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HomeMy WebLinkAbout3/3/2004 - STAFF REPORTS (14) Mayor Ron Oden Mayor pro tem Chris Mills �- Councilmember Ginny Foot Councilmember Mike McCulloch Councilmember Steve Pougnet v' MARCH 1, 2004 — —- TO: RON ODEN FROM: SHIRLEY BUCH RE: SUNRISE NORTE CHRIS, PLEASE GIVE ME A CALL AFTER YOU HAVE READ. THANKS, SHIRLEY, (902 0612 cell) SECTION 1 Who establishes the fair market value,today, 5 or 10 yrs from now? The City just paid$10,000 for an appraisal, is that just blown to the wind? How about the owners who just recently refied? Lenders are not going to take a second position. SECTION 2 Is the City going to contact all the owners and have them individually sign the lease extenstion? Now after 20 yrs is the City going to start to monitor the 2 yr minimum owner occupancy? The resale restrictions have been flawed since day one. Please see attached. Fab 27 04 04: 48p Palm Springs Maifor 3238282 p• 3 NOW THEREFORE BE IT RESOLVED by the City Council of the City of Palm Springs,that: SECTION 1. Sale, The City shall offer the existing developed parcels.in Sunrise Norte for sale to the owners of the property improvements, at fair market value, pursuant to an Agreement in a form acceptable to the City Attorney. Owners shall provide their own financing for the purchase. SECTION 2. Lease Otherwise Unaffected. For property owners that choose not to purchase, except as expressly set forth herein, the terms of the Lease and Sublease, as amended, shall remain unaffected and unimpaired by reason of the foregoing amendments,and the Lease and Sublease,as amended,shall remain in full force and effect and binding on all parties hereto. SECTION 3. All proceeds from the sale of the parcels shall be deposited In the City's Community Development Block Grant fund for the development of new affordable housing units. SECTION 4. The City Manager or his designee is authorized to execute this formal amendment to the Lease(s) and any agreements, letters, documents, deeds, easements to facilitate this transaction. ADOPTED this day of 2004. AYES: NOES: ABSENT: ATTEST: THE CITY OF PALM SPRINGS, CALIFORNIA By City Clerk City Manager REVIEWED &APPROVED AS TO FORM By: City Attorney 4 ft SUNRISE NORTE RESALE RESTRICTION SHIRLEY BUCH 902 0612 (cell) THE CITY, 20 YRS AGO INITIATED CC&R'S WITH THE FOLLOWING RESTRICTIONS: 1. THE CITY IMPOSED A RESALE RESTRICTION WITH A FORMULA THAT WOULD KEEP THIS TRACT OF 51 MODULAR HOMES IN THE LOW/MOD BRACKET. 2. OWNERS HAD TO OCCUPY FOR A MINIMUM OF 2 YRS. FOR THE LAST 20 YRS THE CITY HAS NOT CONSISTENTLY MONITORED OR ENFORCED THESE CC&R'S. THE STUDY SESSION OF RUNE 11, 2003,MR RAYMOND SAID REFERENCING THE RESALE RESTRICTIONS , "ENFORCEMENT OVER THE YRS HAS BEEN SPOTTY AT BEST" "ALSO, FLAWED, OUT OF WACK." IF THE ENFORCEMENT HAS BEEN SPOTTY FOR THE LAST 20 YRS., WHAT MAKES STAFF THINK THEY CAN TURN THE CLOCK BACK AND NOW START OVER. TO OBTAIN AN APPROVED SALE PRICE,AN OWNER HAS TO PROVIDE THE CITY WITH A PROPOSED OFFER&ESCROW INSTRUCTIONS. (AN OWNER CANNOT CALL & SAY I AM THINKING OF SELLING, WHAT PRICE CAN I SELL FOR.) IN JANUARY LOT 42 SOLD. THE CITY'S ALLOWING PRICE WAS $117,000 (2 BD/IBA,NO POOL, 840 SQ. FT.) THE OWNER OF LOT 49 WAS CONTEMPLATING PAYING A PORTION OF HIS STATE CHAP LOAN. (THE CITY'S ALLOWING SELLING PRICE WAS $92,837) (2 BD/IBA, WITH A POOL, 840 SQ. FT.) With the City's formula,the same home with a pool has to sell for less money. . IN SUNRISE PALMS (SAME FORMULA) THE CITY'S ALLOWABLE PRICE WAS $30,000 MORE THAN WHAT THE UNITS WERE ACTUALLY SELLING FOR. CONSIDERING THERE ARE 360 UNITS, THIS WAS AN ADMISISTRATIVE WASTE OF TIME&MONEY THIS IS ONE OF MANY EXAMPLES OF HOW FLAWED THESE RESTRICTIONS WERE AND ARE. THE CC&R'S CLEARLY STATE THAT THE CITY CAN WAIVE IN WHOLE OR PART,AT ANY TIME,BY RECORDING A WAIVER EXECUTED BY THE CITY. 8111 Cocking From: Bill Cockins Ibilloockins@yahoo,com] Sent: Wednesday, October 29, 2003 1OAS AM To: John Raymond Subject: RE: Sunrise Norte -----Original Message----- From.John Raymond [mailto:JohnR@ci,palm-springs.ca.usj Sent: Monday,.October 27, 2003 1:24 PM To: 'bllicocklns(pyahoo.com' Subject: RE: Sunrise Norte Bill, Thanks for the proposal. We'll have to set up a,meeting (a$ we agreed, now that we have your proposal), I'll have Martha in the City Council office start working on that. Just so you know, your�first proposal 0.) would entail both a subsidy on the sales price and a subsidy on the interest rate both of which could lead us to need new resale restrictions. i Again, a,'!fair market"(transaction gets you out of