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HomeMy WebLinkAbout6/2/2004 - STAFF REPORTS (2) DATE: JUNE 2, 2004 TO: COMMUNITY REDEVELOPMENT AGENCY FROM: DIRECTOR OF COMMUNITY & ECONOMIC DEVELOPMENT PUBLIC HEARING APPROVING THE FIRST AMENDMENT TO A RESTATED AND AMENDED DISPOSITION AND DEVELOPMENT AGREEMENT WITH HACIENDA SUNSET AFFORDABLE HOUSING ASSOCIATES, A CALIFORNIA LIMITED PARTNERSHIP, AND COACHELLA VALLEY HOUSING COALITION TO PROVIDE ADDITIONAL AGENCY ASSISTANCE IN THE AMOUNT OF $350,000 FOR THE DEVELOPMENT AND CONSTRUCTION OF THE HACIENDA SUNSET APARTMENTS, LOCATED ON THE WEST SIDE OF SUNRISE WAY NORTH OF SAN RAFAEL ROAD RECOMMENDATION: It is recommended that the Agency approve the First Amendment to a Restated and Amended Disposition and Development Agreement with Hacienda Sunset Affordable Housing Associates, a California Limited Partnership, and Coachella Valley Housing Coalition (CVHC), amending the terms of the Agency assistance to provide an additional $350,000 in Agency assistance at the end of the construction of the project. The Agency had previously agreed to provide $1,000,000 (One Million Dollars) in land write downs and Agency financial assistance for the construction of a 66-unit low-income apartment complex, south of the Coyote Run Apartments on Sunrise Way and San Rafael Road. SUMMARY: This resolution amends a previously amended Disposition and Development Agreement with the developers of the Hacienda Sunset Apartments to provide an additional $350,000 in Agency assistance to close a financing gap to assist the project to close on its construction-and permanent financing. The Agency will still contribute a 6.25 acre parcel of Agency-owned land (valued at $250,000) and provide up to $750,000 over three years, to assist the project financing, but will now pay an additional $350,000 at the conclusion of the construction project, expected to be in early 2006. In return, the Developer expects to proceed with the project as proposed and approved by the City Council on July 3, 2002. This project is another piece of the Agency's efforts to upgrade and develop the area near San Rafael Road and Sunrise Way. BACKGROUND: Sunset Hacienda Apartments, proposed for 66 low-income families,was approved by the Council on July 3, 2002. The Agency also approved a DDA at that meeting under which the Developer agreed to restrict, though a Regulatory Agreement approved as an attachment to the Disposition and Development Agreement, the rents on 49% of the proposed units (32) to levels affordable to families with incomes no more than 60% of Area Median Income (AM[). On December 3, 2003, the Agency approved an Amended and Restated DDA restructure the promissory note for the $750,000 in Agency Low Income Housing Setaside funds, and the land contribution, to conform to the requirements of the project's primary financing program, the State of California's Multifamily Housing C 'B Program (MHP). The Developer has also received HOME funds for the project nearly adequate to begin construction, but is still faced with a shortfall of$350,000 in the project budget. They had expected to be able to cover the $350,000 shortfall with a grant from the Affordable Housing Program (AHP) of the Federal Home Loan Bank Board, but they started bidding the construction project and discovered that the steep escalation in lumber prices has driven the cost of the project up by $500,000, necessitating that they receive the AHP grant and additional Agency assistance. The Developer has made up the difference. The total Agency contribution, then, would be $1,350,000, comprised of $1,100,000 in cash spread over a four year period, as well as the land value of $250,000. Funds are available in the Low/Mod Housing Fund. J HN S RAY O D Di ect of Co unity& Economic Development Executive Director ��� ATTACHMENTS: 1. Resolution 2. First Amendment to an Amended and Restated DDA 3. Public Hearing Notice C _7t NOTICE OF 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 7:00 p.m., Wednesday, June 2, 2004, to consider the following: The First Amendment to an Amended and Restated Disposition and Development Agreement ("DDA") between Hacienda Sunset Affordable Housing Associates, a California Limited Partnership, Coachella Valley Housing Coalition and