HomeMy WebLinkAbout3/25/2009 - STAFF REPORTS - RA.5. o PALM Sn
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Community Redevelopment Agency Staff Repo
DATE: MARCH 25, 2009 CONSENT CALENDAR
SUBJECT: APPROVAL OF AMENDMENT NO. 1 TO AN OWNER PARTICIPATION
AGREEMENT ("OPA") WITH COACHELLA VALLEY HOUSING COALITION
DBA DESERT HIGHLAND ASSOCIATES, LP FOR $400,000 IN
ADDITIONAL PROJECT FINANCING AND REDUCTION OF THE LOAN
INTEREST RATE FOR THE DEVELOPMENT OF A 57-UNIT APARTMENT
PROJECT, LOCATED ON 4.45 ACRES AT 555 ROSA PARKS ROAD IN
THE DESERT-HIGHLAND GATEWAY ESTATES NEIGHBORHOOD,
INCREASING AGENCY FINANCIAL PARTICIPATION TO $1,600,000 IN
GAP FINANCING, MERGED PROJECT AREA NO. 1
FROM: David H. Ready, Executive Director
BY: Community & Economic Development Department
SUMMARY
RECOMMENDATION:
Adopt Resolution No. , OF THE COMMUNITY REDEVELOPMENT AGENCY OF
THE CITY OF PALM SPRINGS APPROVING AMENDMENT NO. 1 TO AN OWNER
PARTICIPATION AGREEMENT ("OPA") WITH COACHELLA VALLEY HOUSING
COALITION DBA DESERT HIGHLAND ASSOCIATES, LP TO PROVIDE $400,000 IN
ADDITIONAL ASSISTANCE AND REDUCTION OF THE LOAN INTEREST RATE FOR
THE DEVELOPMENT OF THE ROSA GARDENS APARTMENTS, A 57-UNIT
APARTMENT PROJECT ON A 4.45 ACRE SITE AT 555 ROSA PARKS ROAD IN THE
DESERT-HIGHLAND GATEWAY ESTATES NEIGHBORHOOD, INCREASING THE
AGENCY FINANCIAL PARTICIPATION TO $1,600,000 IN GAP FINANCING, MERGED
PROJECT AREA NO. 1.
STAFF ANALYSIS:
Coachella Valley Housing Coalition ("CVHC") has processed an application for an
affordable housing project to be developed in collaboration with the Community
Redevelopment Agency on a 4.45 acre site owned by CVHC at 555 Rosa Parks Road in
the Desert-Highland Gateway Estates Neighborhood. CVHC and the Agency have a long
and successful history of partnering on projects filling the need for affordable housing for
families in Palm Springs. CVHC, which has owned the property for several years, wanted
to make a contribution to the many exciting new projects and initiatives taking place in the
Desert Highland Gateway Estates neighborhood, including the City's proposed College of
the Desert West Valley Educational Center, and wanted to contribute to the continued
revitalization and growth of the neighborhood.
ITEM NO. �p`S.
CRA Staff Report
March 25, 2009- Page 2 of 3
CVHC Rosa Gardens Apartments
CVHC has received national recognition for providing attractive, service-enriched
affordable housing for low-income households. For example, in conjunction with the
Agency, CVHC successfully completed 140 units in Coyote Run Phase One in 1993 and
opened the second 66-unit phase in 2006. In addition, CVHC and the Agency completed a
number of single-family units including the award winning Cottonwood-Chuckwalla project
in 2003.
CVHC will develop 57 family apartments on the Site which had been modified from 59
units due to the State HOME funding award. The project is a mix of one, two, three and
four bedroom units and will include their typical site amenities such as pool, community
room, laundry, tot lots, etc_ The project will also supply a rich variety of community
services modeled after Coyote Run, which shall include computer classes, after school
programs, ESL classes, health education, and music and arts programs.
Similar to Coyote Run 2, the financing structure utilizes 4% Tax Credits, MHP, HOME, with
CaIHFA Bonds for construction financing as well as Agency funds. Based on the project's
initial budget projections, CVHC requested an Agency contribution of $1.2 million, or
approximately 10% of the total development budget. Ultimately, the project budget
increased to over $15 million, reducing the percentage of Agency participation.
