Yucca Valley, Ca.,-OPINION-Quick! Pull the plug on this run-away project asap! Why would anyone approve a plan to build 74 Senior Housing one-bedroom units at a cost of $227,299.00 per unit, or $140.00 per square foot, for a total construction cost of $17,047,409.00?
That is the Senior Housing proposal pushed forward by Yucca Valley Town Manager, Mark Nuaimi, with his associates at C.O.R.E. of Rancho Cucamonga, DBA, Yucca Valley Senior Housing Partners.
May 2011, application for HUD 202 Funding:
A RDA Staff report dated May 17, 2011, states the (RDA) “Agency” and C.O.R.E. would actively seek $1.5 million San Bernadino County HOME funds to reduce the Town’s financial commitment from $3.2 million to $1.7 million and any savings in project costs would offset the “Agency”contribution to the project. **But that did not happen!
In a funding commitment letter dated May 18, 2011 addressed to Orlando Cabrera, signed by Yucca Valley Town Manager Mark Nuaimi, he outlines the terms of the loan by the Town of Yucca Valley. The loan amount of $3.2 million dollars for 55 years at a simple 1% interest rate and the appraised property valued at $941,000 will be transferred for $1 (one dollar), the loan will be a residual receipts loan and no mandatory periodic payments will be due during the term of the loan. (page 69 of 207 pages>>Doc.)
Bottom line-This loan will NEVER be paid back. The $3.2 million dollar commitment was SUPPOSED to be only for the application for two rounds of HUD funding seeking $14 million dollars, which were unsuccessful.
Original construction costs were submitted at $21 million dollars, and the Town’s original commitment was $1.5 million dollars. It appears this Nuaimi Senior Housing project has spun out of control. The five-page Project Staff Report dated October 10, 2012, “CALIFORNIA TAX CREDIT ALLOCATION COMMITTEE” outlines the amount of total funds committed for this project:
Town of Yucca Valley.
Construction Financing: Permanent Financing:
**Please note in the above document, the SB County HOME funds did NOT lower the Town’s obligation nor did the reduction in construction costs from $21 million to $17 million lower the Town’s contribution.
Nuaimi writes: “Senior housing project is a residual receipts loan. If there are not residual receipts from the operation of the affordable housing project, then the investment value continues to accrue interest and the Town has an ownership interest in the project at the end of the 55 year operating covenant. Nobody EVER guaranteed that the residual receipts loan would be repaid. It is an investment made from low/mod funds, redevelopment land, and development impact fees.”
So there it is, a non-existent pay back schedule of $2,000 per year in the 10th year and $179 in the 15th year, after everyone else gets paid to run and operate this Project. Go to page 44-link
Accruing “ownership interest” is almost comical and the Town Council is buying this BS? The Town gets the building back 55 years from now and I ask, will pre-fab last that long?
It’s time to stop this madness and pull the plug on this project. The Town of Yucca Valley does not have sufficient funds in low/mod funds, the value of RDA land is $941,000, there are NO MORE RDA funds, C.O.R.E. borrowed $500,000 and there are no Development Impact Fees in the till. (Besides, $350,000.00 on future DIFs was loaned internally to complete the gap funding to build the dog park.)
One more thing…..Measure U was defeated.
Margo Sturges Author link
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