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HomeMy WebLinkAbout2006-06-21 STAFF REPORTS RA2 O,tip PLM S,6 iy td En a % C iIORAtE93'M1 qt 000 COMMUNITY REDEVELOPMENT AGENCY STAFF REPORT DATE: June 21, 2006 Joint Public Hearing SUBJECT: JOINT PUBLIC HEARING TO APPROVE AMENDMENT NO. 2 TO A DISPOSITION AND DEVELOPMENT AGREEMENT ("DDA") BETWEEN CENTURY CROWELL COMMUNITIES, LP D/B/A MOUNTAIN GATE II PALM SPRINGS VENTURE, LLC, AND THE COMMUNITY REDEVELOPMENT AGENCY, ADJUSTING THE TERMS OF THE AGENCY BUYER ASSISTANCE NOTE TO ALLOW IT TO AMORTIZE OVER A PERIOD OF FIVE YEARS, FOR 5 SINGLE FAMILY INFILL HOMES FOR MODERATE INCOME HOUSEHOLDS IN THE DESERT HIGHLAND GATEWAY AREA OF MERGED PROJECT AREA#1 FROM: David H. Ready, Executive Director BY: Community & Economic Development SUMMARY This action approves a second amendment to a Disposition and Development Agreement ("DDA") between Century Crowell Communities, LP d/b/a Mountain Gate II Palim Springs Venture, LLC, and the Community Redevelopment Agency of the City of Palm Springs, adjusting the terms of the Agency Buyer Assistance Note to allow the note to amortize over a period of five years, based on buyer occupancy in the home, for five (5) single family infill homes for moderate income households in the Desert Highland Gateway area of the city, north of Las Vegas Road. RECOMMENDATION: 1. Adopt Resolution No. "A RESOLUTION OF THE CITY OF PALM SPRINGS COMMUNITY REDEVELOPMENT AGENCY APPROVING AMENDMENT NO. 2 TO, A DISPOSITION AND DEVELOPMENT AGREEMENT ("DDA") BETWEEN CENTURY CROWELL COMMUNITIES, LP D/B/A MOUNTAIN GATE II PALM SPRINGS VENTURE, LLC AND THE COMMUNITY REDEVELOPMENT AGENCY, ADJUSTING THE TERMS OF THE AGENCY BUYER ASSISTANCE NOTE TO ALLOW IT TO AMORTIZE OVER A PERIOD Item No. R " 2. OF FIVE YEARS, FOR 5 SINGLE FAMILY INFILL HOMES FOR MODERATE INCOME HOUSEHOLDS IN THE DESERT HIGHLAND GATEWAY AREA OF MERGED PROJECT AREA#1 2. Adopt Resolution No. "A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, CONCURRING WITH THE COMMUNITY REDEVELOPMENT AGENCY REGARDING THE APPROVAL OF A AMENDMENT NO. 2 TO, A DISPOSITION AND DEVELOPMENT AGREEMENT ("DDA") BETWEEN CENTURY CROWELL COMMUNITIES, LP D/B/A MOUNTAIN GATE II PALM SPRINGS VENTURE, LLC AND THE COMMUNITY REDEVELOPMENT AGENCY, ADJUSTING THE TERMS OF THE AGENCY BUYER ASSISTANCE NOTE TO ALLOW IT TO AMORTIZE OVER A PERIOD OF FIVE YEARS, FOR 5 SINGLE FAMILY INFILL HOMES FOR MODERATE INCOME HOUSEHOLDS IN THE DESERT HIGHLAND GATEWAY AREA OF MERGED PROJECT AREA#1 3. AUTHORIZE THE EXECUTIVE DIRECTOR OR HIS DESIGNEE TO EXECUTE ALL DOCUMENTS RELATED TO THE AGREEMENT STAFF ANALYSIS: The Community Redevelopment Agency established a Desert Highland Infill program in 2002 with the issuance of an RFP to builders interested in constructing single-family homes in the neighborhood on Agency-owned parcels. These properties were targeted at moderate-income families priced out of the single-family market in Palm Springs. The Agency approved a DDA with Mountain Gate II Palm Springs Venture, LLC, an affiliate of Century Homes, in January 2005 for the construction of 5 single family homes in the Desert Highland area for moderate-income families on Agency-owned lots, APNs 669- 353-001, 669-413-019, 669-394-004, 669-394-005 and 669-394-006. Staff used the Century DDA as a model for other homes to be constructed in the neighborhood on the additional lots, and the Agency approved one other DDA for several lots and staff is working with two other builders to develop a similar package as the Century DDA. Century has completed five (5) of their Model 102 homes (1,400 s.f.) and they are working with Agency staff on joint marketing of the homes. They have sold one. Based on over 200 inquiries for the homes, the problem is that, at the moderate income level, buyers have several housing options for home ownership available to them without the state-imposed resale restrictions under