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HomeMy WebLinkAbout9/15/2004 - STAFF REPORTS (13) DATE: SEPTEMBER 15, 2004 TO: CITY COUNCIL FROM: DIRECTOR OF COMMUNITY & ECONOMIC DEVELOPMENT EXCHANGE AGREEMENT WITH SIHAM SHTAYYEH TO ALLOW FOR CITY ACQUISITION OF SINGLE-FAMILY PARCEL IN THE DESERT HIGHLAND GATEWAYAREA FORTHE PURPOSE OF FACILITATING THE DESERT HIGHLAND INFILL PROGRAM, IN RETURN FOR TWO CITY- OWNED PARCELS AVAILABLE FOR MULTI-FAMILY HOUSING DEVELOPMENT RECOMMENDATION: That the City Council approve an Exchange Agreement with Siham Shtayyeh for the exchange of two City-owned C-1 zoned lots for an equivalent-sized R-1 Lot on El Dorado Boulevard to be included in the Desert Highland Infill Program SUMMARY: Siham Shtayyeh ("Developer") is the owner of an R-1 lot of approximately 8,000 s.f. on El Dorado Boulevard near the corner of Tramview Road in the Desert Highland area. She is also a partner in a project approved by the Planning Commission on July 14, 2004 which consists of three triplexes to be built on the east side of El Dorado in the strip that backs up to Indian Canyon Drive. The Developer has asked to exchange the R-1 parcel for the two small C-1 parcels owned by the City (that total less than 9,000 s.f. of usable space). The Agency approved an Exclusive Agreement to Negotiate with the Developer on April 7, 2004 to allow the Developer to move forward on the entitlements on the triplex project. The Agency's intent was that the exchange of the lots would be included in a DDA related to the Desert Highland Infill Program, but the timing of the exchange using that mechanism remains problematic, so staff is bringing forward a direct exchange between the City and Developer, with the parcel later being transferred to the Agency. The 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 will be targeted at moderate-income families recently priced out of the single-family market in Palm Springs. The successful respondent to the RFP was Century Homes, the developer of the nearby Mountain Gate project. Century is proposing to build several of their successful model 102 and 103 homes from Mountain Gate on the Agency-owned lots. The current Agency-owned lots were acquired in the past for various reasons, including CVHC's 1996 self-help program in the neighborhood and to abate non-conforming structures. The Agency has tried to acquire additional lots to add to the program to create more economy of scale for the developer and raise the profile of the program. The DDA with Century is expected to go to the Agency on October 6, since the deal numbers have now been finalized. However, the DDA will only for 5 homes, to accommodate a desire to have smaller local builders also participate in the program. Those DDAs will follow shortly after, using the Century agreement as a template. This R-1 lot would not be part of the Century DDA, which creates a timing problem"for the Developer. (For efficiency purposes in the first phase, we tried to locate the infill sites as close to one another as possible.) By separate action, once the exchange is completed, the City will convey the parcel to the Agency for the Desert Highland program. The proposed exchange will ultimately increase the number of vacant lots owned by the Agency in the Desert Highland Gateway neighborhood of Palm Springs. There are no monies to be exchanged for any of the three lots. Buyer and seller will share escrow costs equally. Pgo n Raymon ector of Com u ity & Economic Development APPROVED:— City Manager C ATTACHMENTS: 1. Resolution Approving Exchange Agreement 2. Exchange Agreement EXCHANGE AGREEMENT THIS EXCHANGE AGREEMENT is made effective as of the _ day of 2004 by and between Siham Shtayyeh ("Developer") and the City of Palm Springs, California, a California chartered municipal corporation ("City"). RECITALS A. Developer is the owner of an 8,000 square foot parcel of land on El Dorado Boulevard in the City ("Developer Parcel") which is zoned R-1 as more particularly described on Exhibit"A" which is attached hereto and incorporated herein. B. The City owns two lots on El Dorado Boulevard in the City which total approximately 9,000 square feet ("City Parcel") and are zoned C-1 as more particularly described on Exhibit "B" which is attached hereto and incorporated herein. C. Both the Developer Parcel and the City Parcel are located in the Merged Palm Springs Redevelopment Project Area No. 1 (formerly the Highland Gateway Project Area). D. In an effort the effectuate