One Church Street Apartments

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One Church Street Apartments San Francisco, CA
94114 Census Tract 168.98 Developed by BRIDGE
Housing Corporation Click Page Down Key to View
Slide Show
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NEIGHBORHOOD One Church is located in the Duboce
Triangle neighborhood of San Francisco. Nearby
are grassy fields and recreational space, as well
as a variety of retail and services offerings.
Market Street, a main arterial route through the
city, is within one block, and schools, religious
institutions, a library and hospital are all
within walking distance.
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NUMBER OF UNITS One-bedroom Units 31 Two-bedroom
Units 34 Three-bedroom Units 28 Total Units
93
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RENT STRUCTURE Thirty-one units will have
project-based Section 8 subsidies with a 15 -year
term, renewable on an annual basis. These units
will be leased to families earning up to 50
percent of the area median income.Twelve of the
31 Section 8 units will be set aside for families
in which one or more persons have HIV/AIDS
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Interior Court Yard

• AMENITIES
• Laundry facilities and garbage chute on each
  floor
• Large community room
• Computer lab with up to eight workstations
• Two elevators
• Tot lot
• Parking

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Interior Court Yard
Tot Lot and Child Care Center (not completed)
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• RESIDENT PARKING
• The project includes 93 spaces of underground
  parking.

