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HomeMy WebLinkAbout7/5/2001 - STAFF REPORTS DATE: JULY 5, 2001 TO: COMMUNITY REDEVELOPMENT AGENCY AND CITY COUNCIL FROM: DIRECTOR OF REDEVELOPMENT APPROVAL OF CITY AND AGENCY RESOLUTIONS REQUESTING THE CALIFORNIA MOBILE HOME PARK CORPORATION,A NON-PROFIT CORPORATION, UNDERTAKE ACTIVITIES WITHIN THE CITY OF PALM SPRINGS TO ACQUIRE, REHABILITATE,AND OPERATE MOBILE HOME PARKS IN THE CITY OF PALM SPRINGS; APPROVAL OF AN AGENCY RESOLUTION REQUESTING THE CALIFORNIA MOBILE HOME PARK CORPORATION (i)ACQUIRE THE FEE INTEREST IN THE LAND FROM THE AGENCY, (ii) TO PURCHASE THE SUNRISE VILLAGE FROM SANTIAGO, AND (iii) TO TERMINATE THE GROUND LEASE FOR BOTH THE 20 ACRE MOBILE HOME PARK PARCEL AND THE ADJACENT 20 ACRE UNDEVELOPED PARCEL RECOMMENDATION: It is recommended that the Agency and City approve resolutions requesting the California Mobile Home Park Corporation (CMHPC), a Non-profit corporation, to undertake mobile home park conversion activities in Palm Springs; and, that the Agency approve a resolution requesting the CMHPC to acquire the Sunrise Village Mobile Home Park and to terminate the leasehold interest in the Park and the Undeveloped Parcel. SUMMARY: These resolutions invite the California Mobile Home Park Corporation, a Non-profit Corporation, to undertake mobile home park conversion activities within the City of Palm Springs;specifically,to purchase the fee interest in the Sunrise Village Mobile Home Park and terminate the ground lease on the Park and the adjacent 20 acres. BACKGROUND: The City of Palm Springs, California (the "City"), acquired 100 acres of land in the 1960's in the area commonly referred to as North Palm Springs. The purpose of this land acquisition was intended to provide low income housing. The City and Community Redevelopment Agency have traditionally participated actively in housing programs to assist lower income residents who are primarily service workers employed by the numerous resorts and hotels in the Palm Springs area. It was the expectation of the City when it acquired the 100 acre site that the property be developed within a few years into affordable lower income housing projects. The City has struggled for almost 40 years in its continued efforts, in addition to the joint efforts of its Redevelopment Agency, to accomplish a viable affordable housing program in this area in the northern part of Palm Springs. ekk 4 Staff Report California Mobile Home Park Corporation Page 4 The City responded to a need demonstrated by the community to provide affordable housing on a portion of this 100 acre parcel and sought to develop a mobile home park on up to 40 acres of the 100 acre parcel. In 1982, the City executed a lease with Fredericks Development for 60 acres to develop affordable housing. The Sunrise Village Mobile Home Park ("Sunrise Village") was opened with the first residents taking occupancy shortly thereafter. Fredericks developed approximately 2/3 of the first twenty acre phase of the 40 acre park, as well as Sunrise Norte to the west. Sunrise Norte is a development of deed-restricted single family homes. Fredericks also quit-claimed their interest in a portion of the site that is now Coyote Run. In 1987, the ground lease with Fredericks was terminated and a new lease with Santiago Sunrise Village, a California Limited Partnership ("Santiago") was entered into for the 40 acre parcel. Santiago completed the build-out of the final 1/3 of the first 20 acre phase but never commenced construction on the second (19.17+ acre) phase. This second 20 acre parcel was intended for future expansion of the original 176 spaces but has never been developed. In 1995, the City sold the entire 40 acre parcel to the Community Redevelopment Agency of the City of Palm Springs (the "Agency") for a purchase price of $1,510,000 based upon a fair market value appraisal conducted at that time. The Agency acquired title to the 40 acre parcel, subject to the ground lease with Santiago. The Agency in 2000 received an offer from Burnett Development to purchase the remaining unused 19.17 acre mobile home park remainder parcel, as well as a 22.21 acre City-owned parcel located immediately to the north of it, for the purpose of constructing single family, market rate homes. The Agency is obliged in that instance to sell the parcel for fair market value; however, as a result of the subsequent downturn in the local real estate economy and the higher planning and development costs associated with any lower income development, the Agency has acknowledged that it will be required to sell the fee interest for the 20 acre parcel comprising Sunrise Village for less than the 1995 fair market value sale price between the City and the Agency. Today, however, there is a mix of housing types in the neighborhood, including affordable multi-family housing, deed-restricted single-family housing, a mobile home park, and market rate single family homes and condominiums. The neighborhood has recently expressed concern about the City's intent to "over- concentrate" low-income housing in that area, which has led to a re-examination of the objectives of the entire 100-acre site. With the offer from Burnett Development on the surplus 20 acres of the mobile home park, plus another 20 acres of City-owned land, to construct a market-rate single-family-home community, the opportunity to provide demographic balance to that area while creating additional revenue for low-income housing project within the city is presented to the City and Agency. Of the 100 acres comprising the original City acquisition of land for affordable housing purposes, the existing and proposed use of the land is as follows: CQA AA Staff Report California Mobile Home Park Corporation Page 3 20 acres Sunrise Village mobile home park 40 acres Intended market rate single family housing project to be constructed by Burnett Development 6 acres Available for a new affordable housing project 34 acres (i) Coyote Run Low-Income Multi-Family Project financed with low income housing tax credits, and (ii) Sunrise Norte, 53 single family home subdivision built in the 1980's and which have resale price restrictions The Agency has been constrained financially by the decline in tax increment over the past several years (though the past three years have seen increases) and is no longer in the position to "land bank" such a significant parcel. A major source of potential funds at the disposal of the Agency is the sales proceeds from the sale of the 20 acres comprising Sunrise Village and the