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Home My WebLink AboutMINUTES - 03161993 - 1.62 1 -62 TO: REDEVELOPMENT AGENCY FROM: Phil Batchelor Executive Director DATE: March 16, 1993 SUBJECT: Pleasant Hill BART Child Care Response Program SPECIFIC REQUEST(S) OR RECOMMENDATIONS) & BACKGROUND AND JUSTIFICATION RECOMMENDATIONS Acknowledge receipt of correspondence from the California Council on Partnerships encouraging nomination of the Pleasant Hill BART Child Care Response Program for future Partnership Awards competitions. FISCAL IMPACT None. BACKGROUND/REASONS FOR RECOMMENDATIONS The Pleasant Hill BART Station Child Care Response Program was nominated for the California Council on Partnerships "Partnership Awards '93" (attached) . The Redevelopment Agency did not receive the award this year because quantified results were not. yet available. The proposal was considered excellent, and the Agency was encouraged to submit for future Partnership Awards when results are quantified. CONTINUED ON ATTACHMENT: YES SIGNATURE: J RECOMMENDATION OF EXECUTIVE DIRECTOR RECO DATION O AGENCY CO TEE APPROVE OTHER . . SIGNATURE(S) ACTION OF AGENCY ON Marsh 16 , 199"1 APPROVED AS RECOMMENDED X OTHER VOTE OF COMMISSIONERS I HEREBY CERTIFY THAT THIS IS A x UNANIMOUS (ABSENT ) TRUE AND CORRECT COPY OF AN AYES: NOES: ACTION TAKEN AND ENTERED ON THE ABSENT: ABSTAIN: MINUTES OF THE REDEVELOPMENT AGENCY ON THE DATE SHOWN. Contact: Jim Kennedy 646-4076 ATTESTED March 16 , 1993 orig: Redevelopment Agency PHIL BATCHELOR, CC: CAO GEN% SECRE Y Community Development m8khildcanbos BY , DEPUTY CALIFORNIA COUNCIL J ON PARTNERSHIPS J J f 1100 K Street, Suite 101 • Sacramento, CA 95814-3941 • (916) 327.7507 t'1 February 16, 1992 Mr. James Kennedy Redevelopment Director Contra Costa County Community Development Agency 651 Pine Street, 4th Floor, N Wing Martinez, California 94553 Dear Mr. Kennedy: Thank you for submitting your application for the Partnership Awards '93 competition. While your project was an excellent one,there were projects that more clearly reflected the criteria established and more readily quantified results. We intend to continue this recognition process in the years ahead and welcome your submitting your project in the future. In the immediate future,the Council and CSAC will profile these streamlining efforts in newsletters and magazines in an effort to share.successful ideas among all local government jurisdictions. Again, thank you and congratulations on your actions to create positive change in addressing California communities' problems. Sincerely, Muriel Stacp oole Director cc: Harvey Bragdon ANN C.WALSH Pacific Gas d Electric Co-Chair TOM ROGERS Initiated by Supervisor,sans Barbara count' Co-Chair the County Supervisors rc� MURIEL STACFOOLE Association of California Director Public Relations and Citizen Education Pacific Visions Communications S + .J EXECUTIVE SUMMARY Statement of the Challenge and the Solution Contra Costa County/Pleasant Hill BART Station Area Child Care Response Program A. Problems/Challenge The Contra Costa County General Plan guides decisions on future growth, development and the conservation of resources through the year 2005. The Public Facilities/Services includes child care goals and policies designed to assist and encourage the development of adequate, affordable and quality child care that maximize parental choice for child care. The County believes that children need and have a right.to a safe, healthy and caring environment. To implement its child care policies, the County has adopted a Child Care Facilities Ordinance that encourages the participation of parents, child care providers, public officials and employers in the planning and provision of child care facilities. In the mid-1980's,the County adopted a Specific Plan and a Redevelopment Plan for the Pleasant Hill BART Station area in Central Contra Costa County. This 140 acre area surrounding the Pleasant Hill Station of the Bay Area Rapid Transit District (BART) provides an opportunity to locate development next to a regional transportation hub. The Pleasant Hill BART Station area is an emerging model for the development of suburban employment/housing centers next to transportation facilities. Planners and environmental interests have advocated this type of development for years. The Pleasant Hill BART Station plan included a strong growth management element in which public infrastructure was provided concurrent with or prior to development. Included in