The Agency approved an Owner Participation Agreement in February 2008 (Res. No.
1350, A0531 c) that committed the original $1.2 million as part of the development project.
Since the original approval, CVHC has proceeded with the final design and permitting of
the project, but had requested an additional $400,000 in Agency assistance to construct a
required 60 inch storm water drainage line from west to east across the property, as well
as acquire a small adjacent parcel on McCarthy for a discharge basin and the construction
of a concrete spillway at the street for the discharge of the storm water.
The development of the Rosa Gardens project may have potentially qualified for the
federal Neighborhood Stabilization Program (NSP) funds because of the neighborhood
impact. However, the timing of the NSP funds does not coincide with the timing of the
project's financing, as Palm Springs was not qualified as a direct NSP recipient under
HUD's guidelines, and must apply through the State's program. It will be a couple of
months, if not longer, before funds would be available through the State program.
CVHC has been successful in syndicating the tax credits for the project, even in a
historically bad market. Historic low tax credit rates have squeezed the project's equity
financing even further, creating additional stress on the project's pro forma. However, the
financing is due to close at the end of March, requiring the additional Agency contribution
to close the gap and revision to the Agency's Loan from a simple interest of one percent
(1%) per annum to zero. The interest reduction on the loan is a tax deduction for the tax
credit investor, US Bank. In the competitive 4% bond transactions for low-income housing
tax credits, these investor deductions effects the amount of losses the investor can factor
into their yield. This OPA amendment provides for the additional funds necessary to allow
the project to close the construction loan and move forward to construction.
02
CRA Staff Report
March 25, 2009- Page 3 of 3
CVHC Rosa Gardens Apartments
FISCAL IMPACT:
This Amendment increases the Agency's contribution in the project from $1.2 million to
$1.6 million. The Agency's current annual Housing set-aside funds is approximately
$3,000,000. Since all of the units currently are, and would continue to be, restricted to low-
and very-low income residents, the Agency per-unit subsidy would increase to about
$28,000.
slc
DALE E. COOK, JR.
Community Development Administrator
THOMAS J. Vy SON DAVID H. REA sq. Ph.D.
Assistant City Manager - Development Services Executive Director
Attachment: Resolution
Amendment No. 1 to the Owner Participation Agreement
D aleClHo u s i ng\CRA_StaffReport_RosaGa rde n sApt.13 Feb09
N� c�0
RESOLUTION NO.
A RESOLUTION OF THE COMMUNITY
REDEVELOPMENT AGENCY OF THE CITY OF PALM
SPRINGS APPROVING AMENDMENT NO. 1 TO AN
OWNER PARTICIPATION AGREEMENT ("OPA") WITH
COACHELLA VALLEY HOUSING COALITION DBA
DESERT HIGHLAND ASSOCIATES, LP TO PROVIDE
$400,000 IN ADDITIONAL ASSISTANCE AND
REDUCTION OF THE LOAN INTEREST RATE FOR
THE DEVELOPMENT OF THE ROSA GARDENS
APARTMENTS, A 57-UNIT APARTMENT PROJECT
ON A 4.45 ACRE SITE AT 555 ROSA PARKS ROAD IN
THE DESERT-HIGHLAND GATEWAY ESTATES
NEIGHBORHOOD, INCREASING THE AGENCY
FINANCIAL PARTICIPATION TO $1,600,000 IN GAP
FINANCING, MERGED PROJECT AREA NO. 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, Rosa Gardens Apartments, proposed for low-income families, was
approved on February 13, 2008 by the Palm Springs Planning Commission; and.
WHEREAS, the property developers, Coachella Valley Housing Coalition dba
Desert Highland Associates, LLC, sought Agency financial assistance to cover a
portion of the development cost; and
WHEREAS, the property developers, Coachella Valley Housing Coalition and
Desert Highland Associates, LLC, have received project funding from State HOME
funds and the State Multi-Family Housing Program (MHP) and will submit a Low
Income Housing Tax Credit (LIHTC) application to the California Tax Credit
Allocation Committee for the July, 2008 application round and have requested
Agency assistance to strengthen the application; and
WHEREAS, the Developer and Agency entered an Owner Participation
Agreement in February 2008 to provide the Project $1,200,000 in Agency
financing; and
Resolution No.