the Redevelopment Plan for the Merged Palm Springs Redevelopment Project Area No. 1 by providing for the development of affordable housing units in the Desert Highland Gateway neighborhood, the Palm Springs Community Redevelopment Agency ("Agency") is negotiating a disposition and development agreement ("DDA") with Century Vintage Homes ("Builder") to construct single family homes for moderate income buyers on Agency-owned parcels. As part of the DDA, the Agency has been seeking to acquire parcels to be included in the DDA. E. Developer desires to construct and operate several market-rate duplexes in the area of the City between El Dorado Boulevard and Indian Canyon Drive ("Developer's Project"). F. On May 12, 2004, Developer and the Agency executed an Exclusive Agreement to Negotiate the preparation of an agreement to allow the Agency to acquire the Developer Parcel to be used as a single family home lot in connection with the DDA. G. Due to the delays in the preparation of the DDA, instead of including the Developer Parcel in the DDA, City and Developer now desire to exchange the Developer Parcel for the City Parcel as the City Parcel would be suitable for the Developer's construction of duplexes and the Developer Parcel would be suitable to the construction of a single family home as part of the Agency's infill project. H. Pursuant to Government Code Section 37350, the City has the authority to acquire and dispose of property for the common benefit. I. City deems this exchange to be in the best interest of the City because the Developer Parcel will be transferred by City to the Agency for the construction of a moderate income single family home as part of the Agency's infill project which will benefit the City by adding to its stock of affordable housing. 1003/013/33914.01 t 5 J. Developer deems this exchange to be in its best interest as she will be able to develop the City Parcel with additional town homes as part of the Developer's Project. NOW, THEREFORE, in consideration of the mutual covenants and conditions contained herein, the parties do hereby agree as follows: 1. EXCHANGE: Developer agrees to convey the Developer Parcel to the City and the City agrees to convey the City Parcel to Developer, subject to the terms and conditions hereinafter set forth, together with all rights and appurtenances thereto. 2. CONVEYANCE: Each of the parties agree that it shall convey its property to the other utilizing the form of Deed attached hereto as Exhibit "C" ("Deed"). 3. RESTRICTIONS ON USE OF CITY PARCEL: Developer acknowledges that it will obtain title to the City Parcel subject to the restriction that any proposed use of the property be limited to the construction of multi-family purposes and agrees to take title subject to such restrictions. 4. ESCROW: Within 10 days from the date hereof the Parties will deliver signed escrow instructions to Melvena Schaefer at Liberty Escrow, Palm Springs, California, ("Escrow Holder'), a copy of which instructions are attached hereto and incorporated herein as Exhibit "D" ("Escrow Instructions"). Escrow fees shall be paid entirely by Developer. The escrow instructions shall in all cases be consistent with the provisions of this Agreement, and in the event of a conflict between the terms of the escrow instructions and this Agreement, the terms of this Agreement shall prevail. At the close of escrow ("Closing"), titles to the respective properties shall be conveyed by the duly executed and acknowledged Deeds. 5. PHASE 1 HAZARDOUS MATERIALS REPORT: Developer shall reimburse the City for the cost to inspect the Developer Parcel and to issue its Phase 1 Report ("Hazardous Materials Report") to each of the Parties. In the event the Hazardous Materials Report indicates that either property is likely to have been contaminated by any Hazardous Material, either Party may terminate this agreement and the Escrow. The Parties anticipate the cost of the Phase 1 Report to be approximately One Hundred Fifty Dollars ($150.00). 6. TITLE: At closing, each of the Parties shall convey to the other party title to their respective property, free and clear of any and all liens, encumbrances, covenants, conditions, restrictions, easements, rights of way and assessments except those acceptable to both parties set forth on a preliminary title reports to be furnished by Developer, at her sole cost and expense, within ten days after approval of this Agreement by the City. In the event the preliminary title report with 2 1003/013/33914.01 qj , respect to either exchange property contains any lien, encumbrance, covenant, condition, restriction, easement, right of way or assessment which is unacceptable to the party which is to receive that property in the exchange, that Party may terminate this agreement and the Escrow. 