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Home My WebLink About3/24/2004 - STAFF REPORTS (13) _ DATE: -Marchr+- —, 20)4— TO: City Council FROM: Director of Public Works/City Engineer ASSESSMENT DISTRICT 162 RECOMMENDATION: It is recommended that after consideration of a review of the Assessment District application, the City Council consider one of the following options: 1. Approve the application for further processing of the formation of Assessment District 162, submitted by Ironwood Homes, doing business as Palm Springs Modern Homes, and allow the formation of Assessment District 162 to proceed with an initial estimated bond amount less than the$2,000,000 minimum established by the City's Policies and Procedures for Special Assessment and Mello-Roos Community Facilitiy District (CFD) Municipal Bond Financing for Public Improvements for Development Projects; authorize staff to select and negotiate contracts with consultants for an assessment engineer's report, appraisal and market absorption study; and collect necessary deposits from the applicant to fund consultant contracts. 2. Deny the application for further processing of the formation of Assessment District 162, submitted by Ironwood Homes, doing business as Palm Springs Modern Homes. SUMMARY: An application has been filed with the City in October 2003 and modified in February 2004 for formation of a 1913 Act Assessment District using 1915 Act Bonds for two separate development projects: "The Villas", Tract No. 29077, located on the south side of Tahquitz Canyon Way west of Cahuilla Road; and "48 @ Baristo", Tract No. 30941, located on Baristo Road west of Sunrise Way. These developments are being constructed by Ironwood Homes, doing business as Palm Springs Modern Homes. The City has established Policies and Procedures for Special Assessment and Mello-Roos Community Facilitiy District(CFD) Municipal Bond Financing for Public Improvements for Development Projects that outlines the minimum criteria for Assessment Districts formed in the City, as well as the guidelines and process for their formation. The subject application requires special consideration with regard to the minimum bond amount, as well as a review of the potential benefit to the City as a result of the Assessment District formation. BACKGROUND: Ironwood Homes, doing business as Palm Springs Modern Homes, is the developer for Tract No. 29077 located on the south side of Tahquitz Canyon Way west of Cahuilla Road. The Tract Map was approved and recorded in September 2003 and consists of 47 single family residential lots. They are also the developer of Tract No. 30941 located on Baristo Road west of Sunrise Way which consists of 48 condominium units. Ernie Vincent, Vice-President of Palm Springs Modern Homes, has submitted an application for formation of a 1913 Act Assessment District using 1915 Act Bonds for the public improvements for both of their approved developments. In accordance with the City's Statement of Policies and Procedures for Special Assessment and Mello-Roos w7 A Assessment District 162 March 17, 2004 Page 2 Community Facility District (CFD) Municipal Bond Financing for Public Improvements for Development Projects, a pre-application conference with staff was held and the applicant submitted a $10,000 initial application fee. On February 27, 2004, the applicant met with the City's Special Districts Committee to review the proposed application. The applicant is proposing that the Assessment District fund public sewer improvements, water improvements, street improvements, sewer fees, drainage fees, water fees, engineering costs, and all district formation and financing costs for both development projects. In addition, relatively extensive utility undergrounding adjacent to the property being developed as Tract No. 29077 is proposed to be funded by the Assessment District. The total estimated bond amount for Tract No. 29077, known as"The Villas" is$1,083,626 and the total estimated bond amount for Tract No. 30941, known as "48 @ Baristo" is $418,208 for a total Assessment District bond amount of $1,501,834. The Committee noted that this total was less than the $2,000,000 minimum bond amount established by the City's Policy. This minimum bond amount was established by City Council for reasons of cost effectiveness, because there are certain fixed costs associate with all district formations. These fixed costs are a higher percentage of the overall district improvement costs, when the districts consisted of relatively limited amounts of improvements. The developer is requesting an exception to the minimum bond amount requirement, which is allowed by formal action by the Council, as specified