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HomeMy WebLinkAbout04/15/1980 . . . . if MINUTES SPECIAL MEETING COMMUNITY REDEVELOPMENT AGENCY SANTA ANA, CALIFORNIA APRIL 15, 1980 The Special Meeting of the Community Redevelopment Agency of the City of Santa Ana was called to order by Chairman James E. Ward at 5:05 P.M. in the City Council Chambers, 22 Civic Center Plaza, Santa Ana, California. After the pledge to the Flag, roll was called: PRESENT ABSENT Gordon Bricken Daniel Griset Robert Luxembourger J. Ogden Markel Al Serrato (5:09 P.M.) James Ward Harry Yamamoto Others in attendance: Richard E. Goblirsch, Executive Director Dave Ream, Assistant Executive Director Stacey Creveston, Secretary Carl Thornton, Interim City Manager Keith Gow, City Attorney Edward Cooper, Assistant City Attorney Michael Whipple, Miller and Schroeder Municipals Pamela Wiget, Miller and Schroeder Municipals Andrew Hall, Jones, Hall, Hill & White Terry McCarty, Stone & Youngberg RESIDENTIAL MORTGAGE REVENUE BONDS, ISSUE OF 1980 The Chairman requested that staff give a report. The Executive Director stated that the Agency's bond counsellor, Andy Hall of Jones, Hall, Hill & White¡ the financial consultant, Terry McCarty of Stone and Youngbeig¡ and the underwriter, Michael Whipple of Miller and Schroeder were all in the audience. He stated that Mr. Hall would make a presentation regarding the format and procedures to be followed. Mr. Hall addressed the Agency suggesting that the Agency and Council hear an oral description of what the documents contained and how the financing is structured, and then return to the meeting of April 21 to adopt all of the documents required for the closing. Mr. Hall provided an oral description of the documents and the sequential steps of the SB-99 process from selling of the bonds through return on the bonds to bond holders. The Chairman. asked that Mr. Hall bring to the Agency's attention the areas that have changed. Mr. Hall stated that changes are occurring in the commitment contract, and that Miller and Schroeder could be~ter describe those changes. Mr. Yamamoto questioned the emergency of calling a special meeting if changes could be made at the next meeting. Mr. Hall stated that Miller and Schroeder could better explain the reasons, but stated that due to the interest rates rising, it was to everybody's benefit to close the transaction as quickly as possible before they go even higher, or the bond sale could fall apart. . . . . :) Mr. Whipple addressed the Agency and stated that the reason the special meeting had been requested was because the interest rates were fluctuating greatly. In the past, interest rates did not change as rapidly as they presently are. The special meeting was also called in order to have the documents presented to the Agency and Council and have some sort of action taken by the Agency approving those documents to determine whether or not the transaction could be completed. He also stated that if the transactions are approved, there are numerous commitments to be made. Mr. Whipple stated that the action requested today is to approve the documents in concept and form, and then staff would like to come back on April 21 and ask for formal adoption of the three resolutions (one, authorizing the issuance of the bonds; two, spells out in greater detail as to the terms of the bonds, and; three, approves the rules and regulations.) Included in the text are the approval of the contracts and documents as well as some other agreements to be approved by the Agency (such as Western Center, etc.) Mr. Whipple stated that by the time the bonds are issued, there will be an additional $268,000 received by the Agency. The Chairman asked the Executive Director what the intended use of this money would be. The Executive Director stated that approximately $60,000 would be used to recoup some of the costs that the Agency has incurred, and would be placed back into the Agency's funds. He further stated that $200,000 would be set aside in a special interest bearing account for a period of approximately 18 months until staff can see what is going to happen to the private mortgage market in the future. If the market drops, staff would like to have funds to be able to protect the bonds. He stated that staff is selling the entire issue and, at the present time, are only building 159 units. The remainder of the units are to start construction within the next few months, and no one knows what the market rate will be in 18 months. The Executive Director stated that the Agency members have before them suggested agreements between the Agency and developer, the Agency, City and Western Center, and bond documentation. He stated that item 12 on the Agency's agenda pertainst to the Agency and the developer