HomeMy WebLinkAbout1/17/2007 - STAFF REPORTS - RA.2. Paac 1 of 1
Cindy Berardi
From: CityClerk
Sent: Wednesday, January 17, 2007 3:52 PM
To: Cindy Berardi
N -
Subject: FW: To Council concerning Sahara Park
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From: Wild ickl@aol.com[SMTP:WILOICKI@AOL.COMI
Sent: Wednesday, January 17, 2007 3:52:08 PM
To: city.clerk@palmsprings-ca.gov
Cc: re-berry@msn.com; terry4pathm29br@hotmail.com; peterbhenson@yahoo.com
Subject: To Council concerning Sahara Park
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Dear All,
It has been brought to my attention that at your council meeting this evening, you are going to
vote on how the money you are loaning to Sahara Park should be allocated.
As a past President of the one time Home Owners Association ( Now Residents Association) , I
fought tooth and nail for the residents, not the Park owner, and I suggest that there are many
projects that must be ahead of" The Wall".
#1 --- Completion of the electrical upgrade.
#2 --- Completion of the sewer upgrade.
( These two items alone need to be addressed immediately so we can eliminate
the health hazards they impose)
#3 --• Filling in all the cracks in the streets and resealing same so as avoid further
deterioration that could cause some of we elderly people to trip and fall during our routine walks
( remember we have no sidewalks ).
Yours truly,
Richard L. Steiner
211 N. Safari St.
Sahara Park
Palm Sp[rings, CA 92264
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1/17/2007
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q�lFp6e�P COMMUNITY REDEVELOPMENT AGENCY
STAFF REPORT
DATE: January 17, 2007 NEW BUSINESS
SUBJECT: PROPOSED AMENDMENT TO THE OWNER PARTICIPATION
AGREEMENT BETWEEN THE COMMUNITY REDEVELOPMENT
AGENCY OF THE CITY OF PALM SPRINGS AND MILLENNIUM
HOUSING CORPORATION OF NEWPORT BEACH, CALIFORNIA TO
PROVIDE A LOAN OF $450,000 FOR THE PURPOSE. OF
CONSTRUCTING A PERIMETER BLOCK WALL AT SAHARA MOBILE
HOME PARK, 1955 SOUTH CAMINO REAL
FROM: David H. Ready, Executive Director
BY: Community and Economic Development Department
SUMMARY
Approval of the first amendment to the Owner Participation Agreement with Millennium
Housing Corporation will allow the Community Redevelopment Agency to loan an
additional $450,000 to Millennium for rehabilitation improvements to the Sahara Mobile
Home Park and to update original schedule of improvements and cost estimates.
Specifically, the $450,000 would pay for the construction of a 6' block wall on the
perimeter of the park.
RECOMMENDATION:
1. Adopt Resolution No. "A RESOLUTION OF THE COMMUNITY
REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, CALIFORNIA,
APPROVING THE FIRST AMENDMENT TO AN OWNER PARTICIPATION
AGREEMENT WITH MILLENNIUM HOUSING CORPORATION.
STAFF ANALYSIS:
Millennium Housing Corporation purchased Sahara Mobile Home Park, a 254-space
mobile home park located at 1955 South Camino Real in Palm Springs in 2002. While
the park is attractive and well maintained, it was built in 1955 and has over the previous
several years experienced problems with its major systems and utilities including gas,
ITEM NO.A� —
CRA Staff Report
(January 17, 2007) -- Page 2
(Sahara Mobile Home Park OPA Amendment)
electricity and sewer. Millennium used tax exempt bonds issued by the City of Palm
Springs and its non-profit status (which reduces the property tax burden) to create a
fund and revenue stream to be able to perform the necessary repairs to the park without
needing a rent-control waiver, which would normally be allowed for an owner
undertaking major capital improvements.
The original bond issue, including $400,000 in Community Redevelopment Agency
participation created an initial $850,000 Repair and Replacement Reserve Fund, with
additional funds from the cash flow of the project to be used for repairs or other property
improvements jointly prioritized by the residents and Millennium. In return for the
Community Redevelopment Agency participation, Millennium agreed and committed
that 50% of the units would remain affordable to low and very low income residents. On
June 5, 2002, the Agency and the Owner (Millennium) entered into an Owner
Participation Agreement for the rehabilitation of the park. The OPA included a Schedule
of Performance tied to Millennium's proposed Schedule of Rehabilitation Improvements
describing work to be done and budget estimates over a 10 year horizon. The needs
analysis carried out for the park in 2002 identified $1.2 million worth of necessary
improvements to the park. The major rehabilitation improvements included removal of
oleander trees around the perimeter of the park and construction of a block wall around
the park as well as entire replacement of the electrical system over a period of four to
five years. In addition, the OPA work schedule included improvements, preventative
maintenance and ongoing maintenance and repair items.
