Loading...
HomeMy WebLinkAbout7/3/2002 - STAFF REPORTS DATE: JULY 3, 2002 TO: COMMUNITY REDEVELOPMENT AGENCY FROM: DIRECTOR OF COMMUNITY & ECONOMIC DEVELOPMENT PUBLIC HEARING APPROVING A DISPOSITION AND DEVELOPMENT AGREEMENT WITH SUNRISE HACIENDA PARTNERS AND COACHELLA VALLEY HOUSING COALITION TO FACILITATE THE APPLICATION FOR LOW INCOME HOUSING TAX CREDITS AND THE DEVELOPMENT AND CONSTRUCTION OF THE SUNRISE HACIENDA APARTMENTS, LOCATED ON THE WEST SIDE OF SUNRISE WAY NORTH OF SAN RAFAEL ROAD RECOMMENDATION: It is recommended that the Agency approve a Disposition and Development Agreement with Sunrise Hacienda Partners and Coachella Valley Housing Coalition (CVHC), providing up to $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, referred to as the Sunrise Hacienda Apartments, south of the Coyote Run Apartments on Sunrise Way and San Rafael Road. SUMMARY: This resolution approves a Disposition and Development Agreement with the developers of the Sunrise Hacienda Apartments in the amount of$1,000,000. The Agency would 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 with the Low Income Housing Tax Credit application process. In return, the Developer agrees to proceed with the LIHTC application and, once funded, to construct the project as proposed and approved by the City Council on July 3, 2002. BACKGROUND: Agency members are familiar with the adjacent Coyote Run Apartments, developed by CVHC as a LIHTC project in 1992. The project has remained beautifully maintained and is the finest low-income apartment complex in the city. The Agency owns the adjacent 6.25 acre parcel and would contribute it to the expansion of Coyote Run. Staff first discussed the concept of expanding Coyote Run with the Agency at a Study Session in March, 1999, in a meeting that lead to the development of the City's Affordable Housing Market Study and later the Affordable Housing Strategy. The project has a variety of different-size apartments, from 1-bedroom to 4- bedroom. The Affordable Housing Strategy mentioned above identified low- income rental housing for larger families as the City's most pressing housing need. This project makes a small dent in that need. C �� As with most LIHTC projects, the non-profit housing developer acts as the General Partner (and often property manager), but then sells most of the project to a for-profit limited partner who would be able to uses the 9% credits (LIHTC). The Partnership in this case is called Sunrise Hacienda Partners. Agency financial participation in the project will make the developer's LIHTC application much stronger and make the project more likely to be built. The deal is structured as a three-way deal, with the financial assistance flowing to the partnership (Sunrise Hacienda) but the land contribution being made to CVHC as the General Partner. This is being done to maximize the number of points in the application process: 1. Once the project received its tax credit allocation, the Agency would Grant Deed the property to CVHC as the General Partner. The Agency would retain reverter rights if the Developer fails to proceed or complete the project. 2. Once the project received its tax credit allocation, the Agency would release its first disbursement of $300,000 based on invoices received from the developer, including both soft costs and hard costs. In the next two years, the Agency shall make payments of $225,000 each year to the project. The assistance shall be secured by a Deed of Trust. 3. The developer commits to building the project as proposed, including the architectural upgrades, noise buffering, quality landscaping, and other components. A regulatory agreement with the Agency will assure that the units will count towards the City's low and moderate income housing goals. 4. The Agency shall assist the Developer in applying for the Low Income Housing Tax Credits in every way possible. 5. Plans and Drawings: Project plans and drawings would become property of the Agency at the time of the land transfer and would be necessary to the Agency in the event it becomes necessary for the Agency to complete the project. Half of the project's units (32) shall count in the Agency's inventory of Low/Mod Housing Units. The 32 Agency-funded units, at a total subsidy of $1,000,000, equates to $30,000 per unit, well within the prototypical financing gap in a tax- credit-funded, family multi-unit project. This gap is calculated only on Agency- restricted units; since the entire project will be affordable due to the tax credit restrictions, the effective subsidy is $16,666 per unit. Based on the attorney's research on the Article 34 issue, the Agency may be able to restrict all of the units based on the nature of the financing. Tax Credit financing restricts them all, anyway, for a period of 55 years. Sunrise Hacienda Partners DDA cm .a .z July 3, 2002 Page 3 A Summary Report describing the purchase and sale of the property, as required by California Health and