Our immediate goal is to prove that there is an untapped demand for affordable, car-free homes in the Bay Area that Bayview Village will fulfill.
We have worked with the City of Hayward in defining land use designations along the 238 corridor. Next steps are to involved patient green investors to bring the project before the City for permitting. We anticipate the build out sometime in 2012-2014.
Please take a look at our financial analysis on our website. These are current as of Fall 2009. Financial Spreadsheets
The operating cost figures in the Financial Spreadsheet are based on a very detailed analysis designed to meet the requirements of the California Department of Real Estate for new condominium offerings. Operating Cost Spreadsheet (RE 623).
We have consulted with professional civil engineers and other experts to be realistic about home prices.
The financial analysis of the Village Bus is in a separate spreadsheet: Village Bus
The Hayward Area Planning Association is continuing to work with the City of Hayward to get General Plan designations and zoning in support of Bayview Village. The City is cooperative and supportive; however, they have been clear about their financial limitations and concerns. We will be applying for Site Plan approval, and are hopeful that the City can do most of the environmental review with a Program EIR. The Site Plan will have two stages - what we can do with limited resources and what we can do with “pre-predevelopment” investment funds. The plan will include a draft site plan and a charette for consultants.
Actually, HAPA will be applying to the City for two projects - Bayview Village and a fall-back, Smart Growth, lower density, condominium plan with inconspicuous parking. We hope to get both projects approved through the Conditional Report stage with the California Department of Real Estate.
HAPA will be applying to the City for two projects, QV and a fall-back Smart Growth condominium plan with inconspicuous parking at a lower density. We hope to get both approved through the Conditional Report stage with the California Department of Real Estate.
HAPA is in the process of developing a fairly detailed proforma. The Bayview Village proforma will give us a good idea of how many units need to be presold to make large investments and loans profitable for investors. Next, we need to aggressively market Bayview Village; we already have an “interested parties” list of about a hundred people. With financial commitments from those interested in buying into Bayview Village, we can go to investors and banks with enough of the project already sold to insure success. Should we fail to sell sufficient units in Bayview Village within an agreed upon time, HAPA would switch to the Smart Growth, fall-back project which is relatively assured of profitability. Investors would lose some time on the Bayview Village marketing period, but they would be assured of protection with the fall-back project.
HAPA as a non-profit, and as a recipient of foundation grants through a fiscal sponsor, cannot make any profit from Bayview Village. In order to have a corporate vehicle for investors, HAPA has incorporated as an S Corporation. QV Corp is controlled by the HAPA Board, with bylaws that prevent profit to HAPA or its Board of Directors. As an S Corporation QV Corp can make private offerings of stock in successive issuances as need arises. The price, minimum purchase, and number of shares would be spelled out in the private offerings. For example, if HAPA needed $800,000 for the development team to apply to the City of Hayward, we might sell stock at $1 per share, minimum purchase $50,000, until the $800,000 was raised. Investors would be committed to the business plan in the private offering, which would be regulated by a proforma. Currently, QV Corp. is looking for patient, green investors to buy stock in Bayview Village, initially to cover pre-predevelopment costs. Subsequent funds would be raised by issuing additional stock at values that reflect decreasing levels of risk.
Once QV Corp has predevelopment funds, it can hire an experienced developer, make applications and get permits, contract for professional services, and sign construction contracts. Major contracts include the architect, the site engineer, site improvements contractor, building construction contractors, and construction management team.
Currently, the biggest barrier to investors is the fact that HAPA does not control the land. At some point, we need to get an option to buy the land for Bayview Village. Before that, we need some kind of commitment from Caltrans to negotiate an option to sell to QV Corp at the appraised value. This value will be based on the City’s Land Use Plan, due to be completed in February 2009.
Caltrans’ core goal is to sell the #238 right of way at market value, issuing an option is the easiest, lowest overhead means of disposal of the property. To persuade Caltrans to issue an option on the property slated for Bayview Village, we need political consensus and support from the City. We think City support would be forthcoming if investors are willing to invest. As well, HAPA plans to talk to large lenders to see their level of interest in this project. For no cost, key investors and lenders can let the City know of their interest and how important the City is in the process. Then, the City could ask Caltrans to work on the option with QV Corp.
QV Corp would own the land, build the project, and gradually transfer ownership to the Bayview Management Company. Owners at Bayview Village will hire a professional condo management company, The Bayview Management Company, with two on-site residential units for managers. This entity would manage condo sales, unit rentals by condo owners, the community center and its amenities, homeowner association meetings, 24-hour security, and the Village transit plan and related transit issues. Commercial building(s) and bus service would be managed by the Bayview Village Homeowner Association.
The QV Homeowner Association will have contracts with subsidiary corporate entities, the heads of which would sit on the The QV Homeowner Association will have contracts with subsidiary corporate entities, the heads of which would sit on the Bayview Village Board. The subsidiary corporate entities would be:
- The QV Store and Restaurant Company, which would design, outfit, and lease the commercial space from the Association, and sub-let it to operators of the grocery store and café-restaurant.
- The Village Bus Company would own and run the buses based on a contract with a private bus company.
At some point, QV Corp will buy an option from Caltrans and purchase the property with an A&D loan and additional funds from a mezzanine loan or sale of stock. QV Corp. will sell condominiums, gradually transferring full ownership until the last condo is sold. QV Corp. will continue to cover its warranty obligations before dissolving. The owners will own their condos and the common property, and manage the common property through a QV Homeowners Association.
Assuming the QV Homeowners Association ran the project, it would have corporate subsidiaries or contractual relationships to fund and run the Village Bus and the commercial buildings. The QV Homeowners Association would have to hire professional managers. Two apartments could be built as the third floor of Village Center and be a housing benefit for a manager and assistant manager. Resale or subletting to renters by original condo owners would have to be regulated to require approval by management or an HOA committee to screen renters similar to that for the original owners.
And, the QV HOA will have to establish and enforce rules: basically, see that owners pay the homeowners association fees; take care of the condos; and be good neighbors. The HOA will have to have the ability to foreclose on owners who break serious rules, following procedures for due process.
Challenges as of Fall 2009
- Financial analysis: update the main proforma, bus proforma, and Homeowner Association Fees proforma.
- Make presentations to green investors and get advice about how to proceed and get investors.
- Refine garding to reduce cut and fill.
- Upgrade the QV website
- Make progress on the site plan and charette.