the Community Redevelopment Agency of the City of Palm Springs for a project located on the west side of Sunrise Way near San Rafael Road Palm Springs, California 92262 The nature of the amendment is to provide additional financial assistance to the project in the amount of $350,000 in Agency Low Income Housing Setaside funds, bringing the total Agency cash contribution the $1,100,000. The DDA also calls for the Agency contributing the 6.25 acre Agency-owned parcel to project as well. The partnership has received federal HOME funds, as well as state MHP funds. The general partner in the project is Coachella Valley Housing Coalition, the general partner and property manager of the adjacent Coyote Run apartments. The two projects would share some amenities, including the existing day care center and new tot lots. The new project is adjacent to Coyote Run. 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 prior to the Public Hearing. Members of the public may view this document and all referenced documents in the Community & Economic Development 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 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. PATRICIA A. SANDERS, City Clerk PUBLISHED: May 18 and May 25, 2004 c �A 3-3 FIRST AMENDMENT TO AMENDED AND RESTATED DISPOSITION AND DEVELOPMENT AGREEMENT This First Amendment to Disposition and Development Agreement (the "First Amendment") is entered into by and between the Community Redevelopment Agency of the CITY OF PALM SPRINGS, a public body, corporate and politic ("the Agency") and COACHELLA VALLEY HOUSING COALITION AND HACIENDA SUNSET AFFORDABLE HOUSING ASSOCIATES, A CALIFORNIA LIMITED PARTNERSHIP (collectively, "Developer"), and is intended to provide additional Agency financing to cover a financing shortfall in the project through an additional contribution of Three Hundred Fifty Thousand Dollars ($350,000.00) at the completion of the project's construction. RECITALS 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, Sunset Hacienda Apartments, proposed for 66 low-income families, was approved on July 3, 2002 by the Palm Springs City Council; and WHEREAS, the Developer, Coachella Valley Housing Coalition and Hacienda Sunset Affordable Housing Associates, a California Limited Partnership, ("Developer ') sought Agency financial assistance to cover a portion of the development cost, and received Agency approval of a Disposition and Development Agreement ("DDA") at a duly noticed public hearing held July 3, 2002; and WHEREAS, the Developer has agreed to restrict, though a Regulatory Agreement approved as an attachment to the Disposition and Development Agreement, the rents on 49% of the proposed units (32) to levels affordable to families with incomes no more than 60% of Area Median Income (AMI); and WHEREAS, on December 3, 2003, the Agency approved an Amended and Restated DDA ("ARDDA") to change the name of the partnership to "Hacienda Sunset Affordable Housing Associates, a California Limited Partnership," and to restructure the promissory note for the $750,000 in Agency Low Income Housing Setaside funds, and the land contribution, to conform to the requirements of the project's primary financing program, the State of California's Multifamily Housing Program (MHP); and WHEREAS, in addition to the Agency contribution, the Developer has received HOME funds and state MHP funds for the project nearly adequate to begin construction, but is still faced with a shortfall of$350,000 in the project budget; and WHEREAS, the Developer has requested and the Agency desires to provide additional assistance to the project in order to facilitate its construction. flaciendaSwset Antendmen[Na.2to DDA -t- f� a>• q NOW, THEREFORE, based upon the foregoing recitals and the terms, conditions, covenants, and agreements contained herein, the parties hereto agree as follows: Section 1. Developer and Agency agree that Section 403 of the ARDDA shall be amended as follows: C. (§403) Disposition of the Site. Agency shall convey the Site to Developer and Developer shall acquire the Site from Agency, upon the terms and conditions hereinafter set forth. 