Safety Code Section 33433 (a), is enclosed with the resolution. /// iJOHN 8. RAYMO;ND Direc of Commu y & Economic Development APPRO ED ram , Executive Director ATTACHMENTS: 1. Resolution /'� �/1 2. Dispostion and Development Agreement —CLt�t✓�craHLL 3. Summary Report 4. Public Hearing Notice_�h �. REVIEWED BY DEn OF FINANCE I/ Co" rck •a- Sunrise Hacienda Partners DDA July 3, 2002 Page 3 SUMMARY REPORT: DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE PALM SPRINGS COMMUNITY REDEVELOPMENT AGENCY AND COACHELLA VALLEY HOUSING COALITION AND SUNRISE HACIENDA PARTNERS JULY 2002 cra ,malmy INTRODUCTION Before real property acquired by a Community Redevelopment Agency with tax increment proceeds may be sold or leased, the transaction must be approved by the Agency Board in accordance with California Health and Safety Code Section 33433. This Section requires a "Summary Report", which describes and specifies certain information in regard to the proposed transaction, be available for public inspection. DESCRIPTION OF THE PROPOSED AGREEMENT Site and Interests to be Conveyed The Site consists of three parcels of land, totaling approximately 6.25 acres. The Site is located north San Rafael Road along the west side of Sunrise Way in the City of Palm Springs. The Developers of the Property, Coachella Valley Housing Coalition and Sunrise Hacienda Partners, are seeking Agency financial assistance in developing a proposed 66-unit low- and very low- income apartment project on the site. Part of the assistance will be that the Agency shall contribute the land to the project when the project is ready to proceed to the construction phase. The Agency shall also make a loan to the developer, disbursed over three years, after the project has received its Low Income Housing Tax Credit Allocation. Proposed Development The Purchaser is building 66 low-income apartment units on the vacant land, including 8 one- bedroom units, 24 two-bedroom units, 24 three-bedroom units, and 8 four-bedroom units ranging in size from 600 square feet to 1,400 square feet. The 66 units will be contained in 7 one-story buildings and 16 two-story buildings, with each building containing from 2 to 6 units. The project, while receiving several reductions in development standards and a density bonus required under Section 65915 of the California Government Code, contains significant architectural and landscaping upgrades as well a day care center and tot lot. This project helps the City meet its requirements to provide affordable housing under California law. Financing The developer is seeking an allocation of Low Income Housing Tax Credits through the California Tax Credit Allocation Committee and established pursuant to the Internal Revenue Code Section 42, as the primary source of project financing. Based on the restricted rents, the project's economics support a minimal amount of private financing, leaving a gap of at least $1,000,000. The Developer has sought Agency financial assistance to cover its gap in the project. Agency Responsibilities The Agency agrees to contribute the site which it owns, valued at$250,000, to the project, as well as make a deferred loan of$750,000 once the project has received its tax credit allocation. The Agency agrees to contribute the land to the project when the project is fully funded, all permits have been obtained, and the Developer is prepared to commence construction. The Agency would retain reverter rights if the Developer fails to proceed or complete the project. In addition, the Agency agrees to assist the Developer in applying for Low Income Housing Tax Credits. Developer Responsibilities The developer commits to contruct the project as proposed, including the architectural upgrades, noise buffering, quality landscaping, tot lots, and other components. A regulatory agreement with the Agency will assure that the units will count towards the City's low and moderate income housing goals. Project plans and drawings would become property of the Agency at the time of C � l • the land transfer and would be necessary to the Agency in the event it becomes necessary for the Agency to complete the project. Agency's other standard terms and conditions, including non-discrimination and maintenance covenants, and other terms and conditions remain as in Disposition and Development Agreement for Developer. COST OF AGREEMENT TO THE AGENCY The Agency will commit an amount of $1,000,000 to the project should it receive a tax credit allocation and proceed to the construction phase, including $250,000 in land value and a $750,000 deferred loan disbursed over three years. c ra .. a 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 Public Hearing in the City Council Chambers, located at 3200 Tahquitz Canyon Way, Palm Springs, California 92262, beginning at 7:00 p.m., Wednesday. July 3, 2002, to consider the following: A Disposition and Development Agreement ("DDA") between Sunrise Hacienda Partners and the Community Redevelopment Agency to the City of Palm Springs, including the sale of a 6.25 acre parcel located on the west side of Sunrise Way near San Rafael Road Palm Springs, California 92262 The Community Redevelopment Agency of the City of Palm Springs ("Agency") proposes to enter a DDA with Sunrise Hacienda Partners for the purpose of developing a 66- unit low-income apartment complex adjacent to Coyote Run on Sunrise Way. The DDA calls for the Agency contributing the 6.25 acre Agency-owned parcel to project, as well as $750,000 in Agency Low Income Housing Setaside funds over a period of three years. The partnership intends to apply for Low Income Housing Tax Credits under Article 42 of the IRS Code. 