City Council - Regular Meeting

You're really focused on the financing, right? Don't you want to focus Heat. Heat. Heat. Heat. Heat. Heat. Heat. Heat. Heat. Heat.

Heat. Heat. Heat. Heat. Heat. Heat. Heat. Heat. Heat. Heat. Heat. Heat. Heat.

Heat. Heat. Heat. Heat. Heat. Heat. N. Heat. Heat. N. Heat. Heat. N. Heat. Heat.

Heat. Heat. N. Heat. Heat. N. Heat. Heat. Heat up here.

Heat. Heat. Heat. Heat. Heat. Heat. Heat. Heat.

Heat. Hey. Hey. Hey. Heat. Heat. N. Heat. Hey, Heat. Heat. Heat. Heat. Heat.

Heat. Hey. Hey. Hey. Heat. Heat. Heat. Hey. Hey. Hey. Heat. Heat. Heat. Heat. Heat. Heat. Heat.

Heat. Heat. Heat. Heat. Heat. Heat. Hey, heat. Hey, heat. Heat. Heat. Heat. Heat.

Heat. Heat. Heat. Heat. Heat. Heat. Heat. Heat. Heat. Heat. Hey, hey, hey.

Heat. Heat. N. Heat. Heat. N. Heat. Heat. N. Heat. Heat. Heat. Heat. N. Hey, hey, hey. Heat. Heat. N.

Heat up here. Heat. Heat. Heat. Heat. Heat. Heat. Heat. Heat.

Heat. Hey. Hey. Hey. Sh. Hey. Hey. Sh. Sh. Hey, hey, hey. Heat. Heat. N. Heat. Heat.

Heat. Hey, Heat. Heat. Hey. Hey. Hey. Heat. Heat. Heat. Heat. Heat.

Heat. Heat. Heat. Heat. Heat. Heat. Heat. Heat. Heat. Heat. Heat.

Heat. Heat. Heat. Heat. Heat. Heat. Good evening and welcome back to a joint meeting of the Burbank City Council with the Housing Authority on Tuesday, April 21st. 1st, 2026. Today's study session item is an update on the proposed Burbank Housing Corporation master loan agreement phase 2 related to activity center programming and proposed financing for 2321 and 2335 North Fairview Street development, the village at Fairview Street. I just want to also uh note the absence of council member Perez right now as she is pumping for her baby at this moment, but she'll be back in a little bit. And I welcome Marbel Leland from the community development department to please present the report. Welcome, Miss Leland.

Thank you very much, Madame Mayor. Good evening, Madame Mayor, members of the city council. Maybel Leland, assistant community development director. This evening, you will be hearing from the Burbank Housing Corporation and team. all this evening. Um the city's longtime affordable housing partner with proposed actions related to their LA master loan agreement phase 2. The council, the housing authority board, and members of the public may recall the discussions related to the MLA phase 1 approved last January 2025 that allowed BHC as an organization to have favorable financial records to continue creating additional affordable housing units in the community. MLA phase 1 approved last year made global accounting and oversight changes to the existing master loan agreement that now provides BHC the flexibility to apply to other funding sources such as state and federal federal tax credits, private funds, and other grants to continue to finance projects. Furthermore, those changes allow the release of properties from the larger agreement for future development opportunities. This evening, BHC will be presenting the MLA phase 2 proposed changes for the Village at Fairview project. You will hear BHC present the project and the request for proposed financing that includes the request for conditional commitment reservation letters for that those proposed funds. Furthermore, BHC will present proposed changes to activity center programming that will give BHC the financial stability and ability to create additional affordable housing units in the community. The presentation this evening is forformational purposes only. With the council imports feedback, staff will return next month for the proposed actions presented this evening. And again, staff will return with full

financing documents when other financing is secured. With this introduction, I invite Sylvia Moreno up to the podium to introduce her team and present the proposal.