additional 20 acres that is presently encumbered by the Ground Lease with Santiago, proposed for sale to Burnett Development. The Agency is unable to sell or otherwise cause the development of the vacant 20 acre parcel in the foreseeable future unless it is able to encourage Santiago to sell Sunrise Village to another entity such as a non-profit mobile home park corporation with a concurrent termination of the Ground Lease for both 20 acre parcels. Upon a sale of the land underlying Sunrise Village, the Agency will not only realize the sales proceeds from this transaction, but the Ground Lease with Santiago for the vacant 20 acres would be terminated and this additional 20 acres would also be available for resale to Burnett or any other market rate housing developer. This will enable the Agency to recoup most of the $1,510,000 that was invested in this 40 acre parcel in 1995. The Agency plans to then apply the net available sale proceeds derived from the sale of the combined 40 acre parcel to assist other lower income and affordable hosing projects throughout the City, including rehab or new construction. The Agency has been approached by developers seeking to construct low income tax credit multi-family housing projects and multi-family rehab projects in the City, but the Agency has been and continues to be without the adequate financial resources to assist enough such worthwhile projects to further and improve the City's supply of affordable housing stock. C1 h A3 Staff Report California Mobile Home Park Corporation Page 4 Staff is requesting the City Council authorize the California Mobile Home Park Corporation, a California non-profit corporation, to have the requisite jurisdiction and authorization to undertake its established mobile home park conversion program within the City of Palm Springs; and, the Agency authorize a formal request to the California Mobile Home Park Corporation, a California non-profit corporation (i) to acquire both the fee interest in the land from the Agency, (ii) to purchase the Sunrise Village from Santiago and (iii) to terminate the ground lease for both the 20 acre mobile home park parcel and the adjacent vacant 20 acre parcel. These resolutions do not execute the sale of the Mobile Home Park to the Corporation; that action will be undertaken with a Disposition and Development Agreement between the Community Redevelopment Agency and the Corporation. Likewise, the sale of the excess 20 acres will be undertaken with a Disposition and Development Agreement between the Agency and Burnett Development. J6HN S. AYMOND� Director Redevelo, ent APPROVED Executive Director ATTACHMENTS: 1. City Resolution 2. Agency Resolution REVIEWED BY DEPT.OF FINANCE CRr4 A � RESOLUTION NO. 1136 RESOLUTION OF THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS APPROVING THE MAKING OF A REQUEST TO THE CALIFORNIA MOBILE HOME PARK CORPORATION TO PURCHASE CERTAIN PROPERTY LOCATED WITHIN THE CITY OF PALM SPRINGS WHEREAS,the Community Redevelopment Agency of the City of Palm Springs,California (the "Agency"), owns the real property upon which the Santiago Sunrise Village Mobile Home Park ("Sunrise Village") is located and an additional 20+ acres of land adjacent thereto (collectively the "Real Property'); and WHEREAS, the Real Property is currently being leased to Santiago Sunrise Village, a California Limited Partnership; and WHEREAS, the market value of the Real Property is less than its value in 1995 when it was purchased by the Agency and the Agency lacks the requisite financial resources to continue ownership of Sunrise Village; and WHEREAS, the Agency has difficulty undertaking additional low-income housing projects in the city without additional capital, and selling the parcel upon which Sunrise Village is located and terminating the lease upon the remaining 20 acres would assist the Agency in further development of low income housing in the city; and WHEREAS, the California Mobile Home Park Corporation, a California non-profit corporation (the "California Non-profit') has successfully undertaken programs on behalf of other cities within the State of California, and has thus far acquired ownership of eight (8) mobile home parks through the use of tax-exempt municipal bond financing and other governmental funds contributed by participating municipalities to assistsuch municipalities in overcoming their housing problems; and WHEREAS,the Agency desires to request thatthe California Non-profit assist the Agency by implementing a similar program within the municipal boundaries of the City of Palm Springs (the"City")for the benefit of the residents of the City and to relieve the significant burden upon the Agency caused by the ownership of the land upon which the Sunrise Village mobile home park is located. NOW THEREFORE BE IT RESOLVED by the Community Redevelopment Agency of the City of Palm Springs, as follows: SECTION 1. The above recitals are true and correct and incorporated herein. SECTION 2. The Agency further finds and determines that the Agency does not have the financial resources and experience to own the land nor operate the Sunrise Village mobile home park. Thus, establishing a conversion program as proposed by the California Non-profit will W relieve a burden upon the Agency by easing the financial burden associated with its financial interests in the property and enhancing the living conditions fora significant number of residents of the City. SECTION 3. The Agency Board by this official action hereby requests that the California Non-profit take such actions as it deems necessary (i)to acquire both the fee interest in the land under the Sunrise Village mobile home park from the Agency, (ii) to purchase Sunrise Village from its current owner, Santiago Sunrise Village, LP and (iii) to terminate the ground lease forthe real property upon which Sunrise Village and the adjacent vacant 20 acre parcel is located. SECTION 4. The Agency Board hereby authorizes the Executive Director to do such acts and execute such additional documents as are necessary to carry out the transactions contemplated by this Resolution. SECTION 5. This Resolution shall take effect upon adoption and shall be not be repealed as to any activities undertaken prior to the date of any modification or rescission of this Resolution as to the authorizations delegated to the California Non-profit herein. ADOPTED this day of , 2001. AYES: NOES: ABSENT: ATTEST: COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, CALIFORNIA By Assistant Secretary Chairman REVIEWED &APPROVED AS TO FORM Cat �4G