requesting that staff be directed to prepare an amendment to the Disposition Development Agreement. The actual proposed agreement between the Agency and the developer is 70-80 percent complete. Staff is requesting information to prepare the amendment and bring it back to the Agency. The amendment would eliminate the requirement of the developer to produce the 58 units as rentals. Mr. Cooper stated that the amendment will also include other items the Council has previously acted on, such as the bonus being paid because of the condominium conversion; the added cost for the land; and points to be paid by the developer to the Agency. The Executive Director stated that item lIon the agenda, regarding the agreement with Western Center, etc., would agree to eliminate the 58 units, and all of the provisions of the existing contract with the exception of the $55,000 the Agency originally set aside for relocation purposes, and Section VIII of the original agreement which states "The City agrees that after one year of successful operation of the CDBG program designated as the Housing Rehabilitation Program, to expand that program into rental housing, so long as the benefit to any absentee owner is not in violation of HUD's rules and regulations." The Executive Director pointed out that a sample agreement of the necessary amendment was contained in the agenda packet. -2- . . . The Executive Director asked the Agency members to note that item 11 (in the agenda packet), page two of the sample amendment, that it does not speak to Section VIII, and that if the Agency approved this particular agreement, Section VIII would remain in effect. Staff negotiated with Western Center to find a solution to the rental rehabilitation solution. Prior to today's meeting, staff received a letter from Western Center regarding a suggested revision to the rental rehabilitation section. (Copies of this letter were distributed to the Agency members prior to the start of the meeting.) Mr. Serrato asked if there was any reason why staff didn't go after two separate bond issues. The Executive Director stated that due to the provisions of the Ullman Legislation, the Agency had to sell a bond to cover the entire development. We will not be eligible to sell another bond for this project. Chairman Ward asked what was binding the developer to build phase two. The Executive Director responded that the agreement required the developer to construct Phase II. The Executive Director asked the Agency members to turn to Exhibit 13, the letter from Goldrich & Rest, which refers to Phase II, stating that Goldrich & Rest are requesting a "change in date of purchase of land and start of construction upon the close of 63 escrows of Phase I, Redeveloper agrees to pay Agency $2,000 per month until the land in Phase I is purchased by Redeveloper and construction of the final phase commenced; provided, however, said land must be purchased by Redeveloper and construction commenced no later than April 30, 1981." After brief discussion, a motion was made by Mr. Bricken and seconded by Mr. Ward to indicate that the Redevelopment Agency is prepared to move forward in concept with all of the agreements that have been put before the Agency members, with the stipulation that the Redevelopment Director will attempt between now and Monday to determine if there is any further room for negotiations regarding Section VIII of the agreement with Western Center on the rental housing program. Before the question was called for, lengthy discussion was held. The motion was amended by Mr. Bricken to indicate that the Redevelopment Agency is prepared to move forward in concept with the agreements contained in items 1 through 10 on the Agenda. The motion failed by the following roll call vote: AYES: NOES: ABSENT: Bricken, Ward Griset, Luxembourger, Markel, Serrato, Yamamoto None After brief discussion, another motion was made by Mr. Bricken and seconded by Mr. Ward to request the Redevelopment Director to refine Section VIII of the Agreement with Western Center. Before the question was called for, lengthy discussion was held. The motion was amended by Mr. Griset, and agreed to by the makers of the motion, to include, "and, if possible, to delete Section VIII from that agreement, with the issue of rehabilitation of rental housing to be returned to Council for discussion and policy within the next 90 days. The motion carried by the following roll call vote: AYES: NOES: ABSENT: Bricken, Griset, Luxembourger, Ward Markel, Serrato, Yamamoto None ADJOURNMENT A motion was made by Mr. Bricken, seconded by Mr. Ward and carried unanimously to continue the items on the agenda to Monday, April 21, 1980. The meeting was adjourned at 7:06 P.M. .~~~~ " ~~~ Richard E. Goblirsch Executive Director -3-