by the Policy in Section 4(2)(C). The main reason the developer is requesting the exception is that they are proposing to complete the utility undergrounding work in and around the neighborhood adjacentto Tract No. 29077 including construction of new underground services to existing residential and commercial properties, if the Assessment District is approved. The City Council, as a requirement of its conditional approval of Tentative Tract Map 29077, required the developer to underground all overhead utilities on or adjacent to the site. However, the overhead utilities on the south property line have overhead service connections to existing properties, which would require 100% property owner concurrence to allow the developer to enter onto the properties and convert the overhead services to underground services for each existing property. The developer is proposing to fund these on-site conversion costs, if the Assessment District is approved, thereby resulting in the undergrounding of all adjacent overhead utilities. The utility undergrounding of the overhead lines adjacent to Tract No. 29077 was a commitment that was made to the neighborhood by the original tract developer. The current developer subsequently acquired the property from the original developer after it was entitled and the requirement to underground the existing overhead utilities was imposed. Additionally, improvements to the west end of Tahquitz Canyon Way (near Museum Way) were an important item discussed during the entitlement process for Tentative Tract Map 29077. The current proposal by the developer includes removal of existing street improvements and construction of decorative pavers, a landscaped median, and other aesthetic improvements within Tahquitz Canyon Way that will greatly enhance the public right-of-way. A final factor to consider with regard to public benefit is the improvements related to flood control and storm drainage in the area. The existing property, when vacant, was subject to extensive flooding during severe storms. The runoff from the adjacent hillsides would subject downstream properties that were constructed 20, 30, and even 50 years ago to 7&= Assessment District 162 March 17, 2004 Page 3 potential flooding. As a result of this project, flood control improvements are proposed that will redirect storm water runoff to existing storm drain facilities; and the development itself will collect and convey runoff in a manner that provides greater flood control protection for downstream properties than existed previously. The developer estimates that for "The Villas" project, the bond amount assessed to each lot will be$23,454(approximate$1,383 annual payment per lot); and for the"48 @ Baristo" project, the bond amount assessed to each lot will be $8,578 (approximate $523 annual payment per lot) which are both below the City's policy requiring a value to lien ratio of 4 to 1. At a 4 to 1 ratio, the minimum property value for "The Villas" project would be $92,224; and the minimum property value for the "48 @ Baristo" project would be$34,851. The developer has indicated that pre-sale prices of"The Villas"are approximately$600,000 and pre-sale prices for the "48 @ Baristo" project are approximately $400,000. The controlling criteria established in the City's policy on the formation of Assessment Districts is outlined under Section 4, "Minimum Requirements," Section 1, "Benefit". This section indicates that the City should consider formation of Assessment Districts if the following minimum "benefit" criteria are met: 1. The proposed project shall provide major infrastructure improvements that significantly benefit the general public, and/or 2. The project shall provide significant financial benefit to the City. Determining whetherthe proposed Assessment District application meets these two general criteria is somewhat subjective. However, the application does propose to convert existing overhead utility lines to underground facilities which is a major infrastructure improvement that affects "The Villas" project as well as the adjacent properties. Furthermore, development of the vacant land into individual residential properties that may sell for $600,000 each at "The Villas" project and $400,000 each at "48 @ Baristo" project has some financial benefit to the City in terms of additional property tax revenue as well as the spill-over effect of additional property owners living and working in our City and contributing to the overall economy of the community. SUBMITTED: DAVID J. BARAKIAN Director of Public Works/City Engineer APPROVED: DAVID H. READY City Managers ATTACHMENTS: REVIEWED BY DEPI OF FINANCE 1. Assessment District Application 