Welcome. Thank you. Thank you, Mayor Bell. Good evening, Madame Mayor, Vice Mayor, and members of city council. Sylvia Moreno, executive director of Burbank Housing Corporation. It's nice seeing you all tonight. I'm here tonight with Raha Arnold, our VP of operations, John Mlen, BHC's construction manager, and members of BHC board of directors, Chris Welker, board president, Chris Bear and Angelina Santenno. Tonight, we are here to discuss phase two of the MLA, which includes BHC activity centers, and our new affordable housing development, The Village at Fairview. Joining me this evening are our partners and development team. Dina Fuentes from RSG Consulting, Lynn Hutchkins with Goldfarb, Alex Russell with Homes and Hope, and Manuel Salazar from Y&M Architects. When you look at this map, you're seeing more than properties. In partnership with the city, BHC has produced 326 affordable housing units. We also provide family support services and manage two nationally accredited child care centers. For more than 25 years, this partnership has stabilized neighborhoods and created lasting affordable hop opportunities for our Burbank residents. In August of 2024, we presented the challenges BHC has been facing ensure that we would return with the plan for financial sustainability and future growth. During RSG's financial analysis of our housing revenue, it was determined that funds from our portfolio could no longer sustain the cost of our activity center programming. Our goal is to maintain strong fiscal and operational stability and to remain solvent and financially sound. Lastly, expanding BHC's affordable housing portfolio as well. For over two decades, BHC has provided

an after-school program through our activity centers as a nocost amenities for our families. However, over the past several years of the program, it has faced some real challenges. We've seen a significant drop in attendance driven in part by changing demographics. BHC conducted a parent survey last August and families expressed an interest for an after afterchool program located directly at school sites. In addition to the decline in participation, there is the financial feasibility to consider. The afterchool program cost about $180,000 to operate and BHC pays approximately $1,900 per child per semester. It makes one ask, is that the best use of BHC's limited resources? Finally, there are limited grant opportunities to help cover these costs. To continue to serve and support our families, we have created something special in partnership with the Boys and Girls Club. It's called the Bridge Program. This program will transition legacy participants from our activity center afterchool program to school site programs at 14 BUSD campuses. A legacy participant is a child that attended the activity center afterchool program during the 2026 spring semester. Boys and Girls Club have agreed to negotiated rates and we budgeted $18,000 to cover these fees for the fall semester. When the bridge program concludes this December, we will continue our partnership for another 5 years. BHC families will receive a discount of 110 for elementary and 60 for middle school at all Burbank school sites. Currently, BHC has approximately 150 children within our communities who could benefit from this program. BHC will no longer be able to directly subsidize these fees through our property revenue, but we remain committed to supporting our families by seeking private donations,

applying for grants, and partnering with BGC to help our families secure financial aid. This approach is the most coste effective approach to the activity center program challenges, allowing BHC to remain fiscally responsible while continuing to help our families. BHC plans to repurpose these spaces by converting three of the four sites into affordable housing units and transitioning one into a property management office. Over the next two years, BHC will be following all planning requirements to convert these units and funding for the renovations will be paid through BHC's developer fee and capital replacement reserves as needed. This approach allows us to preserve our real estate assets, create additional housing opportunities, and better align these spaces with our core mission, which is housing. It is I'd like to introduce Dina Fuentes to walk you through our financial strategy for growth. Good evening, madame mayor and members of the city council. Nice to see you all again. BHC's portfolio expansion. And if we can put the PowerPoint up. BHC's portfolio expansion strategy advances two of the core goals. Maintaining fiscal and operational stability while positioning the organization for long-term growth. The transition away from the activity center program is critical to viability and growth. These programs are high costs with low utilization creating ongoing operating pressures. Phasing them out stabilizes cash flow and allows BHC to repurpose existing assets towards its core housing mission which while also creating new affordable housing opportunities such as the units at the village of Fairview. Taken together, the strategy demonstrates the