7. REPRESENTATIONS AND WARRANTIES: Each of the Parties makes the following representations and warranties to the other which shall be true as of the date hereof and as of the Closing: A. This Agreement and all agreements, instruments and documents herein provided to be executed or to be caused to be executed by each Party on or before the Closing will be duly authorized, executed and delivered by and binding upon that Party and enforceable in accordance with its terms; and each Party has the authority to enter into this Agreement and to consummate the transactions herein provided. B. Neither Party has (i) received notice of any outstanding violation of or been charged with the violation of any material legal requirement, restriction, condition, covenant or agreement affecting its Property or the marketing, construction, development, use, operation, maintenance or management of its Property which has not been cured, or (ii) been served in any unresolved litigation relating to its Property or the marketing, construction, development, use, operation, maintenance or management of the Property. Neither Party has actual knowledge of any actions, suits, claims or proceedings, governmental or otherwise, pending or threatened against its Property or any portion thereof. C. Neither the Developer Parcel nor the City Parcel is subject to any certificate, instrument, contract, Deed of Trust, mortgage, indenture, agreement, covenant or other restriction, and there is no provision in any Trust Agreement, Charter or law, or any judgment, order, writ, injunction, or decree of any court, governmental body or arbitrator, which would prohibit or otherwise be breached or violated by the entering into, execution, delivery or performance by either Party of this Agreement or the consummation of the transactions contemplated hereby. D. Both Parties acknowledge that they are required to disclose if their respective Properties lie within the following natural hazard areas or zones: (i) a special flood hazard area designated by the Federal Emergency Management Agency (California Civil Code Section 1103); (ii) an area of potential flooding (California Government Code Section 8589.4); (iii) a very high fire hazard severity zone (California Government Code Section 51183.5); (iv) a wild land area that may contain substantial forest fire risks and hazards (Public Resources Code Section 4136); (v) an earthquake fault zone (Public Resources Code Section 2621.9); or (vi) a seismic hazard zone (Public Resources Code Section 2694). Neither Party shall have any responsibility for matters not actually known to it. E. Each Party certifies that it has knowledge of any hazardous materials or hazardous substances on its property. F. Each Party certifies that it has no service, maintenance, employment, supply, management or other agreements affecting its property, either oral or written, which will remain in effect after the Closing. 3 q#Soi� 1003/013/33914.01 G. Each Party certifies that it has there are no leases, licenses or other agreements permitting the use or occupancy of its property which will remain in effect after the Closing, and that there are no persons entitled to use or occupy its property or any portion thereof by reason of any easements by prescription or necessity. H. Neither Party has: (a) made a general assignment for the benefit of creditors; (b) filed any voluntary petition in bankruptcy or suffered the filing of an involuntary petition by its creditors; (c) suffered the appointment of a receiver to take possession of all or substantially all of its assets; or (d) suffered the attachment or judicial seizure of all, or substantially all, of its assets. I. Neither Party has granted any person any right to acquire all or any portion of its property, including, without limitation, any development, mineral or air rights relating to its property. J. Neither Party has actual knowledge of: (a) any condemnation, pending or threatened, of its property or any portion thereof, including any right of access to its property; (b) any government plans for public improvements that might result in a special assessment against its property; or, (c) any underground