California Redevelopment Law. These restrictions would require that the buyer, upon resale, could only resell to income qualified buyers or, if selling to an over- moderate-income buyer, the Agency would keep 100% of the price appreciation (equity) for the first 15 years. Most buyers have therefore avoided the project because they would be unable to gain any equity in the homes for decades. And, since the terms of the price appreciation share are detailed in state law, the Agency has limited flexibility in amending those provisions. However, amending the terms of the Agency Buyer Assistance Note could provide the initial buyers of the homes an opportunity to gain some equity in the homes and make the homes more marketable to the Developer. The source of the funds for the Note is the $22,000 payment for the lot from the Developer, plus up to $28,000 in cash assistance in Low- and Moderate-Income Housing Funds from the Agency. All other terms of the sale would remain the same, and the Agency would still be able to count the unit as "restricted" under redevelopment law. FISCAL IMPACT: Finance Director Review: No additional subsidy is anticipated; however, the ability to recapture the full $50,000 in the "silent' loan upon resale would be reduced over the five year period. JOHN . RAJOND THOMAS J. WI SON it r of Co munity & Assistant City anager- Economic Development Development Services DAVID H. READY Tf-- Executive Director P/ ATTACHMENTS: 1. Agency & City Resolutions 2. Public Hearing Notice 3. Amendment No. 2 to Disposition and Development Agreement RESOLUTION NO. A RESOLUTION OF THE CITY OF PALM SPRINGS COMMUNITY REDEVELOPMENT AGENCY APPROVING AMENDMENT NO. 2 TO, A DISPOSITION AND DEVELOPMENT AGREEMENT ("DDA") BETWEEN CENTURY CROWELL COMMUNITIES, LP D/B/A MOUNTAIN GATE II PALM SPRINGS VENTURE, LLC AND THE COMMUNITY REDEVELOPMENT AGENCY, ADJUSTING THE TERMS OF THE AGENCY BUYER ASSISTANCE NOTE TO ALLOW IT TO AMORTIZE OVER A PERIOD OF FIVE YEARS, FOR 5 SINGLE FAMILY INFILL HOMES FOR MODERATE INCOME HOUSEHOLDS IN THE DESERT HIGHLAND GATEWAY AREA OF MERGED PROJECT AREA #1 NOW THEREFORE BE IT RESOLVED by the Community Redevelopment Agency of the City of Palm Springs that Amendment No. 1 to a Disposition and Development Agreement with Century Crowell Communities, .LP d/b/a Mountain Gate II Palm Springs Venture, LLC adjusting the allowed moderate income sales price based on the March, 2005 HUD income guidelines for five single family infill homes homes for moderate income households in the Desert Highland area of Merged Area #1 is hereby approved and the Executive Director or his designee is hereby authorized to execute all documents related to the Agreement. ADOPTED this day of 12006. AYES: NOES: ABSENT: ATTEST: COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, CALIFORNIA BY. Assistant Secretary Chairman REVIEWED & APPROVED AS TO FORM \TJ PROOF OF PU$LICATIO�T�fJ ; � r-E1 This 15 space for County Clerk's piling Stamp (2015.5.C.C.P) ` Cf i'I' CLE;'7; STATE OF CALIFORNIA County of Riverside I am a Citizen of the United States and a resident of Procter Publication of the County aforesaid; 1 am over the age of eighteen ------- No 1847 years,and not fl party to or interested In the NOTICE OF JOINT PUBLIC HEARING above-cnlitled matter.1 am the rind al clerk of a NOTICE IS HEREBY GIVEN, that the Gommunity p P Redevelopment Agency of the City of Palm printer of the,DESERT SUN PUBLISHING Springs and the CIry Council or the City of Palm Springs will hold a Public Hearing in the Councll COMPANY a newspaper of general circulation, Chamber, located at 3200 E. Tahqultz Canyon Palm beginning at 6.00 p,m, Wodnooday, June printed and published in the city of I alm Springs, 21, 2006, To consider the following: County of Riverside,and which newspaper bas been Amendment No. 2 in Agreement No. A04000 a adjudged a newspaper of general circulation by the Opposition and