1. Purpose of Sale. Upon attaining required financing as described herein, Developer agrees to develop the Site with sixty-six (66) rental units, thirty-two (32) of which shall be restricted for fifty-five years (55) for rental to persons of Very Low and Low income, all as described in the Scope of Development. 2. Agency Financial Assistance. Agency agrees to provide certain financial assistance to Developer to assist the Developer in the construction costs of the Project. The Reimbursable Costs are those specified in Exhibit "1" to the Scope of Development Attachment No. 4. In addition to transferring the fee interest in the Site to the Developer for $1.00 in cash and carrying back a promissory note for the fair market value of Two Hundred Fifty Thousand Dollars ($250,000), the Agency shall loan the Developer $750,000 cash to be used towards payment of the Reimbursable Costs. An additional disbursement of $350,000 shall be made within 15 days of the date the Certificate of Completion on the project is recorded. The promissory note for the entire loan ("Agency Note"), including the final disbursement, shall be an amount of One Million Three Hundred Fifty Thousand Dollars ($1,350,000), for a term of 55 years, until end of loan term, at no interest or repayment as long as all covenants performed for the term of the loan. Agency shall pay a properly submitted and documented invoice after verification of the work for Reimbursable Costs within thirty (30) days of receipt pursuant to the procedure in subparagraph 3 below, provided that Agency shall comply with all mechanics' lien laws. The Reimbursable Costs loan disbursement shall have limits for the year 2002, 2003, and 2004. No more than $300,000 shall be disbursed in 2002; $225,000 in 2003, and $225,000 in 2004 (the "Maximum Advance Amount"), with the final $350,000 being made within 15 days of the date the Certificate of Completion on the project is recorded. Developer shall be responsible for all costs of the Project with the assistance of the loan disbursement. Section 2. Developer and Agency agree that the Attachment No. 4 of the ARDDA, Scope of Development, paragraph 6, shall be amended as follows: 6. AGENCY ASSISTANCE The Agency shall providence financial assistance in addition to the land value of a maximum amount of One Million One Hundred Thousand Dollars ($1,100,000) as reimbursement for the Reimbursable Costs specified in Exhibit 1 attached hereto and incorporated herein by this reference. Hacienda Sunset Amendment No.2 to DDA -2- $1,350,000.00 Palm Springs, California FOR VALUE RECEIVED, HACIENDA SUNSET AFFORDABLE HOUSING ASSOCIATES, a California limited partnership ("Maker"), promises to pay the COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, a public body, corporate and politic ("Holder") at 3200 E. Tahquitz Canyon Way, Palm Springs, California 92262, or at such other address as Holder may direct from time to time in writing, the sum of One Million Three Hundred Fifty Thousand Dollars ($1,350,000.00) (the "Note Amount"), together with interest thereon at the rate set forth herein. All sums payable hereunder shall be payable in lawful money of the United States of America. This Promissory Note ("Agency Note") is made in connection with the provision by the Holder of funds equal to the Agency Note pursuant to that certain Restated and Amended Disposition and Development Agreement by and between Maker and Holder, dated as of (the "Agreement"). Section 4. Developer and Agency agree that paragraph A. of Attachment No. 9 to the ARDDA, the Regulatory Agreement and Declaration of Covenants and Restrictions, shall be amended as follows: A. Pursuant to the Amended and Restated Disposition and Development Agreement by and between Agency and Owner dated , 2003 (the "ARDDA"), Agency has provided to Owner real property and financial assistance in the amount of approximately One Million Three Hundred Fifty Thousand Dollars ($1,350,000.00) (collectively, the "Agency Assistance"), all for the purpose of assisting Owner in the acquisition of real property and the development of a residential apartment complex thereon for rental to very low and low income households, on that certain real property located in the City of Palm Springs, County of Riverside, State of California, more particularly described in Exhibit "A" attached hereto and incorporated herein by reference (the "Site"). Section 5. Agency's