or above-ground storage tanks on its property. K. The exchange of the properties and the performance of each of the Parties' obligations hereunder are not subject to any requirement to obtain any approval or consent of any other governmental agency or third party. L. Neither Party is a "foreign person"within the meaning of Section 1445(f)(3) of the Internal Revenue Code. M. Except as otherwise expressly provided in this Agreement including this Article 7, neither Party makes any representation, warranty or guarantee whatsoever with respect to its property, or any aspect thereof. Each Party acknowledges and agrees that if the exchange occurs, except as otherwise provided herein, it will be acquired "AS - IS," and each Party's decision in that regard shall be based on its own independent investigation and analysis of the property. N. The representations, warranties and covenants made by each Party in this Article 7 shall survive the Closing and the recordation of the deed. 8. BROKERAGE COMMISSION: Each party represents to the other that no real estate brokers are involved in this transaction. 9. PRORATION OF REAL PROPERTY TAXES: All non-delinquent general and special real property taxes and assessments shall be paid by the property's owner, prorated to the Close of Escrow on the basis of a thirty (30) day month and a three hundred sixty day (360) year. Developer acknowledges that City is a governmental agency, not subject to payment of taxes. Accordingly, Developer shall be solely responsible for seeking a refund of any overpayment of taxes from the appropriate taxing 1003/013/33914 01 4 agencies. In the event that property taxes are assessed on a parcel of real property which includes land other than the property at issue herein, such proration shall include only taxes attributable to the property at issue herein, calculated in terms of total gross square feet of land assessed pursuant to the tax statement versus total gross square footage of the property at issue herein. Any supplemental tax bills received after Close of Escrow shall be paid by Developer to the extent they relate to a period prior to Close of Escrow. If a supplemental tax bill covers a period commencing before and continuing after Close of Escrow, Developer will pay the tax and shall be solely responsible for seeking any refund from the appropriate taxing agency. The provisions of this Section shall survive Close of Escrow. If either party fails to pay its pro rata share of taxes or other expenses by the times herein provided, interest shall accrue on all unpaid amounts from when owing until paid at five percent (5%) over the Federal Discount Rate quoted by the Federal Reserve Bank of San Francisco on the 25th day of the month preceding the date interest commences to accrue. 10. MISCELLANEOUS PROVISIONS: A. NOTICE: Unless otherwise provided herein, any notice, tender or delivery to be given hereunder by either party to the other may be effected by personal delivery or by registered or certified mail, postage prepaid, return receipt requested, and shall be deemed communicated as of the date of mailing. Mailed notices shall be addressed as set forth below but each party may change his address by written notice in accordance with this paragraph: 1003/013/33914.01 up CITY: CITY OF PALM SPRINGS 3200 E Tahquitz Canyon Way Palm Springs, CA 92262 Attn: City Manager Address Copy to: Aleshire & Wynder, LLP 18881 Von Karman Avenue, Suite 400 Irvine, CA 92612 Attn: David J. Aleshire, Esq. DEVELOPER Siham Shtayyeh Address Copy to: B. ENTIRE AGREEMENT: This instrument contains the entire agreement between the parties relating to the matters contained within this Agreement. Any oral representations or modifications concerning this instrument shall be of no force or effect excepting a subsequent modification in writing signed by all parties. C. ATTORNEYS' FEES: If either party to this Exchange Agreement is required to initiate or defend or aid a party to any action or proceeding in any way connected with this Exchange Agreement, the prevailing party in such action or proceeding, in addition to any other relief which may be granted, whether legal or equitable, shall be entitled to reasonable attorney's fees, whether or not the matter proceeds to judgment. D. SUCCESSORS AND ASSIGNS: This Agreement shall be binding upon and shall inure to the benefit of the respective heirs, personal representatives, successors and assigns of the parties hereto. However, This Agreement does not