Development Agreement DCA) between Century Crowell Communlbes, P and Superior Court of the County of Riverside,State of the Communty Redcvplopmcnt Agency of the City of Palm Springs, amending the terms of the California under the date of March 24,1988,Case Agency's second trust deed nose Ter the Buycr's Number 191236;that the notice,of which the assistance to provide for an amortization of the note on five single family Infill homes for moder- annexed is a printed copy(set in type not smaller ate Income households In me QGSOrt Highland Gateway area cf lhp City, north of Las Vegas than I pariel,has been published in each regular Read Palm Springs Callfornla 92252 and entire issue of said newspaper and not in any The Community Redevelopment Agency of the supplement thereof on the following dates,to wit: Gtyy of Palm Springs (Agency_) entire a DDA PP g whit Century Crowe Communities LP In Janua , 2005 for the purpose of developing rive (5) mory- erate Income single Tamely homes in the Desert ,June 7"',14"',2006 Highland Gateway area of the CI and amended T----_�-- - the Aggreement In December 205, Thu current ------------ ---- smenr]ment would provide for the Agency to be ap4e to amortize the second trust deed note ru- g - pp p mica(the"Prom- —„`—T--_-„__---_--`_�--_--_—„--- Issoly Nate nand each of rust4") to provide for amortization of the note over a certaln period of All in the year 200G time thereby reducing the Iron to buyers that continue In occupy these homes and estaUlshing equil'y in the homes. Certain resale resiricbens- would remain agalnst the proper%; each subsidy 1 certify(or declare)under penalty of perjury that the shall be repaya7le oubloct to the terms contained foregoing is true and correct. in the Promissory Note and Deed 01 T141, REVIEW OF PROJECT INFORMATION,•The staff - - - re ort and gthersuppoding'documents regarding Dated at Palm Springs,California this---14"',—day the matter are available for public review at the _ City Hall between me hours a1 8.00 s,rm and 5:00 p.m, Monday through Fndayy. Please contact the 2006 Offlca of the City Clerk at 1760) 323-820a IT you would like to schedule an appeinhnenl to review THIS APPLICATION' COMMENT g ar d i may sing foreot a ra ling once pp nts to this notice ma be made verbally at the Public hearing.Whr- ten e .4gey) to: y Knoll by letter(for mall or hand dUlvcryJ to: /$ignatn re— James Thompson, Clty Clerk ip\ 3200 E. Tahqultz Canyyon Way Palm Springy CA r2262 Any challenge of the proposed project in court ma be limited to rils,ng only these Issues raised at the public hearing described in this notice, or in written correspondence dellvered to the City Clerk at, or prior, to the public hearing An opportunity will be given at sald hearing for All Interested persons to be"card "width ons regard- ing IN-agreement may be directed to John sy- mood, Director of Communlry&Economlo Deycl- opment, al (760) 822.8321. SI neceshs eyuda con esta cans, porLNgr 113 a la Ciudad do Palm Springs y geode hablar can Nadine Fleger telefono (T60) as-9245. James T"omp^on Assl'I"t Secretary/GITy Cleric Published: 6r1, 6J14/2006 NOTICE OF JOINT PUBLIC HEARING NOTICE IS HEREBY GIVEN, that the Community Redevelopment Agency of the City of Palm Springs and the City of Palm Springs will hold a Joint Public Hearing in the City Council Chambers, located at 3200 Tahquitz Canyon Way, Palm Springs, California 92262, beginning at 6:00 p.m., Wednesday, June 21, 2006, to consider the following: Amendment No. 2 to a Disposition and Development Agreement ("DDA") between Century Crowell Communities, LP and the Community Redevelopment Agency of the City of Palm Springs, amending the terms of the Agency's second trust deed note for the Buyer's assistance to (provide for an amortization of the note on five single family infill homes for moderate income households in the Desert Highland Gateway area of the city, north of Las Vegas