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HomeMy WebLinkAbout9/1/2004 - STAFF REPORTS (5) T� DATE: SEPTEMBER 1, 2004 TO: COMMUNITY REDEVELOPMENT AGENCY FROM: DIRECTOR OF COMMUNITY & ECONOMIC DEVELOPMENT APPROVAL OF A MEMORANDUM OF UNDERSTANDING BETWEEN THE CITY, AGENCY AND CENTURY CROWELL COMMUNITIES, LP RELATED TO THE PUBLIC BENEFIT OF AN ASSESSMENT DISTRICT FORMED FOR THE MOUNTAIN GATE II PROJECT RECOMMENDATION: It is recommended that the Agency approve a Memorandum of Understanding with Century Crowell Communities, LP and the City of Palm Springs related to the public benefit derived from a proposed 1913 Act Assessment District using 1915 Act Bonds. The MOU was approved by the City Council on July 28, 2004. SUMMARY: This Memorandum of Understanding with Century Crowell Communities, LP and the City of Palm Springs is related to the public benefit derived from a proposed 1'913 Act Assessment District using 1915 Act Bonds (the "AD"). The MOU was approved by the City Council on July 28, 2004. Century has proposed an AD for its Mountain Gate II subdivision to provide assistance in developing the project; the City's Assessment District requires the Council to make the finding that there is public benefit to the uses of the tax exempt bonds. The MOU identifies several public projects or categories of expenditures that meet the public benefit test, The Developer and City have already approved the MOU; the Agency is a party to the Agreement because of the possible use of a portion of the funds for affordable housing in the Desert Highland Gateway neighborhood. /%A ten, JOHN . RAY I ND irec r of Com unity& Economic Development — `= —ate ` 6 APPROVED=�.--�^=- -T`— Executive Director, ATTACHMENTS: 1. Agency Resolution 3. Memorandum of Understanding \uL � MEMORANDUM OF UNDERSTANDING THIS AGREEMENT (this "MOU") dated as of July 27, 2004, is made by and between the CITY OF PALM SPRINGS, a Charter municipality (the "City"), the COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, a public body, corporate and public (the "Agency") and CENTURY CROWELL COMMUNITIES, LP, a California limited liability company (the "Developer"), with reference to the following facts. RECITALS: A. The Developer is in the process of planning the construction of a new single family subdivision (the "Project" or"Mountain Gate II") located in the City of Palm Springs. B. The Developer desires to apply to the City for the creation of an assessment district (1913 Act District using 1915 Act Bonds — herein "AD") to assist in its development of Mountain Gate ll. C. The City Council has adopted a policy, the Policy and Procedure for Special Assessment (the "Policies and Procedures"), which permits establishment of assessment and community financing districts where certain criteria exist, including the provision of general community benefit. D. Pursuant to the Policies and Procedures, the City's Special Districts Committee has met with the Developer and has recommended proceeding with the application for the AD provided sufficient public benefit is established (see attached July 21, 2004, staff report). E. The City anticipates that following the execution of this Agreement, the City and the Developer shall negotiate the terms of a Assessment Agreement ("AD") for the Project and said Assessment Agreement shall include the public benefit items described in this MOU. F. It is contemplated that the economic contributions made herein will not be included in the assessments to the homeowners. G. The Agency and the Developer are also negotiating a Disposition and Development Agreement ("DDA") for five residential lots owned by the Agency to be sold to Developer for construction of low to moderate income restricted residences. The Developer has been planning to seek public assistance in the development of these units. H. The City, Agency and the Developer desire to enter into this MOU in order to facilitate the negotiation of the AA and the DDA and to set forth the basic understanding of the parties with respect to the public benefits finding necessary under the City's Policy and Procedures for Special Assessment. NOW, THEREFORE, the parties hereto agree as follows: 1. Public Benefits to be provided by Developer as terms in the Assessment Agreement for the AD: 1003/008/33t45.01 �- (a) $150,000.00 contribution to the rehabilitation and improvement of the visitor center facility located in close proximity to the proposed AD. This will supplement other funding provided by City. (b) $50,000.00 payment to provide improvements to the Desert Highland Unity Center. This will supplement approximately $160,000.00 in CDBG funding already available to the City for a budget of$210,000.00. (c) $10,000.00 to be used toward a $40,000.00 study of fire safety costs and needs that will be City-wide but will have a primary focus on fire safety needs in the developing area of the City, surrounding the Project, and which study is also being funded by other developers. (d) $50,000.00 to a pilot property improvement program in the Desert- Highland area, to be administered by City, and supplemented with another$100,000.00 in Agency funding. (e) Developer agrees to support the formation of an assessment district for police protection, criminal justice, fire protection and suppression, ambulance, paramedic, and other safety services and recreation, library and cultural services, and shall waive any right of protest, provided that the amount of such assessment shall be established through appropriate study and shall not exceed $500.00 annually per lot subject to CPI. The district shall be formed prior to sale of any lots or a covenant agreement shall be recorded against each parcel in a form approved by the City Attorney. (f) The potential development of blighted in-fill lots pursuant to Section 2. The collective contributions of the parties hereunder to the general area where the Project is located would be $500,000.00, not counting enhanced property values from the Project itself or the development of the in-fill lots, should the projects contemplated above proceed. 