confer any rights or remedies upon any person, firm or entity other than the Parties and their respective successors and permitted assigns. E. GOVERNING LAW: This Agreement is entered into in the State of California, concerns real property located within this state, and all questions concerning the validity, interpretation and performance of any of its terms or provisions or any of the rights or obligations of the parties hereto shall be governed by and resolved in accordance with the laws of the State of California. F. COOPERATION: Each party hereto agrees to execute and deliver such other and further documents and perform such other acts as shall be necessary to effectuate the purpose of this Agreement. G. NO WAIVER: Any waiver of the breach of any covenant, condition or promise contained within this Agreement shall not be deemed a waiver of any succeeding breach of the same or of any other covenant, condition or promise set forth within this Agreement. No waiver shall be deemed to have been given unless given in writing and in compliance with the Notices section set forth above. 1003/013/33914 01 mm H. TIME OF THE ESSENCE: Time is expressly deemed to be of the essence of this Agreement and each and every provision hereof. I. COUNTERPARTS: This Agreement may be executed in one or more counterparts, and bear the signature of each Party on a separate counterpart, each of which when so executed and delivered shall be deemed an original but all of which taken together shall constitute but one and the same instrument. Signatures on facsimile copies when so delivered shall be deemed to be originals and shall operate in the same manner as original counterparts. J. REPRESENTATIONS AND WARRANTIES: All representations and warranties set forth in this Agreement and all provisions of this Agreement shall survive Closing and be fully enforceable thereafter. K. CONFLICT OF INTEREST: No officer or employee of the City shall have any financial interest, direct or indirect, in this Agreement, nor shall any such officer or employee participate in any decision relating to the Agreement which affects his financial interest or the financial interest of any corporation, partnership or association in which he is, directly or indirectly, interested, in violation of any State statute or regulation. Developer warrants that it has not paid or given and will not pay or give any third party any money or other consideration for obtaining this Agreement. L. QUALIFICATION; AUTHORITY. Each individual executing this Agreement on behalf of a partnership or corporation represents and warrants that such entity is duly formed and authorized to do business in the State of California and that he or she is duly authorized to execute and deliver this Agreement on behalf of such partnership or corporation in accordance with authority granted under the formation documents of such entity, and, if a corporation, by a duly passed resolution of its Board of Directors, that all conditions to the exercise of such authority have been satisfied, and that this Agreement is binding upon such entity in accordance with their respective terms. Upon request of either party, Escrow Holder or Title Company, City and Developer agree to deliver such documents reasonably necessary to evidence the foregoing. M. MODIFICATIONS. Any alteration, change or modification of or to this Agreement, in order to become effective, shall be made by written instrument or endorsement thereon and in each such instance executed on behalf of each party hereto. N. EXHIBITS: Exhibits "A," "B" and "C," inclusive, attached hereto, are incorporated herein by this reference [signature page appended] 7 1003/013/33914.01 IN WITNESS WHEREOF, the parties hereto have executed this Agreement and made it effective as of the day and year first above written. ATTEST: CITY OF PALM SPRINGS, a municipal corporation By: By: City Clerk City Manager REVIEWED AND APPROVED ALESHIRE & WYNDER, LLP By: David J. Aleshire, Esq. City Attorney SIHAM SHTAYYEH By: (Authorized signature) 8 1003/013/33914.01 EXHIBIT C FORM OF DEED TO CITY RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: THE CITY OF PALM SPRINGS 3200 E. Tahquitz Canyon Way Palm Springs, CA 92262 Attn: Director of Community Development Space above this line for Recorder's Use MAIL TAX STATEMENTS TO: The City of Palm Springs 3200 E. Tahquitz Canyon Way Palm Springs, CA 91706 Attn: Finance Director GRANT DEED FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, Siham