Page 2 of 3 Pages
WHEREAS, while all of the units are income-restricted under agreements with
HOME and MHP, the Developer shall agree to restrict, though a Regulatory
Agreement approved with the Owner Participation Agreement, the rents on 49% of
the proposed units (57) to levels affordable to families with incomes no more than
60% of Area Median Income (AMI); and
WHEREAS, the Developer has requested an additional $400,000 in Project
assistance and the Loan's interest rate reduction in Project assistance.
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. 1 to an Owner Participation Agreement
with Desert Highland Associates, LLC 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 and other
documents necessary to the Agreement, and make minor
changes as may be deemed necessary, in a form approved
by Agency Counsel.
PASSED, APPROVED, AND ADOPTED THIS DAY OF MARCH, 2009.
STEVE POLIGNET, CHAIRMAN
ATTEST:
James Thompson, City Clerk
y. 5
Resolution No.
Page 3 of 3 Pages
CERTIFICATION
STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss.
CITY OF PALM SPRINGS )
I, JAMES THOMPSON, City Clerk of the City of Palm Springs, do hereby certify
that Resolution No. is a full, true and correct copy, and was
adopted at a regular meeting of the Palm Springs City Council on the
day of , 2008, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
James Thompson, City Clerk
City of Palm Springs, California
DaleC\Hou s i ng\CRA_Resolution_Rosa G arden sApt.13 FebOg
Re.Rosa Gardens Apartments
1
2
RECORDING REQUESTED BY AND
3 WHEN RECORDED MAIL TO:
4 Community Redevelopment Agency of the
5 City of Palm Springs
P.O. Box 2743
6 Palm Springs, CA 92263
Attn' Assistant Secretary
7 SPACE ABOVE THIS LINE FOR RECORDERS USE8 FIRST AMENDMENT TO THE OWNER PARTICIPATION AGREEMENT
9 BETWEEN
10 THE COMMUNITY REDEVELOPMENT AGENCY
11 OF THE CITY OF PALM SPRINGS
12 AND
13 DESERT HIGHLAND ASSOCIATES, LP
14
15 PALM SPRINGS MERGED REDEVELOPMENT PROJECT AREA NO. 1
16
17 This First Amendment to the Owner Participation Agreement (the "First
is Amendment") is entered into effective this day of
19 , 2009, by and between the Community Redevelopment Agency of
20 the City of Palm Springs (hereafter referred to as the "AGENCY") and Desert
21 Highland Associates, LP, a California limited partnership (hereafter referred to as the
22 "DEVELOPER").
23
24 RECITALS
25
26 WHEREAS, the AGENCY approved an Owner Participation Agreement
27 ("OPA") in February 2008 (Res. No. 1350, A0531c) that committed the original $1.2
28 million as part of the development project.
1 "r4
Re:Rosa Gardens Apartments
i WHEREAS, the AGENCY and the DEVELOPER entered into the OPA dated
2 March 28, 2008;
3 WHEREAS, pursuant to the OPA, DEVELOPER proposed to develop a 59 unit
4 affordable apartment project (the "Project") on a certain parcel of approximately 4.45
> acres located at 555 Rosa Parks Road, in the City of Palm Springs, more particularly
6 described in the attached Exhibit A;
7 WHEREAS, under the terms and conditions of the OPA, the AGENCY has
s agreed to provide to DEVELOPER Agency Financial Assistance in the amount of
9 $1,200,000 (the "Agency Contribution") and DEVELOPER has agreed to restrict to
10 make no fewer than 49% of the units available to families below 60% of Area Median
I Income; and
12 WHEREAS, the DEVELOPER requested that the Agency provide $400,000 in
13 additional Agency Financial Assistance to provide for the construction of certain on-
14 site flood control structures.
is NOW, THEREFORE, in consideration of the foregoing, and the promises and
16 mutual covenants and conditions hereinafter set forth, the AGENCY and the
17 DEVELOPER do hereby agree as follows-
is 1. Section 101, Purpose of this Agreement, is hereby amended as to
19 adjust the number of rental dwellings within the rental housing complex
20 from fifty-nine (59) to fifty-seven (57) which had been modified due to
21 the State's HOME funding award of $4.1 million.