Execution. The Agency shall execute this First Amendment within thirty (30) days of the execution by Developer. Section 6. The Amended and Restated DDA is Deemed Modified to the Extent Inconsistent With the Provisions of This First Amendment. Except as provided herein, the ARDDA continues unmodified and in full force and effect. /\//��• rQ, V Hacienda Sunset Amendment No.2 to DDA IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date of execution by the Agency. "AGENCY' THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, a public body, corporate and politic Date Chairman ATTEST: Agency Secretary APPROVED AS TO FORM: ALESHIRE &WYNDER, LLP Agency Counsel "DEVELOPER" HACIENDA SUNSET AFFORDABLE HOUSING ASSOCIATES a California limited partnership Date: By: Its: General Partner [END OF SIGNATURES] Hacienda Sooset AmeudmenWo.2 to DDA -4- V ` r7 STATE OF CALIFORNIA ) ss. COUNTY OF RIVERSIDE ) On 2001, before me, personally appeared , personally known to me (or 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 signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. (SEAL) STATE OF CALIFORNIA ) ss. COUNTY OF RIVERSIDE ) On 2001, before me, personally appeared , personally known to me (or 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 signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. (SEAL) Hacienda Sunset Amendment No.2 m DDA -$- STATE OF CALIFORNIA ) ) ss. COUNTY OF RIVERSIDE ) On 2001, before me, personally appeared , personally known to me (or 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 signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. (SEAL) c ro." Hacienda Sunset Amendment No.2 to DDA -6- 9 RESOLUTION NO. OF THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, CALIFORNIA APPROVING THE FIRST AMENDMENT TO A RESTATED AND AMENDED DISPOSITION AND DEVELOPMENT AGREEMENT WITH COACHELLA VALLEY HOUSING COALITION AND HACIENDA SUNSET AFFORDABLE HOUSING ASSOCIATES, A CALIFORNIA LIMITED PARTNERSHIP TO EFFECTUATE THE DEVELOPMENT OF A LOW-INCOME APARTMENT COMPLEX ON THE WEST SIDE OF SUNRISE WAY, NORTH OF SAN RAFAEL ROAD AND SOUTH OF THE COYOTE RUN APARTMENTS 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, Sunset Hacienda Apartments, proposed for 66 low-income families, was approved on July 3, 2002 by the Palm Springs City Council; and WHEREAS, the Developer, Coachella Valley Housing Coalition and Hacienda Sunset Affordable Housing Associates, a California Limited Partnership, ("Developer") sought Agency financial assistance to cover a portion of the development cost, and received Agency approval of a Disposition and Development Agreement ("DDA") at a duly noticed public hearing held July 3, 2002; and WHEREAS, the Developer has agreed to restrict, though a Regulatory Agreement approved as an attachment to the Disposition and Development Agreement, the rents on 49% of the proposed units (32) to levels affordable to families with incomes no more than 60% of Area Median Income (AMI); and WHEREAS, on December 3, 2003,the Agency approved an Amended and Restated DDA to change the name of the partnership to "Hacienda Sunset Affordable Housing Associates, a California Limited Partnership," and to restructure the promissory note for the $750,000 in Agency Low Income Housing Setaside funds, and the land contribution, to conform to the requirements of the project's primary financing program, the State of California's Multifamily Housing Program (MHP); and WHEREAS, in addition to the Agency contribution, the Developer has received HOME funds and state MHP funds for the project nearly adequate to begin construction, but is still faced with a shortfall of $350,000 in the project budget; and WHEREAS, the Developer has requested and the Agency desires to provide additional assistance to the project in order to facilitate its construction. WHEREAS, a Notice of Public Hearing concerning the First Amendment to the Amended and Restated Disposition and Development Agreement was published in accordance with applicable law; and WHEREAS, the Agency has considered the staff report, and all the information, testimony and evidence provided during the public hearing on June 2, 2004; and 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. Pursuant to the California Environmental Quality Act (CEQA), the