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HomeMy WebLinkAbout5/23/2007 - STAFF REPORTS - RA.3. OFpALM SA4 41 U y, 9</FORN�� Community Redevelopment Agency Staff Report DATE: MAY 23, 2007 LEGISLATIVE AGENDA SUBJECT: AMENDMENT NO. 2 TO IMPLEMENTATION AGREEMENT WITH VISTA SUNRISE APARTMENTS, LP, AND MBA DEVELOPMENT CORP. TO ALLOW $75,000 OF THE PUBLIC IMPROVEMENTS HOLDBACK TO BE USED TO INCREASE AND ENHANCE THE MECHANICAL SCREENING AND LANDSCAPING ALONG THE VISTA CHINO ROAD/HIGHWAY 111 FRONTAGE FROM: David H. Ready, Executive Director BY: Community & Economic Development Department SUMMARY: This Amendment allows for the funding of landscaping and mechanical screening enhancements at the new Rick Weiss Apartments, formerly Vista Sunrise Apartments, along Vista Chino Road. The original Implementation Agreement and subsequent DDA Amendments dealt with the issue of the offsite improvements by reserving $125,000 of the original $1,300,000 Agency cash contribution toward the estimated $250,000 cost of the offsite improvements, to be shared with the County of Riverside as it develops its Family Care Center on the same campus. The estimated cost of the additional screening and upgraded landscaping is approximately $75,000, which would be released from the $125,000 to be used for this purpose. The City Council just approved the plans, specifications and estimates of the offsite improvements at its May 2, 2007 meeting, to facilitate the bidding of the project; the $75,000 to be used for screening and landscaping from Agency funds would be replaced in the offsite improvement project at the point of awarding the contract with Merged Project Area ##1 funds. RECOMMENDATION: COMMUNITY REDEVELOPMENT AGENCY RECOMMENDATION: 1. Adopt Resolution No. "A RESOLUTION OF THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, CALIFORNIA, APPROVING AMENDMENT NO. 2 WITH VISTA SUNRISE APARTMENTS, LP AND MBA DEVELOPMENT CORP. TO ALLOW $75,000 OF THE PUBLIC IMPROVEMENTS HOLDBACK TO BE USED TO INCREASE AND ENHANCE THE MECHANICAL SCREENING AND LANDSCAPING ALONG THE VISTA CHINO ROAD/HIGHWAY 111 FRONTAGE ITEM NO. IZ A 3 Community Redevelopment Agency May 23,2007 Page 2 STAFF ANALYSIS: This Amendment therefore allows for the funding of landscaping and mechanical screening enhancements at the new Rick Weiss Apartments along Vista Chino Road. Agency members are familiar with the Rick Weiss Apartments, formerly called Vista Sunrise Apartments, developed by Desert AIDS Project and McCormack Baron Salazar, Inc. The grand opening ceremony for the apartments was held on April 27, 2007. However, since the completion of the construction the City has been dissatisfied with several aesthetic elements of the project, including the screening of the at-grade air conditioning compressors, as well as the landscaping, facing Vista Chino Road. The proposal includes additional landscaping designed by landscape architect Michael Buccino. There will be a total of 18 sycamore (36" box) trees with 21 ocotillos added to the project in order to soften the mass of the building as viewed from the street. The shrubs around the air conditioning units will be relocated outside of the new fence line so that they could be perceived along Vista Chino. The landscape architect will help determine final location of all new tree and plants at the time of installation and will provide tree, planting and irrigation plans so that the Developer can cost the project before going out to bid. The conceptual landscape plan is attached. The air conditioner compressors will be screened from view with new mesh fencing. Because of the drainage swale along the Vista Chino, the room to locate an effective fence with appropriate footings between the top of the slope and the air conditioner is limited. Additionally, the property management team at the Rick Weiss Apartments has recommended that all the ground floor units facing Vista Chino should be fenced for security purposes. The challenge has been to develop a fence that will screen the units from view and provides some measure of additional screening and security for the ground floor residents. The proposal for the fencing is for approximately 4'/z' mesh. Interactive Design, the project architect, has simplified the design so that the screening breaks between buildings and does not present as a single long fence- The Developer has requested that the Agency modify the Implementation Agreement to reflect utilizing the $75,000 from the off sites improvement line item towards the costs associated with the landscaping and fence. Essentially, these funds would be moved from the off-sites line item into another line item in their budget. The other Agency funds that Staff is recommending would instead be allocated to pay for the off-sites. The reason for this shift is as follows: 1. If the City were to pay for the landscaping directly through another source such as CDBG, this expenditure would actually reduce the eligible tax credit basis. In order to not reduce the basis, the money would have to be lent to the project, as the current Agency contribution is, subject to a Deed of Trust and Promissory Note. IJ 2 Community Redevelopment Agency May 23,2007 Page 3 2. Amendment of the Implementation Agreement would expedite the completion of the fence and landscaping, as the funds are already appropriated and the project could be bid by the Developer right away_ 3. Improve the likelihood of keeping costs down because this is dependent on starting the work as soon as possible. Since preliminary pricing has already been obtained, the longer this is held up the more uncertain prices are to be. The original Implementation Agreement and subsequent DDA Amendments dealt with the issue of the offsite improvements by reserving $125,000 of the original $1,300,000 Agency cash contribution toward the estimated $250,000 cost of the offsite improvements, to be shared with the County of Riverside as it develops its Family Care Center on the same campus. The