Road Palm Springs, California 92262 The Community Redevelopment Agency of the City of Palm Springs ("Agency")entered a DDA with Century Crowell Communities, LP in January,2005 for the purpose of developing five (5) moderate income single family homes in the Desert Highland Gateway area of the city, and amended the Agreement in December, 2005. The current amendment would provide for the Agency to be able to amortize the second trust deed note recorded against each of the properties (the "Promissory Note and Deed of Trust ") to provide for amortization of the note over a certain period of time, thereby reducing the lien to buyers that continue to occupy these homes and establishing equity in the homes. Certain resale restrictions would remain against the property;such subsidy shall be repayable subject to the terms contained in the Promissory Note and Deed of Trust. All interested persons are invited to attend the Public Hearing and express opinions on the item listed above. If you challenge the nature of the proposed action in court,you may be limited to raising only those issues you or someone else raised at the Public Hearing described in this notice, or in written correspondence delivered to the City Clerk,at the address listed above,at or priorto the Public Hearing. Members of the public may view this document and all referenced documents in the Community Redevelopment Department, City Hall,and submit written comments to the Community Redevelopment Agency at or prior to the Community Redevelopment Agency Meeting at or prior to the public hearing described in this notice. Further information, including a copy of the DDA Amendment and Resolution, prepared in accordance with Health and Safety Code Section 33433, is available in the Office of the City Clerk, at the above address. James Thompson Assistant Secretary PUBLISHED: June 7 and June 14, 2006 NOTICE OF JOINT PUBLIC HEARING NOTICE IS HEREBY GIVEN, that the Community Redevelopment Agency of the City of Palm Springs and the City Council of the City of Palm Springs will hold a Public Hearing in the Council Chamber, located at 3200 E. Tahquitz Canyon Way, beginning at 6:00 p.m.,Wednesday,June 21, 2006, to consider the following: Amendment No. 2 to Agreement No. A0490C, a Disposition and Development Agreement ("DDA") between Century Crowell Communities, LP and the Community Redevelopment Agency of the City of Palm Springs, amending the terms of the Agency's second trust deed note for the Buyer's assistance to provide for an amortization of the note on five single family infill homes for moderate income households in the Desert Highland Gateway area of the City, north of Las Vegas Road Palm Springs, California 92262 The;Community Redevelopment Agency of the City of Palm Springs ("Agency")entered a DDA with Century Crowell Communities, LP in January,2005 for the purpose of developing five (5)moderate income single family homes in the Desert Highland Gateway area of the City, and amended the Agreement in December, 2005. The current amendment would provide for the Agency to be able to amortize the second trust deed note recorded against each of the properties (the"Promissory Note and Deed of Trust ") to provide for amortization of the note over a certain period of time, thereby reducing the lien to buyers that continue to occupy these homes and establishing equity in the homes. Certain resale restrictions would remain against the property; such subsidy shall be repayable subject to the terms contained in the Promissory Note and Deed of Trust. REVIEW OF PROJECT INFORMATION: The staff report and other supporting documents regarding this matter are available for public review at the City Hall between the hours of 8:00 a.m. and 5:00 p.m. Monday through Friday. Please contact the Office of the City Clerk at(760)323-8204 if you would like to schedule an appointment to review these documents. COMMENT ON THIS