portfolio expansion is viable because it's paired with an operational right sizing, strengthening BHC's financial foundation while meaningfully scaling long-term housing impacts. This slide shows a clear comparison of the long-term financial sustainability. When the activity centers are included, the portfolio generates a cumulative loss of over $1.8 8 million. By transitioning away from these high-cost, low utilized centers, the same portfolio shifts to a positive cash flow of over $400,000. This change is not about reducing services. It's really about aligning resources that are most effective. This slide looks at whether the portfolio expansion is feasible specifically in the Golden State neighborhood and at the Fair View properties. the move forward with redevelopment. To move forward with redevelopment, BHC proposes to remove 16 existing units to create capacity for 60 new units. So the key question is whether the broader portfolio can absorb the revenue reductions. This line brings together the story. By stabilizing BHC's operations and making targeted changes, particularly transitioning away from the high-cost, low utilization activity centers, BHC establishes a financially viable foundation for growth. Importantly, this growth is achieved while maintaining a positive 10-year cumulative cash flow of over $400,000 even after absorbing the revenue impacts associated with redevelopment. This strategy directly advances the city's housing element and its rena goals by delivering new affordable housing units without compromising the long-term stability of the existing portfolio. And now Sylvia will introduce the village of Fairview

presentation please. Thank you Dina. I'm excited to present our future development the village at Fairview. In 2021, we conducted a portfoliowwide analysis to identify underutilized properties. With that, we pinpointed four contiguous parcels on Fairview Street. These properties currently contain 16 units and are located in the Golden State neighborhood where BHD already owns and operates 78 affordable homes. These sidebyside parcels are zoned R4 and present a unique opportunity for highdensity redevelopment. BHZ has assembled a project specific team to develop to develop the village at Fairview. Since this will be our first TCAC project, the village will be a standalone affordable housing development serving 60 extremely low to lower income households. This project will have 20 project-based vouchers, 15 of which will be dedicated to the permanent support of housing units for homeless families with children and five vouchers will support lower income families. To support this effort, BHC has partnered with Homes and Hope, our development partner, for their extensive experience in tax credit financing, entitlements and development, and with Y&M Architects for their expertise in designing highquality affordable housing projects. BHC will serve as the long-term operator responsible for leasing and managing the units and the day-to-day operations. I would like to turn it over to Manuel who will walk through the design and amenities that shape the village.

Welcome, Mr. Salzer. Presentation, please.

Good evening, Madame Mayor and members of the council. Uh, this redevelopment replaces aging structures with 60 new homes in this charming apartment building that reflects BHC's values in creating housing and amenities through thoughtful design and remaining respectful of the existing neighborhood character. The design of the building consists of a mix of ones, twos, threes, and four bedroomedroom units totaling uh uh 60 affordable units. U this is four stories of uh apartments and amenities over one level of subterranean parking. Now the project is organized around the concept of creating a community within its residence. The importance of open space both interior and exterior thus become a priority. opening. Upon entering through the large entry lobby, you are greeted to a large central courtyard that is adorned with several seating areas, gaming tables, and a tot. Directly adjacent to the courtyard is a very large recreation room with ample interior open space for indoor lounge, table, and other recreational spaces to invite the residents to enjoy and commune with neighbors of the village. We even integrated fitness into the design by creating a walking path around the perimeter of the property that takes you to uh exercise equipments um for supporting health and wellness for residents of all ages. Now, I mentioned earlier that we were able to accommodate parking for the 60 apartment units with a subterranean parking structure. We decided to provide underground parking instead of an on-grade so that we can be respectful of the neighborhood charm by hiding the parking below the ground and maximizing the curb appeal by creating a residential facade design from the ground up. We tried to maximize as much as possible uh to accommodate 60 parking stalls, one parking stall for every tenant.

Now, we took great care in the exterior design of the facade. We wanted to make sure that through um war materials and human scale massing, we created thoughtful detailing to ensure that the housing feels like it belongs from day one. And this is the ingredients that make this such a special project. It is our objective of maintaining character and contributing while contributing long-term beauty and vibrancy. Now, where are we right now with the project? The project completed development review in February of 2026. It utilized available state concessions and waivers and has successfully completed the required public appeal period. All local planning and environmental clearances are in place, allowing the project to move directly into design, advancement, and permitting. I'll now turn it over to Sylvia Moreno to walk through the tenant relocation plan.