22 2. Section 212, Project Loan, is hereby amended as to provide for
23 $1,600,000 in total Agency Financial Assistance.
24 3. All references to interest rate in the loan documents executed in
25 connection with the OPA shall be revised from "1%" to "zero".
26 4. All other terms and conditions of the OPA remain unmodified and in full
27 force and effect.
2s
2 or4 �;
Re:Rosa Gardens Apartments
1 This Agreement may be signed by the different parties hereto in counterparts,
2 each of which shall be an original but all of which together shall constitute one and
3 the same agreement.
4
s IN WITNESS WHEREOF, the AGENCY and the DEVELOPER have executed this
6 First Amendment as of the date first above written.
7
ATTEST: COMMUNITY REDEVELOPMENT AGENCY
$ OF THE CITY OF PALM SPRINGS,
9 CALIFORNIA
10
11 By. By:
James Thompson, David H. Ready, Esq. Ph.D_
12 Assistant Secretary Executive Director
13
14 APPROVED AS TO FORM
15
16 By:
17 Agency Counsel
1s Desert Highland Associates, LP
19 a California limited partnership
20 By: Coachella Valley Housing Coalition,
21 Its General Partner
22 By:
23
24 By.
26
26
27 (All signatures on this page need to be notarized)
28
3 of 4 l;
Re:Rosa Gardens Apmmenis
State of California )
)ss.
County of Riverside )
On before me,
Date Name and Title of Officer
personally appeared
Name(s) of Signer(s)
who proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signatures(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal
Signature of Notary Public
State of California )
)ss.
County of Riverside )
On before me,
Date Name and Title of Officer
personally appeared
Name(s) of Signer(s)
who proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signatures(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal
Signature of Notary Public
4 O1'4
6➢
EXHIBIT "A"
LEGAL DESCRIPTION OF THE SITE
ALL THAT CERTAIN REAL PROPERTY SITUATE IN THE CITY OF PALM SPRINGS,
COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AND MORE PARTICULARLY
DESCRIBED AS FOLLOWS:
THAT PORTION OF THE SOUTHWEST QUARTER OF THE SOUTHEAST QUARTER OF SECTION 34,
TOWNSHIP 3 SOUTH, RANGE 4 EAST, SAN BB`RNARDINC) BASE P.NR MERIDIAN, DESCRIBED AS
FOLLOWS.
BEGINNING AT THE NORTHWEST CORNER OF THE SOUTHWEST QUARTER OF THE SOUTHEAST
QUARTER OF SAID SECTION;
THENCE SOUTH 00. 08' WEST, ON THE WESTERLY LINE OF SAID SOUTHEAST QUARTER, 460
FEET;
THENCE SOUTH 890 38' 20" EAST, PARALLEL WITH THE NORTH LINE OF THE SOUTHWEST
QUARTER OF T.VE SOUTHEAST QUARTER OF SAM SECTION, 4-30 FEET;
THENCE NORTH 000 06' EAST, PARALLEL WITH THE WEST LM OF THE SOUTHWEST QmtIMR
OF THE SODTEMST QUARTER OF SAID SECTION, 460 FEET, TO THE NORTH LINE OF THE
SOUTHWEST QUARTER OF THE SOUTHEAST QUARTER OF SAM SECTION;
THENCE NORTH 690 381 20" WEST, ON SAID NORTH LINE, 430 FEET, TO THE POINT OF
BEGINNING.
EXCEPT= THEREFROM ONE-STXTEENTH OP ALL COAL, OIL, GAS AND OTHER MINERAL
DEPOSITS AS RESERVED IN THE PATENT EXECUTED BY THE STATE OF CALIFORKA RECORDED
MAY 22, 1936, IN BOOK 202, PAGE 274, OF OFFICIAL RECORDS.
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