APPLICATION: Response to this notice may be made verbally at the Public Hearing and/or in writing before the hearing. Written comments may be made to the Agency/City Council by letter(for mail or hand delivery) to: James Thompson, City Clerk 3200 E. Tahquitz Canyon Way Palm Springs, CA 92262 Any challenge of the proposed project in court may be limited to raising only those issues raised at the public hearing described in this notice, or in written correspondence delivered to the City Clerk at, or prior, to the public hearing. An opportunity will be given at said hearing for all interested persons to be heard. Questions regarding this agreement may be directed to John Raymond, Director of Community& Economic Development, at (760) 322-8321, Si recesit:a ayuda con esta carta, porfavor Ilame a la Ciudad de Palm Springs y puede hablar con Nadine Fieger telefono (760) 323-8245. mes Thompson assistant Secretary/City Clerk RESOLUTION NO. OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, CONCURRING WITH THE COMMUNITY REDEVELOPMENT AGENCY REGARDING THE APPROVAL OF A AMENDMENT NO. 2 TO A DISPOSTION AND DEVELOPMENT AGREEMENT WITH CENTURY VINTAGE HOMES FOR THE DEVELOPMENT OF FIVE SINGLE-FAMILY MODERATE-INCOME HOMES IN THE DESERT HIGHLAND AREA OF MERGED AREA#1 NOW THEREFORE BE IT RESOLVED by the City Council of the City of Palm Springs that: it concurs with the action of the Community Redevelopment Agency regarding the approval of a Amendment No. 2 to a Disposition and Development Agreement with Century Vintage Homes for the development of five single-family moderate-income homes in the Desert Highland area of Merged Area #1. ADOPTED this day of 12006. AYES: NOES: ABSENT: ATTEST: CITY OF PALM SPRINGS, CALIFORNIA By_ CityClerk City Manager REVIEWED & APPROVED AS TO FORM AMENDMENT NO. 2 TO, A DISPOSITION AND DEVELOPMENT AGREEMENT ("DDA") BETWEEN CENTURY CROWELL COMMUNITIES, LP D/B/A MOUNTAIN GATE II PALM SPRINGS VENTURE, LLC AND THE COMMUNITY REDEVELOPMENT AGENCY, ADJUSTING THE TERMS OF THE AGENCY BUYER ASSISTANCE NOTE TO ALLOW IT TO AMORTIZE OVER A PERIOD OF FIVE YEARS, FOR 5 SINGLE FAMILY INFILL HOMES FOR MODERATE INCOME HOUSEHOLDS IN THE DESERT HIGHLAND GATEWAY AREA OF MERGED PROJECT AREA #1 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 funds are earmarked for the acquisition, construction, or rehabilitation of affordable housing to benefit the community; and WHEREAS, the Agency solicited proposals from builders and developers interested in constructing affordable single-family homes on Agency-owned parcels in the Desert Highland Gateway neighborhood, and received a successful proposal from Century Homes; and WHEREAS, the property developers, Century Vintage Homes and Century Crowell Communities (Developer) are the developers of the successful Mountain Gate project adjacent to the neighborhood, and have endeavored to provide service to the Desert Highland neighborhood; and WHEREAS, the Agency and Developer have entered a Disposition and Development Agreement whereby the Developer would construct five single-family homes on Agency- owned lots in the neighborhood; and WHEREAS, Section 33430 of the Community Redevelopment Law allows that an agency may, "for purposes of redevelopment, sell, lease, for a period not to exceed 99 years, exchange, subdivide, transfer, assign, pledge, encumber by mortgage, deed of trust, or otherwise, or otherwise dispose of any real or personal property or any interest in property;" and WHEREAS, the Developeragreed to restrict, though a Regulatory Agreement approved as an attachment to the Disposition and Development Agreement, the resale provisions on the five homes to make the homes affordable to families with no more than 110% of Area Median Income (AMI); and WHEREAS, the Agency agreed to provide assistance to the buyers in an amount up to $50,000, in the form of a "silent second" loan. NOW THEREFORE, the Parties mutually