Shtayyeh, as an unmarried woman ("Seller"), hereby grants to the City of Palm Springs, a public body, corporate and politic, the real property in the City of Palm Springs, County of Riverside, State of California, described in Exhibit "I" attached hereto and incorporated herein by reference (the "Property"). The Property conveyed hereby is subject to (i) non-delinquent general and special real property taxes and assessments; and (ii) matters of record. Dated: 2004 "SELLER" Siham Shtayyeh, as an unmarried woman Siham Shtayyeh C-1 1003/013/33914.01 FORM OF DEED TO DEVELOPER RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: Siham Shtayyeh Space above this line for Recorder's Use MAIL TAX STATEMENTS TO: Siham Shtayyeh GRANT DEED FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, the City of Palm Springs, a public body, corporate and politic, hereby grants ("Seller") to Siham Shtayyeh, as a single woman the real property in the City of Palm Springs, County of Riverside, State of California, described in Exhibit 1" attached hereto and incorporated herein by reference ("Property") subject to the following restriction: The property may only be developed for multifamily housing purposes. The Property conveyed hereby is subject to (i) non-delinquent general and special real property taxes and assessments; and (ii) matters of record, but Dated: , 2004 "SELLER" ATTEST: CITY OF PALM SPRINGS, a public body, corporate and politic By: Agency Secretary City Manager APPROVED AS TO FORM ALESHIRE & WYNDER, LLP David J. Aleshire, Esq. 1003/013/33914v1 C-2 EXHIBIT D ESCROW INSTRUCTIONS SEE ATTACHED ESCROW INSTRUCTIONS FROM LIBERTY ESCROW COMPANY D-1 X/3- 1003/013/33914.01 RESOLUTION NO. 2 /0 fl%/ OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, APPROVING AN EXCHANGE AGREEMENT WITH SIHAM SHTAYYEH, EXCHANGING 8,900 SQUARE FEET OF CITY-OWNED LAND FOR 8,000 SQUARE FEET OF PRIVATELY-OWNED LAND, WITH RESTRICTIONS ON THE FUTURE DEVELOPMENT OF BOTH PARCELS ---------------------- WHEREAS, Siham Shtayyeh ("Developer") is the owner of that certain unimproved real property located in the City of Palm Springs, County of Riverside, State of California, consisting of approximately 8,000 square feet which Real Property is more particularly described in attached Exhibit A ("Developer Property'); and WHEREAS,the City is the owner of that certain unimproved real property located in the City of Palm Springs, County of Riverside, State of California, consisting of two lots totaling approximately 8,900 square feet which Real Property is more particularly described in attached Exhibit B ("City Property'); and WHEREAS, Developer desires to construct a cluster of triplexes in the Desert Highland area and received Planning Commission approval on July 14, 2004;the project site of such a cluster includes the two Agency-owned parcels; and WHEREAS, the City and its Community Redevelopment Agency have created an infill housing program in the Desert Highland Area and desire to include the Developer's parcel in the program; and WHEREAS, it is the intention of the City to develop both single-family affordable housing and market rate multi-family housing in the area,and to that end is willing to convey the City Property to the Developer in exchange for the Developer Property in the fashion set forth hereinafter to assure that both the Developer Property and the City Property shall be developed as described in the Agreement; and NOW THEREFORE BE IT RESOLVED by the City Council of the City of Palm Springs, that: SECTION 1. The City, pursuant to its authority under Government Code Section 37350, to acquire and dispose of property for the common benefit, deems the exchange of property between the City of Palm Springs and Siham Shtayyeh to be in the best interest of the City because it results in additional housing development in a blighted area, resulting in a long term benefit for the residents of the City without additional expense to the City. SECTION 2. In consideration of the mutual covenants and conditions contained therein, the Exchange Agreement between the Siham Shtayyeh and the City of Palm Springs, in a form approved by the City Attorney, is hereby approved. SECTION 3. The City Manager or his designee is hereby authorized to execute all contracts, deeds,declarations, or other documents related to the Exchange Agreement. ADOPTED this day of 2004. AYES: NOES: ABSENT: ATTEST: THE CITY OF PALM SPRINGS, CALIFORNIA By City Clerk Mayor REVIEWED & APPROVED AS TO FORM