Community Redevelopment Agency finds as follows: a) The City Council adopted a Mitigated Negative Declaration for the project based on the preparation of an Initial Study and the recommendation of the Planning Commission. Mitigation measures are included in the project design and adopted as part of the Conditions of Approval for the Project. b) The Agency finds that the Planning Commission adequately discussed the potential significant environmental effects of the proposed project(land use,traffic/circulation,parking,air quality, noise, aesthetics, geology/soils, water quality, drainage, public utilities, public services, archaeological/historic resources, public controversy, and light and glare). The Community Redevelopment Agency further finds that the Mitigated Negative Declaration reflects its independent judgment. SECTION 3. The Agency does hereby find and determine as follows: a) The project was originally approved by the City Council on July 3, 2002. In February, 2002 the Developers requested Community Redevelopment Agency assistance and a Disposition and Development Agreement, contributing $750,000 over three (3) years and land valued at $250,000 to the project, was also approved on July 3, 2002. b) The parcel was acquired by the Community Redevelopment Agency for the purposes of providing low- and moderate- income housing on it. C) The developer has received federal HOME funds, as well as state MHP funds, nearly sufficient to construct the project; but still has a project shortfall in the amount of$350,000. d) The Amended and Restated DDA, approved on December 3, 2003, effectuates the purposes of the Community Redevelopment Law by assisting in the development of housing affordable to families with incomes below 60% of Area Median Income and preserving the affordability of that housing for a period of 55 years. I f) The Amended and Restated DDA effectuates the purposes of the Community Redevelopment Law as it is intended to eliminate blight and promote the health, safety and general welfare of the people of Palm Springs. SECTION 6. The proposed project is consistent with the Five Year Implementation Plan and Housing Compliance Plan for the Palm Springs Community Redevelopment Agency, insofar as this project will provide additional housing for persons of low- or moderate income within the City of Palm Springs. SECTION 7. Based on foregoing reasons,this First Amendment to the Amended and Restated Disposition and Development Agreement with Coachella Valley Housing Coalition and Hacienda Sunset Affordable Housing Associates, a California Limited Partnership, providing an additional $350,000 in Agency assistance at the end of the project, is hereby approved and incorporated herein by this reference. SECTION 8. The Chairman, or his designee, is hereby authorized to execute on behalf of the Agency the Restated and Amended Disposition and Development Agreement and other documents necessary to the Agreement, and make minor changes as may be deemed necessary, in a form approved by Agency Counsel. ADOPTED this day of 2004. AYES: NOES: ABSENT: ATTEST: COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, CALIFORNIA By Assistant Secretary Chairman REVIEWED & APPROVED AS TO FORM RESOLUTION NO. OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA APPROVING THE FIRST AMENDMENT TO A RESTATED AND AMENDED DISPOSITION AND DEVELOPMENT AGREEMENT WITH COACHELLA VALLEY HOUSING COALITION AND HACIENDA SUNSET AFFORDABLE HOUSING ASSOCIATES, A CALIFORNIA LIMITED PATNERSHIP TO EFFECTUATE THE DEVELOPMENT OF A LOW- INCOME APARTMENT COMPLEX ON THE WEST SIDE OF SUNRISE WAY, NORTH OF SAN RAFAEL ROAD AND SOUTH OF THE COYOTE RUN APARTMENTS 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 in the matter of approving the First Amendment to the Amended and Restated Disposition and Development Agreement with Coachella Valley Housing Coalition and Hacienda Sunset Affordable Housing Associates, a California Limited Partnership, to effectuate the development of a low-income apartment complex on the west side of Sunrise Way, north of San Rafael Road and south of the Coyote Run Apartments. ADOPTED this day of , 2004. AYES; NOES: ABSENT: ATTEST: CITY OF PALM SPRINGS, CALIFORNIA By; By: City Clerk City Manager REVIEWED &APPOVED AS TO FORM: C ra1,-