estimated cost of the additional screening and upgraded landscaping is approximately $75,000, which would be released from the $125,000 to be used for this purpose. The City Council just approved the plans, specifications and estimates of the offsite improvements at its May 2, 2007 meeting, to facilitate the bidding of the project; the $75,000 to be used for screening and landscaping from Agency funds would be replaced in the offsite improvement project by other Agency Grant funds. The County is separately working on the development of the health care facility, which was the motivation of the Desert Healthcare District to participate in the project. The County anticipates it will break ground on the health care facility in the next few weeks. Part of the problem with the separation of the health care facility from the housing project (since they were approved as a single project) was coordinating the construction of the off-site improvements and dividing the cost responsibility between the two projects. The largest single cost item in the required improvements is the additional right turn lane on Vista Chino Road, which requires the relocation of a storm drain and a traffic signal in addition to the street widening. The improvement is not adjacent to either the health care facility or the apartment project; either project proposed alone would have to install it; and, the Developer originally divided the estimated cost 50/50 between the two. The Developer was concerned that, given they would likely be completed with their apartments prior to the completion of the health care facility, that their Certificate of Occupancy could be withheld because their conditions of approval require all the improvements to be installed. As a way of satisfying their lenders, the Agency proposed that it take the responsibility (through the City's Public Works Department) for constructing the improvements with the costs ultimately being borne by the Developer and County. The Developer's share was through a "holdback" of$125,000 from the $1,300,000 Agency cash contribution to the housing project; and, the County would reimburse the City for its share up to $125,000 through the Reimbursement Agreement, when it builds the health care facility. Therefore, the Agency would "front" the County's share of the improvements but receive payment once the project is built. Community Redevelopment Agcncy May 23,2007 Page 4 FISCAL IMPACT: J hn S1 Ra ond, Director of Tom WI n �-�--� m� nity Economic evelopment Assista t City Manager DAVID H. READY Executive Director Attachments: 9. Resolution 2. Amendment No. 2 to the Implementation Agreement 3. Planting Plan —to be provided 4, Conceptual Fence Plan —to be provided Community Redevelopment Agency May 23,2007 Page 5 RESOLUTION NO. A RESOLUTION OF THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, CALIFORNIA, APPROVING AMENDMENT NO. 2 WITH VISTA SUNRISE APARTMENTS, LP AND MBA DEVELOPMENT CORP. TO ALLOW $75,000 OF THE PUBLIC IMPROVEMENTS HOLDBACK TO BE USED TO INCREASE AND ENHANCE THE MECHANICAL SCREENING AND LANDSCAPING ALONG THE VISTA CHINO ROAD/HIGHWAY 111 FRONTAGE WHEREAS, the Community Redevelopment Agency of the City of Palm Springs (the "Agency") has established an affordable housing setaside fund in accordance with Section 33000 et. seq. of the California Health and Safety Code; and WHEREAS, the Agency and the Developer entered into that certain Restated and Amended Disposition and Development Agreement ("RADDA") dated February 15, 2005 which provided for the construction of 85 affordable housing units pursuant to the terms of the RADDA; and WHEREAS, as the parties began the implementation of the terms of the RADDA they discovered that certain assumptions concerning financing requirements and timing of the adjacent health care facility project necessitated non-material revisions for purposes of the Agency in the form of the Promissory Notes and Deeds of Trust which have to be clarified but which do not affect the Agency's basic financial contribution to the Project or the Scope of the Project; and WHEREAS, the Agency and the Developer entered into that certain Implementation Agreement ("Original Agreement ") approved May 18, 2005, for purposes of clarifying the parties' understandings of how the RADDA will be implemented and to make certain non-material revisions to the terms of the RADDA as more particularly set forth therein; WHEREAS, in September 2005, the Parties approved the First Amendment to the Implementation Agreement to make certain additional revisions to the financing of the Project which were which did not materially affect the Agency's basic financial contribution to the Project or materially change the Scope of the Project. L)rq"-�5 Community Redevelopment Agency May 23,2007 Page 6 WHEREAS, the Agency and the Developer now desire to approve Amendment No. 2 to the Implementation Agreement in accordance with the terms and conditions set forth in this Amendment. For purposes hereof, the Amended Agreement and this Amendment are collectively referred to as the "Agreement." 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. This Amendment No. 2 to the Implementation Agreement with Vista Sunrise Apartments, LP, is hereby approved and incorporated herein by this reference. SECTION 3. The Executive Director, or his designee, is hereby authorized to execute on behalf of the Agency the Amendment No. 2 to the Implementation Agreement and other documents necessary to the Agreement, and make minor changes as may be deemed necessary, in a form approved by Agency Counsel. ADOPTED this day of , 2007. AYES: NOES: ABSENT: COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, CALIFORNIA Chairman ATTEST: James Thompson, City Clerk Community Redevelopment Agency May 23,2007 Page 7 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: AMENDMENT NO. 2 TO IMPLEMENTATION AGREEMENT This Amendment No. 2 to Implementation Agreement ("Amendment") is made and entered into as of May , 2007 by