Thank you, Manuel. So, a tenant relocation plan has been prepared by Trans Systems. Our families will have first right of refusal to return to this development. If our families are not interested in returning to the project, they will be entitled to receive permanent relocation benefits. Homeigan LA will serve as the supportive services provider at the village. Through this partnership, Holla's team will maintain a dedicated on-site office and work directly with families to provide case management services, connect residents to public benefits, assist them with employment opportunities, and host specialized community workshops for all 60 residents. Now, I would like to turn it over to Alex. Good evening, council members. Really happy to be here tonight. So, I want to briefly walk you through the project timeline. You know, we're beginning with tonight's study session, and then we're hoping to come back on May 5th uh to go over the conditional commitment letters for the funding. That way, we can apply for the biggest funding source, which I'll talk about next, which is long-term housing tax credits, which the application is due May 19th. And if we're successful with that, which we feel really good about, we' get an award on August 18th of this year. and then we'd come back to you again in September for the detailed loan documents and to approve the relocation plan. So, there's still opportunities to comment and on this project. Uh from there, we hope to start construction or we do the relocation in the fall and through February of next year and then start construction in March of next year. Uh we anticipate construction taking about 21 months and then finishing in December of 2028. That's when people would move in. Overall, this schedule reflects a practical and achievable path forward.

And assuming we get the credits, uh, we definitely should hit all those metrics. Next slide. So, the next one's a little bit more challenging. It's the financials for the project. Let's see. The next slide is me, so I should have been talking to myself.

Before this financing structure for the Before You was a financing structure for the village of Fairview, the project is about $49.8 $8 million. It's a compilation of permanent sources through private investment through state funding, federal programs, and the local funding here. The largest single source is tax credit equity, which again we're looking to apply for uh next month, which is $29 million. Uh you might be asking, what are low-inccome housing tax credits? How does it work? This program is the largest affordable housing program in in America. It is where the federal government provides tax credits to private investors, usually uh financial institutions, big banks, things of that nature who then take those credits and invest in the project. So, they give the project money, federal government gives them the tax credits, and it's basically a win-win. We get the money for affordable housing and they get their federal subsidies. We are looking to borrow $4 million in permanent debt. So, we're borrowing as much as we can, but again, the rents are low, so we can only borrow a lower amount. And that's why we're here with the city to kind of fill that that gap. Uh we're requesting about $8.4 million in new funding and then rolling over the existing debt that's on the property of $2.9 million. So that's again not new money. It's rolling over the existing debt. Uh I would also note that the financial plan uh was reviewed by Kaiser Marston uh the city's uh p uh independent financial consultant. So we feel really good about the assumptions and the city has been able to vet them. Again, tonight we're only requesting conditional commitment and reservation letters. So again, we will be back for the the final documents. And again, I want to mention that the city's investment will leverage nearly $40 million in in state and federal funding. So, we feel that this will bring new jobs and resources to the community as well as much needed affordable housing. If you have much uh more detailed questions about the financials, we're here. I will turn it back over to

Sylvia. Thank you, Alex. Moving on, uh BHC would like to move the village at Fairview forward by requesting approval from the city and the housing authority to change the use of our activity centers. We also request approval for the rollover of the existing Fairview loans along with the approval of the new city and housing authority loans to support the construction and long-term operations. Ownership and management. The ownership structure for the village will be different from prior developments between BHC and the city. This tax credit project is structured as a single asset limited partnership. Under this structure, BHC and Homes and Hope serve as general partners. Homes and hope is responsible for securing entitlements, assembling financing, which is applying for the tax credits because they're the experts, assisting with the groundup development process. B2 will continue its core role as the developer and long-term operator responsible for leasing, day-to-day management, and compliance monitoring. This ownership structure capitalizes on the specialized expertise needed to deliver this project while ensuring BH retains long-term control of this asset and responsibility for its operations. That concludes our long presentation and uh we're all here to answer any Q&As's. Thank you so much for your time.

Great. Thank you and thank you for your patience and waiting for us earlier. And thank you for all of you for your uh presentation. Council, do you have any questions for the speakers? Yes, Vice Mayor. Thank you. Uh yeah, and thank you for waiting. I know we apologize the ran a little late. Um, if you can just elaborate a little bit about uh the permitted relocation benefits and um what is that mean and how are you going to relocate um the residents currently right at the units right now?