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Childcare Space (under construction)
COMMERCIAL SPACES A licensed child care provider
will lease one of two commercial spaces and will
serve 36 children. The childcare center is a
requirement of city funding. A second
nonresidential space of 330SF is proposed as a
coffee shop. This space is located at the corner
closest to the commuter trains and buses.
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Proposed coffee shop
One Church Street is directly adjacent to one of
the largest transportation Centers in San
Francisco. It shares a property line with a MUNI
station that represents the only residential
location running all five train lines from
downtown to the rest of the city.
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SOCIAL PROGRAMS One Church Street will provide
after-school programs including educational
classes and computer training.
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EXCERPTS FROM THE NEF INVESTMENT PROPOSAL
SUMMARY PROJECT APPROVED BY NEF BOARD OF
DIRECTORS PROJECT REVIEW COMMITTEE JUNE
2000 NAME OF PROJECT One Church Street
Apartments LOCATION 1 Church Street San
Francisco, CA 94114 Census Tract
168.98 SPONSOR BRIDGE Housing Corporation,
a California 501(c)3 TAX CREDIT LIMIT TARGET
MARKET Rents for 63 of the 93 units (68) are up
to 50 of the 2000 San Francisco County
Statistical Area Median Income of 74,900 for a
family of four. The remaining 30 units (32) are
at 60 of AMI. One Church Street Apartments is
located in a Difficult Development Area. As
such, it will receive a 30 boost in basis. The
California Debt Limit Allocation Committee
awarded the project its tax-exempt bond financing
authority in April 2000. ADDITIONAL RENT/INCOME
RESTRICTIONS One Church Street Apartments will
have sources of financing that require the
following additional income and rent constraints
San Francisco Redevelopment Agency/AHPP 31
units will have project-based Section 8, 15-yr.
term that is renewable on an annual basis - units
are at 50 AMI. City of San Francisco, HOPWA
(Housing Opportunities for People With AIDS) 12
of the 31 units will be set aside for very
low-income families in which one or more persons
have HIV/AIDS - units are targeted at 20 of AMI
but may increase to 50 dependent upon
income. PROJECT DESCRIPTION One Church Street
Apartments is a 93-unit affordable housing
project located in the Duboce Triangle
Neighborhood of San Francisco, Calif. Intended to
serve low-income families and special needs
populations, the project includes 31
one-bedroom/one-bath units, 34 two-bedroom/one-and
-one-half bath units and 28 three-bedroom/two-and-
one-half bath units. The site is near a variety
of services and amenities, and the project offers
on-site community space as well as a play lot and
laundry facilities.
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The site plan takes advantage of the site
conditions by designing a three-story building on
the high end of a slope and a four-story building
on the low part of the slope, thereby creating a
feeling of having only a three-story development.
The three-story walk-up design also compliments
the surrounding neighborhood, with walk-up flats
across from the two residential streets (Church
and Hermann) and a four-story, two-elevator
building on the commercial fronts facing the U.S.
Mint and the MUNI (local rail service) tracks and
the nearby Safeway supermarket. The style of the
development is a mixture of Victorian/Edwardian
that is visually integrated with the surrounding
neighborhood architecture. The site will also
house two nonresidential spaces. The childcare
center will have a private entrance on Webster
Street that is a dead end and therefore has
little traffic. A licensed child care provider
will lease the space that will serve 36 children.
The inclusion of a childcare center is required
by city funding. The second nonresidential space
of approximately 329 square feet is proposed as a
coffee shop. Located at the corner closest to
the commuter trains and buses, an express coffee
shop would flourish. The apartments will
feature wall-to-wall carpeting in the living
areas, all-electric kitchens and storage space.
Laundry facilities will be provided on each
floor, as will garbage chutes and recycling
areas. A large community room is located on the
first floor of the development, directly adjacent
to the main pedestrian entry. A computer lab
with up to eight workstations is located off of
the community room. Both areas are fully
accessible. In this same area, BRIDGE Property
Management will have two offices for its staff,
including the resident manager and the
maintenance staff. These areas are directly
adjacent to the main pedestrian entry and one of
two elevators for the four-story building, and
they have direct access to the garage. An
exterior courtyard that includes a tot lot with
play equipment and a quieter lawn is currently
being developed. DESCRIPTION OF NEIGHBORHOOD
AND AREA The sites proximity to services and
amenities makes it ideal for affordable housing.
One Church Street Apartments is located in the
Duboce Triangle neighborhood in San Francisco.
Duboce Park, which has a large open grassy field,
a walking path, benches, a basketball court and
enclosed childrens playground, is located one
block from the development. Less than half a
block from the project is a large complex
anchored by Safeway, including an on-site
pharmacy. Within the same shopping complex,
there is a coffee shop, a film store and a small
eatery. Market Street, a main arterial route
through the City, is also within one block, with
its multiple restaurants and a small grocery
store. There is also a hospital, religious
institutions, two community centers and a library
within walking distance. Three schoolsMcKinley
Elementary School, Mission Middle School and
Mission High Schoolare within one mile.
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FINANCIAL RISKS Development Financing Risk All
funding for this project has been
committed. OPERATING RISK This project shows
minimal operating risk because it has substantial
operating reserves, generous replacement reserves
and significant cash flow. The operating budget
shows expenses of 3,861 per unit and is trended
at a rate of 3.65 per year. Rental income is
being trended at 1.5 for the units. The
replacement reserve is not capitalized but the
annual contribution of 37,200, or 400 per unit
per year, is greater than NEF guidelines. The
budget and reserve amounts have been approved by
Portfolio Management. This project has
substantial cash flow and a capitalized operating
reserve of 289,170, which must be maintained at
that level from project income. Operating
deficits will be funded first from this
source . The underwriting allows for full payment
of the Partnership Management Fee that will be
used in second place in case of operating
deficits. The cash flow also allows for
significant repayment of the City Redevelopment
Agencys loan, which is paid on a contingent
basis and therefore will fall in line as a third
payment source for operating deficits. Finally,
the sponsor is projected to capture an incentive
management fee that, if necessary, will be used
to pay any operating deficits. These combined
funding sources along with the sponsors
8,738,933 net asset position mitigate any risk
of operating cost overruns. PROJECT-BASED
SECTION 8 CONTRACTS Of the 93 units at One Church
Street, 31 are supported by a project-based
Section 8 Contract (PBS). The contract is for 15
years and is renewed on an annual basis. The
annual renewal of the HAP contract does not put
this project at risk because the city of San
Francisco backs the bondholders debt. The
bondholders debt service is paid directly from
Section 8 funding. The city will enter into an
Agency Payment Obligation that will retire some
or the entire bondholders debt if there is an
adjustment or expiration of Section 8 funding.
Bank of America is the bondholder and is
providing construction and term financing for the
project. The commitment letter dated February
23, 2000, addresses the issue of non-performance
of the Section 8 subsidy. Specifically, In the
event that the Section 8 contracts are terminated
for any reason, the city of San Francisco will
either pre-pay all principal, interest and costs
due on the Series B Term Loan or will fund all
debt service payments to the borrower in a timely
manner to allow the borrower to make timely
payments on the Series B loan. The Series B
principal and interest is equal to the estimated
subsidy payment over the 15-year period.
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MARKET RISKS There is minimal risk associated
with marketing and leasing this property on a
timely basis. The lease-up has been phased over
a three-month period that is considered
conservative in this market. This project has
received more than 8,000 applications, of which
3,000 are qualified to live in the project.
Recently, BRIDGE selected the tenants via a
lottery of these qualified applicants. The units
were in such demand that BRIDGE was required to
have a CPA, and two city officials to observe the
lottery and ensure that the tenants were selected
fairly. BRIDGE expects to have the project leased
within one month. There is clearly a need for
projects such as One Church Street. In March
1998, the San Francisco Housing Authority opened
its Section 8 waiting list for one month and
38,000 families registered for the program. Once
the registration was closed, 10,000 families were
randomly selected for the list, which today
includes more than 4,400 households. There are
few larger family-size units available in the
city, which has a vacancy rate of only 0-2.
However, should One Church Streets HAP contract
expire, the manager offers two avenues to secure
eligible tenants. First, there are approximately
4,300 Section 8 certificates and vouchers in use
in San Francisco. Approximately, 90 of the
certificates are in use, as are 100 of the
vouchers. Second, there are approximately
200-300 subsidies accessible, with plans to grow
the unit count to 9,000 with the addition of the
Welfare-to-Work program and additional
preservation projects. The rents, at 50 and
60 of AMI, are still significantly below the
Fair Market Rents for the city. They are also
below the pure market rents, particularly in the
Duboce Triangle/Castro area. Conveniently located
near transportation, schools, employment
opportunities, retail and entertainment, this
project offers residents access to all services
and support. The project offers one-to-one
parking, which is a sought-after
amenity. EXTRAORDINARY RISKS The risks in this
project have been mitigated in large part through
city of San Francisco-backed guaranties relieving
debt if the subsidy is reduced or expires. As of
June 2002, construction for the project is
substantially complete. The HOPWA funds may be
deducted from eligible basis without a negative
impact on the project due to its sizable basis,
which is derived from construction costs. This
would comply with a potential IRS decision on
treatment of federal funds in basis.