2. Resolution (approving formation of assessment district) 3. Minute Order (denying formation of assessment district) j I palm springs wwm p a l m s P i n g s m c d e r n , c o m -'-- March 17, 2004 City of Palm Springs Mayor and City Council Subject: Assessment District 162 —The Villas in Old Palm Springs &48 @ Baristo Dear Mayor and Council; We are pleased to be here requesting your authorization and support to proceed with Assessment District #162. This Assessment District would, among other things, finance the conversion to underground of the overhead utility poles on the north and south sides of The Villas in Old Palm Springs. The City's long-term public policy has been to promote the conversion of overhead as reflected in its standard "Conditions of Approval"language regarding utility under- grounding. In furtherance of this policy, we have proposed to underground existing electrical poles over a far broader area than required. The proposed Assessment District #162 will make this possible, in addition to the other public benefits as outlined in our application package. Our project neighbors support the plan (see attached letters) and our home-buyers certainly support the plan and have all acknowledged their consent in writing to the Assessment District (see attached disclosure for both projects). We therefore request your approval of the Assessment District, and thank you in advance for your consideration and support. Sincerely, Palm Spri Mo enn ni enc. endorsement letters sample disclosure r/7 — - — /.iul1�,�1�1) III �ti4.A�s N�UC ?�li�rri'J I ) 1� �i�f I,Of 7/`� i'��'^o G' �� _ Norman Halliday 660 Palisades Drive Patin Springs, CA 92262 March 4, 2004 Palm Springs Modern Homes 180 E. Andreas Road Palm Springs, CA 92262 Attention: Marna Van Horn I wish to express our strong support for the undergrounding of the overhead utilities as relates to the Villas @ Old Palm Springs project. The visual benefit to the properties bordering on the project is invaluable. In order for all of the utility undergrounding to be financially feasible, we ask that the City Council approve the assessment district proposed for the project. Sincerely, f Norman Halliday Dorothy C &Harold J. Meyerman 550 Palisades Drive Palm Springs, Ca. 92262 Tel: (760) 318-6674 Fax: (760) 318-8684 E-mail: hjmeyel932Qre aol.com Palm Springs Modern Homes February 28, 2004 180 East Andreas Road Palm Springs, Ca. 92262 Attention: Ms Marna Van Horn Dear Ms Van Horn: We cannot tell you how pleased we are to hear that the unsightly utility poles and wires located along West Tahquitz Canyon Way, will be placed under ground. We understand that the primary motivation is to appease the new residents of the Villas @ Old Palm Springs but I can assure you that we will be unintended beneficiaries driving along the road several times a day and seeing the overhead utilities from where we live. We cannot help but believe that the benefit to all of us in the area will be substantial. We thank you for taking the leadership on this matter and would strongly encourage the City Council of Palm Springs to approve the assessment district as proposed. Sincerely, Palm Springs Modern Homes 180 East Arenas Road Palm Springs, CA 92262 Attention: Marne We wish to express our strong support for undergrounding the overhead utilities both along the north and south side of The Villas at Old Palm Springs project. Such undergrounding would be of great visual benefit to the immediate properties bordering the project as well as the entire historic Tennis Club District neighborhood. We definitely extend our support for this effort. Sincerely __W- Frank Tysen Co-owner 2J'bGu vyr yy, cvv. yc.y� rvo.,ealYtV 'VV THUG G1 STEVEN CHEROSKE DESIGNS, CORP. 530 WEST TAMOUITZ CANYON WAY PALM 3PRINao.CALIPQRNIA 92262 PHONZ:760 320 4020 FAX: 760 320 1428 EMAIL: 6cv445(9art.N ZT March 3,2004 PALM SPRINGS MODERN HOMES 180 E.ANDREAS ROAD PALM SPRINGS,CA 62262 ATTN:MARNA VAN HORN I WISH TO EXPRESS MY STRONG SUPPORT FOR THE UNDER GROUNDING OF THE OVERHEAD UTILITIES AS RELATES TO THE VILLAS AT OLD PALM SPRINGS PROJECT,THE VISUAL BENEFIT TO THE PROPERTIES BORDERING ON THE PROJECT IS INVALUABLE. IN ORDER FOR ALL OF THE UTILITY UNDER GROUNDING TO BE FINANCIALLY FEASIBLE, WE ASK THAT THE CITY COUNCIL APPROVE THE ASSESSMENT DISTRICT PROPOSED FOR THE PROJECT. SINCERELY, / STEVE CHEROSKE 9W5 THE WILLOWS HISTORIC PALM SPRINGS draw March 3, 2004 Mayor Ron Oden Palm Springs City Council Dear Ivlr. Mayor and City Council, Please approve the assessment district for the Tahquitz Villas project to facilitate the undergrormding of utilities. It is the single most important aspect of this project for The Willows. I have been waiting ten years