Great question. Uh Council Member Mullins, we actually have our relocation consultant here with us tonight, Sonia um Sherlock with Trans Systems that can answer your question. Hello. Hello everyone. All right. So, let me take that. Uh, give me the first part of your question. Is that to explain a permanent relocation? Let me Oh, go ahead. Sylvia had indicated that they're going to work on relocating. So, what does that mean? finding other low-income housing for those individuals and who beside Hollow you mentioned hollow who you would be working with and where they stay still stay in Burbank are they going to another city if you can just bundle all this up

really quick

I have it understood that they can have one of four options actually for the uh uh for the 14 for the 14 households is that they can be um they can be placed in another um in another unit in Golden State if it if it if it's available. If it is not in the Golden State area, then they actually can be placed anywhere in the portfolio actually that they have anywhere else, you know, in Burbank. If they do not want to be placed there, then they can actually choose permanent relocation, which means that they get relocation assistance, both um moving payment assistance and also rental assistance to go into the private market. That assistance is designed to give them um give them the difference in the market rent because it's going to be a big difference um for 42 months which is 3 and 1/2 years. They actually even if they take that actually they have the right of they have the right to return. Um the fourth option is that with the um with the relocation assistance that is calculated for them, they can actually use that as a down payment on a home and stuff and and and and it does happen and we actually have identified there may be one or two households actually um because I' because I've actually have met with all of the households um we've they've already received in January 25 they received the the g what we call the gins the general information notice. So they they know this is happening. and they know they know the timeline. They've been apprised by notices of you know changes in the timeline. Um and a couple of them have expressed an interest actually um in how to do a home and we do that actually when as a relocation agent we work with each household um each house you know not not everyone can get a mortgage and so I actually have walked them have walked through them that like you know what be use this time now the next year and a half and u the first thing you have to do is qualify for a mortgage because

generally people can if they're paying their rent they can pay they can pay a mortgage But not everyone has a down payment. Um, and so basically you can you can do that and there there is a household that has expressed interest, you know, in that. So,

excellent. Thank you. Because it's good information to be out there. Um, not just we're going to relocate them somewhere. We're not doing everything we can possibly do to even enhance their lives and move them on to become owners themselves of a home. So, this is uh, excellent. Um, Madame Mayor, my other quick question is for staff. Um, just curious of the city's obligation for budgetary obligation that is. Um, and thank you. I Yes, I appreciate it. Thank you. Thank you so much.

Um, where would the funds come from? And you know, as people look at our budget and wonder, you know, are you taking out of the general fund or where are you getting? So, if you can just briefly explain where it comes from. Thank you, vice mayor, for the question. Yes, absolutely. Happy to do that. The proposed financing would be from two funding sources from the city of Burbank, which is the federal home funds that we do have and we receive every year. So, we do have a pot of available federal home funds for um for a development such as such as this. And then there's also a pot of funds available through the former redevelopment agency, which is the low and moderate income housing asset fund. So we do have those and both of these are are restricted housing funds. So they're restricted for housing, restricted for a project such as this does not the proposal does not include any general fund monies. It's really restricted housing funds from those two sources.

Thank you. You're welcome. That's it. My questions. Thank you. Good questions. Uh yes, Council Member Rosati. Thank you, Madame Mayor. Um just a couple questions. Um, what will be the funding source to sustain the the cost of the off-site services? Would you like to handle that? Sure. You want me to take that? Okay. Yeah. Essentially, it's included in the operating budget. And so that'll, you know, 47,500 is put in the operating budget with an escalator to pay for services. So, it's not coming from any city funds or anything else. It's accounted for in the operations of the project. But how how will you sustain that?

Uh basically the revenue from the rent uh the re the way that the reason we're only borrowing only $44 million is because we calculate the amount that we can borrow based on the rents that we're charging. That's why we're getting city assistance in these tax credits so we can have enough revenue to cover our expenses, cover our services, cover the high insurance costs, cover all those things that we need. Okay. Yeah. And then on page four, there was a $100 capital contribution to for the general partners. What was that? Yeah. The $100 is mainly just so that when you form a limited partnership for the tax credits, you need to put in money for it to be legally viable. 100 bucks is just so this is a legal agreement. Got it.