restriction, but any subsidy normally requires'one. i'l lii (2.) and 3. ore b asic' ( ) ally okay, with the caveat mentioned above on the price. Also,how does (aJ work? P,FR On (5.), I'm willing to recommend a lower escalator -- we use 3% on many contracts In or er not to have to etermine fair market value over and over again The problem is that I could end up reappraising the unsold lots every year or every y r,�, `ether year for a long period, and there's a cost attached to each appraisal. If the burden falls on the homeowner, that could remove most (or all) of the anticipated savings. If it falls on the City, it becomes an ongoing cost liablity as well as an administrative headache -- especially if the responsibility is triggered when someone has a pending sale and is under time pressure. We can always write it so that the buyer can appraise at their own cost, as a protection against future decreases in value, but as on automatic responsibility it's going to end up costing a lot of money. By the way, we forgot to hand out a signup sheet at the meeting, so we have only a few names and no phone numbers. Should we work through Shirley? JR 10/29/20b3 � FI'<: ,,4�, Study Session Presentation June ll , 2003 Sunrise 51 1983 City owns the land which was Leases are.now at 29 Norte homes purchased with CDBG and years making 30- leases to homeowners for year financing $12.49/month; similar resale im ossible; City may restrictions placed on homes as waive its r hfTo a way of accommodating a restrict resale price density bonus; must be owner- occ ied for o a number of parcels (6)were im proper) conveyed over the Years to homeowners• original developer Quitclaimed property to City,which may have affected the CC & Rs. CURRENTLY THERE ARE APPROXIMATELY 19 TO 21 HOMES IN SN THAT ARE NOT OWNER OCCUPIED. HAS THE CITY AMATTED TO MONITOR THESE RENTALS IN THE LAST 20 YEARS?- ,<fES,9LE�STRICTION5 1 THE CITY'S INTENT ON KEEPING SUNRISE NORTE FOR LOW TO MODERATE INCOME CONFLICTS WITH THE STATES DEPARTMENT OF HOUSING. CPTYOFPALMSPRINGS ----- RESTRICTIONS ON RESALE ------ -_-_-- The,Subdivision is part of a housing project approved by the City and leased to Grantor.pursuant: to a General Plan and program of the City to support the California State Rousing objective of encouraging cities and counties to achieve plans to enable develop- • era to crests housing at a price that is affcrdab}p,tq.low and Moderate income purchasers. Additionally, the eziEtpNeAobje'otive��• i4.fo eoP Fro1 the resale prico,o[.the;houefn9"ra.tbatsit,,wtll:,cgn- ,(}.Lnue-to•tie_"!affoedabkeubyr lov and-moder*t*-,.income'purehdaarb-for , use as a residence. To accomplish these goals, the subdivision shall be subject to the following additional servitudes, which shall be enforceable by the Citys Section 17.ol verification of Sales Price Prior to 130Ro a any--owner, tan Grantor, may ea Oc oC etw as trana- fer Ow1160e Lot, Owner must submit the proposed sales price to the cityt the original purchase price and date of purchase) the cost and nature of any capital improvements and the date the imProve- ments were completed or the expenditure Wader an itemisation of all items included in the proposed $alas pride under section 17.02(d)i the address of the Owner where notice of approval or disapproval Abell be sent) and the name and address of the aserowholder, if any. This submittal shall be in the form of i letter (or other form devised by the City) from the Owner to the City addressed to, city of Palm springs, Attention. Rousing Administrator, P.O. Rox 1706, Palm springs, California 92263, deposited in the united states mall registered or certified, return receipt request - adi postage prepaid, with a copy to the ascrowholder, if any, .nd a enmv to env lender financing the proposed sale. The City --.--- L�� STATED"TMENT OF HOUSINGS When .the,proposed transfer is to be made pursuant to a proposed sale, the Borrower'shall notify the Lender of the sales price agreed upon by the Borrower and the Proposed purchaser of the Property. The Lender shall then appoint, within five (5) working days of.receipt of Borrower's notification, an appraiser to determine if the _ Proposed sales price is five percent (5%) or more below fair market value. The Borrower shall be informed within fifteen (15) working days following Lender's receipt of Borrower's notification to the Lender of the proposed sale, of the appraiser's determination of fair market valve. if the proposed sales price is found not to be five percent (5%) or more below fair market value, the sale shall be approved, I Iva f fair