for the development of this piece of land so that the utilities could be placed underground. The assessment district is a reasonable way to achieve this and the new homeowners in the project will be extremely grateful to have this accomplished. Sincerely,j Tracy Conrad Owner 412 Wes[Tanduiiz Canyon Way Palm Springs -California 92262 -Telephone: 760-320-0771 -Fax: 960-320-0780 DISCLOSURE REGARDING ASSESSMENT DISTRICT LOT _ TRACT 29077 THE VILLAS IN OLD PALM SPRINGS, PALM SPRINGS, CALIFORNIA BUYER ACKNOWLEDGES THAT SELLER MAY FORM A SPECIAL ASSESSMENT DISTRICT 91913/1915 ACT OR CFD) THROUGH THE CITY OF PALM SPRINGS TO PAY FOR PUBLIC IMPROVMENTS BENEFITING BUYER'S LOT WHICH MAY INCLUDE, BUT ARE NOT NECESSARILY LIMITED TO, THE FOLLOWING: 1. STREET IMPROVEMENTS TO TAHQUITZ CANYON WAY, A PUBLIC STREET, INCLUDING, BUT NOT LIMITED TO: DECORATIVE PAVERS, LANDSCAPED MEDIAN, CURBS, GUTTERS AND SIDEWALKS, AND UTILITY UNDERGROUNDING. 2. PUBLIC SEWER AND WATER IMPROVEMENTS 3. PUBLIC DRAINAGE, TRAFFIC AND PUBLIC ART IMPROVEMENTS. IF FORMED, THE ASSESSMENT DISTRICT WILL BE PAID OFF OVER A PERIOD NOT TO EXCEED 30 YEARS AND WILL BE COLLECTED BY THE COUNTY TAX COLLECTOR AS A PART OF BUYER'S PROPERTY TAXES. THE ASSESSMENT MAY BE FULLY PAID OFF AT ANY TIME BY BUYER WITH SOME PREPAYMENT CHARGES. THE ANNUAL COST OF THE ASSESSMENT IS ESTIMATED TO BE $1,344 ($112 PER MONTH). BY SIGNING BELOW, BUYER HEREBY ACKNOWLEDGES DISCLOSURE OF THE ASSESSMENT DISTRICT, AND WAIVES ANY RIGHT TO PROTEST THE FORMATION OF THE ASSESSMENT DISTRICT. Buyer: Buyer: Date: Date: DISCLOSURE REGARDING ASSESSMENT DISTRICT LOT 1, UNIT _, TRACT 30941 48 @ BARISTO BUYER ACKNOWLEDGES THAT SELLER MAY FORM AN ASSESSMENT DISTRICT (1 9 1 311 91 5 ACT OR CFD) THROUGH THE CITY OF PALM SPRINGS TO PAY FOR PUBLIC IMPROVMENTS BENEFITING BUYER'S LOT WHICH MAY INCLUDE, BUT ARE NOT NECESSARILY LIMITED TO, THE FOLLOWING: 1. PUBLIC STREET IMPROVEMENTS 2. PUBLIC SEWER AND WATER IMPROVMENTS 3. PUBLIC DRAINAGE, TRAFFIC AND PUBLIC ART IMPROVEMENTS. IF FORMED, THE ASSESSMENT DISTRICT WILL BE PAID OFF OVER A PERIOD NOT TO EXCEED 30 YEARS AND WILL BE COLLECTED BY THE COUNTY TAX COLLECTOR AS A PART OF BUYER'S PROPERTY TAXES. THE ASSESSMENT MAY BE FULLY PAID OFF AT ANY TIME BY BUYER WITH SOME PREPAYMENT CHARGES. THE ANNUAL COST OF THE ASSESSMENT IS ESTIMATED TO BE $672 ($56 PER MONTH). BY SIGNING BELOW, BUYER HEREBY ACKNOWLEDGES DISCLOSURE OF THE ASSESSMENT DISTRICT, AND WAIVES ANY RIGHT TO PROTEST THE FORMATION OF THE ASSESSMENT DISTRICT. Buyer: Buyer: Date: Date: Apr 01 04 02: 44P 1 P- Dorothy C. & Harold J. Meyerman 550 Palisades Drive Palm Springs, Ca. 92262-5644 Tel: (760) 318-6674 Fax: (760) 318-8684 �'�f�°°'" ' W E-mail: hirneyeI932 cniaol.com To the Mayor and Members of the Palm Springs City Council April 1, 2004 Dear Mayor and Members of the Council: We are the owners of a wonderful property,the Burgess property, immediately to the North West of The Villas project. We were most disappointed to learn that the City Council voted down the developer's request for an assessment district that includes under grounding overhead power and telephone lines, along the small narrow road leading to our property. The power lines were moved below ground on our property, on the mountainside, with City permission and encouragement, some years ago. Power poles are unsightly at any time but only more so along a small narrow road. It was with this in mind that we strongly supported the developers suggestion to move them underground. As community leaders you have an opportunity, if not an obligation, to help beautify our neighborhood and I hope that you will not let this opportunity pass. If not approved by you this time, it may never be done. As a retired investment banker I tend to take a dim view of assessment districts and Mello Roos financings in general, unless the project appears reasonable, the benefits are obvious and the community support is strong. This is where I would consider exceptions to the general rule as I would strongly urge you to do. Most of the hotnes immediately impacted by this project have already been sold. We also have been most impressed by Palm Springs Modern. They have been most accommodating to us as neighbors and we are pleasantly surprised that they have shown a great deal of sensitivity to all of us. As a result I would strongly urge you to reconsider Palm Springs Modern' request to move all of the utility poles under ground as recommended, as reasonable, sensible and the last opportunity to significantly and permanently improve the beauty of the neighborhood. Sincerely, P IV co Lo a, RAV, A- r ... -._. 4. •may:"'�. � w ,y ' � 1 Vi 14 ,�dii O ��ia Ilr : ..a. tt C pCk '.,^��+..Irc.u.; i i � � 1�1� 11 J I � � � ��.. �l�_ •. III ' C I �+'•. + ..4.