Over the last 4 years, Millennium has completed many of the scheduled OPA
Rehabilitation Improvements including replacement of almost the first half of the
electrical system. Due to ongoing increases in the cost of building materials, labor costs
and repairs that were not originally anticipated, Millennium has experienced cost
increases in the rehabilitation improvements. Between 2003 and 2006 approximately
$632,000 of the original $1.2 million budgeted through 2012 was spent on park
rehabilitation and repairs. For example, the actual cost of the first half of the electrical
system replacement completed in 2005 was just over $110,000 higher than the original
OPA estimate; additionally, it was anticipated that the electrical system would be able to
be replaced over a seven year period, but due to the configuration larger sections need
to be replaced, meaning that there are fewer, larger phases to the project. That has
caused other scheduled improvements, such as the perimeter wall, to be moved back in
the schedule. Millennium estimates the $800,000 to replace the remaining electrical
system to be higher by the time these improvements are undertaken.
The Schedule of Rehabilitation Improvements, therefore, was revised to provide a more
accurate reflection of required expenditures over the next 10 years to the end of 2016.
Millennium undertook a needs analysis from 2007 forward to 2016 and determined that
approximately $1.5 million would be needed to meet rehabilitation and repair
requirements to 2016. (Approximately $980,000 would be needed up to 2012 and
$520,000 more to 2016) These figures are over and above the $632,000 already spent
over the last three years.
CRA Staff Report
(January 17, 2007) -- Page 3
(Sahara Mobile Home Park OPA Amendment)
In order for Millennium to carry out the scheduled improvements without the need for
rent increases, assistance was requested from the Community Redevelopment Agency
in the form of a loan in the amount of $450,000. The loan is intended to be used to
cover the cost of the 6' high perimeter block wall, which was estimated in 2002 to cost
$150,000 but was most recently bid at $450,000, including removal of the oleanders.
By obtaining this loan and constructing the wall this year, funds from the park surplus
and annual revenues can be redirected to other park improvements such as the
electrical system replacement. This loan will also ensure that affordability covenants
will be met and Millennium will have adequate cash flow for maintaining the park. The
loan is to be amortized over a period of 18 years with repayment starting in 2009 to
allow Millennium to satisfy a current bond repayment and free up available surplus
funds to make the required $25,000 in annual payments for this loan.
While a number of residents in the park have expressed a desire for the Agency funds
to be dedicated to the electrical system upgrade, Staff has attended a number of HOA
meetings and had several meeting with the HOA board regarding the status of the wall.
While the proposal is not to gate the park (installing gates would be infeasible), the wall
was one of the "hot button" projects dating back to the original bond issue in 2002, and
remains an important issue to a majority of residents in the park. The park is bounded
by oleanders on several sides, including the longest frontage on Calle Palo Fierro,
which provide little barrier to intruders or thieves.
FISCAL IMPACT: IFinance Director Review: i.
The fiscal impact will be expenditure of$450,000 of Community Redevelopment Agency
funds from the Low and Moderate Income Housing Fund.
J hn S. RayM nd, om Wilson
Dor of C munity and Economic Development Assistant City Manager
David H. Ready, xec i hector
Attachments:
1. Resolution
2. First Amendment to the Owners Participation Agreement
RESOLUTION NO.
A RESOLUTION OF THE COMMUNITY
REDEVELOPMENT AGENCY OF THE CITY OF
PALM SPRINGS, CALIFORNIA, APPROVING THE
FIRST AMENDMENT TO AN OWNER
PARTICIPATION AGREEMENT WITH MILLENNIUM
HOUSING CORPORATION.
WHEREAS, the Community Redevelopment Agency of the City of Palm Springs
(the "Agency") has established an affordable housing set-aside fund in
accordance with Section 33000 et. seq. of the California Health and Safety Cade;
and
WHEREAS, the funds are earmarked for the acquisition, construction, or
rehabilitation of affordable housing to benefit the community; and
WHEREAS, the Community Redevelopment Agency entered into an OPA with
Millennium Housing Corporation on June 5, 2002 for the purpose of facilitating a
schedule of rehabilitation improvements for the Sahara Mobile Home Park; and
WHEREAS, the Sahara Mobile Home Park at 1955 South Camino Real, is in
significant need of rehabilitation, including replacing the electrical system,
installing a block wall and performing other improvements to the park; and
WHEREAS, approval of the first amendment to the OPA with Millennium Housing
Corporation will allow the Community Redevelopment Agency to loan an
additional $450,000 to Millennium for rehabilitation improvements to the Sahara
Mobile Home Park specifically to pay for the construction of a 6' block perimeter
wall.
THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM
SPRINGS DOES HEREBY RESOLVE AS FOLLOWS:
SECTION 1. The first amendment of the OPA is hereby approved.
SECTION 2, The Executive director or his designee is hereby authorized to
execute all documents related to the OPA amendment.
ADOPTED THIS 17th day of January, 2007.
David H. Ready, City Manager
Resolution No.
Page 2
ATTEST:
James Thompson, City Clerk
CERTIFICATION
STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss.
CITY OF PALM SPRINGS )
I, JAMES THOMPSON, City Clerk of the City of Palm Springs, hereby certify that
Resolution No. _ is a full, true and correct copy, and was duly adopted at a
regular meeting of the City Council of the City of Palm Springs on
by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
James Thompson, City Clerk
City of Palm Springs, California
I
it
t RECORDING REQUESTED BY AND
1 WHEN RECORDED MAIL TO:
2 Community Redevelopment Agency
of the City of Palm Springs
3 P.O. Box 2743
Palm Springs, CA 92263
4 Attn: Assistant Secretary
5 SPACE ABOVE THIS LINE FOR RECORDERS USE
6
7 FIRST AMENDMENT TO THE OWNER PARTICIPATION AGREEMENT
s BETWEEN THE
9 COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS
10 AND
11 MILLENNIUM HOUSING CORPORATION
12
13 This First Amendment to the Owner Participation Agreement (OPA) is entered into
14 effective this day of , 2007, by and between the
15 COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, a
16 public body, corporate and politic, (hereafter referred to as the "AGENCY") and
17 MILLENNIUM HOUSING CORPORATION, a California non-profit Corporation (hereafter
18 referred to as the "OWNER"). Together, AGENCY and OWNER are referred to as the
19 Parties.
20 RECITALS:
21 WHEREAS, the Parties entered into an Owner Participation Agreement (OPA)
22 dated June 5, 2002, wherein the AGENCY provided OWNER assistance in the form of
23 funding from its Housing Fund for the rehabilitation of a 254 space mobile home park
24 (Sahara Mobile Home Park); and
25 WHEREAS, the Mobile Home Park is subject to recorded covenants restricting the
26 operation of the Park for very low and low income residential rental purposes for a term
27 equal to 55 years; and
1 of 4 Sahsm Mobile Home Park,Palm Springs
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I WHEREAS, the OWNER has experienced cost increases in the rehabilitation
2 improvements in an amount of approximately $450,000 due to a variety of factors
s including an increase in the cost of building materials, labor costs, and repairs that were
4 not anticipated when the OPA was approved; and
5 WHEREAS, the OWNER desires to borrow an additional $450,000 from the
6 AGENCY and the AGENCY is willing to grant such request to continue to improve and
7 preserve the community's supply of low-income housing, subject to the repayment terms
s provided for herein; and
9 WHEREAS, the Parties agree to revise the work schedule of Rehabilitation
10 Improvements as more particularly described in the attached Exhibit A.
11 AGREEMENT
12 NOW, THEREFORE, in consideration of the foregoing, and the promises and
13 mutual covenants and conditions hereinafter set forth, the Parties do hereby agree as
14 follows:
15 1. The Rehabilitation Improvement List and Cost Estimates of Attachment No.
16 3 to the OPA (Scope of Performance) is hereby amended pursuant to
17 Exhibit A, attached herewith and made a part hereof.
is 2. The AGENCY agrees to lend to OWNER, interest free, subject to a Cash
19 Note for a term of 18 years, secured against the Park property by a Deed
20 of Trust with Assignment of Rents, the principal sum of$450,000.
21 3. The Term of Note Repayment for the additional loan shall be in equal lump
22 sum annual payments of$25,000 over a term of 18 years to be paid at the
23 beginning of each calendar year starting in the year 2009 and continuing
24 until paid in full on or before the year 2027_
25 4_ Quarterly reports required under the OPA shall be consolidated with
26 quarterly report required under Section 6.6c of the Bond Loan Documents.
27
2 of 4 Sahara Mobile Home Park,Palm Spring.
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1 5. All other terms and conditions of the OPA not referenced herein shall
2 remain unmodified and in full force and effect.
3 6. This Agreement may be signed by the Parties hereto in counterparts, each
4 of which shall be an original but all of which together shall constitute one
5 and the same agreement.