and between the Community Redevelopment Agency of the City of Palm Springs, a public body, corporate and politic ("Agency"), and Vista Sunrise Apartments, L.P., a California limited partnership ("Developer"), with reference to the following recitals of fact: RECITALS: A. WHEREAS, the Agency and the Developer have entered into that certain Restated and Amended Disposition and Development Agreement ("RADDA") dated February 15, 2005, which provides, among other things, for the construction of 85 affordable housing units pursuant to the terms of the RADDA; B. WHEREAS, the Agency and the Developer have entered into that certain Implementation Agreement ("Original Agreement ") approved May 18, 2005, for purposes of clarifying the parties' understandings of how the RADDA will be implemented and to make certain non-material revisions to the terms of the RADDA as more particularly set forth therein; C. WHEREAS, in September 2005, the Parties approved the First Amendment to the Implementation Agreement to make certain additional revisions to the financing of the Project which were which did not materially affect the Agency's basic financial contribution to the Project or materially change the Scope of the Project. D. WHEREAS, the Agency and the Developer now desire to approve Amendment No. 2 to the Implementation Agreement in accordance with the terms and conditions set forth in this Amendment. For purposes hereof, the Amended Agreement and this Amendment are collectively referred to as the "Agreement." NOW THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable considerable considerations the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: L Original Agreement. The Agency and the Developer acknowledge that the Original Agreement, as amended in September 2005, is in full force and effect, except as modified by this Amendment. All capitalized terms not otherwise defined herein shall have the meaning set forth in the Original Agreement. In the event of any inconsistency between the terms and conditions set forth in the Original Agreement and the terms and conditions set forth in this Amendment, the terms and conditions in this Amendment shall control. 2. Additional Proiect Landscaping The Developer has agreed to develop a plan for and install several aesthetic upgrades of the project along Vista Chino Road, including the screening of the at-grade air conditioning compressors, as well as the W40320G95.1 landscaping. The additional landscaping shall include no fewer than eighteen sycamore (36" box) trees with twenty-one ocotillos added to the project in order to soften the mass of the building as viewed from the street. The shrubs around the air conditioning units will be relocated outside the new fence line so that they could be seen from Vista Chino Road. The landscape architect will help determine final location of all new tree and plants at the time of installation and will provide tree, planting and irrigation plans. 3. Screening of "At-Grade" Mechanical Equipment on Vista Chino. The air conditioner compressors will be screened from view with new fencing. Because of the drainage swale along the Vista Chino, the room to locate an effective fence with appropriate footings between the top of the slope and the air conditioner is limited. Interactive Design, the project architect has designed a fence that will screen the units from view and provides some measure of additional screening and security for the ground floor residents; the design uses 4'x8' metal sheets cut into shapes (as shown in Exhibit A), along the entire building face of Vista Chino; the design will be modified to create about 25% opening in the fence. 4. Funding of the Improvements. The Parties agree to modify the Implementation Agreement to reflect utilizing the $75,000 from the off-sites improvement line item ("holdback") towards the costs associated with the landscaping and fence. These funds would be moved from the off-sites line item into another line item in the Development budget and accessible to the Developer for the landscaping and screening costs, including City fees and design costs. Staff would recommend to the City Council that an equal amount of CDBG funds be allocated to cover the off-site improvement costs 5. Effect on Tax Credit Basis and Project Equity. The Parties agree that the reallocation of Agency funds, to be replaced in the public works project by CDBG funds, would have the least impact on project equity through a potential reduction in Low Income Housing Tax Credit basis. The existing Agency funds are already subject to the Cash Contribution Note and existing Regulatory Agreement and Deed of Trust, which do not need to be modified. 6. No Other Modifications. Except as otherwise provided herein, all other terms and provisions of the Agreement shall remain in full force and effect, unmodified by this Amendment. 7. Binding Effect. The provisions of this Amendment shall be binding upon and inure to the benefit of the heirs, representatives, successors and permitted assigns of the parties hereto. 8. Counterparts. This Amendment may be executed in any number of original counterparts. Any such counterpart, when executed, shall constitute an original of this Amendment, and all such counterparts together shall constitute one and the same Amendment. For purposes of this Amendment, facsimile signatures shall be deemed to be originals. waoazosssi 'L��� ��J IN WITNESS WHEREOF, this Amendment has been duly executed by the parties hereto as of the day and year written above. DEVELOPER: VISTA SUNRISE APARTMENTS, L.P., a California limited partnership By: MBA Development Corp., a Missouri corporation Its: Development General Partner By: Name: Title: By: Coachella Valley AIDS Consortium, a California nonprofit public benefit corporation Its: Managing General Partner By: Name: Title: AGENCY: ATTEST: THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, a public body, corporate and politic By: Executive Director LA/40320695 I ;L�Pl1f'