•... I u n i •t, l I - o � n I � I I 5 . --i is � � a > � ;. > —�•- � � � �� .J�i � � �T lY �• �� r ` - J � i:_..�; .I I / r-,•nS,�.._`�. � fir Fla• Nn + r4G v N I}1 I + "- a, I t jury" 1�f.t-� - ' - ;� �,� i `•-•:; 4 NI } '' LN > c i C fA.-1d/LLA n( K I L CL C 000 Vt. I_li k, LA Nti^^i ro e*41-1 LfIzz A0911Y C-AVV,'fAl RESOLUTION NO. OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS,CALIFORNIA,APPROVING THE APPLICATION FOR FURTHER PROCESSING OF THE FORMATION OF ASSESSMENT DISTRICT 162, SUBMITTED BY IRONWOOD HOMES, DOING BUSINESS AS PALM SPRINGS MODERN HOMES WHEREAS, the City of Palm Springs adopted Resolution No. 17774 on January 22, 1992, amended by Resolution No. 20304 on April 3, 2002, establishing Policies and Procedures for Special Assessment and Mello-Roos Community Facilitiy District(CFD) Municipal Bond Financing for Public Improvements for Development Projects; and WHEREAS,the City's Policies and Procedures establish minimum criteria for the formation of Special Assessment and CFD municipal bond financing for public improvements for development projects, including a minimum bond amount of$2,000,000; and WHEREAS,the City's Policies and Procedures establish minimum criteria for the formation of Special Assessment and CFD municipal bond financing for public improvements for development projects requiring that proposed public facilities to be finance must meet a public need, including the provision of major infrastructure improvements that significantly benefit the general public, and/or the provision for significant financial benefit to the City; and WHEREAS, the City has received an application from Ironwood Homes, doing business as Palm Springs Modern Homes, for formation of a 1913 Act Assessment District using 1915 Act Bonds for two separate development projects: "The Villas", Tract No. 29077, located on the south side of Tahquitz Canyon Way west of Cahuilla Road; and "48 @ Baristo", Tract No. 30941, located on Baristo Road west of Sunrise Way; and WHEREAS, the proposed Assessment District includes construction of public improvements, costs, and fees with an initial total bond estimate of$1,501,834 which is less than the City's required minimum bond amount; and WHEREAS, Section 4, 2 (c) "Bond Sale Minimum," of the City's Policies and Procedures for the formation of Special Assessment and CFD municipal bond financing for public improvements for development projects authorizes the City Council to take formal action to allow a minimum bond amount below the $2,000,000 requirement; and WHEREAS, the proposed Assessment District includes conversion of existing overhead utility lines, construction of decorative pavers and other aesthetic improvements to West Tahquitz Canyon Way, and construction of storm drain and flood control improvements which are of benefit to the general public; WHEREAS,the proposed Assessment Districtwill facilitate public improvements for private development thatwill help stimulate the local economy and provide a financial benefitto the City. 78 Resolution No. NOW THEREFORE BE IT RESOLVED bythe City Council of the City of Palm Springs that: 1. The City Council does hereby approve the application for further processing of the formation of Assessment District 162, submitted by Ironwood Homes, doing business as Palm Springs Modern Homes; and 2. The City Council does hereby allow the formation of Assessment District 162 to proceed with an initial estimated bond amount less than the $2,000,000 minimum established by the City's Policies and Procedures for Special Assessment and Mello-Roos Community Facilitiy District(CFD) Municipal Bond Financing for Public Improvements for Development Projects; and 3. The City Council hereby authorizes staff to select and negotiate contracts with consultants for an assessment engineer's report, appraisal and market absorption study; and to collect necessary deposits from the applicant to fund consultant contracts. ADOPTED this 17" day of March, 2004. AYES: NOES: ABSENT: ATTEST: CITY OF PALM SPRINGS, CALIFORNIA By City Clerk City Manager REVIEWED & APPROVED AS TO FORM: MINUTE ORDER NO. DENYING THE APPLICATION FOR FURTHER PROCESSING OF THE FORMATION OF ASSESSMENT DISTRICT 162, SUBMITTED BY IRONWOOD HOMES, DOING BUSINESS AS PALM SPRINGS MODERN HOMES I HEREBY CERTIFY that this Minute Order, denying the application for further processing of the formation of Assessment District 162, submitted by Ironwood Homes,doing business as Palm Springs Modern Homes, was adopted by the City Council of the City of Palm Springs, California, in a meeting thereof held on the 17" day of March, 2004. PATRICIA A. SANDERS City Clerk 7 d--