the growth management program was the requirement for a proactive child care program. B. Solution Survey results in the Pleasant Hill BART Station Area have consistently found that employees desired high quality and affordable child care services. With those survey results in mind, the County was successful in getting all developers to participate in a Child Care Mitigation Program. This mitigation program of the Contra Costa Centre Association (LCCA) is funding a child care affordability program and the construction of permanent child care facilities. In approving the Park Regency Apartment Project in 1988, the Board of Supervisors required that an on-site child care facility be provided. The child care center came to be known as "Kids Wonderland.' It was determined that an optimal child care facility should have space for 90-120 children. A major factor limiting capacity was the availability of outdoor space. Another major limiting factor was the extremely high property values associated with the Pleasant Hill BART Station area. In order to proceed with Kids Wonderland, solutions to the three problems of land availability/cost,construction/permanent financing cost, and the affordability of child care needed to be resolved. The County, through its Redevelopment Agency, orchestrated the following solutions: 1. Land Availability/Cost. The owner of the Park Regency Apartment Project was required to provide the land at a substantially below market price to Kids Wonderland. In addition, the Agency provided an easement on property it owned adjacent to the child care center at no cost to the operator. The easement area permitted the center to enroll 92 children. 2. Construction/Permanent Financing Cost. Financing this $700,000.00 facility had capital availability and cost of capital dimensions. A creative solution involving funds of Kids Wonderland, COCA, and funds secured with Mello-Roos bonus was conceived: a. Contra Costa Centre Association Contribution Child Care Mitigation Program funds were available to finance a portion of the facility. In exchange for having first rights to 50% of the child care slots being created, the CCCA agreed to provide $100,000 towards the construction of Kids Wonderland. b. Mello-Roos Financing A portion of the Park Regency Apartments public infrastructure requirements were being financed with Mello-Roos bonds. Child care centers, while not a traditional project for financing under the Mello-Roos procedures, are eligible because the facility could be owned by a public entity. Federal tax law, however, did not provide for the financing of privately owned child care facilities on a tax exempt basis. Federal tax law does, however, provide that up to 5% of the proceeds of any tax exempt bond issue may be used for certain "bad costs" that would otherwise be ineligible. Because the remaining portion of the Mello-Roos issue consisted of clearly "good costs," the County was able to provide$205,000 in financing for Kids Wonderland at substantially below market tax exempt rates. 3. Child Care Affordability. Using interest earnings on its capital account, the CCCA will be able to subsidize child care for its tenant employees at Kids Wonderland and elsewhere. Five of the eleven commercial property owners in the area secured their Child Care Mitigation contribution by participating in the Mello-Roos bonds. Because child care affordability is not eligible,the property owners agreed to pay for eligible County improvements, in exchange for which the County contributed a like amount for child care affordability. This application of an "asset transfer" is a creative marriage of public finance and public program objectives. C. Budget/Costs/Savings The total cost of land and construction for Kids Wonderland is approximately$700,000. Over 80% of the financing of this project came through creative public/private partnership sources. The sources of funding for the project are as follows: Developer land subsidy $200,000 Contra Costa Centre Association contribution $100,000 Contra Costa County Mello-Roos contribution $205,000 Owner equity $145,000 Redevelopment Agency land subsidy $ 50,000 D. Results With this rather unique package of financing, the owner of Kids Wonderland was willing to proceed with construction. Construction is currently under way, with an expected completion date of December 1. In addition, the CCCA has capitalized a fund that can provide an ongoing revenue source for child care affordability. JK:lh/SRA5:executiv.sum