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. 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 Redevelopment 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: June 19 and June 26, 2002 Coil 009 608 667 Christopher FUI)cr Ff 486 Lindbergh pi NE#317 GA 30324 FUU-1486 30:tZ2I4fOa7 tiOJ. Oc? 07 I�s FORWARD TIMa FXP RTN TO SEND FULL) R - C H R SS TO P HER 1300 W ?Tl ' 5T APT CI..LVt-LANr !4 44I.J.3 -10-14 --F� f...... CA ifnmia t ' . J2263 '2743r _ 009 608 701 Caxhdine'Yohn 17671 1}yir'Blvd#104 T' Palm Springs, CA" 3 501 203 001 Priscilla Amrepete 3099 N Biskra Rd 9226'' rings,CA Palm Sl --- r - -_-- PEYE O94 _�'t7rUR.2brN 6O0 tri3E N.Oi=R Y FILE No FORI�JARD ORDER ON I.Pi�lr-,1 f_[. To FOR4J IlRO U NA191�nl "fO l:-P"47I Rf 21 JUN 909, 60S 622 Theodore Alexander' Jr. i65]'SarincAVer Ct S; jpTlrigs�, In SI)rIngs•CA 92262 63-2743 009 1509 727 Larry Johnston&Terence P Reeks 1306 SUni C', 9 262 palm Springs, ngs•CA JOHN3O6 O6l�S - q?2bf=F�,Oofa6F ND ER 5 1„:t l„[_ NO FOR4JARo GRT�ER ON UNACi f..E 'T.O Fi7�'Twit�R7 ""ice cri iRN '[O ,ak°f�. �O 009 609 587 - - 1331, Swd MAlCr t Elizabeth Chavez er Ci S � Palm Springs, CA 92262 _ f'i PROOF OF PUBLICATION This is space for County Clerk's Filing Stamp (2015.5.C.C.P) STATE OF CALIFORNIA County of Riverside -- I am a citizen of the United States and a resident of No.t a34 the County aforesaid;I am over the age of eighteen CITY OF PALM SPRINGS NOTICE OF PUBLIC HEARING years,and not a party to or interested in the NOTICE IS HEREBY Agency of that the Community above-entitled matter.I am the principal clerk of a F.development the Agency l the,City of Palm tinter of the,DESERT SUN PUBLISHING Springs and the City of Palm Springs will hold a P Public Hearin in the City Council Chambers, In- COMPANY a newspaper of general circulation, dated at 32�0 Tahguitz Canyon way, Palm Springs,California 92262, beginning at 7.00 p ni printed and published in the city of Palm Springs, wadnesday, July 3, 2002, to consider the follow- County of Riverside,and which newspaper has been tng. adjudged a newspaper of general circulation b the A ors os tw e and Development Agreement I gg y ("DDA"�between Sunrise Hacienda Partners and Superior Court of the County of Riverside,State of the Community Redevelopment Agency to the P h' vers e City of Palm Sp,m s, including the sale se a 6.25 California under the date of March 24,1988.Case acre parcel located on the west side of Sunrise Nay near San Rafael Road Palm Sprirgs, Califor- Number 191236;that the notice,of which the his 92262 annexed is a printed copy(set in type not smaller The Community Redevelopment Agency of the Ctty of Palm Springs("Agency")proposes to enter than non pariel,has been published in each regular a DDA with Sunrise Hacienda Partners for the and entire issue of said newspaper and not in an purpose of developing a 66-unit low-income I Y apartment complex adjacent to Coyate Run on supplement thereof on the following dates,to wit: sunrise way. the DDA cacrells for the Ag end y can- June 20th,26t1t project9as wel�ae$750,p 00 in end one y-owgne yparcel to A Low In- - -come Housin�gg Sclearda funds over a period of -------------------------------------------------- three years. the as neiship intends to apply for Low Income Housing Tax Credits under Arto e 42 of the IRS Cade. ----'-""'----------'—'--'-"'----------"-'---""----------- The general partner in the project is Coachella All in the year 2002 Valley Housing Coalition, the general partner and property manager of the adjacent Goyoto Run I certify(or declare)under penalty of perjury that the apartments. The two projects would share some amerntres, including the existing day care center foregoing is true and correct. and new tot lots. 27th All interested persons are invited to attend the Dated at Palm Springs,California this--------------day Public Hearing and express opinions on the item Y listed above If you challenge the nature of the June proposed action in court, you may be limited to raising only those Issues you or someone else of-----------------------------------,2002 raised at the Public Hearing described in this no- ��-��`///qqq,,,��' tice,or rn written correspondence delivered to the City t Clert the address listed above, at or Prior