markaC�wefue,;th'aesp 1� Shallbe tlri'sa pporuondv eo,' If `p ( l P fthe proposed sae. is°dlsappovaQ; k omplotion QVI;W proposed-sale of the Property following disapproval by the Lender • 4 shall-constitute a default under this Bead of Trust. THERE ARE 51 HOMES IN SN,THE STATE INITIATED 14(CHAP)LOANS WITH THE CITY'S INDORSMENT. THE CITY NEVER ENFORCED THE INCREASE OF 2%PER YEAR ON THE LEASE THE APPRAISAL WOULD HAVE BEEN HIGHER HAD THE CITY INCREASED THE T ALLOYED 2%PER YEAR. P CURRENTLY THERE ARE APPROXIMATELY 19 TO 21 HOMES IN SN THAT ARE NOT OWNER OCCUPIED. HAS THE CITY ATTEMPTED TO MONITOR TRF.SF(RRNTAT.R IN TAR T.A cT,)n WAR c9 RESOLUTION NO. OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, APPROVING THE TERMS OF PARCEL SALES WITH THE HOMEOWNERS IN SUNRISE NORTE, OFFERING THE FEE INTEREST IN THE PARCELS FOR FAIR MARKET VALUE, AGREEMENT TO BE IN A FORM ACCEPTABLE TO THE CITY ATTORNEY WHEREAS, the City of Palm Springs approved that certain Lease Agreement No. 1779 with Fredricks Development Corporation, a California Corporation, dated March 1, 1982 for the development of 60 acres of land located at the northwest corner of Sunrise Way and San Rafael Drive, a memorandum of which was recorded on March 22, 1982 as Instrument No. 47803 of the Official Record of the Riverside County Recorder; and WHEREAS, the Parties made a Declaration of Covenants, Conditions and Restrictions ("Declaration")and subsequently recorded the Declaration on October 22, 1982 as Instrument No. 182722 of the Official Records of the Riverside County Recorder; and WHEREAS, on February 8, 1983, the City entered an Agreement Re Enforcement of Lease Number 1779 with the State of California Department of Housing and Community Development to facilitate the State making California Homeownership Assistance Program ("CHAP") loans to eligible households, recorded on February 15, 1983 as Instrument No. 28930 of the Official Record of the Riverside County Recorder; and WHEREAS, the parties entered an Amendment to Lease Agreement on February 23, 1983 as Instrument No. 37067 of the Official Record of the Riverside County Recorder, for the purpose of assisting the Lessee obtain Federal Housing Administration Insurance for the loans taken by purchasers which were to be secured by the lots into which the Property was to be subdivided and improvements constructed thereon; and WHEREAS Lessee subdivided and sold homes in the Tract as described in the Legal Description shown as Exhibit"A"to the Resolution, subject to the terms of subleases executed by Lessee and Sublessee; and WHEREAS Lessee Executed a Quitclaim Deed on December 12, 1991, recorded on December 27, 1991 as Instrument No. 446363 of the Official Record of the Riverside County Recorder; terminating and cancelling the Lease Agreement by and between City and Lessee, as well as the Lessee's interest in the Covenants, Conditions and Restrictions (the "Declaration"). WHEREAS, with the execution of the Quitclaim Deed by the Lessee and acceptance by the City, the City's real property interest merged with the Lessee's interest for the purpose of the subleases with the individual subleases. WHEREAS, on November 19, 2003 the City Council approved a Lease Amendment creating a new sixty (60) year term for the existing leases, but not changing any other term. 1605 NOW THEREFORE BE IT RESOLVED by the City Council of the City of Palm Springs, that: SECTION 1. Sale. The City shall offer the existing developed parcels in Sunrise Norte for sale to the owners of the property improvements, at fair market value, pursuant to an Agreement in a form acceptable to the City Attorney. Owners shall provide their own financing for the purchase. SECTION 2. Lease Otherwise Unaffected. For property owners that choose not to purchase, except as expressly set forth herein, the terms of the Lease and Sublease, as amended, shall remain unaffected and unimpaired by reason of the foregoing amendments, and the Lease and Sublease, as amended, shall remain in full force and effect and binding on all parties hereto. SECTION 3. All proceeds from the sale of the parcels shall be deposited in the City's Community Development Block Grant fund for the development of new affordable housing units. SECTION 4. The City Manager or his designee is authorized to execute this formal amendment to the Lease(s) and any agreements, letters, documents, deeds, easements to facilitate this transaction. ADOPTED this day of 2004. AYES: NOES: ABSENT: ATTEST: THE CITY OF PALM SPRINGS, CALIFORNIA By City Clerk City Manager REVIEWED &APPROVED AS TO FORM By: City Attorney