreeing to loaning $1.81 million toward the project’s $26 millionfirst phase of what has been dubbed the Waterman Gardens revitalization effort. According to county officials the gamble is justified by the consideration that the county’s participation will coincide with the city of San Bernardino’s own $1.5 million loan stake in the effort as well as an even larger federal show of faith in the form of a $10.45 million loan.
According to Dena Fuentes, the county’s director of community development and housing, “This project, located at the corner of Valencia Avenue and 9th Street in the city of San Bernardino, is the initial phase of the Waterman Gardens revitalization effort. The borrower’s managing partner is National Community Renaissance of California and is coordinating with city of San Bernardino (City), County of San Bernardino and the Housing Authority of the county of San Bernardino to finance this project.
The total budget for construction and fees for this development is $26.6 million. The borrower received an allocation of $1,139,951 of 9% low income tax credits over a ten-year period from the California Tax Credit Allocation Committee to assist in financing the development of the project. Currently the borrower is securing all funding resources in order to commence construction in March 2015.
Fuentes continued, “Through this loan agreement, the county will be underwriting four units to remain affordable with a 20-year HOME affordability term and an additional county-imposed 35-year affordability term, for a total of 55-year terms from completion of the project. The remaining 72 units will also remain affordable for a period of time, as required by the
other affordable funding sources.
The project’s proposed financing sources are a tax credit investor equity contribution
of $12,424,223; a Housing and Urban Development, Title 24 Section 221 (d)(4) Loan of $10,447,263, an estimated city of San Bernardino HOME Loan of $1,500,000; a loan of $1,000,000 from the housing authority of the county of San Bernardino; an additional $810,000 county HOME Loan from the county and a deferred developer fee estimated at $438,665.
Fuentes said, “The project’s proposed financing sources are estimated, Fuentes said, adding, “It is the responsibility of the borrower to secure all commitments from the proposed financing sources. Failure by the borrower to secure all required commitments will not allow the project to move forward and may result in an item being brought to the board of supervisors for consideration of its commitment of the funds to the project. The HOME funds will be disbursed in three progress payments. The first two payments will be disbursed over the course of pre-development phase when all pre-development conditions are met by the borrower. The final payment is to be released after receipt of the project’s certificate of occupancy, issued by the city at construction completion, which is estimated to be Spring 2016.”
In January, the board of supervisors considered but held off on a recommendation by Fuentes to approve a “sub-recipient revenue agreement” between the city of San Bernardino and the county in the amount of $834,999, pursuant to the federal HOME Investment Partnership Program. Fuentes had requested that the county assume the city’s investment and risk in the project, she said “because the city is in the process of restructuring its financial position.” Fuentes said that “the United States Department of Housing and Urban Development (HUD) asked the county to assist the city in investing its Fiscal Year 14-15 HOME funds towards a project that meets HUD’s national objective of providing low and moderate income housing.”
In January, the budget slated for the project followed the schedule initially laid out for the undertaking, which was $23 million. That cost has been reassessed and now stands at $26,620,151. While the city of San Bernardino’s economic circumstance remains bleak, city officials have agreed to participate in the project.
The developer involved in the Val 9 Apartments rehabilitation is National CORE, I.e., National Community Renaissance, a non-profit corporation founded by Jeff Burum to provide affordable housing to low and moderate income home buyers. Steve PonTell is currently serving as its president and chief executive officer.
“In October 2014, National Core Renaissance and its development partners received an allocation of $1,139,951 of 9% low income tax credits over a ten-year period from the California Tax Credit Allocation Committee to assist in financing the development of the Val 9 Apartments,” Fuentes said. “The project consists of 70 affordable housing units on 4.65 acres at the corner of Valencia Drive and 9th Street in the city of San Bernardino. This project is the initial phase of the Waterman Gardens revitalization effort sponsored by the Housing Authority of the county of San Bernardino.