2. NEGOTIATION IN GOOD FAITH FOR DDA. Developer and Agency agree to negotiate in good faith a DDA providing for transfer of five infill lots owned by Agency to Developer at fair market value to be developed as low or moderate income single family residences. Developer and Agency have been in negotiations for this program and Developer was seeking a subsidy in the write down of the land value. Developer will pay fair market value for the lots not exceeding $25,000.00. 3. TERMINATION. The Agency and/or the City may terminate this MOU if Developer fails to comply with all material provisions hereof on Developer's part to be performed. The Developer may terminate this MOU if Agency and/or City fail to comply with all material provisions hereof. If a party hereto believes the other party has not complied with its obligations under this MOU, such party shall give the other party ten (10) business days written notice detailing with specificity such noncompliance, and if such noncompliance has not been cured within such ten (10) business day period, then the party who delivered such notice may terminate this MOU by delivering written notice thereof to the defaulting party at any time thereafter. C ® � 1003/009/33145.01 2 4. NO PREDETERMINATION OF CITY AND AGENCY DISCRETION. The parties agree and acknowledge that, while this MOU does provide that the parties shall negotiate in good faith, this MOU does not obligate either the City, the Agency or the Developer to enter into an AA or DDA, and approval of any AA or DDA shall require the approval of all parties, with the City Council and/or Agency Board giving its approval, if at all, only after consideration of the AA or DDA at a public meeting and any other proceedings required by law. It is the intent that binding legal instruments be in effect prior to establishment of the AD, 5. NO OTHER AGREEMENT. This MOU constitutes the entire agreement of the parties hereto with respect to the subject matter hereof. There are no agreements or understandings between the parties and no representations have been made by either party to the other as an inducement to enter into this MOU, except as expressly set forth herein. All prior negotiations, written or oral, between the parties are superseded by this MOU. This MOU may not be altered, amended or modified except by a writing executed by both parties. Notwithstanding anything provided herein to the contrary, whether express or implied, the parties shall have no obligation to enter into a contract, and neither the City nor the Agency nor their respective members, officers, staff or agents have made any promises to Developer. No statements of the City or the Agency or their respective officers, members, staff or agents as to future obligations shall be binding upon the City or the Agency unless and until the proper legal contract is approved by the City and the Agency. 6. PROHIBITION AGAINST ASSIGNMENT BY DEVELOPER. This MOU shall not be assigned by Developer to an unaffiliated party without the City and Agency's prior written consent, which consent may be withheld in its sole and absolute discretion. 7. NON-BINDING NATURE OF AGREEMENT. Each of the parties acknowledges and agrees that because circumstances may change, and because each of the parties have not fully considered the ramifications of their present intentions, including the proposed terms of the DDA, the AD, the Assessment Agreement, and/or any other agreement this MOU shall not be construed to bind the City, Agency or the Developer to enter into or establish the AD, DDA, Assessment Agreement and/or any other agreement. The actual covenants and agreements of the parties with respect to the disposition and development of the Property shall be set forth in the AA, DDA or other agreement to be hereafter negotiated. This MOU does not constitute a disposition of property or exercise of control over property by the Agency or the City and does not require a public hearing. Execution of this MOU is merely an agreement to enter into a period of exclusive negotiations according to the terms hereof, reserving final discretion and approval by the Agency and the City as to any AD, DDA, Assessment Agreement or other agreement and all proceedings and decisions in connection therewith. 10. APPLICABLE LAW. This MOU shall be construed and interpreted under, and governed and enforced according to the laws of, the State of California. 11. COUNTERPARTS. This Agreement may be executed simultaneously or in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same MOU. 1003/008/33145.01 3 IN WITNESS WHEREOF, the parties hereto have executed this MOU as of the day and year first written above. AGENCY: COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, a public body, corporate and politic By: Executive Director Attest: Agency Secretary CITY: CITY OF PALM SPRINGS By: Mayor Attest: City Clerk Approved as to form: City Attorney DEVELOPER: CENTURY CROWELL COMMUNITIES, LP By: Its: 1003/008/33145.01 4 RESOLUTION NO. OF THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS,CALIFORNIA,APPROVING AN MEMORANDUM OF UNDERSTANDING WITH THE CITY OF PALM SPRINGS AND CENTURY CROWELL COMMUNITIES, LP, A CALIFORNIA LIMITED LIABILITY PARTNERSHIP, RELATING TO THE PUBLIC BENEFIT DERIVED FROM A PROPOSED 1913/1915 ACT ASSESSMENT DISTRICT BE IT RESOLVED by the Community Redevelopment Agency of the City of Palm Springs that the Memorandum of Understanding with the City of Palm Springs and Century Crowell Communities, LP, a California Limited Liability Corporation, relating to the public benefit derived from a proposed 1913/1915 Act assessment district is hereby approved and incorporated herein by this reference. ADOPTED this day of , 2004. AYES: NOES: ABSENT: ATTEST: COMMUNITY REDEVELOPMENT AGENCY CITY OF PALM SPRINGS, CALIFORNIA By Assistant Secretary Chairman REVIEWED & APPROVED