tot k.a he k,at Hearing. _ Members of the public may view this document '------'-'---"---"-'-'-'—'"'"---"'-'-----'-----""---- and all referenced documents in the Community Signature Redevelopment Department,City Hall,and submit written comments to the Community Redevelop- ment Agency at or prior to the Comri Rede- 1 x U velopment Agency Meeting at or prior to the pub- lic hearing described in this notice. J Further information, including a copy or the ,ylf Amendment and Resolution, prepared in accor- dance 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 PUB. Juno 20, 26, 2002 RESOLUTION NO. OF THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, CALIFORNIA APPROVING A DISPOSITION AND DEVELOPMENT AGREEMENT WITH COACHELLA VALLEY HOUSING COALITION AND SUNRISE HACIENDA PARTNERS 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 accordancewith 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, Sunrise Hacienda Apartments, proposed for low-income families, was approved on July 3, 2002 by the Palm Springs City Council; and WHEREAS, the property developers, Coachella Valley Housing Coalition and Sunrise Hacienda Partners, LLC, sought Agency financial assistance to cover a portion of the development cost; and WHEREAS, the property developers, Coachella Valley Housing Coalition and Sunrise Hacienda Partners, LLC, are submitting a tax credit application to the California Tax Credit Allocation Committee for the July 17, 2002 application round and have requested Agency assistance to strengthen the application; and WHEREAS, Section 33430 of the Community Redevelopment Law allows that an agency may, "for purposes of redevelopment, sell, lease, for a period not to exceed 99 years, exchange, subdivide, transfer, assign, pledge, encumber by mortgage, deed of trust, or otherwise, or otherwise dispose of any real or personal property or any interest in property;" and WHEREAS, the owners shall agree 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]); and WHEREAS, a Notice of Public Hearing concerning the 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 July 3, 2002, 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. r a say+ 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 thatthe 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 furtherfinds that the Mitigated Negative Declaration reflects its independent judgment. SECTION 3. The Developer has proposed building 66 low-and very low-income apartment units on the site, including 8 one-bedroom units, 24 two- bedroom units, 24 three-bedroom units, and 8 four-bedroom units ranging in size from 600 square feet to 1,400 square feet. The 66 units will be contained in 7 one-story and 16 two-story buildings, with each building containing from 2 to 6 units. The project, while receiving several reductions in development standards and a density bonus required under Section 65915 of the California Government Code, contains significant architectural and landscaping upgrades as well a shared day care center with Coyote Run and 3 tot lots. This project helps the City meet its requirements to provide affordable housing under California law. SECTION 4. The Agency agrees, through this Disposition and Development Agreement, to contribute the 6.25 acre site valued at $250,000 to the General Partner, Coachella Valley Housing Coalition, as well as a loan of an additonal $750,000 spread over three years, once the project receives its tax credit allocation by the California Tax Credit Allocation Committee. The Agency agrees to contribute the land to the project when the tax credits are allocated, all permits have been obtained, and the Developer is prepared to commence construction. The Agency would retain reverter rights if the Developer fails to proceed or complete the project. In addition, the Agency agrees to assist the Developer in applying for Low Income Housing Tax Credits. SECTION 5. 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. b) The parcel was acquired by the Community Redevelopment Agency for the purposes of providing low- and moderate- income housing on it. Coachella Valley Hosuing Coalition has a previously-approved tract map on it for the development of 20 self-help homes. c) The Developer intends to apply for 9% credits (LIHTC), and Agency financial participation in the project will make the developer's LIHTC application much stronger and make the project more likely to be built. d) The DDA 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. f) The 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, insofaras 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 DDA with Coachella Valley Housing Coalition and Sunrise Hacienda Partners, 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 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 2002. AYES: NOES: ABSENT: ATTEST: COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, CALIFORNIA By Assistant Secretary Chairman REVIEWED & APPROVED AS TO FORM C%Md - C •3