Yeah. And then um what is the calculation for the price per unit for the unit? The price per unit was I'm sorry. The price per foot for the 60. Yeah, sorry. I have John. Perfect. I have our construction manager that can answer that question. Uh, good evening, Madame Mayor and council members. Uh, the cost per square foot is coming in right around $352. And is that elevated because of the subterranean? Uh that includes yes includes the units and the subterranean parking over a total of 85,000 square ft. So it's 85,000 and it's 3 what?

352 roughly. 352

And then how are we seeing that in the marketplace? It's consistent with uh projects of this nature. And over time do you see construction costs going up. Have you budgeted for that? Uh yeah, we've al allocated for cost escalation. Uh this project is based on prevailing wage and considers that element. So what's the contingency for that? How much uh the contingency we're carrying? We have a 5% hard cost contingency plus a G internal GC contingency. The hard cost contingency is 1.5. Hold on. Could you repeat that the whole thing? 5 million. Yeah. Yeah. That's where you have a cushion in our in our construction cost. And over how much time is that?

Well, if we're hoping to start construction in March. So, um the the 1.5 million assumes say we have actual current GC bids for this project that John put together, which I'll let him answer. As long as there's no delay, we should be good. You're good. Yeah. Yeah, we should be fine. Okay, I'm good. Thank you. Thank you, Madam Mayor. Good questions. Did you have a question, Council Member Anthony? I mean, we could help them out. You want to get some shovels, get a hard hat? I'm I'm happy to help out. You need an extra pair of hands. I'm only 30 bucks an hour. Be great.

Um, I actually don't have any questions. Uh, I just want to simply state that I am so pleased to see BHC operating at this level now. I remember when it was like pulling teeth just to get you three units and now we're flipping 14 into 60. I mean, I love this new direction that we're going. All of the work that we've all everyone in this room has been doing for years to get you to this operating level, I think is is fantastic. Uh you should all be very proud of yourselves. Um I know I speak for the council when when when we look at the work that you're doing. Uh we are very happy with what we see. So thank you.

Any other comments to follow up your questions? General comments back? No. Okay. Um, I uh echo the sentiment Council Member Anthony just shared. Thank you for the questions. Great questions. I'm so pleased to see that the families who did use the afterchool care, even though the numbers were low, that they're being taken care of and that they will have a place and so pleased that the residents that live there are being taken care of, too. You put a lot of thought and care into that. In fact, the whole project, your team has put incredible amount of thought and care into doing it the right way, the best way. You have an all-star team here on this project that you've put together. Such high quality and it's ambitious. The project is very ambitious yet you're persevering and you're not letting it deter you and it's just incredible that you are continuing on with that. Um I'm let's see I'm also particularly improved with uh impressed with the design that was presented for the property that um even though it is affordable units that the property has a creative ways to offer quality of life aspects with the example with the track around and the outside gym. Normally people play pay a premium to have a gym on site and this is an opportunity for affordable housing units to have a an a premium service and in a creative way that's low cost. So, excellent job in being creative that way. Sounds like you have a few more presentations you'll be bringing to us and I look forward to seeing um your progress and hopefully the timeline will stay on budget and on time and we'll see it coming at the end of 28. Yeah. Thank you.

And keep up the good work providing housing. Thank you. Thank you. And we really appreciate your partnership. Um it's been the direction of the board to grow the organization and we're very proud of where we are today. So, thank you so much for all your help. Yeah. All right. Thank you. So, that concludes our study session. Now, this room is full and I'm going to say something that might make the room kind of make a big noises, which is we're going to have a fivem minute break, but we're going to be back here in five minutes. Uh, yeah,

we need to like Yeah, there's some things. So, we are going to be back here in five minutes and I shall use my gavvel to bring everybody back very quickly. When you hear that, it's like the teacher going sh. And then we're going to all go back to spit. So, five minute break. See you. Bye.