desire to amend the Amended Disposition and Development Agreement as follows: Section 1. The Parties agree that Regulatory Agreement and Declaration of Covenants and Restrictions, shall be amended as follows: The Section that reads: "Note Repayment Amount. The entire Agency Loan shall be due and payable at the end of the Affordability Period, or upon the occurrence of an Event of Acceleration pursuant to Section 7, whichever is earlier. When the Agency Loan becomes due and payable for any reason, Owner shall pay to Agency the entire Note Amount, plus simple interest for the entire Note Amount at the rate of three percent (3%") per annum commencing on the date of the Promissory Note ("Note Date'). If the Agency Loan becomes due because of an Event of Acceleration, then in addition to the principal and interest due to Agency, and regardless of when the Event of Acceleration occurs, Owner shall pay to Agency an early termination charge equal to ten percent (10%) of the entire Note Amount." shall be replaced with: Repayment by Maker. This is a deferred loan. Unless the conditions of Section 8 of the Agreement are met("Due on Sale; Due on Encumbrance"), the Makerwill not make payments on this note. Instead, interest in the amount of five percent (3%) per annum shall accrue on the 15rh day of each calendar month after the Interest Accrual Commencement Date until principal and interest have been fully amortized. On the anniversary date of the Interest Accrual Commencement Date, an amount equal to twenty percent (20%) of the unamoritzed principal and interest shall be forgiven by the Agency. Section 2. The Parties agree that the Agency/Purchaser Promissory Note shall be amended as follows: The Section that reads: Time of Payment. Repayment of the Note Amount shall be made upon the expiration of the Affordability Period set forth in the Affordable Housing Agreement, unless and except upon the occurrence of an Event of Acceleration as described in Section 7 of the Affordable Housing Agreement. Note Repayment Amount. The entire Agency Loan shall be due and payable at the end of the Affordability Period, or upon the occurrence of an Event of Acceleration pursuant to Section 7 of the Affordable Housing Agreement,whichever is earlier. Borrower shall pay to Agency the entire Note Amount, plus simple interest for the entire Note Amount at the rate of [three percent (3%)] per annum commencing on the Note Date. If the Agency Loan becomes due because of an Event of Acceleration, then in addition to the principal and interest due to Agency, and regardless of when the Event of Acceleration occurs, Borrower shall pay to Agency an early termination charge equal to ten percent (10%) of the entire Note Amount. shall be replaced with: Repayment by Maker. This is a deferred loan. Unless the conditions of Section 8 of the Agreement are met("Due on Sale; Due on Encumbrance"),the Maker will not make payments on this note. Instead, interest in the amount of five percent (3%) per annum shall accrue on the 15th day of each calendar month after the Interest Accrual Commencement Date until principal and interest have been fully amortized. On the anniversary date of the Interest Accrual Commencement Date, an amount equal to twenty percent (20%) of the unamoritzed principal and interest shall be forgiven by the Agency. Section 3. The Parties agree that all other terms and conditions of the agreement shall remain unchanged. IN WITNESS WHEREOF, the parties have executed and entered into this Amendment as of the date stated below. DATED this day of 2006. "AGENCY" THE COMMUNITY REDEVELOPMENT AGENCYOF THE CITY OF PALM SPRINGS, a public body, corporate and politic Date Chairman ATTEST: Assistant Secretary APPROVED AS TO FORM: WOODRUFF, SPRADLIN & SMART, LLP Agency Counsel "DEVELOPER" CENTURY VINTAGE HOMES, a [California corporation] Date Name: Title: Date Name: Title: [END OF SIGNATURES]