6 IN WITNESS WHEREOF, the AGENCY and the OWNER have executed this First
7 Amendment as of the date first above written-
8 COMMUNITY REDEVELOPMENT
AGENCY OF THE CITY OF PALM
9 SPRINGS, CALIFORNIA ATTEST:
10
11 By: By:
Chairperson Secretary
12
APPROVED AS TO FORM
13
14
By
15 Agency Counsel
16 MILLENNIUM HOUSING INC.,
a non-profit Corporation ATTEST:
17
18
By: By:
19 President Secretary
20
21
22
23
24
25
26
27
3 of4 Sahara Mobile I-Iome Park,Palm Springs
525061 1
I STATE OF CALIFORNIA ))
2 COUNTY OF RIVERSIDE ) §§
3
On before me, (here insert
4
name and title of the officer), personally appeared
5
personally known to me (or proved to me on the basis of satisfactory evidence) to be the
6
person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to
7
me that he/she/they executed the same in his/her/their authorized capacity(ies), and that
s
by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of
9
which the person(s) acted, executed the instrument.
10
II WITNESS my hand and official seal.
12
13 Signature (Seal)
14
STATE OF CALIFORNIA )
15 ) §
COUNTY OF RIVERSIDE )
16
17 On , before me, (here insert
18 name and title of the officer), personally appeared
19 personally known to me (or proved to me on the basis of satisfactory evidence) to be the
20 person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to
21 me that he/she/they executed the same in his/her/their authorized capacity(ies), and that
22 by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of
23 which the person(s) acted, executed the instrument.
24
WITNESS my hand and official seal.
2s
26
Signature (Seal)
27
404 Sahara Mobilc Home Park,Palm Springs
i_'SUSJ I
EXHIBIT A
SAHARA MOBIEHOME PARK
UPDATED OPA WORK SCHEDULE
Fiscal
Des crlptlon of Work 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Removal of Oleander Trees-Perimeter of park 25,000
Perimeter Block Wall 425,000
Asphalt repairs and slurry seal 100,000 300,000
Replacement of Electrical System-2nd half 200.000 200,000 200,000
Palm Tree Trimming/Maintenance 10,750 11,073 11,405 11.747 12,100
450,000 10,750 200.000 11,073 100.000 211.405 0 11,747 200,000 312,100
Current balance in RIR Fund 170,137 226.137 271,387 147,055 216,650 207,318 106,581 227,249 346.170 286,838
Loan from Agency 450,000 0 0 0 0 0 0 0 0 0
Required annual deposit into RIR Fund 28,868 28,668 28,668 28,668 28,668 28,688 28,668 28,668 2B,668
Estimated annual interest earnings 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000 6,000
Estimated surplus 50,000 21,332 41,000 46,000 56,000 76,000 86,000 96,000 106,000 116,000
Estimated Balance in RIR Fund 226,137 271,387 147.055 216,650 207.318 106,581 227,249 346,170 286,838 125.406
2007 annual deposit already counted in the current balance in the RIR Fund
"Palm Tree TrimminglMaintenance during add years [not part of OPA schedule] can be carried out at the option of affected residents at their expense
EXHIBIT A
SAHARA MOBILEHOME PARK
ITEMS COMPLETED FROM ORIGINAL OPA
Palm Tree Trimming completed in 2004 and 2006 at a cost of$$20,466. Original OPA estimate was $13,200 for the two years.
Sewer Line repairs spent$10,106 in 2004. There have been no repairs needed since then.
On going sewer meintenancelhydro jet performed quarterly- expense to date $43,030 absorbed 1n park expenses -not drawn from RIR fund
Gas and water valve maintenance performed by on-site staff as needed -costs absorbed in park expenses
Main Water Backflovr Device completed in 2003 at a cost of$1,638 -original OPA estimate $4.800 contemplated for 2007
Replace clubhouse appliances originally contemplated for 2007- haven't had a need to replace-all are working fine
Pool deckworklpool plaster completed in 2002 at a cost of$16,915. Added new tilelcoping in 2005 for$4.070
original OPA estimate was $26.500. We absorbed an additional $12,470 in the park expenses for the deckwork
Pool Equipment Relocation completed in 2002 as part of the pool plaster jab above.
Repainting all building interiors completed in 2003 at a cost of$14,050. Original OPA estimate was$8,500.
Repainting all building exteriors completed in 2003 as part of the above amount. Original OPA estimate was $10,750
Wood flooring/replace carpet in clubhouse completed in 2003. No cost-carpet was donated. Wood ficoring is still in good shape
Replace old windows in clubhouseloffice completed in 2003 at a cost of$18,208. Original OPA estimate was $22,000
Ornamental Iron Painting completed in 2003 as part of building painting and then re-painted in 2005 by on-site staff
Replacement of Electrical System tat half completed In 2005 at a cost of$491,027. Original OPA estimate for 112 of work = $381.000
we sped up the replacement process due to failures occuring in 2003