Thursday, Jul. 24, 2008

Low-income apartments scheduled for Riverbank

City Council OKs project to be built near high school

RIVERBANK -- Facing a tight rental market and rising unemployment, the City Council approved plans to build a 65-unit affordable housing complex adjacent to Riverbank High School.

"We surveyed the rental market in Oakdale and Riverbank, and found the vacancy rate was just 2.1 percent," City Manager Richard Holmer said. "There's a need for more rental options."

Stanislaus County's unemployment rate for June was 10.8 percent; Holmer estimates Riverbank's rate is about 19 percent.

Construction would begin in early 2009 with a budget of $17.4 million, Idaho-based builder Pacific West Communities Inc. said. The Riverbank Redevelopment Agency would contribute $3.2 million toward the project.

The council OK'd the $3.2 million commitment, too, but only if the builder secures the remainder of the financing, including $10 million in tax credits. Pacific West told the city it will pay the Church of Nazarene Central Catholic Advisory Board $1.635 million for the 4.32-acre parcel.

The cost to build each apartment would be $268,000, with Riverbank providing $50,000 toward each unit.

It would be slightly more expensive to build each apartment than it would be to purchase a median-priced home in Riverbank. The median price, meaning half the homes cost more and half cost less, was $250,000 in June.

The project would have eight apartment buildings, a community center with laundry facilities, a pool, a playground and covered picnic grounds.

Two-, three- and four-bedroom apartments would rent for $381 to $981 per month. Tenants must earn 30 percent to 60 percent of the county's average median income, which ranges from $45,200 for a household with two people to $61,000 for five people.

The city hired Seifel Consulting to analyze the project. The firm recommended the city proceed, though it had concerns:

Hiring a builder from Idaho could create logistical problems, compared with hiring a local builder with community ties.

Pacific West Builders will be the general contractor, with Pacific West Communities sponsoring the project. The two are affiliated, meaning fewer checks and balances during construction.

Without a bidding process, it's impossible to determine if the estimated costs are accurate.

Pacific West wants Brackenhoff Management to manage the complex, but the Carson-based firm received negative references at other projects it manages.

Brackenhoff's fee would be $452 per unit a year, which Seifel says is low compared with similar projects. This could lead to poor living conditions or force the city to provide more money.

A well for drinking water must be drilled before the project can be built, as required in the city's master plan. That is why the construction starting date was delayed a few months.

Bee staff writer Richard T. Estrada can be reached at restrada@modbee.com or 578-2304.